Mr Redwood’s contribution to the Statement on the IMF, 23 April 2012

Mr John Redwood (Wokingham) (Con): Given that I agree with the Chancellor that IMF money should not be used to bail out a currency, will he urge the IMF to make sure that loans are made available to European countries only when they are in a position to devalue or when they are withdrawing from the single currency? Otherwise, as with the sterling area, surely the responsibility rests with the governing authorities and the central bank of the euro to make the money, the loans, the subsidies available.

The Chancellor of the Exchequer (Mr George Osborne): I do not agree with my right hon. Friend on this point, because if the IMF said it was never going to support a loan or undertake a programme with a eurozone country, it would, first, be walking away from one of the largest economic areas in the world. Secondly, all those eurozone countries would presumably then cease to be members of the IMF, because there would be no interest in it for them. So France, Germany and other countries would then withdraw from the IMF, and I do not think that that is what we want to see happen in the IMF. The IMF needs to support all countries that get into difficulty, provided the conditions are met and the rigour is applied to those programmes.

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13 Comments

  1. David Walpole
    Posted April 24, 2012 at 5:00 pm | Permalink

    Well John I totally agree with you and totally disagree with George Osborne. The problem is he is our Chancellor with the power to throw our money away and you are not. I have already decided to vote UKIP and everything I see with this Cameron led Government confirms to me that I have made the right decision. I am much more of a Tory than they are, but believe I have been deceived on Europe with successive leaders since Heath. Unfortunately now we are bound in with Europe and Cameron is unwilling break away or ask the people whether they want to stay in this disastrous political union. Nothing is more important than getting out and restarting our manufacturing industries!

    • Bert Young
      Posted April 25, 2012 at 1:12 pm | Permalink

      Osborne is plainly going to support the IMF making funds available to “Europe” ignoring the fact that it is not a Sovereign State . Mdme. Lagarde intends to backdoor the way funds are going to be made . We should not be a party to this . JR must pursue his judgement at the expense of Osborne . I am appalled at the lack of experience with both Cameron and Osborne

  2. Sue
    Posted April 24, 2012 at 6:05 pm | Permalink

    So much for all his statements declaring the money will not be used for the Eurozone bailout. Mr Redwood, you have to finally admit, Cameron & Osborne are more interested in brown-nosing to the EU than representing us.

    Nadine Dorris is right. They’re a couple of jumped up millionaire public schoolboys who couldn’t give a fig for what anyone thinks. They’re not connecting with anyone except others in the Westminster “bubble” and Eurocrats. These two “toffs” will be the downfall of the Conservatives. I think I even prefer Gordon Brown to these two (etc etc)!

    Germany has done extremely well out of the Euro (at everyone else’s expense) and it is them who should be supporting it!

  3. James Sutherland
    Posted April 24, 2012 at 8:47 pm | Permalink

    I find the Chancellor’s assumption that no country would benefit from the IMF if it didn’t have a chance of receiving a loan from them without devaluation being a requirement – or indeed that should any Eurozone country ever have to choose between receiving IMF assistance or leaving the Euro, they would choose to forego the help rather than the hindrance.

    Is there any precedent either way? A loan being refused, by the IMF or the country in need, because of a requirement to leave a currency union, or quitting the IMF over fears they might not qualify for a loan from it? We’ve already seen here how plenty of currency unions have been dissolved again, but I don’t recall anything about the IMF’s approach in such cases.

  4. Alan Wheatley
    Posted April 25, 2012 at 7:35 am | Permalink

    The logic of the Chancellor’s reply is that in IMF terms the “country” is the EU.

  5. Scott Speight
    Posted April 25, 2012 at 11:55 am | Permalink

    Don’t suppose you fancy a coup and become chancellor?? At least then we’d have conservatives in power and so then the recovery can start – please?!?

  6. nicol sinclair
    Posted April 25, 2012 at 12:37 pm | Permalink

    I cannot believe that I am reading this reply from the Chancellor to a most perspicacious question and, as it assuredly is a quotation from Hansard, it must be accurate. Has he so obviously lost the plot? To use an old cliche that seems to have fallen out of favour, “he doesn’t get it”.

  7. Barbara Stevens
    Posted April 25, 2012 at 1:01 pm | Permalink

    I agree with you Mr Redwood, and Mr O is wrong. Giving money to the IMF is now supporting a currancy not countries has it’s intention when set up. Who does Mr O think he’s kidding? Given the state our our economy and this double dip recession we are now in, why is this government lending money to an organisation which as simply lost it’s way and not attending to it’s remit? If the Eurozone goes pear shaped, which it is in danger or doing, will be get this money back? While the Germans tell everyone else what to do, they fail to support the countries they dicatate to. To my mind its foolish to keep giving money while the eurozone fails to support it’s self and boost it’s own firewall. Who will boost ours if we fail, which we are in grave danger of doing if this carries on? I see if this happens the poor of this country being asked to make the biggest sacrifice for that is what they are doing now. We are to expect more cuts in welfare next year, as many people are now on the breadline, how can any MP or government begin to justify giving money away in foreign aid, wars, and for health tourists, the logic tells us something is very wrong when they take this path against our own citizens. It is not in the ‘national interest’ to have famlies virtually staving in these islands, and of course homeless to boot. That is why I shall vote UKIP at the next election, I want fair politics not selfish ones.

  8. Normandee
    Posted April 25, 2012 at 1:12 pm | Permalink

    So you are right and the Chancellor is wrong, in effect his response to you was not true. What are you going to do about it ? If you were given a false statement from the opposition in the house would you just walk away and do nothing ?
    Then you must react the same to anyone who is not telling the truth, or is attempting to deviate the truth.

  9. Tad Davison
    Posted April 25, 2012 at 1:55 pm | Permalink

    A friend of mine, an author on banking and finance, and advisor to some African countries, and to some extent, China, says that the latter are playing around with a parallel mechanism to the IMF. I have my own private thoughts on such a thing, but would dearly love to hear other people’s views.

    Tad Davison

    Cambridge

  10. BobE
    Posted April 25, 2012 at 10:38 pm | Permalink

    They have no idea or control. It is all left to the EU. They just talk big until they vanish in 2014. Im voting UKIP along with millions of others.

  11. Patrick Loaring
    Posted April 26, 2012 at 8:14 am | Permalink

    I can only assume that the USA and Canada did not contribute to this new fund being established by the IMF because they knew that it would be used to bail out the Eurozone at some stage. Why didn’t the UK government also join the USA and Canada and decide not to contribute? The Europrats in this coalition have stuffed us all once again.

  12. David Langley
    Posted April 27, 2012 at 1:40 pm | Permalink

    Had a look at the IMF website, interesting stuff. New IMF buildings being built and others renovated at great expense. I think they must be on a big earner living on the profits from lending to countries down on their uppers. Of course they can always have a nibble at the large amounts people like Osborne dish out to them. Some countries of course fail to repay like Sudan and Zimbabwe, who would lend to them anyway, and they have financial punishments for countries that fail to stump up their planned repayments.
    How we manage to lend when we are in debt both deficit and structural and need to borrow on the world markets IE Bonds to get through the year beats me. The rationale of having to borrow at all seems wrong, much better to have a large sovereign cash pot in the bank and be truly strong and independent. Living beyond ones means perpetually is always a recipe for disaster, one day you can’t repay then its trousers down time again.

  • 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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