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Baroness Trumpington: My Lords, I beg to move that further consideration on Report be now adjourned.

Moved accordingly, and, on Question, Motion agreed to.

Business Tenancies (Northern Ireland) Order 1996

7.26 p.m.

The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield) rose to move, That the draft order laid before the House on 15th January be approved.

The noble Baroness said: My Lords, this order implements the recommendations contained in the report of the Law Reform Advisory Committee for Northern Ireland on Business Tenancies, published in June 1994. The Business Tenancies (Northern Ireland) Act 1964 governs the law relating to business tenancies in Northern Ireland and gives the tenant of business premises basic rights; namely, the right to security of tenure and the right to compensation. The committee, following its review and after extensive consultation with interested parties in Northern Ireland, concluded that the 1964 Act on the whole achieved a fair balance between the competing interests of landlord and tenant. The committee recommended that the basic principles of the Act should remain, but that its procedures should be streamlined to promote legal certainty and simplicity.

The Government accepted the recommendations of the advisory committee generally, and the order contains its core recommendations. This is a technical piece of legislation, but it is important. I beg to move.

Moved, That the draft order laid before the House on 15th January be approved.--(Baroness Denton of Wakefield.)

Lord Williams of Mostyn: My Lords, once again I am grateful to the Minister for introducing this order,

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which we support. I commend the Law Reform Advisory Committee for its work. I believe that it is still chaired by Lord Justice Carswell so the quality of the work is no surprise. I believe also that it was set up in the almost forgotten but happy days of a Labour administration, which is another cause for self-congratulation.

On a more sober note, no one has worked harder than the Minister in the cause of the improvement of business, inward investment and the development of employment opportunities. This order will have a part to play in that picture at a time when there are so many difficulties which threaten the very useful and fruitful work that the Minister has done over these past months and years. We support this order.

Baroness Denton of Wakefield: My Lords, I thank the noble Lord, Lord Williams, for his support for the order. I would expect it to come with commendation, given its source. We appreciate the work of the committee. I also thank the noble Lord for his concern for Northern Ireland at this time. It is heartbreaking to see the views and prayers of Northern Ireland for peace ignored so outrageously.

I should like to place on the record that we are cheered by how much was achieved in the 17 months of the ceasefire. There are foundations which a break in the ceasefire will not take away. People who would have crossed the street to avoid one another now work together in community and business. Business leaders have emerged to lead in the commercial world. We have always maintained shareholder value, and it remains. The strength of the local firms and their export record will help us. In Northern Ireland, if the effort amounted to 110 per cent. previously, it is now 140 per cent. We shall continue to simplify legislation. I thank the noble Lord for his support. I commend the order to the House.

On Question, Motion agreed to.

Hong Kong (Overseas Public Servants) Bill

7.31 p.m.

Read a third time.

Lord Chesham: My Lords, I beg to move that the Bill do now pass.

I explained at Second Reading that the Bill is an enabling measure which will allow the Government to offer a package of benefits to certain overseas Hong Kong officers. In particular, we propose to make schemes, by Order in Council, to pay officers compensation for loss of their career prospects and to provide Hong Kong overseas pensioners with a measure of protection for the sterling value of their pensions. Officers will also be allowed to retire prematurely before 30th June 1997 and be entitled to resettlement help.

The Bill was considered in Committee. Noble Lords who spoke recognised the contributions that Hong Kong overseas officers have made to the success

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of Hong Kong and that they should receive benefits similar to those provided to their predecessors in 42 former British dependent territories. It is gratifying that no noble Lord questioned the object of the Bill. There was some discussion also of the proposed pension safeguard scheme which the Government propose to implement, by Order in Council, after enactment of this legislation.

I explained in some detail the considerations which underlie the proposed scheme and why the Government consider that it is fair to Hong Kong pensioners and to British taxpayers. The Bill passed through Committee unamended, and I have no government amendments to propose. I beg to move.

Moved, That the Bill do now pass.--(Lord Chesham.)

Baroness Blackstone: My Lords, I thank the Minister and the other contributors who discussed the Bill. I should like also, as I did on Second Reading, to pay tribute to the Hong Kong Civil Service and its overseas members. They have worked with great efficiency and commitment to Hong Kong and its future. I should like also to wish them well in the months leading up to the handover, and for those who intend to remain in their posts over that period and beyond, I express my hope that the transition will be as trouble free as it possibly can be.

