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Mr. Gardiner: I am grateful to the hon. Gentleman for giving way, and particularly for doing so at the precise moment that he did, because that was his 18th use of "regardless". I swore that if he reached 17, I would intervene.

In fact, the conditions and tests that my right hon. Friend the Chancellor of the Exchequer has laid down ever since he assumed the role of Chancellor, and the tests which were reiterated by my right hon. Friend the Prime Minister in his statement to the House only last week, make it clear that it is not the case that Britain, regardless, will join the single European currency. It is even acknowledged by the hon. Gentleman that it would only be regardless in joining a successful currency. That is not to make any sense whatsoever. It is to make a tautologous statement--

Mr. Deputy Speaker: Order. The hon. Gentleman must make a brief intervention, not a mini-speech.

Mr. Loughton: I think that the hon. Gentleman should reread the Prime Minister's statement and the subsequent questions last week. I was determined to beat the Chancellor of the Exchequer's record for mentioning prudence or financial prudence some 17 times in his Budget last year, and I have done it by a margin of one.

There is little sign of economic convergence between the United Kingdom and Europe; there is every sign of economic divergence. The "one size fits all" policy of the euro zone will lead to serious strains in Ireland, for example. In the past two years, Dublin house prices have risen by 82 per cent. The cost of living in Ireland is soaring; in response, interest rates have been halved. Company profits in Ireland are under pressure as companies become uncompetitive. It is a recipe for boom and bust, if ever I saw one.

The truth is that the Government have made up their mind, and are working on ways of getting round the minor irritation of the fact that the British people do not agree. Slowly but surely, we are being spoon fed the mantra of inevitably in the exercise.

Just last week, in The Spectator, Bruce Anderson said that the "inevitably of gradualism" is the Government's policy. It is changeover by stealth. All that guff about

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"if the economic criteria are right" is subterfuge. As far as the Government are concerned, it is a matter, not of "what if", but of "what when". I fear that such arrogance, in prejudging a referendum, is becoming all too much a hallmark of the Government.

Last Tuesday, the right hon. Member for Yeovil (Mr. Ashdown) welcomed the truth that the Government had crossed the Rubicon, albeit only by the "tiniest millimetre"--which any study of classical history would show to be something of a paradox. Nevertheless, from my study of the late-Roman republic, I was reminded that the phrase was made famous, in 49 BC, by Julius Caesar, who put himself above the law--some parallels may become clear--overturned Rome's constitutional framework, and became a dictator. He cared little for the democratic processes of the Senate, and attended the chamber rarely. By declining to stand down his army at the banks of the Rubicon, he challenged the authority of the Roman people, to promote his own personal self-embellishment and grand design for the map of continental Europe.

Mr. Bercow: Brutus.

Mr. Loughton: Candidates for Brutus may well be in the Chamber later today, on the Treasury Bench.

Five years of civil strife ensued across most of mediterranean Europe, culminating in assassination of the arrogant tyrant--at the hands of his erstwhile allies--while on a rare visit to the now emasculated senate.

The imperial age followed. The constitution of the republic was lost for good. Parliamentary accountability, such as it was in classical Rome, never recovered, as power was vested in the body of the emperor.

The Prime Minister may have more of a Napoleon complex than a Julius Caesar complex. Nevertheless, I trust that, last week, in crossing his Rubicon--as it was described--the Prime Minister has not unleashed a repeat of history.

10.32 am

Jacqui Smith (Redditch): After hearing the speech of the hon. Member for East Worthing and Shoreham (Mr. Loughton), I fear that--not having had the benefit of a classical education, unlike some Conservative Members--I might be at a bit of a loss on that matter. However, I hope that I do have an understanding of economics, which is probably more relevant to this debate.

I thank the hon. Member for Twickenham (Dr. Cable) for initiating the debate, and welcome the opportunity of discussing the issue. I welcome especially the opportunity of considering the Government's performance in meeting the criteria that will have to be met if we are to achieve convergence. I share the Government's wish to achieve that aim, as I believe that membership of the single currency will bring significant economic benefits to the United Kingdom. The Government appreciate those benefits.

