IMF debate

 

           The £9.3 billion for the IMF passed in Committee by 10 votes to 6 today. The Committee divided on party lines.

            Bill Cash, Steve Baker, Douglas Carswell, Peter Bone and I went and spoke against, but we were not voting members of the Committee. Graham Stringer and Gisela Stuart also spoke against from the Labour side.

             Douglas memorably said of the Greek bail out “It is the first time in history that they have been ladling the water into the boat”

              I raised the issues we have been talking about on this site.

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32 Comments

  1. Posted July 5, 2011 at 3:07 pm | Permalink

    Guido Fawkes is reporting that this means there needs to be a vote in the house on the matter. Is this correct?

  2. Posted July 5, 2011 at 3:29 pm | Permalink

    Thanks for your efforts John, at least you and your sensible collegues tried.

    Understand that it was Labour who voted against, and the Lib Dems and the Conservatives under pressure from their Whips who voted for.

    Please explain, how is this anything like democracy, when the vote is fixed in advance of a debate.

    Shame on those government members.

    Just out of interest, how many of those on the committee, have any sort of financial background ?.

    Reply: It is always open to MPs to vote against the whip. I do not know how many had a financial background.

    • Posted July 5, 2011 at 10:20 pm | Permalink

      John
      Thanks for your reply, yes you are correct, those with backbone and who believe in country before personal promotion, may vote against the whips, but unfortunately we are now finding out that there are very few of those in Parliament.

      If Milliband instructed his party members to vote against the bailout he now stands to gain an incredible political boost if Greece default, as the coalition can be shown to have wasted £9.5 billionof taxpayers money, which Labour would have saved at a stoke.

      To my mind Cameron and Clegg have played a very, very risky political game with this one, its heads Milliband wins and tails the Coalition loses.

      Very few of the electorate would agree to this £9.5 billion spend, given a choice. This if it goes through and Greece defaults, may have just cost your lot the next election.

      Increased Foreign aid, increased bailouts, increased debt, rising government spending, rising taxes, yet we cannot look after our own old people.
      You could not make it up.

      Thanks for trying, but if this does go to a full vote, the only way out is for you and your collegues to get working to maximise some back bench support and defeat the government with a no vote.

      Reply: A recent study has shown this is the most rebellious of recent Parliaments by far, and mainly it is Conservatives voting against or abstaining on EU matters. The £9.5 bn may not all be spent bailing out Euro members.

    • Posted July 6, 2011 at 1:45 am | Permalink

      Arithmophobics more likely. Our educational system is far too lenient to people who only have half a brain.

  3. Posted July 5, 2011 at 3:33 pm | Permalink

    “It is the first time in history that they have been ladling the water into the boat”
    Priceless in its wit and accuracy!

  4. Posted July 5, 2011 at 3:40 pm | Permalink

    Thanks for representing our interests in this way – it may eventually have a good effect despite this government’s stonewalling. One wonders why the Cameroons are so intent on following this path when even the spendthrift lefties, Labour, think this is a step too far.

  5. Posted July 5, 2011 at 3:49 pm | Permalink

    So what happens next?

    And will it be possible to read a transcript of the discussion at some point?

    Reply: It is reported to the House, which might have another vote on it. There should be a Hansard of it available tomorrow.

    • Posted July 10, 2011 at 3:29 am | Permalink

      John Redwood

      Thank you so much for having the guts to speak your mind in front of the gutless. This robbery of the British taxpayer must stop. I find it incredible that so many MPs were voted into the House of Commons who have so little conscience that they can betray those who voted for in the way they do.

      I feel the same about this as I did the Climate Change Bill that got almost total support, and yet the level of burden it places on the taxpayer in my mind is simply too much to cope with. And for what? It’s money down the drain, or to be more accurate, it falls into the pockets of dictators. It’s just like spending on Third World projects, except that this one is not just wasted money, it is money that is being used to build the new Soviet Union.

      They want to replace capitalism with a command economy, and this programme goes back a very long way, indeed right back to Keynes. All private money is being sucked into one giant unaccountable dictatorship where we will be no more than slaves.

      The only way I can see of stopping it is to cut off our money. We have to get this blocked. If we can, then it will send a signal to the markets and perhaps with a little help from our American friends as well we might well see the whole thing collapse before they achieve a lockdown scenario. Personally I don’t think the ECB is far off crashing itself. It is highly leveraged and holds a lot of bad debt. All we are doing is keeping the whole sham propped up when it would otherwise crash and burn, and if it did that then the thing that keeps countries locked into the EU would be no more, and they would have to leave.

