They are worried about their savings, and families are struggling to pay their bills at the end of the month. And, of course, the collapse of Bradford & Bingley and the proposed takeover of HBOS has hit the region hard. At a time when the unemployment rate in Yorkshire is already higher than the UK average, this will undoubtedly make life more difficult for many families.

This financial crisis is a challenge for our political system. Political parties and the independent financial authorities must show the character and judgment necessary to make the right decisions under pressure. Our response will have profound implications for the future prosperity of Yorkshire and the country as a whole.

That is why we have made a clear commitment to work with the Government to take action to tackle the financial crisis and prevent more banks from collapsing. This does not mean signing a blank cheque – we will continue to hold the Government to account for its actions.

Our guiding principle should be to protect the taxpayer where possible and preserve the stability of the system where necessary.
We, therefore, support the recapitalisation plan unveiled yesterday.

Injections of capital, with proper safeguards and strict conditions, may be the best way to protect the long-term interests of the taxpayer. The centre-right Swedish government did that in the early 1990s in what is widely seen as the most successful solution to banking crisis ever achieved.

But we must make sure that any support from the taxpayer is used to help save small businesses from closure and enable families to stay afloat, not to pay the bonuses of bankers. We should be rescuing the banks to rescue the economy, not to rescue the bankers.

We also need to look to the future. My team and I have already met the Chancellor and senior Treasury officials to talk about
how we can make sure the Banking Bill, being introduced into Parliament this week, can be passed into law as quickly and smoothly as possible.

This will include the Bank of England-led special resolution régime for dealing with failing banks, that we have been calling for since last year. The point about this proposal is that it would mean that the Government has an alternative to nationalisation if a bank collapses, meaning that taxpayers' interests could be better protected. And when it comes to protecting savers, I am glad to see that our advice on deposit protection has been followed with the announcement that the guarantee limit will be raised to £50,000. In the longer term, we are proposing a new Debt Responsibility Mechanism, which will require banks to put aside money during the boom years to ensure they are not left vulnerable during a downturn.

This will be enforced by the Bank of England, which will be given new powers to take action when lending gets out of hand. This will help to stop debt-fuelled bubbles emerging in the first place by imposing tougher capital rules, bank by bank, during boom times.

The least that we need right now is orderly private-sector recapitalisation to make sure that banks aren't so vulnerable to collapse. Sensible banks are already reducing dividends and raising capital. Regulators must ensure that shareholders and creditors play their part.

As well as taking steps to resolve the financial crisis, the Conservative Party is also proposing action now to help families in Yorkshire cope with the rising cost of living and the impact of the credit crunch.

A Conservative government would go into partnership with your local council to freeze your council tax bill for two years. This plan comes on top of our other policies to help families across Yorkshire. On petrol, we will introduce a Fair Fuel Stabiliser, so that when fuel prices go up, fuel duty would fall.

On energy bills, we will help hundreds of thousands of families across Yorkshire who don't have bank accounts, by reforming Post Office Accounts so that they can be used to access cheaper gas and electricity tariffs, saving low-income families up to £100 a year.

On motoring, we will oppose Labour's new tax on family cars, which will hit one million owners of cars bought up to seven years ago, with tax rises of up to £250.

And as we save money on wasteful welfare, we will abolish Labour's couple penalty in the tax credits system – giving hundreds of thousands of couples an extra £2,000 a year.

People across Yorkshire understand what has gone wrong over the past 10 years. We forgot something we should never have forgotten: An economy built on debt is not an economy built to last. Household borrowing ballooned to the highest ever recorded in a major economy, while the Government racked up the biggest budget deficit in the developed world. Unfortunately, no-one called time on this growing mountain of debt.

When the crisis is over, we will hold the Government to account for what has gone wrong – the system of financial regulation that has failed and the irresponsible government borrowing that has left our economy over-exposed when things go wrong on the other side of the world. But right now, we need to address this crisis and help families cope with the downturn.

George Osborne MP is the Shadow Chancellor.