In 2006 George Osborne wrote:
A party that aspires to be the next government and wants to prepare Britain for the challenges of the next century has got to understand the City’s priorities.
Nothing could have been clearer about what he saw his priority to be: keeping his friends in the City happy was his task.
His first objective in fulfilling that goal was, he said:
Where once we had one of the most competitive corporation tax regimes in the world, now we have one of the least. … [O]ver the long term we want to move toward lower taxes in order to restore Britain’s economic competitiveness.
That’s why the government now praises itself on becoming tax haven UK – outdoing Switzerland, the Netherlands and Ireland in offering low and no taxes.
His second object was:
[W]e have to get regulation right – domestic and European. … I fear that much of this [current] regulation has been burdensome, complex and makes cross-border market penetration more difficult. This is exactly the wrong direction.
To put it another way, what he was very clearly saying was that labour was over-regulating the City and that its ‘light touch’ regime was harmful. And so we learn today from the FT that:
According to the influential Parliamentary Commission on Banking Standards, elements of the government’s proposed new banking legislation are “extremely weak” and must be urgently toughened.
Osborne’s sticking to his word. Light tax and light regulation was the promise, and that’s exactly what he’s delivering.