Orders of the Day — The Economy

Part of the debate – in the House of Commons at 5:55 pm on 13 December 2000.

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Photo of Mr John Major Mr John Major Conservative, Huntingdon 5:55, 13 December 2000

I actually said, in government, that there should be a referendum on the euro. Once again, the present Government gave that commitment because they inherited it from me. That is my position on a referendum, but if in the next Parliament there is concurrence that there will be no decision to enter, it is painfully evident that there will be no referendum.

The Government are allegedly preparing for entry if—and it is a big if—they judge it to be in our national interest. If that is the case, and if their position is not simply a public relations posture, they must consider some serious questions. However, they have not given us their judgment on those serious questions. I do not know the Chancellor's view on the debate. For example, how does he think that the pound will fare in future alongside the dollar, the euro and the yen? Does he worry about the very large capital outflows from the eurozone to the dollar zone? Why does he think that it is happening? What does he think is happening within the eurozone following the birth of the new currency, albeit too early and certainly in the wrong conditions—not remotely the conditions that were agreed at Maastricht some years ago?

It seems to me, as an observer, that the euro has accelerated structural change in continental Europe. If that is so, we need to consider whether the proposed tax reforms in Germany, accompanied by the proposed pension reforms there and the anticipated balanced budget there in about four years' time if the Germans hit their targets, will affect us and if so how?

We also need to consider the implication—as it is critical to the United Kingdom—of the huge growth of mergers and acquisitions in France especially, but also across Europe. If the Government are leading the debate on the euro, what do they think about all those and 50 other issues that the Chancellor and I and all my right hon. and hon. Friends could easily set out as being crucial for discussion and consideration before any rational judgment should seriously be taken to take us into a single currency?

Some oppose it on principle and others do not. Most people probably wish to know whether it will have a benign or a malign effect on the British economy. We cannot know that without a proper debate on all those issues. I wish that we were having that debate and I wish that the Chancellor of the Exchequer would lead it

The Chancellor of the Exchequer is better placed than any other politician to lead that debate, so what does he think? How does the Chancellor think the unification of the continental financial markets will impact on our own financial markets and what will it mean for future policy? Here is another illustration of an issue that is far beyond the often rather superficial arguments for and against the euro and one that we genuinely need to examine and consider before we make a decision. It is all relevant to our national interest. Where is the debate on all this so that we can make a rational judgment?

We have time. As I said earlier, I do not favour entry in the next few years. I do not think that it would be wise and I would not vote for it. In fact, I would oppose entry in the next few years, but we have to consider that the world around us may be changing and we need to look at that changing world and judge what it means for us.