Are we prepared?

Who can tell? When Lord Barnett asked HMG on Tuesday

whether HM Treasury is developing contingency plans for use in the event of a Eurozone collapse.

the answer was not altogether reassuring.

My Lords, as my right honourable friend the Chancellor of the Exchequer made clear in the Autumn Statement, the Government, including of course the Treasury, are undertaking extensive contingency planning to deal with all potential outcomes of the euro crisis.

I can't help feeling that Lord Barnett was a mite ironic when he thanked Lord Sassoon for his "very informative reply". In fact, the exchange between the two peers about that answer makes me think that not only it was ironic but that the Minister realized it. Of the various questions and reassuring, not to say palliative answers, Lord Lawson's was the hardest hitting:

My Lords, there is only one thing as worrying as the collapse of the eurozone, and that is the continuation of the eurozone. It has been demonstrated to be fundamentally flawed and is the cause of all these problems. Is the noble Lord, Lord Campbell-Savours, not right that at the heart of the thing that we need to address is the risk of a banking meltdown? Will the Minister give an undertaking that should it prove necessary for the United Kingdom Government to rescue any British banks, they will do so on much tougher terms than the ludicrously soft terms on which the previous Administration went in to save banks?

Lord Sassoon's reply was not reassuring:

My Lords, we have a lot to learn about the softness with which the previous Administration went about a lot of things. One of the key lessons for this crisis is that we must stick to a deficit reduction programme that is firm and fair, and keep this country isolated from the worst of the problems that are all around us.

I ask again: are we prepared for an even bigger catastrophe than any we have faced so far?