HC Deb 25 October 1973 vol 861 cc1449-51
4. Mr. Marten

asked the Chancellor of the Exchequer if he will make a statement about progress towards monetary union within the Common Market.

6. Mr. Deakins

asked the Chancellor of the Exchequer what further consideration he has given to the second stage of EEC economic and monetary union.

Mr. Barber

Work is continuing on these matters and progress will be reviewed at the next meeting of Community Finance Ministers.

Mr. Marten

As it is the Government's intention to go for the second stage of economic and monetary union by 1st January next year, will my right hon. Friend explain what it means in reality and in practice and, secondly, what provisions are being made for democratic parliamentary control of economic and monetary union?

Mr. Barber

Obviously Parliament will have the usual opportunities to discuss any proposals as they arise. As regards the substance, the Government's view is that the decisions on the second stage of EMU should be taken in accordance with the summit communiqué of October 1972.

Mr. Deakins

Under the second stage, what obligation do the British Government have to harmonise the coverage of value added tax? If they have any such obligation, will it not be a case of Britain going into step with the other eight rather than the other eight coining into step with Britain as regards coverage?

Mr. Barber

That might be what the hon. Gentleman and his hon. Friends would do. I will explain the position to the House. First, the content of the second stage of EMU is obviously now being considered. As to the specific question concerning VAT, paragraph 2 of Article 28 of the Draft Directive allows all zero rates which were in force in the United Kingdom on 1st July 1973 to be retained until the Council of Ministers by unanimous vote decides otherwise, but not later than the abolition of fiscal frontiers, which would also require a unanimous decision by the Council.

Mr. Biffen

In order that our partners in the Community may know precisely where we stand in this matter, can my right hon. Friend say that there will be contained in the Conservative election manifesto at the next election the same explicit pledge that was given at the last election, that we in this party would not countenance value added tax on foodstuffs?

Mr. Barber

I shall be consulting my hon. Friend about the content of the manifesto in due course.

Mr. Healey

Will the right hon. Gentleman confirm the reports that appeared during the Nairobi meeting of the International Monetary Fund, namely, that he told his colleageus that he would not re-peg the parity of the pound until July next year? Will he also confirm the statement by President Pompidou and other French officials that France is not prepared to proceed to stage 2 of the economic and monetary union until the British pound has rejoined the snake? If the right hon. Gentleman can confirm these two statements, is it not total hypocrisy for him to pretend that he or the Prime Minister has the slightest intention of carrying out the pledge made at the summit meeting last year?

Mr. Barber

The position is simple. As regards observations of those in other member countries of the Community, all I can say is that it is the British Government's view that decisions on the second stage of EMU should be taken in accordance with the summit communiqué of October 1972. With regard to the question of the pound, the position is exactly as I have stated it to the House in the past.