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Bill read a Second time; to stand committed to a Committee of the whole House (Order, this day).

Further proceedings on the Bill postponed (Order, this day).

Joan Walley (Stoke-on-Trent North) (Lab): On a point of order, Mr Deputy Speaker. Given that the Secretary of State for Energy and Climate Change has made an announcement this afternoon in respect of fuel poverty and the Warm Front scheme, saying that it is fully allocated, may I ask whether there has been any request from a Minister to make an oral statement to the House? Many people will be concerned about the cold weather and the urgency of having work done, and they will be fearful that that work cannot be completed before 31 March.

Mr Deputy Speaker (Mr Lindsay Hoyle): As the hon. Lady is aware, that is not a point of order for me, but I am sure that the message is getting through to the Secretary of State as we speak. There are other channels that she may wish to use.

Loans to Ireland Bill (Money)

Queen's Recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a),

Question agreed to.

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Loans to Ireland Bill

Proceedings resumed (Order, this day).

Considered in Committee (Order, this day).

[Mr Lindsay Hoyle in the Chair]

Clause 1

United Kingdom loans to Ireland

4.28 pm

Mr Cash: I beg to move amendment 3, page 1, line 4, at end insert

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

The Chairman of Ways and Means (Mr Lindsay Hoyle): With this it will be convenient to discuss the following:

Amendment 7, page 1, line 7, at end insert-

'(3A) Any loans made under this Act, and any repayment of principal or payment of interest received thereunder, shall be denominated in sterling.'.

Amendment 4, page 1, leave out lines 8 to 18.

Amendment 6, page 1, line 18, at end insert-

'(7A) Before determining the interest to be charged on any payments under this Act, the Treasury must specify the rate of interest by order; and the Treasury may not make such an order unless-

(a) the House of Commons has determined by resolution the rate of interest to be charged; and

(b) the order provides for that specified rate to be charged.'.

Amendment 8, page 1, line 20, at end insert-

'(8A) All loans made under this Act shall be repaid by 8 December 2040.'.

Amendment 10, page 1, line 20, at end insert-

'(8A) Before any loan or binding offer of a loan is made, or guarantee given, under this section, the relevant agreement must be laid before, and approved by a resolution of, the House of Commons.'.

Clause stand part.

Mr Cash: I have just abstained on Second Reading for one simple reason. I had intended to vote for it, but I remain gravely dissatisfied by the answer that I received from the Chancellor regarding the increase in the amount specified in clause 1. I do not want in any way to misrepresent what he said, but as I understood it, it was that that was all right because it was about exchange rates. However, anybody who examines clause 1 carefully will notice that subsection (4) states:

which is £3.25 billion.

The next two provisions simply determine whether any increase will be subject to affirmative or negative resolution. An order would be made under the negative resolution only if the increase is to do with exchange rates, but I can see nothing to say that an increase under subsection (4) would be affected by subsequent provisions. I was bound to take great exception to that. It is a serious matter, because we simply do not know what the greater amount
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would be. We are totally exposed, subject only to affirmative resolution, which cannot be amended. Such a measure would simply go through on a whipped vote, just as the rest of the Bill doubtless will. That is why I abstained on Second Reading.

Amendment 3 addresses the definition of "Irish loan". I was staggered when I looked carefully at the Bill, because clause 1(2) states that "Irish loan" means simply

The background is the recent debates on economic governance, and the origins of the European financial stability mechanism and the alternative eurozone facility, which as someone pointed out is as much as €440 billion, which is easily enough to cope with the Irish situation. There is a very close interconnect at all points between the so-called bilateral loan proposed in the Bill and the mechanism that I described.

The difficulty is that there is an overall determination to do as much as possible by way of integrating with Europe when it is quite obvious to anybody that this is the time for us not only to step back, but to desegregate from the European venture. I believe very strongly that the technique that is consistently employed in all spheres of activity is to say, "We don't like what goes on in the EU, but we can just go along with it. Alternatively, to satisfy the Eurosceptics or Eurorealists, as they prefer to be called, we can make parallel arrangements along the lines of what we would have done if we were in the eurozone."

The research paper helpfully supplied by the Library states:

assuming that that is what the Bill is-

In other words, we would have provided the loan anyway. The Minister may well say that that is not his intention, but that is what Library researchers believe, and they are often right.

Mr Redwood: A portion of the total loan package is contingent money for Irish banks-they may or may not need it. Is my hon. Friend worried that they could come back for even more, and that clause 1(4) could allow an extension of our loan for Irish banks?

Mr Cash: Yes I am. Treasury civil servants are exceedingly clever and may know of pitfalls, but they might not fully explain them to Ministers. Of course, the Minister takes ultimate responsibility, but the question is: what is the effect on the daily lives of the people whom we represent? That is the issue on which we have to concentrate.

Under the circumstances, I am extremely dubious about the way in which the whole thing has been put together. In particular, I would mention what I will call the mechanism, as compared with the facility. I had an exchange earlier about the mechanism with the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), who said, "This is all going to be done by qualified majority voting." However, that is not the case. Within the mechanism as it is set out, the request comes from the member state; it is only the final arrangement that requires
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qualified majority voting. Indeed, the EU sent in the European Central Bank and the International Monetary Fund in flagrant contradiction of the provisions of article 3 of the regulation in question.

In fact, the EU was operating the provision as if it were already law, when it was not. That it is typical of the European Union. It keeps on telling us about the rule of law, but when it suits, it completely ignores the law. What happened was unlawful. I also believe that it was unlawful in respect of article 122, which was the legal basis used to create the mechanism. I do not need to go into detail, but article 122 concerns natural disasters, energy supply and things of that kind. Anyone who looks at article 3, article 122 and the others provisions that they mention would reasonably conclude that they should not be used for the purposes of sorting out an unmitigated mess that was created by banks, as well as by the Government of Ireland and other parts of the European Union. Therefore, I am afraid that the answer that I received from the former Chancellor-that there really was no alternative to what was done, because such decisions are reached by qualified majority voting-does not stack up. If what happened was unlawful, it should have been resisted and, because of the consequences, it should, if necessary, have been taken to the European Court.

Mr Redwood: My hon. Friend has great legal expertise. I understand that the European Union is trying to negotiate an amendment to article 122 of the treaty in order to put the matter beyond doubt. Would that be retrospective, or could that undermine the current position?

Mr Cash: That is a very good question. I doubt very much whether an attempt to make the provision retrospective would remedy the mischief.

I am afraid that the question of illegality taints the Government's position as well, and I shall explain why-the Minister will know all the detail, because I think that he was the Minister responsible. There is provision for the European Scrutiny Committee under Standing Order No. 143 regarding scrutiny and scrutiny reserves. It so happens that the European Scrutiny Committee was not set up until November, a few weeks ago. However, I have here a table setting out the dates that shows that the date of deposit was 25 May 2010. The decision was taken on 9 May at ECOFIN, which happened to be 48 hours before the coalition was pushed through. In the case of ECOFIN's decision on the financial stability mechanism, the table states unequivocally that there was an override of both the European Scrutiny Committee and the Lords. On both counts, the then Government and the current Government breached the scrutiny arrangements. Indeed, it is quite extraordinary that the explanatory memorandum that accompanies the documents in question, and which should have been presented much earlier, was presented on 15 July. I know that the Minister will not dispute that, because it comes from Government documents. There is a serious worry about the manner in which this matter has been manipulated.

Just before the proceedings began, we were presented with another document, which reinforces my concern. If my amendment 3 were accepted, the Bill would read: "In this Act, 'Irish loan' means a loan to Ireland by the United Kingdom other than a loan by virtue of any provision by or under the European Communities
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Act 1972." I am very familiar with the way in which interweaving goes on, not only as Chairman of the European Scrutiny Committee but because, for the past 26 years, I have watched this process of integration and the manner in which, by extremely clever and adroit manoeuvring, we get further and further integrated into these arrangements. The mechanism is an open-ended invitation until 2013, as I ascertained during an exchange with the Chancellor of the Exchequer. Until 2013, we are stuck with the present arrangements.

I am sometimes a bit of a Cassandra, in that I make prophecies-more like predictions-about certain events, find out that I was right and then find out that nobody took any notice until they had happened. On this occasion, I am going to say that it is extremely likely that, if Portugal gets into really deep trouble-and perhaps Spain, too-that will happen before 2013. If this greater amount is interwoven into the stabilisation mechanism, or even if it is not, the mechanism itself will entrap us in the arrangements which, although not yet permanent, will go on until 2013.

I also think that the Government are struggling a bit in relation to article 122, under which this measure was introduced-unlawfully, in my opinion-because the Commissioner responsible, a Mr Sefcovic, has stated that the Commission is still considering whether to use article 136 or article 122. Against that background, the Van Rompuy Committee is sitting and might already have concluded that it would be appropriate to have a permanent mechanism in place only under article 136, and therefore only by reference to the eurozone. That would be a plus, but it would not alter the fact that, between now and 2013, we are at risk.

I am concerned about the deficient wording in clause 1(2), because not excluding what might be done under the European Union effectively leaves it open to the European Union's continuing to weave its way into the arrangements, despite the fact that they are described as a bilateral loan. Some people might say, "Ah, but you have to understand that when the explanatory notes talk about a bilateral loan, they mean that." It does not say that in the Bill, however. Furthermore, we have had some unpleasant experiences with explanatory notes in the European Scrutiny Committee recently, as anyone who wants to read the report that we have just issued will see. The explanatory notes in question were positively misleading, and distorted the legal position. That is a matter that we will be pursuing in Committee, when we ask whether parliamentary sovereignty or judicial supremacy should prevail. I do not need to go into the detail of that now, but the fact that a bilateral loan is mentioned in the explanatory notes has been severely vitiated by our experience of the explanatory notes to the European Union Bill.

4.45 pm

My concern is about the weaving-interlocking is probably a better word-of the loan that is provided for in clause 1(2) and the proposals that I have put forward, under the mechanism. Helpfully-at least I think it was helpfully-several hours ago, before the debate started, for the first time we were given a document described as "Summary of key terms: credit facility for Ireland." It says at the front:

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which might raise a few question marks-

I understand, although I am not certain, that the agreement has been signed off today, so perhaps it is now not for information purposes; it may now ne a concluded deal, but I will park that one.

Part of the problem is that the arrangements described in the document set down certain conditions precedent to the efficacy of the arrangements. Specifically, the conditions precedent include

that is Ireland-

that is the UK-

That sounds to me positively a matter of interweaving with the mechanism, which comes within the jurisdiction of the European Union and the European Court of Justice. That is the point I want to make.

Furthermore, the document says that the information covenants

that is Ireland-


The memoranda of understanding are also to do with arrangements within the framework of the European Union, and in that context in fact appear to be within the framework of the facility, which is the eurozone only. What we have here is a kaleidoscope of interacting, different fragments, which all ultimately seem to me to hang together.

Furthermore, the document goes on to say that the general covenants will include

a point that my hon. Friend the Member for Rochester and Strood (Mark Reckless) raised earlier-

but not different from-

There are therefore two interacting, constantly interlocking arrangements, and I am left with the very deep worry that, in the absence of the clear wording that I have provided in my amendment, our so-called bilateral loan would effectively be part and parcel of the European jurisdiction. That is why I tabled the amendment.

