The unofficial online home of the UK Independence Party
Archive for February, 2010
Europe to become more taxing than ever?
Feb 28th
So proposals are flying around this week that the EU should introduce a “family of taxes at a European level”.
This at a time when we already have a system of taxation that is far too punishing on the British people. We have income tax, corporation tax, national insurance (employers and employees sides), VAT, various excise duties (most particularly fuel duty), inheritance (death) tax, stamp duty, council tax, road tax, and a whole host of other methods of taking people’s money away to fund endless bureaucracy and politician’s gravy trains.
As at November 2007, the average family pays a total of £32,779 in tax. And on top of that we are now faced with the prospect of European “Federal” Taxes on top of all that! A “whole family of them”! European Income Tax? European Road Tax? Its sheer lunacy! This is just another development that makes the whole European project ever scarier than it already was for the British people, but we shouldn’t be surprised really: the Lisbon Treaty was designed to turn the EU into a fully fledged country, and a country needs the power to raise its own revenue.
Westminster Corner
Feb 28th
In his third newsletter, UKIP Leader Lord Pearson looks at a by-election in Buckingham South and Lord Monckton's controversial press conference.
THOUGH UKIP’s election campaign will not be launched officially until the spring conference in Milton Keynes on March 19, many things are happening already as we prepare ourselves for what will be the most important election in the party’s history.
The next by-election in which we have a candidate is on March 11 for a place on the town council in Buckingham South Ward. Our candidate is Alfred May, a resident of Buckingham. His opponent is an Independent, Eliza Caroline O'Donaghue, who lives in Linden Village, Buckingham. There are no other candidates. The importance of all local by-elections in Buckingham are self-evident. As far as the media will be concerned in the General Election one of the biggest battles will be between Nigel Farage and the Speaker, John Bercow in that constituency. We need to prepare the ground well.
We had a very successful meeting of the Regional Organizers on February 24, which both James Pryor and I addressed. It is gratifying to see that people are volunteering to help and giving donations to UKIP. We are grateful to them all but I have to repeat that all PPCs and volunteers will need to remember very clearly all the rules laid down by the Electoral Commission.
Ever more PPCs have signed up on the Electoral Address site. Let me urge those few who have not yet done so to follow their colleagues’ example. It is very important that constituents should be able to find their candidates and have information about them. Here is the link to the site: http://candidates.ukip.org
Communication will be the key in this election. We shall be sending out briefing notes, copies of Press Releases, Leaflet designs, A4 size posters, Policy documents and other campaigning material. From March 15 we shall be sending out at least one e-mail with information a day but often more.
As the election approaches there will be quite a few. Could all candidates make sure that the Campaign Office has their up-to-date and most frequently used e-mail address. We shall also be creating a PPCs’ online forum on which candidates will be able to post messages, share campaign techniques and generally 'chat' to one another.
We are in the final stages of putting together our key campaigning messages. Once they have been decided, the campaign office will produce leaflets, flyers, posters that follow these themes. The messages will be repeated on our billboards, advertising, press releases and briefing notes.
he mainstream media will not give us sufficient time – it will be up to us to get our message out to the electorate through all the usual channels, including and especially the internet. A number of PPCs have set up their own blogs. This is to be welcomed. Those who have not done it yet are encouraged to do so. It is a painless experience though blogs do have to be kept up. Once the campaign starts in all seriousness there will be no shortage of material.
On Wednesday of this week I chaired a media conference in Greycoat Place at which Lord Monckton of Brenchley explained UKIP’s policy on climate change. The science, he reiterated forcefully, is not settled. Lord Monckton has been saying that for some time but now admissions are coming from the climate change establishment that their data is inaccurate, not properly reviewed and does not mean what it was supposed to mean according to them.
For example, there has been no significant warming for about a decade and a half now; in fact, for the last eight years there has been noticeable cooling. How significant that is we do not yet know but, as Lord Monckton said, we need to look at measurements not build computer models that are good as playthings but not for much else.
UKIP’s policy is quite clear: we cannot go on spending enormous amounts of money on projects that are based on unproven and suspect data; we cannot risk our economy and the economy of the West because the political classes insist on it; we cannot allow the developing countries to lose their economic momentum for the sake of an ideology.
UKIP, therefore, proposes to set up a Royal Commission on “global warming” science and economics, under a High Court Judge, with advocates on either side of the case, to examine and cross-examine them and their evidence with all the rigour of a court of law.