I also hope that the debate might give us some opportunity to consider Conservative Members' views on the benefits and future of the single currency. Unfortunately, the hon. Member for East Worthing and Shoreham gave us only a lengthy reiteration of all the old

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Conservative scare stories about Europe, and paid very little attention to the arguments on economic and monetary union.

Many of the untruthful scare stories promulgated by the hon. Member for East Worthing and Shoreham have nothing to do with the single currency. If the stories have any basis in reality, which is questionable, they would have more to do with membership of the European Union than of the single currency. Are we therefore to assume, from what we have heard today from Conservative Members, that they have gone even further and are actively--

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

Jacqui Smith: No, I shall not be taking any interventions.

Are they actively advocating withdrawal from European Union?

Mr. Bercow: Will the hon. Lady give way on that point?

Jacqui Smith: No, I shall not. Is that the Conservative position? Perhaps the Opposition spokesman will tell us.

Mr. Alan Clark: The hon. Lady has asked a question. Will she give way?

Jacqui Smith: No. I should like to finish my speech, so that the Opposition spokesman will have an opportunity to clarify the position.

The hon. Member for Twickenham asked whether we should establish further convergence criteria, and whether the Government are taking sufficient action to meet the current criteria. It might be worth while--as it is the subject of the debate--to review the Maastricht convergence criteria that will have to be met if we are to join EMU. An analysis of those criteria shows that the Government, in their stabilisation policies, have already met the criteria. Perhaps we should put a tick against those criteria.

As hon. Members have already made clear, however, the Government have decided that the Maastricht criteria are not the only ones that shall be considered in judging whether entry to the single currency is in the best interests of the United Kingdom economy. Although the point seems frequently to get lost in Opposition scare stories, that is the most important criterion in deciding whether entry to the single currency would be beneficial for the UK economy.

We should therefore consider the five tests that the Chancellor has set himself, and whether--as the hon. Member for Twickenham asked--the Government are taking active measures to ensure that the criteria are met.

The first criterion is sustainable convergence. It is a crucial test, and I shall deal with it later in my speech.

The second criterion is whether the UK economy is sufficiently flexible to cope with economic change. If we pool some of our economic sovereignty in Europe, thereby altering our ability to change monetary policy, it is important that we should have sufficient economic flexibility. The Chancellor has already placed emphasis on the supply-side of the economy--on productivity and

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new deal measures--to increase economic flexibility, so that, if we do enter a single currency, we are able to cope with economic change.

The third criterion is the effect of entry on investment. The hon. Member for Twickenham said that he had spoken to business people in his constituency about the issue. Very many other hon. Members have had similar discussions in our constituencies. The very strong and clear message that I have received is that business not only wants economic stability--which the Government are delivering--but is concerned about jeopardising investment opportunities if we do not at least seriously consider joining the single currency.

Many businesses in my constituency, for example, depend on Rover Longbridge for business. As a large manufacturer, Rover's attitude to the euro demonstrates that large business thinks that entry to the euro is very important to their long-term stability and investment plans.

The fourth criterion is the impact of entry on the financial services industry. Before 1 January 1999, many people said that the euro's beginning would cause economic meltdown and chaos, and that the project was impossible. In our Treasury Select Committee visits to the City and in other contacts with the City, we have learned that the City has coped well with the euro, although other opportunities could be realised by full membership.

The final criterion is whether membership will be good for employment. I have already touched on the measures that the Government are taking to ensure that the United Kingdom economy is sufficiently flexible to meet the criterion.

Convergence is very important. Ireland has shown the difficulties that arise from joining without sufficient convergence. However, as I said in my intervention on the hon. Member for Twickenham, the question is whether an explicit convergence target is necessary. I argue that it is not. Bank of England independence and a long-term approach to fiscal policy that will enable us to converge are more important.

I am disappointed that there has been no elucidation this morning of the Conservative position, although I still hope for some. There are important questions that need answers. Do the Conservatives believe that Britain should not join regardless of the economic considerations?


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