HC Deb 23 July 1998 vol 316 cc1254-5
10. Mr. Colin Breed (South-East Cornwall)

What steps Her Majesty's Government are taking to ensure that the European investment bank properly assesses applications for investment. [50496]

The Paymaster General (Mr. Geoffrey Robinson)

All projects approved by the EIB are approved by its board after appraisal by its staff.

Mr. Breed

Is the Minister aware that the Select Committee on European Legislation was recently advised of a substantial write-off of an advance to a regional airline which subsequently failed, and that the reasons given were Poor financial and commercial management, an inadequate choice of aircraft— which seems to bear out the former— and lack of political support from the Government of the region? Does he agree that those assessments should have been part of the original appraisal and that, therefore—in terms of getting EIB loans—such matters should be eliminated? Will he institute a review of the way in which EIB loans are assessed so that we can minimise any future bad debts?

Mr. Robinson

I have met Sir Brian Unwin, and I will bring the matter to his attention. I would not like to leave the House with the impression that the EIB is an inactive or incompetent organisation. It has invested £26 billion, £23 billion of which was in the EU, and, last year, £3.8 billion—the highest level ever—was invested in the UK. I will bring the matters to the attention of Sir Brian. I have met him before and will do so again, and I will report what he says back to the hon. Gentleman.

Mr. Robert Sheldon (Ashton-under-Lyne)

Is my hon. Friend aware that if the Chancellor of the Exchequer were to announce that he was in favour of joining EMU—without setting a date—the consequences would be an increase in inward investment, a reduction in the high level of the pound and a reduction in interest rates? Would that not be one those rarest-of-all economic consequences—a genuinely free economic lunch?

Mr. Robinson

My right hon. Friend the Chancellor made clear the five conditions that must be met and has said that, if it is in the national interest, there is no barrier to our joining EMU. The performance of the European investment bank in the United Kingdom and the European Union is already extremely good and should be welcomed by the whole House.