In the meantime we intend to repeal the Climate Change Act and close the Climate Change Department; halt all UK contributions to the IPCC and to the UN Framework Convention; halt all UK contributions to any EU climate-change policy, including carbon trading; freeze all grant aid for scientific research into “global warming”.
The proponents of “global warming” who base their arguments on computer modelling must not have any more of the taxpayers’ money until they have answered satisfactorily the questions and objections raised by those who have been looking at measurements, a much more certain way of analyzing scientific developments.
Malcolm Pearson
February 26, 2010
PS Some of you may have seen references in the media (especially if you happen to read the Guardian) to me saying that climate change was “crap” and, indeed, that was in the original title of the invitation to Lord Monckton’s press conference, sent out to the media.
In case any of you were shocked by that I shall repeat what I said when I opened the press conference: this is an acronym, much used by climate-realists in the United States: Carbon Really Ain’t Pollution or CRAP. Tempting to use it here, isn’t it?
Prisoner’s Votes
Feb 27th
The proposal that prisoners should have the right to vote has been described as “disgraceful”.
UKIP Euro MP Paul Nuttall has announced that he is totally against the move to allow prisoners to vote in elections.
Following a European Court of Human Rights case the current blanket deprivation of the right to vote in UK elections has been declared unlawful.
“My view is prisoners have broken their contract with society and obviously have no respect for the human rights of others, so why should we afford them the right to vote?” said Mr Nuttall, North West MEP.
“It is another case of politically correct nonsense, which sends out the signal to criminals that society has gone soft.”
“But I fear in due course some prisoners will be able to vote because we remain bound by our Treaty obligations under the European Convention on Human Rights, effectively to implement the judgement and because the Human Rights Act 1998 incorporates the convention into UK law.
“The only way of preventing prisoners from voting, therefore, is for the UK to resile from the Convention, repeal the Act and replace both with a new UK BIll of Rights.
“Membership of the EU requires member states to be signed up to the Convention. Therefore the only way to get a new British Bill of Rights to replace the Convention would be to leave the EU,” said Mr Nuttall.
Mandelson Insists Britain WILL Join the Euro
Feb 27th
Lord Mandelson prompted uproar last night by declaring Britain wanted to join the European single currency even as it is suffering the worst crisis in its history.
Labour’s Business Secretary insisted the Government would eventually take Britain into the euro just a day after German Chancellor Angela Merkel warned Greece’s debt crisis has left it in a ‘dangerous situation’.
Lord Mandelson, who is now the second-most powerful man in the country, has become the first senior minister to enthuse repeatedly about the benefits of euro entry, putting him at odds with Gordon Brown.
But the timing of his latest remarks caused consternation as soaring debt levels in Greece and other countries has raised questions about the survival of the currency.
Economists say euro membership has acted as a straitjacket in the downturn for struggling countries.
But the Business Secretary, speaking at a university in Paris, said: ‘We already have the eurozone providing a single central bank, currency and monetary policy, which one day I believe Britain will be part of.
‘Don’t ask me when. It’s not going to be soon, but we will do it.’
Radio 4 Any Questions Debate
Feb 27th
Paul Nuttall MEP took part in the Radio 4 Any Questions debate, held in Burnely, on February 12th. You can listen to the programme again here.
This is Lancashire reports on the programme…
THERE were heated exchanges about the wearing of the Muslim burka when a national radio show was recorded in Burnley.
BBC Radio Four’s Any Questions has an audience of around one million.
On the debating panel were Kelvin MacKenzie, the outspoken former editor of The Sun newspaper, North West UKIP Euro MP Paul Nuttall, former Arts Council chairman Professor Sir Christopher Frayling, and Baroness Haleh Afshar, a cross-bench peer.
Some of the most angry exchanges came when the subject of the Muslim burka was raised by an audience member.
Mr Nuttall defended his party’s controversial policy to ban the full veil in public places, claiming the measure was needed for national security.
Baroness Afshar said the debate should also focus on other religious clothing, like a nun’s habit, and added: “If we are in a free country, people should have the choice.”
Mr MacKenzie claimed the wearing of the full burka would die out in this country.
The question arose after a British Airways worker lost her legal battle to be allowed to wear a Christian cross at work.
