| Previous Section | Index | Home Page |
Mr. Corbyn: And staffing levels.
Miss Widdecombe: The hon. Gentleman will be aware that, even preceding the inspector's report, we recognised
that there were problems and had put in an extra £326,000, with a specific view to provide extra staff. Following the inspector's report, we drafted in some temporary staff to plug the gap before permanent staff were employed. I hope that that provides some reassurance to the hon. Gentleman. If he has worries about this, he is welcome to raise them with me at any time,as I am aware that he has a genuine constituency concern.
In the final minute of the debate, I should like to say something about our overall aims. I am committed, as the hon. Member for Knowsley, North admitted, to a rehabilitative regime in our prisons. I can think of nothing more--
Mr. Deputy Speaker (Sir Geoffrey Lofthouse):
Order. Time's up.
Single Currency
11 am
Mr. Christopher Gill (Ludlow): I am extremely grateful for the opportunity to debate the consequences of abolishing the pound sterling. I appreciate that the debate is about the implications for the United Kingdom of a single European currency, but in plain language what we are really talking about are the consequences of getting rid of the pound. I hope that the sensibilities of right hon. and hon. Members will not be offended if I continue to express myself in those terms.
The debate takes place against the background of a round-table meeting in Brussels, hosted by the European Commission, to discuss the single currency. It will provide an opportunity for the 400 participants, who represent a wide range of interested parties from throughout the European Union, to discuss their expectations, concerns and ideas about the single currency.
There is absolutely no doubt where the European Commission President, Jacques Santer, stands on these matters. He is reported as having said to the European Parliament last Tuesday that a single currency was crucial in building a dynamic, strong and prosperous Europe.He went on to say that, with some member states devoting 20 per cent. of their budget to servicing their national debts, Europe would have to put its economic house in order anyway, regardless of whether it was introducing the single currency.
Indeed, as Europe's largest-circulation English language newspaper, the Europa Times, stated in March 1995:
That view was echoed in the business section ofThe Sunday Telegraph on 12 March 1995, which quoted the European Commission itself as saying:
I remind the House that both reports that I have just quoted came after 108 of my right hon. and hon. Friends signed early-day motion 581, tabled by my righthon. Friend the Member for Mole Valley (Mr. Baker)on 8 February 1995, which called on the House to congratulate the Prime Minister on making it clear on 8 January 1995 that it is not in the United Kingdom's interest to join a single currency in 1997, and on his confirmation that there are no proposals for legislation necessary for the purpose or for the United Kingdom to accept any changes at the intergovernmental conference that will impact on the constitution of the United Kingdom, and further noted his rejections of support for the principle of a single currency by the Leader of Her Majesty's Opposition and by Mr. Jacques Santer.
It is gratifying to see that the judgment of my colleagues was endorsed by the findings of the Henley Centre for Economic Forecasting, which reported inEP News, the newspaper of the European Parliament,in September 1995, that popular support in the United Kingdom for a single currency was only 31 per cent.--a figure which, broadly speaking, was endorsed by the
findings of the Commission's private polling announced this Monday, which showed support for the abolition of the pound at 36 per cent. Clearly, no popular mandate exists for abolishing the pound. Nor, indeed, has one ever been sought.
It is my intention not to burden the House further with reports and opinions of other people in other places,but rather to turn directly to the facts that should concern us as Members of Parliament, answerable and accountable, as we will shortly be reminded, to the electorate whom we represent. The first fact concerns unemployment. In October 1990, when this country joined the exchange rate mechanism, unemployment totalled 1.67 million. Less than two years later--23 months--when we unceremoniously left the ERM, unemployment had soared to 2.85 million. There will be right hon.and hon. Members who will say, "Well, that was just the way the cookie crumbled on that occasion." Let me remind the House that that was precisely what happened when we were on fixed exchange rates between 1925 and 1931. I shall give the House the figures.
In 1925, when we joined the gold standard, unemployment stood at 1.25 million. By 1931, the figure had risen to 2.9 million. That has been the cost to this country of fixed exchange rates. The cost to my constituents has been the jobs that they lost and the consequential loss to many of them of their homes, because they could not keep up their mortgage repayments. In some cases, they lost their businesses.
Mrs. Teresa Gorman (Billericay)
rose--
Mr. Gill:
I can see that my hon. Friend wishes to intervene. I must make it clear that I shall not be taking any interventions, because I want to allow maximum opportunity for other colleagues to make their contributions to the debate.
