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John Redwood takes Government apart over Banking Bill

John_redwood_mpThe House of Commons debated the Banking Bill yesterday. A number of Conservative MPs spoke out against the Government's plans. The most telling contribution came from John Redwood.

"This is the biggest, most important and most dramatic money resolution I have ever seen in the House of Commons. It has taken 1,000 years to amass a debt that the Government put at around £550 billion. Under this money resolution and the associated actions that the Government might take, they might double the debt by making that amount of money available as loans and share capital to banks or put the same amount again at risk through their loan guarantee scheme. As my hon. Friends have indicated, if we consolidate on the general balance sheet, as we should, all the assets and liabilities of the banks that the Government are buying, we do not just double the debt but quadruple or even quintuple it when one takes into account the full size of RBS, Northern Rock and Bradford and Bingley—no others, we trust, but this is very open-ended and implies that there could be others.

The money resolution takes the form of two different assertions. First, we are invited to give the Secretary of State power to put out money provided by Parliament under these headings, and secondly, in urgent cases, to authorise payments to be made out of the Consolidated Fund. The Bill that backs up the money resolution contains even more wide-ranging powers relating to the central bank, enabling quite a lot of money to be generated by the bank through quantitative easing and the manoeuvres of its own balance sheets, so the process is literally open-ended. We have absolutely no idea how much is involved.


I know that others wish to speak. It is a pity that we do not have a three-hour debate on the biggest sum of money ever voted on in the history of Parliament, but I do not want to detract from colleagues’ time. I have made my main points: the Government should show more care, they should provide us with some numbers and they should understand that the total sum involved is too big."

I am not agitating for the removal of George Osborne, but I do think that the Conservatives would be foolhardy not to draw on Mr Redwood's talents if they win the next election. He is, famously, extremely intelligent and has reminded us throughout this crisis that he has an outstanding mastery of detail.

Yet what I think really sets him apart is his clarity of thought. He doesn't just have all the facts and figures at his fingertips - he can utilise those that are relevant, dismiss those that are not, and package them in remarkably clear language. We shouldn't be nervous or chippy about very bright people being in power. If they are sound and decent, then they should of course be advanced.

Ken Clarke's successful return to the front bench suggests that the public are happier than they might once have been about old hands being brought back into the fold. Mr Redwood's challenge to John Major (which after all he had the courage to make in public) is ancient history. Mr Redwood has long battled with a perceived image problem, but these are surmountable too; just ask William Hague.

I don't even have a job in mind for John Redwood, but I would be delighted to see him back in Whitehall.

Tom Greeves


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