§ 2.44 p.m.
§ Lord Lea of Crondallasked Her Majesty's Government:
Whether, given the publication on 9th March of the second Outline National Changeover Plan, they visualise use of euro notes and coins in the United Kingdom becoming increasingly common practice from 1st January 2002.
§ Lord McIntosh of HaringeyMy Lords, unless the UK joins the single currency, sterling notes and coins will remain the legal tender of the United Kingdom. The introduction of euro cash in the euro zone will not affect this. Businesses and individuals will not need to accept euros, but some might decide to do so for commercial reasons, just as they now accept currencies such as the dollar or the deutschmark.
§ Lord Lea of CrondallMy Lords, I thank my noble friend for that reply. I welcome the modest stepping up of our euro preparations. I wish to ask my noble friend two questions. First, does he not agree that the real significance of the switch to euro notes and coins at the end of next year is the fact that 300 million fellow Europeans from Helsinki to Lisbon and from Rome to Dublin will use the euro not as a foreign currency nor even as a dual currency, but just as the Americans use the dollar; that is, as their only currency—the currency in which they price all their goods and services? Secondly, is not the implication for this country that there is a danger of complacency and of feeling that we do not need to do anything because we have not joined, or, as the Leader of the Conservative Party would have it, try to be King Canute and operate at a disadvantage in the single European market?
§ Lord McIntosh of HaringeyMy Lords, my noble friend is certainly right to say that, at the beginning of 2002, 300 million people will use the euro on a daily basis. Any sensible business in this country which expects to do retail business, for example, with those 300 million people who may visit this country would do well to display the prices of its goods in euros, just 1195 as it may display them at present in dollars. That is the advice which the Government would give from now on, whether or not we ultimately join the euro.
§ Lord Lamont of LerwickMy Lords, has the noble Lord noticed that the "one size cannot fit all" interest rate of the euro is causing financial divergences in the different economies of Europe? Has he noticed that the Irish rate of inflation has now reached over 4 per cent, measured by their own measurement, or over 5 per cent, measured as the British measure inflation? How high does he think British inflation would have risen if, for the past 12 months, we had had euro interest rates?
§ Lord McIntosh of HaringeyMy Lords, as regards the final part of the noble Lord's question, he asks me to speculate on purely hypothetical circumstances. Certainly there have continued to be variations between the different countries in Euroland in interest rates and in many other economic measures. However, only those who thought that the introduction of the euro would bring about an economic superstate can be surprised at that.
§ Lord TaverneMy Lords, has it not become evident in retrospect that the most fundamental strategic mistake which the Government have made in their term of office, and which they must now secretly deeply regret, was the announcement on 27th October 1997 when they flanked the issue of the euro? Is it not clear that if they had been brave then they could easily have won a referendum, the pound would now be closely linked to the euro and the difficulties of manufacturing industry and the agriculture industry would not be as severe as they are now?
§ Lord McIntosh of HaringeyMy Lords, the noble Lord is in another Cloud-cuckoo-land at the opposite end of the spectrum from the noble Lord, Lord Lamont of Lerwick. The announcement by the Chancellor of the Exchequer in October 1997, which was reaffirmed by the Prime Minister in February of last year, is, and remains, the policy of Her Majesty's Government. We have no regrets about that.
§ Lord BarnettMy Lords, does my noble friend agree that even those with the extremist views of the noble Lord, Lord Lamont, must surely accept that millions of British businessmen and holidaymakers will be using the euro every year? Having paid commission to change their money into euros, they will have to pay commission again to change it back. Would it not be sensible to allow the euro to be used here?
§ Lord McIntosh of HaringeyMy Lords, I meant to bring my euro chequebook to demonstrate my devotion to the euro. Unfortunately I have left it at home.
1196 We have never claimed that transaction costs were the principal argument for the single currency, but of course they are significant.
§ Lord SaatchiMy Lords, why do the Government think it right to spend £26 million on preparations to change over to the euro when every poll shows that 70 per cent of the British public do not want to join it?
§ Lord McIntosh of HaringeyMy Lords, the £26 million is an estimate of the total costs of preparation for the existence of the euro, whether or not we join. The amount of public money is of course much smaller; at present it stands at £6.3 million. But not even those opposite with the more extreme views would suggest that we should pretend that the euro will not exist in the 11 countries that have adopted it and that it will not have an effect on our business. The preparations for it are essential in order that we have a proper, practical choice when the time comes.
§ Lord HarrisonMy Lords, does my noble friend accept that the superior design features of the euro—distinctive colours, sizes and embossments of notes—will be much preferred by the blind and visually impaired community of Britain? I speak as a committed "Eurofighter".
§ Lord McIntosh of HaringeyMy Lords, it is a matter of aesthetic judgment. Simplicity has to be set against the complexity necessary to deter forgers. I am not terribly fond of the bridges which appear on so many of the euro notes.
§ Viscount CranborneMy Lords, arising out of the reply given to my noble friend Lord Saatchi, can the Minister explain why he thinks that the views of 70 per cent of the British public are extreme?
§ Lord McIntosh of HaringeyMy Lords, I was describing as extreme the views of noble Lords opposite. The views of the public have changed on the euro and may well change again as the issue gets closer to determination.