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Cameron's hollow speech on "popular capitalism"

His speech was eloquent and historically rich but desperately short on specifics.

You can't fault David Cameron's chutzpah. His speech earlier today was an audacious bid to seize the territory of "responsible capitalism" or, as the Prime Minister called it, "popular capitalism" from Labour. True, during his brief flirtation with "Red Toryism" in 2009, Cameron spoke of the need for "markets with morality" but we've heard little since.

The political assertion at the heart of his speech was that only the Conservatives - those who "get the free market" - can build a better and fairer economy. In a well-crafted passage, he recalled the Conservative figures who had reformed capitalism in the public interest. It was Burke, he reminded us, who insisted on public accountability for the East India Company, and William Pitt who brought it under the control of government. It was Peel who repealed the Corn Laws and Disraeli who passed the Factory Act. "Social responsibility has been part of the Conservative mission from the start," he said. Standing in this tradition, Cameron promised to "change the way the free market works, not stop the free market from working."

But though eloquent and historically rich, Cameron's speech was also overly abstract and often contradictory. He damned Labour's "Faustian pact with the City", conveniently forgetting that himself and George Osborne were calling for more, not less, deregulation in 2007. He promised to deliver genuine "equality of opportunity" but ignored the need for greater equality of outcome, the former dependent on the latter.

With Vince Cable's report on executive pay still to come, it would be premature to judge Cameron's commitment to reform. But his belief that merely "empowering shareholders" will transform the system is hopelessly naive. Just 18 of the company remuneration policies put to a vote since Labour first gave investors a say 10 years ago have been defeated.

In the Q&A session following the speech, Cameron pointed to the government's £2,000 limit on cash bonuses at state-owned banks, ignoring the fact that the likes of Stephen Hester will still take millions in shares. He did, however, strongly hint that he supported moves to strip Fred Goodwin of his knighthood. Though officially impartial, Cameron said the forfeiture committee - the Whitehall body responsible for revoking honours - was "right to examine this issue". But while Goodwin, a convenient sacrifical lamb for the political class since the crisis began, is roundly denounced, the system he embodied continues as before.