With permission, I should like to make a statement on the regulations governing economic and monetary union.
In the past few days, some highly misleading claims have been made about the draft legislation for the detailed preparation of economic and monetary union. They culminated in the misrepresentation of a series of documents in The Sunday Times yesterday.
I am strongly in favour of full parliamentary debate and scrutiny of those important issues. That scrutiny must be properly completed before any decisions are made that might have binding effect on this country. What the whole House must want is an informed debate at the right time, rather than one based on inaccuracies and innuendo.
That is why today I want to clear up the misconceptions and to clarify the issues and the procedures involved. My right hon. Friend the Leader of the House will in due course make an announcement about the form and timing of the debate, which must certainly come before the Dublin summit. I repeat that no binding decisions will be taken in any forum or were ever likely to be until that debate has taken place.
Last week, European Standing Committee B considered the latest relevant documents that should be subject to parliamentary scrutiny. It had all the up-to-date relevant legislative documents before it. They were commissioned at the Florence summit in June and cover the legal status of the euro, the proposals for a new voluntary exchange rate mechanism of the European monetary system, and the stability pact designed to provide a mechanism to help to ensure that participants in stage 3 of EMU do not run an excessive deficit.
I have written to every hon. Member setting out the facts about those texts. [HON. MEMBERS: "No."] I have. The logistics, I gather, have not ensured that every hon. Member has them yet, but a large number of copies of those letters are in the Whips Offices of both sides of the House and, I believe, have been for some considerable time. I have today arranged for further copies of the letter to be deposited not only in the Whips Offices, but in the Libraries of both Houses. I stand by that letter and I believe it to be accurate in every respect. I do not propose to read out the details of the letter, but I should like again to underline four key points about the draft European Union legislation.
First, the opt-out from EMU that the Prime Minister negotiated at Maastricht remains entirely unaffected. Secondly, everything contained in the EU stability pact, including fines on ins, derives from and was foreshadowed in the Maastricht treaty. Thirdly, unless we join stage 3 of economic and monetary union, we shall retain, as now, control of domestic economic policy. We would still have our existing commitment to endeavour to avoid an excessive deficit, but there is no question of any fines or other sanctions being imposed on us for running an excessive deficit.
I know that some colleagues have raised the possibility that recital 13 of the draft regulations strengthening surveillance could be used to impose policy obligations or sanctions that can be binding on member states. That interpretation is incorrect. Article 103(5) can be used to impose only detailed rules as to procedure. Any recommendations that might be made under article 103(4) are non-binding.
Finally, the stability pact makes good economic sense for the United Kingdom and for Europe as a means of ensuring that EMU is soundly based, whether we are in or out of a single currency. If we are in, we need to ensure that no other member of EMU falls into excessive deficit or debt crisis, which might tend to drive up interest rates. If we are out, we need the euro zone to be stable, as the British economy is more successful when the economies of our major customers are successful. That is why I am negotiating so toughly in the Economic and Finance Council in British interests to get the details right. That is why Parliament must scrutinise properly what I am doing.
I have always accepted that such documents should be subject to the House's rules on scrutiny. I have no choice but to accept it, but I accept it extremely willingly; I am in favour of those procedures. Since the scrutiny procedure will not have been completed by the time the ECOFIN Council of Ministers meets on Monday 2 December, I shall maintain a scrutiny reserve at that meeting. There is nothing new or exceptional about that—scrutiny reserves are often entered into by Ministers at many Council meetings. I was quite clear in every discussion that I had with hon. Members and others last week that I would maintain the scrutiny reserve in this matter until the proper process was completed. That means that nothing of substance can now be settled at next Monday's ECOFIN meeting.
I come to the documents referred to in yesterday's edition of The Sunday Times. The first is a briefing note that was prepared at the request of the European Union Commissioners, Sir Leon Brittan and Neil Kinnock. It was designed to help them be aware of British views at an early stage of the negotiations before the Commission's thinking on the stability pact was finalised. The note was requested by them and sent to both of them in confidence. The reason why it was in confidence is that European Commissioners are constitutionally independent, although I am quite sure that other Commissioners regularly receive briefings from other Governments.
As someone—I believe that it was the right hon. Member for Dunfermline, East (Mr. Brown)—has seen fit to break that confidence and put the document in the public domain, I have today decided to release it. I am actually happy to do so because it confirms that, throughout the negotiations, I have shown proper regard for the interests and procedures of Parliament and a desire to achieve a sensible and acceptable outcome on the stability pact. In fact, I particularly rely on the document that I sent to the two European Commissioners. When I sent it, I never expected that Parliament would see it. The document therefore shows that, at the beginning of October, in private as well as in public, I was particularly anxious to preserve the freedom of nation states to control their own economic policies, and particularly anxious to protect this House's position and its parliamentary procedures. I hope that releasing it does not weaken my negotiating position in the Council, because it contains nothing that other Finance Ministers do not now know about the positions that I am holding in the Council.
The paper states:
the current proposals will not he acceptable to Parliament.
That was correct at the time. The whole point of the document, as hon. Members will see when they read it, is that it was sent before the Commission tabled its proposals. The paper makes it quite clear that I was concerned about certain proposals that we feared that the German and French Governments might be making to the Commission. It transpired that we were largely mistaken about the French position. In fact, the German position in negotiation has been much more reasonable than we then feared.
When the Commission later tabled its proposal, in the form of the papers that European Standing Committee B had before it last week, it reflected British thinking to a much greater extent than we expected. In particular, it preserved the key principle of political judgment by Ministers being applied before any fines would be imposed on any member state that had joined EMU. In itself, the Commission proposal that we now have will and can settle nothing. It provides a basis for further negotiation and eventual settlement at the European Council—perhaps, but not certainly, in Dublin. I would welcome the views of the House about the position that we should take in those negotiations.
The second document is from the European Monetary Institute, which comprises all the central bank governors of member states and is sometimes regarded as a precursor to a European central bank. It is not a Commission document or a Council document. Nor does it have any legal effect. It is advice on policy sent to the Council of Ministers in confidence.
I was not able to communicate that document officially because of its declared confidential nature. However, in order to ensure that the House was well informed on its substance, I wrote on 31 October, describing the main points, to the hon. Member for Clydesdale (Mr. Hood), who is the Chairman of the Select Committee on European Legislation. That EMI paper has now been widely quoted in the press and I therefore decided to release it today. Hon. Members will be able to see for themselves that my summary of 31 October sent to the Chairman of the Select Committee was accurate.
