G20

Peter Tapsell Excerpts

Monday 7th November 2011 Commons Chamber

[The Prime Minister]

Honestly, I do not know who writes this rubbish! I liked the bit when the right hon. Gentleman quoted my response to the 2009 summit: I have to say that if the 2009 summit was such a success, why did the Labour party vote in the House of Commons against one of its key conclusions—the idea of increasing IMF resources? He talks about regulating banks, with no recognition of the failed regulatory system that he oversaw for a decade. He talks about the eurozone, with no recognition of the fact that Labour had a “national changeover plan” to get the whole of Britain to adopt the euro. Above all, let us be clear: if we had listened to his advice, we would not have been in Cannes discussing a Greek bail-out; we would have been at the IMF discussing a British bail-out.

Let me remind the right hon. Gentleman of the figures. In 2008 Greek and British bond yields were both 4.5%. Since then, in the UK that rate has halved, whereas in Greece it is up by six times. That is because they did not have a credible policy for deficit reduction, and we do.

Let me come back to the issue of the IMF, because what we are seeing from the Labour party is breathtakingly irresponsible. Let us be clear about its position on the IMF, and let us remember that that is an organisation founded by Britain, in which we are a leading shareholder, and also an organisation that rescued us from Labour in the 1970s. Labour’s position is, first, to vote against the increase in resources agreed by the G20 under their own Government. They called it a “triumph” at the time, yet Labour Members trooped through the Lobby in a complete display of opportunism. But it gets worse, because now they are saying that they do not want IMF resources for any eurozone country. Are they saying that they want to take the money from Ireland and Portugal? They would have turned up at the summit, where every country was talking about increasing IMF resources, and said that on no account would Britain support that. How ridiculous. They are saying to eurozone countries, which also contribute to the IMF, “You’re never, ever allowed to seek its assistance.” If they meant that, I would take it seriously—but this is all about politics: they are putting the politics ahead of the economics. We know that that is the case with the shadow Chancellor: he only ever thinks about the politics. The question for the leader of the Labour party today is: are you a bigger politician than that? I am afraid that the answer is no.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

Did Chancellor Merkel tell my right hon. Friend why the European Central Bank is not fully discharging its duties as the euro’s lender of last resort? It is not providing massive quantitative easing, not moving towards near-zero interest rates and not urging President Sarkozy to renationalise the leading French banks before the credit crunch closes on France. Chancellor Merkel knows very well that it was not inflation but high unemployment which, in my lifetime, brought down the Weimar republic, and will do the same for the European Union.

[The Prime Minister]

My right hon. Friend speaks hugely powerfully about this issue. He is right that we must not allow the IMF to substitute for what the ECB and the other institutions of the European Union need to do; that is vital. It was one of the reasons why, in the end, all the countries of the world that were prepared to see an increase in IMF resources wanted to see more done by the eurozone and by the ECB. I have discussed this with Chancellor Merkel on many occasions. My right hon. Friend will know as well as I do of the huge hold-back that there is in Germany about what a central bank is, and what it should do. But I do believe that, as it says in the communiqué, you have got to have the institutions of the eurozone fully behind the currency in order to save it.