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Mr. Redwood: What is backward about our country under the glorious Labour Government whom the hon. Gentleman supports?
Mr. Sedgemore: I give lectures and present papers on politics and culture, although I fear that you would rule me out of order if I went down that line, Mr. Deputy Speaker. I will invite the right hon. Gentleman to come and listen when next I give a lecture, or send him a copy of any paper that I publish in future, as I am sure he will want to read it.
It is against that background that I want to say something about my right hon. Friend the Chancellor's five economic tests for the euro. They were introduced for two reasons, and the right hon. Member for Kensington and Chelsea was roughly correct in his description of those reasons. The first reason was to kick the matter into the long grass, as the saying goes, so as to avoid a referendum. The second was to enable the Chancellor to establish five hurdles that would give him a veto on euro entry. I do not know what Opposition Members complain about. Why do they get worked up about a Chancellor who has created five hurdles to give himself a veto, and who intends to see that the veto operates for the foreseeable future?
Mr. Love: Will my hon. Friend give way?
Mr. Sedgemore: No, I will bat on for a moment, if my hon. Friend does not mind.
That view was effectively confirmed when I spoke to Britain's top civil servant about the matter. The conversation took place in the great hall of St. Bartholomew's hospital. The mandarin in question was Sir Andrew Turnbull, the Cabinet Secretary and a former permanent secretary at the Treasury. I clearly remember—because I have been telling all my friends about it ever since, and have even written about it—Sir Andrew telling me, in an entirely relaxed fashion, that the five tests were sufficiently opaque to allow people to come to any conclusion that they wanted to, at any given time. I believe that Britain's top mandarin is right about that. The conversation reinforced my view that the so-called economic tests were of extremely limited value.
In his speech today, the Chancellor said rather a lot about housing. I found it difficult to pick up on his point, but I understood him to say that one of the tests for euro entry was balancing supply and demand in the housing market. I do not know why he did not use that simple phrase, but that is what he seemed to be saying, albeit in a fairly convoluted fashion. Then, he said something that was almost unbelievable—that the Deputy Prime Minister was working out how to balance supply and demand and his ideas would come to fruition in 2016. That is not the short or the medium term; it is the long term, in which, as John Maynard Keynes said, "we are all dead". If that is correct, I will be 82 years old, if I am alive, before we even think of going into the euro. I find that astonishing, and even that presupposes that the Deputy Prime Minister is capable of meeting that sort of target. If 2016 is the target, we are probably talking about 2025, in which case I certainly will be dead.
Not so long ago, we had a strange display of unity from the Prime Minister and the Chancellor of the Exchequer over the five tests and entry into the euro. Clearly, I am on the Prime Minister's side on this one, so it was sad to see how the egomaniacs at the Treasury outwitted the straw men in Downing street. In consequence, we are now in the position where the Prime Minister's vacillation and delay have made it impossible for this Government to join the euro. Trust in his determination to join the euro has evaporated not only in Europe but among the British electorate. All the good will of 1997 has gone. It is now difficult to find people who are in favour of Britain joining the euro. I have seriously to ask, as someone who really wants to join the euro, how our politicians could betray the interests of our country and our destiny in that fashion.
Some people have rightly talked about having a long and sustained public debate. No one intends to do so. Every three or four months, we have a couple of speeches from the Prime Minister and then the subject is shoved back into the long grass and we can forget about it. I cannot see how we can join the euro in this Parliament, or indeed, how we are going to have the moral capital to be able to persuade the public to join it in the next Parliament.
Fellow euro-enthusiasts have suggested to me—I hope this will not be misinterpreted—that if we want to enter the euro, the Prime Minister will have to stand down and hand over to someone else. How on earth can we persuade him to do that? Besides, what is the point? His most likely successor will be the Chancellor. He is a wonderful Chancellor, but he is hopeless on the euro. Now hon. Members are beginning to understand the
almost impossible task that we face. The Chancellor promised, in that Tom-and-Jerry dance with the Prime Minister, that hereinafter he would argue regularly and publicly for entry into the euro. Of course, he did not mean it. Indeed, only a couple of weeks after he made the pledge, he went to talk to the money-makers in the City of London. Instead of a pro-euro speech we got the usual curmudgeonly stuff about there being no fudge on the five economic tests and no quick fix. He told us in effect that we would not be joining the euro on his watch.So, we have to get rid of one Prime Minister and then we have to get to work to get rid of his successor. That is not practical politics—it is not a feasible scenario. In terms of practical politics, it means simply this: our Government are never going to take us into the euro and, sad to say, our generation of politicians have let our citizens down.
