Amendment of the law

My hon. Friend makes my point perfectly. This is an issue not only for us but for every other country in Europe, and every other political class in Europe now understands that. They all have the local equivalent of the Federation of Small Businesses writing them letters, sending them e-mails—probably burning tractors in France, I do not know. They are all coming under the same pressure. There is also something to consider in the nature of the business that small businesses go in for. They tend not to be in the great international areas of business that have to compete with China and India. They tend to be localised and service-oriented, so they create the sort of business that is viable in the long term in our western economies. There is a serious deal to be struck among all the EU countries. For me to talk about doing deals in the EU is interesting in its own right, but that is something that we could usefully do. I want to make a rather more esoteric point. The western capitalist market system has been allowed to slip, often by people who do not understand it well. The financial markets in the past few years have resembled a Marxist parody of a free market. They have had huge burdens of silly check-box regulations, but no serious, sensible regulations. Silly decisions have been made, such as the abolition of Glass-Steagall under the Clinton Administration. I cannot make up my mind about whether they did not understand it or whether they were simply bought out by the lobbyists, because $200 million passed into the electoral system from Wall street in those years. The system has come under much pressure, and failed for the reasons that I have discussed, including self-delusion. The massive flow of money from east to west accelerated the failure. India and China saved large quantities of money—much more than they spent—exported the money to us and we spent it. I believe that a Governor of the Bank of England, doing what the FSA was supposed to do, would have spotted, for example, building societies and banks giving 125 per cent. mortgages. A mortgage is part of an investment process, up to spending 100 per cent. of the value of the investment. However, a mortgage of 125 per cent. is a way of transmitting capital into consumption. Somebody who exercised a little common sense would have realised that. He would not have needed a rule, regulation or something laid down by Parliament—he would have seen it coming. We must consider two things. First, we should try to ensure that the structure of our banking and financial systems is such that the important bits can be tackled with some simplicity, not complex check-box regulations. That is one component, and why Glass-Steagall is worth revisiting. The second component relates to the aggregate macro-economic strategy. We must think hard about striking an east-west deal so that the money that has been flowing in a tide from east to west is recycled and goes back, too. The breakdown could happen again in another decade. We should bear it in mind that, in the century before last, such breakdowns happened approximately once every 10 years in America. It could happen again in another decade because the same pressures apply. At the moment, the Chinese are in a mood to talk because their economy is suffering quite seriously.