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I begin by congratulating Mr. Todd on his speech, in which he appeared to be auditioning for the role, in the event of the Conservatives winning the next general election, of the new banger-together-of-heads in Brussels. Whereas Mr. Hoban made a rather equivocal speech from the Conservative Front Bench, the hon. Gentleman gave us something a bit more robust in respect of defending the national interest. I look forward to his being a GOAT after the next general election, if indeed there is a change of Government, and to watching him enjoy a suitable lifestyle in Brussels while he defends our national interest, with zeal and on a daily basis.
The backdrop to our deliberations this afternoon-and, indeed, yesterday and for many months-is the huge regulatory and systematic failure of our financial system. That failure has had huge and ongoing consequences and ramifications for our economy, our banking sector and our tax burden. It also led to the enormous deficit that we as a country are continuing to finance, so those who would like to wish away the circumstances surrounding this debate must face up to the fact that we are living now in a situation that is very different from the one that existed a year or two ago. We have to ask some fundamental questions about how we got into this position, and how we respond to it.
The fact that the UK has the largest financial sector is the main, but not the only, reason why we found ourselves particularly exposed when the system failed. That is why many people in Europe might observe that our representatives around the table in Brussels tomorrow will have as much reason to listen as they have to talk, and that there may be aspects of our performance that could be improved on.
The widespread enthusiasm for greater regulation is an instinctive and natural response to failure of the type that took place. People feel that we must regulate with more zeal and a greater desire to intervene: I believe that the Conservative spokesman, the hon. Member for Fareham, used the expression "proactivity", and I am sure it is true that we need to be more proactive in that regard, although people mean different things when they talk about regulation. Some want banks to be split up, others want an end to the tripartite arrangement in the UK, while still others fixate particularly on the bonuses paid to people operating in the financial services sector.
There is a tendency to lump all those concerns together and to demand greater regulatory intervention in the financial services sector, but how we regulate and how fast we should do it remain open questions. The debate in this country is obviously very much alive, as we saw when we discussed the Financial Services Bill yesterday, but the global circumstances of the collapse that we have just experienced are without precedent. The effects of recessions in the past have of course moved from one country to another, but the consequences of failure are more profound now thanks to the greater interconnectivity and inter-reliance of the financial services sector.
Many people have observed that our status as such a big financial centre proved to be a mixed blessing. As the hon. Member for South Derbyshire noted, the banks located in London were global institutions yet the burden of picking up the bill when things went wrong was national. The problem was that those institutions were so big that it was difficult even for a national economy as large as the UK's to deal with picking up the bill without huge implications for Government borrowing and indebtedness, and the Government's exposure in that regard has had many ramifications.
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