EU: European Financial Stabilisation Mechanism

Lord McAvoy Excerpts

Thursday 31st March 2011 Lords Chamber

Asked By

[Lord McAvoy]

To ask Her Majesty’s Government what discussions took place between the then Chancellor of the Exchequer, Mr Alistair Darling, and his successor, Mr George Osborne, before the decision was taken to join the European Financial Stabilisation Mechanism on 9 May 2010.

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

My Lords, the European financial stability mechanism was created following agreement by a qualified majority of member states at ECOFIN on 9 May 2010. All contact between the Treasury and the then opposition parties in that period followed the agreed Cabinet Office guidelines for the 2010 general election. Both my right honourable friend the Chancellor and the previous Chancellor set out their accounts of the discussions in their written evidence to the Political and Constitutional Reform Committee.

--- Later in debate ---

[Lord McAvoy]

My Lords, I thank the Minister for his Answer. Which of the two following positions is correct—David Cameron saying that George Osborne objected to joining the mechanism or Treasury Minister Justine Greening, who signed the document, saying that cross-party consensus had been gained?

[Lord Sassoon]

My Lords, they are both correct. It may be helpful if I explain the situation a bit further. The discussion on which there was consensus concerned the process that would apply at the ECOFIN meeting on 9 May. There was no consensus on the question of the underlying policy matter. As my right honourable friend the Chancellor said in his written evidence to the Political and Constitutional Reform Committee:

“The purpose of the phone call was not to reach agreement, but for Mr Darling to consult me on the course of action he proposed. Given he was still Chancellor of the Exchequer at that point, representing the UK in a dynamic negotiating environment, it was for him to reach decisions. He did this, aware of my views”.

That is the evidence of my right honourable friend the Chancellor.