---

Ireland: Financial Assistance

My Lords, I am grateful to the noble Lord, Lord Eatwell, for confirming that the Opposition are in support of the proposed package, and I appreciate that support. He asked about the claims that the UK has on Ireland. The latest numbers I have seen state that on 30 June this year, total UK banking-sector claims on Ireland were $131.6 billion—ranking second only to Germany’s banking-sector claims on Ireland. Indeed, they are substantial. However, as I said when repeating my right honourable friend’s Statement, we in the UK have a well capitalised banking sector that is capable of withstanding any pressures from Ireland and elsewhere. The noble Lord refers to growth. Of course this is absolutely critical; it is part of the Irish Government’s plans and is part of the plans in the UK, which we have already discussed at some length this afternoon. Indeed, I can confirm that of course the Government are very much engaged through the Europe 2020 discussions, and in other ways, to make sure that we promote healthy growth within Europe and globally. The accounting for any bilateral loan that may be put in place will be a matter for the Office for National Statistics and the Office for Budget Responsibility, but my understanding is that, with a loan on one side and a matching asset that we will have in our claim on Ireland, there should be no effect on the size of the deficit, because this would otherwise be just a contingent liability. As I said when repeating the Statement, we would expect any loan that is made to be repaid. As to why, if we are lending money to Ireland, there should not be other loans, this is an exceptional situation. Ireland is our closest trading partner which takes a high percentage of our exports. We are contributing to a European package and to a multilateral global effort through the IMF. By supporting the package for Ireland we will support the very many businesses across the United Kingdom that trade with Ireland. That is one of the critical reasons why it is in the national interest that we support the package.