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Mr. Curry: Will the Minister give way?

Mr. Milburn: Not at the moment.

The changes that we have made to the frameworks for monetary and fiscal policy are already delivering results. Low inflation is in line with the Government's target. Politics have been taken out of interest rates with independence for the Bank of England. We have the lowest long-term interest rates in 35 years. The Government are now living within their means, but are still able to invest £40 billion more in our schools and hospitals.

We are promoting greater flexibility in our economy and taking action to close the productivity gap with our competitors. Our new deals for the young and long-term unemployed are bringing fresh hope to communities up and down the country. Today, unemployment figures are down 26,000 on the previous three months, with more than 500,000 more people in work since the election. At a time of economic uncertainty across the world, the Government are giving clear economic leadership at home, steering a course of stability in an unstable and uncertain world.

Mr. Curry: Is the right hon. Gentleman not a little worried that events will move a great deal more rapidly than his stately timetable would suggest? Is there not a danger of the Government's losing control of events here and on the continent? Business needs to know where it stands, and it will increasingly demand to know. The debate on tax and other matters is proceeding in Europe and, to all intents and purposes, the referendum campaign has started. Should the Government not be in control of events, rather than risking the danger of being dragged behind them?

Mr. Milburn: I know the right hon. Gentleman's position on these matters, and I am sure that his Front-Bench colleagues are as interested in his position as I am. However, we are making active preparations to help

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business to be ready for the reality of the euro, and, before we can make any decision on whether to join, we must decide what is in the British economic interest. That was our position in October 1997, and it is our position now.

Dr. Norman A. Godman (Greenock and Inverclyde): I offer my compliments to my right hon. Friend on his promotion.

In my right hon. Friend's opening remarks, he noted that 11 European Union member states have signed up to the single currency. That leaves four outside the euro. Are the other three member states adopting criteria similar to those that the Government have adopted in relation to joining? Is there any likelihood that, over the next few years, the United Kingdom will become the odd man out if the other three nations sign up?

Mr. Milburn: Frankly, those are decisions for the individual member states, just as we have to decide what is best for the British interest. That is our responsibility and that is their responsibility. I do not want to speak for other member states. I am keen to ensure that decisions taken here ensure that the British economic interest comes first.

Mr. Gardiner: Will my right hon. Friend give way?

Mr. Milburn: I will not give way for a moment.

Therefore, we are giving clear leadership at home and, in answer to the hon. Member for Gordon, we are giving leadership by helping business to prepare for the euro. For business, the euro is a fact of life. Some people, notably right hon. and hon. Gentleman on the Conservative Front Bench would wish it away. Others wish that it would arrive sooner. Neither view is right for Britain.

Instead, the Government, in partnership with business, are helping British firms to come to terms with the new economic landscape that the euro has brought. In the past year, the Government have stepped up work with British companies to help to equip them to do business in the euro. Our nationwide information campaign has increased, by 150 per cent. since the general election, the number of small businesses that have made preparations for the euro.

The hon. Member for Gordon asked whether the Government had any plans to change the inflation target from RPIX to the harmonised index of consumer prices. As we have repeatedly said, we will monitor the target and the measure of inflation in the light of the practices of the European central bank. That is precisely what we are doing, but the United Kingdom is under no legal requirement to change our target measure of inflation to the harmonised European index, which the central bank has adopted.

Also, we will shortly publish an outline national changeover plan to set out the key steps that would need to be taken by business and the public sector to facilitate British entry into the euro, should we decide to enter.

Finally, the hon. Member for Gordon raised the important issue of the euro preparations committee. He is aware, as is the right hon. Member for Wells (Mr. Heathcoat-Amory) on the Conservative Front Bench, that my right hon. Friend the Chancellor of the

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Exchequer wrote to all parties in November, asking them for nominations to that important committee. We have received nominations from all of the parties. The Chancellor wrote again last week, and I hope that all the parties represented in the House will take a responsible and positive attitude towards the committee, but time will tell.

