---

Budget Resolutions and Economic Situation

I appreciate the Secretary of State coming to my rescue, but I do not think I need it. I have given an explanation that deals with the point. I conclude by referring to two issues of substance that arose in the Budget in relation to the banks and the banking system. One of the big and unexpected revenue changes was the yield from the bank bonus tax. I acknowledge that we underestimated it, as did the Government. We thought that the tax would be widely avoided and it was not. It suggests a certain degree of chutzpah among the bankers that they were perfectly happy to pay up rather than change their behaviour, but it leaves us with several conclusions that now need to be followed through but are not being followed through. The first is that the banks are perfectly capable of sustaining a permanent rather than a temporary tax in order to cover the insurance—the protection—that the banks derive from the taxpayer. The second is that it is clear that excess profits are being made in the banking system, particularly in the investment banking arms. I was delighted to see that the head of the Office of Fair Trading is now investigating the possibility of cartel, or other forms of anti-competitive behaviour, which are producing excessive profits from Government and possibly private client relationships, and which are the source of many of the bonuses that are currently paid. I would be interested to hear from the Minister when he replies whether the Government have prompted or are encouraging the OFT to pursue the investigation.