The Labour Party has been happy to support the Bill throughout its consideration in this House and another place. It provides the security needed for retiring civil servants in Hong Kong. We know that it is acceptable to them after a long period of negotiation which we are sure they will be glad is now over. It is consistent with the 42 other similar schemes, and as such, again, is highly acceptable to us. I look forward to the Bill receiving its Royal Assent and being implemented.

Lord Redesdale: My Lords, we on these Benches echo the sentiments of the noble Baroness with regard to the commitment of Hong Kong civil servants who are soon to be pensioners. Although I failed to make any impression on the Bill or to change the Government's mind, this is a worthy piece of legislation. I hope that it is enacted well.

Lord Chesham: My Lords, I thank the noble Baroness and the noble Lord for their support for the Bill. We too would like to pay a great tribute to the overseas civil servants in Hong Kong. We wish them the very best, and hope that everything goes as well as it possibly can. I commend the Bill to the House.

On Question, Bill passed.

European Convergence Criteria: Deficit Assessment

7.35 p.m.

Lord Mackay of Ardbrecknish rose to move, That this House approves, for the purposes of Section 5 of the European Communities (Amendment) Act 1993, Her Majesty's Government's assessment as set out in the Financial Statement and Budget Report 1996-97.

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The noble Lord said: My Lords, Section 5 of the European Communities (Amendment) Act 1993 is about sending information on economic matters to the Commission. It asks the Government to submit to Parliament for its approval a report which assesses the UK's medium-term economic and budgetary position. It also says that this report shall form the basis of any submission of information to the Council and Commission which may be required under Articles 103 and 104c of the Maastricht Treaty.

The Financial Statement and Budget Report 1996-97, the Red Book, provides that assessment. It describes the Government's tax and spending plans and explains how they are related to the Government's economic and political objectives. The last paragraph of chapter 1 of the Red Book states that it forms the basis of submissions to the European Commission for the purposes of multilateral surveillance of economic policies.

In sending that report the Government are merely continuing to co-operate in the longstanding practice of sharing information on economic matters with our partners in the Community. The Maastricht Treaty extended that co-operation with two new procedures: the agreement of broad economic policy guidelines by the Council and the excessive deficits procedure. In stage 2 of EMU the Council can make non-binding recommendations only under these procedures.

This debate is not about the Government's economic strategy which was fully debated in another place after the Budget Statement and in your Lordships' House the day after the Budget, thanks to the ingenuity of the noble Lord, Lord Desai. However, the House may note that this strategy has succeeded in providing a stable macroeconomic framework, sustainable growth, the longest period with inflation below 4 per cent. for almost 50 years, falling unemployment, and sound public finances. This debate is about transmitting this information in the Red Book to the European Commission to comply with our treaty obligations. I beg to move.

Moved, That this House approves, for the purposes of Section 5 of the European Communities (Amendment) Act 1993, Her Majesty's Government's assessment as set out in the Financial Statement and Budget Report 1996-97.--(Lord Mackay of Ardbrecknish.)

7.37 p.m.

Lord Eatwell: My Lords, on the previous two occasions upon which we have debated this Motion, as is required, as the Minister said, by Section 5 of the European Communities (Amendment) Act 1993, noble Lords on all sides of the House protested that regurgitating chapters of the Red Book did not fulfil the conditions laid down in that section. Where, for example, in this ersatz report is there the "assessment of the medium term economic and budgetary position in relation to the ... social ... and environmental goals", as is required by the Act? Nowhere, of course.

Including Section 1(16) to assert that the report does meet those conditions does not make it true. It is typical of the Government to think that asserting something is

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true makes it true. The Minister should realise that that is not the case. I suppose that the Minister thinks that if he ignores the law of the land year after year we on these Benches will eventually tire of complaining of the Government's duplicity and let the matter go. We will not. It is about time the Minister displayed some respect for the law. Surely that is not too much to ask, even of this Government.

What is clearly too much to ask is an unambiguous statement of the Government's fiscal objectives. Two years ago, when the first of these debates took place, the Government's fiscal goal, as set out in the 1993 Red Book (para 2.8) was:

    "to bring the PSBR back toward balance over the medium term, and in particular to ensure that when the economy is on trend the public sector borrows no more than is required to finance its net capital spending".

I pointed out at the time that the first part of that sentence contradicts the second part. Perhaps because of my protest--perhaps not--last year the Government's fiscal goal was changed. Paragraph 2.9 of the 1994 Red Book reads:

    "The Government's fiscal objective is to bring the PSBR back to balance over the medium term".
That is all. There is no mention any more of financing capital spending by the public sector.