      So please, do what you can to get others in your party to see sense. There will be no economic recovery if this continues. Cameron can forget all about that. Once you pay the ransom, the thieves will be back a second and a third time and so on until we are bled dry. Conversely if we do put our foot down then the markets will see our country as a sensible investment, and we will see an economic recovery. It would mean that by not holding this bad debt we would have an economic advantage over the entire rest of the EU. That is why it is imperative to get this right. No one invests in countries run by fools.

  6. Posted July 5, 2011 at 3:59 pm | Permalink

    Just the seven sensibly speaking against – how pathetic – but hardly unexpected with the Cameron broken compass pointing out route.

    Had the party a sensible leader, I wonder how many of these sheep would, just as happily, have follow him. Perhaps even more happily, as the economy would clearly have recovered better and they might even have had a good chance of another term.

    What would David Davis have done? At least he probably would have won outright and not have had to carry the Lib/Dem mad green ball and chain I suspect?

    • Posted July 5, 2011 at 7:41 pm | Permalink

      I don’t think David D would have won outright. Possibly not at all. But we won’t know now, will we? We do know there are far too many people with a vested interest in the big state, increasing all the time, and that the PM has to manage that democratically somehow – and through an inveterately left wing broadcasting medium.

  7. Posted July 5, 2011 at 4:43 pm | Permalink

    Greece is selling government owned assets at breakneck speed. What is Scotland selling? Salmond says that Scotland is in budget surplus.

    England has been ladling water into the boat ever since Brown started bashing holes into the British economy, where Scotland is concerned. We’ve had a tartan-tinted Greece right on our doorstep.

    • Posted July 6, 2011 at 10:21 am | Permalink

      ‘Greece is selling government owned assets at breakneck speed.’

      Really? Every report I read says they haven’t even started yet and many doubt they ever will. I’d be interested in a list of a few of these assets they are selling at breakneck speed. And I’d be even more interested in a list of who is buying so I can sell any shares I have in those companies.

      Scotland contributed 9.6% of UK tax receipts last year and received 9.4% of government spending. Of course, spending was still higher than Scotland paid in taxes (due to us borrowing around 20% of spending / raising 80% by taxation) but that’s a fact that the ‘scrounging Scot’ brigade either don’t know or ignore due to prejudice.

      And I’m not saying Scotland should have more spending, heaven forbid, just that things aren’t as clear cut as are often portrayed.

      • Posted July 6, 2011 at 2:45 pm | Permalink

        FYI I’m not bothered whether Scotland pays more in taxes than it receives in spending or not. What vexes me is England’s assets, like forests, being sold and the receipts going into the UK exchequer, thus benefitting Scotland. Danny Alexander, being unable to actually vote on his own country’s domestic affairs, resorted to campaigning against the sale of Scottish forests. If Scotland’s forests had been sold then the money would not have gone into the UK treasury, it would have remained in Scotland.

        Also, at long last and for the first time, England received Solidarity Fund money for reparations needed after the last floods, in Worcestershire and Hull as well as other places. Gordon Brown stuffed that money in the UK treasury, thus ensuring any reparations had Barnet consequentials for his own country Scotland. No doubt the EU will disproportionaely fine England for this, somewhere along the line, for mis-spending SF money on things it was not intended for.

        Even if Scotland pays more tax per capita than England, or anywhere else for that matter, why should it be assumed that England remains bottom for spending per capita? This situation was/is maintained by carving up England into regions (rejected by the English) to disguise what is actually going on by enabling Scotland to compare itself with whatever spurious English region suited Scotland’s case at any given time.

        I couldn’t actually care less whether Scotland is paying its way or not. I am, however, totally fed up with being held to ransom by Scotland and their pretendy-inde party at a time when the British economy is in dire straits. That Cameron and Clegg permit such a destabilising situation to persist, possibly for more than four years, is nothing short of disgraceful.

        My comment about Greece was based on news reports, from Reuters and elsewhere. The concern is that asset sales may be kneejerk.

        However, to repeat my question, what exactly is Scotland selling to assist the UK economy?

  8. Posted July 5, 2011 at 5:13 pm | Permalink

    Great Quote !!

    It’s an interesting example of game theory with the politicans and banks playing chicken. We all know they are all going to crash its just a question of how hard and when.

    The politicians are now ignoring their own medicine .. Merkel saying they should ignore the rating agencies and the ECB saying they will ignore their own rules on holding junk bonds as collateral.

    The IMF money is only going to the ECB thru the back door. As Merkel pointed out the the IMF, EU and ECB are a solid UNIT (“a troika” ) – money to one is money to all. Taxpayers should not bail out German and French banks and Greek politicians.

