My Lords, I declare an interest as chairman of an investment trust. Before I start my speech I shall reflect on Parliament's role at the moment. As my noble friend sitting on the Bench in front of me has mentioned, we have been back for four weeks, before which we had a very long recess. I really do not understand why Parliament was not recalled just because there was a whole host of party conferences. Frankly, Parliament has failed the people at a time when we face the direst economic circumstances that any of us in this Chamber or in the other place has ever faced.
In congratulating my noble friend on the Front Bench, with whose speech for once I totally agreed, I raise two issues: regulation and small businesses. They have been highlighted by several speakers, principally the noble Lord, Lord Bilimoria, who spoke about small businesses, and my noble friend Lord Lawson, who raised regulation.
I start with regulation, because that is the macro-dimension. My noble friend was right: banking supervision is vital to the future and has been missing for a decade—we are all feeling the results of that. There is no point in the new chairman of the FSA saying that he needs more people. He already has 3,000 people working for him, at a cost of more than £300 million a year. The FSA, sadly, has never worked. I suffered when I was chairman of a small life assurance company from the way in which the FSA dictated to everybody about the millennium bug, and not a single problem with anybody or any business arose. The FSA was totally asleep over Northern Rock and, as others have mentioned, during the period when it was responsible for Equitable Life. It had absolutely no idea how to react to the sophisticated financial instruments that we have seen created during the past decade. What is needed within the FSA is a complete switch of resources to proper regulation, to anticipation and to working with economists—academic and applied—and a removal of needless checking of information to the consumer. Will it do it by itself? I doubt it. It needs an urgent independent inquiry into how it has failed and a way forward—or a road map as the noble Lord opposite just said. However, I emphasise the urgency of the situation, because everything happens very quickly in a global market.
Many commentators have noticed how different is the speed of reaction of the authorities in the United States from that of those in western Europe, particularly ours. Why cannot we move with more speed? Why do we dither, deliberate and discuss, and so rarely act? Interest rates have to come down now. When I was at Cambridge, also listening to lectures on Keynesian economics, we had a run on sterling in 1957. Interest rates were put up by 2 per cent overnight. Why can they not come down by 2 per cent overnight? The interest would still be 2.5 per cent, which is way above that of the United States.
I turn to small businesses, because they are practical side of our economy. Thirteen million people are dependent on them, which is a very large proportion of the workforce of this country. I have a number of action points for the Minister, who has now joined us—and very welcome she is, too. If she will tick at least three or four of them, we might get some support for small businesses. I should like to see action to freeze or reduce business rates—it can be for a limited period, but it would be a practical benefit to all small businesses. I should like to see action to suspend any new employment laws, which can be introduced at a later date. I should like to see action to withdraw the policy of charging rates after three months on empty properties—that is not working and is costing the nation dearly. I should like to see action on bank loans and overdraft rates, so that when they are renewed, they cannot be increased nor have terms changed—one of the great problems for many of our small and medium-sized businesses at the moment is that they are being changed. Why cannot stamp duty on any property under £500,000 be charged for a limited period at 1 per cent, which would help the housing market? The Government should support the campaign for retailers' rents to be paid in arrears rather than in advance. I should like to see action taken so that all new leases can be upward or downward. I also support the plea for the small loans guarantee scheme to be introduced.
The Minister, whom we welcome to the Front Bench, said twice that the Government are taking decisive action and are determined to help. Does he not realise that the alleged £4 billion of support from Europe over four years, handled by the banks, is pretty useless for every small and medium-sized business and retailer in this country? Those are the front-line troops who are sustaining the damage at the moment and will continue to do so through the winter and into the spring. If they are to survive this massive downturn, they need action and help now, this winter and next spring. Keynes will not help them any more than he did Denis Healey or Jim Callaghan.
In medicine, early diagnosis followed by remedial action saves lives. Small businesses are like people: the diagnosis has been made; now we need sensible and specific action to restore the patient to good health.