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The Prime Minister: Because I do not believe that would be sensible or in the country's interests. The right hon. Gentleman is right to say that convergence and economic reform are important, but we shall achieve them far better if we set out a clear direction for the country, which is what we have done today. The purpose of the national changeover plan is to put us in the position of making preparations so that we can make a choice. If we do not do that now, we will be in the position of being able to make no choice at all, and I cannot believe that that is right for this country.
Mr. Dennis Skinner (Bolsover): Does the Prime Minister agree that, on any objective account, the Common Market-European Union has not been a rip-roaring success? The common agricultural policy, as he knows and agrees, has been a total failure; the common fisheries policy is not worth a hatful of crabs; and there are 18 million people out of work in the Common
Market--and no signs of improvement. When we take all that into account, as well as the fact that, in seven short weeks, the euro has fallen by 7 per cent. against the dollar and 4.8 per cent. against the pound, all I have to say to my right hon. Friend--I am sure that he will take it on board--is that he should beware of those carrying out experiments in genetically modified currencies.
The Prime Minister: I think that the balance sheet shows that, overall, the European Union has been immensely positive for Europe and Britain's membership of the European Union has been positive or Britain. Of course we believe that the common agricultural policy needs reform, which is precisely why we are trying to make that reform happen, and of course we also believe that levels of unemployment in Europe are far too high. However, I do not believe that either the single market or the single currency has caused those problems. I think that long-term structural reform is necessary and that we should be part of that process to make sure that we put those people in Europe back to work.
One can criticise the European Union. However, if people take a step back and consider the history of Europe since the second world war, most would say that the European Union has been a success overall.
Mr. Archie Norman (Tunbridge Wells):
Given that the Prime Minister has today reaffirmed his intention to hold a referendum on this subject, does he agree with Lord Neill, who said that the Government who conduct a referendum of this kind should not distribute at public expense literature--even purportedly factual literature--outlining or otherwise promoting their case?
The Prime Minister:
As we said, we shall respond in due course to Lord Neill's recommendations. Of course the rules should be fair for both sides, and we shall ensure that they are. When we respond to Lord Neill's recommendations, we shall publish that response in full so that hon. Members may see it.
Mr. Stuart Bell (Middlesbrough):
The entire House must welcome a statement that takes us towards completing the single market under the terms of the Single European Act, which was passed under the previous Administration. That Tory Government committed us to economic and monetary union.
The Prime Minister said that a Minister from each Department would be enlisted immediately to sell the benefits of the proposal and supervise the single currency changeover. Will he give the House a commitment that those Ministers will be enlisted, with the foot soldiers of the European movement--those who support the single currency---from now until the general election?
The Prime Minister:
The purpose is to ensure that the Government are geared up properly for the necessary preparations. My hon. Friend makes a worthwhile point by mentioning the progress that we have already made in the European Union. The Single European Act, which was agreed by the previous Government, was a substantial act of integration, involving qualified majority voting on a scale not seen hitherto and breaking down a series of barriers and securing standardisation across many areas within the European Union. It is important to view this move as part of development in Europe.
All the way through, we have set out clearly the direction that we believe is right for the country and the economic conditions necessary to make EU membership in this country's interests. That balance between the direction and the conditions necessary to make that direction viable and sustainable for this country is precisely right.
Mr. Ian Taylor (Esher and Walton):
The Prime Minister has acted in what I believe to be the national interest by engaging first gear and moving towards preparing to join the euro. Anyone who opposes a national changeover plan must not want to have a referendum, because it can be held only if the British people are prepared. Anyone who thinks that British industry should not prepare does not understand the challenges that it faces: all businesses, whether small or large, are part of a supply chain.
Will the Prime Minister recall the words of the chief economist at ICI who said that it would not damage investment in the United Kingdom if we did not join immediately, but any signal that we would be out for a protracted time could be extremely dangerous for this country's economy and investment? I hope that the Prime Minister continues to change up gears as he moves towards the referendum.
The Prime Minister:
There is no doubt that, if we were to follow a course of hostility to the whole concept, it would damage this country's influence and the prospects for investment in the United Kingdom.
Mr. John Bercow (Buckingham):
What is the right hon. Gentleman's empirical evidence?
The Prime Minister:
The hon. Gentleman asks what the evidence is. If he were to talk to most people around the world who invest in this country, he would learn that they recognise that it is important for Britain to be part of the European Union and to be positive about the single market and the single currency.
The hon. Member for Esher and Walton (Mr. Taylor) is absolutely right: there can be no referendum without a national changeover plan. If we do not start the preparations now, we will not be able to join--even if we wish to do so. The Conservative party's official position today is that, even if joining is manifestly in the country's interest--even if it is plainly in the interests of industry, jobs and investment and even if business and industry are clamouring for us to join--we cannot be in a practical position to join. That is not a sensible position for a party that used to be able to speak for a section of business.
Mr. Denzil Davies (Llanelli):
Does my right hon. Friend recognise the irony that when a British Minister of Agriculture is, for the umpteenth time, in Brussels trying to negotiate radical reform of one common European policy--the common agricultural policy--he, as Prime Minister, is announcing to the House a plan to join another common policy, a common monetary policy? The damaging effect of that would be far greater than any effect that the wretched CAP could have.
The Prime Minister:
I do not agree. I have set out the tests and economic conditions that have to be met for the common monetary policy. As I said, our position involves, first, seeing whether there is a period of sustained convergence; secondly, finding out whether the European Central Bank settles down, and, thirdly, dealing with the issues arising out of the Chancellor's five economic tests for flexibility and economic reform in Europe. We are perfectly placed. We can set out a direction for the country, set out the conditions and, as a result of the changeover plan, take advantage of the fact that we have made active preparations.
Sir Peter Tapsell (Louth and Horncastle):
Will the Prime Minister appreciate, leaving aside the vital constitutional issues, that most serious economists would tell him that it will be impossible to say whether or not the five economic tests have been satisfactorily met until the completion of at least two economic cycles, which makes nonsense of the timetable that he is putting before the country?
The Prime Minister:
We do consult industry widely. I have set out the position of the Confederation of British Industry, the British Chambers of Commerce and the British Bankers Association, and most people in the City of London disagree with the hon. Gentleman. It is not correct to say that we are not listening to business and industry; we are doing so.
Mr. John Home Robertson (East Lothian):
This statement is all the more welcome because it has been made regardless of the ravings of unelected, offshore press barons. The Leader of the Opposition talked about costs. Since the cost to the British economy of exchanges with European currencies in recent years has been equivalent to our contribution to the European budget, I suggest that the sooner we join the European single currency, the better.
The Prime Minister:
The extraordinary thing about the Opposition's position is that they are opposed not only to the single currency, but to preparations. The right hon. Member for Richmond, Yorks (Mr. Hague) could have said that the time scale should be different, but he said that we should not even prepare and put ourselves in the position of being able to make a choice. That is plainly wrong. Without repeating to my hon. Friend what I have already said, I think it important that the conditions be met because they will make the satisfaction of our national economic interests the paramount consideration.
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