European Community

HC Deb 08 December 1977 vol 940 cc1631-4

12. Mr. Biffen

asked the Chancellor of the Exchequer what proposals he has tabled at the Council of Ministers with a view to promoting economic and monetary union within the European Community.

Mr. Healey

None, Sir. But, as my right hon. Friend the Prime Minister in- formed the House yesterday, the European Council on 5th and 6th December listened to proposals from the President of the Commission for a resumption of progress towards economic and monetary union. The European Council agreed to await the views of Finance Ministers before attempting to form a view.

Mr. Biffen

Is the right hon. Gentleman aware that a common European exchange rate and a common European pattern of taxation would involve an intolerable degree of provocative harmonisation and would be unacceptable in the diminution it would imply in the authority of this House? Will he so inform that distinguished refugee from British politics who now serves as President of the Commission?

Mr. Healey

I think that the President of the Commission is well aware of my view, which I have stated on many occasions, that the type of economic and monetary union which involved the characteristics to which the hon. Gentleman has referred would require a degree of convergence in the economic performance and policies of the various countries which it is difficult to foresee at this time.

Mr. Jay

Can the Chancellor assure the House that, whatever Mr. Roy Jenkins may say about this, the Government will retain their sanity on this issue?

Mr. Healey

Yes, Sir, I am glad to be able to give that assurance. The Government intend to maintain their sanity on all issues.

Mr. Tapsell

Does the Chancellor accept that, if the Government do not accept their obligations under the Treaty of Rome to move step by step to the liberalisation of exchange control by 1st January 1978, one inevitable result will be that the £ sterling exchange rate will be forced up higher than would otherwise be the case, which would make our exports less competitive, reduce the incentive to invest at home and destroy the opportunity for creating more jobs? If the right hon. Gentleman does not accept that argument, will he say what steps the Government are taking to extend the derogation arrangements under Articles 108 and 109?

Mr. Healey

I must protest that hon. Members on the Tory Front Bench are continually asking lengthy supplementary questions referring to Questions already put down by their colleagues for answer later in the afternoon. It is an intolerable offence against the procedure of the House to seek to do so.

Mr. Skinner

Is my right hon. Friend aware that one of the problems that the Opposition are up against is that, since the Leader of the Opposition made a speech in Rome about being the European Party. the Opposition are having to bend over backwards and are now even more pro-European than Mr. Roy Jenkins? Has my right hon. Friend anything to say on this?

Mr. Healey

All I can say to my hon. Friend is that the inconsistencies in the views and the behaviour of the Leader of the Opposition on matters of European policy almost match her inconsistencies on matters of pay policy, which were illustrated again by her speech yesterday.

Mr. Gow

Although the Chancellor cannot envisage circumstances in which it would be possible to have a convergence of European economic performance so as to lead to economic and monetary union, will he tell the House whether it is the policy of Her Majesty's Government to move towards economic and monetary union?

Mr. Healey

There is a certain convergence of the performance of the European countries at this time. For example, inflation rates are closer than they were a year ago and look like being closer still next year, and there are degrees of convergence in various other areas. But common exchange rates would imply a common policy in all the important aspects of the economy, and I do not foresee that in the near future.

On the last question that the hon. Member asked, sometimes there is a case for travelling hopefully even if the date of arrival is uncertain.

Mr. Ashley

As Opposition Members are always quoting special cases such as the police and the Army because the Opposition ride the law and order bandwagon, can my right hon. Friend tell us whether they have ever quoted special cases which should be placed below the norm?

Mr. Healey

I invited the right hon. and learned Gentleman to give me such a special case. I agree with my hon. Friend that the Conservatives' tendency is to ask for low wage settlements and then continually, for opportunistic reasons, to pick on groups which, they say, should have a specially high settlement, although they retreat very fast from that commitment when they find those groups—such as the police—acting responsibly and accepting a settlement within the guidelines.

Several Hon. Members

rose—

Mr. Speaker

There are three Questions being answered together. I shall call one more supplementary question.

Mr. Anthony Grant

For the benefit of the hon. Member for Bolsover (Mr. Skinner), will the Chancellor of the Exchequer explain how multinational companies increase the rate of inflation? If they do, how he can reconcile this with the fact that by his policies he is directly encouraging multinational companies to locate in this country?

Mr. Healey

My relations with my hon. Friend the Member for Bolsover (Mr. Skinner) are so intimate that I would prefer to discuss this matter with him privately after the meeting rather than in full public gaze.