Following Ed Balls' appointment, the two coalition parties have been quick to point to Labour's regulatory failures. But the consensus on light touch regulation came from all three parties.
Following Ed Balls’ appointment as shadow chancellor, the two coalition parties have been quick to point to regulatory failures made by the Labour government in office. But the consensus on light touch regulation came from all three parties.
The Financial Times quotes Michael Fallon, Tory deputy chairman and their attack dog on economic matters:
“Ed Miliband and Douglas Alexander can complain all they like about Labour’s terrible record on banks, but Ed Balls, the man responsible for 13 years of regulatory failure, is now back in charge of their economic policy.”
Yet in June 2006, George Osborne wrote in the Telegraph:
“Many of the regulations that affect the City, such as the Markets in Financial Instruments Directive, originate with the European Commission.
“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.”
Indeed, as late as August 2007 – when credit market were starting to freeze – the Sunday Telegraph revealed that the Tories had “a radical programme of cuts in red tape and regulation aimed at saving British businesses £14 billion a year”.
The Lib Dems like to claim that Vince Cable saw the crash coming giving Nick Clegg more license to make claims such as:
“If you ask yourself who was in charge of the City when they were gorging themselves on bonuses and lending irresponsibly … who was whispering into Gordon Brown’s ear budget after budget, creating this huge fiscal deficit – the answer to all of those questions is Ed Balls.”
But as Channel 4 Fact Check has documented, Vince Cable had been a supporter of Gordon Brown’s light touch economic policy. Speaking in the House of Commons in support of the Labour government’s Financial Services and Markets Bill which established the Financial Services Authority:
“I want to express broad support for the bill, whose philosophy and whose architecture of financial regulation reflect a broad consensus.”
According to the New Statesman, Cable said “No one is arguing for an increasingly severe, more onerous and dirigiste system of regulation.” Any regulation, he said, should be “done on a light-touch basis”.
On the regulation of the City before the financial crash, politicians of all parties certainly were all in this together.
45 Responses to “Lib Dem, Tory and Labour all in this together on financial regulation”
william
When will the new Labour inner cabal inhabit the real world?The financial catastrophe took place,2 MAJOR Scottish banks imploded,on our watch.Now we have the walking away of major donors ,in a very public manner,because of the closer alignment to the unions and all the left wing nonsense that TB got rid of.Pretending that other political parties went along with the disastrous policies of banking non control, initiated by GB and Balls,will not wash with the electorate in 2014 or whenever.The party’s leadership are behaving like Liverpool FC.Big crowd(29 percent of voters), used to win lots of things,must be our turn soon.
Will Straw
A few points by way of response:
1. No-one is pretending that Labour wasn’t too blame for lax financial regulation. Ed Miliband has admitted so as has Ed Balls: http://www.newstatesman.com/uk-politics/2010/07/balls-interview-labour
2. The point is that the Lib Dems supported the Financial Services and Markets Act and the Tories railed at Labour for years about imposing too much regulation. Who does the regulating (although important) is less critical than what is being regulated and on this everyone had their head in the sand. Cable was quicker than the rest to spot the housing bubble and problems with box ticking by City regulators but didn’t oppose the initial deregulation.
3. There is no evidence to support the argument that the 10% deficit was Labour’s fault. It would have been better if there had been a current budget surplus in the mid-2000s but the (very) modest deficit at that stage did not cause the huge rise later. For more see this report: http://www.ippr.org.uk/publicationsandreports/publication.asp?id=799
Tweetminster
"Lib Dem, Tory and Labour all in this together on financial regulation" http://bit.ly/ggtI3T – Left Foot Forward
Pat Cox
RT @tweetminster: "Lib Dem, Tory and Labour all in this together on financial regulation" http://bit.ly/ggtI3T – Left Foot Forward
Anon E Mouse
Will – All your points may be valid but it happened on Labour’s watch I’m afraid.
Read your link to Ed Balls – fair enough…