Stewart Hosie: Could it not simply be the case that the UK is providing a loan to Ireland in a time of need-a country that takes 7% of our exports and whose banks provide a quarter of the banking facilities in Northern Ireland? While all this is academic and interesting for those who are interested in it, could it not simply be the case that we are providing a loan to a friend in need at an important time?

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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

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


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:

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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:

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.

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
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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:

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.

5 pm

I strongly support the amendments tabled by the hon. Member for Stone, which I hope are accepted by the House. I hope that we make it clear that this is a loan from Britain to Ireland as a gesture of friendship to a fellow country in danger and that it is not to do with European Union arrangements. It is a friendship loan between two very close countries. Ireland is the country closest to us; it is a country with which we have deep historical links. I hope that all hon. Members will support the amendments if they are pressed to a Division-I certainly look forward to voting.

Mr Carswell: I wish to discuss amendment 6. It commands great interest across the House, although that may be difficult to believe given the swathe of green
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Benches that we can see, and I hope that we will have a chance to divide the House on it. It is right that we should be looking to help Ireland and debating how to do so, not simply because of this country's economic self-interest, but because of the close cultural ties between Britain and Ireland. It is fair to say that there is not a street in any town in this country where there are not close kith and kin connections between our two countries.

The question is whether the Bill helps us to do that. My hon. Friend the Member for Rochester and Strood (Mark Reckless) spoke eloquently, making the point that this deal is not tailored to help the Republic of Ireland, but has been imposed on it. It is not a case of our passing this to bail out Ireland, so much as our passing it to bail out the euro. My right hon. Friend the Member for Wokingham (Mr Redwood) has said that, and he has blogged eloquently about how the European Central Bank triggered this crisis. It began when the ECB called into question Ireland's ability to finance loans. Why did it do so? It did so because the ECB sacrificed Ireland to staunch the haemorrhaging of confidence in the euro and deal with the growing storm around it. The ECB put preserving a paper currency without a state ahead of the well-being of millions of Irish households.

Ireland is in debt because she is a victim of a credit bubble caused by euro membership, but when we consider amendment 6 we must ask how pushing a potentially high-interest loan on a friend reduces her debts. How does extending a debt as overdraft help that debtor to repay their debts? That will dig Ireland deeper into debt. Each of the eight tranches of this loan is yet another step towards debt. It is time that we stopped digging Ireland into deeper debt. The bail-out will not reduce the debt. People sometimes talk about the bail-out as though it were a solution to debt, but it is a deepening of debt. We need to make certain that the rate of interest and the terms of this extension of Ireland's overdraft are in her interests and those of her people. To do that, we need to make sure that we in this House have the final say over the terms of the small print.

Amendment 6 seeks to ensure that the interest on this £3.2 billion overdraft extension is kept low. The small print is certainly not definitive on the subject. The summary of terms states:

We are told by the Chancellor that, at the moment, that would be 5.9% and the document suggests that figure, but it is not definitive. We need to give the House of Commons the final say on the rate, and we need a formal means to allow the House to ratify the rate of interest.

Hon. Members will have heard some discussion about how Iceland got a significantly lower rate. Why is that? Is Iceland a better friend? It is for public debate, public concern and the legislature, not technocrats in the Treasury and watery eyed officials, to decide the rate of interest that we charge our friend.

The explanatory notes have, I think, been issued so that we believe that they are close to what amendment 6 suggests. We are asking for something that is not a million miles away from the explanatory notes, so why
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not formalise the arrangements? Why not require the approval of an order under the affirmative procedure in the House? We have only the explanatory notes to go on- [ Interruption. ] I am delighted that those on the Front Bench are paying such attention. We only have the explanatory notes to go on, so why not enshrine these arrangements by order? The last time that we left EU matters to Sir Humphrey's explanatory notes, we were, bluntly, mugged. The explanatory notes to the Bill on sovereignty-the European Union Bill-were not even defended by the Minister in Committee. It is a cause of concern that we have only the explanatory notes. We must enshrine these arrangements in legislation to make certain that we in this House, who are accountable to the taxpayers who will ultimately have to stump up for this, are satisfied with the arrangements. That would be good for us and good for Ireland, too.

Over the past seven months, we have seen what happens when the House takes its eye off the small print. We have seen what happens when we leave it to Ministers, officials and Treasury negotiators to handle the small print. For example, we have seen how non-euro member countries, such as Britain, become liable through the small print for open-ended eurozone bail-outs until 2013. That is the price we pay as a House for taking our eyes off the small print. It would be quite wrong, incidentally, to blame the previous Government for that. The deal took effect after the coalition Government came to office.

When this House took its eye off the small print on Treasury negotiations on matters European, the Government managed somehow to sign us up to a European Council document that established a common legal framework for pan-EU economic governance. I suggest that this House should not form a habit of deferring the small print to the Treasury and its officials. It is prudent to require the Government to gain the approval of this House over the interest rate.

The amendment goes to the heart of why we are here and why we have a House of Commons in the first place. It is the purpose of us as MPs-and it has been for many hundreds of years-to oversee what Ministers do with our money. That should include the terms under which they lend our money and the terms under which they make taxpayers liable for debts incurred through such financial arrangements. The amendment is reasonable and in line with what the Government are seeking to do-or claim that they are seeking to do-in the explanatory notes drafted by officials.

The amendment would ensure that Ministers thought very carefully and wisely when they entered negotiations and finalised arrangements. It would also help to restore purpose to the House, which some of us would suggest has been in the past rather supine, submissive and spineless. Ultimately, it would ensure a fairer deal for our closest friend and our closest neighbour. I hope to press the amendment to a Division and to obtain the support of Members on both sides.

Mark Durkan: On amendment 3, tabled by the hon. Member for Stone (Mr Cash), the amendment of itself does not preclude the fear that he and my hon. Friend the Member for Luton North (Kelvin Hopkins) have that at some point in the future there might be a loans
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to Spain Bill, a loans to Portugal Bill or something similar. The amendment would not preclude the possibility of any other such bilateral loans being arranged in future. I do not believe that the amendment, which is commended to us in those terms, will serve the purpose for which it was tabled.

Mr Cash: I agree with that, but that is not what I have said. I have said that under this Bill, the consequence of not adding the words that I have provided puts the Bill in jeopardy of falling within the framework of European jurisdiction, which is a different point.

Mark Durkan: I know that the hon. Gentleman made that point, too, and I want to turn to it. He carefully quoted and referred to a number of points in the loan agreement, which was made available at the start of the debate. The summary of key terms refers to a number of matters, and the hon. Member for Stone seemed to say that those references alone mean that the bilateral loan is being interweaved with the wider EU and IMF support packages to Ireland. However, hon. Members should bear in mind a point that the Chancellor made on Second Reading-that one advantage of the bilateral loan arrangement is the place that it gives the UK at the table when it comes to arranging and overseeing the restructuring plan that is to take place in relation to the Irish banking sector.

The key terms include, under the heading "Other Terms", at paragraph 1(d):

Given that the purpose of the loan arrangement is to make sure that Ireland can go to the bond markets on its own as soon as possible and get money at competitive rates, it is clearly in the House's interests, as the UK will be providing this loan, to make sure that the loan terms are protected against any undue terms coming from the other loans being made available in this context.

Several hon. Members have mentioned the role of the European Central Bank. We can look at the history to this situation and question the role of the ECB on a number of occasions. First, it kept interest rates very low-at times against the express wish and request of the Irish Finance Minister-which helped to contribute to the problem. Secondly, as many hon. Members have mentioned, there is the open-ended nature of the Irish Government's guarantee to the banks. Again, the ECB seems to have been the primary body urging a guarantee of that extent. Thirdly, there is the whole issue of the need for the bail-out and the creation of circumstances in which the Irish Government have had to seek it. Again, many people have questions about the precise role and performance of the European Central Bank in all that. Hon. Members have asked serious questions about the ECB, and we know that a much bigger loan facility is being granted through the EU and the IMF, so surely the House will want to know that the terms of the bilateral loan and its operation will not jeopardise the interests or purposes for which it is being made available. It therefore makes sense for the key terms that are summarised in the document to refer to the restructuring plan that is to be undertaken in relation to the banks.

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The document makes it clear that "conditions precedent" will include "finalisation by the Borrower"-namely Ireland-

That is not the interweaving that the hon. Member for Stone has discussed, but a sensible, diligent precaution on the part of the House in providing for money to be borrowed. The "Other Terms" also include at paragraph 1(c):

Again, it makes absolute sense for the House and the Government, who are responsible to it, to make clear cross-reference to what else is happening under the restructuring plan and to what other lenders might urge in relation to other parts of the plan in terms of key interests that the House needs to protect, including those of the banking sector in Northern Ireland and the contribution of the Irish banks to the wider UK economy.

5.15 pm

Unlike the hon. Member for Stone, I do not believe that the information covenants are a Trojan horse that will enable the House and its purposes to be subsumed in a variety of wider EU financial devices. They are there to ensure that any relevant information bearing on decisions relating to the restructuring plan, the wider stabilisation effort or the national recovery plan in Ireland is made available to the UK Government in an appropriate way. I believe that the other points in the summary of key terms reinforce the purposes of the loan rather than raising deeper, more sinister questions about the precedent that it creates.

I understand the motive behind amendment 6, given the fast-track nature of the Bill and the fact that amendments had to be tabled even before Second Reading. However, given that the summary of key terms gives us all the details relating to the interest rate, with which many people in Ireland will be uncomfortable and which, I am sure, is a matter of controversy even in the Dail this afternoon, I do not believe that the amendment is necessary. In my view, its purposes have been overtaken both by the summary of key terms and by the terms in which the Chancellor spoke earlier.

Chris Leslie: Although most of the Opposition's amendments relate to clause 2, these amendments deal with a number of incredibly important issues, and I am grateful to hon. Members for tabling them.

Let me take up some of the points made by my hon. Friend the Member for Foyle (Mark Durkan) about amendment 6 in particular. I understand what he said about the document that was presented to us about five minutes before the start of the debate, which, I have to say, was not only unfortunate, but verging on action that I would describe as morally out of order. It has been very difficult for the Committee to assimilate rapidly what is going on in the negotiations.

However, although I understand, at first glance, my hon. Friend's impression that amendment 6 or others might have been overtaken by events, the more I think about it, the more I feel that it would be important to
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have an opportunity to debate the interest rate question in particular because it has such an important bearing not only on the British taxpayer, as the organisation making the loan, but on the Irish people themselves. There are a number of circumstances that can change from time to time. What we have before us is a summary of key terms of the credit facility, which does not necessarily give us the full picture. Although we support the principle of the loan, I am slightly uncomfortable about nodding through quite technical terms without our having had even a retrospective opportunity to air the details properly. That, I think, is essentially what amendment 6 is trying to rectify. I shall say more about that shortly, but let me first deal with amendment 3, because it makes an important point.

