HC Deb 21 November 1997 vol 301 cc329-30W
Mr. Todd

To ask the Chancellor of the Exchequer how the Government will measure the convergence between the United Kingdom economy and the economies of European states participating in the first stage of EMU; and at what measurable point it will be possible to establish that convergence has been achieved. [14427]

Mrs. Liddell

The Chancellor's statement to the House on 27 October 1997,Official Report, columns 583–88, set out the five economic tests which define whether membership of the single currency would be in Britain's national economic interest.

Applying the economic tests, the Government have concluded that there is no proper convergence between the British and the other European economies now. And there is no realistic prospect of our having demonstrated, before the end of this Parliament, that we have achieved convergence that is settled rather than transitory.

What is needed is a period of stability and intensive preparations, so that Britain will be in a position to join a single currency, should we wish to, early in the next Parliament.

Mr. Mitchell

To ask the Chancellor of the Exchequer if he will take steps to ensure that exchange transfers between sterling and the euro before British membership of EMU are(a) free of exchange costs and (b) not affected by rate fluctuations. [15926]

Mrs. Liddell

The exchange rate between sterling and the euro will continue to fluctuate unless the UK joins the single currency. The cost of, and exchange rates used for, exchanges between sterling and the euro will be principally a matter for financial institutions and their customers.

Mr. Mitchell

To ask the Chancellor of the Exchequer what requirements will apply to the United Kingdom in respect of the management of the exchange rate in circumstances where the United Kingdom is not a member of EMU in the first round and has signified an intention to join later. [15918]

Mrs. Liddell

The fact of having signified an intention to join EMU would not result in any additional requirements applying to the UK in respect of the management of the exchange rate. In particular, membership of the new exchange rate mechanism will be voluntary.

Mr. Mitchell

To ask the Chancellor of the Exchequer if he will list the provisions of those treaties relating to European Economic and Monetary Union on which the influence of(a) Her Majesty's Government and (b) other bodies within the United Kingdom can be exercised (i) before the date of United Kingdom full entry to Monetary Union and (ii) after such entry in respect of the duties and operations of the proposed European Central Bank. [16958]

Mrs. Liddell

Protocol 11 of the EC Treaty defines the terms of the UK's opt-out from the third stage of economic and monetary union. Paragraph 5 of that protocol lists the articles which shall not apply to the UK as a result of our exercising the opt-out.

Mr. Streeter

To ask the Chancellor of the Exchequer what is the minimum period for which a country must belong to the ERM in order to participate in the single currency. [16962]

Mrs. Liddell

[holding answer 20 November 1997]:The Maastricht Treaty states (article 109j) that the Commission and the European Monetary Institute shall report to the Council inter alia on the achievement of a high degree of sustainable convergence by Member States. On the basis of these reports the Council shall assess whether each Member State fulfils the necessary conditions for the adoption of a single currency. The UK Government have made clear their view that, given the changes in the operation of the ERM since the Treaty was signed, ERM membership is not necessarily a precondition for participating in EMU. It will be for the Council to decide whether each Member State fulfils the necessary conditions for the adoption of the single currency.