The document gives opinions and advice on how, in the opinion of central bank governors, a so-called mark 2 exchange rate mechanism for member states outside an economic and monetary union might operate in practice and how the monetary stability of the whole Union might be safeguarded in future. The EMI document makes it quite clear that membership and even co-operation on exchange rate matters will remain voluntary. The conclusions of the Florence Council, repeated by the EMI in its document, stated of any exchange rate mechanism that "Membership would be voluntary."
The EMI document also says:
Such closer co-operation would be concluded on a voluntary basis at the initiative of the individual non-Euro area Member State.
Article 109m of the Maastricht treaty already states that exchange rate policy is
a matter of common interest.
That is of course sensible policy, as wild exchange rate fluctuations would be disruptive to trade in the single market. Actually, that provision about exchange rate policy being a matter of common interest goes back to the treaty of Rome.
At Monday's meeting of ECOFIN, I do not expect and I never have expected any items of EMU legislation to come up for formal adoption. At ECOFIN, we will however seek in good faith to reach a broad measure of political agreement as we were mandated to do by the Florence summit. I will maintain the scrutiny reserve to any political agreement that may be reached. The results of discussion at ECOFIN will be available to inform the European debate in this House before the Dublin summit. That meeting in Dublin is the earliest occasion on which any binding decision could be requested.
There are two possible futures for this country. First, at some stage in the future, we might move to the third stage of EMU and adopt a single currency. As the Government have always made clear, there could be advantages for this country in such a move—[Interruption.] Those who are interested will take the feeling of the voices. If we ever move to the third stage of EMU, the associated legislation on the details of EMU must be sensible and effective and suit British interests. That is why it is so important to maintain our ability to participate in and contribute to the negotiations now. They would represent part of the legislative base on which any future British Government might enter EMU. They are part of the detail to be settled before we form our views on the way in which we should exercise our option. We must never repeat the mistake of abdicating from European negotiation so that the structures are designed to meet only the interests of other member states.
Secondly, we might always remain outside a single currency. [HON. MEMBERS: "Hear, hear."] Under those circumstances, we will ensure that we retain, as now, complete control of domestic economic policy and that we are not made subject to any new, binding legal obligations that go beyond non-binding recommendations of the kind to which we have already been subject, under the treaty and in practice, for the past four years. That is the approach that I have been adopting throughout all the negotiations. Whether we are in or out, my concern is and will remain to respect the position and traditions of this Parliament and our independent nation state.
The muted cheers when the Chancellor mentioned the case for a single currency and the jeers from the Conservative Benches when he mentioned the case against a single currency showed exactly why the Conservatives never wanted a debate. The Chancellor's problem is that every time he tells us what is on the Finance Ministers' agenda for next Monday—the euro, the stability pact, the budget and exchange rates and exchange rate co-operation—he demonstrates precisely why all parties represented on the Select Committee on European Legislation and hon. Members of all parties in the House were absolutely right to unite to demand a full debate on those matters before the meeting. They are still right to do so. The purpose of the Government's statement today is that the House should hear the views of the Chancellor, but surely the whole purpose of a debate is that the Chancellor should hear the views of the House.
The test of the Chancellor's main assertion today—that nothing of substance will be decided on 2 December—is not in the repetition of that assertion, but in the precision of the specific answers that he gives. How does he square his claim that nothing of substance can be decided with the fact that in his letter on 31 October to the Chairman of the Select Committee on European Legislation, he said that political agreement is likely on 2 December, and with the fact that the documents that he gave to the Select Committee state that the Government will participate in political decisions on them at the ECOFIN Council on 2 December? Why did the Leader of the House say that scrutiny would have to be completed by the end of November, because that would be in time for the House's views to be taken into account in any decisions at the 2 December meeting? Surely the main point of the Chancellor's letter of Friday is that, with or without a security reserve—[Interruption.] Conservative Members should listen. The Chancellor's letter of Friday said that on 2 December we might reach a broad measure of political agreement.
The Chancellor has confirmed that papers on exchange rates will be discussed at the meeting next Monday. Will he confirm that—in addition to what he says about the proposals in those papers—there is now a proposal in the European Monetary Institute document that the exchange rates of all the outs will be monitored and assessed, and a further proposal that, where convergence is achieved, countries can be expected to enter ERM mark 2? If, as the Chancellor admitted in his letter of Friday, a broad measure of political agreement might be reached on those issues next Monday, surely that is a matter on which we should hear the Government's position, on which the opinions of Members of this House should be heard and on which we should see the paper that is now before the European Ministers?
If, as the Chancellor confirmed today, the meeting next Monday will discuss both stability plans for the ins and convergence plans for the outs, and as stability plans are, as everybody knows, important even to the countries that remain out; if there is a set of proposals for every one of those inside currency union that the deficit should never be higher than 3 per cent., that it should never be more than 1 per cent. over the cycle and that it should never be considered exceptional unless there is a specified reduction in national income in any one year; and if, as the Chancellor says in his letter, a broad measure of political agreement is likely on 2 December—including on the subject of fines for the ins—surely we should know as a matter of fact what is finally being proposed and whether the Chancellor considers the rules to be too rigid or inflexible. Surely the House should be allowed to give its views on the matter, too.
The Chancellor says that the convergence plan does not include fines—which is right—but also says that it is a requirement only for information and for nothing more, but surely he must explain the proposals that are before his meeting next Monday. As I understand them—I hope that he will confirm this—Britain would be compelled to submit a convergence plan, which the Treasury accepts may yet have to include forecasts on interest rates and unemployment. Britain would then be assessed and judged on the credibility of its economic position and on whether it was meeting the criteria. Britain might then be urged to take corrective action, and given a specified time to do so. The Chancellor must surely explain the fear expressed by the Treasury that those plans go way beyond the provision of information and involve what it calls pre-commitments to respond to changes in the deficit.
The Chancellor says that no agreements have yet been made. Perhaps he will explain why the informal meeting of Finance Ministers in September agreed that there was a broad level of consensus that convergence programmes should be made obligatory and that their contents should be developed along the same lines as for stability programmes. The Chancellor should explain why one thing is being said in Brussels and another back here in Britain.
Try as the Chancellor might to downplay 2 September and to say that nothing of substance is being decided, he cannot do so. Is it not the case that there is only one reason for denying us the debate that the House and the country want—internal Tory party management? On that and on the other issues, the national interest should come first.
On the final point, I can assure the right hon. Gentleman that the policy that I am pursuing is the declared policy of the Government. As I tried to explain, I am pursuing it in a way that I am perfectly happy to debate. It is important to us all and I am happy to make it clear.
