HL Deb 05 February 2001 vol 621 cc936-9

2.59 p.m.

Lord Taverne

asked Her Majesty's Government:

Whether they will publish before the next election an assessment of progress in meeting their criteria for possible entry into European monetary union.

Lord McIntosh of Haringey

My Lords, the Government have said that they will make an assessment of the five economic tests early in the next Parliament.

Lord Taverne

My Lords, why on earth cannot the Government, from time to time, give their judgment on progress towards meeting the five tests? If the national institutes and others can do it, why the secrecy in the Treasury? Will the Minister at least assure us that the final judgment as to whether the convergence tests have been complied with will not be left exclusively to the Treasury, in order to quash suspicions in certain quarters that the Chancellor, in taking such a decision, might just be influenced by the effect on his own career—suspicions which I am sure have no foundation whatever.

Lord McIntosh of Haringey

My Lords, the noble Lord is right: they have no foundation. Of course, it is possible for anyone to make the assessment for which he asks. The committee chaired by Professor Huhne, of which the noble Lord was a distinguished member, made such an assessment, as has the National Institute of Economic and Social Research. We simply do not see it as the Treasury's job to give a running commentary. As to the Chancellor's ambitions, the noble Lord, Lord Taverne, must make up his own mind.

Lord Barnett

My Lords, has my noble friend seen the statement in the Treasury's response to the report by the European Union Select Committee of this House, How is the Euro Working? that they will recommend joining the single currency only: if the economic case for the UK joining is clear and unambiguous"? Has my noble friend ever come across any economic case that has been clear and unambiguous?

Lord McIntosh of Haringey

My Lords, the noble Lord has had three and a half years to reflect on that question; the words that he quotes were delivered by the Chancellor in October 1997. They have not been queried until now, so perhaps he scored a first.

Lord Renton

My Lords, will the Government, in the public interest, try to be as broad-minded and impartial as possible in this matter, by pointing out the circumstances in which their criteria for entry into the euro have not been met?

Lord McIntosh of Haringey

Yes, my Lords.

Baroness Williams of Crosby

My Lords, will the Government consider adding a fifth criterion; namely, the current effect of uncertainty about the euro on British manufacturing and British farming? Is the Minister aware that the directors of Corus attributed one of the company's troubles to the level of the euro against the pound? Is he further aware that one of the reasons given for Vauxhall winding up its plant in Luton was, again, the exchange rate between sterling and the euro; and that the green pound is worth something like a fifth less to British farmers than it is to their competitors in the rest of Europe—again because we remain outside the euro-zone?

Lord McIntosh of Haringey

My Lords, there is nothing magic about the number five, but there are already five economic criteria, as set out by the Government. They include flexibility to cope with economic change, the effect on investment, and the effect on employment. Those three criteria cover the valid points that the noble Baroness makes.

Lord Stoddart of Swindon

My Lords, will my noble friend agree that there are criteria to be considered other than economic and financial criteria—for example, the constitutional implications of joining the euro-zone? Will the Government consider those points before making any recommendation to Parliament?

Lord McIntosh of Haringey

Yes, my Lords; we have always said so.

Lord Saatchi

My Lords, does the Minister agree that the acid test of whether a union will be successful—a marriage, let us say—is whether there is a meeting of minds between the prospective partners? Is there a meeting of minds between the Government and the president of the Bundesbank, who says that, a single currency does not require a single government, but a single government will follow"?

Lord McIntosh of Haringey

My Lords, I am not sure whether an "acid test" implies only one acid, or whether we are allowed a number of chemical tests as acid tests. We certainly listened with interest and attention to the president of the Bundesbank, as we do to all major figures in economic life in Europe.

Lord Hoyle

My Lords, does my noble friend agree that, save in the view of the zealots who are either pro or anti the euro, the Government have got the criteria right? Will he confirm that at the end of the day, when we believe it is in Britain's interests, the final decision will be taken by the British public by means of a referendum?

Lord McIntosh of Haringey

My Lords, I never like using the word "zealots". Whenever I have used it, I have been shot down in flames for doing so. Yes, of course, as I should have said originally in reply to the noble Lord, Lord Taverne, it is not merely a matter of the Treasury making up its mind for itself; we have a commitment that the Government have to make a recommendation, first to Parliament and then to the people of this country, before entry.

Lord Blaker

My Lords, does the noble Lord agree that the point made by the noble Lord, Lord Taverne, has great merit? Would not any government assessment immediately be met with counter-assessments by a number of distinguished economists—possibly putting forward an even larger number of opinions? Does that not show that any answer to at least four of the tests must be subjective? Therefore, will not the tests give the Government the opportunity to hold a referendum when the public opinion polls point to a "Yes" vote—in the unlikely event of that ever happening?

Lord McIntosh of Haringey

My Lords, the noble Lord almost invites me to make cheap cracks about the divergence of opinion among economists, and I am certainly not going to do that. Of course there will be different views; there is no fully objective reality. However, there are political realities. It is on the basis of the political and economic realities, and constitutional considerations, that the Government will make up their mind as a result of the Treasury assessment and make their recommendation to Parliament and to the people of this country.