20 December 2010
Following the Prime Minister's statement to MPs on last week's European Council, Harriett Baldwin welcomes news that when the permanent mechanism for assisting eurozone countries that get into financial difficulty comes into force Britain will not be liable. However she questions the PM on the extent of Britain's liability under the current emergency arrangements signed up to by the previous Government in the Lisbon treaty. Harriett Baldwin (West Worcestershire) (Con): As another happy Back Bencher, may I convey the thanks of the British taxpayer for the hundreds of millions of pounds that the Prime Minister saved us over the weekend? However, I should be interested in the clarification of an issue. The problems in the eurozone are likely to occur between now and 2013. What is the extent of Britain's liability under the emergency arrangements signed up to the previous Labour Chancellor? The Prime Minister: I am glad to hear that my hon. Friend is a happy Back Bencher. The answer to her question is that a mechanism was established under article 122 of the Lisbon treaty, allowing the European Union to spend the headroom between its budget and the money it can spend under the previous financial deal on such bail-outs. The headroom was €60 billion, some of which has been used with respect to Ireland, and the mechanism is established under qualified majority voting. That is the problem we face, so we are dealing with that in the fastest way we can by saying that, when the new mechanism comes in, it will rule out action under the old mechanism. Of course, as they like to say in Limerick, we shouldn't have started from here. | Hansard