Sir Christopher said: “If someone wants to wear the badge of their faith, why shouldn’t they? It’s not harming anyone.”
Earlier Mr MacKenzie had provoked angry shouts from the audience when he claimed elderly people should not expect state help when they grow old, claiming even people in poverty “had family” to look after them.
The Rev Andrew Froud, of St Mary Magdalene’s Church, Clitheroe, had asked a question about the current debate between the main political parties over adult social care.
Mr Nuttall accused the Conservatives of “playing politics” by running a poster campaign about Labour plans for a £20,000 “death tax”.
The half-hour debate, recorded at the Thomas Witham Sixth Form Centre, Barden Lane, was hosted by Shaun Ley, of Radio Four’s The World At One, a last-minute stand-in for Eddie Mair, who was ill.
Euro Gravy Train Pays for Ski Holidays
Feb 27th
CAMPAIGNERS last night stepped up demands for a crackdown on the European Union gravy train after new revelations emerged about how taxpayers’ money is routinely squandered.
Astonishing new details about Euro MPs’ expenses included hundreds of pounds handed out in brown envelopes to their visitors to cover food and travel with no receipts needed.
And more than £70,000 has also quite legally gone on ski holidays for families of Euro Parliament officials.
Massive amounts have also been spent on short conferences and lighting for a special “VIP entrance” to the Parliament building.
The fresh EU junket details emerged when MEPs debated a report on expenditure just as they defied growing public anger and voted to further boost their and the Parliament’s staff at a cost of £12million to the public purse. They say they need the extra money to cope with what they claim is the extra workload of the Lisbon Treaty. As we reported last month, the bonus, which includes an extra £1,300-a-month staff allowance, will put their pay and expenses up to £450,000 a year.
But the extra staff decision has to be approved by national governments and Britain is believed to be opposed. British MEPs are also believed to have not supported the increase.
Pro-reform thinktank Open Europe urged the Government to block the staff allowance rise as it seized on the reports of warnings issued by MEPs about how the European Parliament’s spending practices look to others. Open Europe director Mats Persson said the content of the expenditure debate was “quite an astonishing revelation on the same day as MEPs vote to give themselves even more perks”.
He added: “The European Parliament already has a terrible reputation for wasting taxpayers’ money. Now we hear that citizens’ cash is being handed over, ready-packaged, in brown envelopes without a second thought.”
Matthew Elliott, chief executive of the TaxPayers’ Alliance, commented: “It is frustrating but sadly unsurprising that MEPs are squandering such grotesque amounts of money.
“At a time when British taxpayers are struggling financially it beggars belief that an absolute fortune is being thrown around so carelessly.
“It is small wonder that hardworking taxpayers are becoming increasingly disillusioned with the wasteful, greedy elite who run the EU.” The new revelations were highlighted by MEPs during discussions on tabling a damning draft report on controlling spending in Europe. Some MEPs are understood to have warned that lax controls on spending public money is dragging the European Parliament’s reputation through the mud.
Pro-European Business Secretary Lord Mandelson yesterday reiterated his belief that Britain will one day join the euro. “Don’t ask me when, it’s not going to be soon, but we will do it,” he told an event in Paris. UKIP chairman Paul Nuttall MEP said: “He has got to be kidding. The political elite of this country are so wedded to their love affair with the EU that nothing, especially economic reality will get in the way.”
Nigel and Nick: Defenders of Freedom
Feb 27th
It’s been a strange old week for two of my closest colleagues, Nigel Farage and Nick Hogan. Firstly, Nigel has created a bit of stir to say the least. I must say that I had reservations when he attacked the President of the European Council, Herman van Rompuy. I looked to Trevor Colman MEP, who I sit next to in the parliament, and we both shared a glance of uneasiness. However, as soon as we saw the reaction of the Europhile MEPs, particularly the leader of the Socialist grouping, Martin Schultz, we knew he had got it right. Schultz is always a good barometer because he gets increasingly agitated when one criticises the beloved ‘project’, and he was ‘spitting feathers’ when Farage was giving Van Rompuy a bit of ‘dressing down’. Great fun.
To those who suggest that Nigel’s speech was a bit boorish, I would say look at the media coverage it has generated. Many of us give speeches in the European Parliament and they are never reported (except in local papers), but this one has gone global.
As Oscar Wilde said: ‘The only thing worse than being talked about is not being talked about.’ As a result of Nigel’s speech, we are being talked about.
