|Government Assessment for the Purposes of The European Communities (Amendment) Act 1993
Mr. Ottaway: Before the Minister concludes, will she do as I requested earlier and tell us whether interest rates are converging, in the short or the long term?
Miss Johnson: Interest rate setting is for the Bank of England under the rules for meeting the inflation target. It will have a view on the way in which inflation rates are going and make decisions accordingly. That is the advantage of an independent Bank of England.
Mr. Ottaway: Box 2.1 of the report that is the basis of the Minister's submission to Brussels refers to ``EMU and EMU preparations'', making it clear that the Government set the five criteria and will decide whether they have been met. Convergence of interest rates is one of those criteria; therefore, it will not be a matter for the Bank of England.
Miss Johnson: I apologise. I thought that the hon. Gentleman was making a point about interest rates, not economic and monetary union. The five criteria set out there are those that we shall use to assess whether there is sustained convergence and whether it will be in the UK's economic interests to join the euro. As we have said many times, early in the next Parliament we shall look at how we are doing against those criteria. I do not have anything to add to the well-known statement on the Government's position which has been restated and reiterated on many occasions by my right hon. Friends the Chancellor of the Exchequer and the Prime Minister and by many other hon. Members.
The Government have set out their economic and social policies in the Budget document that hon. Members have before them. The policies will help to ensure stable and prudent management of the public finances and at the same time build a fairer society for the people of Britain. They will help to improve incentives to work and provide firms with the right incentives to improve their productivity, helping to raise living standards.
Sharing the information in these reports with our European partners will help us to shape Europe at this critical time in a way that will bring employment and growth to Britain and to other member states. I urge the Committee to support the motion.
Mr. Ottaway: I wish to press the Minister on the interest point. Twice in her introductory remarks she mentioned long-term interest rates. Why? Was it to draw attention to the fact that convergence will be met in the long term? A yes, no or maybe would satisfy me. If that is not the point and she wishes to consider the short-term interest rates, does she agree that there is no difference between now and what happened when the Chancellor decided in October 1997 that the tests that he set were not being met?
Miss Johnson: We have set our sights on measuring ourselves early in the next Parliament against the five criteria, not on measuring ourselves from time to time. We are not doing that and will not do it. I make no further comment, because I have given the hon. Gentleman a straightforward answer about how we propose to do that. We do not propose to do it in the interim.
Mr. Ottaway: The Minister does not know. That is the answer.
The Committee divided: Ayes 7, Noes 2.
Division No. 1]
Madel, Sir David (Chairman)
Bradley, Mr. Peter
Johnson, Miss Melanie
Jones, Mr. Jon Owen
Simpson, Mr. Keith
Williams, Mrs. Betty
|©Parliamentary copyright 2000||Prepared 24 May 2000|