September 2013 Newsletter

Libor loophole in market abuse rules closed

Euro MPs voted by a large majority to back Arlene’s report and toughen up EU wide rules on market abuse and restore much
needed confidence in financial markets. As Vice President of the European Parliament’s Economic and Monetary Affairs Committee and the lead negotiator on the market abuse law, Arlene said: “In the week of the fifth anniversary of the collapse of Lehman brothers some financial commentators say that the culture which caused the crisis persists in the financial world particularly with instances of abuse continuing to hit the news headlines. The Libor scandal was market manipulation of the worst kind. We are seeing more alleged and potential manipulation of benchmarks in energy markets such as oil and gas and foreign exchange markets. These new rules will close the Libor loophole and ensure all such benchmarks and indices are covered in the law.”

Arlene added: “The litmus test of our new market abuse rules is whether in a fast moving, hi-tech global financial system
these rules can capture, potential and emerging abuses and whether those who commit market abuse in the UK and
Europe will face the full force of the law rather than being extradited to the US because they have tougher sanctions
and longer jail sentences. This law closes the gap and sends a clear signal that the EU is not a soft option or safe haven for perpetrators of market abuse.

Merseyside loses out on vital EU funds

In July Arlene led a delegation of Merseyside representatives to meet with the European Commissioner for Regional Development, Johannes Hahn, to try and overturn a UKGovernment decision to cut £270 million of EU funding from Merseyside’s allocation. Arlene said: “Merseyside has been hit hardest by the cuts to the English regions because money has been moved to Scotland, Wales and Northern Ireland.European funding provides a vital lifeline to Merseyside,without European regional funding we wouldn’t have seen projects like the £47 million investment in the Kings Dock Development.”The delegation believe that the Department of Business,Innovation and Skills (BIS) method of sharing out EU funding is not “in the spirit” of how the European Commission Intended it to be allocated i.e. to prioritise the poorest areas,Arlene added: “The Government are trying to transfer the blame to the EU for the reduction in funding that their own distortion of the EU funding formulae has caused. It is not for the Government to amend the EU formula which should be applied fairly across all areas of the UK. Cutting millions off rightful allocation is a major blow to jobs and growth in the region.

Tory U-turn on EU Vickers banking reform

In a key vote in the European Parliament Labour Euro MPs backed calls for a fundamental shake up of the structure of the EU banking sector.Conservative Euro MPs voted against the call for banking reform despite the Government’s pledge to bring in such reforms in the UK, Arlene said: “This is a prime opportunity to get Vickers banking reform across Europe. Why then would they block their own Government’s interests in the EU? Conservatives today voted against a safer, stable banking system which does not depend on taxpayer bail outs and brings real benefits to the UK economy. An EU banking crisis would have a serious contagion effect on the UK. The Tories are playing fast and loose with jobs and growth in the UK and Europe.”As Vice Chair of the Economic and Monetary Affairs Committee and draftsperson on the report, Arlene added: “Today’s vote is a clear signal in favour of real reform to the structure of EU banks.We are calling for banking services, that are essential to the real economy, to be separated from the excessively risky activities of traders and investment bankers. Depositors and consumers should no longer pay for the excessive risks taken by banks with their money. The taxpayer cannot continue to be the lender of last resort. We need reform to deliver a safe, stable, effective and efficient banking system that operates in a competitive market economy and serves the needs of the real economy and of customers and consumers.”

£16 million for faster broadband in Cumbria

The European Commission has approved £16 million of funding for faster broadband in Cumbria. Arlene said: “This investment is a vital lifeline for businesses in Cumbria. Europe is helping our rural areas to get the support they need to make sure they are not disadvantaged in accessing markets. Affordable superfast broadband will ensure that Cumbria is fully equipped to take advantage of the digital age.”

Positive Steps visit European Parliament

Arlene hosted a visit to the European Parliament by Positive Steps, an organisation which works with young people from
Oldham and Rochdale to get them on the right track and fulfil their potential. Arlene said: “With youth unemployment at an all time high, the work that Positive Steps does with young people to help them make the right choices and build positive futures is vital. I am delighted that they brought a group to Brussels to find out for themselves what our membership of the European Union means for young people in Oldham and Rochdale.”

EU action on potential oil price fixing

Responding to raids by the European Commission of several large oil companies’ premises on allegations of price fixing, Arlene said: “In July 2012 I wrote to EU Competition Commissioner Almunia urging him to look closely at the IOSCO report on allegations of cartels price fixing in oil and gas markets. I remain very concerned that benchmarks in key indices, interest rates and commodity are subject to manipulation. These prices have a knock on effect for households and businesses bills as well as the price of petrol at the pump. People are paying more while companies are booking high profits on the basis of manipulated prices.”

Arlene added: “There is a serious lack of transparency in the price setting system which means we have no idea if the prices
are fair and honest or whether they are a true reflection of the price. The lack of action by UK regulators means it is vital for the European Commission to investigate potential abusive practices in these markets. Should consumers be the victim of overcharging then I want to see companies redress the situation and consumers that have been ripped off compensated.

When 6.5million UK consumers are experiencing fuel poverty and families have seen gas and energy prices rise by between
6 and 9% this year adding on average £200 to their energy bills, this type of market manipulation is abuse which must be urgently tackled”

Arlene added: “One in four young people active in the labour market in the North West are unemployed, the highest level for
almost 25 years. Labour Euro MPs have called on the British government to use the UK’s share of the €6 billion Youth Guarantee funds to save a generation of young people in our region. Young people are top of our agenda in the European Parliament and I want the young people who have visited today to have gone away knowing that their future is our priority.”

Tories delay initiative to stop teenagers smoking

Tory Euro MPs cast the deciding votes to delay progress on EU legislation to protect children from tobacco marketing tactics. Arlene said: “It’s a disgrace that Tory Euro MPs sided with the tobacco industry. They have delayed a vital new law which would  introduce bigger picture warnings and stop the industry making tobacco more attractive to children with innovative packaging and flavourings. It is a key tactic of the tobacco industry to delay and block the Tobacco Products Directive, and Tory Euro MPs have given them a helping hand.”Arlene, who supports North West Tobacco Free Futures Campaign, whose youth campaigners have in the past brought their message direct to the European Parliament in Brussels,said: “A child starts smoking every 28 minutes in the North West.New estimates show that in the North West over 18,000 children start smoking every year, 52 children a day. When you see some of the packaging and cigarettes with their slim designs and pastel colours it’s obvious the industry is deliberately targeting young girls. They are also developing flavours such as chocolate and strawberry, which are clearly aimed at making  to younger smokers. Stopping a new generation of smokers from being recruited has to be our top priority. In order to do this targeting the packets and flavours of cigarettes is crucial. “

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