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The Prime Minister: I entirely agree with my hon. Friend. Maintaining our position is the right and sensible way to proceed, so that we can not only retain the flexibility for Britain to make a decision in Britain's interests, but have the maximum opportunity to influence others in decisions that will affect this country.
Sir David Steel (Tweeddale, Ettrick and Lauderdale): Does the Prime Minister accept that many of the problems that we face in the European Union today--notably with the common agricultural policy and the common fisheries policy--were caused by our opting out of the original negotiations that framed the rules? If so, does he accept that the British national interest is again being damaged, because he is seen by other European Governments and by the British public as being held hostage by a Conservative party whose policy is increasingly not to be at the heart of Europe, but to be out of Europe?
The Prime Minister: The right hon. Gentleman will know that I have made it clear that we are not opting out
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of the negotiations in the matters that lie immediately ahead of us. We propose to play a full part in the intergovernmental conference and in the decision-making process leading up to a determination of whether a single currency proceeds.
There are two elements in the determination about a single currency--first, whether the circumstances are right for anyone to proceed; and secondly, whether the circumstances are right for any individual country, including the United Kingdom, to proceed. The determination of whether every country proceeds is actually made by a qualified majority vote in due course. If we think that other countries are not economically ready to enter a single currency--because their entry into a single currency and their weakening of a single currency, if it proceeded, would damage this country, whether in or not--we retain the option to vote against their entry. I certainly intend to play a full part in the negotiations.
Mr. Iain Duncan Smith (Chingford):
My right hon. Friend said that he was opposed to any country entering a single currency if it could not sustain its position economically, or if it somehow fudged its entry economically. Therefore, during the conference, did my right hon. Friend say anything about the countries that are clearly fudging their entry criteria--such as France, which has abused the process by stealing money from its telecoms fund? Did he warn France that if it continued to do that, Britain would raise it as a major issue again and again and again and declare itself against the process?
The Prime Minister:
I made it clear that we would look carefully at the economic conditions to ensure that they were right, genuine and had not been fudged. I did not raise the specific matter of the French telecoms fund. When the time comes to make a judgment, we shall certainly take into account any actions that appear to us to be short-term fudges rather than a long-term improvement in the economic condition of countries going into a single currency. It was precisely to make it clear that that would be our position that I emphasised-- not only today, but in the discussions over the weekend--that we would examine not only whether people met the criteria on the specific day that the initial decision was taken, but whether it was likely that they could maintain compliance with the criteria over the long term.
Mr. Tony Benn (Chesterfield):
Does the Prime Minister recognise that the question of a single currency--which is a political, not an economic question--goes far beyond the interests of this or of any other country? Ministers have agreed in principle to transfer major political powers from Governments, whom the peoples of the European Union elect, to bankers, whom they do not. Given the situation in France, Germany, Italy and Spain--where, for many years, their peoples were denied, by Hitler, Mussolini, Franco and Salazar, the right to use the ballot box to attempt to remedy their grievances--is it really sensible, in principle, to be in favour of giving up those powers? Is not one reminded of the words of Sir Edward Grey, in 1914:
"The lamps are going out all over Europe; we shall not see them lit again in our lifetime"?
The Prime Minister:
It seems to me that there may be some interesting manifestos from the Opposition, as well
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as from some of my hon. Friends. The only sensible conclusion that one can draw from the right hon. Gentleman's comments--I appreciate the sincerity with which he advances his view, as he has done consistently for many years--is that we should remain in the negotiations to point out the dangers that we may see. I think that he would be forced to agree that that is the logical conclusion to be drawn from what he has said.
Mr. George Walden (Buckingham): Is my right hon. Friend aware that, were the Leader of the Opposition to allow a free vote on this issue, more than three quarters of the House would support my right hon. Friend's policy on Europe? That question comes from a sceptic on a single currency, who is not even angling for a job.
The Prime Minister: The accuracy of my hon. Friend's prediction marks him out as a future Chief Whip, if that is a job that interests him.
Mr. Andrew Faulds (Warley, East): My congratulations. The Prime Minister made it clear that the current state of the peace process in the middle east was discussed. Was the issue raised that that American Zionist, Netanyahu, is endangering the extremely fragile peace in that part of the world, and that something must be done internationally to restrain that gentleman in consistently breaking the Oslo accords, to which the Israeli Government are committed?
The Prime Minister: There was certainly a collective view that the agreements reached previously had to be met and kept, and that there was some need for urgent progress. No one pointed to the specific cause of the current disagreements; I think that there was a general feeling that there may be faults in many directions. However, the unanimous view was that there was a need for early progress.
Mr. Norman Lamont (Kingston upon Thames): What example in history is there of a single paper currency that is not tied to a single Government?
The Prime Minister: My right hon. Friend points to the fact that we are entering uncharted waters, and I agree with him. That fact is precisely why I am so cautious. It is why my right hon. Friend and I negotiated the option for us to decide at a later date, and it is why he and I set out the convergence criteria. The fact that we are entering waters where no one has been before is precisely why it is right for us to be cautious and right for us to examine the economic circumstances. My right hon. Friend is right.
Mr. Terry Davis (Birmingham, Hodge Hill): Given that we can all see the detailed arrangements for a single currency, what is the Prime Minister waiting for? Is it not time for him to make up his mind one way or the other, instead of sitting on the fence?
The Prime Minister: I am interested in the fact that the hon. Gentleman knows all the circumstances. Does he know what the legal conditions are yet? The Governments do not. Does he know who will enter yet? The Governments do not. Does he know who will meet the
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economic criteria? The Governments do not. I can extend that list. Clearly, the hon. Gentleman has knowledge that the rest of us have not yet had.
Mr. David Howell (Guildford): In seeking to protect our vital national interests in Dublin and to promote a non-federalist vision of Europe, can my right hon. Friend say what problems are being caused for him and our interests by the belief in some European quarters that after the general election there will be in London a more subservient, compliant, inexperienced and subordinate Government?
The Prime Minister: There is no doubt that there is a wish among some of our partners with socialist Governments to have a similar Government in the United Kingdom, who would be prepared to surrender the elements of British sovereignty that I set out earlier. I understand that wish, but they also understand the timetable; on that basis, I think that they are beginning to understand the need to negotiate with us now and, I believe, in Amsterdam.
Mr. Peter Shore (Bethnal Green and Stepney): If the Prime Minister had any remaining, lingering doubts about the folly of joining a single currency, surely he had them resolved at Dublin. Of course, we already knew that, if we were to join a single currency, the stability pact would impose vast fines on us--fines amounting to more than £11 billion if it had been in effect for only the past four years. However, we did not know what was the crucial, as it were, exception--the temporary and exceptional circumstances in which there would be exemption from the penalties of the treaty. Now we know that it is the massively deflationary fall of 2 per cent. in gross domestic product, an experience that this country has not suffered in the post-war period. That wholly deflationary policy would be permitted under such a guideline. Does not the Prime Minister recognise that that is unacceptable and that it would be masochism and madness for us to join?
The Prime Minister: But of course, the right hon. Gentleman is wrong in what he has to say about the vast fines that would have been inflicted on us in the past, as he will see if he reads more carefully what my right hon. and learned Friend the Chancellor discussed with his ECOFIN colleagues.
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