Finance Ministers’ Meeting (Ireland)

Chris Leslie Excerpts

Wednesday 17th November 2010 Commons Chamber

[Mr Hoban]

May I first reassure my hon. Friend that it is not the Government’s intention to join the euro during this Parliament? I am not entirely sure what the Opposition’s view is, but we have ruled that out.

My hon. Friend mentions the two mechanisms that are available for stabilisation. The stabilisation facility is purely for eurozone member states, outside the auspices of the current treaties and a bilateral, Government-to-Government arrangement. The mechanism that he refers to is available to all members of the European Union. The previous Government and the previous Chancellor decided to join it in the days prior to the formation of the current Government, and I believe that they need to be held to account for that decision.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Clearly, these are difficult times for the world economy, and Ireland is the current focal point of market concerns. Although the Minister offered little in the way of detail today, is it not clear that, stepping back, the overall long-term lesson to learn from these developments is that economic growth matters?

Ireland is a vital trading partner, to which 7% of our exports are sold, and the current situation matters because its economic strength has a significant effect on our own growth prospects. Will the Minister accept that the emerging global recovery is fragile, and that to rely as heavily as the Government do on export-led growth in the years ahead is a risky gamble?

Will the Minister confirm that this issue extends beyond trade, and that UK banks have lent about £83 billion directly to Irish households and companies? We saw at the G20 last week that the Government need to show stronger leadership on economic growth here and abroad, so can he reassure the House that any forthcoming package from the EU will address fundamental and underlying economic issues rather than act as a sticking plaster, merely tackling symptoms that may recur again and again in future?

The previous Government were clear that the problems facing countries adopting the euro would need to be solved first and foremost by member states within the euro area. Will the Minister confirm that the principal fund designed for any loan to support the Irish or other eurozone countries would be the European financial stability facility, which is envisaged at about €750 billion? Are reports in today’s Financial Times correct that the UK is spending time and effort spinning any future action as “bilateral support” rather than co-ordinating with the EU? Would it not be better if the Government were straight with the public about what they plan?

Does the Minister accept that, although we were right to stay out of the euro, it is essential that the euro is stable and successful for the long term? Will the Minister say categorically that the Treasury’s position will be driven by the best interests of British growth and jobs and not designed to pander to the Eurosceptic political instincts of those in his party who might circle the eurozone in its time of difficulty?

In 2006, the Chancellor wrote in The Times that Ireland’s economy provided a “shining example” to us all. Is it not clear now that, rather than being an example, it provides a warning of the dangers of a one-track economic strategy, built around austerity alone, that endangers growth and puts jobs at risk? Both abroad and at home, what matters is a strong strategy to rebuild jobs and growth.

[Mr Hoban]

The Chancellor made it clear this morning that we will do what we need to do in accordance with Britain’s national interest. Ireland is our closest neighbour, and it is in our interests to ensure that the Irish economy is successful and that it has a stable banking system. He said that we stand ready

“to support Ireland in the steps it needs to take”

to bring about that stability. The reality is that Ireland has got some things right. It has a flexible labour market and low taxes. None the less, it made the same mistake as the previous Government—it failed to regulate its banks properly. The problem in Ireland is driven not by high public spending but by a banking crisis. If we listened to the Opposition, the UK would be the only country that was weakening rather than strengthening its fiscal position.

It is clear that the actions we have taken have been welcomed by a range of bodies at home and abroad. What is happening at the moment demonstrates that concerns about sovereign debt issues have not disappeared. We should be grateful that, thanks to the actions of this Government, Britain has moved out of the fiscal danger zone.