House of Commons Hansard Debates for 6 Jul 1999 (pt 23)

Clause 122

Economic and monetary union: taxes and duties

Mr. Francis Maude (Horsham): I beg to move amendment No. 31, in page 90, line 6, after '122.', insert '(1)'.

Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 32, in page 90, line 10, at end insert--

'(2) The said Commissioners shall make a report to the Chancellor of the Exchequer not later than 31st December 1999 on the exercise of their functions and on the amount and timing of the expenditure incurred in respect of subsection (1), and such report shall be laid before the Commons House of Parliament within a period of one calendar month.
(3) The Commissioners shall make further reports at intervals of six months, which shall similarly be submitted to the Chancellor of the Exchequer and laid before the Commons House of Parliament.'.

Mr. Maude: I am grateful to the Financial Secretary, who is now departing the Chamber, for breaking our spirit of consensus, because that saves me the effort of doing so in this debate. That spirit could not last for ever.

We move the amendments because we regard the clause as profoundly unsatisfactory. The principle that we seek to serve through the amendments is a clear one. It is to ensure proper accountability by the Government in all of their spending. Nowhere is that need clearer than where the Government have pledged to spend an unspecified quantity of taxpayers' money in pursuit of British membership of the single currency, or the euro. That is the proposal that is contained within clause 122. It empowers the Commissioners of the Revenue and of Customs and Excise to spend money to prepare systems in advance of any political decision by the House or apparently even by the Government, let alone by the people, to join the euro and to scrap the pound. Systems can be prepared well before there is any question of there being a referendum, when people will have the choice whether they want to scrap the pound to join the euro.

When there is uncontroversial legislation, Departments will often spend some money in advance of a formal decision being taken by the House. However, there is no

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comparison between that traditional arrangement and the device that is being proposed in clause 122. Quite simply, the clause allows any amount of public money to be spent in advance of a decision following a national referendum, let alone of Britain actually joining the single currency .

Mr. Healey: How much would the right hon. Gentleman regard it as acceptable for the Inland Revenue to spend before a national referendum?

Mr. Maude: Questions about how much it is acceptable to spend should not be addressed to me. The Opposition have repeatedly asked what sums of taxpayers' money the clause allows the Government to spend. It is a blank cheque because no amount is specified. No estimate has been put before the House. The hon. Gentleman would do better to intervene when the Economic Secretary rises to reply, to ask her how much taxpayers' money she is proposing to shell out on this project without the people having had any chance to adjudicate on whether they want it to be implemented.

As the Government's turmoil over the single currency in the past month shows, the result of any referendum is no foregone conclusion, although that is what the clause is designed to try to achieve. The Government's natural inclinations show through in a measure that is oblivious to public opinion and wasteful of public money and that cocks a snook at democracy. I suppose that it is the natural solution for a Government who hope that the state can steamroller its way through public opposition into a project which few people in Britain seem to want. As the Prime Minister was forced to admit recently, hardly anyone in the country wants the project.

Above all, we see a pretty cowardly attempt to encourage businesses to do the dirty work of persuading people to want to scrap the pound. In what is no more than a charade now, the Government hide behind the five economic tests that they set out nearly two years ago and delay the day when they must make a public decision. The experts are more and more doubtful whether those tests mean anything. Mr. Buiter of the Bank of England's Monetary Policy Committee has said:

"Except through a fluke, the UK will not join EMU at a time when the business cycles . . . are synchronised."

The requirement or condition that the British economy should be synchronised or converged cyclically with the continental economies is a fundamental condition for Britain joining the euro. Yet here we have a Government-appointed expert saying that that will not happen.

The Deputy Governor of the Bank of England, Mr. Mervyn King, recently commented:

"You would probably need 200 to 300 years of data. You will never arrive at a point when you will be confident that the cycles have converged."

I am referring to experts who have been appointed by the Government. They make it obvious that any decision to join the single currency that is taken by the Government will not be based on certain economic conditions being fulfilled. On the most important one of all--cyclical convergence of the economies--the Government's experts at the Bank of England say that, effectively, that will never be met. That is the clearest sign that, if they

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find themselves in the position to do this, the Government will fudge the conditions and move ahead anyway, which is what they want to do. That is why the Governmentare apparently willing to start spending money on preparations for Britain to join the euro. They wish to soften up the electorate now while maintaining that there is an economic tripwire in relation to the conditions. That tripwire does not exist.

Mr. Geraint Davies (Croydon, Central): Is the right hon. Gentleman aware that the National Audit Office audits the accounts on an annual basis? What is more, the appropriation accounts focus specifically on areas where there might be difficulties of change. Therefore, the amendment is completely redundant. Can the right hon. Gentleman give any particular reason why the expenditure that we are discussing, which will be transparently reported by the NAO in two sets of accounts, should be the subject of yet another layer of bureaucracy and extra costs for his own party political reasons?

Mr. Maude: If that is all the case, that is a powerful reason for the Government, if they are genuine in their desire to be open about these matters, to accept the amendments. They will then be incorporated in the Act, as it will then be, and the requirement will be there. However, the House is being asked, effectively, to sign a blank cheque. We think that that is wrong. If, as we contend, the process is being handled wrongly, a proper requirement for full auditing and for full transparency on a six-monthly basis would seem to be the least that the House, in pursuit of its historic task of controlling expenditure, should require the Government to agree to. I hope that the Economic Secretary has heard the point made by the hon. Member for Croydon, Central (Mr. Davies) and will be persuaded by him that there is no problem in accepting the amendments.

Mr. Davies: The amendments are about reporting, not limiting, the cost. I am contending that the cost is reported in any event. Therefore, the amendments are unnecessary and we should get on with business.

Mr. Maude: It would be advantageous in those circumstances for the amendment to be included in the Act so that there is an additional form of scrutiny. There is no way otherwise of exercising any control over the amount that the Government spend. The hon. Gentleman may be happy to tell his constituents that, in his great role as a Member of this place, exercising his historic role of controlling the Government and controlling public expenditure, he sat on his hands and thought that it was fine to write a blank cheque for the Government to spend. He may think that, but we do not.

Mr. Davies: Will the right hon. Gentleman give way?

Mr. Maude: No. The hon. Gentleman has made two silly points already. He may want the opportunity to make a fool of himself again, but the House will wish to proceed.

There is every sign that the Government are happy to pick taxpayers' pockets to fund a measure that taxpayers patently do not support. There is no sign of Ministers being willing to commit themselves publicly either to the single currency or to an early referendum. I suppose that

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we should not expect an answer from the Prime Minister. He is rather like a first world war general. He is happy to push his colleagues over the top into the line of fire but is pretty reluctant to get tangled up in the barbed wire himself. General Blair is comfortably ensconced in his chateau ordering his faithful troops to clamber over the barbed wire when he blows the whistle. Not a peep from him, be it noted, until it comes to trying to trumpet and spin his new sceptical image on the single currency. Just the other day, he said that it was "daft" to consider entry straight away.