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Mr. Laws: If the hon. Gentleman looks at the performance of the eurozone economies since they adopted the euro, he will find that in seven out of the 12 countries growth has been faster than in the United Kingdom. Also, as many of the problems that those countries—
Mr. Laws: Such as Germany. Many of the problems may be due to other economic and social issues, not least reunification and the labour market.
If the hon. Member for Ruislip-Northwood (Mr. Wilkinson) presented an economic hypothesis to any serious economist saying that simply because particular eurozone economies have been growing slowly in the past couple of years it was evidence that the euro would not be in our national self-interest, he would be laughed out of court. That is not a serious economic analysis.
At least the Government have undertaken that analysis, even if the Chancellor of the Exchequer has written in the conclusions for the Treasury economists at the end of the process as a result of a political decision—[Interruption.] It is no use the Chief Secretary pretending that there are no politics in this; of course there are. He leads me nicely to the third and, regrettably, the final part of my contribution, which is about the constitutional and political issues involved with the euro.
It would be naive in the extreme, even though the Chancellor pretends that these are merely economic issues, to think that they do not have political and constitutional implications, as Peter Riddell said in his evidence to the Treasury Committee. It is obvious to anyone who is an elected politician and has to account for his or her views on the euro that most people in this country are immensely confused about the economic arguments for it—that is not surprising, given their complexity. They are tending to make up their minds on the political and constitutional issues associated with the euro.
I welcome the debate that we have had in recent months and the past year or so on the European Convention and constitution, as it gives us the opportunity to do what Lord Lawson recommended in his autobiography—again, I recommend that work to Conservative Members, who seem not to have read it for some time. It gives us the opportunity to define and limit more clearly the powers of European Union institutions and to ensure that in those areas where Europe can play a positive role—trade, the environment and so forth—it does so, but also to ring-fence Europe from those areas in which it does not need to get involved.
As the Chief Secretary knows, unless we tackle that issue and take on the political and constitutional concerns of our constituents, we will not be able to win a referendum on the issue. The real test—the seventh or eighth test, or whatever—that must have been uppermost in the Chancellor's mind when he made his decision was not only the economics and the fact that he still seems uncertain about trading in the UK's macroeconomic framework for that of the EU, but the politics. The lack of leadership on the issue since 1997 and the lack of any convincing European strategy on the part of the Government have meant that they have been entirely unsuccessful in shifting the opinion polls on the euro. Since 1997, we have been stuck at about 50 to 55 per cent. of the public saying that they would not want to join the euro. That must have been one of the overwhelming reasons why the Government did not decide to call a referendum. Presumably, it will remain that way until the Government, or at least the Chancellor, feel that a referendum can be won.
If we look slightly more deeply into the polls, we find that although people on both sides of the argument have entrenched views—as we have heard today—the overwhelming majority of the British people are waverers. They are willing to be persuaded by the
economic arguments and, perhaps grudgingly, by the constitutional and political arguments on Britain's role in Europe.The Conservative party has undoubtedly played a useful part, even including some of the more outspoken of its members, in highlighting some of the constitutional issues that need to be addressed and dealt with as part of the process of taking Britain into the euro. They have helped to identify some of the public concerns that need to be dealt with before we can win a referendum. My regret is that so many of them insist on doing so from such an extreme and implausible perspective—[Hon. Members: "Rubbish."] The claim made earlier by the right hon. Member for Wokingham that fiscal stability would only mean higher taxes was an excellent example of that perspective.
The current leader of the Conservative party offered a further example of that view when he wrote in 1996—[Interruption.] The hon. Member for Hertford and Stortford (Mr. Prisk) laughs, but I am sure that the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) has not changed his mind since 1996, when he wrote that
- "the EU has become the legal framework not for containing Germany but for increasing German hegemony".
I commend to Conservative Members not only Lord Lawson's autobiography—
Mr. Laws: I am surprised that Conservative Members pooh-pooh the contribution—
Mr. Bacon: Have you got shares in the publishing company?
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sorry to interrupt the hon. Gentleman, but I must remind the hon. Member for South Norfolk (Mr. Bacon) of what was said from the Chair at column 1151 of the Official Report yesterday. It would assist the debate if there were fewer sedentary comments.
Mr. Laws: I am grateful to you, Mr. Deputy Speaker. I understand that these are sensitive issues within the Conservative party and I am trying not to provoke Conservative Members too much. However, I commend the contribution of pro-European Tories: for example, the contribution to the paper on the Convention on the Future of Europe that many Conservative Members of this and the other place signed up to, including the right hon. and learned Member for Rushcliffe. That paper noted:
- "Where it can be clearly shown that we can achieve together what we cannot so effectively achieve separately, we have no hesitation in stating that the EU and its institutions must have the competence and the effectiveness to act for and on behalf of the citizens of member states".
Over the next couple of years, I hope that the Government will be more robust on the issue and that they will show some leadership. In some of the documents that they have produced recently, they have set out some of the powerful arguments in favour of the economic advantages of the euro. I hope that they will help to communicate those to the electorate, but above all, I hope that they will lead on the political and constitutional issues on which they must persuade the public if we are to win a referendum on the vital issue of the euro.
3.31 pm
Mr. James Plaskitt (Warwick and Leamington): It is a pleasure to follow the hon. Member for Yeovil (Mr. Laws), my erstwhile colleague on the Treasury Committee. I am pleased to note that he is still as concise as he was then. I am struck, however, by the extraordinary lengths to which the Liberal Democrats have gone to ensure unity on their Benches on the subject of the euro.
I applaud the Government's approach to the complex issue of the euro. The analysis that has been provided and the accompanying studies should be praised for their breadth and depth. It is striking that we have not yet heard—at least I do not think we have—what the official Opposition think should be analysed and tested before deciding whether it is right to join the euro. They seem to accept that the issue is complex, but they cannot engage with the analysis of whether entry is in the economic interests of the country. The tests should not be rubbished; they should be studied, and if the other parties do not like the way the Government are carrying out the analysis it behoves them to suggest exactly what should be analysed and assessed, rather than taking such a dogmatic position.
I, too, want to address my brief comments to the report of the Treasury Committee. At the end of our report, we reviewed the possible positions that the Government and the country could reach during consideration of euro entry. Indeed, we anticipated and thoroughly rehearsed the position in which we find ourselves at present: namely, declaring that the Government remain, in principle, in favour of entering the euro; and that the economic conditions, as assessed in the analysis, are not yet right, but that the issue will be revisited at appropriate times in the near future. The Government continue to give positive signals, such as undertaking studies and policy initiatives designed to move the convergence process that has already taken place further along. They are, for example, looking into the mortgage structure and into changing the inflation index to that used inside the eurozone.
As my hon. Friend the Member for Dumbarton (Mr. McFall)—the Chairman of the Treasury Committee—mentioned in his contribution, we are talking about a window of opportunity that opens while we stand in this position and how long that window will remain open. It is a window of opportunity, but opportunity for what? It is the chance to play a leading role in shaping the core institutions of economic and monetary union.
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