Now I’ll move on to Nick. Nick Hogan was the UKIP candidate for Chorley. Nick is also the smoking ban rebel: the man who would not kick three elderly gentlemen out into the cold and rain to have a fag. Unfortunately a council snoop spotted Nick and bingo, he was prosecuted. Nick was given a six-month sentence yesterday, which is appalling if you consider that louts and yobbos, who blight our society, very often get away with a ‘wrap on the knuckles’ and continue to go about their business. It makes me sick to the stomach to see Nick ‘go down’ because prison is for real criminals, for bad people who seek to hurt other human beings, not for people like Nick Hogan.
Nick may be behind bars today, but it is the wrong bar in my opinion and I for one will be there to meet him when he is released.
As Edmund Burke said: ‘Bad laws are the worst form of tyranny.’ And this is undoubtedly bad law.
Immigration sees UK population rocket
Feb 26th
The latest immigration figures have prompted the Migrationwatch think-tank to warn that Britain’s population is heading swiftly towards the 70m mark.
Labour’s open-door policies have resulted in another surge in new arrivals, according to the latest figures from the Office for National Statistics. Almost 204,000 immigrants were granted UK passports in 2009 – a rise of 58% on 2008 figures.
Sir Andrew Green, chairman of Migrationwatch, said: “There is not sign here of any reduction in immigration. We are still headed for a population of 70m by 2030 unless the main political parties face up to the steps that need to be taken.”
UKIP is the only party offering a real solution to the problem – a five-year freeze on permanent immigration along with more strict control of work permits and student visas.
In addition to the 204,000 foreigners granted British passports, last year 190,000 immigrants were given the right to settle in the UK without full citizenship. There was also a 30% rise in the number of foreign nationals arriving on student visas.
In all, 518,000 immigrants came to the UK in the 12 months before the end of June with a net influx of 147,000.
The news comes only days after a freedom of information request unearthed a document published in 2000 proving that Labour ministers deliberately encouraged mass immigration and were even advised to describe as racist anyone who opposed an open door policy.
As UK unemployment continues to rise, the Tories have accused Gordon Brown of going back on his ‘British jobs for British workers’ promise. The Lib Dems have also accused Labour of mismanaging border controls.
Read UKIP’s immigration policy here
UKIP opposes allowance increase
Feb 26th
Despite the protests of UKIP's Marta Andreasen, Euro MPs have greenlighted themselves an extra £1,300 in allowances to cover staff costs and to hire an additional 150 staff for administrative jobs in Brussels.
The politicians, who already get £15,447 to pay for assistants, say the extra money and new staff are necessary because of the additional work created in the wake of the Lisbon Treaty.
Yesterday all UKIP MEPs voted against the absurd proposals, which come as countries across Europe struggle to balance their budgets and stem a rising tide of unemployment.
Ms Andreasen has opposed the hikes since she first caught wind of the European Parliament’s intentions earlier this month.
She said: “I, of course, opposed radically, indicating that once again we are asking more money from the European taxpayer when people are struggling to make it through the financial crisis.”
Ms Andreasen explained that the increase in allowances and staffing now needs to be approved by the European Commission and Member States.
“What will undoubtedly happen is that the increase will take place and the taxpayers will have to bear the burden. This is the EU!” she added.
The European Parliament estimates the 150 new staff will cost taxpayers approximately £12m. Astonishingly that is a mere 0.8% of the EU’s massively swollen budget – which officials in Brussels claim is “stretched to its limits”.
UKIP introduces sceptical eco stance
Feb 26th
Daring to campaign on fact rather than fiction, UKIP peer and leading climate change sceptic Lord Monckton this week explained how the Party is paying attention to scientific truth and not eco-facists. Writing in the International Business Times, William Dove said:
The policy, which took a sceptical position, was unveiled by the party’s leader, Lord Pearson of Rannoch, and Lord Monckton of Brenchley, a former advisor on scientific policy to Margaret Thatcher’s government. He also warned the then prime minister of the possible threat posed by global warming and supported greater research into the issue.
Lord Monckton, who joined UKIP last year, said that his new party would be against taking drastic action to defeat climate change on both scientific grounds and on democratic grounds.
