Forget blaming New Labour, here's what the Conservatives said about deregulation in 2007

Jeremy Corbyn delivered a harsh blow to his own party’s past economic polices in a speech to the Chambers of Commerce on Thursday.

The left-wing Labour leader argued that it was New Labour’s "light touch" regulation during 2007 and 2008 that led to the subsequent financial crash that almost bankrupted the UK.

The political consensus at that time was to opt for light touch regulation of finance – and sit back and collect the tax revenues.

But you cannot base a decent social policy on an unsustainable economic policy.

Yes, the Labour leader has effectively blamed Labour for the bad economy, but Corbyn advocated a change not only in the way the party makes its policy in future, but also a comprehensive reform of the banking sector.

Finance must support the economy and not be an extractive industry that treats consumers, entrepreneurs and businesses as cash cows.

While reactions from his own supporters have been mostly positive, criticism came from likely places.

The Conservative Party press office trotted out a line it used repeatedly before last year's election:

However, while the criticism piles on Labour - after all, the economy was one of the main reasons it lost the election - it must not be forgotten that the Conservatives had called for even less regulation and "red tape" before the financial crash.

A Conservative report submitted to the Shadow Cabinet in 2007 - and endorsed by David Cameron - advocated, in some cases, the complete abolition of certain regulatory policies.

The report from the Economic Competitiveness Policy Group said:

We should be very sceptical of why we need a fifth layer of ‘protection’ in the form of regulation. Much of this additional regulation impedes progress, and acts against the customer interest.

The intrusion of regulation limits innovation.

The more so-called employee protection you have in law, the fewer jobs there will be for the people looking for work.

We recommend deregulating venture capital fund raising, and investment for professional investors.

We propose the repeal of the Legislative and Regulatory Reform Act.

We need to make it more difficult for minsters to regulate.

So before we go blaming Labour for poor economic policy, let's just consider what it could have been like under the Conservatives.

HT Tom Pride

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