On the decisions that will be taken next Monday at ECOFIN, I anticipate that the most likely outcome will be a report to go ahead to the summit in Dublin on where we are in the discussions on all those things. It is possible that we shall seek to reach political agreement on that and other things. I made it clear a few moments ago that, until we have finished the scrutiny procedure here, I shall put in a parliamentary reserve—something that frequently happens in the Council.
The right hon. Gentleman referred to the way in which I described the matter to the Scrutiny Committee in my letter of 21 October, when I said:
the Government will be participating in the formal completion of the process at ECOFIN on 2 December and the European Council on 13 and 14 December.
After the conclusions at Florence, no member state is assuming that ECOFIN will determine the final shape of those things or legislate—there are to be no legislative proposals. ECOFIN is meant to be trying to reach political agreement to go on to Dublin, and I shall enter a parliamentary reserve to that.
No. Let me quote again from the letter to the Chairman of the Scrutiny Committee. I said that the letter,
by providing you with advanced warning, will help to ensure that your Committee is fully able to feed in its views on these proposals in time for the Government to participate in political decisions on them at the ECOFIN Council meeting on 2 December and the European Council on 13 and 14 December".
I went on to say:
I attach great importance to the role of Parliament in scrutinising European business".
That is why I sent the letter and why we still have plenty of time before any of the matters are resolved in the meetings.
Let me say what might prevent political agreement from being reached at ECOFIN and in Dublin. Important matters, particularly in the stability pact, would affect us if we were to go into economic and monetary union at any time. It is important that the fines should not be so excessive as to make the economic crisis worse, that the process should not be automatic and that it should be subject to political decisions by the Council of Ministers at every stage. It is important that the timetable should not be so rapid as to ratchet up a problem to a crisis in one member state. The fines and penalties in the treaty were intended to act as a deterrent but, like all the best deterrents, they would be a deterrent that would never be imposed because they would put pressure on a member state to get back within the excessive deficit.
That is the position that is being taken, and the process will not be concluded next Monday—it was always highly unlikely that it would be concluded next Monday and I am not even sure that it will be concluded at Dublin. I shall put in a parliamentary reserve on those matters until the House is satisfied and its scrutiny process finished. [Interruption.] I have always been clear about that. I have never had the slightest intention of going to any Council of Ministers without the parliamentary scrutiny process being completed.
The right hon. Gentleman also referred to the European Monetary Institute document. That document has no legal effect, and the right hon. Gentleman does not do a service to sensible debate by misquoting or by distorting quotations. It is an inescapable fact that he ought to accept that the EMI is proceeding on the only sensible and true basis: that a country joins ERM mark 2 only if its Parliament decides to. The Prime Minister and I have repeatedly made it clear that we have no intention of proceeding to ERM mark 2.
It is not true that convergence plans can lead to the conclusions that the right hon. Gentleman said they could lead to; they can lead only to non-binding recommendations. It is true that we are contemplating the idea of it being compulsory to submit such plans, but this country has been submitting them for three or four years, they have been approved every year in Parliament, and we have never had back a recommendation that did not endorse our policy; so there is no great threat posed there.
Other member states that might get themselves into fiscal problems have had a habit in the past of submitting inadequate plans and submitting them late, so there are some attractions, if one wants stability in the single market, to getting the conversion programmes sorted out. However, I agree with the right hon. Gentleman about matters such as forecasts of interest and exchange rates, and I do not think that they will survive.
Finally, the right hon. Member for Dunfermline, East talked about the need for a debate. I have made it absolutely clear that we will have a debate. [HON. MEMBERS: "When?"' I welcome a debate; 1 enjoy the debate. The right hon. Gentleman says that he is looking forward to an interesting debate between me and my Back Benchers; I think that he will have some fun with some of his, if we ever get to a debate, not least because I am not the slightest bit aware of his position on any of those matters at any stage.
My right hon. Friend the Leader of the House will in due course announce the terms of the debate—perhaps a longer debate—that we hope to have; it will certainly be held before the Dublin summit, on a motion for the Adjournment.
Will my right hon. and learned Friend confirm that, since before the European Community was even thought of, this country has had the closest interest in the performance of the economies in Europe, and that it would be grossly irresponsible on his part and on the Government's if we did not recognise that it is absolutely vital, given that the euro and monetary union will be introduced among our most important trading partners, to ensure that they are set up on a basis that works? Will he again confirm that we shall ensure that our independence and our right to decide about our own economy, as long as we so choose, are properly preserved?
I agree with my right hon. Friend; he makes an extremely important point. The continental markets are our most important markets, and our well-being is linked to theirs, with the result that when Germany and France are successful, we are successful, and when they get into economic difficulties, we slow down. It is therefore extremely important that in our single market we participate in discussions on a euro zone, even if only others will be in it; instability and failure in that part of the market have a knock-on effect on us.
I confirm entirely what my right hon. Friend said in his final point: I am not engaged in secret or evasive negotiations; I answer parliamentary questions every time I come back from ECOFIN; I submit piles of documents to the Scrutiny Committee, and huge mountains of them fly out and get overtaken the whole time; I am quite open about what I am negotiating for; and I negotiate in line with the policy of Her Majesty's Government—no more and no less.
I am determined to ensure that, unless we go into the euro zone, we shall retain complete control, as now, over our national economic policy, and that if we go in, we shall not be sucked into a system that goes beyond what is envisaged in the treaty and imposes unacceptable restraints on our independence as a nation state.
Does the Chancellor accept that it is welcomed on the Liberal Democrat Benches when he declares that, regardless of whether Britain joins monetary union, if it goes ahead, it is in our interest to ensure that it is a success? Will he nevertheless acknowledge that the House has to some extent exercised a scrutiny reserve on him and his Government, in that it is difficult to believe, given that the ECOFIN discussions are to go forward as proposals to the summit, that ECOFIN has no substantial influence on the shape of the possible proposals?
Will the Chancellor give the lie to the suggestion made by one or two of his Government colleagues that the discussions do not matter, because monetary union will affect only the member states that join it, given that his and the Government's position is that the United Kingdom may well be a founder member of monetary union?
Those who are opposed to our membership of monetary union should realise that the terms and conditions regulating how members of EMU operate are bound to be the basis of how they conduct themselves in relation to states that remain outside. Either way, the conditions are vital to our national interest.
I agree with the hon. Gentleman. Under the treaty, we have a right at any time in the foreseeable future to exercise an option to go into economic and monetary union. That means that we are now negotiating the legislation that will apply—would apply—whenever the United Kingdom exercises that option, under whatever Government. Therefore, it is extremely important that we make a positive contribution to that. We must avoid the mistakes of the past. We would not have the common agricultural policy that we now have if a former generation of politicians had not taken the utterly bizarre view that it would never affect the United Kingdom, so they pretended that it was not going to happen and left it to be set up on a basis that no one in the House thinks is any longer satisfactory.
