Previous SectionIndexHome Page

Dr. Vincent Cable (Twickenham): Does the Secretary of State acknowledge that the closure of Queen Mary's as a district general hospital will bring additional pressure on a variety of neighbouring hospitals--particularly the West Middlesex, which is already under severe pressure? What specific action will he take to deal with that?

Mr. Dobson: As the hon. Gentleman knows, public consultation is in progress on the ramifications of the proposal to close Queen Mary's Roehampton. As I have just told my hon. Friend the Member for Ilford, South (Mr. Gapes), the ultimate decision will have to take account of the impact on other hospitals. Everyone knows that the West Middlesex has severe problems that will have to be sorted out; we want to get on with doing just that.

Despite the comments of the Opposition spokesman, the hon. Member for Stratford-on-Avon (Mr. Maples), in replying to the statement, we have conducted the review as quickly as possible. The review has been established, reported and completed, and is therefore off the list of reviews. It has been a very good review, and it will provide the basis for a programme of real action. We cannot simply sit around talking about action. If we did so, Londoners would never forgive us.

3 Feb 1998 : Column 859

Points of Order

4.26 pm

Mr. David Willetts (Havant): On a point of order, Madam Speaker. I tabled a written question to the Chancellor of the Exchequer, asking

In the past hour, I have received from the Treasury the answer:

    "I shall let the hon. Member have a reply as soon as possible."

However, just as I was receiving that reply from the Treasury, a press conference was being conducted at which the Treasury was providing the results of the review of unemployment statistics.

May I ask you, Madam Speaker, to remind Ministers that they have an obligation to answer openly and frankly questions from hon. Members? It is very disappointing that an answer is available at a press conference, but that it apparently cannot be given to a written question.

Madam Speaker: I shall do more than that. If the facts are as the hon. Gentleman describes them, it is to be regretted that he has not received a substantive answer to his question. I intend to look into the matter as soon as I leave the Chair.

Mr. Tam Dalyell (Linlithgow): On a point of order, Madam Speaker. You are the sixth Speaker whom I have had the privilege of serving, and the one about whom there has been the least complaint--not least because you have permitted two private notice questions on Iraq. [Interruption.] Some people might think that war is more urgent than Welsh devolution--but I leave that.

My point of order is this. In a statement in today's edition of The Times, Mr. Marc Weller, the deputy director of the centre of international studies in the university of Cambridge, says:

Have you, Madam Speaker, had any request from a Minister to state the legal basis on which military action is threatened in Iraq? The background is that, this morning, I talked to four separate international lawyers, three of whom said categorically that military action in these circumstances is unlawful. Before we go any further, and at their convenience, the Government should make a statement on the matter.

Madam Speaker: I fully understand and appreciate the hon. Gentleman's deep anxiety. Indeed, he and I had an exchange this morning, when I let him know that I could not be helpful to him today. The Government have not told me that they intend to make any further statements. As the hon. Gentleman knows, later this week the President of the Council will be announcing next week's business. Perhaps he will seek an opportunity to press for a statement or a debate on the matters that he raised.

3 Feb 1998 : Column 860

Parliamentary Currency Commission

4.29 pm

Mr. Michael Fabricant (Lichfield): I beg to move,

My Bill is straightforward enough. It recognises the importance of the decision that the British people will have to make in due course: whether or not to enter the European single currency.

The Bill has two main provisions. Those old enough to remember the referendum in the 1970s on entry to the European Economic Community might recall that, despite the plethora of information that was available for and against joining the EEC, as it was then known, the salient points were not clearly argued out. The pros made their case and the antis made theirs. Often their arguments did not meet, so clear conclusions could not be drawn. It was a little like Prime Minister's Question Time.

My Bill would appoint a commission, independent of Parliament and politics, chaired by a senior judge, to argue out the pros and the cons of Britain surrendering its national currency. Its findings would be made available to everyone entitled to vote in the referendum.

The Bill then goes further. It seeks to think the unthinkable. If, for the first time since the Norman invasion, the Government were to decide that we should adopt a foreign currency and surrender the pound because they believed that that was the best option for Britain--they might well decide that it was not and that we should stay as we are--the commission would be charged to ask: "Are these our only two options? Might there be an even better one?"

