Article for Wokingham Times

 

                It was always going to take a long time to turn round the financial and economic mess this country was in. So far the Coalition government has put taxes up – VAT and National Insurance – to start to bring the deficit down. Now they are meant to move on to getting more value for all the public money we are still spending.

                This week in Parliament there has been much talk behind the scenes about  how much money we should give and lend to foreign countries. Many of us feel that as government asks people to do with less at home, we should make sure we are not spending too much abroad.  I am very happy to support medical work which saves childrens’ lives in very poor countries. This government is rightly stopping the  money we used to give as overseas aid to China and Russia. It   will be better spent saving children in very poor places. I have urged Ministers to delay further increases in overseas aid until we have got on top of our own debts.  A financially strong UK will be much better placed to help in future than a UK weakened by too much additional  borrowing.

                 My main concerns are the escalating costs of the European Union, and the bail out monies for Eurozone countries in trouble.  The government did stop an even larger increase in the EU budget than the one we finally got this year. They have more power to influence future EU budgets. I want to see big cuts, linked to reform of the agricultural policy so poorer countries can export  cheaper food to us in bigger quantities for our mutual benefit.

                 I also oppose UK money being put into bailing out the Euro zone. Countries like Greece and Portugal do not need bail outs, they need work outs. It is no good giving more debt to a country which cannot afford the debt it has already borrowed. With the support of many of you I helped lead national campaigns to save the pound and to warn of the dangers of the Euro before it was set up. We predicted then  that if they allowed too many countries into the Euro before they had hit all the targets set out for the scheme, it would end in tears. They stupidly allowed in several countries that were miles off qualifying, and so today we face a nasty crisis.

                 The best answer would be to ask Greece and other struggling members of the Euro to leave. They could devalue, setting up their old currencies, and price themselves back into jobs and growth. Stuck in the Euro they are mired in unemployment and find it difficult  to export their way to prosperity. Their debts are getting out of control, and the markets will no longer lend to them on affordable terms.

                  As many EU politicians seem determined to press on with the Euro, whatever the cost, the next best answer is to create a Euroland country as quickly as possible. In most currency unions – like the dollar and the sterling ones – you have a country to control and back up the currency. People in the richer areas of the US or UK accept they have to pay more tax to subsidise and help the poorer areas. If the Germans and French wish to live in a currency union with Greece and Portugal, they will have to pay more of their bills.

                I am disappointed with the way the IMF is running its affairs. The EU seems to be able to turn the IMF into a cash dispenser for troubled Euroland countries. Some of that money is our money, and it is being put at risk in an unacceptable way. IMF money should primarily be for poor countries in real need, not for rich countries that have made a self inflicted mess. The answer to the Euro’s problems is not more borrowing. The answer is a different way of handling the budgets and borrowings, keeping them under better control. They need a work out not a bail out. I did not vote for the last bail out, and will continue to put the case against.

                I don’t think UK voters want to save at home, only to have to send our money to bail out countries that foolishly entered a currency scheme that cannot work as currently designed.

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2 Comments

  1. Scottspeig
    Posted June 23, 2011 at 4:22 pm | Permalink

    Especially when that country is looking like its in a guaranteed default position!

  2. Elliot Kane
    Posted June 23, 2011 at 5:01 pm | Permalink

    Completely agree, Mr Redwood. Excellent article!

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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