The Euro (Hansard, 7 July 2004)

§ Lord Hunt of Chesterton
asked Her Majesty's Government:
Whether it is their policy to encourage the use of the euro; and, if so, when euros will be accepted by government offices and at the Palace of Westminster.

§ The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey):
My Lords, it is a commercial decision for UK organisations to determine whether they wish to accept the euro or any other foreign currency. The Inland Revenue and Customs and Excise have since 1999 accepted euros in payment of tax, converting the payments to sterling at no charge to the payee. The Government have no control over financial transactions in the Palace of Westminster.

§ Lord Hunt of Chesterton:
My Lords, I am grateful for the Minister's positive reply. As the Government's overall philosophy is now to enhance choice when that is in the general interest, should they not be applying that principle by providing the option to British citizens and foreign visitors to use the euro in the UK for public and private business? Do the Government agree that, once that becomes routine—including in the Palace of Westminster—there should soon be a smooth entry of the UK into the euro-zone, much as Ireland smoothly entered the euro-zone after its experiences of using two currencies, the punt and the pound, over many years? I declare an interest as a visiting professor in Delft, and sometimes I have some euros in my pocket.

§ Lord McIntosh of Haringey:
Yes, of course, my Lords; encouragement is what we can provide and encourage is what we do—every six months, we publish a new report on euro preparations—but I do not think, as far as commercial organisations are concerned, that we ought to go further than encouragement. I am glad to be able to tell my noble friend that the position he described in Ireland is still the case, in the sense that about 30 per cent of trade in Newry in Northern Ireland, which is close to the border, is conducted in the euro. One city-centre cash machine has over 5,000 euro-note transactions a week.

§ Lord Lawson of Blaby:
My Lords, is the Minister aware—there is no reason why he should be—that the man who runs the local furniture stall at the market in Vic-Fézensac, in Gascony, still insists on quoting his prices in francs? That aside, can he inform us when the Government's long awaited and indeed long overdue next assessment of whether the celebrated five tests have been met will be announced? We are all agog.

§ Lord McIntosh of Haringey:
My Lords, my builder in France still quotes in old francs, which have been 796 gone for 50 years. The second question of the noble Lord, Lord Lawson, is wide of the Question on the Order Paper.

§ Lord Taverne:
My Lords, the use of the euro by members of the public will largely be decided by the market. But the euro is becoming an increasingly important reserve currency. What is the Treasury's policy towards the relative holding of dollars and euros?

§ Lord McIntosh of Haringey:
My Lords, the Treasury does not have policies for other institutions, individuals or commercial organisations on which currency they should hold their reserves in.

§ Lord Harrison:
My Lords, will my noble friend encourage major visitor attractions to use the euro thereby providing a service to foreign visitors as well as making more money because, as I understood the position when I last asked, the National Trust and the British Museum, both of which, I believe, are supported by government money, were failing to do so?

§ Lord McIntosh of Haringey:
My Lords, the National Trust is not supported by government funds. I take the point that tourist attractions should be encouraged to take euros. I have too short a list of those who do. It comprises: Historic Scotland, CADW (the Welsh historic environment agency), and Dover District Council, which, I suppose, is closest to the euro-zone. Dover District Council accepts euros in its museum, tourist information centre and area offices. As I say, it is too short a list.

§ Baroness Noakes:
My Lords, does the Minister recall that in 1998 the Economic Secretary to the Treasury predicted that once people went on holiday in the euro-zone they would come home and demand to know what the Government were doing to prepare for euro entry? Does he accept that that was one prediction which the Government got 100 per cent wrong?

§ Lord McIntosh of Haringey:
No, my Lords. People demand to use the euro and many organisations do so, not particularly, I have to say, government organisations, but you can certainly shop with the euro in Marks & Spencer. The telephone box outside my department in Cockspur Street takes euros.

§ Lord Peston:
My Lords—

§ Lord Thomas of Gresford:
My Lords—

§ Baroness Amos:
My Lords, perhaps we can hear from the Liberal Democrat Benches and then these Benches.

§ Lord Thomas of Gresford:
My Lords, will the Minister congratulate the traders and shopkeepers of the town of Llangollen who take euros during the international eisteddfod, which is taking place this week?

§ Lord McIntosh of Haringey:
My Lords, I am delighted to hear it. The same is true in England at 797 Cheltenham during Gold Cup week when bookies and businesses take euros but they do not necessarily give euros back.

§ Lord Peston:
My Lords, as someone who would certainly have joined the European monetary system much earlier and would sign on the dotted line today, I ask whether there is not one problem. No firm in its right mind would reject ready money, although our country seems to have quite a few firms that are not in their right mind. Is not the problem the behaviour of our banks who still charge excessive sums for converting euros into sterling when the shopkeeper brings them in? That is something on which the Government could at least say a word or two in public, is it not?

§ Lord McIntosh of Haringey:
My Lords, it is not just a case of excessive sums but also, in my view, excessive delays. The Government and the Bank of England have expressed their disapproval of that behaviour on many occasions.

Lord Renton:
My Lords, will the Government bear in mind that if we joined the euro our Government would no longer be free to cure inflation or deflation in our own country simply by adjusting the value of our own currency, as has been done a number of times—three or four times—in the past 70 years?

§ Lord McIntosh of Haringey:
My Lords, I am sorely tempted to answer that question but it is wide of the Question on the Order Paper.

Lord Carter:
My Lords, does my noble friend agree that for all the countries in the euro-zone the euro is a single currency, but that for all the countries outside the euro-zone, each of which has its own exchange rate against the euro, it is a common currency? Does he also agree that so far as the UK is concerned the euro has all the flexibility of a common currency but not the rigidity of a single currency? Have we got the best of both worlds?

§ Lord McIntosh of Haringey:
My Lords, I am defeated by my noble friend's semantics. I shall have to think about the question that he raises.