I entirely understand the attempt by the hon. Member for Stone (Mr Cash) to limit the way in which the current drafting of the Bill might affect all sorts of other unforeseen loan opportunities. He spoke of the European Union's inveigling its way into other loan arrangements. In particular, he is worried about whether the Bill excludes what might be done under European law, because, as he sees it, this legislation leaves open opportunities for the EU to enlarge and change the mechanism, and to build on what we, at face value, know about the dimensions of the loan under discussion.

There are some interesting points about the jurisdiction of the European Court of Justice in the case of a default, and some questions probably merit further scrutiny, but I am not entirely convinced of the hon. Gentleman's arguments or of whether his amendment to clause 1(2) would necessarily achieve much of great use. I am grateful to him, however, for at least tabling it.

We have not touched on some of the other amendments in the group. The Chancellor addressed the denomination in sterling issue in his opening comments, but the question about whether the loan should be repaid over a particular length of time is quite interesting, and the hon. Member for Kettering (Mr Hollobone) tabled a useful amendment involving the 30-year period. The Opposition have also tabled amendments on those matters, in our case to clause 2, but our proposals are about the reports having to comment on the duration of the loan. Amendment 10, on the terms of the credit facility being open to greater debate, is quite interesting, too.

Amendment 6 looks most interesting, however. Given the drafting of this quite hurried legislation, and the unusually conspicuous absence of certain dimensions of the loan, we have a duty to pay attention to what the hon. Member for Clacton (Mr Carswell) suggests. When one thinks about a loan, one should think about not just the sum of money, but the duration and the interest rate. The rate of return on the British loan is a fundamentally important fact that cannot be simply skimmed over by references in documents that are not currently official documents before the House. The Chancellor said that the Swedish and Danish bilateral loan arrangements have not yet been completed, so it is difficult for us to determine whether our prospective interest rate is more or less favourable than theirs. What would happen if there were a sudden spike in global interest rates? Where in the Bill is there any protection for the British taxpayer?

Conversely, where in the legislation is there any protection for the Irish if the current or any future Government decide to chop and change the rate from time to time,
15 Dec 2010 : Column 989
perhaps making a unilateral, Executive decision to raise the interest rate in future tranches of the loan arrangement? The Chancellor said that the interest rate will be fixed for the duration of each tranche, but there is no assurance of that in the Bill.

There is no harm in allowing the House the opportunity to debate and approve, by the affirmative procedure, a statutory instrument on the interest to be charged following the recommendation of Ministers. Our parliamentary democracy is often disregarded as some kind of rubber-stamping device, but perhaps these are good times to take back some of those safeguards, given the serious issues at hand. While Parliament votes on those moneys tonight, it must also consider taking greater ownership of the process, rather than delegating absolutely everything in absolutely every arrangement to the Chancellor of the Exchequer. I am certainly interested in amendment 6, and I commend the hon. Gentleman for his prescience in tabling it.

Mr Hoban: Amendment 3, which my hon. Friend the Member for Stone (Mr Cash) has moved, would ensure that the Bill did not apply to any loan made by the United Kingdom to Ireland under the European Communities Act 1972. Let me give him a second-tier assurance that the Bill applies only to the UK's bilateral loan to Ireland. Any EU loan made to Ireland through the financial stability mechanism would not be a loan from the UK to Ireland and would not be subject to the Bill.

There is no interweaving or interlocking, and therefore the amendment is unnecessary. My hon. Friend referred to paragraph 6(h) of the loan agreement. I am sure he will understand that the funding Ireland gets is dependent on it being a member of both the International Monetary Fund and the European Union. If it were no longer a member, it would no longer receive the funding and therefore there would be a problem. Amendment 4 would remove the power to increase the cap on the loan and adjust the cap for exchange rate fluctuations. I hope that the comments made by my right hon. Friend the Chancellor remove the need for anyone to push that amendment further.

Amendment 6 would require the interest rate on the loan to be approved by Parliament. That is not appropriate. The interest rate for each tranche of the lending to Ireland will be a fixed rate that is set by adding a margin of 2.29% to the sterling seven-and-a-half-year swap rate at the time that the disbursement is made. That is set out in the loan agreement and gives certainty to us and to the Irish Government, who would want to have certainty when accepting and voting on this package.

My hon. Friend the Member for Clacton (Mr Carswell) said that the amendment would enable the loan interest rate to be reduced. It could also lead to the loan interest rate being increased to the detriment of the Irish Government and their economic recovery. It is important that there is a clear, definitive statement about what the rate is. We have published the summary of key terms of the loan agreement to help colleagues understand what the rate is and how it will be set. The rate is set with the Republic and within the range of interest rates agreed with other multilateral bodies. It would be a big mistake and irresponsible of the Labour party to vote for
15 Dec 2010 : Column 990
amendment 6, because it would create uncertainty and instability where we want certainty and stability for the Irish Government. I question whether what the amendment proposes is the right thing to do. The loan rate is agreed and clear, and it is in the summary of key credit terms. The Irish Government have signed off on those key terms. That is the rate they are expecting to get. Amendment 6 would create unnecessary uncertainty and I therefore ask my hon. Friend to withdraw it.

Mr Cash: For the time being, I have decided against pressing amendment 3 to a Division.

Amendment, by leave, withdrawn.

Amendment proposed: 6, page 1, line 18, at end insert-

'(7A) Before determining the interest to be charged on any payments under this Act, the Treasury must specify the rate of interest by order; and the Treasury may not make such an order unless-

(a) the House of Commons has determined by resolution the rate of interest to be charged; and

(b) the order provides for that specified rate to be charged.'.- (Mr Carswell.)

Question put, That the amendment be made.

The Committee divided: Ayes 243, Noes 301.
Division No. 160]
[5.27 pm


Abbott, Ms Diane
Ainsworth, rh Mr Bob
Alexander, rh Mr Douglas
Alexander, Heidi
Ali, Rushanara
Anderson, Mr David
Austin, Ian
Bailey, Mr Adrian
Bain, Mr William
Baker, Steve
Balls, rh Ed
Banks, Gordon
Barron, rh Mr Kevin
Bayley, Hugh
Beckett, rh Margaret
Begg, Miss Anne
Benn, rh Hilary
Berger, Luciana
Betts, Mr Clive
Binley, Mr Brian
Blackman-Woods, Roberta
Blears, rh Hazel
Blenkinsop, Tom
Blomfield, Paul
Bone, Mr Peter
Bradshaw, rh Mr Ben
Brennan, Kevin
Bridgen, Andrew
Brown, Lyn
Brown, Mr Russell
Bryant, Chris
Buck, Ms Karen
Burnham, rh Andy
Byrne, rh Mr Liam
Cairns, David
Campbell, Mr Alan
Carswell, Mr Douglas
Cash, Mr William
Chapman, Mrs Jenny
Chope, Mr Christopher
Clappison, Mr James
Clark, Katy
Clarke, rh Mr Tom
Clwyd, rh Ann
Coaker, Vernon
Coffey, Ann
Connarty, Michael
Cooper, Rosie
Cooper, rh Yvette
Crausby, Mr David
Creagh, Mary
Creasy, Dr Stella
Cruddas, Jon
Cryer, John
Cunningham, Alex
Cunningham, Mr Jim
Cunningham, Tony
Curran, Margaret
Dakin, Nic
Danczuk, Simon
Darling, rh Mr Alistair
David, Mr Wayne
Davidson, Mr Ian
Davies, Geraint
Davies, Philip
De Piero, Gloria
Denham, rh Mr John
Dobbin, Jim
Dobson, rh Frank
Docherty, Thomas
Dodds, rh Mr Nigel
Donaldson, rh Mr Jeffrey M.
Doran, Mr Frank
Dorrell, rh Mr Stephen
Dowd, Jim
Doyle, Gemma
Drax, Richard
Dromey, Jack
Dugher, Michael
Eagle, Ms Angela
Eagle, Maria
Efford, Clive

Elliott, Julie
Ellman, Mrs Louise
Engel, Natascha
Esterson, Bill
Evans, Chris
Farrelly, Paul
Field, rh Mr Frank
Field, Mr Mark
Fitzpatrick, Jim
Flello, Robert
Flint, rh Caroline
Flynn, Paul
Fovargue, Yvonne
Francis, Dr Hywel
Gapes, Mike
Gardiner, Barry
Gilmore, Sheila
Glass, Pat
Glindon, Mrs Mary
Goggins, rh Paul
Goldsmith, Zac
Goodman, Helen
Greatrex, Tom
Green, Kate
Greenwood, Lilian
Griffith, Nia
Gwynne, Andrew
Hamilton, Mr David
Hanson, rh Mr David
Harman, rh Ms Harriet
Healey, rh John
Hendrick, Mark
Hepburn, Mr Stephen
Hermon, Lady
Hillier, Meg
Hilling, Julie
Hodgson, Mrs Sharon
Hoey, Kate
Hood, Mr Jim
Hopkins, Kelvin
Howarth, rh Mr George
Hunt, Tristram
Illsley, Mr Eric
Irranca-Davies, Huw
James, Mrs Siân C.
Jamieson, Cathy
Jenkin, Mr Bernard
Johnson, rh Alan
Johnson, Diana
Jones, Graham
Jones, Helen
Jones, Mr Kevan
Jones, Susan Elan
Joyce, Eric
Kendall, Liz
Lammy, rh Mr David
Lavery, Ian
Leslie, Chris
Lewis, Mr Ivan
Lewis, Dr Julian
Love, Mr Andrew
Lucas, Caroline
Lucas, Ian
MacShane, rh Mr Denis
Mactaggart, Fiona
Mahmood, Shabana
Main, Mrs Anne
Mann, John
Marsden, Mr Gordon
McCabe, Steve
McCann, Mr Michael
McCarthy, Kerry
McClymont, Gregg
McDonagh, Siobhain
McDonnell, John
McFadden, rh Mr Pat
McGovern, Alison
McGovern, Jim
McGuire, rh Mrs Anne
McKechin, Ann
McKinnell, Catherine
Meacher, rh Mr Michael
Meale, Mr Alan
Mearns, Ian
Mercer, Patrick
Michael, rh Alun
Miller, Andrew
Moon, Mrs Madeleine
Morden, Jessica
Morrice, Graeme (Livingston)
Morris, Grahame M. (Easington)
Murphy, rh Mr Jim
Murphy, rh Paul
Murray, Ian
Nash, Pamela
Nuttall, Mr David
O'Donnell, Fiona
Onwurah, Chi
Osborne, Sandra
Owen, Albert
Pearce, Teresa
Percy, Andrew
Phillipson, Bridget
Pound, Stephen
Raynsford, rh Mr Nick
Redwood, rh Mr John
Rees-Mogg, Jacob
Reeves, Rachel
Reynolds, Emma
Reynolds, Jonathan
Riordan, Mrs Linda
Robertson, John
Rotheram, Steve
Roy, Mr Frank
Roy, Lindsay
Ruane, Chris
Ruddock, rh Joan
Sarwar, Anas
Seabeck, Alison
Shannon, Jim
Sharma, Mr Virendra
Sheridan, Jim
Shuker, Gavin
Simpson, David
Skinner, Mr Dennis
Slaughter, Mr Andy
Smith, rh Mr Andrew
Smith, Angela
Smith, Nick
Smith, Owen
Soulsby, Sir Peter
Spellar, rh Mr John
Straw, rh Mr Jack
Stringer, Graham
Stuart, Ms Gisela
Stuart, Mr Graham
Sutcliffe, Mr Gerry
Tami, Mark
Tapsell, Sir Peter
Thomas, Mr Gareth
Thornberry, Emily
Timms, rh Stephen
Trickett, Jon

