European Monetary Union (Hansard, 24 June 1999)

§ Lord McIntosh of Haringey
My Lords, any country which chooses to enter EMU does so on the basis that it is an irrevocable step. The treaty contains no legal basis for a member state withdrawing from EMU. That is why we are determined that any decision on UK membership of EMU must be based on a thorough assessment of the national economic interest, and would need to be agreed by government, Parliament and the British people.

Baroness Young
My Lords, I thank the noble Lord for that very clear statement that any joining of EMU would be irrevocable. Does he not agree on the importance now of having a statement which sets out clearly not just the economic but the political advantages and disadvantages so that the British people will know what the facts are, if called on to decide in a referendum?

§ Lord McIntosh of Haringey
My Lords, our policy is to prepare in this Parliament in order to create a genuine option to decide whether to join early in the next Parliament. It is when we have a genuine option before us that it is appropriate to make a definitive assessment of the matters to which the noble Baroness referred.

§ Lord Shore of Stepney
My Lords, if a decision to join would be, to use the Minister's word, irrevocable, surely that adds an order of gravity to the decision itself.
1064 Is it not time that the Government stopped pretending that this matter is even primarily an economic decision but rather a constitutional and political decision of the first importance? How can the Government go on pretending that it is not when virtually every other government in Europe—certainly those who have joined EMU—have made it plain that for them it is a major stepping stone towards the goal of a European Union leading to a United States of Europe?

§ Lord McIntosh of Haringey
My Lords, I agree with my noble friend that this is a matter of very great gravity. However, the Government have made their position on the constitutional question and on the economic question very clear. We have taken the view that, although there are important constitutional considerations, those considerations would not rule out membership of EMU if the balance of economic advantage for this country were in favour of our membership. That is why we have set economic criteria and that is why, although we continue to consider the constitutional issues, in the end it is on economic criteria that a decision will be made.

§ Lord Ezra
My Lords, does the noble Lord agree that, when the time is right for us to join EMU, our overriding objective should be to work towards its continuing success based on our considerable experience in the conduct of monetary affairs?

§ Lord McIntosh of Haringey
My Lords, I am sure the noble Lord is right to say that we could at that time make a great contribution to the success of European monetary union.

§ Lord Mackay of Ardbrecknish
My Lords, I wonder whether the noble Lord can help me with his original reply. Is he aware of what Senor Romano Prodi, the Prime Minister of Italy who took Italy into EMU and currently the Commission's president-designate, said in Italy on 21st June? He stated: If we"— that is Italy— continue to have costs that diverge from other European countries, it will be more difficult to remain in the euro". Can the noble Lord say what construction one can put on that sentence other than that membership of the euro is not irrevocable?

§ Lord McIntosh of Haringey
My Lords, Mr Prodi himself put another construction on his remarks. He was speaking during a video conference to Italy's Chemical Industry Association. He did indeed make the remarks to which the noble Lord referred. He said, because he was trying to gee up Italian industry, that, instead of an opportunity, the euro could become our downfall if radical choices are not made. We must be absolutely virtuous". But he clarified his remarks afterwards by saying: My remarks only moved the market because they were reported in a very ambiguous and wrong way". 1065 I think that Mr Prodi knows the position about membership of EMU as well as we do.

§ Lord Stoddart of Swindon
My Lords, is my noble friend aware that he made an extremely important statement when he answered the Question? Is he further aware that what he did was to drive a coach and horses through the basic principle of our constitution that one Parliament cannot bind its successor?

§ Lord McIntosh of Haringey
My Lords, I had no intention of making an extremely important statement, either in my original Answer or in any subsequent answer. I am reflecting government policy, which has not changed for a considerable period.

§ Lord Stoddart of Swindon
My Lords, will my noble friend answer the question?

§ Lord Marsh
My Lords, was not the real reason for Senor Prodi's statement a perfectly honest recognition that the governments currently in euroland will, as they have done in the past, break and ignore the rules whenever it suits their national interests? That is what worried the 400 or more business men and women who met yesterday for the Business For Sterling conference. They were worried specifically about that degree of instability.

§ Lord McIntosh of Haringey
My Lords, I have no direct knowledge of the conference to which the noble Lord referred. I was not present, as no doubt he was. But I certainly reject his assertion that other countries in the European monetary union are constantly seeking to evade the convergence criteria. What was remarkable about the first half of last year was the way in which there was genuine convergence which made it possible for those 11 countries to agree to go into European monetary union and to set a rate of exchange for it.

§ Lord Jenkin of Roding
My Lords, does not the Minister's original reply underline the truth of the proposition that, far from being a building block on the way to building an effective European Union, a unified currency has to be the last brick in the edifice, if we ever get that far? The line now being taken by the organisation New Europe is a great deal more realistic than that taken by those like the noble Lord, Lord Shore, who believe that we should never go anywhere along that road, or those like the Government who think that we should join as soon as possible.

§ Lord McIntosh of Haringey
My Lords, far be it from me to seek to adjudicate between the various bodies that are setting themselves up, such as those referred to by the noble Lord, Lord Marsh, and that referred to by the noble Lord, Lord Jenkin, to express perfectly legitimate views about monetary union. The Government have made their position entirely clear. Nothing I have said has departed from that position.

Lord Bruce of Donington
My Lords, my noble friend has made an important constitutional 1066 announcement this afternoon concerning what is irrevocable and what is not. At the same time, will he agree that no Parliament can bind its successor?

§ Lord McIntosh of Haringey
My Lords, I have made no important constitutional announcement. I have simply reiterated what has been the constitutional position and the view of Her Majesty's Government over a considerable period of time. My noble friend is entitled to his constitutional views, just as my noble friend Lord Stoddart is. He challenged me for not answering his second question. I did not do so because I thought I had rejected the premise on which that question was based. I do so now again.

§ Lord Pearson of Rannoch
My Lords, in that case, will the Minister tell the House whether the House of Commons and this Parliament would be capable of taking the United Kingdom out of EMU if ever it had once been so foolish as to join?

§ Lord McIntosh of Haringey
My Lords, I reject the words, "so foolish", used by the noble Lord. Clearly, if the Government, Parliament and the people of this country decide to enter EMU, they will be doing so on the basis of long-term advantage, not short-term considerations.

§ Lord Haskel
My Lords, does my noble friend agree that it is best to leave this decision until it suits our economic interest, and not to attempt to make decisions now on matters of principle?

§ Lord McIntosh of Haringey
My Lords, that has indeed been the Government's position for a considerable period of time. We reject the views both of those who believe it is necessary to enter now, regardless of other considerations, and those who believe that it would never be possible or necessary for us to enter.