grow in value over the next period of time.
The Prime Minister: I was very grateful for the support that the Opposition party gave to the recapitalisation of the banks three months ago. I suppose that I should not be surprised that the minute there is a difficulty, they withdraw their support from the right proposal. The recapitalisation of the banks was the right thing to do. The right hon. Gentleman has no other policy that would replace that policy. We are right to continue to support the banks so that they can lend to people in this economy, and the measures that we have announced this week are the right measures to take us forward.
The right hon. Gentleman is completely isolated from every major party in every country in the world. Every country understands that when the private sector and the markets fail, and particularly when banks fail, the Government have a duty to act. He wants to cut public investment while others want to increase it. He wants to withdraw help from the unemployed while we want to give it. As far as the banks are concerned, he does not know what his policy is because it changes from one day to the next.
Mr. Cameron: The Prime Minister talks about being isolated, but does he not realise that he is the only person in the country who thinks he is doing a good job? [ Interruption. ] There was not exactly a roar of approval from behind him. The whole point about the first recapitalisation was that it was meant to get the banks lending. It has failed to do that, as even the Prime Minister has admitted. Let me put the question again. The shares were worth £37 billion. They are now worth less than £17 billion. Will he confirmit is simple mathsthat, as things stand, the taxpayer has lost more than £20 billion?
The Prime Minister: The point of the recapitalisation of the banks [ Interruption. ] I am sorry that the Conservatives do not want to understand economics. The purpose of the recapitalisation of the banks[Hon. Members: Answer!] They should really grow up and face up to the big issues. The point of the recapitalisation of the banks was to stop them collapsing. If we had taken the right hon. Gentlemans advice and not put our stake into the banks, they would have collapsed. Thousands more people would have been worse off and thousands more businesses would have suffered. As a result of what we have done no saver has lost any money. What is his alternative to the capitalisation of the banks?
Mr. Cameron: The fact is that the Prime Minister is completely unwilling to answer the most basic questions about what the recapitalisation has cost so far, and what it might cost in the future. This comes at a time when the whole country is asking whether the Government know what they are doing. Is that surprising when we have the Employment Minister sayingtoday of all days!that he can already see light at the end of the tunnel? Is it surprising when we have the Business Minister talking about the green shoots of recovery, or the Housing Ministershe is not in her placesaying that there is a new boom in the housing market? Meanwhile, we have a Prime Minister who thinks that he has saved the world.
The Prime Minister: The right hon. Gentleman has not one idea about how to begin to sort the problem out. I asked him what he would do in place of the recapitalisation of the banks, and he had no idea what he would do. Only this week, the secretary general of the CBI said:
The Government needed to be bold and it has been. These measures are the essential pre-cursors for economic stability which will expand the availability of credit.
We are doing what other countries are doing. The only thing that the right hon. Gentleman says is that we should do nothing. He spends all his energies going around the country telling people that nothing can be done about this recession. We will act, but the Opposition will not. He is out of step with the rest of the world, and he is out of his depth.
Andrew Mackinlay (Thurrock) (Lab): Were the Serious Organised Crime Agency, the Financial Services Authority or our security and intelligence services fast asleep, or were they part of a cover-up in relation to Lloyds TSBs illegal handling of money from Iran to get round sanctions? Surely we need a statement about why this bankno individual has been prosecuted in the UKlaundered in America $300 million of Iranian money and money from London that related to the Sudan. I think we should be told.
The Prime Minister: My hon. Friend is making very detailed allegations. Our sanctions policy against Iran has been one of the toughest in the world. It is tough on banks, tough on oil companies and tough on other institutions. I will of course look at the allegations that he has made, but I can tell him that we and other countries are leading the world in the sanctions against Iran.
Mr. Nick Clegg (Sheffield, Hallam) (LD): I should like to add my own expressions of sympathy and condolence to the family and friends of Captain Tom Sawyer, Marine Danny Winter and Corporal Richard Robinson, all of whom tragically lost their lives in Helmand province this last week. I should also like to join in welcoming the inauguration of President Obama, and I especially welcome his early announcement of the suspension of all military tribunals at Guantanamo Bay.
The British economy is now standing at the edge of a cliff. It is clear that international markets believe that many of our banks are effectively broke, and that is pushing confidence in the pound and in the Governments finances to an all-time low. Will the Prime Minister accept that his announcements and half-measures have created confusion and uncertainty, when the country desperately needs clarity and certainty at this very dangerous time?
if fully implemented...should stem a further downward recessionary spiral and provide a stable economic platform on which the UK can trade through this difficult period.
