Euro (Hansard, 4 February 2003)

§ Lord McIntosh of Haringey
My Lords, government officials regularly travel to Brussels to discuss EU business. The Government will recommend UK membership of EMU only if it is in the national economic interest and the economic case for joining is clear and unambiguous. A comprehensive and rigorous assessment of the five economic tests will be completed within two years of the start of this Parliament.

§ Lord Lea of Crondall
My Lords, I thank my noble friend for that reply. Given the referendum commitment and all that it entails, it may be that the Government's intended sequence of first pronouncing on the five tests with 14 studies and only then—here I quote from the Treasury Select Committee document of 6th September—making them all, subject to intensive public debate and scrutiny", is back to front. Would not one way to cut through this Gordian knot be to follow up the useful discussions now taking place with members of the EU on growth, stability and jobs—basically the fifth test—and to do the same for business cycles, housing markets and price differentials, thus helping to demystify all these issues in public before the Cabinet makes its definitive judgment?

§ Lord McIntosh of Haringey
My Lords, I agree that we strongly support multilateral surveillance and the stability and growth pact process. We have always cooperated fully with it. However that is different from the question regarding the recommendation of UK membership of EMU. When we publish the results of the assessments and the supporting studies, the people of this country will expect us to make a recommendation at the same time.

§ Lord Barnett
My Lords, are the Government looking at how many current members of the euro-zone would meet the five tests? Would it not be better to concede that it is impossible to give a guarantee on sustainable convergence and instead to make the case for entry being in the public interest?

§ Lord McIntosh of Haringey
My Lords, I think I answered that point in my first response. It is our view that we would recommend membership only if it were in the national economic interest. Any developments in other euro-zone countries are matters for them and for the finance Ministers of the 11 euro-zone countries.

§ Lord Taverne
My Lords, is it not a complete contradiction of all the Government have said about 109 open government for the Chancellor to keep the five tests to himself, excluding public discussion, guarding them jealously and sitting on them rather like a broody hen hatching her eggs?

§ Lord McIntosh of Haringey
My Lords, I do not recognise that description at all. Since the beginning of the process in 1997, the five tests have been well publicised and there has never been any inhibition of public discussion on them. In September last year the paper for the Treasury Select Committee was produced, which was a detailed report on the supporting studies. However. I know that the noble Lord, Lord Taverne, will recognise that the difficulty we face is that any injudicious statements made by Treasury Ministers are taken—always wrongly—by the press and some politicians to be prejudgments of the conclusion of a process which is not yet complete.

§ Lord Radice
My Lords, the Chancellor is correct to insist on getting the economics of entry right. However, does my noble friend agree that the Chancellor must avoid the excessive caution shown by his predecessors, which led to us opting out of both the Schumann plan and the common market and then joining too late?

§ Lord McIntosh of Haringey
My Lords, no doubt the noble Lord, Lord Radice, is correct in his economic history. His qualifications in that area are much better than mine. However, I suspect that the mistakes to which he refers took place under Conservative governments.

§ Lord Harrison
My Lords, can my noble friend confirm that the European Commission has recently agreed to waive the need for the United Kingdom to participate in the exchange rate mechanism for a period of two years?

§ Lord McIntosh of Haringey
Yes, my Lords. We never had any intention of joining the exchange rate mechanism and it is useful that the assessment of the European Commission, to be discussed at ECOFIN on 18th February, confirms what my noble friend has said.

§ Lord Howell of Guildford
My Lords, as the Brussels institutions referred to in the Question have repeatedly pointed out that the implications of developing the euro-zone are both political and constitutional, would it not be right to add to the five tests as an element for public debate the fact that this is a constitutional and political issue? Why do Ministers continue to deny that when those issues, rather than the economic tests, which are bound to be ambiguous, are what are before us?

§ Lord McIntosh of Haringey
My Lords, the Government have always been of the view that politically there are significant advantages to us in membership of the euro and that there is no constitutional bar to our membership of the euro.
110 Therefore, we insist that it conies down to the economics of the issue. Whatever the politics or the constitutional position, it would be madness for us to enter the euro unless the economic conditions were right. I should have thought that that would be accepted in all parts of the House.

§ Lord Peston
My Lords, is my noble friend not slightly puzzled—this point is connected with the question of my noble friend Lord Barnett—that our economy at present easily meets the conditions of the growth and stability pact, compared with some countries that are already in EMU? We meet the conditions easily, yet we are still shilly-shallying about joining; whereas others who are already in could not enter if they had to meet the criteria at present.

§ Lord McIntosh of Haringey
My Lords, again, I do not recognise the relevance of the phrase "shilly-shallying". We set out our timetable and we propose to stick to it. That is not to say that my noble friend Lord Peston is not right—if that is not a double negative. I mean to say that he is right: we meet the conditions of the stability and growth pact. It is useful to have the Commission's recent confirmation that our interpretation—the prudent interpretation—of the stability and growth pact is gaining ground in Europe.

§ Lord Phillips of Sudbury
My Lords, the Minister referred to public debate. Does he agree that so far, that debate has been confined to a small part of the public'? It is vital that on the issue of the single currency—which, as the noble Lord, Lord Howell, said, involves constitutional issues—the wider public is involved in the debate, and the sooner the better for all. Will the Government therefore take some steps to involve the wider public?

§ Lord McIntosh of Haringey
My Lords, I certainly agree that the widest possible debate is necessary; I do not agree that that wide debate is not taking place. I had the misfortune when in the cinema on Saturday night to sit through a revolting advertisement from the No Campaign, which included clips of a double for Adolf Hitler, saying, "Kein Reich! Kein Volk! Kein Euro!" That was in appalling taste. I had thought that the No Campaign had recognised that that advertisement was in appalling taste and was going to withdraw it.