    John does this now mean that it goes to a vote in the commons ?

    Reply: Probably a vote but no further debate will be allowed

    • Posted July 5, 2011 at 10:23 pm | Permalink

      Javelin

      I prefer

      “we are busy drilling holes in the bottom of the boat, to let the water out”.

    • Posted July 6, 2011 at 11:55 am | Permalink

      But even if there were to be a further debate much the same group of objectors would voice much the same set of objections in an almost empty chamber, the minister would repeat his points to justify the government’s position, and then the rest of the coalition MPs would come in and vote it through without having heard any more of the arguments than they have this time.

      No transcript is available yet, but there is an audio record here:

      http://www.parliamentlive.tv/Main/Player.aspx?meetingId=8814

  9. Posted July 5, 2011 at 5:16 pm | Permalink

    Head of trading where I work just described the ECB, EU and the IMF as …

    “Three planks onto the same sinking boat.”

  10. Posted July 5, 2011 at 6:16 pm | Permalink

    If there is a lead story today, and something for Cameron to get angry about, this is it. We give money away, to a (questionable -ed) organization with (questionable principles-ed), whilst our own countrymen are being made unemployed, the young cannot find jobs and the lives of the old get worse – words fail me.

    Whatever the rights and wrongs of phone hacking, the biggest crime being perpetrated today is this and it is being ignored !! What on earth is going on.

  11. Posted July 5, 2011 at 7:30 pm | Permalink

    Ever imagine a German, French, Italian or any other major European countries trains running on anything else other than their own rolling stock? Me neither. The EEC and the previous governments policies are not a good enough answer. We are not talking unskilled NMW jobs here, but skilled manufacturing jobs paying above this, so that in probably why costs need to be cut, but I doubt German would be cheaper or better?

  12. Posted July 5, 2011 at 8:29 pm | Permalink

    I am amazed that there has been little or no coverage in the media of this important event.
    So thank you Mr Redwood, for your efforts to save more of our money being wasted, you are an excellent MP properly working for the interests of your constituents.
    I only wish we had more like you to represent us in Parliament.
    Also, thank you for this website and your interesting and informative daily articles, they give me more information about the political and economic situation of this country than any newspaper or TV programme does.

  13. Posted July 5, 2011 at 10:10 pm | Permalink

    Great to hear that you share common concerns with people such as Steve Baker and Douglas Carswell. They are both MPs with wide ranging concerns and a desire to change things for the better.

    It’s an up hill struggle but you are on the right path and you are not alone.

    The IMF should be abolished – not given our money. They are stealing democracy, amongst other things.

  14. Posted July 6, 2011 at 12:27 am | Permalink

    It appears that a cowardly parliament will buckle under to this absurd policy. Ironic that the only real hope now rests with a few German judges.

    Not only was this a wrong decision, it confirmed a loss of British sovereignty.

  15. Posted July 6, 2011 at 1:33 am | Permalink

    The Germans I speak to just dismiss the whole Greece thing with a kind of backhand slap gesture, a shake of the head and a snigger followed by a kind of “What? We didn’t do it!” shrug of the shoulders.

    They might have a point, but since they blame WW2 on the 1929 Wall St Crash and allied demands for reparations I like to put it too them that now they are making the same mistake with Greece.

    Some of them can see a point here, but they still invariably come back with the ‘slap, shake, snigger, shrug’ thing.

  16. Posted July 6, 2011 at 1:24 pm | Permalink

    The transcript is here:

    http://www.publications.parliament.uk/pa/cm201012/cmgeneral/deleg2/110705/110705s01.htm

    and an audio recording is here:

    http://www.parliamentlive.tv/Main/Player.aspx?meetingId=8814

    The minister Mark Hoban seems overly concerned to pay more into the IMF in order to maintain the level of UK influence – presently about 4% of the votes – which directly parallels the longstanding folly of paying more into the EU in an unsuccessful attempt to buy influence, and as for the coalition MPs on this Committee they seem to have been hand-picked to unquestioningly follow the government line.

  17. Posted July 6, 2011 at 8:04 pm | Permalink

    The hypocracy of our Government becomes truly breath taking when they allow £9.5 BILLION to be passed over, with no debate in the Commons, possibly a whipped vote. This is a huge amount of money from the Taxpayers and should have several days of debate, proper reporting and an open vote in Parliament. Does this Government really think that none of follow what is going on here? I just cannot understand what this Coalition thinks it is doing. It is certainly not working in the National Interest and will rue the day, it makes these crazy spending/

  18. Posted July 7, 2011 at 6:21 am | Permalink

    Politicians are the problem in the Eu Debt problem. They spent too much money to get votes QED. It is more than a problem it is an inevitable crisis.