Now, lo and behold, in the 1995 Red Book the objective of fiscal policy has been changed again. In paragraph 2.12 we find that the internal contradictions of 1993 have been reinstated and that the Government's medium-term objective is to bring the PSBR back into balance over the medium term--that is, to borrow nothing--and at the same time to borrow no more than is required to finance net capital spending--that is, to borrow something.

That confusion over the very foundation of the Government's fiscal strategy is intolerable. Even if the Minister adopts his customary position of ignoring all questions asked of him, he really must answer this: is the Government's medium-term fiscal objective that government borrowing should be zero? Or is it the Government's medium-term fiscal objective that the Government should borrow to finance capital expenditure? Which is it? To submit a report to Parliament which is internally contradictory is simply unacceptable.

Regrettably, this report is not just muddled, though that would be bad enough, it is also quite literally calculated to deceive. The deficit projections in the report are based on assumptions about general economic performance which are widely accepted by informed commentators to be false. Table 4.2 of the Red Book provides an estimate of the general government financial deficit, the relevant measure of the fiscal deficit under the Maastricht criteria. The deficit is forecast to be 4¾ per cent. of GDP in 1995-96 and 3½ per cent. in 1996-97, which is "close", as the report puts it, to the Maastricht target.

However, as is pointed out in paragraph 4.7 of the Red Book:

    "The projections of the public finances in the medium term are based on the assumptions on the economy set out in paragraph 3.61".

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Let us turn to paragraph 3.61 and find out what those assumptions are. Crucially, we find the assumption is that the economy will grow by 2¼ per cent. in 1995-96 and by 3 per cent. by 1996-97. When the assumption of 3 per cent. growth this year was touted by the Government last November it was just barely credible. Today, three months later, as the latest issue of the Bank of England's latest Inflation Report makes clear, the assumption of 3 per cent. growth is truly incredible.

In the face of the Government's projection of accelerating growth, on which their estimates of the fiscal deficits are based, it is worth examining what the Bank has had to say in the past couple of weeks. In its Inflation Report it stated:

    "Economic growth slowed throughout last year. Non-oil output was about 2½ per cent. higher than in 1994. But the fourth-quarter growth rate fell throughout the year from 3½ per cent. at the beginning to about 1½ per cent. at the end ... a more protracted period of slow growth during 1996, as a result of significant downward revisions to growth prospects in the world economy (especially France and Germany) cannot be ruled out".
So much for 3 per cent.; so much for 2½ per cent., the so-called "slow-growth" scenario used in Table 4.11 of the report. Today's PSBR figures reinforce the Bank's view.

Will the Government now tell us what, in the light of the factors which the Bank of England has identified, is the Treasury's current forecast for the impact of slower GDP growth on the projected deficit outturn?

Of course, the report is not just about forecasts; it is about the Maastricht convergence criteria. In the midst of the confusion and dissimulation, it might be expected that the Government would at least make clear to your Lordships' House what their attitude to the convergence criteria might be. Do the Government believe that the convergence criteria are the appropriate criteria for judging whether Britain should join a single currency or do they not?

I am not asking the Minister to tell us whether Britain will join. I quite understand that the Government wish to postpone that decision to a later date. What I am asking is: what are the criteria which the Government will use to reach that decision? What are the Government looking for? Do the Government believe, for example, that the achievement of the Maastricht guidelines are appropriate criteria or are they looking for something else? If so, what? If the Prime Minister is too confused, or too fearful of Mr. Portillo's xenophobic battalions, to state what the basis of his own judgment might be, can the Minister at least tell us what is the Government's attitude to other member states forming a monetary union?

The Prime Minister's regular attempts to argue that France and Germany should not join in monetary union even if they want to do so simply makes this country look ridiculous. He is pretending that he can fix the rules of a game that he himself does not want to play. The unrestrained glee with which government Ministers greet every difficulty encountered by France and Germany on the path to monetary union clearly reveals

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their attitude to the enterprise. In the face of civil war in the Conservative Party, they want the whole thing to fail; they want their private nightmare to go away.

What happens to the Conservative Party does not matter much. But when party in-fighting determines the international stance of Her Majesty's Government that is enormously damaging to this country's interests. Crowing over the difficulties of our European partners in the pursuit of their political objectives is bound to build up long-standing resentment and to weaken yet further Britain's political and economic standing with our partners.