For the reasons that I have given my right hon. Friend the Member for Bridgwater (Mr. King), it is equally important that, if we stay out, the euro zone is a stable element in the middle of our European Union and single market, and there are not destabilising consequences from it. I shall seek to ensure that as well.
As I made clear, I give descriptions to the Scrutiny Committee of documents that, strictly speaking, perhaps I should not be giving. I go beyond what is absolutely necessary for scrutiny sometimes. What I ask is that, while I submit myself to scrutiny, one cannot keep ringing up from ECOFIN at every stage of the negotiations to try to keep Parliament covered. One must understand how we negotiate. I would rather that other member states did not know at every stage exactly what I was pushing for, exactly what I was going to withdraw, what I really meant, what was a try-on and what I was actually trying to secure. A process of permanent parliamentary debate, permanent parliamentary scrutiny and occasional parliamentary hysteria is not always in the national interest.
May I thank my right hon. and learned Friend for his statement? As someone who helped to negotiate the opt-out at Maastricht in addition to the Prime Minister, might I say to my right hon. and learned Friend that I agree with his interpretation? I believe that he is correct to say that fines would not apply to us provided that we did not join the single currency. I agree with him that the monitoring of our economy by the European Commission will not in any way interfere with the ability of the British Government to conduct our own economic policy.
To that extent, our opt-out remains intact, but my right hon. and learned Friend has made it clear this afternoon, and on many other occasions, that he would quite like to join the single currency. If that happened, the fines and the scrutiny would apply to us. The House is entitled to debate the level of the fines and the flexibility and the inflexibility of the system. That has not been debated adequately so far, until this afternoon. If it had been, this needless row would have been avoided.
My right hon. Friend did a very good job, as he did on many other things, in his negotiations on the opt-out at Maastricht. I have never had the slightest trouble with the provisions of the treaty as we now have them. The treaty always envisaged that at some stage we would move to detailed regulation making of the kind that we are now engaged on. The treaty always envisaged, and we accepted it in our negotiations, that for the ins there would a system of deposits and fines. The detail of that still has to be negotiated. I entirely accept that that is something that the House should scrutinise and consider.
As I said in my statement, I welcome the views of the House. I revealed, as the documents that I sent to the Commissioners revealed to everyone, that I have been arguing throughout that the fine should not be excessive. We do not want bovine spongiform encephalopathy crisis-type financial obligations falling on a country that is already struggling to cope with an excessive deficit. I have argued that, as one goes down that path, the procedures should be reasonable and flexible, and at all times should be under the political control of the Council of Ministers.
I suspect that my right hon. Friend and the bulk of my right hon. and hon. Friends would agree with me on those points. I am—or was—making good progress on those matters in the Council, and I was also making good progress in the Commission—perhaps it has influenced matters. When I wrote to the Commission, I thought that something closer to the more rigid, automatic procedures of other member states would emerge, but what emerged was nearer to our procedures. It was still not perfect and I welcome the House's scrutiny of those procedures.
The Chancellor has certainly not reassured me with his statement. His statement this afternoon that he would put a reserve on any detailed agreement reached does not go far enough. He has reaffirmed today what he said in his letter on Friday: the purpose of the meeting on 2 December is to reach an agreement. He has reaffirmed that he will seek to reach a political agreement on 2 December and that that will form a report to go to the European Council 13 days later, or whenever it is. The fact that on 2 December the Chancellor will reach a political agreement on the report's general shape raises the question of what is being agreed—what is being agreed is the idea of a stability pact.
Is the right hon. and learned Gentleman really saying that he, as Chancellor of the Exchequer, is prepared in future—we all know that he wants to join the single currency—to have the Budget judgment made for him in Brussels rather than here in London? Is he prepared—like a rate-capped local authority—to have fines imposed on him because he has dared to exceed the limit of the 3 per cent. ceiling on gross domestic product? I find that shameful.
The Chancellor mentioned the EMI report and tried to describe how it came about—I accept that. Is it true that that report contains a recommendation that in future Britain should force the pound sterling to shadow the euro, and that arrangements will be put in train to bring that about? If that is so, we shall find ourselves without the advantages that we would otherwise enjoy were our currency not absorbed into the euro.
Any political agreement will be subject to parliamentary scrutiny reserve until we have satisfactorily completed parliamentary scrutiny. The political agreement that is likely to be reached is on a report that will set out member states' differing positions. What I expect now is what I expected before. We shall proceed and seek to resolve—indeed, we have a mandate to do so—as many of the difficulties as possible, but not to resolve them finally—we never intended to do that.
The next step will be for ECOFIN to do the best that it can to resolve the disagreements and forward them to Dublin, where they might or might not be agreed—all that is subject to scrutiny reserve. It is true that the stability pact is being contemplated—in particular, members that are in may find themselves subject to fines and penalties. It has always been true that the Maastricht treaty contemplated that those in economic and monetary union would be subject to deterrent penalties, to ensure that they all continued to follow the convergence criteria once they had joined. I am in favour of that, and most people looking at economic and monetary union think it sensible.
It is no good aspirant member states hitting a target in the relevant year—particularly if they fiddle it—and then assuming that they can satisfactorily proceed with economic and monetary union, without keeping within those convergence criteria. The treaty as drafted by my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) always contemplated pressures to ensure that members stayed within the convergence criteria. I agree with the Germans on the principle and I also agree that they should not fudge the convergence criteria. My position is that I would expect myself to be against this country joining economic and monetary union if the criteria were fudged, or if there were not adequate guarantees that we would stay convergent after we had joined, because the whole thing would set up intolerable pressures and this country would be much better out of any such arrangement if it went ahead.
Finally, there is no question in the EMI document of shadowing the euro or any other currency. Sterling is now a floating currency and I have no intention of shadowing any currency as long as it remains floating, because it would be futile and damaging to do so.
The right hon. Gentleman's other points might be clarified by a little internal debate in the Labour party—it gets fairly bewildering, seen from Conservative Benches.
As it seems likely that the pound will not join the euro in the first wave, at the very least, can my right hon. and learned Friend share his thoughts with us and give us an unequivocal assurance on whether he is likely, at ECOFIN or subsequently at Dublin, to be asked to agree to anything that could impose penalties on our economic behaviour in the future? Can he confirm that the maintenance of the convergence criteria—in other words, keeping inflation down and restricting public spending to a reasonable proportion of gross domestic product—is desirable in itself and is likely to continue for as long as the Conservative party remains in government?
