The Economy

Part of Council Tax Rebate – in the House of Commons at 5:50 pm on 31st March 2009.

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Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras 5:50 pm, 31st March 2009

No, I have not got time.

Frankly, the Tories hope that the G20 will fail—it would be to their political advantage—and their friends in the press, TV and radio have been taking every opportunity to contribute. They even quoted on BBC TV, with approbation, the Czech Prime Minister's denouncement of the policy of Obama and the British Prime Minister, but they did not mention—and I think it was germane—that the preceding day, he had lost a vote of confidence in his own Parliament due to his ludicrous running of the Czech economy. That did not get a mention. He was treated like some economic guru by virtually everybody who reported him.

The G20 must try to shorten and lessen the depth of the recession. Different approaches will be suggested by different Governments, employing all possible methods, including trying to strengthen the International Monetary Fund to make it a trifle less stupid than it has sometimes been. As my right hon. Friend John Reid pointed out, we will need to toughen the regulatory system, both national and international, and make it much more transparent.

We have to act on tax havens, which we all know private profiteers and corporations exploit to evade tax due on transactions and profits in places where the transactions occur and the profits are actually made.

We also have to act against commodity speculators. The oil price shot up to $140 a barrel, but there was no shortage of oil. Sometimes, in the time it took a cargo of crude leaving the Gulf to get to Halifax, Nova Scotia or Rotterdam, it was bought and sold 10 times. There were massive speculative increases in prices, and that has to be stopped.

Worse still, the price of rice practically trebled at one point, which was attributed to the fact that the Chinese had started eating more rice. Actually, a lot of filthy speculators in this country, in the United States and in European exchanges were trying to get more money out of rice. I was in Bangladesh recently, and I was assured by some of the rice farmers that they had not been paid three times as much for the rice they produced. We have to stop those speculators, because what they do is also part of banking's greed and stupidity. We have had difficulties in this country because of the credit crunch, but in many parts of the third world, what is happening is at that horrid boundary between life and death. People will die because of the greed of bankers, and it is shameful that bankers have continued to do what they have been doing. We need a changed world system; we do not want to go back to the old system. We cannot leave such matters to lightly regulated bankers, or to the apologists for bankers.

Some of the apologists are unable to make up their minds. Some say they do not want regulation, but others say they were not properly regulated. They cannot have it both ways. The latest line is that the old ways were the best: "Perhaps we could go back to the old ways when the Governor of Bank of England had influence." It is argued that people were constrained by the Governor's "raised eyebrows". You've got to be joking. The only thing that would have restrained the worst offenders who caused this crisis would not have been the Governor of the Bank of England raising his eyebrows, but the police feeling their collars.

The Governor's remarks were somewhat exaggerated by the newspapers, television and radio, and used to undermine the Prime Minister. The Governor expressed caution. Well, that is what Governors of the Bank of England do—it is their job to express caution. I remind the Governor that he has some very undistinguished predecessors. One of the greatest contributors to changing the Wall street crash into the great depression was the great Montague Norman, who absolutely insisted on rejecting Keynes' policies, which might have rescued the whole world from the '30s depression and Germany from Hitler.

I wish the Prime Minister well at the G20 in London and the subsequent G20 meetings. Nobody believes that things will be sorted out in one meeting, and there will be a long series of such meetings and many meetings of officials to thrash out the changes that are needed. If anyone does not wish him well and hopes that his efforts will fail, as I believe many Opposition Members do, they might be thinking about what is good for the Tory party but not about what is good for the people of this country.

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