He said that ahead of last year’s Copenhagen Climate conference a draft text had been prepared that had continued reference to a “world government” needed to deal with the issue. However Lord Monckton said that the text did not mention once words like “democracy”, “election”, “ballot” or “vote”.
He said, “UKIP approaches the climate question the same that it approaches the EU question. If it is necessary to have a world government it should be elected”.
On scientific grounds Lord Monckton said the idea that climate change was caused by human activity had not yet been proven and that even if it was, reducing carbon emissions is not the way to tackle the issue.
Lord Monckton slammed the use of computer models by the Intergovernmental Panel on Climate Change as an unreliable research method in determining global temperature records. He said, “If you want to know the length of my tie you can call up all the tie manufacturers and ask them the average length of the ties they sell and produce a model based on that. Or you could just measure it”.
He went on to say that global warming measured between 1983 and 2001 was probably caused by a naturally recurring reduction in cloud cover, recorded from space by satellite pictures.
He said that “Our conclusion is that there probably isn’t a problem and even if there were, there are cheaper and more effective ways of dealing with it, such as adapting to climate change.”
“If you closed the whole carbon economy for 41 years you would only forestall one degree of warming”.
As a result he said that UKIP’s policy would be to cease funding for the IPCC, pull out of the EU’s Carbon Trading Scheme and would establish a Royal Commission that would allow scientists on both sides of the debate to research climate change and come to a conclusion.
This, he said, would allow politicians to then act sensibly in response to the science rather than spending billions at a time of recession on ineffective carbon emission measures, when “the science is not settled”.
Lord Pearson welcomed the policy as a possible vote winner, citing a recent Guardian poll which found that the number of people sceptical of climate change has increased 50 per cent to around four out of five people, despite the three main parties giving a high priority to fighting climate change.
© This article first appeared in the International Business Times. February 25, 2010
Mann Island Controversy
Feb 25th
The National Audit Office has confirmed it is keeping a close eye on the controversial land deal at Liverpool’s Mann Island.
Euro MP Paul Nuttall contacted the NAO last month because he is seriously concerned about the deal in which the Northwest Regional Development Agency apparently sold the prime site for less than a quarter of its true value.
He took the step after NWDA boss Steven Broomhead announced that this complex matter was to be investigated internally.
Mr Nuttall has now been told by the NAO that they are aware of the issues and that PriceWaterhouseCoopers is currently reviewing the sale.
The findings of this review will be examined by the Audit Office and Mr Nuttall, Merseyside MEP for the UK Independence Party, has been assured he will be notified about the outcome.
“We are talking about millions of pounds of taxpayers money and my constituents are entitled to be reassured that they have been properly spent, albeit by the NWDA, a quango that UKIP would abolish,” said Mr Nuttall.
“I am pleased that the Audit Office is monitoring the matters and the public told of the outcome,” he added.
Empty promises for the future
Feb 25th
The hearings that take place before the European Parliament decides to approve the 2008 EU expenditure (a process known as disharge procedure) have continued this week.
Commissioner Semeta - the one I questioned on the European Public Prosecutor- came to tell us how he will be fixing things in the future...but the past ... what about the funds spent in 2008???...it is this that we have to approve or disapprove now...The trick has been used for years: the Commission promises reform and Parliament approves the accounts on the basis of promises. We should not be surprised when the Court of Auditors says that the important thing is the evolution and not how positive or negative their opinion on the EU expenditure is today!
Today I had to listen to the rapporteur for the discharge of the Council accounts stating that he was waiting for explanations to be able to form an opinion. He is a Polish member from the ECR group ( European Conservatives and Reformists) who has recently said he would support me after having read my book, though immediately after this he voted against my proposals. Last year the discharge for the 2007 Council expenditure was postponed from March to November 2009 due to lack of information. In November the Parliament voted - except for me and my UKIP colleagues who followed my advise- to give discharge on the basis of "promises" for the future. Here we are now facing the same situation for 2008 expenditure and still expecting to give discharge. I raised my voice to show my disagreement with this proposal but my ECR "friend" did not like what I had to say...( see video)
It is frankly amazing how the European Parliament continues to approve the management of EU funds in the face of negative opinion from the auditors and how they justify this on "promises for the future". I am convinced that there is no hope for real change unless we withhold this discharge until there is a radical overhaul of the financial management. But...I doubt this will happen soon. Too many vested interests at stake!
