IMF

‘Women on boards of banks ensures they’re more financially stable’, says IMF

Labour Party

The IMF has found that including women on the boards of banks ensures they are more financially stable. Its report, which you can read here, provides further compelling evidence why having women in senior positions and on company boards is good for business.

I find I defend my position regarding women on boards too frequently. The IMF- an institution which obviously musters high regard and respect- found in its report that: “the higher proportion of senior positions occupied by women, the greater the institutions ‘distance to distress’.” It went on to explain that a larger distance means the bank is more protected against shocks to earnings.

The report also found that the vast majority of banks (across the world) don’t have any senior women or women on their boards at all. It revealed less than 20% of directors on the boards of banks are women.

The lack of women in senior positions is not exclusive to the banking sector, indeed last month the Chartered Management Institute revealed respondents to its survey told of a 22% pay gap at management level. It equated the gap to women working an extra 57 days for free compared to their male counterparts.

Plans to force the top FTSE companies to be more transparent about their pay does help because it forces employers to consider how they remunerate staff and if they do so fairly.

Furthermore, an environment must be created so that capable women feel empowered enough to recognise the skills and expertise they bring to the table and feel able to robustly negotiate their pay.

Women remain an asset to business. Not least for the reasons identified in the IMF report. Yet some business leaders remain concerned that any period of time taken away from employment, for childrearing for example, in some way de-skills women. Yet the majority of women who take maternity leave are only away for a few months, during which period most organisations won’t go through a significant transformation. And even where they do, women are able to stay in touch with Keep in Touch days.

So I repeat the wise findings of the IMF report which indicate women are an asset to business: “Including women in senior positions ensures banks are more financially stable.”

David Cameron appears to be engaging with the EU in a good way

Labour Party

Even small-state, cut public expenditure David Cameron seemingly wants to help young people find jobs.

This is excellent news which I hope will be translated into concrete action in Britain to bring down youth unemployment which currently stands at a staggering 22% of those aged 16 to 24.

David Cameron is, moreover, discussing youth unemployment at an EU summit starting in Brussels today, according to the Observer. Cameron will apparently play a full part in the talks, a welcome change for our avowedly Eurosceptic Prime Minister. Let’s just hope he stays the course and doesn’t walk out as he did at the previous Brussels summit on 9 December last year.

The EU could, we understand, provide 22 billion euros from an underspend in the European social fund for measures to combat unemployment among young people. While youth unemployment stands at 22% in the UK, it is even higher in other EU member states – 51.4% in Spain, 46.6% in Greece and 30.7% in Greece.

The EU initiative is therefore very welcome. Having young people unable to find work constitutes a real tragedy, robbing them of the start in life they deserve, leading often to long-term defeatism and periods on the dole throughout their lives.

If the proposals are agreed, the European Commission will work with member states to draw up country specific programmes on how to address the problems and use the EU funds.

Unemployment is the scourge of our times. Even George Osborne is beginning to understand this as he teamed up with Ed Miliband joining leaders of the International Monetary Fund and the World Bank urging action to create jobs amid warnings that youth unemployment was a time-bomb under the global economy.

However, Cameron and Osborne making all the right noises abroad is no substitute for action at home. The main reason unemployment is so high in Britain lies at the door of the Tory-led coalition’s fierce austerity measures. The cuts have been much too much, much too soon. Such policies could lead to a much longer recession than necessary, possibly even a double dip.

We, the British people, need a government that looks after all our interests not just those of a rich few. Everything possible should be done to bring down unemployment at home where it matters. International action is all very well, but the real solution is here, fairly and squarely with David Cameron and George Osborne.

Hungarian Premier Orban seeks to out-Putin Putin

Labour Party

The European Parliament Socialist and Democrat Group earlier today expressed extreme concern at the antics of the right-wing Fidesz governing Party in Hungary led by the populist and dictatorial Viktor Orban.

On 1 January a new prescriptive constitution entered into force in Hungary which will slash the powers of the judiciary, the central bank and the media. Orban has also gerrymandered parliamentary constituencies to keep his party in power and cemented loyalists in key positions for nine years.

You may be forgiven for wondering what this new constitution and governmental set-up offers that differs in practice from the Stalinist era one imposed in 1949 which it aims to replace.  It would appear that Orban is intent on out-Putining Putin, despite his impeccable credentials as a dissident hero in the 1989 revolution. The Hungarian Civil Liberties Union activist, Szabolcs Hegi, is right when he says, “The constitution is an undemocratic law that came from an undemocratic legislative process.” And it gets worse, if that’s possible. Not content with decimating Hungary’s legal system, gagging its media and turning its government into a virtual dictatorship, Orban has also introduced a flat rate personal income tax.

He may have got away with this utterly regressive financial measure but for Hungary’s dire economic situation. As its economy falters, Hungary needs assistance from the International Monetary Fund in the form of its second bailout in four years. However, Christine Lagarde, the strong and determined head of the IMF, is not minded to grant such help while Hungary maintains the flat rate tax on income. She told CNN on Friday, “We’re not complacent. We don’t compromise.”

