HC Deb 02 February 1995 vol 253 cc1209-10
8. Mr. Duncan

To ask the Chancellor of the Exchequer whether the United Kingdom economy meets the EC convergence criteria; and what is the corresponding position with the performance of other EC partners.

The Paymaster General (Mr. David Heathcoat-Amory)

Ireland and Luxembourg are currently the only countries which are deemed to meet the convergence criteria.

Mr. Duncan

I am grateful to my hon. Friend for that answer. Does he accept that there may well be a moment when various national economies are roughly in balance, but that later, they might not be? Does my hon. Friend accept that if, in the meantime, a single currency had been imposed, business risk and differing conditions would merely have shifted to areas other than the exchange rate? What, then, are the Government's divergence criteria?

Mr. Heathcoat-Amory

My hon. Friend makes the good point that the temporary convergence of the economies of Europe would not provide good conditions for a single currency because subsequent divergence of economic performances by the national economies of Europe would create intolerable strains within that single currency area. That is one of the reasons why the Government believe that the timetable for monetary union laid down in the Maastricht treaty is unrealistic. That is also why my right hon. Friend the Prime Minister ensured that the protocol to the treaty requires a subsequent Act of Parliament and the consent of the House before the United Kingdom moves in that direction.

Mr. Andrew Smith

In the light of the answer just given, and now that the Secretary of State for Employment speaks for the Government in Davos and elsewhere on such matters and the civil war in the Conservative party is so damaging to this country that the Chancellor chose to come to the Dispatch Box earlier and refer, not to the role that this country is playing in Europe, but to the role that this country "could" play in Europe— the Chancellor's word—have the Government ruled out the United Kingdom participating in economic and monetary union by the 1999 deadline in the Maastricht treaty—yes or no?

Mr. Heathcoat-Amory

We play a full and constructive role in Europe, but that does not mean that we are required to sign up to a single currency now, as the Opposition parties would. We are quite content to leave that final decision to a future Parliament. I cannot help but observe that the Opposition parties which are most keen on a single currency are the most unlikely ever to deliver the economic criteria which would make that possible.