On the first point, I can confirm that, if we do not join stage 3, article 103 does not allow any fines or penalties to be imposed upon us—under article 104, those fines and penalties fall only on those that have joined stage 3. The British opt-out, as negotiated by my right hon. Friend the Prime Minister, preserves our indemnity from those fines and penalties.
On the convergence criteria, such as the excessive deficit procedure, which we have been following for two or three years, I agree strongly with my hon. Friend that we on the Conservative Benches do not think that it is good economic policy to run a deficit above 3 per cent. of gross domestic product. We do not think that it is in this country's interests to have a debt:GDP ratio of above 60 per cent. We intend to be a low-inflation economy. We believe that complying with those convergence programmes—if we do, which is a matter for us—is a sign of economic health, whether anyone is thinking of a single currency or not.
Is the Chancellor aware that the real issue is a slightly different one? If the stability pact is agreed, it will come into force only if Britain joins a single currency; but it pre-empts a decision of a future Government and a future Chancellor, refreshed by the mandate of the electorate, when the decision comes to be made. By agreeing in principle what are called fines, but which are really the taxation of this country by the European authorities, he is transferring in advance the power to tax this country from the Treasury, which he heads and which can be removed, to people who are not accountable to Parliament. That is the issue.
If the Chancellor really thinks that he can present this as only a little detail, he misses the whole point. If he thinks that a single currency guarantees unity, he should remember that the dinar did not guarantee the unity of Yugoslavia, the dollar did not prevent the American civil war and the rouble did not prevent the break-up of the Soviet Union. He must be living in a dream world, motivated solely by the idea that a single currency is a guarantee of peace and unity, which it is not.
On the first point, the penalties and disciplines imposed on those that go into economic and monetary union are in the Maastricht treaty under article 104. The right hon. Gentleman voted against the Maastricht treaty and I quite understand that. All I can tell him today is that the negotiations in which I am involved add nothing by way of fines and penalties beyond what is contemplated in the Maastricht treaty, which this House discussed two or three years ago.
The Maastricht treaty paves the way for the regulations, in the same way as our social security legislation in this House eventually paves the way for regulations on the practical implementation of what has been agreed. The large issue of principle that the right hon. Gentleman raises is important, but the House has already looked at it once and we have bound ourselves by treaty. All I can tell him is that the process in which I am currently engaged and which is now being scrutinised adds nothing to that, in the sense that it is all based on the Maastricht treaty, which has been through the House.
I agree with the right hon. Gentleman on his second point; I do not believe that currency unions guarantee political union and so on. I do not believe that that is the best argument for currency union; it is not the reason why I believe that we should keep our option open one way or the other. It could be an extremely misguided way of trying to pursue political union. There are many other ways in which peace, harmony and the correct defence of genuinely common interests among countries should be pursued.
Economic and monetary union is essentially an issue concerning how the single market will operate, how we shall preserve stability in future, whether it is desirable to seek to go into a single currency to preserve the most stable conditions and what the political or other price will be if one does that.
The next big question cannot be settled until we have finished negotiating all those details—and I am not running away from the House having a debate or a discussion about that and contributing to that very important issue.
On Thursday, in the House, the Prime Minister said that the regulations would not apply to the United Kingdom unless we were joining the single currency. Will the Chancellor ensure that such words are written clearly on the face of each regulation, so that there can be no more legal doubt? Our record before the European Court of Justice is very disappointing, and there are different legal views about the current loose wording.
I explained that I believe that what the Prime Minister said was the correct statement of the position, but obviously I undertake to my right hon. Friend that I shall respond to all the anxiety that has been expressed at the weekend and in the House today about whether we can be absolutely sure that that is the case. The Commission proposals that we have before ECOFIN were in any event put forward only for the Council of Ministers to negotiate on that basis.
It is often not understood in this country that the Commission does not decide such things. In that specific area, the Commissioners are the servants of the Council of Ministers, and they act as such. We asked the Commission to try to take things forward by producing some draft regulations, and then I sent briefing to our Commissioners and so on to try to ensure that what they came forward with was rather nearer to my position than I feared it might otherwise be. We then intended to carry on negotiating to get the text right.
In the light of all the fears that have been expressed, I assure my right hon. Friend that I shall seek to come back with the best possible text that puts, as he says, absolutely beyond doubt what I already believe to be genuinely the case, but I agree that it must be seen to be copper-bottomed, or as copper-bottomed as we can get it.
Well, there was scrutiny. I regard myself as a parliamentarian as least as much as I am a Minister, but we all know that, if things are reserved to a Committee, it is up to the hon. Members to decide how they use the time on that Committee. I was not there, but I gather that a very good time was had by all; some process of scrutiny was carried forward at the time. It has not been completed. We know that it has not been completed because a motion has yet to be carried.
With the greatest respect, in my opinion, we do not need all these wrangles about parliamentary procedure; what we want is a debate, which the Government are undertaking to give. My right hon. Friend the Leader of the House will in due course make a business statement about the form of that debate, to which the Government are committed.
May I welcome my right hon. and learned Friend's statement? Does he agree that, if the Government were now to rule out membership of EMU in the next Parliament, it is likely that he would find that he was largely excluded from the discussions or that the real decisions would take place elsewhere? Is it not very important that he should take full part in those discussions, not least in emphasising that, if other members of the Union fiddle the convergence figures, as is clearly the case in France, and probably Belgium and Spain, a rush towards a core currency will end in disaster and its disintegration, and the whole process will be set back for a generation?
I could say that I agree entirely with every point that my right hon. Friend has made. At times, I find myself trying to win points that are not the first points of preference of other member states. My ability to win those points is greatly reduced if the other member states all take the view that it is academic for us in any event because we shall not be members, and that gives others greater influence. I happen to think that, in the national interest, it is wrong to exercise our option anyway because it is too soon to determine which way the national interest will lie.
Some of my right hon. and hon. Friends—not my right hon. Friend the Member for Worthing (Sir T. Higgins)—are irreconcilably opposed to our ever joining at any stage. Nevertheless, they cannot guarantee that, in 10 years' time, this House, which is sovereign, will not decide under some Government or other to go in. I want British influence to be the maximum in those negotiations, because they will result in the legislation, whether that option is exercised sooner or later.
