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The Economy

Perhaps I might ask the right hon. Gentleman when he first gave me a warning about what was happening with debt in the British economy. We have heard that somehow all these issues are problems caused by our national regulatory arrangements. They clearly are not, because they manifest themselves around the developed world in advanced financial services and, in particular, in banks. Far from demanding more regulation during the passage of the Financial Services and Markets Act 2000, which created the current tripartite arrangements, the Conservatives called for less. The right hon. Member for Wells (Mr. Heathcoat-Amory), for example, said from the Tory Front Bench on Second Reading of that Bill that""we believe that regulation should be minimal"" and that their concern about the Bill was""the danger of over-regulation".—[Official Report, 28 June 1999; Vol. 334, c. 42-44.]" The hon. Member for Chichester (Mr. Tyrie) expressed similar concerns. Four years later the then shadow Chancellor, the right hon. Member for West Dorset (Mr. Letwin), announced that an incoming Tory Government would abolish or rein in the FSA because of its "intrusive regulatory regime". In March last year, in the middle of the credit crunch, the Leader of the Opposition was still at it when he said:""I understand totally that the strength and success of the City of London has been based on light-touch regulation"." It is little wonder then that just as the credit crunch took hold the right hon. Member for Wokingham (Mr. Redwood) was unveiling plans to scrap completely the regulation of all mortgages. So, are the Opposition in favour of boosting demand?