Loans to Ireland Bill

Lord Dodds of Duncairn Excerpts

Wednesday 15th December 2010 Commons Chamber

[Mr Cash]

I happen to agree with that, which is why I did not vote against the Bill, but I must say that this is not a matter of merely academic interest, because the consequence that I mentioned at the beginning of my speech, which led me to abstain, is that there is no restriction on the greater amount. I wait with enormous interest to hear whether the Minister will differ from the Chancellor of the Exchequer on that, but when it is an open-ended provision for a greater amount, I would like to know what that greater amount’s limit would be.

In the context of the interlocking aspect to which I have just referred, I remain deeply concerned that the amount could be greater, and that this matter could get caught up in the complicated ongoing negotiations—I recognise that the Chancellor and his Ministers have had some very complicated negotiations. I remain worried about the direction in which we seem to be going, therefore. It would be so simple for the Government to give me either a direct assurance, which I would regard as a second-tier response, or a specific agreement to accept my amendment just to get me off their back. I would regard such an agreement as a useful way of dealing with the situation, but I bet I do not get that.

[Mr Dodds]

We will listen with interest to what the Minister has to say, but, just to be clear, is the hon. Gentleman’s argument that the greater amount under clause 1(4) could be used to increase not only the amount of the loan to the Irish Republic, but interweaved with the financial stability mechanism to provide money for other countries? Is that his argument, or is it specifically about the loan to the Irish Republic?

[Mr Cash]

The provision appears to apply to the Irish component, but because of the implications of what I am saying and the interlocking aspects in the kaleidoscope, it is extremely difficult to work out exactly what is intended by such opaque words. What I am asking for is very modest: simply the removal of all doubt by making it clear that any such loan would be

“other than a loan by virtue of any provision by or under the European Communities Act 1972.”

If all doubt were to be removed in that way, it would be the end of the story and there would be no problem, so why not do it? I look forward to the Minister’s response.

Another issue arises under paragraph 6 of the summary of key terms document. The paragraph covers events of default, and sub-paragraph (h) states that one event of default will be

“the Borrower”—

Ireland—

“not being or ceasing to be a member of the European Union”.

Why would such a provision be wanted if it were not integral to the fact that Ireland is a member of the European Union? I do not think I need to advance the case any further as it is very simple: if we would exclude Ireland from the arrangements by virtue of its ceasing to be, or not being, a member of the EU, that must have special significance, otherwise it would not be stated. That is another exceedingly worrying feature.

Paragraph 8 refers to the governing law, and it states:

“The credit agreement and any non-contractual obligations arising out of or in connection with it will be governed by English law.”

Paragraph 9 is on enforcement, and the document’s authors have clearly thought a lot about this matter, and the more they think about it the more worried I get, because they are transposing their thinking into the provisions of the Bill and this document:

“The English courts will have exclusive jurisdiction in relation to any dispute including a dispute relating to non-contractual obligations arising out of or in connection with the credit agreement.”

That gets to the heart of the problem, because anything that within law is under the jurisdiction of the European Union and within the framework of the European Court under the European Communities Act 1972 cannot be excluded from that jurisdiction by such words in a document of this kind that is “for information purposes”—hence our European Scrutiny Committee report on the relationship between parliamentary sovereignty and the judiciary. Therefore, merely writing in such a document that something will be governed by English law and that the English courts will have exclusive jurisdiction in relation to any dispute is not worth the paper it is written on.

If it is within the European Union legal framework, that means the European Court will get its hands on it. It may be that if there was a dispute or default or any of the other difficulties that could arise from the agreement in the Bill as enacted—as I rather suppose it will be—that will in no way alter the fact that ultimately, as long as parliamentary sovereignty prevails in the light of the European Communities Act, the Supreme Court will not prevent it from falling within the framework of the European Court of Justice.

Of course, it would be open to any future parliamentary Bill to try to unravel the arrangement, but what a pity it would be if we found that the fast-track arrangements we are experiencing today led us to the situation that I have described, simply because we were not prepared to listen to the argument that could resolve the problem by excluding the European jurisdiction. The legal advisers, the Treasury officials and the Minister may well be wrong. If they are wrong, we are in deep trouble. If they are doubtful, perhaps they could listen to those of us who have been proved right on a number of past occasions.

These are my final words—not from Cassandra, but from me. When things go wrong, it is much better to have taken advice beforehand and keep ahead of the curve, rather than allowing the curve to catch up with us.