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The Chief Secretary to the Treasury (Mr. Alan Milburn): As a point of information to assist the hon. Gentleman, the report alluded to in The Independent--he should not necessarily believe everything that he reads in that newspaper or any other--which we submitted to the European Commission before Christmas was placed simultaneously in the Libraries of both Houses.

Mr. Bruce: I see. The report was presumably placed in the Library when the House was in recess, with no notification to any hon. Member of the fact that it had been placed there. Another example, then, of open government and freedom of information.

Mr. Paul Tyler (North Cornwall): Did my hon. Friend hear a Minister earlier today denying that his Government ever made important statements without bringing them to the House? In the previous debate, during which I do not think the Chief Secretary was present, one of his colleagues stated explicitly that, when an important document was to be published, a statement would be made to the House. That does not seem to have happened.

Mr. Bruce: My hon. Friend makes a pertinent point which shows how these two debates fit logically back to back.

The Independent reports that the document states that

"the new arrangements provide the best platform to deliver greater stability in the sterling-euro exchange rate."

I do not know what those arrangements are. Do the Government envisage any policy mechanisms to stabilise the euro-sterling rate? Will the Chief Secretary clarify that? If the Government have put a paper in the Library dealing with their policy to stabilise the exchange rate, will they tell us what their policy is, what the rate is and how they propose to achieve it?

If, as I suspect, that is just a general statement that the Chancellor is using to inform the debate without specific commitments, will he tell us what the Government think might be an appropriate rate for sterling to join the euro? Such a debate would help to create a consensus that could give stability to the pound in what would otherwise be rather turbulent waters.

In my discussions with business people in the past day or two, a number of them said that, although the launch of the euro had gone relatively smoothly, they could foresee mid-year circumstances that could create turbulence in the market and cause sterling either to shoot up or to shoot down, which would be extremely destabilising to an already fragile British economy.

Mr. David Lock (Wyre Forest): According to the hon. Gentleman, he is the only one who has been working over Christmas, while everyone else has been doing other things. His motion refers to the level at which sterling

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should join the euro. As he has been working so hard, can he tell us at what rate he would wish sterling to join the euro?

Mr. Bruce: That is extraordinary. The Government will not even tell us whether they think there should be a rate, but they expect us to tell them what the rate should be. If that is the standard of debate on an issue as serious as this, we are in deep trouble. If that is the sort of leadership that the Government can offer, the country faces a serious problem. We need a more intelligent contribution than that to the debate.

Will the Chief Secretary describe to the House the remit of the new euro preparations committee, which has not yet met, even though its formation was announced four months ago? I understand that all parties may not yet have submitted nominations, but that is no reason to delay consideration of the remit and no reason why the committee should not meet at an early date. Does the Chief Secretary agree that the committee must consider preparations for possible British membership if it is in our interests to join?

To suggest that the euro preparations committee should not be allowed to discuss the possibility of Britain's joining is preposterous. No major party in the House is committed to staying out of the euro for all time--at least not yet. I do not know whether the shadow Chancellor has returned from the Pacific, but, if he withdraws his nominee, as I understand that he has suggested that he might, because the committee's remit is too wide and includes the possibility of Britain's joining, will the Chief Secretary offer the Conservative place to a Tory of a more sensible disposition?

If the Chancellor's five economic tests are to mean anything, will he undertake--[Interruption.]

Mr. Deputy Speaker: Order. There are far too many sedentary interjections from the Government Benches. I should be grateful if they ceased.

Mr. Bruce: Thank you, Mr. Deputy Speaker.

Will the Chancellor undertake to present an annual report to the House on progress towards meeting his tests? Will he allow for a regular debate on the progress being made on convergence? We have suggested that the Bank of England and the Treasury jointly should make half-yearly reports on convergence, stating first the progress that has been made and, secondly, what further steps need to be taken to ensure that convergence continues.

It remains my view that, whether we are in favour of joining at the earliest date, at an early date or in the fairly near future, or not even in the long term, we need to have a sensible strategy for how we are to live with the euro and what sort of exchange rate and interest rate convergence is sensible or necessary. Surely it is reasonable to suggest that we should have a report from the Government. I believe that it would serve to persuade some of us who are somewhat doubtful that the five tests are really relevant to policy. A regular report might clearly define where the Government stand, whereas at present some of us think that the tests are an infinitely elastic excuse for a Government whose policy is being driven by political rather than economic considerations.

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There is a wider issue which I hope that my hon. Friends--

Mr. Barry Gardiner (Brent, North): Will the hon. Gentleman give way?

Mr. Bruce: No. I am moving on.

I hope that my hon. Friends, if they are able to catch your eye, Mr. Deputy Speaker, will be able to elaborate on this issue later in the debate. It is our belief that the euro could be a huge advantage to Britain economically. It is our belief also that it will be acceptable to the British people only in the context of a Europe which is seen to be open, accountable, democratic and decentralised. We do not believe that it is only the British who take that view; indeed, there is wide support for it.

In that event, we need a Europe in which the nature and the limits of the power of European institutions are clearly defined. As Liberal Democrats, we find it odd that we are about to create a decentralised United Kingdom in circumstances where others are talking about powers that are being dragged unnecessarily to the centre of an excessively centralised European Union. That is not the way in which we see it. That is why we believe in the development of a European constitution, which would define and limit the powers of Europe.

Mr. John Bercow (Buckingham): Will the hon. Gentleman give way?

Mr. Bruce: I will in a minute.

I am talking about an idea that appeared in the memoirs of Lord Lawson of Blaby. Although my right hon. and learned Friend the Member for North-East Fife (Mr. Campbell) has developed it as a Liberal Democrat view, it is not peculiar to our thinking.

Mr. Bercow: In the Liberal Democrat policy document entitled "Moving Ahead", published in the autumn of 1998, it is claimed on page 106 that the Liberal Democrat party is committed to the retention of the veto on tax matters. Will the hon. Gentleman clarify whether Liberal Democrats are committed to the retention of the veto in relation to business, savings and personal taxes, or only in relation to personal tax rates?

Mr. Bruce: We meant what we said. We would retain the veto that now exists on tax matters. If there is any doubt in the hon. Gentleman's mind, let me point out that it is our belief that the corollary of a European single currency with a European Central bank and a common rate of interest is that we need tax competition and tax flexibility. We are extremely robust on all three points. We are clear about that.

Mr. James Plaskitt (Warwick and Leamington) rose--

Mr. Bruce: No. I am coming towards the end of my remarks.

We need greater accountability on the part of European institutions. It is true that problems in Europe are often much exaggerated by those who have an alternative agenda, but I accept that problems, such as the current fraud issues, exist and that they must be dealt with firmly. We on the Liberal Democrat Benches have reason to be

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proud that the European Liberal Democrats are leading the way in trying to bring accountability to Europe and to the Commission. If commissioners have failed to act effectively against fraud, Liberal Democrats believe that they should be held to account. We have no hesitation in saying that they should leave their jobs and in naming and identifying those whom we think should resign. Nobody should be beyond democratic accountability.

Our conclusion is that Britain's role in Europe cannot be allowed to continue under absentee government. That started under the previous Prime Minister and we have not broken away from it adequately. It is surely time for the Government urgently to take a lead on issues in Europe. However, for the Government to be able to give a lead in Europe effectively, they must first lead opinion in Britain--something that they are abjectly failing to do.

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