The right hon. Gentleman has to understand that we have done three things. The first is that we have recapitalised the banks to stop them collapsing. We have done that not to help bankers but to ensure that people who rely on the banks, and who have their savings in them, can be secure.
The second thing that we have done is give real help to families and businesses through this difficult period, when it is right that the Government should intervene; only the Conservative party seems to oppose that. The third thing that we have done is take measures to extend lending to businesses and families. Lending to businesses now takes the form of the Bank of England being in a position to lend to non-bank institutions and to lend directly to companies through the corporate bond market. We have created the asset insurance scheme so that we can give more certainty for the future about how we will deal with the problem of assets. All those things are done so that the banks can be stronger to extend lending. I believe that that the right hon. Gentleman will find that other countries around the world are doing the same.
Mr. Clegg: I am grateful to the Prime Minister for his reply, but does he not see the extreme danger in any remaining ambiguity in the Governments response? Does he agree with me, and the Chair of the Treasury Committee, that that must now mean the full, if temporary, nationalisation of our weakest banks without any further delay?
The Prime Minister: The issue is the extension of lending; that is the issue before us. The agreements that we have signed with the banks already are, I believe, agreements that are being honoured at the moment. I have to say to the right hon. Member that the problems is that when the banking crisis started, foreign banks that were operating in Britain reduced their capacity in Britain. Non-banking institutions that were lending in Britain for mortgages and companies reduced their capacity, so even if the Royal Bank of Scotland, Lloyds TSB, Barclays or those other banks increased the capacity substantially, we would have suffered a loss, just as every other country has suffered a loss of foreign capacity. That is the problem that we are trying to deal with. The problem is the resumption of lending; that is still the problem that has to be dealt with, whatever the status of the banks.
Ms Diane Abbott (Hackney, North and Stoke Newington) (Lab):
Will the Prime Minister agree with me that people all around the world will have been moved by the inauguration of President Obama? There
are many reasons to welcome his inauguration, but one is that when a man whose father, 60 years ago, could not have been served in restaurants in Washington becomes President of the United States, we can all of us, in our communities, turn to our children and say, Yes, you can.
The Prime Minister: I am very grateful to my hon. Friend for showing the historic nature of the moment that we are seeing in America. This is the first black President of the United States of America. Let us not forget the history books: the White House was built by slaves, and it is now occupied by the first black American President.
Q2.  Mr. Edward Garnier (Harborough) (Con): At the same time as the Prime Minister pleads with President Obama for a special relationship, is not his own relationship with the British public irretrievably breaking down? Have we not reached hideous levels of insensitivity when the Prime Minister, in the very week when unemployment is heading to 2 million, and when our constituents and our constituency businesses are deeply concerned about their finances, requiresindeed, demandsthat his own Members of Parliament keep their expenses secret?
The Prime Minister: The hon. and learned Gentleman misunderstands what we are doing and the transparency that we are providing in the expenses. I said earlier that the main Opposition party and the Government had discussions about the statutory instrument. The Opposition party gave the impression that it was supporting that statutory instrument but it has now withdrawn its support for it. It is right, then, to seek all-party agreement on that, and that is exactly what we are doing. Far from spending a great deal of time this week on the issues that he is talking about, I am spending my time dealing with the problems of the British economy, and that is what I will continue to do.
Mr. Dennis Skinner (Bolsover) (Lab): Can the Prime Minister tell us what action will be taken again those bankers who have run their banks into the ground? Those Tory fat cats cannot blame [Interruption.]
Mr. Skinner: Those Tory fat cats at the banks, represented by the Conservative party, cannot blame the trade unions this time for the almighty mess that this country is in. In another generation, they would have been described as the enemy within.
The Prime Minister: This problem has not been caused by inflation in our economy or in other economies. It is a global banking crisis that must be dealt with by global co-operation, and I am pleased that President Obama and others want to see that co-operation happen.
Q3.  Bob Spink (Castle Point) (Ind):
Fairs fair: we must all welcome the action that the Government are taking to get money flowing into small businesses and to keep people in work. The Prime Minister is doing that to help small businesses, not fat cats, but may I press him on behalf of pensioners, who also suffer from the recession? Will he meet me and Age Concern so that we can look at ways of further helping pensioners on issues such as meeting their fuel costs
and on savings interest? Doing something constructive is much better than doing nothing.