Turner, Mr Andrew
Turner, Karl
Twigg, Derek
Twigg, Stephen
Umunna, Mr Chuka
Vaz, rh Keith
Vaz, Valerie
Walley, Joan
Watson, Mr Tom
Watts, Mr Dave
Whitehead, Dr Alan
Whittingdale, Mr John
Wicks, rh Malcolm
Williamson, Chris
Wilson, Phil
Winnick, Mr David
Winterton, rh Ms Rosie
Wright, David
Tellers for the Ayes:

Mr Philip Hollobone and
Mark Reckless

Adams, Nigel
Aldous, Peter
Alexander, rh Danny
Andrew, Stuart
Arbuthnot, rh Mr James
Bacon, Mr Richard
Bagshawe, Ms Louise
Baker, Norman
Baldry, Tony
Baldwin, Harriett
Barclay, Stephen
Barker, Gregory
Baron, Mr John
Barwell, Gavin
Bebb, Guto
Beith, rh Sir Alan
Bellingham, Mr Henry
Benyon, Richard
Beresford, Sir Paul
Berry, Jake
Bingham, Andrew
Birtwistle, Gordon
Blackman, Bob
Blunt, Mr Crispin
Boles, Nick
Bradley, Karen
Brady, Mr Graham
Brake, Tom
Bray, Angie
Brazier, Mr Julian
Brine, Mr Steve
Brooke, Annette
Bruce, Fiona
Bruce, rh Malcolm
Buckland, Mr Robert
Burley, Mr Aidan
Burns, Conor
Burns, Mr Simon
Burrowes, Mr David
Burt, Lorely
Byles, Dan
Cairns, Alun
Campbell, rh Sir Menzies
Carmichael, Mr Alistair
Carmichael, Neil
Chishti, Rehman
Clark, rh Greg
Clarke, rh Mr Kenneth
Clifton-Brown, Geoffrey
Coffey, Dr Thérèse
Collins, Damian
Colvile, Oliver
Crabb, Stephen
Crockart, Mike
Crouch, Tracey
Davey, Mr Edward
Davies, David T. C. (Monmouth)
Davies, Glyn
Davis, rh Mr David
de Bois, Nick
Dorrell, rh Mr Stephen
Dorries, Nadine
Doyle-Price, Jackie
Duddridge, James
Duncan, rh Mr Alan
Duncan Smith, rh Mr Iain
Dunne, Mr Philip
Durkan, Mark
Ellis, Michael
Ellison, Jane
Ellwood, Mr Tobias
Elphicke, Charlie
Eustice, George
Evans, Graham
Evans, Jonathan
Evennett, Mr David
Fabricant, Michael
Fallon, Michael
Farron, Tim
Foster, Mr Don
Fox, rh Dr Liam
Francois, rh Mr Mark
Freeman, George
Freer, Mike
Fullbrook, Lorraine
Fuller, Richard
Gale, Mr Roger
Garnier, Mr Edward
Garnier, Mark
Gauke, Mr David
George, Andrew
Gibb, Mr Nick
Gilbert, Stephen
Gillan, rh Mrs Cheryl
Glen, John
Goodwill, Mr Robert
Gove, rh Michael
Graham, Richard
Grant, Mrs Helen
Gray, Mr James
Grayling, rh Chris
Green, Damian
Grieve, rh Mr Dominic
Gummer, Ben
Gyimah, Mr Sam
Halfon, Robert
Hames, Duncan
Hammond, Stephen
Hancock, Matthew
Hancock, Mr Mike
Hands, Greg
Harper, Mr Mark
Harrington, Richard
Harris, Rebecca
Hart, Simon

Haselhurst, rh Sir Alan
Hayes, Mr John
Heald, Mr Oliver
Heath, Mr David
Hemming, John
Henderson, Gordon
Hendry, Charles
Herbert, rh Nick
Hinds, Damian
Hoban, Mr Mark
Hollingbery, George
Hopkins, Kris
Hosie, Stewart
Howarth, Mr Gerald
Howell, John
Hughes, Simon
Huhne, rh Chris
Hunt, rh Mr Jeremy
Huppert, Dr Julian
Hurd, Mr Nick
Jackson, Mr Stewart
James, Margot
Javid, Sajid
Johnson, Gareth
Johnson, Joseph
Jones, Andrew
Jones, Mr David
Jones, Mr Marcus
Kawczynski, Daniel
Kelly, Chris
Kirby, Simon
Kwarteng, Kwasi
Laing, Mrs Eleanor
Lamb, Norman
Lancaster, Mark
Latham, Pauline
Laws, rh Mr David
Leadsom, Andrea
Lee, Jessica
Lee, Dr Phillip
Leech, Mr John
Lefroy, Jeremy
Leslie, Charlotte
Liddell-Grainger, Mr Ian
Lilley, rh Mr Peter
Lloyd, Stephen
Lopresti, Jack
Lord, Jonathan
Loughton, Tim
Luff, Peter
Lumley, Karen
Macleod, Mary
MacNeil, Mr Angus Brendan
Maude, rh Mr Francis
May, rh Mrs Theresa
Maynard, Paul
McCartney, Jason
McCartney, Karl
McDonnell, Dr Alasdair
McIntosh, Miss Anne
McLoughlin, rh Mr Patrick
McPartland, Stephen
McVey, Esther
Menzies, Mark
Metcalfe, Stephen
Miller, Maria
Mills, Nigel
Mitchell, rh Mr Andrew
Moore, rh Michael
Mordaunt, Penny
Morgan, Nicky
Morris, James
Mosley, Stephen
Mowat, David
Mundell, rh David
Munt, Tessa
Murray, Sheryll
Murrison, Dr Andrew
Neill, Robert
Newmark, Mr Brooks
Newton, Sarah
Nokes, Caroline
Norman, Jesse
Offord, Mr Matthew
Ollerenshaw, Eric
Opperman, Guy
Osborne, rh Mr George
Ottaway, Richard
Paice, Mr James
Patel, Priti
Paterson, rh Mr Owen
Pawsey, Mark
Penrose, John
Percy, Andrew
Perry, Claire
Phillips, Stephen
Pickles, rh Mr Eric
Pincher, Christopher
Poulter, Dr Daniel
Prisk, Mr Mark
Pritchard, Mark
Pugh, Dr John
Raab, Mr Dominic
Randall, rh Mr John
Reevell, Simon
Reid, Mr Alan
Rifkind, rh Sir Malcolm
Robathan, Mr Andrew
Robertson, Angus
Robertson, Hugh
Robertson, Mr Laurence
Rogerson, Dan
Rosindell, Andrew
Rudd, Amber
Ruffley, Mr David
Russell, Bob
Rutley, David
Sanders, Mr Adrian
Sandys, Laura
Scott, Mr Lee
Selous, Andrew
Shapps, rh Grant
Shelbrooke, Alec
Simmonds, Mark
Simpson, Mr Keith
Skidmore, Chris
Smith, Miss Chloe
Smith, Henry
Smith, Julian
Smith, Sir Robert
Soames, Nicholas
Soubry, Anna
Spelman, rh Mrs Caroline
Spencer, Mr Mark
Stanley, rh Sir John
Stephenson, Andrew
Stevenson, John
Stewart, Bob
Stewart, Iain
Stewart, Rory
Streeter, Mr Gary
Stride, Mel
Stunell, Andrew
Sturdy, Julian

Swales, Ian
Swayne, Mr Desmond
Swinson, Jo
Swire, Mr Hugo
Syms, Mr Robert
Thurso, John
Timpson, Mr Edward
Tomlinson, Justin
Tredinnick, David
Truss, Elizabeth
Tyrie, Mr Andrew
Uppal, Paul
Vaizey, Mr Edward
Vickers, Martin
Villiers, rh Mrs Theresa
Walker, Mr Charles
Walker, Mr Robin
Wallace, Mr Ben
Walter, Mr Robert
Ward, Mr David
Watkinson, Angela
Weatherley, Mike
Webb, Steve
Weir, Mr Mike
Wharton, James
Wheeler, Heather
White, Chris
Whiteford, Dr Eilidh
Whittaker, Craig
Wiggin, Bill
Willetts, rh Mr David
Williams, Mr Mark
Williams, Roger
Williams, Stephen
Williamson, Gavin
Willott, Jenny
Wilson, Mr Rob
Wishart, Pete
Wollaston, Dr Sarah
Wright, Simon
Yeo, Mr Tim
Zahawi, Nadhim
Tellers for the Noes:

Mark Hunter and
Mr Shailesh Vara
Question accordingly negatived.
15 Dec 2010 : Column 991

15 Dec 2010 : Column 992

15 Dec 2010 : Column 993

15 Dec 2010 : Column 994

Clause 1 ordered to stand part of the Bill.

Clause 2


Mr Hoban: I beg to move manuscript amendment (a), page 2, line 16, at end insert-

'(d) the remaining term of each Irish loan which is outstanding at the end of that period, and

(e) the original term of each Irish loan in respect of which a payment was made by the Treasury by way of an Irish loan in that period.'.

The Second Deputy Chairman of Ways and Means (Dawn Primarolo): With this it will be convenient to consider the following:

Amendment 1, page 2, line 16, at end insert

(d) the original term for any Irish loan and remaining terms for any outstanding Irish loans.'.

Amendment 5, page 2, leave out lines 17 to 26.

Amendment 2, page 2, leave out lines 18 and 19.

Clause 2 stand part.

Mr Hoban: In dealing with the issues emerging in Ireland, we have sought to keep the House informed as much as possible about the progress that was being made as the crisis emerged, and the role that the UK Government felt they should play in helping to resolve it and responding to the Irish Government's request for help at the end of last month. We have done that through statements to the House and the publication of the Bill last week, and to aid debate, we ensured that before today's debate started a copy of the loan agreement was placed in the Vote Office. I hope that hon. Members will recognise that we were not able to place the summary document in the Vote Office earlier-or, indeed, to place the full signed agreement there-because negotiations
15 Dec 2010 : Column 995
are still ongoing with the Irish Government. However, the principles that have been agreed were set out in the summary of key terms.

I think hon. Members would say, "Well, it's all very well that you've been transparent and open in the run-up to the loan process, but what's the next stage? Are you going to be transparent during the life of the loan? How are you going to keep the House informed of what's happening, whether the Irish Government are drawing down each of the eight tranches, how far they've got with repayments, and so on?" For that reason, we decided that there should be a clause to deal solely with reporting. It states that the Treasury will

The first period will end on 31 March 2011 and a report will be published for each subsequent six-month period. The clause states that those reports will include details of

the loan, and details of


5.45 pm

Clearly, we will not be required to report if no payments are made within subsection (3)(a), and if no sums under subsection (3)(b) are received as payment, or if

Subsection (5) states that the clause will cease

The shadow Chancellor, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), tabled amendment 1, which helpfully suggests that we broaden the information that should be supplied in Parliament. I believe that the Government would have supplied such information anyway, but the proposal prompted us to consider the matter carefully and to reflect on it, in the spirit of bipartisan co-operation that has characterised most of the debate.