I very much agreed with my right hon. Friend's last point. When deciding whether countries are convergent and ready to join economic and monetary union, the Commission makes a report on whether, in its opinion, sufficient member states satisfy the convergence criteria. The European Council—that is, the Heads of Government—then decides, by qualified majority vote country by country, whether a particular country meets the conditions for membership. In my opinion, it should take that decision not on fudged attempts to meet the criteria but after a genuine wide look at whether that country can take on the constraints of economic and monetary union and continue to comply with convergence. It must look at reality, not patent accounting devices, when and if that decision is taken.
I certainly agree with my right hon. Friend. I have said this before and have probably not repeated it for a bit: convergence is more important than the timetable from the point of view of every member state in the Union. I am firmly on that side of the argument.
I agree entirely. It is important to have a proper process of parliamentary scrutiny but we must conclude it satisfactorily, because, for all the reasons that we have been exploring, there is an overriding national interest in getting it right. However, as any negotiator would say, the process of scrutiny must not totally confine the negotiator's ability to say or do anything in the course of discussions. I like to think that I sometimes come away with a good deal from negotiations, but I shall not come away with the best deal if the House insists on imposing a total constraint on any movement whatever from the position that I take.
Does my right hon. and learned Friend accept that, given the economic policy laid down in article 102 of the treaty, we are bound to be affected by the proposals, even if we are out? Does he further accept that, if the countries that are in are fined, our taxpayers, who are net contributors, will end up paying into the European coffers one way or another? Does he therefore accept that we must go to the European Council meeting and veto the regulations unless the Council is prepared to guarantee that we shall not be affected by them? For the reasons that I have given, we need a crystal clear exclusion from the regulations.
I am extremely reluctant to contemplate vetoing one of the regulations requiring unanimity. Again, it is all subject to parliamentary scrutiny. It is extremely important to sort out now the regulation which I would describe as the legal base of the euro, which provides for continuity of contracts—those contracts already in existence, which are denominated either in ecu or in currencies that might go into the euro. There is a great deal of commercial interest in the City of London to get that matter resolved as quickly as possible, and to have legal certainty governing existing contracts and the legal rules applying to every member of the Union. I was among those who pressed for retaining unanimity and, under the relevant article—number 235, I think—for requiring unanimity to apply to all member states, and I keep pressing for a decision to be taken as quickly as possible. Subject to what my hon. Friend might say to me afterwards, that is the firm view of interested parties in the City of London.
With regard to my hon. Friend's earlier reference to an article, the regulation is under article 103, which cannot lead to fines and penalties, but can lead only to non-binding recommendations.
My memory is failing: I have forgotten my hon. Friend's third point.
I shall certainly veto or vote in every way to confirm the policy that I have described. That is what I continue to do. We must address what is actually being proposed, not what we fancy is being proposed or might be proposed, although of course we must guard ourselves against future risk. Those risks can be satisfactorily answered.
I accept that it has all along been the Chancellor's intention to protect the procedures of this House. Does that not make even more inept the action last Thursday of the Prime Minister and, more sadly, of the Leader of the House, in ruling out immediately the possibility of a forthwith motion? Secondly, as the Chancellor has said repeatedly today that he wants the opinion of the House, and as he knows full well that even in a two-day debate, at most 10 per cent. of the House will have a chance to participate, does he not recognise that the only way to get that opinion is in the Division Lobbies, with individual votes on the individual components in the package?
The matter of a forthwith motion will be addressed in due course by my right hon. Friend the Leader of the House in a business statement. I accept that the motion must be taken at some stage to complete the process of parliamentary scrutiny, but as the right hon. Gentleman knows—he has been in the House longer than I have—we are arguing about a take note motion. If the House decides that it does not want to take note of documents, the outside world, away from the hothouse of Westminster, will find that slightly bewildering.
My right hon. Friends the Prime Minister and the Leader of the House are anxious to give the House a proper opportunity for debate. The difficulty with a debate, as the right hon. Gentleman said, is that there is a limit to the number of Members who can take part. That is why the House has the Scrutiny Committee, which allows everyone to go—[Interruption.] I admit that it is a new process, so I have not participated in one. I am told that the scrutiny process involves the Minister attending, and being subjected to repeated and lengthy questioning in depth on the technical details of the regulations.
We shall then move to a debate. My right hon. Friend the Prime Minister made it clear that we must have a debate before Dublin. We always have a debate before we go to a European Council. I have already said that the business managers are contemplating whether it would be possible to make room for an extended debate.
Will my right hon. and learned Friend accept my congratulations on having put the record straight this afternoon in a clear, concise and comprehensive statement? Will he confirm that nothing has been done, is being done or will be done that will fetter the right of the United Kingdom, under the opt-out so successfully negotiated by our right hon. Friends the Prime Minister and the former Chancellor, to make our own decision in our own time about whether to join economic and monetary union and the single currency? Finally, will he ensure that, until he has received a satisfactory explanation of what went wrong, no further confidential papers will go to Commissioner Kinnock's office?
I can confirm the first part of the question. The Maastricht opt-out remains completely untouched by what we are considering. It will remain untouched and I have no doubt that the House will debate it many times hereafter.
On the latter point, I have no means of knowing where the document came from, as it was sent to both Commissioners. I had to take the decision whether to send it to one British Commissioner—Sir Leon Brittan—or to both, including Neil Kinnock. I decided that the national interest required me to send the document to both Commissioners and their chefs de cabinet, personal and in confidence. I have no idea how it has reached the outside world. The fact that the right hon. Member for Dunfermline, East revealed it and was waving it about, makes me think that Sir Leon Brittan is probably in the clear. I shall certainly consider what briefing I put forward to anyone in Brussels in the near future.
The Chancellor told us that he loves debates, but he seems to be shy of votes. Will he give an absolute assurance that, before Her Majesty's Government sign a binding agreement on the stability pact, the details of that pact will be brought to the House and hon. Members will have a chance to vote on it specifically and, if necessary, approve or reject it?
The form and nature of debate is not for me—[HON. MEMBERS: "Yes."] It is not. This is not a business statement and it is no part of my duties to give such a statement. I look forward to debate and we must have a proper debate. No doubt, many hon. Members have views about the form of that debate, all of which will be listened to by the business managers. After some process of consultation, my right hon. Friend the Leader of the House will make a proper statement in due course.
Order. This statement has now been running for an hour and only 12 Back-Bench Members have been called, largely because questions are much too long, too many questions are being put and the answers are equally long. I need now brisk questions and answers.
This unnecessary row could have been resolved much earlier by the granting of a full debate about an issue that the Prime Minister has described as the most important decision facing the country.
