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Mr. Peter Lilley (Hitchin and Harpenden): Does the Chancellor accept that his statement today was forced out of him by the confused, contradictory and improper briefings by his own office in recent weeks--briefings that have displayed contempt for the House, which should have been told first; contempt for financial probity by releasing to selected journalists market-sensitive information that caused turmoil in financial markets; and contempt for the truth, since the briefings, which we must assume he authorised, are shown, at least in part, to have been false? Would the Chancellor like to take this opportunity to apologise to the House and to the savers and pensioners whose investments have been put at risk by the cavalier way in which he has treated them?
I shall deal briefly with the confusion--the Chancellor's private office assured me today that he would deal with this in his statement, but he did not--that
led up to the statement. Who was the "unnamed Government Minister" quoted on 26 September in a Financial Times story which said that the Government would make a
Why did the Chancellor allow a false market to persist for some three weeks before effectively repudiating that story? Does he realise that, if any private individual did that, they would be guilty of a very serious offence? Is the Chancellor aware--[Interruption.] Is the Chancellor aware of anything? [Interruption.]
Madam Speaker:
Order. The Chancellor was heard. We have just been listening to a very crucial statement, a very serious statement. I hope that the House will deal with it as such.
Mr. Lilley:
Is the Chancellor aware that I have just received a letter from the chairman of the Securities and Investments Board saying that he will look into some of the matters that I have raised, but that he cannot investigate the main allegation, because
Was not the confusion caused by the Financial Times story, amplified by the diverging statements that the Chancellor and his press officer gave to The Times on 18 October? Can the Chancellor tell the House whether he authorised his press secretary to give certain newspapers--not to mention the denizens of the Red Lion--information which should have been given to Parliament, and which was highly market-sensitive? Did he authorise that? Will he tell the House, yes or no? Can he now say whether he authorised the briefing by his press secretary?
If the Chancellor refuses to say that he authorised the briefing--if he dissociates himself from Mr. Whelan's announcement--surely Mr. Whelan should resign. If, however, the Chancellor accepts responsibility for the release of market-sensitive information, can he tell the House of any Treasury Minister who has released such information to a journalist and has subsequently remained in office?
It was that briefing that precipitated today's statement. The question is, was the policy forced to fit the briefing, or did the briefing reflect what was already settled Government policy?
Did the Foreign Secretary know before that briefing that this was Government policy? Did the President of the Board of Trade know that it was policy? Clearly not. We know that the Deputy Prime Minister had no idea that it was Government policy; we are pretty certain that the Secretary of State for Health did not know, when he appeared on television to defend it. Was the Prime Minister himself fully aware of what his Chancellor
intended to release? [Interruption.] I think that the Prime Minister is telling the Chancellor that his position is unassailable.
The fact is that the dither, dodge and denial of the past three weeks have been a rollercoaster ride on the stock market that has wiped billions of pounds from pensioners' savings. Is that what the Chancellor meant when he said that his priority was ensuring a "period of stability" in the financial markets? Can he now give the House a cast-iron assurance that, in future, the release of all market-sensitive information of this kind will be carried out by democratically accountable Ministers in the House, not by unelected spin doctors in secret briefings?
Now we turn to the substance of this belated statement--[Interruption.] I understand that Labour Members are embarrassed by the confusion and ambiguity of their previous briefings. The fact is, however, that, although we were promised an unambiguous and totally clear statement, even today's statement by the Chancellor allows the possibility of entry during the current Parliament, in the light of what the Chancellor calls a possible unexpected or "unforeseen change in . . . circumstances". Can he give us examples of circumstances that might cause him to change his mind? [Laughter.] Can he tell us the type of thing of which he is thinking? Is it not the case--[Interruption.]
Madam Speaker:
Order. I would be obliged if the House would now come to order.
Mr. Lilley:
Is it not the case that we now know when we probably will not enter the single currency, but do not know when, if ever, we will be ready to enter the single currency?
In essence, the Chancellor's policy remains that we will join when the time is right, but that it will probably not be during this Parliament. Does that move him forward? Is he not trying to have it both ways--trying to please those who do not want us to enter, including his friends in the Murdoch press, while declaring a commitment in principle to entry?
The Chancellor said that he will prepare the country and industry for entry, but there is nothing in his statement about one condition of entry that is laid down in the treaty: the two years' membership of the exchange rate mechanism. Why is there no mention of that? Is he saying that we will not abide by, or that he has sought a waiver of, that condition? If so, why is he afraid of Britain paddling in the shallow end, when he is prepared later to dive in the deep end of EMU?
Is the Chancellor planning in the next few years to apply for money from the European Union's propaganda fund to persuade the British people to abandon the pound? Has he already asked for such money? If he does so, does he intend that all sides of the argument should receive finance? Would it not be odd for the Government to accept European money given that they seek to ban foreign donations to political parties?
Is the Chancellor asking British industry to prepare now for entry at an unknown and unforeseeable date? Where does that leave small businesses: should they invest at this stage in cash registers and accounting systems to deal with the single currency?
The Chancellor said that he has five tests. The truth is that none of those tests is objective, measurable and capable of independent assessment. Does not the fact that the ERM would have passed all his five tests show that they are not a very effective measure?
Does the Chancellor not realise that this is the most momentous decision that this country will take? It is more significant than joining the ERM, than going back on to the gold standard in 1925 or than joining the Bretton Woods system: they all had an exit door, whereas the single currency is intended to be permanent and irrevocable. We must be convinced that it is good for Britain not just at a moment of time, but for all future time; that it will be beneficial not just in good times, but in bad times; and that it will benefit not only some companies, but the whole country.
The Chancellor's first test is the business cycle. He is right to say that our cycle is out of line with the rest of the Community. Surely he realises that it has been getting further out of step, and there is no reason to suppose that it will move back in step in the short term.
The Chancellor says that he wants more flexibility of labour markets. Why, by signing up to the social chapter, have we handed over to countries with inflexible labour markets the power to set our rules? Does he agree that France and Italy are moving towards less flexible labour markets, as they insist on legalising a 35-hour week and imposing that on their companies?
Financial services are an important part of our industry. Why does not the Chancellor refer to the danger mentioned in previous Treasury documents that membership of a single currency would mean centralisation of regulation of financial markets, which would deprive us of the flexible regulation that has enabled the City to become a pre-eminent financial centre not just in Europe but in the world?
The greatest weakness of the tests that the Chancellor has laid down is the absence of any political or constitutional test. He cannot wipe aside--as he tried to do in his preamble--the constitutional issue as if this matter merely concerned monetary policy. The key issue is whether entry into the single currency requires centralisation of taxation and of borrowing powers. Will there be the power at the centre to transfer resources from prosperous countries to those that are handicapped by joining the single currency?
"declaration shortly on UK entry soon after the EMU launch",
which caused the biggest movement in financial markets in recent times? Who was he? Has the right hon. Gentleman inquired? Does he know?
"where allegations of market misconduct are of a criminal nature, they will not fall naturally for the SIB to pursue"?
Will the Chancellor and his staff co-operate with any inquiry by the market authorities or by the Treasury Select Committee?
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