Amendment 1 would require the Government to report on the original term of the loans and any amendments to it, as well as payments made, sums received and amounts outstanding. As I said, I would have expected our reports to cover those points, and for us to include the duration of the loans and-in reporting outstanding liabilities-their remaining terms. We accept the principle, but as I know from my experience as an Opposition spokesperson, Opposition Members do not have access to the full array of drafting skills that Governments have. That hampered my drafting of amendments previously, and I am grateful that I now have those resources to call upon.

We therefore tabled manuscript amendment (a), which achieves the same effect as amendment 1, but more clearly.

Mr Bone: Does that not show that this coalition Government are willing to listen to Parliament's views and to change their mind now and again?

15 Dec 2010 : Column 996

Mr Hoban: I am pleased that my hon. Friend recognises the spirit of the new politics, but I am not quite sure where he will take the debate from there. I welcome his recognition of the Government's flexibility. I do not know what his experience is, but my experience of opposition was that it was rare for a Government to accept an Opposition amendment even in principle. So this perhaps shows that the spirit of the new politics is now coursing through the House.

I should make some holding remarks on amendment 5, which my hon. Friend the Member for Stone (Mr Cash) tabled. I am pleased to see him in the Chamber, because he may be able to be clearer about the thinking behind his proposal than I could.

Subsections (4) and (5) are there to ensure that the duty to report does not continue indefinitely once all loans made under the Bill have been repaid and the authority to make further loans has lapsed. The way in which my hon. Friend has drafted amendment 5 would turn the requirement to report on the loan while sums are outstanding into an open-ended requirement to report every six months ad infinitum, even once all the loans had been fully repaid. I hope that the Committee will agree that this would be unnecessary and undesirable.

Amendment 2, tabled by Her Majesty's Opposition, would do something slightly different. Whereas my hon. Friend seeks to amend clause 2 to ensure that reports appear ad infinitum, the Opposition seek to bring forward the date on which the duty to report would end, by removing the requirement to report where there were no outstanding liabilities, but where there had been repayments or payments of interest in the preceding reporting period. In effect, amendment 2 says that there should not be a report where there is no balance to be repaid at the end of the period, although payments have been received in those six months. It would seem odd to remove the need for a report on the period during which the last part of the loan was paid off. Clearly the Government should be required to report that that has happened, and that is what the Bill as drafted requires.

I hope that the Committee will accept amendment (a), and that the proposers of amendments 1, 2 and 5 will not press them to a vote.

Chris Leslie: I do not necessarily wish to pour more congratulations on to the shoulders of the Minister-that would not be doing my job correctly-but in the spirit of Christmas I have to acknowledge, albeit begrudgingly, my appreciation of manuscript amendment (a), which the Chancellor of the Exchequer himself has tabled. I like to imagine him poring over the Order Paper, happening upon my amendment 1 and immediately thinking, "I must accept that amendment, but the drafting is not quite right," and therefore rewriting it in his own fair hand. However, I suspect that several dozen parliamentary draftsmen and women were involved in the process. As the Minister said, the intention was indeed to ensure that when we report every six months on what is happening with the loans, we are talking not just about the aggregate amount of the payments made and the interest, or about the sums that are returned, but about some of the other dimensions.

As the Minister said, the reporting arrangements as set out in the Bill do not exclude the ability to make the reports more comprehensive. Indeed, we ought to state
15 Dec 2010 : Column 997
at this stage that we would appreciate as much data being contained in them as possible. One piece of information that I would have found useful is the remaining term of the loan, although that is a small point; given how small it is, I am grateful that the Government have conceded it. Perhaps I should regard this as a famous victory for the Opposition.

Mr Bone: No, for Parliament.

Chris Leslie: I thank the hon. Gentleman. Just at what I thought was my moment of great glee, he took it away from me. Nevertheless, I will take some satisfaction from what the Government have decided.

I was trying to listen carefully to the Minister's statement on amendment 2. As a lone traveller trying to amend the legislation, I might have misread the wording of clause 2, but I still do not quite understand the sequences of subsection (4), which states:

"No report is required to be prepared or laid in relation to a period if-

(a) no payments...are made...

(b) no sums...are received in the period, and

(c) no amount of principal or interest in respect of an Irish loan is outstanding at the end".

I could not see any circumstances where paragraphs (a), (b) and (c) would simultaneously apply. For example, if no amount of principal or interest were outstanding, how could there be any circumstances where, under paragraph (a), payments had been made or, under paragraph (b), sums had been received? Surely if no report is required when no amounts are outstanding, the conditions under subsections (4)(a) and (b) are redundant. Looking at the drafting of subsection (4), it would be easy to imagine the parliamentary counsel becoming entangled in an arcane discourse on ontological logic. There are several twists to the double negatives set out in the drafting.

As a layman reading subsection (4), I could not see why paragraphs (a) and (b) were necessary, when they must be concurrent with subsection (4)(c), given that (4)(c) states that there is nothing left owing, according to my reading of it. If each of the three paragraphs were alternatives, or contrasting, perhaps using the words "either" or "or", that might make sense. They are conjoined, however, by the non-contrasting linkage "and", suggesting that each of the three conditions must be fulfilled simultaneously, and I am not quite sure that I follow that. Perhaps the Minister needs to walk me through it one more time. I do not wish to press this matter to a vote, because I am sure that there is a higher drafting power at work here, but as I read it, I could not see any circumstances in which paragraph (c) would be true simultaneously with paragraphs (a) and (b).

In general terms the reports will be important, not least because we need to see the terms of the loan that the people of Ireland will have to repay, as well as the amounts of money that the British people will have in return for adding to our national debt. There is a whole series of other questions to which I would eventually like answers. For example, what is the aggregate amount of interest that we expect to be paid by the Irish Government, and what is the impact for us in this country?

15 Dec 2010 : Column 998

As I have said, it is a shame that the summary of the terms of the credit facility was deposited only at the eleventh hour, and I hope that we will have another opportunity to scrutinise it at another time. For the time being, however, that was the purpose of amendment 1, and I am grateful to the Minister for his acceptance of the first amendment that we tabled.

Mr Cash: I have much the same curiosity as the hon. Member for Nottingham East (Chris Leslie). I was a bit puzzled by the drafting of this provision, and I wanted to find out what the Minister had in mind. I am not sure that he has left me any more satisfied than I was when I started out, however, because my experience over the past 26 years of the dogged fashion in which Ministers operate is that they just say, "We're not going to make the amendment." They do not usually explain the position satisfactorily either.

Having said that, it seems to me that if there is nothing to report, we should just not bother with the reports. Subsections (1), (2) and (3) will be necessary. It is possible that, in due course, the concerns that I raised on an earlier amendment might need to be included in the report. That was the case, for example, in relation to the reports on the Maastricht convergence criteria, despite all the footling remarks that were made during the debate on Maastricht, when we were assured that this, that and the other would not happen. When we came to the convergence reports, and got into the whole business of the golden rule, the stability and growth pact and all the other shenanigans and wriggling, we were proved right over and over again.

Chris Leslie: I just want to pick up the hon. Gentleman's point that if there is nothing to report there is no need to have any reports. I believe that it would be of interest to the House if, even when no payments were made, a report were still produced to set out that fact. That might seem a small point but, for example, in the unlikely event that default became an eventuality, the lack of a payment being received might be of interest. That was also part of the rationale behind deleting subsection 4(a) and (b).

Mr Cash: I think I might agree with that too, but I think that is catered for by subsection (3)(a), which says that each report must include details of

One could have said, "payments, if any," but for practical purposes I think subsections (1), (2) and (3) would be sufficient. I am not particularly fussed about it; I just wanted to table a probing amendment. I got the usual stonewalling operation from the Minister. I have got used to it over the years; it makes no difference to me and it makes no difference to him.

6 pm

Mark Durkan: Like my hon. Friend the Member for Nottingham East (Chris Leslie) and the hon. Member for Stone (Mr Cash), I found clause 2(4) a bit tortuous. However, I can see the problem with amendment 2, because if paragraphs (a) and (b) were removed and the subsection read only

15 Dec 2010 : Column 999

the point at which the loan is finally discharged-when a final payment is made-could be the one point when a report would not be necessary, whereas I would have thought that that was the one point where a report would have been relevant and necessary.

I therefore understand why subsection (4) is framed as it is and why there is a conjunctive that covers all three parts. It is only when no payment is made, no sum is received, and nothing outstanding is due at the end of the period, that no report is made. Otherwise, if all three conditions are not satisfied, there will be a report, as I understand it. Given what Members have said about the scrutiny and oversight that they want the House to have, although subsection (4) reads tortuously it seems to stand, so I would not be persuaded by amendment 2.

Mr Hoban: I think the hon. Member for Foyle (Mark Durkan) has a second career beckoning as a parliamentary draftsman. He has summed up the situation exceptionally well.

In subsection (4) all three paragraphs-(a), (b) and (c)-have to apply if no report is to be published. If amendment 2 were made, removing paragraphs (a) and (b), payments could have been made in the period but they would not be reported if there was no balance outstanding at the end. Therefore we must ensure that all three are true before we allow no report to be published. I hope that provides clarification.

I hope I am not seen by my hon. Friend the Member for Stone (Mr Cash) as someone who seeks to stonewall his inquiries, but having imposed a duty on the Treasury to report, it is right that that duty be extinguished when the loans are repaid; otherwise someone will say, "Yes, the loans have been repaid, but your Act requires you to make those reports." It is right that the duty to report is extinguished when the loan has been repaid, and that is simply the purpose of-

Mr Cash: Perhaps a little bit of irritation, which is not usual in my case, is beginning to burgeon, because a number of questions that I tabled weeks ago about the legal advice regarding the stabilisation mechanism still have not been answered, and when I use the word "stonewall" I mean just that. When I do not get an answer, and I am told that I will get the answer as soon as possible but I still do not get it, and I have to put in a reminder but I still do not get it, there is something going on; I know that. They do not want to disclose the legal advice; they do not want even to disclose whether in fact it was given, or when it was given. I would like to know the answer to those questions because as Chairman of the European Scrutiny Committee-

The Second Deputy Chairman: Order. This is an intervention. It is a very long intervention. The hon. Gentleman has clarified what he meant by stonewalling, but perhaps we might leave the considerations about the European Scrutiny Committee for another day, because it is not particularly relevant to the amendment that we are discussing now.

Mr Hoban: It is right that the duty to report is extinguished when there is no principal outstanding, and that is the purpose of subsections (4) and (5).

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I hope that, with that explanation, hon. Members will accept manuscript amendment (a) and will not seek to press amendments 1, 5 and 2.

Manuscript amendment (a) agreed to.

Clause 2, as amended, ordered to stand part of the Bill.

Clause 3

Short title, commencement and extent

Question proposed, That the clause stand part of the Bill.

