European Single Currency

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 13th March 1997.

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Mr. Alan W. Williams:

To ask the Chancellor of the Exchequer if he will make a statement on how adherence to the criteria for joining the European single currency would affect the United Kingdom economy. [18529]

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

The Maastricht convergence criteria of low inflation and sound public finances make sound economic sense in their own right, with or without economic and monetary union. They will continue to form the basis of the Government's policies.

Mr. Williams:

Has not the Chancellor lost the argument in the Conservative party over monetary union? Are not the Tories being increasingly driven by Euro-sceptics into supporting a complete withdrawal from the European Community, which would cost 3.5 million jobs?

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

As I understand it, new Labour's policy is exactly the same as ours. As soon as we changed our policy and said that we would have a referendum on economic and monetary union, Labour poodled along behind us on that policy, as on so many others. Is the hon. Gentleman also arguing, for the sake of symmetry, that the many Euro-sceptics in his party—including the 50 who signed a letter condemning Labour's policy—have driven the Labour party into exactly the same position as us?

Photo of Mr Nigel Forman Mr Nigel Forman , Carshalton and Wallington

Under a responsible Conservative Government, would not one answer to the question be that adherence to the Maastricht criteria would have little effect on the British economy, because we are very likely to meet those criteria whether we are in or out of EMU? Is there not a strong pro-European case for saying that EMU should not go ahead on the timetable that is now being talked about unless it does so on the basis of a very small homogeneous core of countries?

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

My hon. Friend is absolutely right. It looks as if we will meet the Maastricht criteria. We have lower debt than any other major European Union country, and our debt has been lower every year under the present Government than in any year under the last Labour Government. Our borrowing is running at half its level under the last Labour Government, our inflation is below the EU average and our unemployment is lower than that in any other EU country. We have done all that while looking very likely to meet the Maastricht criteria.

Contrast that with the position of other countries such as France and Germany which are suffering terribly by having to meet those criteria. The reason for that is that they have not made the structural reforms that we have made in the teeth of bitter Labour opposition. Those reforms have meant that three quarters of the competitiveness gap with Germany has been closed over the past 18 years. It is no wonder that new Labour's unique selling proposition to the electorate is, "Those guys have made such a mess of things that we shall copy all their policies."

Photo of Mike O'Brien Mike O'Brien , North Warwickshire

When the Exchequer Secretary speaks about "our" policy, which "our" does he mean? Does he mean the Foreign Secretary, who says that he is hostile to a single currency, or does he mean the Chancellor, who has always said that he is a supporter of economic and monetary union? Who now speaks for the Government?

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

I could ask the hon. Gentleman exactly the same question. Who speaks for new Labour on Europe? Is it the right hon. Member for Livingston (Mr. Cook), the shadow Chancellor or the leader of the Labour party? For the hon. Gentleman to suggest that there are no divisions whatever in the Labour party, when 50 of his colleagues signed a letter condemning Labour's policy on Europe, is ridiculous. He has dodged—[Interruption.] I am relieved that the hon. Member for Reigate (Sir G. Gardiner) has decided to stay on Government Benches. No doubt he recognises the success of Government policies.