Eurozone Financial Assistance

Lindsay Hoyle Excerpts

Tuesday 24th May 2011 Commons Chamber

[Mr Cash]

I did not say anything adverse about it at the time other than that the opportunity was not taken, despite advice I tried to give, to use the treaty opportunity to say to other member states that we would not agree to the treaty and would veto it unless we were taken out of the EFSM; we could then have brought forward the arrangements currently proposed for 2013. That proposition was eminently reasonable, eminently possible and €440 billion was available under the facility, which is in operation until 2013. In other words, the whole EFSM issue pivots on vanity and a determination not to unravel something that cries out for unravelling. It is not just; it is not right; it is completely irrational.

There are going to be further and deeper riots and protests. Worse still, I believe that the Government are contributing towards instability throughout Europe while claiming that within the time frame extending to 2013, bailing out the German and French banks—we should remember that that is what lies at the root of the problem—as well as Portugal and Greece will achieve stability. It will not. The argument is not only wrong, but totally—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

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[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We are running out of time very quickly, and I want to enable as many Members as possible to speak. We need to hear about the amendment, so I now call Chris Heaton-Harris. If there are fewer interventions and Members do not use all their allotted time, we shall do very well and get much lower down the list.

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[Claire Perry (Devizes) (Con)]

I speak with some trepidation from the depths of the Maastricht maestros on the Government Benches. If I may echo the point made by my hon. Friend the Member for Stourbridge (Margot James), it is a tribute to many people, surrounding me today and not in the House, that we are no longer part of the euro and that we have been able to establish a healthy Euroscepticism both in opposition and since we came into government.

Let me go back in history to see how we reached this sorry state of affairs. Many Members will remember the debates around the time of the Nice treaty in 2001. Indeed, there are Ministers on our Benches today who urged the Government of the time in the strongest possible terms not to sign up to the treaty as they believed it would give away any future veto on bail-out mechanisms. We were assured at that time by the then Minister for Europe that article 103 made it clear that there would be no bailing out of member states, whether that meant Britain or any other member state. I question whether the Minister for Europe at that point knew what was being done.

In May 2010, the acting Chancellor of the Exchequer signed Britain’s commitment to the temporary European financial stability mechanism. Our total commitment is 12.5% of the putative total of €60 billion—€7.5 billion, a substantial sum. Later, I shall address what that means for hard-pressed British taxpayers. First, let me move the timeline further forward one step to December 2010. As has been said several times, the Conservative Chancellor of the Exchequer agreed that Britain would play no further role in a permanent European bail-out facility and also fought for and had implemented a number of stringent requirements for draw-downs from the existing facility.

What will this facility cost the taxpayer? As my hon. Friend the Member for Orpington (Joseph Johnson) said earlier, it is a contingent liability. A number of things must happen before there is any cash bail-out. The entire thing has to go belly up and the countries all have to default. Given that our ranking on this debt is pari passu with the facilities put in place by the IMF, we will have a superior credit position and will be paid first in the unlikely event that there is a partial or full default. It is not a gift or a grant but a contingent liability of €7.5 billion, of which approximately €1.2 billion has been put into the facility to date. The suggestions we often hear from Members on the Government Benches that hard-pressed taxpayers will see further cuts to public services or will not see the schools, hospitals or road repairs that they have been promised are simply fiction. It is not the case.

This amount is a proportion of the EU budget and the budget is agreed for this year, so the liability is capped at this level. There is no further liability under the facility. What is the “so what” of this point? It is my belief that the action of this Government’s Chancellor has stopped Britain further sleepwalking into handouts, bail-outs, gifts or grants to the European Union. This fund is a eurozone experiment about which we have many concerns and I share the concerns that have been eloquently raised by Government Members about the long-term future direction of countries that are hamstrung by the tightness of their currency conditions and the overall problems with their economies.

A Conservative Chancellor argued for tough conditions and pari passu rating with IMF debt for this facility, the only facility in which we have involvement. If hon. Members consider the conditions under which a country can access the facility, they will see that extremely tight conditions must be met and plans must be made. Although the situation is not ideal, the Government have done far more than the previous Government to put a stop to such developments—in fact, they have done the opposite of what that Government did for 13 years. The point that has been made about fighting to ensure that there is equal draw-down from the facility is right and I believe that the amendment also calls for that.

I urge Members on both sides of the House to stop this Eurosceptic scaremongering, to focus on the facts of the debate and to ensure that we collectively never again sign our country up to the sort of bail-out mechanisms and removal of vetoes with which the previous Government left us.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I call Andrea Leadsom. You have two minutes before the Front-Bench wind-ups.

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[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

On a point of order, Mr Deputy Speaker. May I put it to you that the Backbench Business Committee is in fact not being allowed to operate as was clearly originally intended when it was established? Because the motion was amended, the Committee was unable to allow the House to vote on the motion that it had selected for debate. What advice can you give to the House on how that matter might be rectified so that in future, as on Opposition days, the motion is voted on before the amendment is taken? What advice can you give to enable that to happen in future?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I recognise that there is a lot of frustration at the way the motion was dealt with today. However, things have been carried out in order. I am sure that the Leader of the House will reflect on the hon. Gentleman’s comments and think about them, but I am also sure that he will speak to the Committee to see whether there is a way forward for everybody. Hopefully, some amiable agreement can be reached in future, if that is the desire of the Committee.

[Mr Davidson]

Further to that point of order, Mr Deputy Speaker. Does that not demonstrate quite clearly that this set of Government Whips is just as bad as the previous one?

[Mr Deputy Speaker]

I thank the hon. Gentleman for that non-point of order.