HC Deb 06 December 1990 vol 182 cc440-1
6. Mr. Beith

To ask the Chancellor of the Exchequer whether he has any plans to modify his hard ecu scheme.

Mr. Norman Lamont

The United Kingdom proposals for a hard ecu have been widely welcomed as a positive contribution to the ongoing debate on EMU. The ideas first put forward by my right hon. Friend the Prime Minister will continue to be developed and discussed with European Community colleagues.

Mr. Beith

I congratulate the Chancellor on his appointment and remind him that one of his first tasks will be to convince the Rome conference that there is still life in the hard ecu scheme. Does he agree that he will have to satisfy two conditions to do that? He will have to demonstrate, first, that the scheme can lead directly to single currency and then that the institution running the currency will not be subject to political interference in its responsibility for price stability. Are those conditions acceptable to the Chancellor and to the Prime Minister?

Mr. Lamont

On the hon. Gentleman's point about how independent a European monetary institution should be, he is not correct. There are a variety of views and not all countries are in favour of fully independent institutions. For example, the French take a different view from the Germans. A number of countries have expressed interest in the hard ecu and the hon. Gentleman may have noticed that the French Finance Minister, Mr. Bérégovoy has said that he thinks that the full potential of the hard ecu should be explored as a contribution towards stage 2. We have said that the hard ecu could, in time and if people and markets wish it, evolve towards a single currency, but only on that basis—that individuals chose so to do.

Mr. Dykes

I add my congratulations to my right hon. Friend on his first appearance as Chancellor. Will he confirm that the hard ecu proposals can fit felicitously into the longer-term EMU objectives? Will he remind the House that the European central bank proposals being worked out also include the full involvement of all the national central banks?

Mr. Lamont

My hon. Friend is right on the last point. On Sunday, I discussed those very issues both with other Finance Ministers and with the governors of the banks of Europe. On the first point, I have made the position clear. We see that it could evolve, but this is an approach that is market driven and involves individuals choosing how the monetary system of Europe should develop.

Mr. Chris Smith

Does the Chancellor share the view of his Financial Secretary, who told the House of Lords Select Committee on 9 October that in his view the hard ecu could lead to a single currency even more quickly than the Delors programme, or the view of the Prime Minister, who told the House on 30 October that the hard ecu would not be widely used in any case and therefore could not lead to a single currency? Does the Chancellor back his Minister, or the back-seat driver? What is his view?

Mr. Lamont

In putting that question, the hon. Gentleman shows that he does not understand the hard ecu proposal at all. We have repeatedly made it clear that what the hard ecu would ultimately lead to would depend on what individuals and markets decide. My right hon. Friend the Prime Minister and my hon. Friend the Financial Secretary have expressed their views about the speed at which any change might happen and it is perfectly in keeping with the theme of letting people choose the hard ecu that those different views should be expressed.

Mr. Favell

Is my right hon. Friend aware that yesterday the French Finance Minister, whom he has just mentioned, said that the move towards economic and monetary union can be achieved only by the simultaneous erection of an economic Government? Does my right hon. Friend agree?

Mr. Lamont

We have always feared that an imposed single currency and an early imposition of monetary union must lead to a degree of political integration for which I do not believe the people on the continent of Europe are ready.