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Mr. Barry Gardiner (Brent, North): Will my hon. Friend give way?

Mr. MacShane: I have not taken interventions from Conservative Members, so I shall not do so from my hon. Friend. I would like to end my remarks soon so that others may make speeches.

During the Rotherham euro week, there was dual pricing in Tesco and all the shops, and we distributed questionnaires on the euro in schools, eliciting 3,000 responses. The week went down very well. The Rotherham and South Yorkshire Advertiser, a fine and excellent journal, published its price in euros for the week. To begin with, the people of Rotherham sensibly asked, "What the heck's going on with this Mickey Mouse money? This is a bit silly". But, by the end of the week, they were enjoying it. Since then, seminars that the chamber of commerce has organised on the euro have

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been flooded with applications from representatives of small businesses who want to learn about it. There is a hunger for information.

The British economic community has been told a lie for the past 10 years: that Europe was none of its business, that everything that happened in Europe was negative, and that nothing emanating from anywhere in Europe was of any help to it. However, the plain fact is that we sell more to the tiny Netherlands than to all the Asian market. If any of our businesses increase sales to almost any mature European market by just 0.1 per cent., they will make more money for the United Kingdom than massive export wins that are paid in devalued Asian currencies. The European market will expand. Anyone who travels to Prague, Budapest or Warsaw will see the strength and confidence of those economies and their desire to join the euro.

I appeal not for debates in the House, but to the press to allow an informed, unhysterical, pro and anti debate. The antis have many of the finest writers, some of the best speakers and command a disproportionate amount of space in the debate. But there are three reasons--the three S's--why the euro matters: stability, security and society.

As the hon. Member for Twickenham mentioned, the euro will bring stability, with a stable inflation rate and stable interest rates, instead of the peaks and troughs that allow none of our businesses or house buyers to plan properly. It will provide security in the new global world economy, where fluctuations of currencies--the holy grail of the part of the Conservative party that is present in the Chamber--can deeply destabilise economies.

Mr. Alan Clark: Will the hon. Gentleman give way?

Mr. MacShane: No. I am coming to the end of my speech.

It is essential that we search for economic security for the British people because they are the ones whom we represent.

Finally, yes, there is a European project for a society that seeks, perhaps imperfectly, to include all in it. As the French Prime Minister, Lionel Jospin says, yes to the market economy, no to the market society.

I wonder whether Conservative Members who read The Wall Street Journal and get many of their ideas from that excellent newspaper read the wonderful article by Charles Murray a few weeks ago that described what was happening in the United States: the break-up of families, the creation of an underclass, the exclusion of millions of people from health care, the need for the American model to be based on an ever widening gap between top and bottom.

I admire much in the United States. I am pro American. We must learn from its dynamism and creativity. Tomorrow, I will publish a pamphlet on ownership, which pays tribute to innovative forms of ownership in the United States, if I may get a modest plug in for another publication, but the European model, with its idea of access to health, education and housing for all, is one which we should stick by. That is another buttressing reason why I unashamedly say that Britain's future lies in Europe.

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If the British people in a referendum say yes to the euro, that will be good for Britain. I welcome the referendum debate because we need a great debate to drain once and for all the anti-European poison that has been injected into the British body politic by too many of the anti-Europeans in the Conservative party who are in the Chamber.

The great talents of those in that historic party who are in the Chamber--I see an array of future volcanoes waiting to burst into life--will be allowed to find expression only when they realise that our nation's future is inextricably linked to Europe, and that Britain must lead in Europe, instead of being an offshore island that is isolated from the future of the 21st century.

10.14 am

Mr. Tim Loughton (East Worthing and Shoreham): I congratulate the hon. Member for Twickenham (Dr. Cable) on securing the debate and, perhaps even more, congratulate the hon. Member for Rotherham (Mr. MacShane) on a stocking filler of a contribution: it filled in for the reluctance of his colleagues to make any contribution to the debate. I for one am much more enlightened about the South Yorkshire press than before he spoke.

Mr. Gardiner: Will the hon. Gentleman give way?

Mr. Loughton: May I just start my speech before taking interventions?

