§ 1. Mr. HawkinsWhat is Her Majesty's Government's policy on joining the arrangements for a single currency on 1 January 1999. [12111]
§ The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook)As the Chancellor of the Exchequer made clear in his statement yesterday, British membership of a single currency in 1999 could not meet the five economic tests that the Government have set out. The Government will therefore be notifying our European partners that we shall not seek membership of the single currency on 1 January 1999.
§ Mr. HawkinsWill the Foreign Secretary now answer the question that the Chancellor of the Exchequer so obviously ducked yesterday: will the Government be applying for European funding to propagandise for our joining the euro?
§ Mr. CookI am happy to say that we shall not be making any such application. It is a decision for the British people. As we assured the House yesterday, if and when the Government should take a decision to join the single currency, we shall put the matter to a referendum of the British people, who will have the final veto, as is their right.
§ Mr. CorbynWill the Foreign Secretary tell the House what proposals he has and what pressure he intends to put on the European Union to ensure that any central bank is democratically controlled and is accountable to an elected body somewhere, rather than its being an unelected organisation dictating economic policies to member states?
§ Mr. CookMy colleague the Chancellor of the Exchequer yesterday made it clear that it is, and long has 690 been, our policy to press for a strengthening of ECOFIN so that it can set broad economic parameters and strategy within which the central bank would operate. That remains our position, and we shall continue to work for it.
§ Mr. HowardYesterday, the Chancellor of the Exchequer stated that it was not the Government's intention to join the exchange rate mechanism. How do the Government square that with the exchange rate mechanism requirements of the Maastricht treaty?
§ Mr. CookI am happy to confirm what the Chancellor said yesterday, which is that we have no intention of joining the exchange rate mechanism. As he himself said, there have been many changes to that exchange rate mechanism since the Maastricht treaty. What will be required of us, should and when we ever wish to join the single currency, is evidence of currency stability. That can be perfectly well arranged without membership of the ERM.
§ Mr. HowardWill then the right hon. Gentleman confirm that the effect of that answer is that the pound will shadow the euro for at least two years before any date of entry to EMU?
§ Mr. CookNo, I can confirm no such thing. We have made it perfectly plain that we do not intend to join the ERM. We have also made it perfectly plain, if and when it appears to be in Britain?s economic interest, that we will join. I am bound to say that I thought that that would have been welcomed by the right hon. and learned Gentleman. In the past three months, his party has gone through three different policies on the euro—
§ Mr. HowardAnswer the question.
§ Mr. CookI have answered the question. The right hon. and learned Gentleman's party began by ruling the euro out for several decades; it then ruled it out for one decade, and now it rules it out for the foreseeable future. It is a matter of relief to the country that the Conservatives will be in opposition for several decades to sort out their policy.
§ Mr. SkinnerIs my right hon. Friend aware that I am pleased that the Government will not apply to join the exchange rate mechanism? After what happened on 16 September 1992, that would be like a dog returning to its vomit.
§ Mr. CookI think that my hon. Friend will wish me to clarify to the House that it was not our vomit, but that of the Conservatives. He puts his finger on one of the reasons why we are in office and they are out of office.