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European Financial Services Proposals

Part of Oral Answers to Questions — Foreign and Commonwealth Office – in the House of Commons at 5:32 pm on 1st December 2009.

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Photo of Mark Todd Mark Todd Labour, South Derbyshire 5:32 pm, 1st December 2009

Let us leave it for the electorate to decide what they make of Conservative policy, its origins and its allies. I certainly listened with attention to the speech of the hon. Member for Fareham. I have to say that Conservative politicians speaking from the Front Bench about Europe always have a somewhat tightrope-like approach, particularly when Mr. Cash is in his place behind them, trying to prod them in other directions. The speech was an interesting attempt to adhere to a tightrope in spite of provocations from time to time.

Let me go to the fundamentals of this issue. The previous model of what constituted not European regulation but advisory frameworks in this policy area was focused on what I would regard as the useful purpose of enabling information and practical experience to be exchanged between regulators in the various marketplaces.

Not everyone feels that talking shops have value. For instance, the Governor of the Bank of England has made a number of entertaining and, one might say, dismissive remarks about de Larosière's thoughts on this area of European intervention. When questioned about the future function of the European systemic risk board, he said:

"Whether this body turns out to be a mere talking shop or a useful talking shop, in terms of an exchange of views and ideas being generated, remains to be seen-that is up to the people who sit on it. We will see. I go to vast numbers of international meetings and I cannot claim that most of them live up to the billing that one would hope. Nevertheless, as I said, hope springs eternal-cautious, moderate hope for this committee-and we will do our best to try and raise the level of debate."

There is certainly evidence that some of the international gatherings that are organised to discuss even the more practical issue of regulation may have relatively little value. However, let us take a slightly more optimistic position than that taken by the Governor of the Bank of England, and suggest that these forums for the exchange of information and experience may have some value. What I have puzzled over is the question of what added value results from an extension of that role of information exchange and experience exchange into an activist regulatory framework. That is what the proposals before us represent, not in their fully evolved form-as I shall explain later, I believe that we are moving along a ramp towards a rather higher level of intervention than we see before us now-but certainly in the early stages of establishing a European regulatory framework in the relevant marketplaces.

I have no principled objection to such an extension as an idea-unlike the hon. Member for Stone, who certainly would-but I should like to see a demonstration of the practical added value that would result from the additional layer of regulatory intervention. I have not seen a case proven which shows that the establishment of some European regulatory framework will cause our consumers to be better protected, our taxpayers to be better protected-from chaos-or the individual trading entities within our nation states to be better protected.

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