Economic and Finance Council (Hansard, 15 June 1995)

§ 2. Mr. Soley
To ask the Chancellor of the Exchequer what decisions were reached at the last meeting of ECOFIN. [27033]

§ The Chancellor of the Exchequer (Mr. Kenneth Clarke)
At its last meeting, on 22 May, the Council reached political agreement on a proposed investor compensation directive. We agreed that the conditions were now met for the disbursement of the 85 mecu loan to Ukraine which was first agreed in December 1994 and we reached agreement in principle to a further loan of up to 200 mecu, subject to conditionality. Lastly, the Council adopted a regulation to delay revaluation of the Belgian franc within the agrimonetary system.

§ Mr. Soley
Have there been any discussions at all in ECOFIN about the political framework that would be necessary to operate a single currency?

§ Mr. Clarke
ECOFIN has made quite a lot of progress talking about the technical issues that surround the 875 proposal to move to economic and monetary union. Obviously, there are considerable political implications in that and ECOFIN is composed of Ministers of Finance who discuss the politics of it, but these are early days. It is when the framework becomes clearer, the timetable becomes clearer and the number of states that comply with the convergence criteria becomes clearer that the political debate will no doubt deepen.

§ Mr. Wilkinson
As the mechanistic and regulatory impediments to a true, single, integrated market remain since the last meeting of ECOFIN, will my right hon. and learned Friend, when he goes to Brussels on Monday for its next meeting, say clearly to his counterparts on the Council that they really ought to get rid of the bottlenecks and impediments to free trade in the Community and pay less attention to harmonisation of exchange rates?

§ Mr. Clarke
I agree with my hon. Friend that the completion of the single market with the removal of all regulatory and other impediments to free trade and fair competition between the member states is extremely important. As he knows, the British Government have taken the leading part in that, and it was really following the Single European Act and the actions we took after that that the British paved the way for the creation of the single market. We intend to complete it. Anything that improves the workings of the market and removes barriers to or distortions of trade is, in my opinion, welcome.

§ Mr. Gordon Brown
Given the Chief Secretary's stated opposition this afternoon to the principle of a single currency and given the Prime Minister's statement earlier this week on the principle of a single currency that he is persuadable—and persuadable against it by the very group the Chancellor of the Exchequer accused this morning of right-wing xenophobia—will the Chancellor now confirm his position on a single currency? Is he, as he always was, in favour of the principle of a single currency—yes or no?

§ Mr. Clarke
I think the hon. Gentleman should consult an ear, nose and throat specialist, because he did not seem able to hear clearly what I said last night about my inflation target and I do not think he was quite able to hear what my right hon. Friend the Chief Secretary said a few moments ago, either. The position is that we negotiated an opt-out at Maastricht, which means that we were left free to decide for ourselves in due course, if and when the situation arose, whether to join an economic and monetary union.
We are now taking part in the discussions on what form that monetary union may take and, in due course, if any states go ahead, Britain will decide one way or the other. The decision, in my opinion, ought to be taken on a hard-nosed judgment of British interests, judged when we see what the details are. That is the principle on which the party of which I am a member fought the last general election and it is the policy recently restated by my right hon. Friend the Prime Minister. It is plainly the only sensible policy to pursue until we see whether economic and monetary union is going ahead in the EU.