As the G7 finance ministers meet in Canada to try to thrash out a deal on the regulation of banking, Lord Mandelson said that the US had shown a "surprising" lack of international perspective on the issue. He also admitted that Britain had been at an advantage during the financial crisis because it had retained sterling rather than being in the euro. He signalled that he would support considering lowering business taxes after the next election if Labour were elected. The Cabinet minister, often described as the second most powerful man in Britain behind the Prime Minister, said a reversal of the 50pc higher tax rate for those who earn over £150,000 would be an option. In a wide ranging interview with The Sunday Telegraph as part of the Business and the Election series launched by The Daily Telegraph yesterday and running online, Lord Mandelson revealed that he had attended "a tough meeting" with Irene Rosenfeld, the chief executive of Kraft, about the Cadbury takeover and had yet to be convinced that the American conglomerate would protect the Cadbury brand in Britain. "[There has been] a surprising lack of internationalism displayed by the US administration [on global banking regulation]," Lord Mandelson said. "But also and equally importantly a failure in the European Union to show stronger leadership. "I think that both the European Council and the European Commission have to play a much stronger leadership role. "Heads of government need to set the direction and pace and the Commission needs to be a much more active, implementing body than we've seen in recent months." His comments come three weeks after President Barack Obama said that he was "up for a fight" with big banks and unilaterally announced that he wanted to see a ban on proprietary trading by global investment banks. The British Government had not been consulted about the announcement. "It is a difficult situation all round, and in my view plain speaking is good, rabble rousing is bad," Lord Mandelson said. "Consistent demands from governments are necessary. Chopping and changing is not. "Above all governments need to speak in an internationally joined up way, this is an international banking system we are trying to regulate and if we have different moves made by various governments you are opening up the risk of regulatory arbitrage of competing banking jurisdictions, rather than encouraging competition within financial markets as a whole." Asked specifically about critics of the single currency who argue that by retaining sterling, Britain had been sheltered from the worst of the market backlash against high public deficits, Lord Mandelson said: "That's true. "But it doesn't necessarily mean that being out of the eurozone will always play to Britain's advantage. "The truth is that Britain depends on a vibrant, growing European economy, this is our domestic market. The one on our doorstep, we don't want it to fail. It will have a better chance of succeeding the more Britain is able to influence its policies." Asked if still supported Britain going into the euro he said he "didn't want to go any further" and that he had always been "consistent". Lord Mandelson argued that the 50pc bonus levy on banks had not put the UK at a disadvantage as the country had to repair its finances and without it there would be a worse public backlash against the banks. He said he was still New Labour and that he had no problem with people earning high salaries for being successful entrepreneurs and taking risks. He also signalled that he would like to see the tax burden fall if Labour won the next election. "On the 50p top rate tax I think it was the right move, it's fair, it's what the public expects when everyone is tightening their belts. "But the Government is right not to rule out lowering it in the future when public finances allow. The more important issue in my view is corporation tax and capital gains tax, and I would be disappointed if those taxes had to be increased in the future." Asked if they should fall, he said: "In the right ciorcumstances it may be possible but I can't exercise the Chancellor's judgement for him." Turning to Cadbury and his meeting with Ms Rosenfeld, who described being quizzed by the Secretary of State as akin to "root canal work", Lord Mandelson said he had significant concerns. "It was a fairly tough meeting, I accept. But I think I have a responsibility. "These companies are not just pieces of property to move around a monopoly board, they are living entities, they have workforces, they are communites, they mean more than simple share transactions. "And in the absence of the board and shareholders seeming to represent that somebody has to and I did. "I was encouraged by her expectation that there will be more manufacturing jobs and output in Britain. I was left rather more uncertain about how the Cadbury brands will be managed or operated in future. "But I accept I don't have a veto over such decisions. I can only encourage the new owners to do what I think is not only right for Britain but right for them as well."Mandelson attacks US and Europe
The full scale of world tension between governments over the way to deal with the banking crisis has been revealed today after Peter Mandelson, the Business Secretary, said that neither America nor the European Union had shown global leadership on the issue.
Sunday, 7 February 2010
Posts
