George Osborne today blamed the previous government for the lack of banking regulation that led to the Barclays scandal. However, he was attacking the Labour Party for quite the opposite back in 2006 when he accused them of enforcing “too much regulation”.
Writing for the Telegraph in June 2006, the chancellor said:
“I fear that much of this regulation has been burdensome, complex and makes cross-border market penetration more difficult.
“This is exactly the wrong direction in which Europe should be heading and it threatens the global competitiveness of the City of London.”
Today, Osborne had a change of heart and now feels the last government’s regulation system was not strict enough.
The Guardian reports:
[Osborne] said the Barclays scandal exposed the weakness of the tripartite regulatory regime set up by Labour. [He said] the worst abuses happened when Labour was in power, and before the financial crisis. He said the new regulatory regime being introduced by the government would be “far tougher” than the tripartite system it will replace.
He told Parliament:
“Through 2005, 2006, and early 2007, we see evidence of systematic greed at the expense of financial integrity and stability. They knew what they were doing wrong.
Yet no one at Barclays prevents them. And no one in the tripartite regulatory system knows anything about it. The Government of the day was literally clueless about what was going on.
This government is getting rid of the whole tripartite system. The Financial Services Bill now before Parliament will create a new, far tougher regulatory system.”
Osborne isn’t the only culprit in this story, as the prime minister also confessed his distaste for Labour’s “excessive bureaucratic interventionism”:
As a free-marketeer by conviction, it will not surprise you to hear me say that a significant part of Labour’s economic failure has been the excessive bureaucratic interventionism of the past decade too much tax, too much regulation, too little understanding of what our businesses need to compete in the modern world.”
Labour hardly wrapped itself in glory with its approach to the City before the financial crisis, but Osborne should know those in glass houses shouldn’t thrown stones.