Recently I joined members of Cardiff’s local WDM group to meet an influential member of the European parliament. Kay Swinburne, former investment banker and MEP for Wales, is one of just seven parliamentarians (out of a total of more than 700) who will be sat around the negotiating table in a month’s time when the final stage of negotiations on legislation to tackle food speculation kick off.
We were there to explain how major loopholes in the legislation could be addressed – and ask for her to push for these changes to be made. But while she was certainly charming, and complementary towards WDM’s campaign (apparently our stunt last year outside the European parliament was one of the most amusing things to happen in Brussels in a long while), we left unconvinced of her support for strong rules.
Back in the autumn, MEPs collectively voted in favour of a system which would make limits on speculation mandatory across the EU. The question is whether negotiators will leave big enough loopholes for banks and hedge funds to get around these limits.
On the positive side, Kay agreed that legislation should be set at EU level rather than delegated to each EU member state, risking a race-to-the-bottom as countries try to attracted more business by having less constraints. But she seemed unconvinced by the need to ensure that the limits on speculation apply to all contracts – including any which traders manage to get away with through opaque bilateral deals. The last thing we need is for them to have an incentive for doing more trading outside of transparent and regulated exchanges.
And more fundamentally, we heard the same tired argument for a ‘flexible’ system known as position management, which is used in the UK at the moment and is utterly ineffective. Under this system, hedge fund Armajaro was able to buy up almost the entire European cocoa supply through the London exchange, pushing prices to a 33-year high. While decision-makers have said that such self-regulation should only be allowed in addition to set limits on speculation rather than instead, it seems Kay is not yet convinced.
The good news is that there’s still a month left to persuade her and other MEPs to push for stronger rules. We’ve got an exciting new action coming soon – but in the meantime we’re asking all of Kay’s constituents to sign a petition to show the strength of public support for stronger rules. If you live in Wales, please sign it; if you have friends or family in Wales, please encourage them to sign it, and share it far and wide!