Loans to Ireland Bill

Lord Cope of Berkeley Excerpts

Tuesday 21st December 2010 Lords Chamber

[Lord Cope of Berkeley]

My Lords, first, I should perhaps confirm that I am indeed the British co-chairman of the British-Irish Parliamentary Assembly, although in what I say this afternoon I am speaking entirely for myself and not in any way for the assembly. I do not think that this is an interest in the strict sense that your Lordships’ House understands, but for that matter, a lot of the interests that are declared in the course of your Lordships’ debates are not, in the strict sense, interests either. The House is quite right to err on the side of disclosure in that matter.

As the noble Lord, Lord Bew, has just indicated, as it happened, our last joint meeting as representatives of the legislatures of these islands occurred on 20 and 21 November, at exactly the time that the crisis which is the reason for the Bill was coming to a head. Our Irish colleagues were, indeed, somewhat distracted during our meetings over those days, as your Lordships will guess. It certainly gave us all a greater insight into the stresses that they were under and the political as well as the economic effects of the crisis. I can confirm, as the noble Lord, Lord Bew, has just said, that a great deal of gratitude was expressed by our Irish colleagues for the attitude of UK Ministers and, in particular, for some of the Chancellor’s remarks at that time. That has a political importance quite separate from the economic importance of the Bill and the loans it allows.

I strongly support the Bill. As my noble friend the Commercial Secretary has explained, the Bill and the loans it permits are part of the underpinning of the economy and banking system of the Irish Republic. It is important, as other noble Lords have said, for our economy and particularly for the economy of Northern Ireland. It is difficult to express that aspect of this too strongly.

I go along with the noble Lord, Lord Liddle, to the extent that this is not, of course, the end of such matters. We must expect further strains within the eurozone and, clearly, EU Finance Ministers, including our own, are right to seek agreement on a debt restructuring mechanism, and so on. We in Britain are necessarily involved because our banks are involved, as has been said, but that does not make the Bill wrong. On the contrary, it is right and I support it.

I also support the use of the fast-track procedure, which was devised, after all, by our Constitution Committee and which has proved its worth in this case, although it was questioned in debates in another place. Her Majesty’s Government are to be congratulated on seeking specific legislative authority before signing up to the loans, rather than relying on so-called common-law powers and coming to Parliament afterwards for ratification, which is something that they could have done. The previous Government were accused of having breached the spirit and, arguably, the letter of the Public Accounts Committee Concordat of 1932 which governs these matters. This Government were right not to have risked such condemnation in this case. At the same time, if the Bill had followed normal timings through Parliament, it would have been delayed until well after the loan agreements were likely to be agreed. That is the first reason for the fast-tracking.

The Government also say in the Explanatory Memorandum that fast-tracking is necessary to give confidence to our international partners. I understand that, but it is only part of the matter. The important fact which underlies all this is that markets these days move very swiftly and fast, firm decisions are required to deal with that. I was a Treasury Minister at the time we left the ERM—although I was not involved with that side of the department—so I need no convincing about the power of the markets and the speed with which they can influence events.

Incidentally, there is a tendency to dismiss currency market operations as purely speculators speculating. Of course, there are some operators within those markets who are pure speculators, but the foundation of currency markets—the size of them reflects this—is legitimate traders trying to offset potential currency fluctuations. A board deciding to invest in a new major plant whose operations and building will extend over decades to come needs to insure itself as much as it can against possible currency fluctuations during the time taken to bring it to fruition. Similarly, someone buying or selling large items which take time to deliver can easily find that the profit or loss on the exchange rate can be greater than the profit on the goods themselves. They need to ensure that they are not penalised by currency fluctuations by buying or selling forward. Which of us planning a holiday overseas has not thought about buying some local currency in advance if rates are likely to change? That is not speculation; it is prudent foresight.

I make one further point before I sit down. My right honourable friend the Chancellor of the Exchequer was not quite accurate when, in debates in another place, he compared the affirmative procedure in Clause 1(4) for agreeing any increase of these loans to new primary legislation. He said that the effect is exactly the same, but it is not; certainly not in this House, which is not involved in the affirmative procedure in Clause 1(5)—quite rightly, given the nature of the Bill. The effect of affirmative orders and primary legislation is not the same, and certainly was not when I was a Member of another place a decade and a half ago. I realise that the timetabling of Bills in another place has made things rather different from when I was there. It means that there is less distinction between affirmative orders and Bills in another place, but what a commentary that is on the way in which primary legislation is now scrutinised there.

However, that is by the way. I support the making of these loans to our friends and neighbours in the Republic and I support the mechanism by which it is being accomplished; namely, this fast-tracked Bill.