Exchange Rate Mechanism (Hansard, 4 July 1990)

§ The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)
My Lords, Her Majesty's Government have made very clear their policy on joining the exchange rate mechanism. There has been ample opportunity to discuss the policy in this House and in another place.

§ Lord Stoddart of Swindon
My Lords, is the noble Lord aware that that is a most unsatisfactory Answer? It may very well be that we in this place and in another place, and even those in the City and the banks, know government policy, but will he agree that there has been no widespread discussion of this matter, which affects people's jobs, the exports of this country, its financial position and the ability of the Government to run the economy as they should as elected representatives of the people? Will he not agree at least to publish a new White Paper on the subject setting out the pros and cons of the whole matter? If he does not do so, should one not expect people to believe that the Government have something to hide?

§ Lord Henley
My Lords, the Government have nothing to hide. They have made their views on this matter perfectly clear on many occasions, not least in an Answer by my noble friend Lord Caithness to a Question from the noble Lord not so very long ago. I remind the noble Lord that this is a parliamentary democracy and the subject has been discussed in both Houses on many occasions.

§ Lord Thorneycroft
My Lords, before asking the public detailed questions on these complex matters will my noble friend remind the noble Lord that the British Labour Party is fully and publicly committed to membership of the Common Market?

§ Lord Henley
My Lords, I agree with my noble friend but I understand that there are problems on the other side of the House in that some members of the party opposite seem to have different views on the subject.

§ Lord Jenkins of Putney
My Lords, if the Government intend to publish a White Paper on this question do they agree that in the White Paper there should be listed those Ministers who are pro and those who are con?

§ Lord Henley
My Lords, I did not say that the Government intended to publish a White Paper on this matter.

§ Baroness Seear
My Lords, the noble Lord said that the Labour Party has different views, which is certainly true. Will the noble Lord tell the House how many views there are on the other side of the House and indeed within the Cabinet?

§ Lord Henley
My Lords, there is one view and that is the Government's view.

§ Lord Monson
My Lords, is the Minister aware that in a most important article in to day's Daily Telegraph the noble Lord, Lord Deedes, points out that European monetary union would mean that the fiscal prerogative would no longer be exercised only at the national level and that the power to raise taxes would gradually shift to ward Europe, by which he means the EC? Is he further aware that the noble Lord goes on to suggest that we may be going a bridge too far, to use the Arnhem analogy? Can he say whether Her Majesty's Government share the noble Lord's fears?

§ Lord Henley
My Lords, the Question does not relate to EMU. It relates to sterling joining the exchange rate mechanism. The question about EMU is slightly different from the Question on the Order Paper.

The Earl of Bessborough
My Lords, does my noble friend agree that it would be appropriate for us to await the report of my noble friend Lord Aldington, who is chairman of the ad hoc committee on European monetary and political union, and that we might well wait to see the conclusions of that report?

§ Lord Henley
My Lords, I look forward with interest to that report. Only yesterday Dr. Karl Otto Pöhl spoke to that committee.

Lord Bruce of Donington
My Lords, as these matters are likely to be discussed at the meeting of the Council of Ministers to be held on 23rd July, does the noble Lord consider that the request of my noble friend Lord Stoddart of Swindon for the public to be made more fully aware is a reasonable one? In pursuing that point perhaps I may ask him a specific question which arises in particular in view of the apparent disagreements between No. 10 and No. 11 Downing Street and with the Deputy Leader of the Conservative Party. If the visible trade deficit with the EC, mainly with Germany, continues at its existing rate of some £15 billion a year, and bearing in mind our own inflation rate which is running at 9.7 per cent. and rising, will the Government consider entering the ERM with the deutschmark standing to day at 2.945? In those circumstances, do Her Majesty's Government consider any time to be the right time for entry?

§ Lord Henley
My Lords, as I said, the Government do not intend to publish a White Paper. I repeat that there is no disagreement between my right honourable friends the Prime Minister and the Chancellor of the Exchequer. In view of the noble Lord's wish to be better informed, I shall repeat what my noble friend and my right honourable friends in another place have said on many occasions; namely, that the Government are committed to join the ERM when the level of United Kingdom inflation is significantly lower, when there is capital liberalisation in the Community and when real progress has been made toward the completion of the single market, freedom of financial services and strengthened competition policy.

§ Lord Mackie of Benshie
My Lords, do I detect in the noble Lord's reply any similarity in the Government's attitude to ward joining the ERM and their attitude to the Easter Act of 1928?

§ Lord Henley
My Lords, the Easter Act 1928 was a somewhat long time ago. I do not think that it would serve any purpose if I were to repeat the conditions laid down by the Government for joining the ERM. I merely stated them to the House in answer to the noble Lord, Lord Bruce.

Lord Morris
My Lords, will my noble friend be surprised to learn that in dining rooms, drawing 2097 rooms, clubs, pubs and restaurants throughout the United Kingdom the desirability or otherwise of the United Kingdom joining the exchange rate mechanism of the European monetary system is not a favourite topic of conversation?

§ Lord Henley
My Lords, it is possible that my noble friend has been in many dining rooms, clubs and so on in the United Kingdom, but I do not know.

§ Lord Glenamara
My Lords, I am in favour of a common market. Indeed, I went round the country with the noble Viscount, Lord Whitelaw, at the time of the referendum, trying to persuade the electors to vote for the common market. But I am not in favour of entering a federal Europe.

Noble Lords
Question!

§ Lord Glenamara
It is a question, my Lords. Anyone who appears tooppose being drawn into a federal Europe is regarded as rather odd nowadays. The Government have no mandate whatever to take this country into a federal Europe. When will the Government consult the people about this issue? We do not want to go into a federal Europe.

§ Lord Henley
My Lords, the matter has nothing to do with a federal Europe. I note that the noble Lord has different views from those held by some of his other friends in his party. I have repeated the Government's view that we shall enter the exchange rate mechanism when the time is right.

§ Lord Stoddart of Swindon
My Lords, the Question was short, but the noble Lord's answer was very unsatisfactory. Is he aware that the Prime Minister herself does not realise that to alter the bands of the exchange rate mechanism will need unanimity? So, even if it is only to inform her of the real situation, does he think it would be as well if the Government were to issue a Green Paper?

§ Lord Henley
My Lords, I do not think I can take the matter any further than I have already taken it.