European Union: Single Currency (Hansard, 13 December 1994)

§ Lord Henley
My Lords, no. As my right honourable friend the Chancellor of the Exchequer has repeatedly made clear, the United Kingdom has a completely open option on when and whether to seek to participate in Stage 3.

§ Lord Barnett
My Lords, does the Minister agree that if there is to be the kind of integration in Europe, which I hope that we would both like to see, inevitably it must result in a single currency? However, given the constitutional importance of such an event, does he accept that it would be important to get the support of the British people by way of a referendum?

§ Lord Henley
My Lords, I can do no better than repeat what my right honourable friend the Prime Minister said yesterday: that obviously we believe in the primacy of Parliament. However as he made clear, we have never ruled out a referendum; and he made clear only yesterday that one might be appropriate on a single currency or on moves towards further political integration. That decision cannot be made now. It is something for the future.

§ Lord Clark of Kempston
My Lords, does my noble friend agree that it is premature to talk about a single currency, particularly in view of the fact that the ecu is being used more widely not just for commercial but for government funding? Would it not be a good idea to drop this business of a single currency? Let us see how the ecu develops. We might then be in a better position to make up our minds.

§ Lord Henley
My Lords, my noble friend is right. It is premature to talk about a single currency and a referendum. It might be necessary to go down that route in the future, but those are not decisions that we have to take at the moment.

Lord Bruce of Donington
My Lords, addressing oneself to the Question which refers to "permanently ruled out", will the Minister confirm that under the British constitution no government of any party can bind their successors who can do exactly as they wish? In 1200 case he may be uncertain, will the Minister confirm that with his noble and learned friend Lord Hailsham of Saint Marylebone?

§ Lord Henley
My Lords, I can answer the noble Lord briefly. Yes.

§ Earl Russell
My Lords, I am grateful to the Minister for repeating the Prime Minister's remark that we cannot rule out a referendum. But in the event of the other members of the European Union agreeing on a single currency, and Her Majesty's Government refusing to participate in the agreement, could we have a referendum on that refusal, and, if not, why not?

§ Lord Henley
My Lords, that is a hypothetical question. Given the present degree of economic convergence, it is unrealistic to suggest that a majority of countries will be ready to go ahead with Stage 3 by 1997, or whenever. It would be a gross economic mistake to go ahead prematurely. We shall make the appropriate decision at the appropriate time.

§ Lord Wyatt of Weeford
My Lords, is the Minister aware that, according to the rules of the single currency, only Britain, Germany and Luxembourg are likely to meet the conditions, and that will be some time in the next century?

§ Lord Henley
My Lords, I can take the noble Lord even further. I believe that at the moment only Luxembourg meets the two primary conditions on debt and deficit. It will be a long time before the majority of countries gets anywhere near meeting them.

§ Lord Beloff
My Lords, does my noble friend agree that as Luxembourg has no currency of its own but uses the Belgian franc, it is of interest to note that it is also the only country which has a single currency with another country without a single government? Is it not a fact that a single currency naturally necessitates a single government to be responsible for it? Therefore, in talking about a single currency we are talking about whether we wish to have a single government for the whole of Europe.

§ Lord Henley
My Lords, my noble friend makes the valid point that moving to a single currency is an important step in the development of the European Union. That is a decision which will have to be considered carefully if and when it has to be made.

§ Lord Campbell of Alloway
My Lords, is not the single currency, from a practical point of view, in any event on the back burner indefinitely while we consider the vast enlargement with all the other states? What on earth has that to do with a sensible referendum?

§ Lord Henley
My Lords, the point my noble friend makes, with which I agree, is that this is something which is a long way off; it is not something that we need waste time discussing today, tomorrow or for the foreseeable future.

§ Lord Peston
My Lords, I am not sure what is a long way off. I hope that the Minister meant that a referendum was a long way off. Is he aware that some 1201 of us, at least, are strongly in favour of a single currency, and regard it as central to the future of the Union?

A noble Lord
Some of us are not.

