§ 11.15 a.m.
§ The Question was as follows:
§ To ask Her Majesty's Government whether, if the Republic of Ireland enters the European Monetary System and the United Kingdom refuses to do so or postpones her decision, they can ensure that the many thousands of Irish citizens working in the United Kingdom are not made to suffer hardship through disparity between the two currencies; and how Her Majesty's Government propose to prevent speculation without imposing hardship.
§ The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey)
My Lords, the noble Lord will be aware of the decision by the Government of the United Kingdom not to participate in the exchange rate mechanism of the European Monetary System. The Government of the Republic of Ireland is still, I understand, considering its position. Meanwhile, the parity link between the Irish pound and the pound sterling continues; and the circumstances envisaged by the noble Lord's Question remain hypothetical.
If the link were to be broken, sterling earned by Irish citizens in the United Kingdom might become worth either more or less in terms of Irish pounds. The Government could not however undertake to ensure that nobody was adversely affected by exchange rate movements in this or any other situation. Should controls to prevent speculation become necessary, the intention would be to avoid creating difficulties for individuals or companies so far as possible.
§ Lord MOYNE
My Lords, while thanking the noble and learned Lord for his sympathetic reply, may I ask him to urge Her Majesty's Government in consultation with the Government of the Republic, if the hypothetical circumstances arise, to seek to minimise any difference between the value of the two pounds so as to reduce the uncertainty and hardship which could face Irish 714 wage-earners in this country who support a family at home, and so as to prevent the smuggling of currency across the Irish border from becoming a profitable activity?
§ Lord McCLUSKEY
My Lords, first, consultations have taken place between the Governments of the two countries, and these consultations continue. One of their objects—and not the only one—is to minimise, so far as possible, any difficulties which may arise because of some disparity between the two currencies. But one must not jeopardise the effect of any controls that may be necessary to prevent speculation. I think that cross-border smuggling in Ireland is not an entirely new problem, but it is one of the problems which will have to be looked at in the light of any such development as the noble Lord's Question envisages.
§ Lord O'NEILL of the MAINE
My Lords, is the noble and learned Lord aware of the unfortunate effects which the breaking of the link with sterling will have in the North of Ireland as; well as in the South? Is he further aware that a bank like the Ulster Bank has more branches in the South of Ireland than in the North and, equally, the Allied Irish Bank of Dublin has many branches in the North of Ireland; and that, in addition, the two currencies circulate freely in the two countries and those of us who have spent a lifetime trying to improve relations between North and South would deplore a final breaking of this link?
§ Lord McCLUSKEY
My Lords, the Government are certainly well aware of the importance of the matters to which the noble Lord draws attention; but may I remind the House that the Government indicated their firm intention to keep sterling stable in terms of the effective rate—and that should help. The Irish themselves are considering, on the basis that they do go in—if they go in—taking measures to try to preserve the link with the pound. That may be difficult, but there is no certainty, given these circumstances, that the two currencies will diverge to the extent of causing any real problem.
§ Lord LEATHERLAND
My Lords, will my noble and learned friend bear in mind that if Irish citizens come to this 715 country to take the jobs of English men and women, then they must expect to conform to the policies and laws of this country?
§ Lord McCLUSKEY
My Lords, I should not like to put the matter in that way, but no doubt it is technically correct.
§ Lord HAILSHAM of SAINT MARY-LEBONE
My Lords, would not the noble and learned Lord agree that the presence of Irish men and women in this country is wholly welcome and that the contribution they make to our economy is very widely appreciated on this side, if nowhere else?
§ Lord McCLUSKEY
My Lords, may I say that I entirely agree with the noble and learned Lord about the value of the contribution made by these people. It was that appreciation which lay behind the somewhat dusty answer that I gave my noble friend.
Viscount ST. DAVIDS
My Lords, is it not clear that, if the two currencies diverge and the Irish pound rises above ours, it will then be a clear sign that we have made a mistake in not following their example?