Cameron vows to work with Government on financial crisis

TORY leader David Cameron said today that everything necessary must be done to protect people's jobs, savings and mortgages as the financial crisis deepened.

In an emergency statement to the Tory conference, Mr Cameron said there would be a "day of reckoning" for the bankers but today was not that day.

"Today we must do everything necessary to protect the stability of the system because everyone's jobs, savings, pensions and mortgages depend on it."

The last minute change to the schedule came after increasing turmoil in the financial markets, following the US Congress's rejection of a 700 billion dollar rescue plan for ailing banks.

Mr Cameron told party supporters that when they arrived in Birmingham the country faced a "very serious" economic situation.

Reaction to last night's vote in Congress showed just how serious that situation had become.

Household names were collapsing, Governments were bailing out banks with enormous amounts of taxpayers' money.

It was a "difficult end to a decade of debt".

The Tory leader said he would use his speech tomorrow to try to answer questions raised by the financial crisis.

He said: "First let us get our attitude towards financial services straight. We must not let anger cloud our judgment. It's easy to see why people are so angry with the bankers today.

"They paid themselves vast rewards when all was going well and the minute it went wrong they came to us to bail them out.

"There will be a day of reckoning but today isn't that day. Today we must do everything necessary to protect the stability of the system because everyone's jobs, savings, pensions and mortgages depend on it."

Mr Cameron said he would work with the Government to ensure the passage of legislation to allow the Bank of England to step in to save failing lenders.

He said he would not allow the "political wrangling" which scuppered the US bailout plan to happen in Britain.

The Tories have dropped a key objection to the Banking Reform Bill to speed its progress through Parliament.

"Today is a time for us to send a clear message to our political opponents and to our country: let us not allow the political wrangling that took place in America happen here in our own country," he said.

Setting out his party's position, Mr Cameron said: "We must pass legislation to enable the Bank of England to rescue failing banks.

"That legislation is ready, it can be brought before Parliament on Monday and I will support it.

"We have been arguing with the Government over one aspect – who pulls the trigger to start the process of rescuing a bank. We argued it should be the Bank of England, the Government argued it should be the Financial Services Authority.

"In the end, what matters is getting the legislation through quickly and so I can announce today we are prepared to drop that objection to allow rapid and safe passage of the Bill and we can return to the issue later."

He also said there was a need for legislation to protect savings and deposits and ensure quick payment.

"If we pass this legislation, everyone will have the comfort and security of knowing that whatever happens their money is safe.

"I'm calling on the Government today to accelerate this legislation, to bring it forward next week, and I can promise them it will have our full support."

Mr Cameron also called for an end to the "self-fulfilling cycle" that has reduced banks' ability to lend to each other.

When the value of financial assets falls, the international "marking to market" regulation automatically downgrades the value of banks, making it harder for them to raise money.

"This is making the financial crisis worse than in previous downturns. Our regulatory authorities, together with European authorities, need to address this difficult issue."

Vowing to carry on with the party conference, he said the financial crisis was not the only issue facing Britain today.

He said he would set out his analysis of how the crisis developed and his plan for the future in his leader's speech to conference tomorrow.

Mr Cameron said: "We will be critical of the decisions over the last 10 years that have brought us to this point and we will talk about the lessons that need to be learned.

"That is our task and we will do it."