Mr. Bercow rose--

Mr. Milburn: I will not give way.

The Government want the single currency to succeed because it is in Britain's economic interests for it to do so. The prosperity of the British economy, both in manufacturing and in services, is closely linked to the euro's success. Those preparations are vital, too, if Britain is to have a genuine choice about joining the single currency.

The Government are providing leadership not only on the economy and on preparations for the euro, but in Europe too, by working in alliance with our European partners on a wide-ranging programme of economic reform. It is simply not true to say that, just because Britain is out of the euro, we are unable to shape developments in the European Union. The progress made under our presidency is clear evidence of that. A successful euro is one based on sound economics and markets that function well. Those ideas lie at the heart of the Government's agenda in Europe. Britain is playing a key role in taking them forward.

That is the Government's position on Europe and it is based on common sense, not narrow partisan ideology--national economic interest, not party interest. It is a principled position, which puts the national economic interest first.

Let us contrast the Government's policy with the position of the two major Opposition parties. On the one hand, the Liberals are prepared to say yes to joining the euro at any time, at any price. On the other, the Conservative party is prepared to say no to joining the euro--no at any price. We see uncritical support from the Liberals and uncritical opposition from the Tories. They are united only in their irresponsibility--an irresponsible neglect of the national economic interest.

The Liberals irresponsibly disregard the national economic interest for the sake of cloud-cuckoo economics. To join the single currency early, without the necessary convergence or preparations, would be a recipe for more, not less, instability.

Mr. Malcolm Bruce: Where are the preparations?

Mr. Milburn: I have just set some of them out.

The Liberal's position would be a classic mistake--seeking short-term solutions, rather than long-term solutions for long-term gain. It would be damaging for Britain and, frankly, for Europe. We need a period of stability and we need to have demonstrated sustainable convergence with the other European economies before we can join. That is yet another example of the same old fantasy economics from the Liberals, and now they want to halve Britain's interest rates overnight, without any regard for the state of the economic cycle or, indeed, the consequences for fiscal policy. Theirs is an economic

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policy without the slightest grounding in reality--an irresponsible policy that is totally against Britain's economic interests.

At the other extreme stand Her Majesty's official Opposition, the Conservative party. From the Conservatives, we see only a pursuit of their narrow party interest at the expense of the national interest. They have ruled out membership of monetary union for 10 years, even if it were in Britain's national economic interest to join before then. It is an arbitrary policy, which closes down the options available to this country. It ignores our national economic interest.

These are the questions that the shadow Chief Secretary must answer. If the Conservatives' hostility to a single currency is one of principle, why not rule it out for ever? If it is pragmatic opposition, how can they rule it out for 10 years even if it is in Britain's interest to join? Having moved so far to the right, today's Tory party is simply anti-Europe. The real agenda of that party is withdrawal from Europe altogether, with all the damage that that would do to British interests, jobs and future British economic prosperity. Indeed, the hysteria in the Tory party is such that the shadow Trade and Industry Secretary, the right hon. Member for Wokingham (Mr. Redwood)--a man not known for his temperate views--was compelled to say at one point:

The truth is that the Conservative party is backward looking, with no vision of the future for our country. Meanwhile, a serious debate is going on in Europe about its direction. The Tories would isolate us from that debate, damaging Britain, the British economy, British business and British jobs. They are failing in opposition, just as they failed in government.

In contrast, the Government are working with our partners to shape Europe's future. The days of foghorn diplomacy--of shouting, but not being heard--are over. As the lifting of the beef ban shows, we can do more for Britain by working constructively in Europe. That approach--the Government's approach--goes with the grain of our history as a trading nation. Those who would turn Britain into an economic fortress are not only living in a dream world, but turning their backs on our history of commercial success over hundreds of years. Britain has always prospered best when we have led and looked outward. The Government are determined that we will help shape Europe's future, just as we have helped to shape its past. I commend the Government's amendment to the House.

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