Speeches by Grady.

“Continuing the discussion on headroom, Mr Hughes, in your presentation in March, you said, “This Spring Statement breaks a historical pattern of asymmetric policy responses to forecast changes—in which windfalls were generally spent but shortfalls were not fully made up.” Against that background, do you support the Cha…”

“When looking at your own finances, would you try to adopt a symmetric approach to such shocks and windfalls, if properly advised?”

“In chart 7.2 of your report, we see that headroom averages £30 billion, but after Mr Sunak’s last Budget, in March 2022, it is around £10 billion, so over the last three or four years there has been much lower headroom—it is not a new turn of events. Presumably, if we were to expand it up to £30 billion, that would inv…”

“This may be a question for Professor Miles. If we carried out significant spending cuts and tax rises to get us back to £30 billion, what would that do to growth in the short run?”

“If you slammed the brakes on, that would be damaging to growth.”

“The other thing that some people are saying is that the Government should just increase borrowing. Professor Miles, what would be the risks of increasing borrowing and an associated change in the Chancellor’s rules?”

“If a family has just bought a house in Mount Vernon in my seat, is it in their best interests, from the point of view of their mortgage rates, that the Chancellor of the Exchequer does not radically increase borrowing?”

“Reckless management of public finances leads to higher costs of Government borrowing. As any economist will say, that increases the cost of capital across the British economy, putting at risk and increasing the cost of the essential investments in housing and infrastructure that my constituents desperately need. Does m…”

“People rely on this sector more than ever, so trust in it is critical. This is maybe a question for Mr Alder. Obviously, we have the review that we have just been discussing. If you look at the investment universe, including things like crypto, do you think much more is needed beyond that review to secure good advice a…”

“A final question from me on this chapter, before we move on. We have got the motor finance case, we have got the Collateral case, Safe Hands, and potential issues with BNPL. That is in a lower-risk environment. As we go on this dash for growth, would more of these cases fall within a tolerable or acceptable level of ha…”

“But it is a good answer.”

“I am sorry, Mr Alder; I do not want to interrupt, but we might come back to Safe Hands. We have read the correspondence, which is very helpful. The question I am getting at is more, if you look at it from the point of view of, not a Financial Times reader, but someone like me, sitting in Shettleston on a Friday night, …”

“That is good. Turning quickly to compensation, I do not want to get into the detail of these cases, but in the Collateral case the FCA has said that it could have done better, in simple terms. For Safe Hands there is no compensation whatsoever. That low level of compensation for Collateral and no compensation for Safe …”

“Have you got any data on consumer understanding of what all this means?”

“No, just more generally, just an investor in Shettleston saving for their pension or their grandkids.”

“It also follows, because the FCA is full of human beings, that that judgment may sometimes turn out to be less than ideal in retrospect and that some firms that were not supervised intensively could have done with a bit more intensive supervision. It also follows that the FCA does not guarantee that any firm is well ru…”

“From the point of view of a consumer in Shettleston, with that proportionality and risk-based approach, it must follow that some firms are monitored intensively and some firms not at all, or to a limited extent.”

“So the FCA may not be supervising that firm in any great detail at all?”

“The fact that I have the FCA label on my website does not mean that the FCA is supervising the firm intensively, does it?”

“Or the last, for that matter.”