A leaked document has revealed attempts by the UK government to scupper proposed controls on food speculation ahead of negotiations in Brussels next Wednesday.
New rules to prevent banks driving food prices up through financial speculation are due to be finalised in the European Union. But a memo sent by UK negotiators to their counterparts from other European countries last week reveals the UK government’s push to prevent major loopholes in the proposals being closed in the draft regulation.
The memo states UK negotiators’ opposition to strict limits on the amount that banks and other financial players can speculate in commodity derivative markets – a measure that campaigners see as essential to stop speculation destabilising food markets and fuelling global hunger. Instead UK negotiatiors are pushing for the continuation of a system of self-regulation under which speculators have been able to cause huge spikes in the price of foodstuffs.
The memo is likely to have been written by the Financial Conduct Authority (FCA), the UK government body tasked with regulating the financial sector, and the FCA would certainly have reviewed it. Yet the changes it is calling for would constrict the FCA’s ability to regulate speculators.
Nick Dearden, director of the World Development Movement, said today:
By trying to weaken crucial regulation to curb food speculation, the government is putting the profits of big banks like Goldman Sachs before the fundamental right of people everywhere to access to food. Yet again, our government is doing the banks’ dirty work for them. The UK should be backing tough controls to stop banks gambling on hunger, instead of throwing a wrecking ball.