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12.10 pm
Mr. Mike O'Brien (North Warwickshire): I hesitate to intervene in the debate lest I interfere in the private grief of the Conservative party. I suspect that all parties have their own reservoirs of private grief to entertain them.The Minister and I have agreed to be relatively brief, and for that reason I should prefer not to take any interventions as there is a lot to say on the issue.
I welcome the debate and I congratulate the hon. Member for Ludlow (Mr. Gill) on raising an issue of such enormous importance to the people of Europe in the coming decades. It will not surprise him when I say that I fear that the Labour party does not agree with him.The Labour party approves of the principle of economic and monetary union, but believes that questions about the practicalities still need to be resolved. In principle, we believe that in the long term a move towards economic and monetary union through the creation of a single currency would produce significant benefits for the people of Britain and Europe. In particular, a single currency would remove the cost of currency transactions, which have been variously estimated to cost in excess of£15 billion per year. The hon. Member for Harrow, East(Mr. Dykes) said that such transactions account for0.5 per cent. of GDP of European currencies. It is also likely that a single currency would boost inward investment by reducing exchange rate risks, and in the long term it would create a more stable economic environment for industry by reducing currency speculation.
Unlike the Government, the Labour party has a clear principle to guide it when assessing the criteria and practicalities of entry into a single currency. Getting the circumstances right is important to the Opposition.We will take a hard-headed, businesslike view of the costs and benefits of a single currency. If approached wrongly, a single currency could do enormous damage to the British economy; if approached correctly, it could be a great stimulus to trade expansion, new jobs and prosperity.
The Opposition's criteria for judging the issue are clear. We believe that the convergence of the real economic performance of member states is a vital precondition of
economic and monetary union. Convergence must be based upon improved levels of growth, jobs and productivity, and not just on monetary objectives alone. That is why we have long argued that the Maastricht convergence criteria need to be applied flexibly and that real economic convergence is of primary importance. Indeed, the hon. Member for Milton Keynes, South-West (Mr. Legg) said that the Prime Minister had suggested that the Maastricht criteria no longer applied at all--I hope that the Minister will tell us whether that is the case.
I was pleased to see that page 1 of the report from the European Monetary Institute on the circumstances for EMU contained the following sentence:
We in the Labour party agree with that. I was also pleased to note that during a recent debate in European Standing Committee B the Paymaster General agreed that Labour's policy that economic convergence was a prerequisite of entry to a single currency had now been accepted by the Government.
The Labour party also believes that, on entry, we should be confident that British industry will be able to compete effectively within the single currency area. Furthermore, and in response to the hon. Member for Aldridge-Brownhills (Mr. Shepherd), the Labour party has always said that it wants the Council of Economic and Finance Ministers to be developed as the political counterpart of the proposed European central bank to give the public a voice in shaping economic policies. The move towards a single currency must also be based upon the consent of the British people.
The Labour party's first commitment in Europe is to jobs for our people. That is why we back the Swedish proposal to write into the Maastricht treaty a clearer commitment to full employment. Labour's vision is not of a Europe for bureaucrats or politicians, nor is it just a Europe for business--although we want business to succeed and prosper--our view of Europe is a community for ordinary people. We want workers to have better rights at work. That is why the Labour party will sign the social chapter and join our European partners in setting a minimum wage. We also want the unemployed to have jobs, which is why we put economic convergence before monetary criteria for joining the EMU.
The Opposition want a Europe in which Britain has a central role--where it is, in the Prime Minister's own words:
Under the Tories, Britain has been reduced to the sidelines in Europe. The Prime Minister has sacrificed the interests of Britain to the interests of the Tory party.
The Tories are now so divided that they cannot agree the agenda for Britain's future in Europe. Some of them would crawl forward; some of them would go into reverse. I have made the analogy before and I will repeat it today. The Prime Minister reminds me of the driver of a stalled, clapped-out old bus marked "Conservative party". He sits there watching his passengers squabble while he tells them that he is not going to start the engine. The reason is that he is unable to move. He knows that if he starts and moves either way some of his passengers
will get out. Two of them have already vacated the old bus. The Prime Minister dares not move, so he spends his time inventing excuses for doing nothing.
Mr. Graham Riddick (Colne Valley):
Will the hon. Gentleman give way?
Mr. O'Brien:
The hon. Member was not present for the entire debate, so I will not give way to him.
Because of the Government's policies, Britain is marginalised and isolated. We do not know whether the Government support the principle of European monetary union. The Prime Minister has been quoted as saying:
Does that remain the Government's position? Who knows, least of all, I suspect, the Prime Minister?The Deputy Prime Minister has said:
Is that Government policy? Who knows, least of all the Deputy Prime Minister? Are the words of the former Conservative Prime Minister, Baroness Thatcher, the policy of the Conservative party? Is it based on the words of the Secretary of State for Defence? He has said:
Who knows whether that is Government policy, least of all the British people? We simply do not know the Government's principles on this matter. As a result,as the right hon. Member for Old Bexley and Sidcup(Sir E. Heath) recently said, so simply but accurately:
They do not listen because the Tories continue to play the British hokey cokey--in, out, in, out, shake it all about. They are having a pointless little dance, which is played to placate the egos of the Euro-sceptics on the Conservative Back Benches, but which, by turns,now simply irritates or amuses our European partners.
It is fair to say that over the years all political parties have had their internal disagreements about Europe. It is also fair to say, however, that historically there has always been leadership from the leaders of both parties, whether Macmillan or Gaitskell, Alec Douglas-Home or Harold Wilson, the right hon. Member for Old Bexley and Sidcup, Lord Callaghan or Baroness Thatcher. In each case, leadership was displayed--a sense of direction was clear for the Government of the day. Today, we have a divided, disorganised and disunited Cabinet, which fails to provide the sort of vision that Britain needs on the European issue.
The decision to publish a White Paper on the intergovernmental conference was dictated by internal struggles within the Tory party. It was a victory for the Europhobes. It is vital that British interests in Europe are determined not by parties' internal problems but by a genuine appreciation of where those interests lie.
The hon. Member for Southend, East (Sir T. Taylor) asked the Minister five questions. Let me put our five questions about the White Paper and Government policy. Do the Government agree with the Chancellor of the Exchequer, who said that a single currency is not
Do they agree with the Deputy Prime Minister that a single market needs a single currency? Can they say whether, in the unlikely event of their re-election, a single currency is a possibility in the next Parliament, if the economic conditions are right? If the economic conditions were right, would the Government in principle favour persuading the country that it was right to join a single currency? One must ask whether they are prepared to agree with the following statement:
Do they agree with that statement by the Prime Minister? Of course they do not.
"For there to be a successful European currency area, a high degree of sustainable convergence of economic performance in the participating area is a pre-requisite".
"Where it belongs, at the very heart of Europe".
"There is no more important issue facing the European Community than the path we choose towards economic and monetary union. We are all committed to this goal."
"No truly unified market can exist without a single currency.A close association of monetary policies will be needed if the single market itself is not to be put at risk."
"Economic and monetary union are a long way to political union and no Government can give up the government of the UK."
"Our partners in Europe do not listen to us."
"a threat to the nation state"?
"Some observers hope--and others fear--that economic and monetary union as set out in the Maastricht treaty will be a step in the direction of a federal Europe . . . I believe that such hopes or fears are unrealistic".
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