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Economic and Monetary Union

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 14th May 1998.

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Photo of Nigel Evans Nigel Evans Conservative, Ribble Valley 12:00 am, 14th May 1998

What assessment she has made of the effect the introduction of EMU in other EU states will have on the competitiveness of British firms. [40958]

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

Economic and monetary union will create both opportunities and competitive challenges: opportunities for British companies that are prepared to expand into new markets as trade becomes more open in the euro-zone, but challenges for the unprepared.

Photo of Nigel Evans Nigel Evans Conservative, Ribble Valley

The assistance given by the DTI team to help Back Benchers with their questions is legendary. I should like to thank the Secretary of State's parliamentary private secretary for her assistance with this question. It is a great shame that, although the questions are inspired, the answers never are. When will the Government take responsibility for the fact that their policies have led to the strength of the pound? The Government's acceptance of the fudged criteria has allowed 11 other countries to go ahead with the single currency. If they want British companies to be competitive in Europe and in the rest of the world, they should listen to Jacques Delors, who said that deregulation and competitiveness had enabled Britain to become a magnet for inward investment. The Government's adoption of the social chapter and the minimum wage will make British companies uncompetitive with the rest of Europe.

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

The hon. Gentleman is clearly unaware that two thirds of the increase in sterling took place before the election. Consequently, it is hard to see how the Government's policies can be held responsible for the strength of the pound. Perhaps he was not present earlier when I pointed out to the right hon. Member for Wokingham (Mr. Redwood) that it is no good Conservative Members complaining about the level of sterling being too high, when by trying to damage confidence in the euro they are talking it up.

Photo of Jim Cousins Jim Cousins Labour, Newcastle upon Tyne Central

Will the Secretary of State acknowledge the good work of companies such as Siemens that intend to trade in the euro internally in Britain and to offer advice and guidance to their suppliers and to those to whom they sell about how they, too, can trade in the euro so as to obtain the advantage of currency stability and gain practice for selling to European markets? Does she welcome that? Will she give an undertaking that the DTI will follow through that example and offer assistance to smaller businesses?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

It has often occurred to me that one of the greatest failures of the Conservatives in government was not preparing themselves for the advent of the euro and giving British business, especially small and medium enterprises, which will be the most vulnerable, the impression that the only thing that mattered was whether Britain went in. They failed to point out to businesses that they will be affected by the launch of economic and monetary union whatever decision Britain makes. My hon. Friend is right about the need to give advice and support to businesses. We are doing that in a variety of ways, including a series of regional seminars.

Photo of Edward Garnier Edward Garnier Conservative, Harborough

What evidence did the President of the Board of Trade rely on in her main answer to my hon. Friend the Member for Ribble Valley (Mr. Evans)?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

I am not quite sure what the hon. and learned Gentleman means. I told the hon. Member for Ribble Valley (Mr. Evans) that there will be both opportunities and challenges. We have consulted extensively with British business, and that is very much its view. The challenges are obvious: I was just referring to them. People who are unprepared will face difficulties. As to the opportunities, British businesses that are genuinely competitive may find that, in the euro-zone market, price transparency will give them a potential competitive advantage. It is therefore all the more essential that businesses that could prosper in that environment take advantage of that opportunity.