§ 3.1 p.m
§ Lord Renton of Mount Harryasked Her Majesty's Government:
Whether they have any target exchange rate for sterling in relation to the euro.
§ Lord McIntosh of HaringeyMy Lords, the Government do not have a specific exchange rate target, but a stable and competitive pound is sought over the medium term. The key to a stable and competitive pound is low and stable inflation, combined with sound public finances.
§ Lord Renton of Mount HarryMy Lords, I thank the noble Lord for that Answer. Does he not agree that the debate on entry to the euro is now inevitably hotting up, and that it would be very helpful for British manufacturing industry if the Government could make their hand rather clearer than they have done to date? With sterling having decreased by 10 per cent against the euro and approaching the range at which many businesses think it would be reasonable to exchange sterling for the euro, surely this is the time when the Government should say, "The five economic tests have been passed. Let us now make it clear that we are going to have a national referendum on whether or not we join the euro".
§ Lord McIntosh of HaringeyMy Lords, I do not agree that it would be in the interests of British industry and commerce for us to advance in any way the proper consideration of the five economic tests. We have undertaken to complete those five economic tests within two years of the last general election, and we shall do so. We shall do so when it is in the best economic interests of this country.
§ Lord Pearson of RannochMy Lords, since EMU is designed to hold the emerging EU mega-state together, is it not dishonest of the Government to set economic tests, however bogus and whatever they may be, for what is clearly a constitutional project?
§ Lord McIntosh of HaringeyMy Lords, as I do not accept the premise of the question, the conclusion that the noble Lord, Lord Pearson, draws must be illegitimate.
§ Lord Stoddart of SwindonMy Lords, does the noble Lord—
§ Lord TebbitMy Lords—
§ Lord Stoddart of SwindonMy Lords, we are not going to quarrel about it.
Does the noble Lord agree that whether we scrap the pound and join the euro is such a vital and fundamental decision that it ought not to be entered 1200 into lightly? Does he remember how, in 1989, the same sort of people asking this question urged us on to join the ERM come what may, and what a disaster that turned out to be? We do not want high unemployment again—1 million extra unemployed—or 100,000 people to go bankrupt, do we? I therefore agree with the noble Lord that the Government are right in being cautious.
§ Lord McIntosh of HaringeyMy Lords, I am unnerved to find myself agreeing with the noble Lord, Lord Stoddart, that this is a fundamental question for this country—of course it is. We have already said that we see significant advantages for this country in being part of European monetary union. We recognise that there are constitutional issues, but they are surmountable. The fundamental decision that has to be taken is an economic one. It will be taken with due seriousness not only by the Government but also by Parliament and the people of this country.
§ Lord NewbyMy Lords, does the noble Lord agree that the movement of the pound against the dollar in recent days effectively demonstrates that the argument that we should not join the euro zone because the pound is effectively linked to the dollar is patently not true?
§ Lord McIntosh of HaringeyMy Lords., the Government do not comment on short-term exchange rate changes.
§ Lord Lea of CrondallMy Lords, when recalling who said what and when in recent years, is it not a fact that many noble Lords speaking against Britain joining the euro have repeatedly in the past couple of years predicted that the euro would go through the floor, and that the whole thing would fall apart? However, in a matter of days—or, at most, weeks—the euro will probably return to parity against the dollar and prove a very successful project.
§ Lord McIntosh of HaringeyMy Lords, I do not think that that question is addressed to me. Certainly many Members of this House have said many times in the past two and a half years that the euro was not a success because it had a weak exchange rate. I do not notice them saying that it is a success now that it is stronger.
§ Lord TebbitMy Lords, will the noble Lord say what are the constitutional issues to which he just alluded?
§ Lord McIntosh of HaringeyMy Lords, I do not wish to add anything to that which the Chancellor of the Exchequer and the Prime Minister have already 1201 said. Indeed, I have answered a number of Written Questions from the noble Lord, Lord Tebbit, on this issue which are available from Hansard.
§ Lord Howe of AberavonMy Lords, would the noble Lord find himself less embarrassed by the company he has to keep if the Government were more prepared to argue positively the case in which they claim to believe?
§ Lord McIntosh of HaringeyMy Lords, I am not embarrassed in any way by the company I keep. Moreover, my personal opinions are of no importance in this matter, even if there were any differences—which there are not. I think that we all regard the Government's position on the issue as being responsible, as recognising the importance of the issue, and as being prepared to take the views of the people of this country seriously, while giving priority—as I am sure is right—to the protection of this country's economic interests.