The Labour Party in Blackpool: Brown seeks global curbs on currency speculators

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The Independent Online
MEASURES to curb currency speculators should be drawn up at an international summit aimed at restoring stability to exchange rates, Gordon Brown, the shadow Chancellor, said yesterday.

Later, John Edmonds, general secretary of the GMB general union, won loud applause when he demanded a windfall tax on speculative gains to help fund Labour's economic recovery programme.

Mr Brown's bid for global action against speculators was combined with an attack on John Major as 'the spectator Prime Minister', a man, he said, who had no policy, no ideas, no friends and soon no future.

Blaming the weakness of the pound on the weakness of the economy, not the European exchange rate mechanism, Mr Brown declared that under two years of Mr Major's leadership the country had gone 'all the way from Thatcherism . . . to Thatcherism. I say there was never anything more to Majorism than monetarism'. Repeating his call for a recovery programme, he said: 'When the Tories say they cannot afford the cost of recovery let me say this: If the Tories can mobilise pounds 12bn to pay for their poll tax shambles, if they can mobilise pounds 26bn to pay for the unemployment they have created, if they can pay out pounds 1bn for the speculators in one short day - money that should have been used to rebuild our health service, to attack homelessness and poverty here and abroad - then they should have the power to mobilise resources to attack the evils of unemployment, under-investment and recession.'

The shadow Chancellor, however, underlined Labour's continued commitment to managed exchange rates by demanding 'European intervention, global action and pooled reserves to curb the powers of speculators' so that 'never again should the lives and livelihoods of millions of people and the destinies of national economies be directed by a handful of shirt-sleeved speculators'.

Away from the platform, Mr Brown said a summit was needed to strengthen the ERM and encourage the United States and Japan to join in curbs on speculation. A tax on speculative profits could be considered, he said, but there were real difficulties in trying to introduce that in one country or continent as dealing would move off-shore.

Within Europe central banks needed larger pooled reserves for intervention, needed to intervene for longer and to do so earlier - before a currency hit its ERM floor.

In the debate, Mr Edmonds said there had never been a better case for a windfall tax than the sight of instant fortunes being made in the City. 'This wasn't the Bundesbank or the gnomes of Zurich. These were British dealers, working for British high street banks, making more money in an afternoon than our top 10 engineering companies invest in a year. A fortune for NatWest, Barclays, Midland and Lloyds. And I don't think they should be allowedto keep it,' he said. 'Decent people were sickened by what they saw in the dealing rooms of the City of London. And I believe that if we said, 'Take that pounds 500m off the banks and use it to rebuild industry', there would be a surge of relief throughout Britain that at last politicians were starting to tackle the real problems of our country.'

Winding up the debate, Robin Cook, Labour's trade and industry spokesman, spoke of the need to solve 'the paradox at the heart of the British economy' - the City was one of the three largest financial centres in the world, yet it was surrounded by an industrial base which attracted one of the lowest investment rates in the world, still stuck at the level of 1979.

Fresh thinking was needed, Mr Cook said. It was the pension funds of millions of working people that gave the City its cash flow. 'The key to our future is how do we get those savings of working people used, not to finance the short-term speculation of takeovers that destroy jobs, but in the long-term investment in industry that creates jobs.'

(Photograph omitted)

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