The IMF funds

 

            Some people think there will be an immediate vote on IMF funds in the Commons. My understanding  is that the government has full authority from the 11 July vote to almost double our subscription to the IMF. No new enlarged numbers seem to have been agreed at Cannes.

           I attended the Committee which considered the increase in money Order  on 5 July to raise concerns along with various other Conservative colleagues. Parliament  required a vote of the whole House, despite the Committee passing the Order. This was taken on 11 July.

           The government got approval for an 88% increase in our subscription to the IMF,  to take our total commitment to around £20 billion. The vote was 274 in favour, and 246 against.  Those against  included 205 Labour MPs and  31 Conservatives.  225 Conservatives voted with the government on a 3 line whip to approve the measure, supported by 48 Lib Dems.   86% of Lib Dems voted, 84.3% of Conservatives, and 80.2% of Labour MPs.  I voted against.

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27 Comments

  1. Donnald
    Posted November 5, 2011 at 5:11 pm | Permalink

    Good for you John, let history judge those other traitors!

  2. Mike Chaffin
    Posted November 5, 2011 at 5:34 pm | Permalink

    So to check that I have this right….

    The ECB is already leveraged to 28.4x and won’t as a matter of principal print money or even act as a lender of last resort. They also do not intend to write down Greek debt, which would take their gearing to over 100x.

    The EFSF is the big bazooka with headline figures of 1 trillion Euros, but has only managed to raise £13 billion thus far. Despite it’s AAA rating it had to cancel the latest bond sale due to lack of interest (this is shocking, AAA rated bonds are supposed to be a safe haven ). Newspapers continue to print the guarantees rather than the amount of cash it actually has (I seem to recall the 13 billion went to Portugal and Ireland anyway).

    Eurozone banks are still vulnerable to a Greek default, with particular emphasis on he French banks, and don’t have a lender of last resort.

    Italian bonds are nearing 6.5%, which is unsustainable. When they hit 4.5% above a basket of AAA rated bonds the clearing houses will demand extra collateral, intensifying the problem.

    Hence Cameron has decided that we are going to pay, through the IMF.

    • Denis Cooper
      Posted November 6, 2011 at 12:10 pm | Permalink

      The EFSF has lent on 9.5 billion euros out of the 13 billion it has borrowed so far, and on that basis it will have about 3.5 billion euros to hand.

  3. Richard
    Posted November 5, 2011 at 5:46 pm | Permalink

    Thank you yet again Mr Redwood, for voting against this increase in expenditure for two reasons:-
    Firstly this extra money will not succeed in helping Greece or any other seriously indebted nation become successful because the structural changes needed are not being carried out.
    Borrow and spend Governments all over Europe are the cause of this crisis and until they return to a balanced budget approach any money lent to them will be wasted.
    Secondly, it is foolish to borrow money and then re-lend it to someone else because this always ends in tears.

    • sjb
      Posted November 5, 2011 at 9:28 pm | Permalink

      Was it foolish of the United States of America to borrow money so that it could lend [1] some of it to Europe (including the UK) so that we could rebuild our economies after the devastation of WWII?

      If Greece does leave the euro then it seems to me that tens of thousands of young Greeks will come to the UK seeking work.

      [1] The European Recovery Programme (a.k.a. Marshall Plan) ran from 1948 providing aid in the form of grants and loans

      • Richard
        Posted November 6, 2011 at 2:32 pm | Permalink

        The Marshall Aid plan loan was finally paid off by the UK in the late 1990’s and most of the money was invested by the UK Govt in asset producing and employment producing schemes.
        The difference is that the money we are giving to Ireland, Greece and other EU nations, is money we probably won’t see back and will not reverse their casual overspending or be invested in asset producing projects, just wasted on paying interest on loans already taken out and employing people in the public sector doing things of little worth.

        • sjb
          Posted November 19, 2011 at 9:30 pm | Permalink

          Richard: “The Marshall Aid plan loan was finally paid off by the UK in the late 1990′s and most of the money was invested by the UK Govt in asset producing and employment producing schemes.”