The most remarkable thing about the debate on the very important subject of EMU is that it has taken a Liberal Democrat Adjournment debate to get that discussed in the Chamber. Last Tuesday's announcement was described in The Independent, about which we have heard much already, as


it went on to say. In that announcement, the Prime Minister referred to the whole euro project as "an intensely political act." He reassured us that the Government had


    "resolved the political issues in favour of the principle of joining"--[Official Report, 23 February 1999; Vol. 326, c. 181.]

yet we have had one short statement from the Prime Minister and questions lasting just 67 minutes in total in the Chamber on that most important subject.

On the continent, a different debate is going on. Speaking to the European Parliament in January, Joschka Fischer said that the introduction of the euro was an essential counterpart to making political union the goal of the European Union. He said:


yet our Prime Minister tells us that he is interested only in the economic advantages.

Joschka Fischer went on:


In November, Chancellor Schroder said:


    "Only through the further development of a political union would we succeed in forming a Europe that is close to its citizens."

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    The debate in Europe is on an altogether higher plain, where everyone openly views the euro as merely a rung on the ladder to full political integration. That is what the debate here should be about, yet we have had just 67 minutes in the House to scrutinise the decision of the Prime Minister and Government to rush in with the changeover plan.

Mr. Bercow: My hon. Friend wisely points out the fact that, on the continent, it is recognised that the European single currency is principally a political project. Would he also care to reflect on the frankness and candour of the former Spanish Prime Minister, Felipe Gonzalez, who said in May 1988 that the single currency was the greatest abandonment of sovereignty since the foundation of the European Community? He went on to say that it was an instrument for the project of European integration. Does not that tell us all we need to know?

Mr. Loughton: I am grateful to my hon. Friend for that intervention. He is right; he is much more able at remembering quotes. The same goes throughout the continent, but not in this country.

The euro changeover plan would mean the withdrawal of sterling notes and coins in the space of just 34 months. The Prime Minister set out clinically and methodically, with no regard for the sensitivities of the British public, the details of the plan. It involves an enormous upheaval and enormous cost for industry, business and the people of the UK, but the Government cannot quantify or publish the figure--they cannot even quantify the estimated cost of the plan for Government Departments. However, on the balance of probabilities, Britain is unlikely to join the euro in the foreseeable future if a yes in the referendum remains an unassailable component of the Government's intentions.

Poll after poll shows that a great majority of the British public are against giving up sterling, despite the Government's softening up exercise, spending £7.5 million, so far, of public money on an advertising campaign, and trying to lull the public into thinking that joining the euro is little more than a convenience--they will not have to change their currency at Thomas Cook when going on a booze cruise to Calais, and it will lead to the importation of cheaper cars from the continent. As we know, that is just the tip of the iceberg.

A total of 315,906 people have so far called The Sun to voice their opposition to the euro. The comprehensive British and social European attitudes poll that was conducted last November, the most comprehensive opinion survey of its kind, which was funded by the Government, showed that only 55 per cent. of the UK public support even membership of the EU, down from 77 per cent. in 1991. The poll concluded that a majority of the British public would not cede Britain's national decision-making powers to the EU on a single policy, from agriculture to pollution.

What if a referendum comes up with a no vote? What preparations and what resources are the Government directing now to meet that much more likely eventuality? The Government seem mesmerised by preparing almost exclusively for the euro. What about the rest of the world? It is a fact that only 18 per cent. of this country's gross domestic product is down to the EU. The rest of it is in the UK and further afield overseas. Yet 100 per cent. of

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British industry, British business and the British people will bear the costs of preparing for the euro, as advocated by the Prime Minister last week.

We are constantly reminded that it is in no one's interest if the euro fails, and I certainly agree with that. Equally, and perhaps more so, it is in no one's interest if the dollar fails. The dollar is the currency of 80 per cent. of the world's financial transactions. It is the currency of 60 per cent. of the world's commercial transactions.

We are often accused--we almost heard it a short time ago from the hon. Member for Rotherham--of being little Englanders. However, the siege mentality of Europe and the EU is quite breathtaking. The United States is virtually singlehandedly playing the role of the importer of last resort to salvage the problems in the far east, and is constantly complaining that Europe is not pulling its weight.

We are told that TINA is back--there is no alternative. Last Tuesday, the Prime Minister said quite clearly:


We have joined effectively in all but name, regardless of all the problems and uncertainties surrounding our joining up.

In his statement last week the Prime Minister alluded to this. He said:


But, regardless, Britain should join a successful single currency.

