HC Deb 02 November 2000 vol 355 cc820-1
2. Mr. Michael Fallon (Sevenoaks)

If he will estimate the cost to small retailers of changing over to the euro. [133888]

The Secretary of State for Trade and Industry (Mr. Stephen Byers)

The cost to retailers will depend upon the detailed approach that they take to any changeover.

Mr. Fallon

How much has been allocated for conversion preparations in the DTI's own three-year spending plans? When exactly should small retailers begin to prepare?

Mr. Byers

The hon. Gentleman is right to raise the importance of retailers preparing for any changeover; that will allow the British people to make a genuine choice as to whether they want to join a single European currency. Only the Labour party offers the people that choice; the Conservatives would not give the British people that choice.

As for costs, that depends on how retailers decide to approach the matter. In the changeover plan, we laid down the precise way in which they can prepare; it will be for retailers themselves to take that decision.

Mr. David Kidney (Stafford)

What benefits does my right hon. Friend anticipate would come from trading in a common currency rather than in different currencies? Does he estimate that those benefits would outweigh the costs of conversion?

Mr. Byers

The Government have made it clear that, in principle, we would join a successful single currency for three principal reasons: the benefits that would come from improved trade; the transparency of costs; and the currency stability that would clearly result from being part of a single currency. Those are the reasons why we are keeping the option open; why we have a policy of prepare and decide; and why we are prepared to give the people of this country a genuine choice—[Interruption.] I agree that the Liberal Democrats hold the same position. However, the Conservatives do not; they want to deny choice to the British people—the Conservatives are not prepared to hold effective discussions about the realities.

Mr. Alan Duncan (Rutland and Melton)

The cost of changing over to the euro will not be merely a matter of amending invoices and tills. If the exchange rate is fixed, other economic variables—such as labour costs, taxation and prices—will have to take the strain, as the economies of other countries behave differently. Small businesses will feel that strain much more than big ones. What estimate has the DTI made of the extent to which, for instance, an inappropriate interest rate will hurt small retailers or of how much more volatile other economic variables will turn out to be if the European exchange rate is fixed? How does that climate of much higher risk for small businesses fit in with the Chancellor's five fatuous tests?

Mr. Byers

The economic conditions must be right before we would recommend to the British people joining a single currency, and we have said very clearly that we will test those five economic conditions early in the next Parliament. The hon. Gentleman is right to raise the important issue of those important conditions. Unfortunately, he failed to raise the constitutional issues, which I know concern him greatly, which is why he actually said during "Any Questions" on 20 October, "I have no intention whatsoever of voting in favour of the euro". [HON. MEMBERS: "Hear, hear"]. I see that the right hon. Member for Wells (Mr. Heathcoat-Amory), who leads from the Conservative Front Bench on trade and industry matters—I welcome him to his new position—shares that view: he would not vote in favour. I wonder how on earth that can be reconciled with the official policy of the Conservative party?

Conservative Members know that, for principled reasons, they would never support joining a single currency. If that is the principle, and if there are constitutional reasons, why is it not ruled out for ever, and why is there this fudge in the Conservative party to rule it out for one Parliament? Increasingly, people are seeing through the cracks in Tory policy regarding the single currency.

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