HC Deb 23 April 1998 vol 310 cc953-5
3. Mr. Hugh Bayley (City of York)

If he will make a statement about the outcome of the ECOFIN meeting in York. [38243]

The Chancellor of the Exchequer (Mr. Gordon Brown)

As president of ECOFIN, I hosted the informal meeting of European Finance Ministers and central bank governors in York from 20 to 22 March. I am grateful to the city of York, which my hon. Friend represents, for the hospitality that was provided and the marvellous reception that delegates received. The agenda for the meeting covered critical issues facing the European Union—its enlargement, economic reform and the implications of the financial and economic situation in Asia.

Mr. Bayley

I thank my right hon. Friend for his kind remarks about my constituency. Does he agree that Britain's influence in the European Union is growing because of the constructive role that the Government have played in the United Kingdom presidency? Did he think that the ECOFIN meeting in York was more successful because the Government's policies contrasted with the policies of isolation and drift of the Conservative Government before the election? Finally, did he and his fellow Ministers enjoy their time in York?

Mr. Brown

Indeed we did. Some delegates reminded me what happened when, under the Conservative Government, they arrived in Bath for an informal meeting and some things went wrong.

Britain is leading the agenda for European economic reform. We proposed the Luxembourg conference on employability, which led to significant advances, including employment action plans from each country, and we are now proposing the same reforms for product and capital markets. I believe that we are making considerable advances in the agenda for economic reform, which is vital for the future of Europe, and I am grateful to York for providing the facilities in which many of these decisions were considered.

Sir Michael Spicer (West Worcestershire)

At the ECOFIN conference in York, did the Government not completely cave in on the Maastricht criteria for entry into the single currency? Is that not scandalous? What is the point of the criteria, if no one believes in them or complies with them? Does that not call into question the Government's tests for economic credibility on sterling's entry into the currency?

Mr. Brown

No. The convergence criteria of the Maastricht treaty were not discussed at York.

Mr. Denis MacShane (Rotherham)

Is my right hon. Friend aware that, at the next ECOFIN meeting in Austria, he will find many prices—for books, beer and win—-posted in euros as well as in Austrian schillings? The Conservative party is terrified of the fact that all other European parties of the right now back the euro. In the interests of stability, will he join me in welcoming British Steel's decision to pay its bills in euros and the fact that the Vauxhall workers have today voted to accept a pay deal that will link their pay to the stability that is offered by the euro? Is that not the right way for British business to go?

Mr. Brown

Yes. The difficulty that we faced when we came to power was that, because of the divisions in the Conservative Government, so few preparations had been made for the introduction of the euro. The Government are encouraging the legal changes that make it possible to trade in euros—when I met the Confederation of British Industry last night, I was told that that was one of the measures in our first 11 months that has encouraged it.

Mr. Michael Fallon (Sevenoaks)

Why is it that, four months into the right hon. Gentleman's six-month chairmanship, there is still no agreement on the presidency of the European central bank? Is that another hard choice that is being fudged along with the rest of the Maastricht criteria, or is he waiting for the Prime Minister to sort out the stalemate that has arisen because of his flawed chairmanship?

Mr. Brown

I am glad that, from the Opposition Front Bench, we now have a positive and constructive interest in matters European and in who is appointed president of the European central bank. As I reported after Monday's meeting, the decision must be made by July, which is when the central bank comes into being—I expect the decision to be made in May.

Mr. Gordon Prentice (Pendle)

Was the proposed abolition of duty-free sales within the European Union in July 1999 raised in York? If not, will my right hon. Friend undertake to raise the matter at the next ECOFIN meeting on 19 May, bearing in mind the fact that the European Parliament has unanimously called—there were no dissenters—for an urgent study before September of the implications of the abolition of duty-free sales on jobs and on economies throughout the Union?

Mr. Brown

The issue of duty-free could be reopened only if there was unanimity in favour of doing so. That is the European Union position. There is not such unanimity, and we are dealing with the implementation of a decision that was agreed by the previous Conservative Government.