By Jonathan Isaby
Steve Baker has written elsewhere on the site this morning about the Loans to Ireland Bill, which went through all its Commons stages in one day yesterday.
14 MPs rebelled on the timetable motion (13 opposing and 1 registering a positive abstention by voting in both lobbies) which provided for its rapid passage through the Commons and 7 defied the whip to vote against the Bill's Second Reading.
"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: “The rate of interest payable on a loan will be at a fixed rate per annum equal to the aggregate of: (a) the Margin; and (b) the Sterling 7.5 year swap rate at the date of disbursement.”
"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."
"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."
"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 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."
He did not and it was pressed to a vote, where it was defeated by 301 votes to 243. However, the following 27 Tories backed it (two of whom registered a positive abstention by also voting in the other lobby), most – although by no means all – of whom are "usual suspects" (indeed, it was the very first time this Parliament that Stephen Dorrell voted in a lobby without a government minister or whip for company):
- Steve Baker
- Brian Binley
- Peter Bone
- Andrew Bridgen
- Douglas Carswell
- Bill Cash
- Chris Chope
- James Clappison
- Philip Davies
- Stephen Dorrell (voted in both lobbies)
- Richard Drax
- Mark Field
- Zac Goldsmith
- Philip Hollobone
- Bernard Jenkin
- Julian Lewis
- Anne Main
- Patrick Mercer
- David Nuttall
- Andrew Percy (voted in both lobbies)
- Mark Reckless
- John Redwood
- Jacob Rees-Mogg
- Graham Stuart
- Sir Peter Tapsell
- Andrew Turner
- John Whittingdale
The Bill's few outright opponents did not then press the Third Reading to a division.