Loans to Ireland Bill

Philip Hollobone Excerpts

Wednesday 15th December 2010 Commons Chamber

[Kelvin Hopkins (Luton North) (Lab)]

It is a pleasure to follow the hon. Member for Stone (Mr Cash); I very much agree with what he has been saying. He is clearly much more erudite on these matters than me, but I understand what he is saying—that today, we are making to our closest friendly neighbour country a bilateral loan which has nothing to do with the European Union and which is not part of the panoply of EU arrangements. I am happy to go along with such an arrangement.

The right hon. Member for Wokingham (Mr Redwood) has said many times that, if there are problems in the eurozone with the eurozone, they should be sorted out by the eurozone, not by countries outside the eurozone. I agree with him very strongly. This is a country that is our closest neighbour, with which we have deep, long historical relations—very friendly relations now, we are pleased to say. Indeed, I have many Irish constituents who are concerned about their country. We are making a friendly gesture to a neighbouring country—our nearest friendly neighbour—that happens to be in the eurozone, which we happen not to be.

We do not want to be in a situation where, if another country gets into difficulty, it says, “You made a loan to Ireland—you can make a loan to another country in the eurozone.” That would not be acceptable.

[Mr Hollobone]

That is exactly the danger. Under the present discussions about the permanent crisis resolution mechanism, the draft conclusions of the European Council state:

“Member States whose currency is not the euro will be associated to this work.”

So the danger is that this Bill could be a precedent for the “Loans to Portugal Bill”, the “Loans to Spain Bill” and the “Loans to Italy Bill”, which may be just round the corner.

[Kelvin Hopkins]

I thank the hon. Gentleman for his intervention. The amendments from the hon. Member for Stone will hopefully clarify the position and change the Bill to the way we would like it to be, so that it will not have implications for other members of the eurozone.

As I have said, however, if the Irish are to recover from their situation, they must remove themselves from the eurozone, re-create the punt, depreciate their currency and bring it into line with sterling, because we are their natural trading partners. Their economy and ours are the most closely integrated, and that is the sensible thing to do. I have said that before in this Chamber, and I have said it in private to senior Irish politicians on two occasions—I must say that it was not received in a very friendly way. Nevertheless, that is the logic, and even now we are looking towards a progressive deconstruction of the eurozone, partial or complete, in the not-too-distant future.

It would be better to deconstruct the eurozone in a rational and controlled way, rather than in a disastrous crash. So I hope that the eurozone members will be sensible and start to deconstruct it as practically and sensibly as they can and not allow it just to go into a massive crisis, which will benefit nobody. Even deconstructing it through country-by-country removals will cause problems, because many other countries have money in Irish and Greek banks, so it will be devalued and people will lose. Nevertheless, it is better to do that than to allow the situation to continue and the elastic eventually to break, causing the whole thing to come crashing down.