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Mr. Bercow: Did my hon. Friend notice how the Foreign Secretary failed to respond to the point that in the United States between 1974 and 1994, some 31 million private sector jobs were created, whereas the figure in the European Union was nil? That is the comparison between the deregulated market in the United States and the over-regulated labour market in the European Union.
Dr. Fox: My hon. Friend makes an excellent point. Perhaps I may paraphrase what he said. The real people's Europe is the one in which people are working, not the one in which politicians get to fulfil the timetables of their political dreams. What we mean by a people's Europe is one in which prosperity and economic freedom are given to the people; not a Europe in which those who lead European political parties get to follow utterly false political timetables to bolster the political esteem in which they hold themselves rather than to help their nations.
One of the big problems is that Europe is driven by abstract political considerations. If Europe moves together at some time in the future, there may be arguments for structural economic change. But what if it does not? If we all move around more freely, learn to speak the same language, and have proper pension arrangements and genuine convergence, we can make appropriate arrangements. We do not close a hospital in the hope that people will get healthy next year. We wait to see what happens first.
What is currently happening in Europe is dangerous. I am not in any sense anti-European, but if the present process is driven too fast and too far, we risk losing all the good that Europe has done and which I mentioned
earlier. There is a positive danger of driving Europe into a nationalist backlash, which will result in the resurrection of all the political traits that we sought to eliminate by having the European exercise in the first place. The Government are doing nothing to put the brakes on the current process: they are merely trying to gratify their own egos at European conferences.
Mr. Letwin:
When the Foreign Secretary was speaking, there was an interesting example of precisely that problem. The Foreign Secretary systematically confused, did he not, the word "weaker" with the "word looser"? Is it not exactly part of our thesis that a looser union may be a stronger union and could be sustained?
Dr. Fox:
The final part of my hon. Friend's intervention is exactly right: sustainability is the issue. There is no point in reaching a short-term solution that will enable pro-European Governments to rush to their electorates. What matters is that over the next 20 to 100 years we can create stable institutions. Just as there must be more flexibility in the wings of an aircraft as the aircraft gets bigger, so in Europe we shall fall out of the sky by trying to achieve too much, too fast.
We must accept that our European partners are not only partners; they are competitors on the world market. It gives me no great pleasure when a company locates in Germany or France, as opposed to the United Kingdom. I do not think, "Hurrah--more jobs have come to Europe." The job of the House is to defend British interests. I am not here to defend the economic interests of the electorate of Athens, South or Lisbon, West. Our job in this House is to do what is good for the British people. As long as we are competing, we must keep a competitive economy.
There is a fundamental difference of view between us--a free-trading nation--and some of our European competitors. Whereas we have always seen the European Union as a potential stepping stone to world trade liberalisation, there remain too many politicians on the European continent who see it as a means of protecting their own economies from the harsh economic winds that blow in a global economy.
We cannot be both a free-market Europe and a fortress Europe: only one of those views can prevail. We must ensure that a free, outward-looking Europe prevails. I have no great confidence at present that that view will prevail.
I look at the examples of how we have worked together in recent years, and I shudder at the prospect of EMU. One of the questions with which the Foreign Secretary did not deal adequately--I look to the Minister of State, Foreign and Commonwealth Office, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), to deal with the matter this evening--is the currency of denomination of trade.
When I was a Treasury Whip, and subsequently, I believed that there were figures held in the Treasury that were unhelpful to those who wanted to push forward the EMU agenda, so on 2 May, or as soon as I could, I used one of the few advantages that we have in opposition, to try to get the whole answer out of our former civil servants, rather than half the answer, which we knew previously. I started to ask questions about currency of denomination.
On 19 June, the Economic Secretary to the Treasury replied:
I tried and tried, and with the open government that we now have, I have almost got there after several months. In November I received an answer from the Economic Secretary, which states:
That cannot provide an economic case for linking sterling with another continental European currency. If there is an economic case, it must surely be to link sterling with the dollar. If what the Treasury now tells us is true, we would merely substitute sterling-dollar volatility for euro-dollar volatility. Although the continental economies that trade in their own currencies would be protected from the uncertainties of interest rate changes, we would hand over a trading advantage while getting no advantage for ourselves.
I may be utterly naive, but I do not believe that we are here to provide our European competitors with a trading advantage. That may be helpful to the Prime Minister in gratifying his ego when he goes to shake hands with the masses on the continent of Europe, but our job is surely to protect the interests of those who take part in the British economy.
Mr. Gill:
Would my hon. Friend be interested to know the answer that I received to a question only this week, when I asked what consideration the Treasury would give to linking sterling to the dollar? The Treasury's answer was,"None." Does that surprise my hon. Friend?
Dr. Fox:
Frankly, I am surprised at any straight answers that come out of the Treasury. On that particular answer, it does not surprise me that the Treasury should
If we have a single currency, we shall have a single issuing authority. If we have a single issuing authority, we shall have a single monetary policy. Sooner or later, we shall have a single fiscal policy, because the Commission will extend the current proposals on fiscal harmonisation, and we shall be in a united states of Europe.
I did not give up my relatively lucrative career as a GP to become a district councillor. I do not think that we should sit back while the argument is made about the diminution of our sovereignty economically and politically, and pretend that it is an economic argument.
Mr. Letwin:
My hon. Friend suggests an extremely interesting line of argument. Does he agree that it could be taken one step further? It is a matter not merely of the trade weighting of our currency, which he so powerfully illustrates, but of convergence. If there is genuinely an argument for EMU in terms of economic convergence, does he agree that our convergence with the economy of the United States is at a far more advanced state of development than our convergence with the economies of continental Europe?
"The most recent official data on the currency of invoice of UK trade can be found in the Central Statistical Office's Business Bulletin, Issue 12/89 'Currency of Invoicing', published on the 15 December 1989. The currency of invoice of UK trade is one of many factors the Treasury considers in assessing the short-run impact of exchange rate changes on the economy."--[Official Report, 19 June 1997; Vol. 296, c. 268.]
I was a little perplexed. If the Treasury was using that to measure the short-run impact on the economy, but had no information since 1989, what on earth was going on? Either the Treasury used eight-year-old statistics to try to monitor the present economy--unlikely--or the Treasury has been gathering such information, but has decided that it is probably in our interests as a Parliament not to know about it, because it might not suit the Treasury's agenda.
"Publication of regular data on currency of invoice ceased in 1988"--
so the previous answer was wrong:--but
"the available evidence suggests that use of foreign currency is fairly stable over time."--[Official Report, 13 November 1997; Vol. 300, c. 625-26.]
I am unable to get the data, but at least that one-sentence summary of the data shows where we were in 1989. The point is this: when a previous Chancellor followed the policy of shadowing the deutschmark, we were conducting intensive studies to show which currencies the UK traded in. The result was that at that time, with whichever trading partner and whichever goods we traded in, about 89 per cent. of our trade was done in sterling or in dollars. What proportion was done in deutschmarks? Four per cent. of our trade, and the Treasury says that that is stable over time.
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