          Richard, the historian Correlli Barnett suggests otherwise: “For Britain herself, the offer of the Marshall Aid dollars presented a last chance to modernise herself as an industrial power before her old trade rivals could recover from defeat and occupation. Instead, all the illusions and follies of post-war British policy now reached their climax in the wasting of Britain’s Marshall Aid. ”
          Source: http://www.bbc.co.uk/history/british/modern/marshall_01.shtml

      • Kevin Dabson
        Posted November 6, 2011 at 9:24 pm | Permalink

        Nope, it was not foolish for america to rebuild western europe with british money. At least for them.

        The US banks funded the Hitler war machine. They then got the victor countries like the UK through the war loans, marshall aid to pay the creditors back!

        It’s a circular bank loan. Germany was credited, britian paid the US banks back and rebuilt Germany.

        I want to get some books on this.

  4. Mazz
    Posted November 5, 2011 at 5:52 pm | Permalink

    That 3 line whip again. Can Cameron not do anything without whipping MP’s into HIS shape?

    • nicol sinclair
      Posted November 6, 2011 at 3:57 pm | Permalink

      I would vote for a removal of the 3-line whip.

  5. lifelogic
    Posted November 5, 2011 at 5:54 pm | Permalink

    I see the Archbishop or York seems to have gone mad too following Canterbury as reported today.

    “Dr Sentamu {His doctoral thesis was on Soteriology – doctrines of salvation from an African perspective?} called for a change in public attitudes towards excessive personal wealth as profound and rapid as moves against racism, homophobia and sex discrimination in recent decades.”

    Well I suppose religious groups should at least know a great deal about racism, homophobia and sex discrimination – indeed for thousands of years and to this day these seem to be rather a speciality of faith groups.

    Dr Sentamu called for a change of ethics regarding excessively high incomes and the accumulation of private wealth.

    Well I accept that some directors have on occasions been able to help themselves to over high salaries – thus taking funds that should properly belong shareholders (due to poor shareholder control systems and the poor legal framework).

    But accumulating wealth, by honourable and legal means, and using it wisely is highly moral and highly desirable. Indeed in general I would far prefer nearly all wealth to be in private hands and out of the dead hand of the state – and the church for that matter. It will thus, almost certainly, be invested and used more wisely and that is what counts in the end the interests of all.

    Finally he suggests that “Queen’s Honours” should not be given “to those who have already rewarded themselves handsomely”. So the Queen with a fortune of about £350M and multi-multimillion income would I assume refuse to give awards to the excellent James Dyson or similar!

    Can these Bishops not think things through things, for perhaps say 30 seconds before they open their mouths?

    • lifelogic
      Posted November 5, 2011 at 6:05 pm | Permalink

      Oh well £20 Billion so just yet another £1000 per household to find – they had better start all that fracking in Blackpool soon then.

      Why is Cameron so keen to waste this £1000 per household? Just so Sarkozy won’t insult him again too much – for resisting the “Robin Hood luvies” tax or being from an island.

      Surely he is bigger than that? (and Sarkozy).

      • nicol sinclair
        Posted November 6, 2011 at 3:59 pm | Permalink

        Everyone’s bigger than Mr Sarkozy…

    • lifelogic
      Posted November 5, 2011 at 7:38 pm | Permalink

      I learn from Dellingpole’s blog that following Huhne’s cut in the absurd subsidy to PV:- Gaynor Hartnell, the chief executive of the Renewable Energy Association, which represents producers, said: “The installation rate is likely to fall drastically, and many of the 25,000 newly employed in this industry may end up joining the dole queue.”

      I trust they will all camp outside Huhne’s home for a while to ask him why he distorted the market one way (to make them change jobs and re-train) then the other to sack them all. They can, perhaps, watch his toy windmill as they do so. Maybe he will make them a cup of tea each with the green electricity it produces – it should manage a cup a day if fairly windy.

    • Mike Chaffin
      Posted November 5, 2011 at 8:35 pm | Permalink

      Is is now religious doctrine that money is evil?

      Money allows good men to do good and bad men to do bad. Money in itself however is entirely neutral.

      Indeed if money is now considered to be evil then it must be due to human nature itself, which the church has at least been consistent on; namely that human nature is intrinsically good.

      Has this doctrine changed, I didn’t get the memo….