The Prime Minister: I am grateful for the hon. Gentlemans question. The Sun said only a few days ago that there was only one MP who was more independent of the Conservative party Front-Bench positions than him, and that was the right hon. and learned Member for Rushcliffe (Mr. Clarke), now the shadow Business Secretary. With reference to pensioners, we have increased the winter allowance this year£60 extra is going to pensioners now. We have also increased the pension from April. We will do everything we can to help pensioners with their savings. That is why we have the individual savings accounts for pensioners, and we have raised the pensioners tax allowances so that 60 per cent. of pensioners pay no tax at all. We will do everything that we can in the next few months to help them. The hon. Gentleman is an Independent Member, so he, like those on the Labour Benches, can criticise the Conservatives for not supporting the £60 extra that we are giving to pensioners.
Dr. Stephen Ladyman (South Thanet) (Lab): The people of Gaza want to see aid and trade flowing across their borders again. The people of Israel rightly demand an end to rocket attacks on Israeli towns. Does my right hon. Friend agree that neither side will get those assurances in the long term unless we do more to neutralise the toxic influence of Iran in the region? Can he tell us what more he intends to do, besides the sanctions that he has already imposed, to neutralise that influence?
The Prime Minister: I believe the international community has to show great unity in isolating Iran, not only for the position that it takes on nuclear weapons but for its attitude to Israel. The best way to isolate Iran in the middle east is by finding a settlement between the Palestinians and the Israelis, whereby the middle east countries and the Arab countries can become united in supporting the two-state solution that other people have proposed.
Since the ceasefire, it is important that Israeli troops leave Gaza as quickly as possible. It is important that the crossings are opened. That is being discussed at meetings in Egypt tomorrow. It is also important that the peace process is moved forward. Although this may seem one of the most distant prospects at the moment, I believe we have a duty to use this opportunity to get countries to talk together about the process of peace. But the most important, urgent thing is the humanitarian aid that must be brought into Gaza. We have trebled our support for humanitarian aid, we are helping to transfer children from Gaza into hospitals, we are trying to get rid of the unexploded bombs in the area by working with people in the region, and at the same time we will give all the food aid and all the support aid we can. There has been a terrible catastrophe over recent weeks. We must do everything that we can now to help the people of Gaza, while at the same time stopping rocket attacks from Gaza into Israel. We must see that the ceasefire holds and then brings forward the process of peace.
Q4.  Sir Alan Beith (Berwick-upon-Tweed) (LD):
The Prime Ministers constituents may well benefit from substantial extra European regeneration funding
because Scotland, along with Wales and Northern Ireland, has put in a bid to get unused European money, which is available for hard-hit areas. Will he reconsider the Governments decision not to make a similar application for the north of England, which desperately needs that investment? Why should England lose out?
The Prime Minister: We have successfully lobbied for the European Investment Bank to double the support for cars that have green technology and manufacturing processes. That will help car companies in the north-east. I am not aware that a north-east company has had any application for European Investment Bank support rejected. I hope they will make such applications, and I am happy to talk to the right hon. Gentleman about the economy of the north-east and what we can do to help it.
Q5.  Mr. Ronnie Campbell (Blyth Valley) (Lab): The Prime Minister has to take advice from time to time, but if he took advice from the national newspapers and the Leader of the Opposition to do nothing for the economy, what plight would this country be in now? Will he take advice from me and some of my hon. Friends and nationalise all the banks?
The Prime Minister: President Obama and many countries around the world will be putting forward programmes for public investment in the future: public works programmes, investment in environmental technologies, investment in roads, transport, schools and hospitals. That is what we will do to keep jobs moving in the economy. It is unfortunate, as my hon. Friend says, that there is one party that opposes public investment in the future, and indeed would cut public investment at the time we need it most, and it is unfortunate that the Conservative party is isolated across the world.
Mrs. Jacqui Lait (Beckenham) (Con): The value of Railtrack was talked down by the previous Deputy Prime Minister so that the company could in effect be renationalised. Is that what the Prime Minister and the Chancellor are doing to our banks?
Q6.  Linda Gilroy (Plymouth, Sutton) (Lab/Co-op): May I join in the tribute to those who have lost their lives in Helmand in the past week? Many in the banking sector who have covered things up and given bad advice have paid a price in terms of lost jobs and reputation, but others seem to have got off scot-free. What is being done to drive up performance and behaviour across the banking sector so that our constituents can have confidence that the billions of pounds of their hard-earned taxes that are being used to bail out the banks is money well spent?
The Prime Minister: That is exactly the matter that is being discussed now internationally to agree common standards of disclosure, common standards of transparency, common standards of risk management by the banks and common standards of responsibility to be taken by board members. We will do better by getting an international agreement on these standards and I believe that that will feature in our discussions at the G20 summit on 2 April.