Michael Connarty
Labour Member of UK Parliament - Linlithgow and East Falkirk Constituency
Osborne still evasive on Britain's contribution to Eurozone bail out fund.
Michael Connarty (Linlithgow and East Falkirk) (Lab): I would think much more highly of the Chancellor if he would actually admit that one reason that the banking system in the UK is not under threat is because the last Government and the people of this country bailed out the banks.
The right hon. Gentleman will recall that, as Hansard will show, I asked him last time about the possibility that they would require a £2 trillion fund, which most economists say they will, and that the so-called haircut—more Sweeney Todd than Vidal Sassoon—would be 60%. Surely we must be in the IMF and involved in funding through the IMF; otherwise the big bazooka that the Prime Minister has talked about will say “Made in China”.
Mr Osborne: I am happy to acknowledge that the previous Government recapitalised the British banks. They were obviously under enormous duress at the time—[ Interruption. ] It is simply not the case, as the hon. Member for Nottingham East has just suggested, that the Conservatives opposed that. We supported it at the time; indeed, we were advocating it in advance of it happening. However, I completely recognise that it was a difficult decision for the previous Government to take.
On the question of the size of the fund, of course there are those who would like it to be even larger. We should welcome the significant progress that has increased its size severalfold to, potentially, around €1 trillion, which is a significant sum. The hon. Member for Linlithgow and East Falkirk (Michael Connarty) also asked an interesting question about what was happening during our time as Members of Parliament to the balance of economic force and power in the world. I suspect that we are going to spend many years talking about that in the period ahead.
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