David Cameron gave a warning on Monday night that critics of the nation's banks "end up trashing Britain" as he mounted a strong defence of the financial services industry.
In his annual Mansion House speech, which is normally devoted to foreign policy, the prime minister took a swipe at the likes of the Liberal Democrat peer Lord Oakeshott, who regularly lambast Britain's banks.
Cameron acknowledged that "terrible mistakes" had been made in the City, but he pointed out that financial services contributed an eighth of all government revenue during the recession.
"Yes, some utterly terrible mistakes were made and they need to be addressed properly so they can never happen again," he told his City audience. "But those who think the answer is just to trash the banks would end up trashing Britain. I say recognise the enormous strength and potential of our financial sector; regulate it properly and get behind it."
The prime minister said the government was introducing tough penalties for those in the financial services industry who break the law and the most transparent rules of the world's leading financial centres on pay and bonuses. He also highlighted the government's plans to implement the recommendations of the Vickers report which will ring-fence retail banking from the riskier investment banking.
But he made clear the government would fight for the City if the proposed eurozone banking union jeopardises the single market. "We will fight for rules which deliver open markets, competitiveness and new market access opportunities globally. And, yes, while we support the need for greater integration in the eurozone, including through a banking union, make no mistake, we will never allow a banking union to compromise our fair access to the single market."
The annual Mansion House speech provides a platform for the prime minister to outline his or her thoughts on foreign policy. Cameron told his audience that he was delivering a "different kind of speech" to highlight a new "commercial focus" to Britain's foreign policy.
The prime minister warned of a "global race" to win jobs for Britain, saying he understood why some people felt "squeamish" when he embarked on a tour to the Gulf last week to promote the sale of Eurofighter Typhoons.
"I understand why some people are a bit squeamish about me flying off round the world to help our defence industry do deals abroad. But let me say this. Britain has the most rigorous arms export licensing regime in the whole world – and that is how it will stay.
"But there is a more fundamental point here. Every country in the world has a right to self-defence. And you cannot expect every country to be self-sufficient in providing the tanks, ships and planes needed. So when Britain has a very strong defence industry, with 300,000 jobs depending on it, it's right that we should be at forefront of this market, supporting British jobs and British allies and that's why last week, in the Gulf, I was pushing for new contracts for Typhoon jets worth billions of pounds and thousands of jobs.
"That's vital new business for Britain. And I make no apology for going out there and trying to help win it."
The prime minister also announced the appointment of eight new British trade envoys, from all the main political parties, to drum up trade in emerging markets. They include the Labour peer and Oscar-winning film producer Lord Puttnam of Queensgate, and the former Tory energy minister Charles Hendry.
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