This position was made crystal clear in a remarkably frank letter sent by the Chancellor of the Exchequer last month to Signor Dini, the chairman of the Committee of European Finance Ministers. In his letter, Mr. Clarke identified with remarkable candour the key questions about what will happen if and when--and it is most likely when--France and Germany forge a monetary union and Europe is divided into "ins" and "outs", with Britain among the "outs".

It is well worth examining Mr. Clarke's points. First, what exactly will be the link between the single currency and the pound? Do the Government imagine that the pound will go on floating? What do the Government assume will be the reaction of France and Germany to the strains of monetary union being multiplied by the strains of the devaluing pound?

Secondly, for those on the inside the logical use of the European Union's structural funds will be to develop and strengthen those weaker regions within the monetary union which have no possibility of devaluation, rather than reinforcing the competitive position of the British who continue to devalue. What will the Government do when the structural funds are diverted from Liverpool and Scotland to Lille and the eastern Lander of Germany? Mr. Clarke informed Signor Dini that he would protest. A fat lot of good that will do!

Thirdly, is it not the case that those who have joined the monetary union, the insiders, will feel that their economic interests take precedence over the economic interests of the outsiders? For example, the policies of the Central European Bank, an institution which due to the incompetence of Mr. Major will be located in Frankfurt and not where it should be in the City of London, will be geared to the needs of the insiders not the outsiders.

Fourthly, it seems likely that once the monetary union is formed the insiders will impose stricter conditions on any new entrants than are currently contained in the Treaty. Will the Minister tell us, for example, what is the Government's reaction to Herr Waigel's proposal that once the monetary union is formed the deficit conditions should be tightened? Do the Government agree with Herr Waigel? If so, does the Minister agree that stricter conditions applied to insiders under Herr Waigel's scheme will be applied to outsiders who in the future might wish to join? The terms for any outsider becoming an insider will be much tougher than the terms for joining at the outset.

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Mr. Clarke asked four vital questions. They are vital to this country's economic interests and vital to our future relationship with our European partners. From the evidence of his letter the Government do not have any answers to the questions which the Chancellor has posed. That is no way to trifle with Britain's economic future. Whether we join a monetary union or not, it is vital that the monetary union be a success for those who do join. Their prosperity is our buoyant market. The Government should be putting forward proposals to aid in the success of monetary union. They should be formulating constructive proposals as to how Britain as an outsider, should it indeed be an outsider, can best adapt to our relationship with the insiders to ensure success for both groups.

A positive approach to the goal which is so important to our French and German partners will surely be in Britain's long-term interests. Unfortunately, that is the last thing which is likely to come from the party opposite. They treat the objectives of our partners with fear and contempt.

This report is rife with muddled definitions, dubious statistics and the failure to address the issues required by the Act. It is but another example of the Government's persistent failure to deal with European affairs in the best interests of the nation. This is a thoroughly unsatisfactory report. The Government should withdraw it and draft a report which actually meets the requirement of the law of the land.

7.50 p.m.

Lord McNally: My Lords, even in this non-philosophical age, we sometimes ask why we are here. Certainly when I found myself thrust with the glory of intervening in this debate this evening I felt that a little research was required. I found that, in another place, the Paymaster General told us very clearly that the purpose of the debate and the Motion is to satisfy Section 5 of the European Communities (Amendment) Act 1993, which is sometimes called the Maastricht Act. That usually means loud boos and hisses off from the Government Benches.

In doing my research and looking at how your Lordships' House and the other place has dealt with this Bill over the past two years, one finds three simultaneous debates taking place. There are a few old folks going down memory lane and having a complete debate about whether or not Britain should be in the Common Market--and I use the old term advisedly because it is usually the same people rehearsing the same arguments that they have rehearsed over the past 30 years. Then there are some more recent adherents who want the debate to be entirely about economic and monetary union and the single currency. Thirdly, I notice that the noble Lord, Lord Eatwell, uses the opportunity to bite lumps out of the Red Book, which he has done again this evening.

However, in his remarks, many of which I agreed with, he touched on the whole spirit of the Government's approach. Many of us find the Government's churlishness objectionable. They have the attitude that they have got to do it; this is the minimum

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that needs to be done; and get on with it. As the noble Lord suggested, that may be because to do otherwise would simply provoke the Europhobes on the Government Back Benches and the Government have lost all stomach for that fight. I think that that is a pity because the opportunity to look rationally at the convergence criteria and to have an informed discussion about how we are progressing on that would be to the benefit of all concerned. After all, a commitment to work for price stability, no excessive government deficit, stable exchange rates and no beggar-my-neighbour interest rates are not just matters of convergence but seem to be a Holy Grail of economic management to which most governments would aspire.

