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Mr. Brown: When, by his own admission this afternoon, the shadow Chancellor was in the ERM
Cabinet and was the Secretary of State for Employment who lost 1 million jobs, how can he come to the House to lecture us about economic stability and putting the national economic interest first? The Conservatives joined the ERM with no assessment of investment, no assessment of jobs, no assessment of financial services and no assessment of home owners. Interest rates were at 15 per cent., inflation was at 10 per cent., 1 million jobs were lost, 1 million were in negative equity. Set that against our record, which is the lowest interest rates for 40 years, the lowest inflation for 30 years and economic stability, which they failed to achieve.When the shadow Chancellor tries to give us his balanced account of the studies that were produced this morning, he fails to mention the benefits in transaction costs. He fails to mention that 55 per cent. of our trade is with the European Union. He fails to mention that we have 3 million jobs dependent on the European Union. He fails to mention the estimates of an increase in output as a result of membership of the euro. He fails to give a balanced account of the national economic interest. The reason for that is that he is against the euro on grounds of dogma, even if it is in the national economic interest to join. Even if it were good for jobs, he would refuse to join. Even if it were good for investment, he would refuse to join. [Interruption.] Oh, yes. He said in 1997 that he was against the euro in principle. When he was asked for his dispassionate judgment using the non-prejudiced mind of a lawyer, he said that it would be crazy to join. Far from being open to argument and debate, far from being prepared to look at the studies dispassionately, all he wishes to show is that, to his prejudiced mind, we should not join the euro at any time, ever.
I heard the shadow Chancellor on television yesterday morning. He called for a referendum on the euro immediately. When he was asked whether he would abide by the result of the euro referendum, he could not give a straight answer, so we know what the agenda of the Conservatives is. When the Leader of the Opposition was on the Frost programme yesterday morning and was asked whether he would be staying in the European Union, he could not give a straight answer either. They do not want just to stay out of the euro. They want to get out of the European Union. It is time that we fought the prejudices and the myths of the anti-Europeans on the Conservative Benches and built a pro-European consensus in this country.
On housing and taxation, I do not think that we on the Labour Benches can take any lectures from the party that put up VAT on repairs from 8 to 17.5 per cent. Nor can we take a lecture from the party that put VAT at 17.5 per cent. on house extensions. Nor can we take a lecture about the use of a regulator from the party that when in government used a stamp duty regulator in the early 1990s. If the shadow Chancellor does not believe that volatility and instability in the housing market is not a cause for concern that should be dealt with, again, he is failing the national economic interest.
The shadow Chancellor asked whether all the five tests would be reassessed next year. As I said in my statement, if he had heard me properly, the answer is yes, if the review in the Budget says that we should have an assessment. It will be an assessment of all the five tests. As regards the figures for investment, the shadow Chancellor, again to make his point that he is against the
euro in principle, quotes selectively from one set of figures about projects, when the published figures for last year show that there are issues to be dealt with in terms of inward investment, and that is what we are doing.What the shadow Chancellor and the whole of the Conservative party have revealed by their failure to take these issues seriously today is that, when it comes to the question of stability and instability, we are the Government of stability, they have no policy to avoid instability. When it comes to a positive attitude to Europe, we are the party of Europe, they have shown themselves to be wholly against Europe. When it comes to issues of the future, we are the party of the future, they are the party of the past. They spent 18 years in government. They will spend 18 years now in opposition.
Matthew Taylor (Truro and St. Austell): It was nice to see the Chancellor return to form in responding to the Conservatives, and it was noticeable how confident he was in doing that. He was rather less confident in presenting his own policies, perhaps because there may have been a return to form there; saying no but dressing it up as a warm "almost yes", as if we were poised at any moment to join.
Two assessments, three national changeover plans, 18 studies, 2,000 pages, endless spin; but still we have indecision. The Chancellor said that it was prepare and decide. Actually, for the Prime Minister, it was wait and see, and the Prime Minister still has to wait and see. I take it that the Chancellor remains the guardian of the tests. Yet he says that he is in favour of the principle of joining, and today's studies show why.
Joining the euro means more growth and better-paid jobs, on every range of assumptions. It could save an average mortgage payer £15,000 over a 25-year mortgage—£50 a month. It would mean lower prices and the end of rip-off Britain: televisions, computers, mobile phones, perfumes, shampoos, toothpaste and even chips are cheaper in France and Germany. That is why three out of the five tests clearly have been passed—jobs, investment and the City.