Mr Bone: Can the Minister answer the following question, which has been raised several times during the debate: why is the Bill called the Loans to Ireland Bill rather than the Loans to the Republic of Ireland Bill? That seems very strange, as it gives others the impression that we are lending money to Northern Ireland as well as to southern Ireland.

Mr Hoban: That is an interesting question, as my hon. Friend the Deputy Leader of the House knows because he also recently asked it. I draw the attention of my hon. Friend the Member for Wellingborough (Mr Bone) to clause 1(2), which defines an "Irish loan" as

Of course the United Kingdom includes Northern Ireland. Therefore, the loan is clearly to what one technically might describe as the Republic of Ireland. I am grateful to my hon. Friend for raising that point, in order to enable me to put that clarification on the record.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill, as amended, reported.

Third Reading

6.7 pm

Mr Hoban: I beg to move, That the Bill be now read the Third time.

This has been a quick process; Bills are not usually dealt with so expeditiously. I thank all Members for their contributions and their co-operation during the course of today. The co-operation to enable the Bill to proceed so swiftly today has been particularly helpful because, assuming Third Reading goes according to plan, the passing of this Bill will send a clear signal that the UK is willing to play its part in the financial package to assist Ireland.

As my right hon. Friend the Chancellor said earlier, this package of measures has been discussed in the Irish Parliament today, and it has voted in favour of it. There are further international agreements to be reached over the course of the next few days including on International Monetary Fund assistance. Our progress today helps to ensure that there is a sense of progress in achieving the right outcome in respect of financial support for Ireland.

The Bill will allow Britain to provide up to £3.25 billion in lending to Ireland as part of the wider assistance package. The package will help to recapitalise Ireland's banks, set up a contingency reserve to deal with any future problems and cover the current shortfall in the Irish Budget. As was discussed in the debate, ensuring
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Ireland's stability is very much in our interests. A final written agreement on the various terms of the loans will be forthcoming in the next few weeks, but we have sought to provide a summary of the key terms that have been agreed with the Irish Government, in order to help to inform today's debate. It is clear from the way in which the Committee stage of the Bill proceeded that the provision of that information was helpful.

I note the point made by the hon. Member for Nottingham East (Chris Leslie). I, too, wish that we could have supplied this information sooner, but when one is negotiating a deal with another Government, one cannot always deliver information as timeously as one would perhaps like. However, we are committed to keeping the House informed about the progress of those negotiations, and clause 2 will enable us to do so-rather, it will require us; we could have been enabled to do so anyway, through our own desire-through six-monthly reporting.

It is clear from the debate, particularly on Second Reading, that Ireland is a friend in need. Our economy is currently in a stronger position than theirs, which is why we are able to offer our support. It is clearly in our interests, because of the strong links we have with the Irish economy. Ireland is one of our key trading partners, and a strong Ireland will help to support growth, jobs and investment in the UK.

The Bill is straightforward: it gives the Treasury the power to make disbursements to the Irish Government. There is a mechanism in place to take into account any adjustments in exchange rates that emerge between 9 December and the signing of the agreement, which we expect to be within the next 30 days. We do not expect to increase our contribution beyond the €3.8 billion agreed with our international partners and the Irish Government, but there is a mechanism to do so if it is required. Again, that would be through the affirmative resolution procedure and would be voted on by all Members of Parliament. So the right safeguards are in place, and the use to which the facility will be put will also be subject to regular reporting under clause 2.

There is no doubting that this Bill is important, and I am grateful to Members from all parties for their support today-support that helped us to progress according to such an urgent timetable. I hope the Bill will now proceed to the other place and be enacted as soon as possible. I commend it to the House.

6.12 pm

Chris Leslie: As the Minister has said, this is important legislation. We have been happy to support the spirit of the propositions before us, and in the spirit of bipartisanship, the Government were able to concede a small but beautifully formed manuscript amendment. Although the Minister perhaps has some longer-term issues in the form of disagreements that are increasingly emerging between him and his Back Benchers, by and large, there was support across the House for the Bill.

We have been clear that we will support the Government in providing help to Ireland. Ireland's stability does matter to us: it is in our national interest as a trading partner, because of Ireland's connections with our banks and its being our only land border. Events in Ireland remind us, though, of the inconvenient truths for the
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coalition in particular: first, that this was a global financial crisis; and secondly, that the banks, not Governments, were the root cause of the problem here.

The problems in Ireland make clear how fragile the world recovery is and show how risky the Government's gamble with growth and jobs is. Relying on exports alone delivering them is a risky economic strategy. However, going forward, Europe needs to get ahead of this crisis and the bail-out does buy time, but it does not offer a fundamental solution to the fundamental problem. In Greece, we saw markets calm temporarily, but six months later the Irish problem came to a head.

As part of the longer-term answers required, the Government have to realise that collective austerity across Europe offers countries with high debt burdens no way out. Although we of course support the Bill, we are therefore particularly anxious that the Chancellor of the Exchequer and the Prime Minister show greater leadership in tackling the root causes of the lack of confidence, and argue more fervently for a plan for growth and jobs across Europe and across the eurozone. We believe that that has to be the fundamental objective for the Government at this time; but we are of course happy to support Third Reading.

6.14 pm

Mr Cash: I, too, hope that this Bill succeeds, because it is important to help Ireland. I would like to see Ireland as part of a new configuration of the European Union, rejoining this country on a different footing from the arrangements that currently prevail in the European Union. The European Union is increasingly in its death throes and I hope that this does not lead to an implosion. We have seen riots in the streets here in the United Kingdom, in Greece, in Portugal and in Italy-there were riots in Rome only yesterday. The situation is extremely grave and a lot of it results from the very point made by the hon. Member for Nottingham East (Chris Leslie) about growth. The plain fact is that under the current arrangements there is no growth. Until powers are repatriated we will not get the sort of oxygen into the small business community that will be able to fill the gap between the requirements of the Irish economy and those of the UK economy.

In the meantime, we are considerably exposed to the indebtedness of the Irish banks. The amount that we have made available, small as it is comparatively but great as it is from the point of view of the British taxpayer, has been justified, but that is without prejudice to my concerns. They are that the former Chancellor of the Exchequer's explanation of how the financial stability mechanism came to be put through remains unsatisfactory. He could have referred the whole question to the European Court, because this was unlawful and remains so. I sent a note to the Chancellor of the Exchequer on this very question as he was going off to an ECOFIN meeting. I regret to say that the explanatory memorandum produced by the Government on 27 July-perhaps it was 25 July -endorsed the decision taken by the former Government, and that speaks for itself.

I am also deeply worried about this business of the "greater amount" under the provisions that we have already discussed because, irrespective of what the Chancellor said about the exchange rate, the reality is that the amount of the increase is simply a matter of whether or not it is carried by the affirmative resolution.
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It is only when the exchange rate issue comes into play and we are therefore just dealing with a fluctuation in the amounts to be made available that we revert to using the negative resolution. Therefore, the Bill still provides that this "greater amount" is an open-ended commitment, and I hope that the Government will keep this closely under surveillance. I have heard nothing from the Front Benchers to dissuade me from that view.

Finally, we need to deal with the question of the Euro-ectoplasm and the way in which the kaleidoscope of European legislation in conjunction with all the other arrangements that have been made parallel to this so-called "bilateral loan" weave together, because there is a serious risk that the European jurisdiction applies here. I did not press my amendment to a Division for reasons relating to another vote that did not, in fact, transpire along the lines anticipated.

Be that as it may, the Bill is understandable from the point of view of the Irish economy. However, the Irish Government and the Irish banking system have to take the blame for allowing their economy to get so far out of kilter, and that point needs to be made on the Floor of this House. We are helping them, but we are doing so without prejudice to the fact that they got themselves into the same kind of mess as the Labour Government did on our economy. This is not a day for excuses or congratulation; it is a day for a bit of sober reflection. If people spend what they have not got, they end up with it catching up with them. There is a great deal to be said for prudence, but not of the former Prime Minister's kind.

6.19 pm

Mark Durkan: I join right hon. and hon. Members in welcoming the passage of this Bill, which is a sad necessity. It has been a sad necessity for this House, and for Oireachtas Eireann, too, to undertake these arrangements for the reasons that many hon. Members have touched on in the debate.

I acknowledge the spirit in which the Chancellor and the Minister have spoken, not only today but on previous occasions and in the statements leading up to this Bill. Although this is a fast-track Bill, we have known that it is coming and that it is afoot; although in procedural terms it has been microwaved through the House, we know, understand and appreciate the background. I hope that we can have some shared hopes and confidences about what will come from it.

It is important to acknowledge that the Bill has raised questions. I tabled an amendment, which was not selected, on bonuses. This week, the Irish Minister for Finance has supervened-that was the word he used, which has been bandied about-to prevent bonuses being paid in Allied Irish bank just as it is about to benefit from this and the other loan measures. My amendment-I understand why it was not accepted-simply aimed to offer the House a chance to paravene in support of the supervention of the Irish Minister for Finance.

I am sure that, as we have been told, the Government will have a place at the table in some of the restructuring discussions. I hope that the Chancellor will ensure that the interests of Northern Ireland banking requirements will be held in due regard in the context of such restructuring. Although many of us, from all parties, have raised many issues about the banking of business in our constituencies, there is a fundamental question
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about the future of the business of banking in Northern Ireland. Northern Ireland is in the twilight zone between the British banking market and the Irish banking market. I hope that the Government will show due diligence and be protective of the needs of the Northern Ireland economy and the Northern Ireland banking sector as regards that restructuring.

We also need to recognise that there are clear UK interests at stake to do with the Irish economy and Irish banking in general. The Irish banks are not just significant players in Northern Ireland; they have significant lending in other parts of the United Kingdom, too. Of course, the UK banks lend £94 billion or more in the south of Ireland, too. For those reasons, this Bill and the debate about it reflect-to use an old phrase that was coined by Charlie Haughey in the days when he was creating Anglo-Irish engagement with Margaret Thatcher-the totality of relationships. In many ways, today's debates and the arguments, justifications and explanations that have been given by the Chancellor and Treasury Ministers in recent weeks reflect the modern reality of the totality of relationships between these islands in economic and banking terms.

I understand the question asked earlier by the hon. Member for Wellingborough (Mr Bone) about the Bill's title. As an Irish nationalist, I regard Ireland as the island of Ireland. My constituency of Foyle demonstrates another naming issue. It is the city of Derry or Londonderry, and so it is instead called Foyle, after the river. The issues are similar with the title "Ireland". When I was Minister of Finance in Northern Ireland, I had to present statements and agreements on EU funds that were agreements between Northern Ireland and Ireland. Those terms struck me as odd and I could not get away with saying "between Northern Ireland and the south" because the proper title of the Irish state is Ireland. I assume that that is the explanation for the title of the Bill, uncomfortable though some of us, as profound Irish nationalists, might be with that.

6.25 pm

Mr Peter Bone (Wellingborough) (Con): It is a great pleasure to follow the hon. Member for Foyle (Mark Durkan). The Bill has, as he said, been microwaved through the House today, but the trouble with microwaved meals is that although they are quick and do a job, they are not healthy and are not of good quality. That is how I regard the Bill, but I certainly do not seek to divide the House on Third Reading. I have made it clear that I am against the Bill, but it would be wrong to claim any victory today. My remarks and those of some of my colleagues resulted in at least seven Members going through the same Lobby as me, but the Chancellor's remarks got several hundred Members to go through the same Lobby as him, so it probably is not a good idea to divide on Third Reading.