Does my right hon. and learned Friend the Chancellor agree that some of the draft or proposed regulations are intended to apply to countries that do not join a single European currency? If that is the case, will he undertake not to agree to any further strengthening or widening of this country's obligations if we do not join a single European currency? Will he maintain that position if and when the House resolves to take note of the regulations?
I hear what my right hon. Friend says about debate. We always intend to have a full debate, and we always do, before we go to the European Council. Given the current position—it is quite plain that nothing will be settled at ECOFIN; I do not think that anything legislative was ever going to come from it—we must now consider the proper form of debate before the Dublin summit, which is the next place where agreement might be reached.
Some regulations certainly apply to non-members of EMU—things such as the excessive deficit procedure have applied for two or three years; in so far as they have changed, they will apply to us. What will not apply to us are the fines and penalties and those parts of the stability pact, because they apply only to members of stage 3. I signify to my right hon. Friend that I will not enter into more obligations binding to this country of any kind, unless and until we complete the process of parliamentary scrutiny.
If the Chancellor is enthusiastic about both scrutiny and debate, why have he and the Leader of the House, who foreshadowed such a debate in his letter, not allowed it to take place this week? When will they table the requisite motion under Standing Order No. 102(9)? Why might that not occur this week? Will the one-day debate on a motion for the Adjournment, which the right hon. Gentleman has promised, take place after possible political agreement has been reached? Is that not shutting the stable door moments after the horse has bolted? How can an Adjournment debate, without a proper amendable motion, be regarded as, first, proper scrutiny; secondly, proper debate; and, thirdly, an expression of the views of the House on the merits of the documents?
My right hon. Friend the Leader of the House is listening to the various views expressed about a debate and the form that it will take, and he will make a statement in due course. My Budget and the debate that follows it will take up a substantial amount of parliamentary time this week. I have made it clear that, until we have completed the scrutiny process, any political agreement that I enter into in ECOFIN will be hedged with the parliamentary scrutiny reserve, which means that it is non-binding and subject to the approval of Parliament.
I congratulate my right hon. and learned Friend on his lucid statement.
Is not the real reason for the passion that has led to this mini-debate the fact that hon. Members on both sides of the House are beginning to learn that, whether or not we are in EMU, we shall have to learn to live with it, and it is that knowledge that is making a number of hon. Members wish to have an urgent debate on the Floor of the House? Is not the crude fact that, as 60 per cent. of our manufactured exports now go to our European trading partners, any failure in European markets would be very bad news for British manufacturers? Against that background, is it not in Britain's interest to see that the financial rules governing a stability pact are as tough as possible?
I agree with my right hon. Friend. It would be a great folly for us to seek to detach this country, for some reason, from the process of discussion of this kind inside the European Union when we are so dependent on the major countries of the Union for our exports, as my right hon. Friend describes. He gave one analysis as to why we are having those misunderstandings, and he is right. Another reason, of course, is that there is so much detail in the regulations. They are about as exciting a read as the social security regulations that flow through the House, and they give plenty of opportunity for people to take little bits out of them and get wildly excited that something new is happening.
That process is not helped by Her Majesty's press, which does that all the time—[Interruption.] I have been brought to the House today by weekend newspaper reports written by journalists who—[Interruption.] I do not mind coming to the House at any time. I have come to the House because of reports that appear in the newspapers, which have been written by people who appear to have copies of those documents, who produce front-page stories that do not bear the faintest resemblance to the leaked documents that they allegedly have. That rather confuses debate as far as the public, and sometimes the House, are concerned.
I shall go through the scrutiny procedure—[Interruption.] I am not in control—[HON. MEMBERS: Oh!"] I know that I am. I know that we have not finished the scrutiny procedures. I have repeatedly said that, and I have said that I will keep a reserve until we have finished the scrutiny procedures. The form by which we go through that is not a matter for me, and my right hon. Friend the Leader of the House will make a statement about that in due course.
Does not the whole of this saga demonstrate in the most graphic and dramatic fashion how enormously important it is, in the interest of the country, that we continue to exercise a full measure of leverage on events? Is it not the case that, had my right hon. and learned Friend and the Prime Minister given in to the rather hasty pressures to which they were being subjected a few months ago—to throw away our option—there would not be the slightest point in the statement this afternoon or any scrutiny debate because we would not in practical terms have the slightest influence on the decisions, vital though they will be for our country, whether or not we decide to join monetary union?
I agree. I would have thought that every hon. Member on both sides of the House, whether he or she regards himself or herself as Europhile or Europhobe or anywhere in the spectrum between, would agree that it is not in this country's interest to detach British Ministers from the process of discussion and negotiation inside the European Union. Whatever future one sees for this country inside the EU, it is absolutely important that we keep our influence, and it is particularly important that we keep our options open on such vital matters when all the key details have yet to be settled.
Does the Chancellor of the Exchequer not realise that he has been dragged to the Dispatch Box—the phrase that he almost used—in a humiliating fashion a day before the Budget partly because of the Government's failure to see what was happening when the three proposals were put to the Committee upstairs? Anybody who went up there that Wednesday morning would have known exactly what was likely to happen. The Government have had half a dozen different positions in the past three or four days, so do not blame the press. Most of all, since Maastricht, the vast majority of the people outside—electors—are against the single European currency, and that is being reflected in the House. Why? Because they had a taste of it. On 16 September 1992, the Tory Government, the Prime Minister and the previous Chancellor of the Exchequer lost £10 billion in an afternoon because of the exchange rate mechanism, and they never went near a betting shop.
I decided to come to the Dispatch Box when I realised that the debate was spiralling off who knows where. The matter was reported in ever more extravagant ways outside the House. I am happy to come to the House, and prefer to do so, to answer all points. I am told that the hon. Gentleman passed through the Standing Committee for a few moments. I look forward to seeing him try to catch your eye in the debate, Madam Speaker. It seems to me that he has not had the slightest change of opinion on this or any other subject for the past 25 years, and it is always welcome to hear his views again.
Is it not a delusion to suppose that any future British Government will have the freedom to run a substantial budget deficit without incurring high interest rates? Is it not, therefore, all the more important that we play a part in shaping the rules that will govern the powerful European currency that is certain to emerge?
My right hon. Friend is right. Nowadays, any major country that pursues irresponsible deficit or fiscal policies is rapidly punished by the markets and by reality. The problem that arises from economic and monetary union is that everyone is punished if one country goes off the rails and runs irresponsible policies. The treaty wisely provides deterrent penalties to keep any Government who fail to correct that problem back on track, otherwise all members of the economic and monetary union will suffer.
