HL Deb 14 April 1999 vol 599 cc763-6

2.45 p.m.

Lord Peyton of Yeovil asked Her Majesty's Government:

Whether they will issue a White Paper setting out the political and economic reasons for and against the United Kingdom joining the European single currency and identifying the questions which need to be answered before a decision is reached.

Lord McIntosh of Haringey

My Lords, the Government have already spelt out clearly their policy on membership of the single currency. The key factor underpinning any government decision will be whether the economic benefits to the United Kingdom are clear and unambiguous. If they are, the Government believe that there is no constitutional bar to British membership.

Lord Peyton of Yeovil

My Lords, I wonder whether the noble Lord would be good enough to read the Question on the Order Paper and then attempt to answer it. So far, he has not done so. Does he remember the way in which my right honourable friend the recent Prime Minister was drenched in ridicule for not having forecast, years ahead, the attitude of the Government to the single currency? Now that the single currency is in existence, the Government ought to be capable of setting out in a White Paper the reasons, both economic and political, in favour of and against our joining it. So far, they have failed miserably.

Lord McIntosh of Haringey

My Lords, I reject that accusation. As I said in my Answer, the Government have already clearly spelt out their policy. In doing so, they have spelt out the economic factors and the political considerations. The Chancellor did so in his Statement in October 1997, as did the Prime Minister when he spoke on the subject earlier this year.

Lord Bruce of Donington

My Lords, is the noble Lord aware that at some time in the not too far distant future the people of our country are to be invited to make a decision of the utmost importance? Would it not therefore be in the public interest for the Government to cause to be published the quantified factors in the economic sphere that have enabled them to arrive at their decision? Surely the decision of the people, when it is made, ought to be an informed decision. In the interests of transparency, as well as the future of our country, will the Government reconsider the whole matter of providing proper information?

Lord McIntosh of Haringey

My Lords, my noble friend is right to remind the House that the Government have undertaken that when they have formed the view that it is appropriate to do so a decision will be taken on entry into the single currency. That decision will be taken first by the Government, then by Parliament, then by the people in a referendum. My noble friend is right to say that it must be a fully informed decision—and it will be.

Lord Hooson

My Lords, the Minister said that the Government will be guided by the economic advantages of entering or not entering the single currency. Is he referring to the short term or the long term, or both? Do the political advantages come into the equation at all?

Lord McIntosh of Haringey

My Lords, of course the economic advantages must be the long-term economic advantages. There will be short-term advantages too, but those are not the primary considerations that we should have in mind for such a crucially important step.

Lord Marsh

My Lords, does the Minister agree that the performance of the euro since its launch has certainly not as yet produced anything on which to base a long-term definitive view? Will he, however, confess to any marginal disappointment with its performance in terms of both its stability and its strength against the dollar? Does that lead the Minister to assume any potential dangers in UK entry to EMU? If so, what are they?

Lord McIntosh of Haringey

My Lords, I agree with the first part of the noble Lord's question. He is right to say that it would be quite wrong to draw conclusions about the stability of the euro and its success or otherwise over a period of scarcely more than three months. That leads me to disagree with the second part of his question.

Lord Renton

My Lords, bearing in mind that the Government have a duty to protect the economic interests of this country, can the noble Lord say how the Government can perform that duty if they lose their ability to control the value of our currency?

Lord McIntosh of Haringey

My Lords, the noble Lord is looking a good way ahead. If we joined the European single currency, we should be participating in a larger and more widely held currency and presumably, therefore, in many ways a stronger currency. I think that the noble Lord is oversimplifying this when he says that we should lose control.

Viscount Bridgeman

My Lords, does the Minister not agree that the political consequences of entering the euro zone are at least as important as the economic consequences? Does he not agree that the Government owe it to the electorate to spell out in detail the political costs and benefits of joining?

Lord McIntosh of Haringey

My Lords, I have already said in earlier answers that the economic benefits are the most important consideration. They have to be clear and unambiguous. Subject to that, there is no constitutional bar to British membership. But the noble Viscount is right that the constitutional and political considerations are of great importance. Before any decision is taken, the Government will spell out all these issues. We want a genuine choice. A White Paper of the kind asked for by the noble Lord, Lord Peyton, is appropriate only when a decision one way or the other is imminent. At any other time, it would not be a genuine and realistic choice.

Lord Grenfell

My Lords, does the Minister not agree that the decision of the European Central Bank to reduce its interest rates by half a percentage point shows that it is not hell-bent on deflation, as so many Eurosceptics would have us believe, and that it takes very seriously the issue of growth? Is he prepared to give us an assurance that Her Majesty's Government will press in the Council for a speeding up of the reform of labour markets (which is necessary in many countries of Europe) so that there is a better assurance that there will be the kind of growth which is attractive to us in the longer term?

Lord McIntosh of Haringey

My Lords, I do not think that it would be appropriate for Her Majesty's Government to comment on the decisions of the European Central Bank on interest rates in recent weeks. As my noble friend knows, when the European Central Bank was set up, under the British presidency, we argued for greater transparency in its workings, but that does not mean that we take a view on its current decisions.