Monday, April 28, 2025
Deregulating like it's the 1980s again - Labour risk another banking crash
The Independent reports that Rachel Reeves has told senior economists and business leaders that she wants to rip up regulations on the financial services sector brought in after the this crash.
The paper says that Reeves has been desperately looking for ways to kickstart economic growth in the UK, which has flatlined since Labour came to power last July with the country teetering on the edge of going into recession:
She said: “Excessive regulation makes it hard for new entrants to come into market, puts up prices for consumers.
“So I do think that we've gone too far in one direction. And of course, after the financial crisis, we had to put in place a good, greater set of regulations than we had before, sure, but we are now what you know, getting on for 20 years since the financial crisis. And I do think we've got to think about that balance.”
When major banks and financial institutions collapsed around the world in 2008 because they were overleveraged on the property markets, the then-Labour government in the UK was forced to bail out Lloyds, Halifax Bank of Scotland and the Royal Bank of Scotland.
Gordon Brown’s government had to nationalise Northern Rock and the collapse saw new red tape and regulations brought in to prevent a similar crisis from happening again.
Internationally, the crisis saw whole countries’ economies, including Greece and Ireland, having to be bailed out.
But Ms Reeves, who until the debate had not indicated any major policy change on her trip to the International Monetary Fund conference of finance ministers in Washington DC, was clear that she considered financial regulation to be similar to environmental.
She repeated Labour’s plans to strip away protection for nature to allow new infrastructure and housing to be built.
This is seriously risky stuff from Labour. It is bad enough that they are compromising our environment with their growth agenda, but unleashing speculators in financial markets devoid of many of the safeguards put into place after the crash, is risking further economic chaos.
The paper says that Reeves has been desperately looking for ways to kickstart economic growth in the UK, which has flatlined since Labour came to power last July with the country teetering on the edge of going into recession:
She said: “Excessive regulation makes it hard for new entrants to come into market, puts up prices for consumers.
“So I do think that we've gone too far in one direction. And of course, after the financial crisis, we had to put in place a good, greater set of regulations than we had before, sure, but we are now what you know, getting on for 20 years since the financial crisis. And I do think we've got to think about that balance.”
When major banks and financial institutions collapsed around the world in 2008 because they were overleveraged on the property markets, the then-Labour government in the UK was forced to bail out Lloyds, Halifax Bank of Scotland and the Royal Bank of Scotland.
Gordon Brown’s government had to nationalise Northern Rock and the collapse saw new red tape and regulations brought in to prevent a similar crisis from happening again.
Internationally, the crisis saw whole countries’ economies, including Greece and Ireland, having to be bailed out.
But Ms Reeves, who until the debate had not indicated any major policy change on her trip to the International Monetary Fund conference of finance ministers in Washington DC, was clear that she considered financial regulation to be similar to environmental.
She repeated Labour’s plans to strip away protection for nature to allow new infrastructure and housing to be built.
This is seriously risky stuff from Labour. It is bad enough that they are compromising our environment with their growth agenda, but unleashing speculators in financial markets devoid of many of the safeguards put into place after the crash, is risking further economic chaos.