Commissioner Semeta - the one I questioned on the European Public Prosecutor- came to tell us how he will be fixing things in the future...but the past ... what about the funds spent in 2008???...it is this that we have to approve or disapprove now...The trick has been used for years: the Commission promises reform and Parliament approves the accounts on the basis of promises. We should not be surprised when the Court of Auditors says that the important thing is the evolution and not how positive or negative their opinion on the EU expenditure is today!
Today I had to listen to the rapporteur for the discharge of the Council accounts stating that he was waiting for explanations to be able to form an opinion. He is a Polish member from the ECR group ( European Conservatives and Reformists) who has recently said he would support me after having read my book, though immediately after this he voted against my proposals. Last year the discharge for the 2007 Council expenditure was postponed from March to November 2009 due to lack of information. In November the Parliament voted - except for me and my UKIP colleagues who followed my advise- to give discharge on the basis of "promises" for the future. Here we are now facing the same situation for 2008 expenditure and still expecting to give discharge. I raised my voice to show my disagreement with this proposal but my ECR "friend" did not like what I had to say...( see video)
It is frankly amazing how the European Parliament continues to approve the management of EU funds in the face of negative opinion from the auditors and how they justify this on "promises for the future". I am convinced that there is no hope for real change unless we withhold this discharge until there is a radical overhaul of the financial management. But...I doubt this will happen soon. Too many vested interests at stake!
Nigel blasts EC president as ‘damp rag’
Feb 24th
UKIP MEP Leader Nigel Farage caused uproar in the European Parliament today when he told the new European Council President that he had the "charisma of a damp rag".
He compared the former Belgian prime minister to a "low-grade bank clerk" and said he came from a "non-country".
The attack, which stunned the chamber, came as Mr Von Rompuy made his maiden appearance in parliament in Brussels.
"I don't want to be rude," Mr Farage began, before launching into a personal attack lasting several minutes.
"Who are you? I'd never heard of you, nobody in Europe had ever heard of you," Mr Farage thundered, as noisy disapproval at his intervention in the chamber rose.
See the video below to see why Vom Rompuy was so upset.
Nigel blasts EU president as ‘damp rag’
Feb 24th
UKIP MEP Leader Nigel Farage caused uproar in the European Parliament today when he told the EU President that he had the "charisma of a damp rag".
He compared the former Belgian prime minister to a "low-grade bank clerk" and said he came from a "non-country".
The attack, which stunned the chamber, came as Mr Von Rompuy made his maiden appearance in parliament in Brussels.
"I don't want to be rude," Mr Farage began, before launching into a personal attack lasting several minutes.
"Who are you? I'd never heard of you, nobody in Europe had ever heard of you," Mr Farage thundered, as noisy disapproval at his intervention in the chamber rose.
See the video below to see why Vom Rompuy was so upset.
UKIP launches pioneering iPhone app
Feb 24th
UKIP continues to blaze a trail in new technologies as the first political party to launch an iPhone application.
The free app allows iPhone users to stay in touch with the Party through Facebook and Twitter while also providing easy access to UKIP news, photos and videos.
The Party will also use the technology, available through Apple’s iTunes store, to inform supporters about volunteering opportunities and collect feedback through surveys and polls.
Damian Wilson, UKIP’s head of online, said: “UKIP are firm believers in using the latest in social networking technology to engage with the public. This is a great addition to our strategy.”
Brian Hurley, founder of Purple Forge, the company which helped develop the application, said: “UKIP is opening the new frontier of campaigning and has taken a leading role in terms of community engagement.
“Their commitment to participatory democracy using modern technology is clearly being showcased in their campaign.”
AIFM latest
Feb 24th
Yesterday morning the report on the draft AIFM ( Alternative Investment Fund Manager) directive was debated at the ECON (Economy and Monetary affairs) committee where I am substitute member.
As I am shadow rapporteur for my group I went there to defend the eleven amendments to the report that I had introduced.
I drew the attention of the members to the fact that the proposal for a directive came out of the frightening events of 2008. I indicated that prior to that there had been a lot of unease about what was happening in the financial services industry and that hedge funds in particular had got a bad reputation after the collapse of Long Term Capital Management and were looked on with suspicion.
