European Single Currency

HC Deb 13 March 1997 vol 292 cc490-2

12. Mr. David Atkinson

To ask the Chancellor of the Exchequer when he next expects to meet his EU counterparts to discuss the introduction of the single currency. [18532]

Mr. Kenneth Clarke

The forum in which EU Finance Ministers meet to discuss economic and monetary union is the Economic and Finance Council, which is known as ECOFIN. The next ECOFIN meeting is scheduled to be held on 17 March 1997.

Mr. Atkinson

What assessment have my right hon. and learned Friend and his European Union colleagues made of the overriding need to ensure that the computer systems involved in the introduction of the single currency are millennium-compliant? Is he aware of the growing concern among information technology experts that, because those are the two largest information projects ever to be undertaken, it will prove impossible to meet the deadline of introducing a single currency on 1 January 1999? Even Brussels would be unable to keep the clock back at five minutes to 12 at the turn of the millennium. Will my right hon. and learned Friend ensure that the matter is on the agenda of the forthcoming intergovernmental conference in Amsterdam?

Mr. Clarke

It would be more suitable to raise the matter at ECOFIN in due course and in the Monetary Committee, where all such practical matters are addressed, but at this stage the European Commission obviously should be consulting as widely as possible about all these practical problems. I think that the date of 1 January 1999 is looking surrounded by doubt in many other ways, but certainly the problem of computer compliance is complicated by the important millennium problem, which my hon. Friend points out.

Mr. Winnick

When the Chancellor meets his EU counterparts, will he consider the possibility of taking the hon. Member for Reigate (Sir G. Gardiner) with him? If he does so, should the Chancellor not explain that, on the issue of the single currency, the hon. Gentleman, who is now in the Referendum party, represents far more of his former Tory colleagues than the Chancellor does?

Mr. Clarke

I have known the hon. Member for Reigate (Sir G. Gardiner) for many years and I remember him as a passionate supporter of the European Movement. He and I held similar views on the whole question until five or six years ago. He seems to have wandered away from my views a little, but I always hold hopes that one day he will return.

Mr. Bill Walker

My right hon. and learned Friend will be aware that I am not a member of such an organisation and never have been. Will he also recognise that the important thing about structures of any type is that they must be sound, they must be based on what can be delivered and they must last? In the present circumstances, it looks unlikely that any dates will ever be met.

Mr. Clarke

I share my hon. Friend's approach. One of the British contributions that we can make to the discussions is to be sensible, to concentrate on the practicalities and to insist that all decisions are taken on the clearest possible basis of a judgment of what is in the interest of the European economy and then of what is in the interest of the British economy. It is absolutely essential that no economic and monetary union should take place unless there are genuinely convergent economies. Convergence matters more than any artificial timetable.

Mr. MacShane

In any consideration of the single currency, the level at which the pound enters to promote British interests is important. This soon-to-go Chancellor is presiding over a yo-yo currency. Why is he refusing to meet British Steel and other businesses, which want to discuss with him the fact that the rise in sterling that we are experiencing will cost dividends, reduce profits and have an impact on jobs? His final gesture of goodbye will be to hurt British manufacturing industry because of his incompetence in handling our currency.

Mr. Clarke

We have a floating exchange rate at the moment and, for that reason, I do not control its level. Finance Ministers do not control the level of exchange rates in today's deregulated foreign exchange markets. We are pursuing strong, stable economic policies aimed at keeping inflation down, keeping the public finances healthy and maintaining the fundamentals of the economy, but thereafter the markets make their own judgment. The consequences of that cause people to keep addressing the question whether to have a single currency in the European Union, but it remains at the moment quite uncertain where we are going to go on that great issue.