HC Deb 06 December 2001 vol 376 cc461-2
14. Mr. Ian Taylor (Esher and Walton)

What are the latest estimates of Treasury expenditure on business euro preparations for the 2001–02 financial year. [186971]

The Chancellor of the Exchequer (Mr. Gordon Brown)

Some £10 billion—[Interruption]—£10 million, and the Opposition will be happy to note this, has already been spent on business euro preparations. Some £23 million has been spent to adopt euro-compatible systems in the Inland Revenue and the Department for Work and Pensions. A copy of the Treasury's fifth report on euro preparations, which was published on 4 November, has been deposited in the Library.

Mr. Taylor

The Chancellor may overspend if he put £10 billion into the problem, but £10 million is too little. Does he agree that there will be a real competitive challenge to industry and traders in this country on 1 January—that 80 per cent. of the single European market, which is the home market for British business, will have one currency? There are 13 million visitors from the eurozone to this country. It is urgent that British companies not only accept notes and coins in euro denominations, but look at their marketing strategy and prepare themselves for what will be the dominant currency in our home market.

Mr. Brown

That is precisely why, in the most practical way, we have done what we can to help British businesses to prepare. We have published 425,000 fact sheets on euro preparation for businesses; we have written to 1.5 million small firms to inform them about the needs that will arise from the euro; we have published more than 50 business case studies showing how the euro can be adapted; and we have issued a euro preparations leaflet to 1.6 million small businesses. In addition, a leaflet is being distributed at ports and airports explaining to travellers to and from the United Kingdom how the euro will work.

We are working with all the sectoral bodies in our euro preparations committee—which includes the Bank of England, the chambers of commerce, the Confederation of British Industry and many other organisations—to produce material for clients in different sectors. In addition, there is a telephone helpline available for businesses inquiring about Europe.

I may add that we are encouraging people who have old coins and notes in foreign currencies that will be converted into the euro to give them to charity, if they are prepared to do so, and we are giving tax relief for that.

Dr. Stephen Ladyman (South Thanet)

Retailers, banks, manufacturers and exporters are already having to spend huge amounts of money to get ready for the introduction of euro coins and notes. However, the real advantage to those businesses will occur only if we are in the eurozone and have the advantage of lower interest rates and still lower costs to business. Should not real preparations be made now to build up the campaign to explain to the British people and to British business the full advantages of joining the euro?

Mr. Brown

It is precisely to inquire about all the advantages of the euro that the five tests will be applied. The technical and preliminary work that is being undertaken in the Treasury will lead to an assessment within the first two years. The issues that must be examined and on which an objective assessment must be made include the effects on employment; the effects on investment; the effects on the flexibility of our economy; the effects on different sectors, including financial services; and whether there is sustainable and durable convergence. I believe that most businesses think that these are the right tests to make.

It would be wrong to do what the Opposition do and rule out the euro on principle as a matter of economic dogma even if it were found to be in the national economic interest to join. The shadow Chancellor, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), shakes his head, but in 1997 he said that he was against the single currency "in principle". Does he still hold that view?

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