Then I referred to the events of 2008 and 2009 and among other things I said that some were led to conclude that it was time to limit leverage, recalling the huge leverage of LTCM. But I pointed out that the leverage used by hedge funds had been drastically reduced due to market considerations since the days of LTCM and that imposing leverage caps today was, in a way, a delayed reaction as the industry had changed and moved on. Where leverage caps would have been required was on the recent outrageous lending of the regulated and respectable banks who brought us to where we are today. These regulators are looking to close the stable door after the horse has bolted, but they even have the wrong stable! I reminded the committee that no hedge fund ever asked for taxpayer money to bail them out and that this could not be said of the banks which had shareholders and supervisory boards and all the trappings of responsible management but yet managed to almost collapse the economies of the western world.
Coincidentally yesterday the FSA released a report on hedge funds. They examined the risk hedge funds posed to the system and found "a relatively low level of 'leverage'" and "a contained level of risk." Hedge funds far from being a credit risk provided substantial collateral. It is gratifying to see some authoritative evidence from a neutral source back my contention.
Then I emphasized that this directive wanted to regulate everything not covered by UCITS covering among others, venture capital funds, investment trusts, real estate funds and of course hedge funds, and that this was a mistake as there were too many different types of funds being merged into a common solution.
I pointed out that, among other amendments, I had submitted one to exempt investment trusts, a form of investment used in the UK which is as far from a hedge fund as one could imagine and which would be badly affected by the cost of regulation imposed by this directive. I added that I had also submitted an amendment to double the threshold for exemption.
I also referred to third country funds , raising awareness that the newest proposals from the Spanish Presidency seemed to go back to an earlier protectionist version of this directive and were limiting the marketing in the EU of non EU funds. "We need investment in the EU and protectionism over investing will hurt us", I voiced loudly. "We should not do anything that will cause capital flight or loss of investment in Europe".
I concluded by saying that given the number of amendments proposed it was clear that as written, the Commission proposal was not satisfactory. I therefore requested the committee to consider sending the proposal back to the Commission asking them to redraft it bearing in mind our obvious concerns.
As I am shadow rapporteur for my group I went there to defend the eleven amendments to the report that I had introduced.
I drew the attention of the members to the fact that the proposal for a directive came out of the frightening events of 2008. I indicated that prior to that there had been a lot of unease about what was happening in the financial services industry and that hedge funds in particular had got a bad reputation after the collapse of Long Term Capital Management and were looked on with suspicion.
Then I referred to the events of 2008 and 2009 and among other things I said that some were led to conclude that it was time to limit leverage, recalling the huge leverage of LTCM. But I pointed out that the leverage used by hedge funds had been drastically reduced due to market considerations since the days of LTCM and that imposing leverage caps today was, in a way, a delayed reaction as the industry had changed and moved on. Where leverage caps would have been required was on the recent outrageous lending of the regulated and respectable banks who brought us to where we are today. These regulators are looking to close the stable door after the horse has bolted, but they even have the wrong stable! I reminded the committee that no hedge fund ever asked for taxpayer money to bail them out and that this could not be said of the banks which had shareholders and supervisory boards and all the trappings of responsible management but yet managed to almost collapse the economies of the western world.
Coincidentally yesterday the FSA released a report on hedge funds. They examined the risk hedge funds posed to the system and found "a relatively low level of 'leverage'" and "a contained level of risk." Hedge funds far from being a credit risk provided substantial collateral. It is gratifying to see some authoritative evidence from a neutral source back my contention.
Then I emphasized that this directive wanted to regulate everything not covered by UCITS covering among others, venture capital funds, investment trusts, real estate funds and of course hedge funds, and that this was a mistake as there were too many different types of funds being merged into a common solution.
I pointed out that, among other amendments, I had submitted one to exempt investment trusts, a form of investment used in the UK which is as far from a hedge fund as one could imagine and which would be badly affected by the cost of regulation imposed by this directive. I added that I had also submitted an amendment to double the threshold for exemption.
I also referred to third country funds , raising awareness that the newest proposals from the Spanish Presidency seemed to go back to an earlier protectionist version of this directive and were limiting the marketing in the EU of non EU funds. "We need investment in the EU and protectionism over investing will hurt us", I voiced loudly. "We should not do anything that will cause capital flight or loss of investment in Europe".
I concluded by saying that given the number of amendments proposed it was clear that as written, the Commission proposal was not satisfactory. I therefore requested the committee to consider sending the proposal back to the Commission asking them to redraft it bearing in mind our obvious concerns.