Let me take this opportunity to congratulate the coalition's Treasury team, who are doing an exceptional job. They are the part of the coalition that is dealing with the economic crisis and we have a collection of very good Ministers here, headed by the Chancellor. It is just my opinion that we have got things wrong on this particular measure; I am very much in the minority but at least I have made my point today.

Question put and agreed to.

Bill accordingly read the Third time and passed.

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Standards and Privileges

[Relevant document : The oral evidence taken from Mr Richard Caborn and reported by the Committee on 14 December 2010, HC 691.]

Motion made, and Question proposed,

(1) approves the Ninth Report of the Committee on Standards and Privileges (House of Commons Paper No. 654);

(2) endorses the recommendations in paragraphs 31, 50 and 64 of the Report; and

(3) accordingly instructs the Serjeant at Arms to suspend the entitlement to use or to be issued with a Parliamentary photopass of-

(a) the Rt hon. Stephen Byers, for a period of two years commencing on 1 January 2011;

(b) the Rt hon. Geoff Hoon, for a period of five years commencing on 1 January 2011; and

(c) the Rt hon. Richard Caborn, for a period of six months commencing on 1 January 2011.- (Mr Heath .)

6.27 pm

Mr Kevin Barron (Rother Valley) (Lab): Before I turn to the three former Members who are the subject of the motion, I wish to make a few remarks about the behaviour of the people who duped them. They would no doubt argue that they have served the public interest, but they were also taking advantage of the need of retiring MPs in the run-up to a general election to provide for their future employment. They dangled the bait in front of our former colleagues and unfortunately some of them took it. If that was not entrapment, it was something close to it, and although I do not seek to excuse the conduct of those three former Members, I think the whole House will feel some sympathy for them because of the way they were deceived.

Three former Members-Sir John Butterfill, Patricia Hewitt and Adam Ingram-were cleared by the commissioner and the Committee that I chair of any breach of the rules. Whatever we may feel about the poor judgment they showed in agreeing to take part in the bogus interviews, and however ill-judged some of the remarks made in the interviews may have been, they did not break the rules and the Committee has therefore made no recommendations about them.

The remaining three former Members did break the rules, and the Committee has recommended sanctions accordingly. I will deal with each of them in turn, because although they were all part of the same deception practised by the media, their cases are different in important respects. Stephen Byers has made a full and I would say gracious apology. He recognises that he made claims to the bogus interviewer that were untrue, and it is evident that he deeply regrets the damage he has caused not only to his reputation but to the reputation of the House. I do not dispute the genuineness of his apology, but unfortunately the seriousness of his offence means that saying sorry is not enough. That is why the Committee has recommended that Mr Byers's entitlement to a parliamentary pass should be suspended for two years.

The Committee also found that Geoff Hoon committed a particularly serious breach of the code which, like that of Mr Byers, brought the House and its Members generally into disrepute. As those who have read the Committee's report and the evidence will know, Mr Hoon has not accepted this conclusion.

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He argued that the code of conduct should not apply because he was discussing his private life and what he might do after he had left the House. The Committee did not accept that argument. Mr Hoon was a Member of Parliament when he attended the bogus interview, and he talked in the interview about information that he had been given while he was he was a Member of Parliament, so the code applied.

Secondly, Mr Hoon suggested that the meaning of what he had said to the bogus interviewer had been misinterpreted. It seemed to come down to whether he had said "this" or "it", or perhaps neither. Some of us refreshed our memory of what he said by watching a recording of the "Dispatches" programme, and he clearly said "this". Ultimately, however, it is not so much about the exact words that he used as about the impression that he was giving. The Committee concluded that Mr Hoon was giving the clear impression that he could brief paying clients about defence policy on the basis of his inside knowledge. That is, as we said in our report, a particularly serious breach of the code, because it brings the House and its Members into disrepute. Unlike Mr Byers, Mr Hoon has neither accepted that he breached the code nor apologised. The Committee has therefore recommended that Mr Hoon's entitlement to a parliamentary pass should be suspended for five years. Hopefully, the apology will ensue.

The Committee found that in Richard Caborn's case there were several minor breaches of the rules in relation to his failure to declare an interest when arranging or taking part in functions in the House. They were most likely due to carelessness on Mr Caborn's part; there is no evidence that he deliberately set out to break the rules. Mr Caborn accepts that that was the case, and he has apologised unreservedly for those breaches.

The Committee found that Mr Caborn committed a further breach when he failed to declare a financial interest in the course of a meeting with a senior NHS official at which a proposal was raised which might have benefited the members of an organisation for which he was a paid consultant. In our judgment and that of the commissioner, that breach was also due to carelessness. There is no evidence of intent on Mr Caborn's part. The commissioner therefore described it in his memorandum to us as "less serious" than the breaches committed by Mr Byers and Mr Hoon, but that does not mean that it was not a serious breach. It was a breach both of the rules on declaration of interests and of paragraph 12 of the code of conduct, which covers all members.

The Committee took the view that, because that was a less serious breach than those committed by the other former Members, a less severe sanction was appropriate. We could have recommended just an apology, but Mr Caborn had written to us stating that he did not accept that he should have declared his interest and did not accept that he had breached the rules. As we pointed out in our report, we could have invited the House to summon Mr Caborn to the Bar to apologise in person, but if he did not accept that he had breached the rules, it was not clear what that would achieve. We therefore agreed that Mr Caborn should also lose his privileged rights of access, and, because his was a less serious case than the others, we set the tariff at six months.

Mr Caborn wrote to me on 12 December seeking a meeting with the Committee. I consulted my colleagues on the Committee, who agreed to offer him an opportunity
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to give oral evidence at its meeting on 14 December. We had, of course, invited Mr Caborn and the others to give oral evidence before we produced our report, but he had declined that initial invitation. We would not normally agree to a request to give evidence after the publication of a report, but in this case we felt that it was right to grant Mr Caborn's request to have his say, because, as a former Member, he was unable to speak in today's debate. The transcript of his evidence, and his letter to me of 12 December, are in the Vote Office, and I hope that Members have had an opportunity to read them.

I do not propose to go through Mr Caborn's evidence in detail, but this is the nub of it. First, we are finding against him on the basis of a rule that we ourselves say is insufficiently clear and needs reviewing. Secondly, he is being treated in the same way as those who have committed particularly serious breaches of the code of conduct.

The Committee says that the rules on lobbying need to be reviewed. The 1974 resolution refers to

the guide to the rules refers to

and the code of conduct, article 12, refers to

That all needs to be brought together and tidied up, but, as the Committee's report states:

The purpose of the rule is quite clear: it is to ensure that Members are transparent in their dealings with people who might be in a position to influence public policy or the spending of public money. Mr Caborn tried in his evidence to tie the rule very tightly to people who are in a position to influence legislation, but such a narrow interpretation is not one that most of us would recognise. To sum up: yes, the rules need reviewing and clarifying, but the purpose of the rules is clear and the evidence that Mr Caborn breached the rules is, in my Committee's view, also clear.

Turning to the Committee's recommendation, I have already explained that we felt that a sanction was appropriate. If Mr Caborn had apologised up front, that might have been enough, depending on what he said, but the fact is that, until I received a letter from him this morning, Mr Caborn did not accept that he had breached the code and had not apologised. In his letter today, Mr Caborn writes that the Committee has "given a new interpretation" of the rules and set a new precedent. I do not accept that, but in his letter he continues:

I welcome this apology, although I am disappointed that it has come so late in the day.

An apology was sought and has been given, but that still leaves the House with a decision to take on what sanction should apply. We could, as I said earlier, have recommended that Mr Caborn be summoned to the Bar of the House for a formal reprimand. That would have been humiliating for him, and I am not sure that it
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would have been all that great for the House. The media would have loved it, and the pictures no doubt would have been broadcast around the world, but it would have been a bit like a public flogging, and we did not think that right or appropriate, so we did not go there.

Given that Mr Caborn is a former Member, the only real option that the House is left with is to take away his pass. He told us that losing his former Member's pass is just like being suspended from the service of the House. With respect, it is not. A serving Member who is suspended loses his or her pay and expenses for the period of suspension and is excluded from the precincts of Parliament. All that Mr Caborn will lose is his ability to enter the building without going through the visitors' entrance and his access to certain facilities, such as the Strangers Bar. He can still come here as a member of the public. Some might say that losing those privileges for a period of just six months is a very light punishment. Well, it is intended to be light, because we recognised that Mr Caborn did not intend to breach the rules or to bring the House or its Members generally into disrepute. In that respect, his case is different from the other two.

In the view of the Committee, its recommendations in respect of those three former Members are regrettable but necessary. They are also proportionate. Once the period of suspension of the former Members' privileged rights of access is over, and assuming an apology has been made, they will be free to re-apply for their passes. It is painful to have to take such action against former colleagues, but by agreeing to the Committee's proposals today, the House will send an important signal that it does not tolerate breaches of its rules.

6.39 pm

The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath): The right hon. Member for Rother Valley (Mr Barron) has clearly set out the basis for the complaints, the commissioner's findings of fact and the Committee's recommendations.

These debates are never easy. The House can take no pleasure in imposing sanctions on Members and former Members who have breached the code of conduct, but it is something that we must do if we are to have any hope of restoring and maintaining public faith in the House. For those former Members who have breached the code, the Committee recommends suspending their entitlement to a parliamentary photo pass for a period ranging from six months to five years. There are those outside this place who might argue that such a sanction is not tough enough. As the Committee has noted, however, the power of the House to discipline former Members once they have left this place is severely limited. In fact, the Committee is not aware of any disciplinary action having been taken against a former Member in modern times.

As these cases do not relate to the misuse of allowances, there is no money to repay and the removal of access is, in effect, the only sanction open to the House to impose. Such a sanction sends a clear message about the strength with which the House deprecates the breaches carried out in these cases. We should not lose sight of the damage that this episode has done to the reputations of the former Members who have breached the code, as they seek to establish new lives and new careers outside this place.

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As the right hon. Member for Rother Valley has said, I emphasise that three of the six former Members about whom complaints were made following the clandestine recordings by T he Sunday Times and "Dispatches" were cleared of any breach of the code by the commissioner. The motion makes no reference to those Members, because no sanction is required in their cases, but it is important that the record shows that not every Member who is subject to media criticism has, in fact, breached the code of conduct for MPs, however unwise their actions may have been.

In the course of these investigations, the commissioner identified three areas where he felt that the code of conduct should be reviewed. First, the paid advocacy rule prohibits a Member from being paid for participating in any proceeding or from lobbying Ministers or officials, if in doing so they would be seeking to confer an exclusive benefit on the organisation that is paying them. However, the commissioner is not confident that the rule as currently expressed has the effect of ruling out lobbying on behalf of a wider business sector of which the organisation paying the Member forms a part.

