Business Secretary Vince Cable has promised to cut business regulation, reduce Government spending and develop policies to stimulate growth.
In his first speech as Secretary of State, Cable defended his economic credentials as a free trader who believes in open markets and promised to reduce the amount of red tape that businesses have to deal with.
Cable said: “Often the most useful thing governments can do is simply get out of the way.”
He said he was still pressing ahead with his plans to reform the UK banking system and promised the establishment of a banking commission, with the aim of separating retail and investment banking functions. He also repeated the idea of imposing a levy on banks to cover the cost of future bailouts.
But Cable also warned of the danger of overdoing regulation and said the failure of the banking system should not be seen as either a failure of capitalism or a general failure of the financial system and warned of the need to guard against overregulation.
He said: “Part of the problem more widely is what I have called the new interventionism – the philosophy that interprets the banking crisis as a failure of markets in general rather than financial markets in particular.
“That leaps straight from a discredited approach based on the naivety of efficient markets to a statist approach based on economic nationalism and protectionism. That has to be resisted, especially in our European backyard, where the protectionist instinct is often worryingly strong. The fact it has not yet materialised does not mean the threat has gone away.”