Economy: Eurozone

Lord Trimble Excerpts

Monday 21st June 2010 Lords Chamber

Asked by

[Lord Trimble]

To ask Her Majesty’s Government what representations they have made to members of the European Union to protect the British economy from the financial situation in the eurozone.

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

The Chancellor of the Exchequer and Treasury Ministers attend regular meetings of EU Ministers, including the Council of Economic and Finance Ministers—ECOFIN. These discussions cover a wide range of issues, including the ongoing situation in sovereign debt markets.

[Lord Trimble]

My Lords, I thank my noble friend for his Answer, and I draw attention to my entry in the register of interests. I have two points to raise with him. Funds have been established to try and help countries in the EU that are in difficulties, but one of the underlying causes of those difficulties is the loss of competitiveness. Is that likely to be solved before the money and time run out? If it is not solved by then, what then happens?

Secondly, I draw my noble friend’s attention to the alternative investment fund managers directive that is currently being imposed on us. The European Parliament estimated that that directive would cost the European Union as a whole roughly 0.2 per cent of its GDP, but, as most of the alternative investment funds are in the United Kingdom, the potential cost to us is much greater. Have the Government managed to draw any of this directive’s teeth? If not, how much is it likely to cost the United Kingdom?

[Lord Sassoon]

My Lords, I will deal first with the question of competitiveness. The UK Government, the European Council and the Union well recognise that competitiveness must be improved in parallel with steps that are being taken to deal with the immediate financial situation of a number of member states. I draw my noble friend’s attention to the EU economic taskforce under the leadership of the President of the European Council, Herman Van Rompuy, which will report to the October Council. As well as dealing with crisis resolution matters, it has competitiveness indicators very much on its agenda. Indeed, it considers competitiveness absolutely in parallel with crisis resolution issues, as well as more broadly as part of the Europe 2020 exercise.

On the alternative investment fund managers directive, the European Council and the European Parliament have each taken positions that do not agree with each other, so the UK Government and the industry have a short window up to the end of July in which to make final representations and attempt to make sure that we get the best deal for what is a very important industry for the City of London out of this trialogue process.