City of London

When I am promoted after the next election, perhaps to the role of Economic Secretary to the Treasury, I shall carefully take account of the points made by the hon. Gentleman. If I was drawing up a list, I would put them in the following order: high-speed rail, Crossrail and Heathrow. A directive on alternative investment managers is being promulgated in Brussels, about which the Mayor of London is getting agitated. I shall not go into massive detail, but I have read the impact assessment done by the European Commission, and there is a case for regulating more alternative investment managers' funds, such as hedge funds and private equity. I also believe that there is a case for having a set of rules that apply across the sector, because the financial sector is nothing if not innovative, and if we try to regulate only one part of the sector or define it more precisely, we might find that the rules quickly become redundant. I believe that organisations such as hedge funds are of sufficient size that they have the potential to pose a systemic risk to the economy; lending by banks and the herd instinct of many funds could be destabilising. With pension funds now investing much more in alternative investment markets, consumer protection is becoming more important. I broadly believe that a strong case can be made for regulation by Brussels.