HC Deb 15 June 1995 vol 261 cc884-5
11. Mrs. Lait

To ask the Chancellor of the Exchequer what study his Department has made of Brown's law of economics. [27043]

Mr. Kenneth Clarke

Brown's law is receiving the study that it deserves.

Mrs. Lait

As my right hon. and learned Friend continues his study of Brown's law, does he agree that its contention that borrowing should not exceed investment is a useless guide to sound public finance, as it sets no level for investment or for borrowing and clearly avoids setting any inflation target, let alone one as low as 2.5 per cent.?

Mr. Clarke

My hon. Friend is correct. That is one of the few specific statements that the hon. Member for Dunfermline, East put into Brown's law, but upon closer examination it turns out to be simply an excuse for having no limit on the amount of borrowing on which one can embark in any one year. That is one of the many examples of what the policy would mean, and it would represent a considerable loosening of present policy, although the hon. Gentleman claims that Labour could match the growth with low inflation that the Government have achieved.

Mr. Campbell-Savours

Would not the costs of speculative and widespread currency exchange transactions be greatly reduced, indeed ended, if we had a single European currency? How long must British tourists throughout Europe continue to be ripped off by banks because politicians cannot face their responsibilities?

Mr. Clarke

It is tautologous to say that economic and monetary union would get rid of wild fluctuations in currencies and transaction costs across the foreign exchanges. We have preserved the position that will allow us to choose whether to join in economic and monetary union with the other European member states once the details have been put in place and when we see the conditions for convergence. We shall then decide whether it will be in Britain's interests to join.

Mr. McLoughlin

Does my right hon. and learned Friend agree that one of the true principles of Brown's law is to reverse the Government's trade union reforms? Would not one of those reversals mean that people such as Mr. Jack Dromey would not be able to challenge Mr. Bill Morris for the general secretaryship of the Transport and General Workers' Union? Would it not be a great pity if Mr. Dromey were prevented from earning income to support his family?

Mr. Kenneth Clarke

I am certainly not going to take a position on the internal battles of the Transport and General Workers Union. It is true that the Labour party is a little more precise in what it believes it will do so far as trade union law is concerned than it is on economic policy. If Brown's law sheds any light on the future control of the trade union movement over Labour policy, I suppose it has some value.