A solid prudent plan that I heartly recommend to the house

This is a good plan and an even better plan than the American plan. This plan doesn't buy so called 'toxic debt' and make it a government and therefore taxpayer liability. This plan is about investing in the banking industry and potentially even turning a profit in the coming years when the crisis lessons.

This plan should solve the immediate crisis and though it is likely we will suffer a recession it is likely to be shorter and shallower because of the positive action the government has taken. For all the whiners out there who say we shouldn't bail out the fat cats they should bear in mind that a broken banking system will lead to deep recession or a complete collapse in the economy. At its best it will mean high unemployment and high inflation, at its worst it could lead to hyper inflation, housing crashes and the extreme devaluation of the pound. Doing nothing was never an option.

A lot of people are saying how it is costing the taxpayer over £2000 per person. Well it actually isn't, the government will borrow the money either from existing reserves, or by selling government bonds etc which are always in demand. They could even cut spending to compensate or in the worst case the £2000 could be reclaimed off people via the tax system over the next ten years.

Plus don't forget tax can be raised from businesses too or that higher rate tax payers could be made to pay more, £2000 per person is literally only the total cost divided by the number of taxpayers. It is another virtually meaningless statistic.

The government is used to sudden demands on capital reserves, natural disasters cause immediate demands. You may find that some of the £500 bn has already been budgeted for in the budget forecasts, it would be bad financial planning by the government if they had not allowed for contigecy funding.

If the worst came to the absolute worst then the government could just print more money or even sell off gold reserves, although both could cause inflation and the devaluation of the pound.

The other good thing is that we are not kissing goodbye to the £500 bn, some £50 bn of the money will buy banking stock as preference shares which means the government will own part of the banks and will get any profit made in preference to other share holders. There is quite a reasonable possibility of the government making a profit, after all when have you ever know a bank like Lloyds making a loss even in these crazy times.

Some of the money, £250 bn is only available as guarantees for bank loans so that will only have to be handed over if a bank defaults on a loan, I think within the next three years and again as everyone keeps saying most of the banks are perfectly well capitalised and unlikely to default on reasonable loan terms, they just cant cope with the crazy loan rates they are being offered at the moment so cant re-finance their debt.

The short term loans, £200 bn, should by and large be repaid with interest. So in all cases there is a reasonable chance we will get the entire £500 bn back plus interest. Even if we don't it is completely unlikely that we will loose any kind of large amount. Even in the absolute worst case once the money comes back into the government it would be hard to imagine any scenario where the government had lost more than £50 bn. This is simply because none of the UK banks are at risk any more. All of the banks with the heavy mortgage exposure have either been nationalised or taken over. All the remaining banks are well capitalsed with a good balance sheet and assest book.

Of course the stock exchange disagrees but this may be simply because the traders are in a blind panic. Once the dust settles and they run out of steam things should start to return to normal. Of course one of the reasons the market is falling is because a lot of people are making money off selling and buyers are too scared to re - enter the market in any great numbers. Once the buyers feel the market has bottomed out they should buy again. In all likelihood if we have a couple of days of peace the volumes traded will decrease, the sellers wills stop selling and the buyers will re - enter.

The icing on the cake if you like is that any bank signing up for this money will have to sign up to an FSA code of practice of executive dividend, pay and bonus payments. The final element of structural reform which can only strengthen the banking system and the economy in the future.

In conclusion, Mr speaker this is a excellent plan and I heartily recommend it to the house.