City of London

If things are taken to an absurd level, one would have to agree. Clearly, there needs to be some regulation, not least to protect consumers. To return to the history of the City of London, I was joking with my hon. Friend the Member for West Suffolk earlier that we should look at the great scandals that took place in the Victorian era, when mines and railway promoters ripped off consumers. Clearly, that did nothing of value. There is a strong argument for saying that much of what should have given this country's industry a competitive advantage was undermined because there was no proper regulation or sense of transparency in the City of London in that era, when transparency and regulation were very much in their infancy. It is at least valid to say that. Clearly, having an entirely laissez-faire approach does nobody any favours—indeed, it does not bring in crucial investment. To return to my earlier point, the directive as currently drafted would, at a supranational level, diminish competition and restrict flows of liquidity into the single market. It would also be seen as protectionist at the very time when barriers need to be brought down, rather than erected. At a domestic level, I fear that it would significantly diminish London's critical mass as a financial centre and reduce individual and corporate tax revenue. The hon. Member for Selby rightly said that the City of London has been a huge cash cow in the past, and one hopes that it will be one in the future. The directive could also damage the market for the professional services that assist the hedge fund and private equity industry, such as law, accounting, investment consultancy and specialist IT.