As for convergence and flexibility, there are now three positions on the euro. "Never join" is the Conservatives' position, which would make the economic assessments irrelevant. There would be a long response, but no point to it; the assessment would not matter, as we would know the Conservative's answer: "We will not join the euro ever, no matter the economic consequences for this country."
The second option is "wait and see", the old Conservative position and the policy of the last Conservative Prime Minister. In truth, it has been the position of the Chancellor over the last six long years, too. However, that left the Government taking no action for six long years while our share of investment fell, manufacturing collapsed and rip-off Britain continued to rip off Britons.
The third position is, "Yes, in principle". That means taking the action necessary to steer the economy towards joining. The last of those has long been the Liberal Democrat position, and, it seems, the Prime
Minister's position: to take the action necessary to meet the conditions for joining the euro to give us lower prices, higher growth and the increased jobs and incomes that the euro can bring. We want the Chancellor to take the action to get us there. That is the real test for the Chancellor; it is time for his indecision to be over.Having heard all that the Chancellor had to say today, I must ask whether, if he wants the convergence and flexibility that he talks about, he will take the action to get it.Today, the Chancellor's warm words suggest that he will, and we welcome that. But staying out of the euro for so long has already had a cost, in higher prices, lower investment and lower exports. He set out some proposals for action today, but he did the same six years ago and nothing happened. He dressed up no as almost yes and nothing happened.
Will he clarify the timetable for proposing legislation for a referendum? Will the draft lead to a Bill before the next assessment, or before the Budget? When will we debate and legislate to allow the British people to decide at last? Will he set a target date for a referendum if progress is made by the next Budget? If his assessment at the Budget is to have another assessment—as he announced today—how long will it take for the assessment after the assessment after the assessment? There could be four assessments.
Will he enter negotiations with our EU partners on terms of entry—particularly the key issue of the exchange rate—before a final assessment and a referendum for the British people, or will they be asked to vote in the dark? Will he take action to end the boom and bust in housing beyond today's announcements, which are no more than a rehash of announcements made in the Budget? Such action is needed to help people in this country afford a home, whether or not we join the euro.
Just as in 1997, in truth the decision today was no, even if the words were warm. For six years, support in principle from the Chancellor has been all talk and no trousers. The time for indecision is over; warm words are not enough. On the question of whether the Chancellor is going to make progress on the decision—on whether this is really about action—the jury remains out. No wonder that throughout the Chancellor's statement, the Prime Minister looked so gloomy; he clearly has no better idea today than the rest of us about whether the British people will get the chance of a referendum on the euro this year, next year, the year after that, or at any date in the future. Beg my pardon—we do know one thing: the date. It is simply the year that is now missing from the Chancellor's assessment.
Mr. Brown: I am glad that the shadow Chancellor from Truro read more of the background documents than did the shadow Chancellor from Folkestone, although I do not believe that we referred in them to the cost of chips across Europe.
I agree with the hon. Gentleman that housing reforms are absolutely necessary, whatever decisions are made about the euro, and I hope that his party and others will support us in the reforms that we are introducing.
The draft Bill on the referendum will be published in the autumn, and there will be paving legislation on expenditures that are to be incurred by Departments for euro compatibility systems.
On the hon. Gentleman's general point about wishing to join immediately, rather than waiting for the review and the further assessments of the tests, just as the Conservatives never want to join, there has never been a time in the past six years when the Liberals have not wanted to join, whatever the exchange rate, whatever the interest rate and whatever else is happening. Indeed, the leader of the Liberal party, who is missing this afternoon, said that we should have joined on the first date in 1999. If members of his party look at our assessment, they will see that the divergence in interest rates and in the exchange rate from a sustainable level was such that it would not have been right to join in 1999; indeed, it would have ignited the very stop-go problems that we have tried to get away from, and which occurred under the previous Government.
I hope that the hon. Gentleman will now accept that the five tests and our examination of them are a serious effort to look at all the economic challenges, as well as the benefits ahead. I hope that he will join us in attempting to address the challenges over the next year, and that when we introduce legislation to deal with the problems he will support us.
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