    • Bazman
      Posted November 6, 2011 at 10:32 am | Permalink

      He was making a valid point about the wealth gap in society becoming ever larger. Is it right for a company making large profits to increase their profits further by decreasing pay and eroding conditions of the workforce whilst the directors get ever larger percentage pay rises?
      The managers cutting the pay of employees by ten percent and then getting a ten per cent pay rise for doing so? Ram it.

  6. forthurst
    Posted November 5, 2011 at 5:54 pm | Permalink

    The IMF can be quite draconian in its prescriptions for how countries in receipt of loans are to proceed; this may have something to do with the benefactors’ desire to see a return on their investment from time to time. It is hard to see how any IMF loan to a Eurozone country which has got into financial difficulties because it is in an unsuitable currency union should therefore not be contingent on that country exiting that currency union sine qua non.

  7. lifelogic
    Posted November 5, 2011 at 6:17 pm | Permalink

    So no vote 20 billion that could be lend to industry for growth thrown away.

    Oh well £20 Billion – so just yet another £1000 per household to find – they had better start all that fracking in Blackpool soon then.

    Why is Cameron so keen to waste this £1000 per household? Just so Sarkozy won’t insult him again too much – for resisting the “Robin Hood luvies” tax or being from an island.

    Surely he is bigger than that? (and Sarkozy).

    • zorro
      Posted November 5, 2011 at 8:31 pm | Permalink

      He is physically bigger than Sarkozy but who isn’t?…..but I’m afraid from the body language I have observed that Sarkozy owns him…..

      Zorro

      • A different Simon
        Posted November 6, 2011 at 1:48 pm | Permalink

        He’s Sarkozy’s bitch alright .

        When they go away for a weekend together there is no doubt Cameron ends up playing Mummy .

        If only he didn’t feel the need to try an compensate for his own inferiority complex with taxpayers money .

  8. oldtimer
    Posted November 5, 2011 at 6:59 pm | Permalink

    Thank you for clarifying this. If such a vote were to be taken now, I suspect it would face a much tougher passage through the HoC.

  9. Mark
    Posted November 5, 2011 at 7:12 pm | Permalink

    Perhaps it should come from the aid budget?

  10. lifelogic
    Posted November 5, 2011 at 7:24 pm | Permalink

    Charles Moore in the Telegraph today says:

    This week in the Commons, a junior Treasury minister admitted, sotto voce, that Britain too has a contingency plan for what to do if the euro collapses. Good. But I doubt it is nearly big enough for the change that is coming.

    Might these contingency plans (which surely now should be their mainstream plan) be enhanced somewhat were we just to keep hold of our £20 Billion (and all the rest) lest we might need it?

  11. John C
    Posted November 5, 2011 at 10:01 pm | Permalink

    I hope, from these types of manoeuvres, that you do realise that Cameron has no intention at all of ever returning powers back from the EU. Both he and Hague (to my great surprise) have gone over to the dark side. Why do you think Cameron is so happy to be in a coalition? Do you really think that Cameron would prefer a Tory government rather than a coalition with the Lib-Dems after 2015?

    He is going to use IMF funds to do, in a roundabout way, what he cannot do openly. That is, support the EURO with UK money without the majority of the UK public knowing.

    How is this not deceitful?

    How many excuses are you willing to give Cameron?

  12. alan jutson
    Posted November 5, 2011 at 10:22 pm | Permalink

    John

    It is becoming a real concern to me that everytime Cameron leaves these shores to go to a meeting abroad, he and promises and pours, more and more money to outside, foreign causes.

    This constant spending of money we do not have is surely making this Country a poorer place, is reducing our own ability to recover, and is placing an extra burden on the taxpayer.

    What is it that Cameron sees abroad, that he does not see here. ?

    • A different Simon
      Posted November 6, 2011 at 3:20 pm | Permalink

      Cast Iron combines the worst excesses of Blair’s contempt towards the UK and Gordon Brown’s propensity to spend , spend , spend .

      Samantha only recently discovered the joint credit card had been stolen when the repayments went down .

  13. BobE
    Posted November 6, 2011 at 3:27 pm | Permalink

    Mercozy are both up for election soon. Should be interesting.

  • 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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