CONSERVATIVE
New Forest East

TERRORISM CRISIS – FINANCE – 8 November 2001

Dr Julian Lewis: When he [Gordon Brown] last met the Governor of the Bank of England to discuss the economic implications of the events of 11 September and afterwards?

Gordon Brown: Together the Governor and I attended last month's G7 meeting in Washington. Next Friday, the Governor and I will both attend the Ottawa meetings of the International Monetary Fund, the World Bank and the G20. We are determined to take action to maintain the conditions for stability and growth. We will also agree at those meetings new measures to cut off the supply of funds to terrorism.  

This morning, the Bank of England has frozen the accounts of many individuals or companies on the latest terrorist suspects list, consisting of 46 organisations and 16 individuals. I can report that, after seizures of $10 million, more than $100 million–£70 million–of suspicious assets in 38 accounts have been frozen in Britain alone.  

When the Governor and I meet the IMF committee next week, we shall ask all 183 member countries to ratify in their domestic law the eight principles governing surveillance and seizure of suspicious transactions. As chair of the United Nations counter-terrorism committee, we will also offer to co-ordinate a central register for technical assistance to countries implementing anti- terrorist measures. Now that asset-tracking centres are being set up in all major financial centres, we will offer London as an international clearing house.

We ourselves will appoint an accountant from the private sector to head our anti-money laundering and terrorist finance unit. As I announced to the House on 15 October, we are proceeding to lay the appropriate regulations for a new supervisory regime for bureaux de change.

[SUPPLEMENTARY:] I am delighted to hear from the Chancellor that such firm action is being taken against terrorist finances. However, will he confirm reports this week from Government sources that the costs of the Afghan conflict have so far been relatively small? Has he discussed with the Governor of the Bank of England the warnings of the Institute for Fiscal Studies and other bodies that, even without the Afghan conflict, if the current rate of Government expenditure continues to increase as it has, taxes will have to increase? 

Gordon Brown: I do not accept the hon. Gentleman's assertion. I have regular meetings with the Governor of the Bank of England. As the hon. Gentleman will know, the Bank of England Monetary Policy Committee is meeting today and will announce its decisions in due course.

As for public spending, we will meet all the necessary costs of military action. We will also meet the costs of international development responsibilities in Afghanistan and Pakistan. Those costs have been £60 million in the past few months. In addition, we will meet the costs for additional home security. All those costs will be met, and they will be met within the fiscal rules that we have established. We shall keep to our fiscal rules, as I told the Confederation of British Industry on Sunday.

The hon. Gentleman says that we are spending more than the country can afford. Consequently, he wants to cut public spending. He will have to tell the House which hospitals and schools and how many nurses and doctors will be cut. He will have to face up to those questions if he makes such proposals.