This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/uk_politics/7924979.stm

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
UK needs right touch - Mandelson UK must learn lessons - Mandelson
(about 9 hours later)
Banking regulation has to be "the right touch", not "the light touch", Lord Mandelson has told business leaders. The UK must learn the lessons of the banking crisis to ensure the regulatory system works better in the future, Lord Mandelson has said.
The government was trying to combine a competitive market with a greater sense of public responsibility, the business secretary said in a speech in London. The business secretary told the BBC the regulatory regime set up by Labour was designed well but had been exposed to an "almighty and unprecedented shock".
"A modern industrial economy is built not on money as such, but on the stable and reliable availability of credit," he told his audience at Mansion House. Ministers are under pressure to admit the UK was ill-prepared for the crisis.
He said the UK would emerge stronger and better from the global recession. Earlier Lord Mandelson told business leaders the UK would emerge stronger and better from the global recession.
Lord Mandelson said he had spent months explaining to "angry" businesses why banks had an "urgent and unique claim" on the taxpayer's support. 'Working better'
In a speech in London, he said the government was trying to combine a competitive market with a greater sense of public responsibility.
Opposition parties have been urging ministers to admit they made mistakes in failing to regulate banks properly and limit the impact of the financial crisis on the wider economy.
The regulatory framework we put in place received an almighty and unprecedented shock Lord Mandelson
In an interview with the BBC, Lord Mandelson defended the much-criticised system of financial regulation set up by Gordon Brown in 1997 as "basically a good design".
While the framework was generally sound, he told Newsnight, it had received an "almighty and unprecedented shock" and it must be able to respond better in future.
"Which is precisely the lesson we have to learn in making sure that in the parts of the regulatory system we put together it works better in response to a future shock should one occur," he said.
Lord Mandelson, a key figure in shaping the government's response to the recession, told business leaders on Wednesday that banking regulation should be "right" rather than "light touch".
He said he had spent months explaining to "angry" businesses why banks had an "urgent and unique claim" on the taxpayer's support.
He had "bruises and scars to show" from that experience, and added: "The demand for a sounder, more sober model of banking will shape the expectations of a generation of businesses."He had "bruises and scars to show" from that experience, and added: "The demand for a sounder, more sober model of banking will shape the expectations of a generation of businesses."
The legal and commercial expertise that has developed here has not somehow been wiped away in the last year Lord Mandelson The UK would be a "different country" after the economic downturn, but City institutions would remain central to the economy. The UK would be a "different country" after the economic downturn but City institutions would remain central to the economy, he argued.
Mandelson says no 'overnight solutions'
"It is important to recognise that whatever went wrong in some City institutions, the legal and commercial expertise that has developed here has not somehow been wiped away in the last year.
"They will remain central to the UK economy in the decades ahead, just as they have been for centuries."
He promised "renewed focus" on public sector reform, referring to the controversial plan to sell off 30% of Royal Mail.He promised "renewed focus" on public sector reform, referring to the controversial plan to sell off 30% of Royal Mail.
The minister said there would be constraints and opportunities in the next decade, with controls on public spending.The minister said there would be constraints and opportunities in the next decade, with controls on public spending.
Comparing the nation to a blue chip company which had taken "a knock in daily trading", he said its fundamentals would be borne out when the global economy returned to growth. Politics of reconstruction
Mandelson says no 'overnight solutions'
He said the shape of the UK economy and the relationship between the private and public interest would need to change and there would have to be a "politics of reconstruction".He said the shape of the UK economy and the relationship between the private and public interest would need to change and there would have to be a "politics of reconstruction".
"That's one of the reasons why the government made the decision to push ahead with modernisation of the Royal Mail, because an unreformed service is a drag on public resources at a time when every pound matters more than ever," he said."That's one of the reasons why the government made the decision to push ahead with modernisation of the Royal Mail, because an unreformed service is a drag on public resources at a time when every pound matters more than ever," he said.
"It means, I believe, some basic choices about where and how we invest public money, and there is no priority more fundamental than the return to growth, and a balanced economy for the future."It means, I believe, some basic choices about where and how we invest public money, and there is no priority more fundamental than the return to growth, and a balanced economy for the future.
"That underwrites everything else.""That underwrites everything else."
The minister said private enterprise would drive the UK's future success and competition would keep the country "lean and innovative". Lord Mandelson also repeated the case against protectionism, an argument made repeatedly in recent times by Gordon Brown.
Open market
He also repeated the case against British protectionism.
"British companies thrive in, and depend on, an open European and global market, and the same is true for any European country or company," he said."British companies thrive in, and depend on, an open European and global market, and the same is true for any European country or company," he said.
Lord Mandelson said that despite the current economic downturn, the UK's strengths built up over the past had to be recognised - including in the City.
"It is important to recognise that whatever went wrong in some City institutions, the legal and commercial expertise that has developed here has not somehow been wiped away in the last year.
"They will remain central to the UK economy in the decades ahead, just as they have been for centuries."