Gordon Brown stood in front of an audience of business leaders in Birmingham on Thursday and declared a return to the fundamentals of honest rewards for honest enterprise.
The day after the Prime Minister announced the biggest financial bail-out in British history, he was in the West Midlands to spell out one of the key objectives of the £500 billion rescue of the banks - to get them lending to companies and housebuyers again.
Mr Brown spent an hour taking questions from a business audience, of more than 200 representatives of small and medium-sized enterprises, at the Cornwall Street offices of accountants KPMG.
Birmingham was one of his first stops on a tour of the nation to explain why the Government took dramatic action on Wednesday to support the banking sector.
He was joined on stage by Treasury Minister Yvette Cooper and Business Minister Pat McFadden, MP for Wolverhampton South West and Peter Mandelson’s voice in the House of Commons, for a question and answer session.
Earlier the Prime Minister had talked bluntly of his anger at the way in which banks had been operating. And he declared an end to the era of big City of London bonuses as he called those who take irresponsible risks to be “punished”.
He said he shared public anger at the damage the banks had done to the economy by buying securitised sub-prime mortgage “assets” and by stopping the credit flow when they turned “toxic”.
“I am angry too,” he said. “I am angry at irresponsible behaviour. Our economy is built around people who work hard, who show effort, who take responsible decisions, and where there is excessive and irresponsible risk-taking, that has got to be punished.”
Later pressed on what form such “punishment” would take, Downing Street backtracked, with a spokesman saying the Prime Minister did not want irresponsible risk-taking rewarded.
In Birmingham (“I have always seen Birmingham and the West Midlands as the heart of our country and one of the great industrial centres” he said, buttering up his audience) Mr Brown reverted to the theme.
“We want to reward hard work and responsible risk-taking and recognise enterprise,” he said. “The banking system is absolutely fundamental to everything and confidence in banking has fallen.
“I think we quickly realised that we cannot solve the problems we have got as a result of the sub-prime market collapse simply by improving liquidity. That would simply not be enough to deal with the bigger problem of rebuilding the banking system for the future and restoring trust is a fundamental element of that.”
Throughout the Q&A session, Mr Brown repeatedly stressed that the banks had to respond to this week’s aid package by unjamming the credit mechanism and resume lending to business and homebuyers.
Speaking from the floor, David Smith, chief executive of Jaguar Land Rover, a key West Midland company, called Tuesday’s package a “bold and imaginative plan combined with an interest rate cut that was badly needed”.
But Mr Smith wanted to know what the Government was doing to help the cashflow of small and medium-sized companies - some of them, presumably, JLR’s suppliers, although he did not spell it out.
The Prime Minister reassured Mr Smith that action was being taken to help SMEs, in part by pressuring bigger companies to speed up their payments to their smaller suppliers.
The Government was also trying to get its hands on its tranche of a £25 billion European investment fund faster.
“I understand that a base rate cut, unless it feeds through to small businesses, is a theoretical cut, not an actual cut,” Mr Brown said.
With businessmen and women queuing up to put their concerns to the Prime Minister, John Kelly, a corporate recovery partner at Begbies Traynor, said he wanted action to set up a fund to help struggling companies along the lines of the one set up in the wake of the MG Rover collapse.
Colin Clinton, of civic engineering consultancy Arup, wanted to know why the Government was cool on the idea of a fast rail link between Birmingham and London.
The new ministerial team at the Department for Transport would be looking at that one, but it would probably all come down to cost, Mr Brown said.
Sir Peter Rigby, the technology tycoon who runs SCC, another key West Midland company, wanted to know how long the Prime Minister saw the banking and growing economic crisis lasting.
Mr Brown did not put a time limit on it, but stressed it was a global issue that needed a co-ordinated global response. He had only that day talked to a bank that had not just bought worthless securities last year and this year but had signed up to buy another three years’ worth.
In other words, it’s going to take a long time to sort out, the PM seemed to be saying.
Well known Birmingham corporate finance specialist David Totney got a laugh when he introduced himself as the boss of a firm called Liquidity. He was concerned about the regulatory burden on placed on businessmen.
Again, that’s something the Government is looking at tackling, Mr McFadden said.
Later the Prime Minister also told The Birmingham Post that the Government would do “everything we can” to help the West Midlands economy during the credit crunch.
Referring to the KPMG audience, he said: “I think they supported the actions we took yesterday. They saw it was something that is leading the rest of the world.
“They raised a number of issues about how we can help small businesses, and we said we will look at those issues.”
He highlighted a pledge he made earlier in the week to help small businesses by ensuring they were paid for goods or services provided to Government agencies and departments promptly.
“We announced that Government agencies will pay within 10 days to small businesses, and that is important.”
Mr Brown added: “There are 270,000 different businesses in the West Midlands, and 100,000 new jobs since 1997. I am determined to do everything we can to help the West Midlands economy.
“My pledge is that we will do everything we can to ensure the West Midlands economy is helped by us during this difficult time for the world economy.”
He was accompanied on his visit to Birmingham by Treasury Minister Ian Pearson (Lab Dudley South) and Ian Austin (Lab Dudley North), the new Minister for the West Midlands, who will meet representatives of the Chamber of Commerce and CBI on Friday in Birmingham.
Mr Austin said: “Over the weeks ahead, I will be out and about in all parts of the region meeting small and medium sized enterprises to talk about the measures the Government is taking, alongside officials from the Government Office and the Regional Development Agency.”