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An "Enron" speech

Posted by Richard Friday, October 17, 2008

Mr David Cameron has delivered a speech, heralding The Conservative plan for a responsible economy. Parts of it are good – some of it is very good, very good indeed.

However, good or bad, in 4,956 words, there are two words missing: "European Union". Nowhere in this wide-ranging speech can those two words be found.

Oddly enough, the speech opens with this stirring passage:

Politics is about many things – the words you speak, the understanding you have of the problems we face, the vision you have, the policies you draw up and your ability to implement them.
With this, of course, we could hardly disagree. But we would add a small rejoinder of our own. Politics is also about the words you don't speak. And in this case, the silence speaks volumes – it screams out and attacks, nay destroys the last part of the sentence: "…the policies you draw up and your ability to implement them".

Mr Cameron, you need to be aware of a few facts of life – although I guess you must know them already, but they need restating:

  • The regulation of financial services is an exclusive European Union competence – it comes under the Single Market provisions and is touched by other aspects of the treaties, such as the "freedom of movement of capital" and "right of establishment".

  • Not only is this an exclusive competence, it is also what is known as an "occupied field", an area in which the European Union has chosen to legislate.

  • This means that member states have very limited powers. They may not legislate in areas which are already covered by EU law and which will interfere with or in any way contradict EU law. And EU law, as you well know, is supreme and cannot be changed unilaterally.

  • As a general rule, the member states may only legislate in this field in order to implement EU law, to clarify it or to ensure its proper enforcement.

  • A member state may, however, go further than EU law, but only if it does not contradict EU law and does not impinge upon treaty provisions, such as "freedom of movement of capital", and then only with the express permission of the EU commission.


  • The scope for any British government to legislate and control financial services is, therefore, extremely limited. Many of your proposals thus, while excellent on their own account, would – if you tried to implement them – impinge on EU law. In short, you could not implement them – at least, not without confronting the EU, which you have no intention of doing.

    In my school days, we were taught the meaning, the definition of a lie. It is not simply the utterance of an untruth. In full, it is the "act, default or sufferance". You can also tell a lie by not saying something, which conveys thereby an untruth.

    In omitting the words "European Union," you seek to convey that you, as leader of a Conservative government, could and would do certain things which you must know – you cannot avoid knowing – you cannot do. You seek to convey the impression that you are in control when you must know that you are not.

    This, Mr Cameron, is an "Enron" speech. In the US, they put the Enron directors in jail. What should we do with you?

  • Other posts on the financial crisis here.


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