Osborne pledge to rebuild banks

George Osborne apologised for the MP expenses row

Douglas Fraser's blog

Shadow chancellor George Osborne has pledged to rejuvenate the Scottish financial sector by rediscovering its "traditional values".

He told the Scottish Tory Conference it had to be encouraged to once again lend prudently and encourage saving as well as borrowing.

UK ministers ploughed millions into saving the Royal Bank of Scotland and backed the HBOS/Lloyds TSB merger.

Mr Osborne also apologised for the expenses row which has engulfed MPs.

Much of the blame for the crisis in the UK banks has been laid at the door of their bosses.

'Reckless past'

"I want to get Scotland's financial services back on its feet again," Mr Osborne told delegates in Perth.

"We have to rediscover some of the traditional virtues of Scottish banking.

"Thrift. Knowing your customer. Lending prudently. Asking for a deposit in return for a mortgage. Encouraging people to save as well as borrow."

The shadow chancellor went on to accuse the Scottish National Party of failing to understand there was a limit to financial borrowing, while saying Prime Minister Gordon Brown was now trapped by his "reckless past".

"The child born today in Perth Royal Infirmary is born owing £22,000 in national debt before they even open their mouths and take their first breath," Mr Osborne said.

Turning to the on-going Westminster expenses revelations, he said: "I don't excuse the scandal of the MPs expenses. I apologise for it.

"We will right past wrongs - and we will sort this mess out."