Are the figures that I just quoted on unemployment a price worth paying for what is no more and no less than an economic theory? Even if they are, who in the House will vote for a single currency? Certainly notall hon. Members on the Conservative Benches,and definitely not all hon. Members on the Opposition Benches.
Mr. Walter Sweeney (Vale of Glamorgan)
rose--
Mr. Gill:
I am not giving way.
Indeed, there is increasing doubt that such a measure would command a majority in the House, even on a free vote. Why can we not simply conclude that a single currency is not in Britain's interest? Why must we keep up the pretence that, in spite of experience and all the political pain along the way, one day--miraculously--it will all come right? What the country needs is certainty. Decision makers in trade, industry and commerce need certainty, as do individuals, families, and--dare I say--politicians, particularly if they are seeking re-election, because in the final analysis there are no votes in equivocation, obfuscation and prevarication.
I hope that, when my hon. Friend the Economic Secretary responds to the debate, she will be able to provide the House with some sound and positive reasons
for abolishing the pound. Before she does that, I remind her of yet another fact. Between 1925 and 1931, while the country was on the gold standard, economic activity stagnated, just as it did between 1990 and 1992 during our membership of the ERM. On each occasion, the abandonment of fixed exchange rates resulted in dramatically reduced interest rates--from 6 per cent.in September 1931 to 2 per cent. a mere nine months later, and from 12 per cent. on black Wednesday to 6 per cent. only three months later.
In both instances, the start of economic recovery coincided with the abandonment of fixed exchange rates, the effect of which had been to choke off exports due to an unrealistic and uncompetitive exchange rate, and to choke off investment due to the necessity to keep interest rates high to sustain a totally arbitrary rate of exchange. That was a vicious circle, the inevitable consequences of which were, as I have described, unemployment, economic stagnation and all the consequential effects on Government expenditure and the public sector borrowing requirement.
We should look at the situation today, now we are free of the straitjacket of fixed exchange rates. On 20 June 1995, The Daily Telegraph, in an article headed:
said:
The report then said:
Last week, The Daily Telegraph, in an article headlined,
said:
If my analysis of the effect of fixed exchange rates on interest rates, unemployment and economic activity in Britain is wrong, I am sure that the House will be quick to correct me.
Another question arises from the proposition to abolish the pound. It is the associated costs of doing so--the costs to the Treasury, to banks and the financial sector, and to trade, industry and commerce, not to mention to the general public. Various bodies have made inspired guesses as to the overall cost, but one thing is for certain--Treasury Ministers, as evidenced by their written answer to me on 6 December 1995, do not know or will not tell. They will only say:
In other words, there will be no cost-benefit analysis because, as is all too plain to see, the decision to abolish the pound will be made, not for economic but for political reasons.
Without a shadow of doubt, the abolition of the pound, and all other national currencies in Europe, and the creation of a single currency, is the keystone to the
completion of political union--the very apogee of the integrationists' dreams. The implication is that, by not ruling out the abolition of the pound, Her Majesty's Government are reconciled to the inevitability of political union. Again, if I am wrong, let my hon. Friend the Economic Secretary say so unequivocally, but I should perhaps warn her that many Conservative Members will need much convincing that political union does not follow monetary union as surely as night follows day.
"A single currency needs uniformly low inflation and stable exchange rates. But with low inflation and stable exchange rates who needs a single currency?"
"Since the empirical research has not found any robust relationship between exchange rate variability and trade it is not possible to estimate the increase in intra-EC trade that might derive from the irrevocable fixing of exchange rates."
"Britain runs ahead of EU rivals"
"Britain outpaced its main European rivals last year, achieving a growth rate of 3.8 per cent. against 2.9 per cent. for Germany,2.7 per cent. for France and 2.2 per cent. for Italy."
"Norway, which decided to stay out of the EU, experienced a5.1 per cent. rise in its gross domestic product last year."
"Britain shows the way on jobs"
"On internationally agreed measures, the jobless rate in Britain, has fallen to 8.1 per cent. against a European average of 10.6 per cent. Unemployment has reached 11.4 per cent. in France and9.9 per cent. in Germany."
"there will be transitional costs to business and public authorities, associated with the changeover to the single currency. These potential costs would be one of the factors that would need to be taken into account, at the appropriate time, when the Government make their assessment of whether it is in the United Kingdom's interest to join a move to the third stage of economic and monetary union."--[Official Report, 6 December 1995; Vol. 268, c. 261.]
| Next Section
| Index | Home Page |