4.49 pm
Mr. John Wilkinson (Ruislip-Northwood): What a refreshing contribution that was from the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore). He not only speaks his mind, but he has a mind. It is a joy to hear a Member speak in that way and, in particular, to be so unashamedly critical of the Chancellor.
I do not have the hon. Gentleman's background. My background is in aviation—you and I, Mr. Deputy Speaker, will understand this metaphor—and to me the Chancellor seemed to disappear into the stratosphere spewing out chaff. I knew where he was going, we could plot his course—it was to an environment of higher taxation, more regulation and more interference, preferably by himself. Of course, he was in his element. As usual, he had set the stage himself. We can see the monument in the pile of Hansards and euro-style dossiers under his arm. After all that, we were none the wiser, except for noting that he was only too delighted to make policy for the Deputy Prime Minister and to expand his own empire. The charge of egotism levelled by the hon. Member for Hackney, South and Shoreditch was valid.
At the beginning of his speech, the Chancellor claimed that he had perceived a global perspective in the European Union. He may have seen it in the EU but the analysis in his speech betrayed no such perspective. The Chancellor claims to be an historian, but if we look at the way that the world is constructed it is notable that none of the other free trade areas has followed the EU's model. The North American Free Trade Agreement does not require Mexico or Canada to give up their own currency merely because they have a powerful next-door neighbour. Those countries would not dream of giving up their currency.
In Latin America, the subcontinent that I know better, thank God Chile never dreamt of giving up its peso in favour of the Argentine one, just because Argentina was next door and had a bigger economy. In Asia, none of the Association of South East Asian Nations countries dreams of giving up their currency. Even outside the free trade blocs, Taiwan would not give up its currency in favour of that of the People's Republic of China.
The only instance of a movement to give up a currency, apart from the determination of many Labour supporters to give up the pound in favour of the euro, is
in Belarus, where the Belarusians seem to be taking pride in the possibility that they may again adopt the Russian rouble in two years' time. That move is satisfying to Putin and the Russians, as it demonstrates the aggrandisement of the Russian Federation and the extension of its influence abroad.
Mr. Bryant: Does the hon. Gentleman agree that in many periods in the 20th century several Latin American countries gave up their currency, owing to terrible internal economic problems, and took on the dollar? In fact, on several occasions, Argentina gave up not only the peso but also the austral—its created currency—for the dollar.
Mr. Wilkinson: The hon. Gentleman is rather misguided. What happened in Argentina was the monetary dollarisation of its currency; the country locked itself into an uncompetitive situation whereby the peso was overvalued, which was catastrophic for Argentine exports. The case to which the hon. Gentleman should have alluded is, of course, that of Ecuador, where there was a complete implosion of the economy following the election of a clown as president. He raided the state's coffers and the only way to solve the country's economic problems was through full dollarisation.
Mr. Challen: Will the hon. Gentleman give way?
Mr. Wilkinson: No, I shall not give way.
The Chancellor also referred to convergence. Why should we want to converge with an institution as over-regulated, statist, corporatist, over-taxed and bureaucratised as the EU?
We must judge the euro in the context of the proposed European constitution; we cannot assess one without the other. In 1972, I, like you, Mr. Deputy Speaker, voted in favour of our joining the European Community, as it then was, but the Maastricht process was the creation of a single state via economic and monetary union. The proposed Giscardian constitution takes that process further and formalises the EU as a legal entity with all the characteristics of a single state. There would be competences and requirements for member states that no democratic free country such as ours ought, in my judgment, willingly to accept. I do not wish convergence on our nation; I wish the opposite. I wish our country to excel, in the economic field as in the political: a free democratic polity, setting its own laws and its own economic objectives according to the desires of its own electorate, setting an example to our continental neighbours. Taiwan offers such an example to the People's Republic of China, as does Singapore, which only became prosperous when it broke away from the Malaysian Federation, established its own currency and pursued its own economic policy.
The Chancellor also talked about flexibility.
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