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Comprehensive Spending Review

I shall come on to that point. And by playing a massive game of financial jiggery-pokery, the financial institutions had made it impossible to say with confidence who was solvent, who was insolvent and who was simply short of liquidity. Their reaction was to conserve cash, refuse to lend—even overnight—and thereby threaten a seizure in the world financial system. When banks stop lending, firms and consumers stop spending, throwing jobs into jeopardy everywhere. It is a fair question—the point that was muttered from a sedentary position is in that direction—to ask where the regulatory bodies were while all that was going on. Actually, the Conservatives are demanding less regulation, even given the historic judgment that there was inadequate regulation before. But it is not fair to claim that the crisis was due to reckless spending by Governments and excessive public borrowing, certainly not in the United Kingdom and certainly not by our Labour Government.