Chancellor of the Exchequer Alisatair Darling used his speech at the Labour Party Conference in Manchester this afternoon to give centre stage to the challenges of globalisation: the risks from high oil prices and the credit crunch on the one hand, and the advantages of increased employment and wealth for the UK on the other.

In a solid speech, he said the secret of navigating the “unprecedented global challenges” of this downturn was “effective regulation”, rather than either "light or heavy-handed regulation", coupled with international cooperation. One government alone cannot deal with the challenges, he said.

The Chancellor – never a darling of the unions – brushed aside criticism that he is pandering to the unions on tighter financial regulations, saying that it is clear to all but the Tories that the City needs more effective control.

This will be addressed in a new banking bill in a fortnight, he said – a bill that will be analysed to see how strict those recommendations actually are.

The Prime Minister himself has contributed to an unfettered banking culture, and the Government is unlikely to over-regulate the shrinking, less competitive banking sector that remains the engine of the service economy.

Despite a few verbless sentences that recall the Blair age, the Chancellor's speech received what can best be described as a polite standing ovation, rather than an ecstatic one: one could imagine the tottering edifice of government balanced on delegates' shoulders.

That said, it's becoming clear that the extraordinary events of the past week – US nationalisations, plus record stockmarket falls and bounces – have given the Brown government an opportunity to throw new light on its earlier, much-criticised decisions, such as the nationalisation of Northern Rock. Put in the context of recent US events, that decision now seems prescient and stabilising, rather than muddled and mishandled as it was seen at the time.

It is also an opportunity to put some clear water between Labour and the Tories: the public would support signs of the Government intervening strongly in the City – something that David Cameron would be reluctant to advocate.