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Finance (No. 3) Bill

That is right, and I supported that entirely. I support any large manufacturing company with a base in the UK that we are seeking not to protect, but to develop and expand. I have stressed the progressive loss of self-confidence in British manufacturing across the nation. That example involves a large American company. Although it had got into a much worse mess than the old British motor industry ever got into, because it was American it had a naive faith that it would be able to pull itself, and us, out of that situation. There has been a loss of confidence in our industries. I will not delay the House by giving example after example, but the view of the Treasury, the old Board of Trade and the old Department for Industry—unbelievably misnamed—has always prevailed: that the Government can do nothing, and market forces must prevail. That is despite the fact that every country that was a real competitor of ours took exactly the opposite view, and ensured that their industries thrived and prospered. They were not protected, but they were supported. We have so many latent advantages that we simply ignored, to the advantage of others and to our own continuing and cumulative disadvantage. That is the point that I am trying to make. This is by no means a digression from the debate, Mr Deputy Speaker. This is why the tax on the banks should be increased. The banking sector's preponderance in the economy has to be reduced if we are to survive as a manufacturing and balanced economy in the future. In one way or another, that has to be done. What we have seen from the Government is a pathetic capitulation to the banks. It was difficult enough for us when we were trying to save the banking industry in the crisis, when it was in a bad state. When the banking industry is clearly on the way to recovery, there is absolutely no reason not to proceed with the bonus tax. The only reason—with which I disagree—is that if we dare tax the banks, they will go abroad because they are being taxed too highly in the UK. This is another area where I would like a study to be done. To what extent is that really a risk? If it were a risk that major bankers would leave the UK in droves and we would have a denuded financial sector over night, it would have some benefits and a lot of disadvantages, but to what extent is it a risk? That could be studied. There are some hard-headed people in the Treasury who would certainly not agree with the banking point of view. What is so special about the bankers that they can generate these huge profits and bonuses? I do not think that anybody knows. Anybody who thinks about it objectively thinks, ““How can that be done?”” The manufacturing industries in Germany and France, such as the telecoms sector and the car and lorry manufacturers, are sweating it out in their export markets. They are rebuilding the east of Germany and eastern Europe, and are now helping to industrialise China with massive exports of huge engineering resources. How can it be that they struggle to make 10% on turnover, but bankers can come in and generate huge profits—unrelated, as far as one can see, to any meaningful or socially useful activity, as Lord Turner said in another place? We need to consider how much real danger there is of bankers leaving the UK. Is it a real threat? I do not believe it is, to be quite honest, or at least it is nothing like what the Government fear. We also need to consider how to redress the apparently inherent profitability of the banking sector compared with the rest of the economy. We must get those two pieces of work under way. The Government should find enough nerve to stand up for what they and the whole country said when the ordinary taxpayer had to go to the rescue of investment banks that had brought the economy of the country, and the world, to the verge of collapse. They need to see that there is no inherent danger in saying to the banks, ““You're going too far, with too much support from the taxpayer. You've got to be reined in.”” They must have the courage, determination and good sense to do that. It is not a question of market forces prevailing, as the Liberal party would have us believe. Instead, the Government must take a sensible view. Labour has admitted that we were not tough enough on regulation. Of course we were not. However, the current Government have been far too lax in their attitude to banking, and particularly to bank bonuses. We were weak, but this Government have been dreadfully weak, just as they were on regulation. If we were weak on regulation, the Conservatives were hopeless: they did not want any regulation. In their pamphlet on it they said not ““Let's have more,”” but ““Let's have less.”” That was their only contribution to that debate. Instead of always saying what we did wrong, why do the Government not learn from it and do now what we should have done then, with the benefit of having seen our failure? They have fudged this coalition together one way or another, so why can they not see where we went wrong? Why can they not see that we were weak with the banks, and they should be strong? Why can they not be as strong as they said they would be during and before the election campaign? The Financial Secretary has gone to great lengths to tell us what we said during the election. We do not want to repeat what the Conservatives said, but they were right then and they are wrong now. Can he not see that? The Government should do something about this now, and that is why I and my hon. Friends will vote for amendment 13. I hope that we will also vote for amendment 31, if my hon. Friend the Member for Hayes and Harlington (John McDonnell) presses it. I am pleased that I caught your eye, Mr Deputy Speaker, and I hope that there is still time for many other Members to speak on this important issue. We only wish that the Government would find some guts.