HC Deb 30 October 1997 vol 299 cc1020-2
11. Mr. Rammell

How he proposes to further the public debate on the implications of a single currency. [12659]

Mr. Gordon Brown

In addition to publishing a guide to economic and monetary union, with a special edition as a guide for business, the Government are preparing for economic and monetary union by setting up a steering group, led by the president of the Confederation of British Industry, the Governor of the Bank of England, the chairman of the Association of British Chambers of Commerce, and Ministers. We are also planning sectoral and regional consultations on the single currency to start from January.

Mr. Rammell

I thank my right hon. Friend for that response and congratulate him on his statement this week, which was the most positive statement on economic and monetary union that we have heard from a British Government. Does my right hon. Friend agree with the Tory Reform Group, which stated this morning that the Leader of the Opposition's tactics on EMU have united the Government and business against the Conservative party?

Mr. Brown

I quite understand my hon. Friend's remarks. Because the Conservatives cannot tell us whether they support the principle of a single currency or whether they will put a national economic test above all others, they have lost the support of business. They are the anti-business party in Britain today. Confirmation of that, if it was needed, has come from the Tory Reform Group and the remarks of the right hon. Member for Henley (Mr. Heseltine), the former Deputy Prime Minister, who said this morning that the Conservative party is at war with business.

Dr. Julian Lewis

In the light of his repeated comments this week that all that matters are the economic tests, will the Chancellor explain what he would do if other countries went ahead with economic and monetary union and—against the expectations of people on both sides of the House, including me—it succeeded economically but the tests failed democratically? What would the Government's view be if a new regime emerged that destroyed the democratic freedoms of those countries?

Mr. Brown

The hon. Gentleman does not seem to understand my statement on Monday. I said that we supported the principle, that we would apply economic tests, that national economic interests would be decisive in the Government's recommendation and that the people would have the final say. The hon. Gentleman should tell us whether his party supports the principle of a single currency or not. I understand that Conservative Members went to Eastbourne to sort the matter out in what they called sessions for bonding. I gather that they were split up into small groups—and that is literally the position in which they are now.

Mr. Winnick

I am aware of all the fiscal constraints involved. Arising from what my right hon. Friend has just said, is there not a case for public money being used for another prolonged bonding session for the Conservative party so that it can try to sort out the issue? May I also suggest that it could be held at Henley and that a few more records of wartime songs could be thrown in at evening sessions?

Mr. Brown

I offer the shadow Chancellor the chance—with your permission, Madam Speaker—to tell us whether he supports the principle of a single currency or not. Within the Conservative party, there is now a five-year group, a 10-year group, a 30-year group and a group that will never go into the single currency. If the Conservative party does not support a single currency for the foreseeable future, it will not be a single party for the foreseeable future.

Mr. Malcolm Bruce

Does the Chancellor accept that many in this country believe that economic tests are the only basis on which a decision to join a single currency should be made? It is conceivable that those tests may arise within this Parliament. Will the Chancellor accept, therefore, that it is imperative to mobilise public opinion to ensure that we get support for a commitment to enter a single currency? Does he agree that the split within the Conservative party at least creates the opportunity for a cross-party campaign that can ensure a yes vote in a referendum whenever it comes?

Mr. Brown

I respect the hon. Gentleman's long-standing commitment to a single currency. I think, however, that on reflection, he will agree that getting it right is more important than getting it quickly. If he believes, as I do, that the economic tests must be met and that we need a sustainable and durable period of convergence, he must accept that that will take time. What he found on Monday was a Government prepared to make the preparations. I hope that he will support us, not only in the standing committee that will deal with the preparations for monetary union, but in our attempt to inform and to show the people of Britain what monetary union can mean. What happened on Monday is that we were the first Government who were prepared to support the principle of a single currency. We are still waiting for an answer from the Conservative party.

Mr. Todd

In the Chancellor's welcome statement on Monday, he addressed the lack of convergence between our economy and that of our European neighbours. Will he give some information on how we shall measure that convergence over the next few years, picking out particularly the element of interest rates, on which he laid so much emphasis?

Mr. Brown

My hon. Friend makes a good point. We have laid down five economic tests. They include investment and what impact the single currency will have on it, whether there is sufficient flexibility to withstand shocks, whether the business cycles are convergent, and the impact on jobs. We can set these tests down because we have been prepared to say that we support the principle of a single currency. Until we clarify the Opposition's position—do they support a single currency or not—we cannot move further in understanding it. The leader of the Conservative party said at one stage: We should say very clearly that we have principled objections to a European single currency. If in some future decade, that is no longer the case … He is a Conservative leader who has principles for one decade, but who may drop them in the next. That is the sort of party we are dealing with.

Mr. Nicholls

If, as is inevitable, there comes a point when the interests of this country are not the same as the interests of the rest of Europe, whose interests does the Chancellor think will prevail in this brave new world—the interests of this country or the interests of the rest of Europe?

Mr. Brown

It is precisely because we have set national economic tests for Britain which have to be met that we can say that the decision will be made in the national economic interest. Even if the economic arguments for a single currency were compelling and it was in the national interest to go in, the Conservatives cannot say that they would recommend doing so. I suggest that they return to Eastbourne and have another bonding session to see whether they can sort things out.