    I ask myself every day what will trigger the crisis. It seems obvious it will be a political trigger. Some where in Europe a counties people will get fed up throwing money at a lost cause. They will realise this is a solvency, not a liquidity problem. No amount of taxpayers cash is going to stop the PIGs from defaulting. Structural reforms will only work when these countries lose their debt. Best to default and burn private investors along with structural reforms.

    Meanwhile Europe waits for countries to get to zero deficits. So that the defaults will get less painful. And this is the second trigger. The first PIG to get to a zero deficit situation will then be in a position to trigger a default – they will do so in the face of public hostility to the structural reforms and calculate it’s best to default and not pay interest on their debts and use this cash to stimulate growth.

    The crisis hasn’t been triggered yet – but it will do.

    • Posted July 7, 2011 at 6:30 am | Permalink

      The third trigger will be the IMF or ECB running into financial difficulties. Once nation states are no longer willing to support this farce then they will have no power to play their games of deficit and debt denial. Again once the French and German banks look more stable then the French and German politicians will be more likely to stop giving money to theses funds. This is another case where as things improve then the full blown crisis is more likely to be triggered.

      It seems like it’s a race out if negative territory and the winner will pull the trigger on the others still in negative territory. If the PIGs get their deficit to zero before the banks they would benefit by pulling the trigger. If the banks get stable first they will pull the trigger.

  19. Posted July 7, 2011 at 12:49 pm | Permalink

    I read the transcript. As I understand it, the government says this extra money is not an extra liability, rather more akin to moving money from one account to another. I’m no expert, so I’ll accept that basic premise. But two things still strike me: One, money earmarked in this way presumably cannot be used for something else, or against a different liability… opportunity cost. Two, if the IMF uses the extra cash for a euro bailout, then that money surely ceases to be an asset in practical terms. It looks a little like the situation after 1918, when Britain was still a net creditor in the world, but to countries unable or unwilling to repay their debts. And if the IMF doesn’t use the cash for a euro bailout, what does it want it for, given Mme Lagarde’s comments?

    The other things that struck me was how airily and easily such a vast sum of taxpayers money could be appropriated in this way. The Commons can (rightly) expend a good deal of fury on the misdoings of newspapers, but is silent on such a major appropriation of funds. Instead it is waved through by a committee of 16, some of whose members by their own admission don’t understand what they are voting on. And the fact goes virtually unreported. Something has gone terribly wrong with the way this country is governed.

  20. Posted July 7, 2011 at 2:19 pm | Permalink

    It’s notable that out of the 10 coalition MPs who voted to pay an extra £9.3 billion into the IMF on Tuesday, only 4 said anything other than “aye” during the whole course of proceedings.

    One was the minister, the Tory Mark Hoban, who spoke at great length in his attempts to justify the payment; two others were the LibDem Stephen Williams and the Tory George Hollingberry, who both made short and reasonable points; while the fourth, the Tory Richard Fuller, tried to intervene on JR but the latter wouldn’t take the intervention pleading lack of time.

    The other 6 – Goodwill, Hands, Mensch, Morris, Reid and White – only ever uttered the single word “aye”, even though the non-committee members who attended and spoke – Baker, Bone, Carswell, Cash and Redwood – and also some of the Labour MPs on the committee had set forth good reasons why the payment should not be authorised.

    Maybe there just wasn’t enough time allowed for all the committee members to contribute to the debate even if they wanted to, or maybe those 6 saw themselves as being present only in a voting rather than in a thinking and debating role.

    Reply: Time was too short – I only said around half of what I wanted to say so that other colleagues could get in. I see no evidence that the Conservative members who did not speak wanted to.

  21. Posted July 7, 2011 at 2:45 pm | Permalink

    Trichet is now saying the ECB will accept Greek bonds as collateral even if they are Selective Default. He is saying “No selectiveDefault”, “No Credit Event”, “No Default” – he then says this is clear. But is clear as mud to me.

    What does this mean? He means tax payers will have to pay for Greek debt – not today but over the years thru subscriptions to the ECB.

    • Posted July 8, 2011 at 1:33 am | Permalink

      Sounds like fun, one for the list: London town houses for welfare claimants, London townhouses for carehome residents, pointless public sector jobs, wasteful PFI and consultancy contracts, subsidies for green energy, compliance with pointless EU regulation, EU membership fees and next bigger handouts to sustain the PIGS in perpetual backruptcy.

  22. Posted July 11, 2011 at 5:39 pm | Permalink

    Thank you for your efforts, John.

  • 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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