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Amendment of the Law

Part of Budget Resolutions and Economic Situation – in the House of Commons at 6:05 pm on 21st March 2000.

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Photo of James Plaskitt James Plaskitt Labour, Warwick and Leamington 6:05 pm, 21st March 2000

I beg his pardon—he does not. He should nevertheless know that the Treasury Select Committee has had detailed breakdown figures from the Treasury on the gold sales, and the reinvestment in not just in the euro but in a basket of currencies. So far, the Treasury's move in switching the nature of our deposits has produced a net gain for the Exchequer. So the hon. Gentleman does not need to worry about the gold sales.

There is no getting away from the fact that it is hard going for manufacturing companies which predominantly export to the euro zone. I believe that the Government and the Bank of England are right not to attempt to lower sterling against the euro artificially—it would not work. Sterling's strength against the euro does, after all, help to hold down inflation. Far bigger risks of inflation would result from a sterling devaluation than from holding the current position.

The best bet, and the best way in which to help hard-pressed manufacturing companies in the west midlands and in my constituency, is to deliver the measures in this and previous Government Budgets to give direct assistance with investment. That is why, despite the export struggle that many in the manufacturing sector face, we see growing investment, growing output and—certainly in my constituency—growing employment. The combination makes it possible to live with the weak euro until the rate improves, as the European economies grow.