In January, the German Foreign Minister said that qualified majority voting posed no threat to the Germans as Germany would always be able to assemble a blocking minority of EU Members to stop any proposals that they did not like. Therefore, they would be in favour of abolishing the veto. But, regardless, we are told, Britain should join a successful single currency.

In January also the spokeswoman of the SPD in Germany, Ingrid Matthaus-Maier, told British Members of Parliament that forcing Britain to accept tax harmonisation would be the price for joining the single currency, even though it has been estimated that this could increase the UK tax burden by about 20 per cent. But, regardless, Britain should join a successful single currency. That is despite the threat to the eurobond market in London from the harmonisation of withholding tax, which will inevitably overnight drive the eurobond market to Zurich and New York, as it did in reverse back in the early 1980s, under a draft directive of article 100, with the loss of thousands of jobs in the City. The eurobond market supports $2,000 billion-worth of lending to corporates world wide.

The Government's failure to realise that financial markets especially are global and that local controls cannot be imposed in isolation is quite breathtaking. But, regardless, Britain should join. That is despite Oskar Lafontaine openly admitting his intention to shift the burden of taxation on to companies, mobile capital and environmentally polluting activities and encouraging the harmonisation of Europe to sustain each country's capacity to tax capital and preserve employment.

In the UK, we have learned the lesson that mobile capital moves when taxed. The success of the London financial markets is down to the knowledge that capital

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can be moved out at the flick of a switch when things get rough. The Government are constantly boasting about reducing tax rates on companies, in contrast to the higher corporate tax burden in Germany. In the UK, the social security charges on employers account for about 6 per cent. of their GDP. On the continent, the average is double that--12 per cent. However, Oskar Lafontaine was referred to in The Daily Telegraph last month, in an article entitled, "Tony Blair and I march in step on Europe".

Chancellor Schroder also admitted that the true purpose of tax harmonisation is to staunch the investment flight from Germany rather than setting its own house in order by reforming punitive tax rather than the regulatory system.

If Britain were to be dragooned into this process, the public sector would most likely grow from about 40 per cent. of GDP at present to as much as 49 per cent. All the gains made by successive Governments over the past 20 years would be reversed. The plans of the Finnish, who take over the presidency of the European Union later in the year, are to table formal proposals to modify the treaty of Amsterdam to further tax harmonisation. But, regardless, we are told, Britain should join. That is despite all the talk of harmful tax competition between EU states. That is a paradox if ever there was one.

German companies are continuing to invest in the UK rather than in Germany. Foreign companies invest eight times more in the UK than they do in Germany. Mr. Henkel, the head of the German chamber of industry, said only last month:


Let us not forget that the UK has created more new jobs in the past six years than the whole of the euro zone put together. In Germany, unemployment last month rose to 4.45 million, about 11.5 per cent. It is predicted to stay above 4.1 million for the rest of this year. The response of the largest union in Germany, IG Metall, has been to put in a 6.5 per cent. pay claim. Last week, Allianz, Europe's largest insurer, threatened to move its key businesses out of Germany if the German Government pressed ahead with tax reforms targeting insurance companies. But, regardless, according to the Prime Minister, Britain should join.

Despite attempts to grab the United Kingdom's rebate of £2.1 billion under Mr. Lafontaine--it is referred to as a correction mechanism, apparently--regardless, Britain should join, despite the continuing furore over EU fraud and the missing £3 billion, despite the very real threat of deflation within the euro zone and despite the German attempts to devalue the euro and influence the European central bank--only this week the euro fell to a new low. That was over what was described in the Financial Times as


That theme was taken up by the International Herald Tribune, as no doubt the hon. Member for Rotherham will have seen in scouring the press. An article entitled, "Initial

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lustre of new money begins to fade for Europe" ended with a comment from the Federal Reserve head, Alan Greenspan that the


    "euro will be an interesting experiment. It has not yet been tested"--

obviously--


    "It is going to take years before there is really significant tests on that system."

But, regardless, apparently, Britain should join.

Despite all the uncertainty, despite all the threats of harmonisation to the UK plc, despite all the structural weaknesses in the EU and despite the fact that we just do not know where the experiment is leading, the Prime Minister has decreed that we should move up a gear and make haste to join this untested experimental currency as soon as the minor irritation of a referendum is out of the way. Regardless, Britain should join a successful single currency.

If the changeover plan was instead an Ealing comedy, it would be called, "Carry on Regardless".


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