Financial Assistance (Ireland)

Debate between George Osborne and Jeffrey M Donaldson

Monday 22nd November 2010 Commons Chamber

[Mr Osborne]

I make two observations. The first is that this is a loan to a sovereign nation state and, barring a really extraordinary turn of events, we would expect Ireland to pay us back. So we are making a loan to another sovereign nation that we fully expect to be paid back. The long history of international packages shows that the IMF and others get their money back in almost all circumstances. This is a loan that we can afford to make and which we will get back. Secondly, there is a broader observation about banking systems in Ireland, the UK and elsewhere. They became vastly over-leveraged and vastly over-borrowed and they were very badly regulated. The assurance that I can give my constituents and those of the right hon. Gentleman is that we are sorting out the regulation of the UK banks. We hope that the Irish Government are now dealing with the situation of the Irish banks. They were interconnected with the UK and made a lot of loans in the UK, and it is in the interests of us all that we sort out the Irish banks as well.

[Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)]

I recognise the reasons why the Chancellor has had to provide the loan to the Irish Republic, and he has recognised the potential impact of that on the Northern Ireland economy and on business in Northern Ireland. Will he support the Northern Ireland Executive in reducing the level of corporation tax there to the same level as exists at present in the Irish Republic?

[Mr Osborne]

I thank the right hon. Gentleman for the support that he has given to the action that we have decided to take today. He will know that my right hon. Friend the Northern Ireland Secretary is pursuing with vigour the subject of Northern Ireland’s economic environment and business environment, the corporation tax rate and so on, and we are coming forward with plans to stimulate the Northern Ireland economy. Specifically, the Northern Ireland Secretary and my hon. Friend the Financial Secretary to the Treasury will be in Northern Ireland later this week to talk principally about what is going on this week, but I am sure they can have discussions about broader issues as well.