The Euro: Tests for Joining (Hansard, 3 October 2000)

§ Lord McIntosh of Haringey
My Lords, the determining factor as to whether Britain joins a single currency is the national economic interest and whether the economic case for joining is clear and unambiguous. The Treasury's five economic tests define whether a clear and unambiguous case can be made.

§ Lord Blaker
My Lords, is the Minister aware that in the past few days the Governor of the Bank of England has said that joining the euro is primarily a political, not an economic question? The Danish people rejected joining the euro on political grounds. If the Prime Minister believes that the five economic tests are a daily topic of conversation in the drawing rooms of this country and that it is because of an anxiety that they are not met that the British people are opposed to joining the euro, as they clearly are, is he not as out of touch on this issue as he was on the fuel crisis?

§ Lord McIntosh of Haringey
My Lords, neither the Prime Minister nor I claim to be experts on the subjects of conversation in the drawing rooms of this country. As to the Governor of the Bank of England, as the noble Lord knows, the Bank is independent.

§ Lord Clinton-Davis
My Lords, what stupider policy could there be than ruling out joining the euro for five years, as the Conservatives suggest?

§ Lord McIntosh of Haringey
My Lords, we need to wait until the end of the week before we know what the Conservative Party's policy on the euro this week will be. I am told that there are those who believe that it should be ruled out for considerably longer than five years and they have some money behind them.

§ Lord Marsh
My Lords, does the Minister accept that the five tests can be answered only as matters of opinion either way? They are not even faintly objective.

§ Lord McIntosh of Haringey
My Lords, I do not know what is wrong with matters of opinion. We can agree that they are matters of judgment rather than of absolute certainty.

§ Lord Clark of Kempston
My Lords, does the Minister agree that, while the economic factors involved in joining the euro are very important, if we were to join there would also be a loss of sovereignty for this country?

§ Lord McIntosh of Haringey
My Lords, I am grateful for the noble Lord's support for the Government's position. We think that the economic conditions are very important. That was my original answer to the Question. Of course we acknowledge that there are issues of sovereignty. We have said that clearly. There is a pooling of sovereignty involved in a shared currency.

§ Lord Newby
My Lords, does the Minister agree that, in addition to the existing five tests set by the Chancellor, there is a sixth missing test: an exchange rate target? Will he agree that before the Government commit the country to entering the euro, they should express their view on what the exchange rate should be?

§ Lord McIntosh of Haringey
No, my Lords, the Government have consistently resisted the pressure from the Liberal Democrats and others to set exchange rate targets that could conflict with our other economic targets.

§ Lord Shore of Stepney
My Lords, I wish that my noble friend would come clean on the issue. It is not primarily about economic matters; it is a political and constitutional issue. Everyone in Europe other than Ministers of this Government accepts that. If it is not a major constitutional issue, why are the Government, for only the second time in British history, to have a national referendum on it?

§ Lord McIntosh of Haringey
My Lords, I do not question my noble friend's integrity in his views and I wish that he would not use phrases such as "come clean" when he talks about what I have said. The Government are right to say that, of the issues involved in the single currency, those that will determine the view that they express to Parliament and then to the British people in a referendum are primarily economic ones.

§ Lord Howell of Guildford
My Lords, is the Minister up to date in his exposition of the Government's thinking on the matter? I understand that the Prime Minister will say in his forthcoming speech in Warsaw that it is all part of a wider political development and that we must learn lessons from the Danish referendum, which was all about politics and not about economics at all. Is that not a wiser view and should not the Minister amend his answer after the Prime Minister's speech in Warsaw on Thursday?

§ Lord McIntosh of Haringey
My Lords, the noble Lord is welcome to ask me that question after the Prime Minister has spoken in Warsaw. As I have frequently said when I am questioned on the subject, if 1263 I say anything new, I apologise, because that is not my intention. The Government's position today, Tuesday 3rd October, is as set out in the Chancellor's Statement of October 1997 and the Prime Minister's Statement of February 1999. The noble Lord clearly knows more than I do about what the Prime Minister will say in Warsaw on Thursday—and good luck to him.

§ Lord Peston
My Lords, is it not patently obvious that the single currency is an economic phenomenon and that it therefore follows as night follows day that the relevant criteria are its economic effects, particularly on this country? The Government's position is completely sound, but the Opposition's is puzzling. They seem unable to see anything but politics these days.

§ Lord McIntosh of Haringey
My Lords, I do not object to seeing politics in any of those issues. My noble friend is, of course, right in saying that fundamentally this is an economic issue; it is not one of a "United States of Europe" or of the other matters that conspiracy theorists would wish us to consider. However, certainly it is true that some people wish to see way beyond a single currency to other matters which are not, as I understand it, the subject of this Question.

§ Baroness Carnegy of Lour
My Lords, surely, as night follows day, the people of this country will not behave all that differently from the people of Denmark in relation to this matter. The discussion in Denmark was about the effect of having a common interest rate which might not suit Denmark. Surely the people of this country are not so daft as to believe the Government.

§ Lord McIntosh of Haringey
My Lords, I am glad that the noble Baroness, Lady Carnegy, agrees with my noble friend Lord Peston that night is going to follow day. That at least is a measure of agreement which is worth while. Of course, the people of Denmark are entirely entitled to their own opinion. However, I wonder whether the noble Baroness is aware that the Danish krone has in fact shadowed the deutschmark, and therefore the euro, for a considerable number of years?