Secondly, the code of conduct does not apply to former Members, although it does apply to discussions Members have while serving in the House about what they might do after they leave. The commissioner is concerned about contacts between former Members and serving Members, Ministers and officials based on previous working relationships. An issue arose in the case of Mr Richard Caborn about the scope of the rules relating to contact with public officials. Although the rule itself refers to "Ministers and crown servants," the guidance refers to "public officials." That is another area the commissioner feels should be clarified. The Committee proposes that the rules regarding lobbying should be reviewed as soon as time permits. I understand that that will be a wide-ranging review conducted by the commissioner, who will report to the Committee. The Committee will, in turn, make a report to the House.

I remind the House of the measures that the Government have taken and will take to raise standards in public life. The coalition agreement sets out the Government's commitment to introduce a statutory register of lobbyists. We intend to take as many views as possible of those who are interested through a broad consultation on the introduction of a statutory register of lobbyists, before publishing a draft Bill before the end of this Session. We will introduce legislation in the next parliamentary Session. When Ministers leave office, they will be prohibited from lobbying Government for a period of two years. They must also seek advice from the independent Advisory Committee on Business Appointments about any proposed appointments or employment they wish to take up within two years of leaving office. The ministerial code is also clear that former Ministers must abide by the advice of the advisory committee. In conclusion, on behalf of the House, I thank the right hon. Member for Rother Valley, other Committee members and the Parliamentary Commissioner for Standards for their work. I hope that the House will feel able to support its Committee.

6.43 pm

Helen Jones (Warrington North) (Lab): I echo the thanks given to the Select Committee on Standards and Privileges and to the commissioner for their work on
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investigating these matters. These were very difficult issues to get to grips with. As my right hon. Friend the Member for Rother Valley (Mr Barron) has said, they have arisen from the contact that former Members had with a fictitious company set up by journalists. It is worth noting that the commissioner obtained full certified transcripts of those meetings before making his report, and that he did not rely simply on the parts that had been broadcast or that had appeared in the media. I think we are all grateful for the thoroughness of the investigations that have been carried out.

It is important to put on the record the fact that the report is not concerned with whether former Members were unwise in their dealings, with whether they exaggerated their claims, or even with what they planned to do when they had left the House; it is concerned solely with whether they breached the rules while they were Members of this House. That is the only question before us. Indeed, in some cases the Committee found that Members who had been reported to the commissioner for investigation had not breached those rules, and they were exonerated through the investigation. In three cases, as we have heard, they upheld the complaints and have recommended that parliamentary passes be withdrawn for different periods.

Labour Members support the Committee's recommendations on this matter. As has been said, however, we believe that the case involving Richard Caborn, who, it is fair to say, was and is widely respected in this House, raises some issues that need to be looked at in future. The report clearly states that

We agree with that. However, the Committee found that he had breached the code of conduct. As the Deputy Leader of the House has said, this case raises some important issues. First, the rules need to be clarified. Members need clear rules that they can obey, in which case there is no dispute about whether they have been breached. Secondly, the definition of "a public official" needs to be the same as that in the rules, in the code and anywhere else that it is mentioned. Thirdly, there is the whole problem of what Members who are planning to leave the House may and may not do when they are planning their future careers. Again, clear guidelines are needed.

We also need to consider whether former Members should have a right of appeal. Any existing Member of this House who is subject to a report by the Standards and Privileges Committee can stand up in this Chamber and make their case; clearly, that is not possible for former Members. I welcome the fact that the Committee decided today to hear evidence from Richard Caborn, but that is something that we will perhaps need to consider formalising in future.

I, too, hope that the House will support this motion, and I look forward to a proper debate on the issues that have arisen during the investigation of these cases.

6.48 pm

Mr Alan Meale (Mansfield) (Lab): Let me say to my right hon. Friend the Member for Rother Valley (Mr Barron) that I welcome all aspects of his Committee's report apart from one, to which I will refer in a moment.

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As the Deputy Leader of House has said, it is never easy for the House to discuss such matters. It is even less easy for someone to stand up and say that they do not agree with parts of a report such as this, because inevitably those comments will be picked up by whoever is out there and played against them. However, I feel absolutely obliged to do so in respect of the case of Richard Caborn. Richard Caborn is a person who gave 27 years of honourable service in this place. In the past few weeks, people from both sides of the House have told me that what he and other colleagues are going through is absolutely appalling.

What about the three former Members who were exonerated entirely? We must, as a House, look to see what they have been put through over the past few weeks and months by people outside this place. Perhaps, as the Chair intimated at the beginning of his address, we need to look at how people treat this place and how they portray it to the general populace, as that is not in the interests of the democratic process.

I turn to what the Chair of the Select Committee said in respect of Richard Caborn. The Committee's recommendation states:

As its Chair said, the Committee accepts in its conclusions that the rules and associated guidance need to be clarified and amended, and that the rules relating to lobbying must be reviewed as a matter of urgency.

I conclude as I started by reminding the House of Richard Caborn's long years of honourable service in this place. He served at all levels of Government and served the House well-as did Sir John Butterfill, who was exonerated in this examination. Richard Caborn spent most of his working life in this place, serving the people of this country and the people of Sheffield, only to be admonished at the end of it by this place because of our lack of rules, the sting that was referred to by the Chair of the Select Committee, and that Committee's findings, which state that he brought neither the House nor Members into disrepute. The six-month suspension that he has been given is, frankly, disproportionate to his so-called crimes. It would have been enough to say that it was unsatisfactory that he did not make a full apology to this House at an earlier stage. If we are going into the business of bringing stings performed by people outside this place to the Floor of the House and of purging our own Members, something wrong is happening.

Question put and agreed to.

Mr Speaker: I call Neil Parish to present a public petition. He is not here, so we will move on.

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Water Supplies (Developing World)

Motion made, and Question proposed, That this House do now adjourn.- ( Miss Chloe Smith.)

6.52 pm

Mr Don Foster (Bath) (LD): After many years of campaigning on water, sanitation and hygiene, I am grateful for this opportunity to debate the topic. Far too many people in the world lack safe clean water. Globally, just short of a billion people struggle without access to it. That is more than the population of Europe. In places such as Zambia, Ethiopia, Tanzania and Mozambique, I have seen personally that when clean water is not available there are minimal opportunities for good health, gaining an education, looking after crops or animals, or developing a business. If a major part of the day is taken up with walking many miles to collect water, there is no time for a child to get an education, and no time for a parent to earn a living.

Similarly, far too many people do not have decent sanitation or hygiene provision. The figures are frightening. Whereas the number of those who lack safe water is dreadful, 2.6 billion people go without access to decent sanitation. That is twice the population of China. Without decent sanitation or hygiene, the chances of a healthy life are minimal. Diarrhoea is the biggest child killer in Africa. On that continent alone, almost a million children aged under five died from diarrhoea in 2008. Worldwide, some 1.3 million infants die as a result of diarrhoea every year. Ninety per cent. of those diarrhoea cases are down to inadequate sanitation, unsafe water or poor hygiene.

It is clear to me that one of the most important ways in which we can help the poorest people in the world is by providing support in the areas of water, sanitation and hygiene, collectively referred to as WASH. Many of the other targets of our aid provision-education, agriculture, business development and health-need, as a starting point, people to have access to decent water, sanitation and hygiene.

I have seen at first hand the impact that help with those facilities can make. I have seen, for example, a health clinic in the bush in Ethiopia that was almost deserted because of the improvements in the health of local people following the installation of water pumps in local villages. In many other places I have seen the impact of the excellent work done by the UK-based charity WaterAid. I have even done a bit of well building for it in Zambia.

Fiona Bruce (Congleton) (Con): I thank the hon. Gentleman for introducing a debate on this important subject, on which I support him. I have to declare an interest: my father spent his entire professional career as a water engineer, building and maintaining water and sanitation projects both in the UK and in many countries abroad. Does the hon. Gentleman agree that if we are to ensure the sustainability of projects in the developing world such as those provided by WaterAid, it is essential that community groups and church groups on the ground are trained to maintain the projects commenced by voluntary organisations and ensure their continuity?

Mr Foster: The hon. Lady is absolutely right. Like me, she has probably seen examples of totally unsustainable aid development. In Zambia I once saw a brand-new
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fire engine that had been donated to Lusaka urban district council by another country. Within 24 hours nobody could use the fire engine, because its engine was designed to use a fuel that was not available in Zambia. I have seen video recorders provided by other countries with videotapes in a language that was not understood by the population. She is right: there is no point in installing a water pump without involving the villagers in learning how to maintain it and ensuring that they will be able to get parts for it. They can possibly even go further by making a small charge for the water from the pump, so that there can be paid attendants to ensure that it is well looked after and serviced, and the project is sustainable. I agree that involving local people is critical.

As I said, I have seen some excellent work by WaterAid, but many other charities such as Tearfund and Pump Aid work in the field and deserve our praise. Given the importance of that aspect of the UK's aid work, I was pleased by the Government's promise in the coalition agreement, which stated:

Those words are encouraging, but delivering that aim will not be easy.

One of the United Nations millennium development goals is to halve, by 2015, the proportion of the world's population without sustainable access to safe drinking water and basic sanitation. Sadly, that goal is not going to be met. According to a UN report this year, the number missing out on proper sanitation will actually grow to 2.7 billion by 2015, if current trends continue. Although the safe water target is on track globally, there are parts of the world where it will be missed by miles, not least in sub-Saharan Africa, where it is predicted that 350 million people will remain without access to safe water.

The UN report says:

That warning becomes even more pressing in the context of climate change. The problem is not just hotter weather, causing more frequent droughts that in turn limit access to water. Climate change also disrupts weather patterns, resulting in more frequent and powerful floods. Flooding leads to overflowing latrines, contaminated drinking water, waterborne diseases such as cholera and all kinds of other sanitation problems. The problem is extremes of water shortage and water excess, and that problem will intensify as climate change continues to progress. That is part of the reason why we need to do even more.

Rather than discuss the work of my right hon. Friend the Secretary of State for Energy and Climate Change and his Department, however, I wish to concentrate on what I believe the Department for International Development can do. In recent years water and sanitation have not been given the priority that I would wish them to have. As a proportion of the UK's aid budget, spending on water and sanitation has dwindled to just 2.2%, yet if I am right, and if water and sanitation are a vital plank in delivering all our aid goals, increasing the proportion of aid money dedicated to them would be money well spent. WaterAid made that argument powerfully in its recent submission to the Department-

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7 pm

Motion lapsed (Standing Order No. 9(3)).

Motion made, and Question proposed, That this House do now adjourn.- (Miss Chloe Smith .)

Mr Foster: The argument was well made by WaterAid, and I hope the Minister has had a chance to read its submission. It considers each of the millennium development goals in turn in the context of WASH.

The first goal is to eradicate poverty. The World Health Organisation estimates that for every £1 invested in WASH, £8 is generated. That is because people save time on water collection, so they can be more productive, and WASH provision limits the number of days lost to illness.

The second goal is universal primary education, but children who are busy fetching water do not have time to go to school. The education of young girls ends up suffering the most, as that task more often than not falls to them. Sanitation also has a role to play in education. Dedicated girls' toilets and menstrual hygiene facilities are important in making schools accessible for older girls.

DFID already knows that. It published a girls' education strategy in January 2005, which prioritised

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