Eurozone Crisis

Lord Barnett Excerpts

Tuesday 17th January 2012 Lords Chamber

Asked By

[Lord Barnett]

To ask Her Majesty’s Government whether HM Treasury is developing contingency plans for use in the event of a Eurozone collapse.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, as my right honourable friend the Chancellor of the Exchequer made clear in the Autumn Statement, the Government, including of course the Treasury, are undertaking extensive contingency planning to deal with all potential outcomes of the euro crisis.

[Lord Barnett]

Thanks for that very informative reply. I hope that there will never be a need to use the contingency reserve, because, as the Chancellor has said, it would be devastating for the UK economy if there was a collapse in the eurozone. We already have a near recession—if not an actual one—forecast without such a collapse. I gather that the Government are more amenable to the new draft treaty that has been promoted for the next summit. In those circumstances, and given the risk of jeopardising the slightest chance of preventing that collapse, would he not agree that it would be very foolish to veto that summit as well?

[Lord Sassoon]

My Lords, first of all I welcome the compliment paid to my Answer by the noble Lord, Lord Barnett. He asked me a yes or no Question. I gave him a very full Answer and some extra things he did not ask about, so I am glad that he appreciates that. I am not going to speculate on our negotiating position because this is all very fast moving. All I can reiterate is that we are working very hard with our European partners to see a resolution of all aspects of the crisis. They have invited us to be at the table to discuss the arrangements that the eurozone countries are making among themselves and we are active and positive participants when we are invited to be there, as we are at those discussions.