Deciding to stay with sterling or to adopt the euro are not the only two options. Joining a new currency is a decision that might last for generations. Limiting the options to just two is not rigorous economics and the Chancellor himself wants the decision to be based on economic grounds.

Last October, the Chancellor published "UK Membership of the Single Currency: An Assessment of the Five Economic Tests". Although parts of the document owe more to Mandelson-speak than to Treasury-speak, on the whole I welcome the Green Paper with the brown cover. I agree with the opening statement that the Chancellor makes in the preface:

Although members of the United States Federal Reserve, historians and economists have all said that a single currency can work only if there is, in effect, a single Government commanding a pan-European economic regime, that is a separate though most fundamental issue which--using all my reserves of will power--I shall ignore today.

Let us look at the economic criteria set out in the Green Paper for entering a single currency: business cycles, economic structures and--in Euro-speak--convergence. For Britain to operate successfully in a single currency, our economy must be synchronised to that currency. I asked the Library to analyse movements of the pound

3 Feb 1998 : Column 861

against the deutschmark, the French franc and the United States dollar since we left the exchange rate mechanism and the pound could float freely, reflecting the real value of the currency. In the five years from October 1992 to October 1997, the standard deviation in values between the pound and dollar was just 3.3. In marked contrast, the standard deviation between the franc and the pound was almost double at 6.3 and between the deutschmark and the pound it was more than double at 7.

In other words, the pound is linked twice as strongly to the dollar as it is to either of the two main continental European currencies. That is good for British exporters to the Americas, the far east, and other dollar zone areas, but it does not augur well for British membership of a European single currency, which would be dominated by the German and French economies.

It is not surprising that Oxford Economic Forecasting's report published last autumn states that income tax and unemployment would rise if we entered economic and monetary union. It forecasts that the basic rate of income tax would have to rise from 23p to 28p to control inflation, with a resulting rise in unemployment.

What about labour market flexibility? European Union citizens can already work in any EU member state without a work permit. In practice, language and culture present the real barrier. Twice as many workers from the United States, Canada, Australia, and New Zealand as EU citizens are currently employed in the UK. Our entering EMU will not make a euro's worth of difference to that. Commonality of language, legal system, and culture is everything.

The Prime Minister has justified the introduction of the national minimum wage by claiming that the United States has such legislation. I am not opposed to the principle of a minimum wage that protects workers exploited in garment trade sweatshops in Bradford or the east end of London. However, the legislation in America is realistic. It excludes young employees and many industries, including those related to tourism. The Prime Minister is wrong to say that there is a national minimum wage in the United States. It has regional variations and the rate, which has just gone up, is only £3.05 an hour for those to whom it applies.

The legislation currently before Parliament has no exemptions and is convergent to some European legislation. I fear that if it is meant to converge our economy with the rest of Europe, it will succeed. Our unemployment will rise in harmony with the rest of Europe, where laws owe more to political correctness than to economic reality. The American economist Barry Eichengreen found that

3 Feb 1998 : Column 862

    "The adjustment to regional labour market shocks is about 20 per cent. faster in the US than in the EU".

Is not that what we want for Britain?

James Capel's November briefing last year stated:


    "The UK is different".

It reports that, while German households have debt of only 17 per cent. of disposable income because they rent, the equivalent figure for Britain is 110 per cent.--six times as much--because we enjoy a home-owning economy. However, the US figures are similar to Britain's. Long-term mortgages are as available in the US as they are in the UK. To converge with Europe, are we to become a home-renting society?

We may not like it, but Britain's economy has greater economic convergence with the US than with the larger continental economies. The culture, legal system, and huge mutual investments make it so. Moreover, that convergence has stood the test of time. It meets the economic tests set down by the Chancellor.

The Bill would empower an independent commission to examine all the options. I believe that there are sound economic, let alone constitutional, grounds for keeping the pound. If I am wrong, let the commission investigate whether our interests would be better served by joining the dollar zone rather than the euro zone. I am not seriously suggesting today that we should adopt the dollar, but if the commission favours the dollar, why should we opt for the euro if it is second best?

The Chancellor has said:

The commission could determine which single currency.

I beg that leave be given to bring in my Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. Michael Fabricant, Mr. Eric Forth, Mr. David Amess, Mr. Howard Flight and Mr. Peter Atkinson.

Next Section

IndexHome Page