Meanwhile, last Monday 30,000 Hungarians protested against Orban and his government on the streets of Budapest and the incoming Danish presidency of the EU is facing pressure from its MPs at home to do something about Hungary. The European Commission is meeting in Copenhagen today and will discuss Hungary in some depth, although the Commission is not expected to come to a conclusion for a while yet.

It is, however, clear that the EU will not put up with a member state defying the acquis communautaire, the criteria required for a country to be admitted into the EU in the first place. Whatever its faults, the European Union is a bastion of democracy and the rule of law, and those of us elected to the European Parliament in the Socialist and Democrat Group will make sure the core values of the EU are consistently upheld by all member states.

The IMF warns slower pace of deficit reduction may be necessary

Labour Party

It’s finally happening. The International Monetary Fund, hardly a bastion of leftie thinking, has advised the Tory-led coalition, specifically George Osborne, that a slower pace of deficit reduction would be necessary if the British economy continued to grow less rapidly than expected.

This warning came as a result of the IMF cutting its growth forecast for theUKfor the third time in nine months.

The IMF said it was reducing its forecast for theUKto 1.1% this year – down from 1.5% in June, 1.7% in April and 2% at the start of the year. It also predicted a more sluggish recovery in 2012, with activity expanding by 1.6% against the 2.3% it was talking about just three months ago.

Economists at the IMF are of the view that only an improvement inBritain’s trade performance will prevent the economy returning to recession this year. Domestic demand is expected to contract by 0.5%, the weakest of any country in the G7.

Whatever happened to the Tory idea that private enterprise would pick up the slack following the cuts in public spending? Private initiative is clearly sadly lacking, which just goes to show how infantile, flawed and downright ridiculous the government’s “strategy” actually is.

It’s stupid and it’s also tragic for those many people at the sharp end of what the Tory-led coalition is doing.  Many people are losing their jobs and our National Health Service is already beginning to show the effects of Tory cuts.

Yet it need not be as bad as this. Ed Balls, the shadow chancellor, quoted in today’s Guardian said: “These are deeply concerning forecasts for both theUK and world economy. Our chancellor and political leaders inEurope need to wake up to the scale of the problem and finally realise that we need economic growth and more people in work to really get deficits down.”

Meanwhile a Treasury spokesperson stressed that the government has no intention of backtracking on a deficit-reduction plan.

So the government intends to continue with its appalling policies. More people will suffer. It’s Thatcher all over again. Thatcher’s cuts were ideologically driven, and I believe the same in true for Osborne and Cameron. Best not to be anything less than a millionaire in Con-Dem land.

Tax on Financial Transactions

Labour Party

Given the recent publicity about the “Robin Hood” tax, it’s perhaps not surprising that it was given an honourable mention at the plenary session of the European Parliament in Strasbourg last week.  An amendment to a resolution on the Conference on Climate Change held in Copenhagen in December suggested a tax on financial transactions, the Tobin tax named after the economist James Tobin who first mooted the idea, to support international climate action.

Although the amendment was defeated due to lack of support from the centre-right and right wing groupings in the European Parliament, I was pleased that many, though sadly not a majority, of MEPs joined with those campaigning to make the Tobin tax a reality. 

We know that Prime Minister Gordon Brown, Nicolas Sarkozy, President of France, and the German Chancellor Angela Merkel have all been strong advocates of  what is becoming known as the “Robin Hood” tax.  You couldn’t find a much better line up than that.  Gordon Brown, in fact, started to lobby for support for the Tobin tax in the City of London in the autumn of last year and I understand the International Monetary Fund is looking at such a plan, despite opposition from the United States.

It is, of course, the international nature of the Tobin tax which it such an ideal tool for raising money for matters which require action in more than one country.  The recently launched campaign in Britain by comedy writer Richard Curtis and popular actor Bill Nighy for such a a “Robin Hood” tax to be levied on banks is rare indeed in that it is popular for its own sake and targeted at an unpopular group – the banks.  Richard Curtis’s proposal to impose a 0.5% tax on international bankers’ transactions could raise up to £250 billion per year, a huge sum half of which would be retained by the country where the deal took place and the other half split between tackling climate change and reducing global poverty.  The plan targets institutions not ordinary people and is set at a level which should not hurt the banks.

You may have thought that even bankers would be hard pushed to oppose a tax which could do so much good at little cost to themselves.  Sadly, this does not appear to be the case as Goldman Sachs apparently orchestrated moves to vote against the “Robin Hood” tax on the campaign’s website.  Fortunately the Goldman Sachs ruse, which showed both the utmost arrogance and disregard for the plight of so many people on our planet, was rumbled.  However, the fact that they tried it on in such a way shows that bankers still have a long way to go before they think the same way as the majority.  

Back in the European Parliament, you will, of course, not be surprised to know that the Tories voted against the Tobin tax amendment.  Although the resolution in question was not legislative and hence only a recommendation to EU member states, European Parliament support for a Tobin tax to fund climate change work would have sent a strong signal.  It would also have put us on the same side as Oxfam, Save the Children, Action Aid, many trade unions, most mainstream churches and celebrities such as Bono who are known for the humanitarian work.  It’s a real tragedy that the right wing in Europe prefers to peddle its reactionary ideology rather than supporting moves to combat climate change and reducing world poverty.