§ Lord Peston
My Lords, I should have thought that a majority of your Lordships' House was in favour of a single currency, but that is something that we will discover one day. Will the Minister clarify an answer which staggered me? He said that he thought that only one country would meet the convergence criteria under Maastricht within the foreseeable future. I thought that he said something like that. Does he agree that in the very near future probably six, if not eight, of the present countries within the Union will meet those criteria? That is my view. Does he agree with me? Two, if not all three, of the countries joining will meet those criteria. What is paradoxical, within all of that, is that if there is one country upon which I would bet to meet those criteria, it is our own.

§ Lord Henley
My Lords, the noble Lord is right. We will meet them relatively soon and we shall do so as a result of the economic policies that Her Majesty's Government have been pursuing, which have been opposed by the party opposite for a number of years. As regards a single currency, some, like the noble Lord, and, for all I know, like the whole of his party, are in favour of it, but some are not. I am saying that it is not a decision that we have to take today. It is one that is some way off, because I still believe that we are a long way from the majority of the countries meeting those convergence criteria.

§ Lord Peston
My Lords, will the Minister take the opportunity at some time to explain why we are a long way off? Will he accept from me—I am becoming very puzzled by this—that we on this side at least are not engaged in electioneering? I am becoming more and more fed up—

Noble Lords
Oh!

§ Lord Peston
My Lords, no. I at no stage make any such remarks at any time. I am becoming more and more irritated by noble Lords on the Government Front Bench assuming. that there is going to be an election any day. If there is, I should like them to tell us.

§ Lord Henley
My Lords, all I can say is that the noble Lord has come jolly close to misleading the House in that respect. I just do not agree with what he had to say.

§ Lord Boardman
My Lords, does my noble friend agree that from the remarks of the Opposition Front Bench, it seems that the Opposition are not just in favour of a single currency but inevitably, flowing from 1202 that, a single European bank, a single European fiscal system, and, as my noble friend Lord Beloff said, a single European government?

§ Lord Henley
My Lords, my noble friend is correct; that is what one has to presume when the Official Opposition Treasury spokesman makes such remarks from the Dispatch Box.

§ Lord Monson
My Lords, does the Minister agree that, were the UK to join a single currency, no future Chancellor of the Exchequer would ever be able to fine tune the economy by persuading the Governor of the Bank of England to make slight adjustments, upwards or downwards, to interest rates? The only weapon left to the Chancellor would be the fiscal weapon—the power to raise or lower taxes once a year in November. That is a very blunt instrument and not always a very efficient one.

§ Lord Henley
My Lords, as I have already made clear, joining a single European currency would have major consequences. These are not decisions that we have to make today, tomorrow or even in the foreseeable future. We shall leave them to the appropriate time.

§ Lord Stoddart of Swindon
My Lords, may I assure the Minister that there are many people in the Labour Party who do not believe in a single currency and who will fight against it? He should not assume that there is a majority in the House for a single currency. Does he agree with his noble friend Lord Lawson that a single currency implies a single government? Can we have an assurance from this Government that under no circumstances will they consider giving away our sovereignty to the extent that we have a single government in Europe, which would result in the sweeping away of our parliamentary democracy?

§ Lord Henley
My Lords, I cannot speculate upon the myriad of different views within the party opposite. All I can say is that Official Opposition policy seems to be that they would join the single currency as soon as possible. We recognise the significance of such a decision, and that is why my right honourable friend negotiated the UK protocol to the Maastricht Treaty, which I should have thought the noble Lord would have welcomed. That will ensure that no move can be made without the approval of a full Act of Parliament.

The Earl of Gowrie
My Lords, immensely enjoyable though it is, does my noble friend agree that it is foolish of us to argue about a purely notional European federation, including a common currency, at a time when all the major European powers are following the sensible lead of Her Majesty's Government and becoming Euro-sceptical?

§ Lord Henley
My Lords, my noble friend makes a valid point. The most important thing is that the question is hypothetical. It is not one that we have to address at the moment.