In a House of Commons debate today (Thursday) on financial stability, Mark Lazarowicz MP, Labour MP for Edinburgh North & Leith,  spoke of the importance of the UK Government’s bank plan for Edinburgh’s financial sector and for the wider UK economy.

See Mark's speech in the House of Commons here. Read the full debate on financial stability here

Mark said: “There is undoubtedly a lot of concern amongst the public at the fact that this bail-out for the banks was necessary. I am sure I am not the only MP who has had emails and phone calls overnight from angry constituents about the fact that people who have made massive amounts of money and enjoyed massive bonuses are now expecting the taxpayer to pick up the tab for their mistakes.

That public anger is not misplaced. But there is no doubt that the action yesterday was both right and necessary.

I speak, of course, as a member representing a constituency in Edinburgh where the problems in the banking and financial industry have a very direct and immediate local dimension. 16,000 people in Edinburgh are directly employed by HBOS or RBS. Thousands more in Lloyds TSB or its subsidiaries including Scottish Widows. Thousands in other businesses such as Standard Life. On top of the many thousands of my constituents directly employed in this sector, the jobs of thousands more are indirectly dependent on the banks and financial services sector. That is why I and my other Parliamentary colleagues have been in regular contact with senior management in these businesses, with our colleagues in the Scottish Parliament, with our local government colleagues, and of course with the Chancellor himself.

The package announced yesterday should give reassurance to those employed by the banks and the financial sector – in Edinburgh, but also in Halifax and elsewhere. It should allow an ordered recovery from the current crisis, and make it possible for decisions to be taken on a longer term basis and in the longer term interests of the banking sector and of the economy as a whole. I hope that, along with the effect on small businesses, one of the factors that the government will take into account when arranging the details of any support for particular banks will be the effects on the thousands of ordinary people employed by those businesses – they should not be the victims of greed and excessive ambition higher up the institution.

But of course everyone in Edinburgh would be affected in the same way as in the rest of the UK by a melt-down in the banking sector. The local authorities who are now facing the loss of  millions of pounds as a result of the failure of Landsbankki in Iceland emphasises how the effects of a bank failure rapidly spread out into the wider world. If, heaven forbid, if one or more of the big British banks were to fail, then it wouldn’t just be a few local authorities as with this case – every local authority in the country would face the inability to meet its pension commitments and to continue to provide vital services for their communities.

........the action taken this week must only be the start.

Firstly, we do need to return to sound banking practices here in the UK.......The problem is not with just a few people at the top earning big bonuses, although that’s certainly part of the problem, and if public money is put in to any bank, part of the condition must certainly be an end to such payments and practices. But the big bonus culture is just the symptom of a much wider cultural problem which will need action in a number of ways to sort out – from the government, the regulators, and the industry itself. And the public expect us to do that – and they will be very angry indeed if that doesn’t happen.

A return to sound banking will also be more likely to be brought about if the government and regulators seek to strengthen those sectors of the financial services sector which haven’t fallen prey to the greed and irresponsibility of some, not all, in other sectors – I refer to the mutual sectors, the building societies, where although there have been problems, which have been dealt with, haven’t overextended themselves with massive international expansion, funded by expensive borrowing, in the way that some of the banks have.

Secondly, it is absolutely clear that we need stronger international rules and agreements to ensure collective action can be taken successfully. I believe that the action taken by the UK can lead the way in setting an example for the rest of the world. Finally, we also need to strengthen the ability of the EU to act together – the fact that clearly that didn’t happen in the way it should have should not lead us to the conclusion that the EU’s role should be weakened – rather the conclusion we should draw is that it is time to strengthen the ability of the EU to ensure its members work together in such a crisis and actually put into effect a common response and action plan when it is agreed. “

See Mark's speech in the House of Commons here. Read the full debate on financial stability here