HL Deb 12 February 1996 vol 569 cc389-90

2.50 p.m.

Lord Bruce of Donington asked Her Majesty's Government:

Whether, at the Inter-Governmental Conference to be held in 1996– 97, they intend to propose that the Treaty of Rome be amended to provide that the European Central Bank shall be accountable to the Council of Ministers.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, no.

Lord Bruce of Donington:

My Lords, is the noble Lord aware that I am most disappointed by that reply, particularly in view of the flexibility of mind exhibited in answer to the previous Question? Is the noble Lord telling the House that Her Majesty's Government believe that the independence of a European Central Bank is equivalent to infallibility, or is the Minister telling the House that they do not trust the Council of Ministers to be able to exercise any effective political control— that degree of political control, incidentally, demanded by my own party?

Lord Mackay of Ardbrecknish

My Lords, the Government's view is that many of these matters are still to be decided, hence the opt-out that we have. The position is that the European Central Bank, as currently proposed, would indeed be independent, and the governing council would be drawn from representatives of the central banks of all participating member states.

Lord Peyton of Yeovil

My Lords, does my noble friend share in the glow of satisfaction no doubt felt by his noble colleagues that the noble Lord opposite should prefer Ministers to bankers?

Lord Mackay of Ardbrecknish

My Lords, I am interested in that fact. I understand that it is not a view shared by every member of the party opposite. As I understand it, some of them would like the Bank of England to be independent. I wonder what our interest rates might be like now were that the case.

Viscount Chandos

My Lords, does the Minister accept that to have any serious prospect of influencing the constitution of the European Central Bank the Government must make our European allies feel that we have a fundamental, though not uncritical, commitment to the principle of a single European currency? Were that to be the case, would it not be so much easier to ensure the accountability my noble friend Lord Bruce of Donington advocates and which we endorse? Can the Minister not get his colleagues to understand that, in the words of President Theodore Roosevelt, the best policy in Europe would be "to talk softly and carry a big stick" rather than vice versa?

Lord Mackay of Ardbrecknish:

My Lords, I still do not understand what is the policy of the party opposite in regard to the opt-out. I do not know whether it would abandon the opt-out immediately just as it would hereditary Members of this House, or whether it approves of the opt-out. We are at this moment involved closely in the workings of the European Monetary Institute, the forerunner of the European Central Bank. It is our policy to be fully involved in all the work that goes on in order to protect the United Kingdom's interests whether we are in or out of the European Monetary Union.

Lord Bruce of Donington

My Lords, I am not quite sure whether the Government are in favour of the infallibility of Ministers— or at any rate, their wisdom— or whether they agree with the observation that fell from the lips of a senior French official yesterday that the council has ceased to be a place of negotiation and become a place where you drop in to sign a press release.

Lord Mackay of Ardbrecknish

My Lords, I was not aware of that utterance by a French official. Those of my ministerial colleagues who attend the Council of Ministers certainly know that a great deal of hard work goes on there on the part of all the Ministers involved in order to try to advance the position of the European Union. Ministers from this Government who attend always ensure that they put British interests first.