Intergovernmental Conferences

HC Deb 06 December 1990 vol 182 cc441-2

7. Mr. Sedgemore

To ask the Chancellor of the Exchequer what work he is undertaking in preparing for the intergovernmental conference in December.

Mr. Norman Lamont

My right hon. Friend the Prime Minister put forward proposals for a hard ecu and European Monetary Fund, for which I shall be arguing at the intergovernmental conference on EMU. My right hon. Friend the Foreign Secretary has put forward suggestions for improving the efficiency and effectiveness of the Community in the context of the intergovernmental conference on institutional reform and he is working up those ideas in preparation for that conference.

Mr. Sedgemore

I ask the Chancellor again: does he intend to reaffirm the support that he gave just two weeks ago to the Bruges group of anti-European Tory Members of Parliament or, having no further use for their votes, does he intend to repudiate their views at the intergovernmental conference? Bearing in mind the fact that his Financial Secretary now says that we can move speedily towards the creation of a single European currency through the hard ecu, what will happen to notes in circulation when he abolishes the pound?

Mr. Lamont

I am grateful to the hon. Gentleman for his close study of the speech that I made two weeks ago. He has asked me about it not just today but four times yesterday at the Select Committee. My answer today is no different from my answer yesterday, and that is that the speech that I gave then was in accordance with Government policy and remains so today.

Mr. David Howell

I, too, congratulate my right hon. Friend on his assumption of the high office of Chancellor. He has our very warm support. Is not the point about the hard ecu that it is, unlike the present ecu, a currency that has to be managed and will be managed by a new institution, the European Monetary Fund? Is not it the case, therefore, that once the processes of management develops, it will give markets, customers, individuals and Governments the opportunity to choose whether, in the years ahead, we wish to move to a single currency, enlarging our choice and making it more important?

Mr. Lamont

I am grateful to my right hon. Friend. He is right and expresses the point well. The hard ecu is not a single currency—it is a common currency and it differs, as he says, from the existing ecu in that it is not just a basket currency; it will be a hard counter-inflationary currency, and it will be up to individuals and markets to choose. In that way, the development of monetary union would, if it happened, be entirely evolutionary and in accordance with people's choice.

Mr. Molyneaux

I congratulate the Chancellor on behalf of my right hon. and hon. Friends on this Bench. Now that most of the 11 have started to wriggle out of the commitment to a single currency, will the Chancellor undertake to uphold the freedom and the decision-making power of the Treasury, over which he now presides?

Mr. Lamont

That is very much our objective.

Mr. Aitken

Will my right hon. Friend, far from repudiating his excellent speech to the Bruges group two weeks ago, take note that the European institutions seem to have read it carefully and moved in his direction—particularly in respect of that part of my right hon. Friend's speech in which he said that economic convergence among member states is a mirage? Does he welcome the apparent change of mood before the forthcoming intergovernmental conferences, at which uniformity will no longer be demanded but instead there will be new emphasis on two-speed or even multi-speed progress towards economic and monetary union?

Mr. Lamont

I am grateful to my hon. Friend. There is a wide variety of growth and inflation rates in the European economy, and a number of member states now acknowledge that one cannot move to a single currency without first achieving much closer convergence than currently exists.