Is the Chancellor of the Exchequer aware that those of us who favour a single currency, and would like this country to join on the first wave, are nevertheless worried about two important matters? First, reports on the criteria for convergence give us to believe that there will be a loose organisation for the first tranche, which could be an enormous disaster for the economic basis of the European Community. Secondly, many hon. Members believe that the matters that went before the Scrutiny Committee should be decided on the Floor of the House, as the Scrutiny Committee itself resolved. The three issues could be debated and put to the vote on the Floor of the House so that, if the vote were in favour, the Chancellor could go to the summit with the support of the House, and would not have to come back to tales of treachery and treason and a hysteria that he and his colleagues have whipped up.
I agree with the hon. Gentleman on the first point. It is highly desirable for the member states that go into economic and monetary union not to do so on such a loose basis that their economies are not genuinely convergent. I am in favour of a strict interpretation of the convergence criteria.
On the hon. Gentleman's second point, the many views that have been put forward in this exchange of questions and answers will be considered by my right hon. Friend the Leader of the House when he makes his statement.
Does my right hon. and learned Friend agree that, in a single market, Britain would have a right to be concerned if one of our partners were pursuing a policy of gaining competitive advantage by devaluations? By the same token, would it not be legitimate for our partners to have an interest in limiting the scope for competitive devaluations?
It would be an absolute disaster for the single market if individual member states decided that they would gain a trading advantage by competitive devaluation. I do not think that they would get a lasting advantage, but if a member state tried that, it would cause considerable disruption to trade. That is why the treaty of Rome, to which we have been subject for more than 20 years, regards exchange rates as a matter of common concern.
It really will not do for the Chancellor to say that the form of a debate is nothing whatsoever to do with him, and that it is a matter for the Leader of the House, when he has already announced that the debate will be on a motion for the Adjournment. Given his reputation for fluency, will he explain in simple language—not just for us, but for anyone who may be listening or viewing—exactly how a motion that this House do now adjourn relates to a decision on the Government's competence in the handling these matters?
I am the bringer of news. I am not saying that it has nothing to do with me. I have the advantage of frequently being able to give my views to the Leader of the House, as does everyone else. It is the responsibility of the Leader of the House, in due course, to give the Government's decision on the timing and nature of the debate. I suppose that the hon. Gentleman makes a valid point against me, given that I have expressed surprise at the anxiety about this "take note" motion. A motion may not make anyone much wiser. Adjournment debates also have difficulties, but the House often debates matters of great importance on the Adjournment. It is a sensible way of allowing the House to express its views on a range of issues that will be raised at the Dublin summit, without binding negotiators hand and foot with a series of detailed resolutions before they ever get there. No other Head of Government goes to a European Council with a great list of instructions prepared in advance by Parliament, because that would weaken his negotiating position.
My right hon. and learned Friend has expressed his respect for the House of Commons. He has also given us an insight into the profound nature of the regulations that we are considering. Some would say that the regulations are more profound and that their implications are deeper than anything that he may introduce in his Budget this week. In the light of that, will he confirm that scrutiny of the regulations will now take place by means of a full debate on the Floor of the House of Commons?
I agree with my hon. Friend that the regulations are extremely detailed. As I said, on Friday I decided to give a precis of the enormous explanatory memorandum that I had already sent to the Committee. I could not do so in fewer than four pages, which are now circulating in the House. I agree that those matters deserve close scrutiny. We have begun that process in the Committee, and I am sure that my hon. Friend's views on how the House should handle the regulations will be taken on board. We cannot spend months on each and every particular. We must have a policy. We have a policy, which I adhere to strictly in all my activities at ECOFIN, and which I hope I have set out with some clarity in the statement and the answers that I have given today.
If the Chancellor of the Exchequer has such faith in the sovereignty of the House of Commons, will he tell us in simple terms why he is frightened of giving individual Members of Parliament the right to debate a matter that will affect our economic and political future for untold generations? The debate should not arise from an Adjournment motion—which the right hon. and learned Gentleman knows perfectly well the Government can ignore—but on a motion, the wording of which has been agreed and on which individual hon. Members can record their views.
Nobody in the Government is frightened of a debate. We have said constantly that the debate must take place before the Dublin summit. Debates always take place before European summits. Nothing of a binding nature is ever agreed if it has not passed parliamentary scrutiny. The hon. Lady must await the statement by my right hon. Friend the Leader of the House about the form that the debate will take.
Does my right hon. and learned Friend share my concern that those who are hostile to the EMU convergence criteria, and who seem to believe that the definition of sovereignty may include a right perpetually to devalue the pound sterling, show a failure to understand the success of the British economy, which has been achieved under the Government?
I agree. The idea that, in today's world, it is our sovereign right to keep devaluing and to run excessive deficits, and that we can do so without suffering tremendous economic punishment from the markets, is a myth. The convergence criteria conform to what any British Conservative regards as a sound approach to macro-economic policy. Unless and until we join EMU, I follow what I regard as the best economic policy for this country. It is chance that that happens to coincide with the Maastricht criteria. It is not wholly chance: the coincidence is partly because my right hon. Friend the Prime Minister and my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) played a part in negotiating those convergence criteria.
For the avoidance of doubt, let me say that I had not heard whatever caused the uproar when I replied.
What I am charged with is the conduct of negotiations in ECOFIN, and I have set out with the greatest clarity—I hope—the way in which I pursue those. I have also made it clear that I am always ready to debate those matters in the House and to be scrutinised by the House, but the form of the debate must first follow our parliamentary procedures. It cannot be off the peg and purpose designed; it must be discussed in the usual way, and in due course will be announced by my right hon. Friend the Leader of the House.
Is it not clear that the right hon. Member for Dunfermline, East (Mr. Brown) is not very familiar with the use of parliamentary scrutiny reserves? Can my right hon. and learned Friend confirm that such reserves are frequently used in European Union affairs—not just by this country, but by other countries that have proper methods of parliamentary scrutiny—and that it is therefore not beyond the bounds of possibility that other member states might wish to enter parliamentary scrutiny reserves after ECOFIN?
I have been attending European Councils for many years. Given his experience, my right hon. Friend will know as well as I do that they come up quite often, and that it is not at all unusual for a Minister to enter a parliamentary scrutiny reserve. It passes very quickly in the proceedings, because no one ever argues with it. It is understood by all the other Ministers, and is taken to mean that that Minister cannot commit his Government unless and until he has gone through the parliamentary process. I have encountered that over and over again; I have done it myself sometimes, and heard it done at other times. The Danes often do it, because they have particular parliamentary procedures. If anything, they tend to do it more often than we do, but all member states do it quite frequently.