Wednesday, January 20, 2010

Brown's Crumbliest Flakiest Answer

As the Government owns 84% of the Royal Bank of Scotland is the Government therefore 84% liable for the £12bn loan they have given Kraft to buy Cadbury's putting British jobs at risk.

That is the question (iPlayer Nick Starts at 17:54) that Nick Clegg the Lib Dem leader asked Gordon Brown at PMQ's today. Also why are they lending such amounts to American based multi-nationals when they still refuse to lend to British businesses trying to invest in British jobs and British products. The Prime Minister responded with the crumbliest, flakiest answer. An answer that did not taste like the question before.

Indeed he went off listing economic achievements of his Government rather than answering the specific charges of Nick's question. Brown's default position even though that looks more dodgy the more he quotes his economic achievements in response to economic disasters.

Vince Cable has made a follow up statement on this issue.

"Cadbury is a national institution which provides thousands of jobs in the UK and there is a real danger its takeover by Kraft will lead to job losses.

"It is particularly galling then that state-owned RBS should part fund this takeover when it is clearly not in the interests of the UK economy.

"This takeover also raises broader questions about how hedge funds, out to make a quick buck, can destabilise even the most established companies.

"We have seen Cadbury shares rapidly bought up by hedge funds that are keen to accept the Kraft takeover regardless of whether it is in the long-term interests of the company.

"As the City minister Lord Myners himself notes, it is becoming too easy for good British companies to be taken over by foreign predators."

So there you have it the Government has aided an abetted a predatorial take over of a British institution. Anyone who have ever tasted American chocolate will know we have far the superior product.

UPDATE: Now that Hansard has issued the 3 hour later official record here is the exchange. I've added a few comments in red.

Mr. Nick Clegg (Sheffield, Hallam) (LD):......

I should like to return to the issue of Cadbury’s. Last month, Lord Mandelson declared that the Government would mount a huge opposition to the Kraft takeover of Cadbury’s, so why does the Royal Bank of Scotland, which is owned by this Government, now want to lend vast amounts of our money to Kraft to fund that takeover?

The Prime Minister: If the right hon. Gentleman is really suggesting that the Government can step in and avoid any takeover that is taking place in this country overnight (Actually I think Lord Mandelson suggested it when he said "If you think you can come here and make a fast buck [you] will find that you face huge opposition from the local population... and the British Government"), and then tell a bank that it has got to deprive a particular company of money by Government dictate (Again Mandelson "We expect long-term commitment, not short-term profit, to rule."), his liberal principles seem to have gone to the wall.

Mr. Clegg: I thank the Prime Minister for the little economics lecture, but there is a simple principle at stake. Tens of thousands of British companies are crying out for that money to protect jobs, and instead RBS wants to lend it to a multinational with a record of cutting jobs. When British taxpayers bailed out the banks, they would never have believed that their money would be used to put British people out of work. Is that not just plain wrong?

The Prime Minister: Putting the words “liberal” and “principle” together seems very difficult now—[Interruption.] I have to tell the right hon. Gentleman that no Government are doing more to try to protect and increase jobs than this country’s (actually quite a number are doing better). Unemployment is falling today (except in Scotland where is it up 9,000) as a result of the actions we have taken (This time I'm quoting Jim Murphy who isn't so certain "After previous recessions the jobs market has taken longer to bounce back than the economy, and we know that we are still in very uncertain times."). If we had taken the advice of the Liberal (I assume he means to insert Democrat here) party (the Banks wouldn't have been given the free reign they had and income tax and capital gains would be in parity), unemployment would be a great deal higher than it is now (I dispute this as around here many jobs were lost when the banks no longer where willing to lend). He has nothing to offer the debate on the economy at all—[Interruption.]

A bit of a visual update:

Hat tip to Subrosa Video from Ollie at the Red Rag

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