I approach the debate by saying that we on these Benches urge on the Government the need for a positive approach to these matters while they occupy the Government Benches, even though we understand the great difficulties which face them in keeping the party together. Recent opinion polls about economic monetary union and a single currency show overwhelmingly that people do not feel that they are sufficiently well informed about the issues. They would welcome more information and more public debate. That is surely true. If we are, as some of the critics of EMU and the single currency suggest, taking one of the most fundamental decisions which has ever faced this country, and certainly one of the most important decisions concerning sovereignty, parliamentary control and so on, there is a duty on the Government to encourage a well-informed public debate about the issues concerned.

My party makes no secret about the matter. We believe that both EMU and a single currency would be good for Britain. It would increase trade and assist business by removing uncertainty and transaction costs, especially for small and medium-sized enterprises. Membership would place Britain in a hard currency zone, protecting us from the volatility of speculation. It would reduce long-term interest rates, making the cost of borrowing cheaper for firms, individuals and government itself. It would ensure that the City of London and British business are able to gain fully from the advantages of the single market, which will be greatly enhanced through the convergence of European economies and a single currency.

The noble Lord, Lord Eatwell, referred to the City of London. I echo those remarks. I am sometimes very concerned about the aloofness--or is it the cowardice?--of the City at the moment in playing its part in encouraging informed debate. Sometimes the complacency with which I hear City figures saying that the City is so far ahead of any of its European competitors that it can survive almost any threat makes me wonder where I have heard that before. I then remember that it was our motorbike industry in the 1950s which used to think in that way. I am extremely worried about whether London could remain one of the three world-great financial centres if we miss the bus in terms of European monetary union.

I realise fully that this is a debate in which there are passions and strongly-held opinions on both sides. I believe that the Government are failing in the way in which they are handling their treaty responsibilities by

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not encouraging debate at all. The Government should look again at the suggestion made two years ago by the noble Lord, Lord Cockfield, that they should produce, as their commitment under the treaty, not just the Red Book but a proper paper of assessment which could be the basis of a decent and informed debate.

As someone who has been involved in the European debate almost since my student days and certainly through the 1960s, 1970s and 1980s, I am concerned that the way in which the debate about European monetary union and the single currency is developing has uncanny echoes of all the other times at which Britain has deluded itself into thinking that it could make its own pace, stay out of the argument, stay on the periphery of the arguments, and then finds itself pursuing an already moving train. The analogy has been made so often because that is exactly what has happened. We were not there for the iron and steel community because Ernie Bevin memorably said, "The Durham miners won't have it". There are no Durham miners today. We missed the Treaty of Messina. We missed the early development of the Community when we could have set our seal on many of the developments.

Yet again, because of the power and the threat of the Europhobes, the Government are neither playing their part at the heart of the discussions which are taking place in the Community, nor encouraging the informed debate which should be going on in this country. The criticism that that process receives from this side of the House is something that I believe the Minister should answer tonight.

8 p.m.

Lord Mackay of Ardbrecknish: My Lords, although this has been a short debate, a number of interesting and important points have been raised. Perhaps I may begin by telling the noble Lord, Lord McNally, with whom I have not had the pleasure of debating before--there will no doubt be a number of further occasions upon which we can open up on such issues--that I do not believe the spirit of our response to Section 5 is churlish. The Red Book contains all the relevant information for the purposes of multilateral surveillance, which is what the debate is all about, and the UK's participation in that multilateral surveillance.

The one point upon which I agree most strongly with the noble Lord, Lord McNally, is the fact that if EMU and the single currency is to succeed, no matter how many members join it, it is very important that the people of the countries of Europe are taken along with the policies that their leaders make. I believe that it was perfectly clear two or three years ago in the aftermath of Maastricht that it was not only in Britain that there were great reservations; there were reservations in many other countries. One or two factors going the other way could have brought about considerable mayhem--if, for example, the French referendum had just gone a few points in the other direction.

Therefore, I hope we can all agree about the importance, not just in this country but in all European countries, of taking our people along with us. Perhaps

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because of the way that we operate in this country it is even more important for us to take our people along with us. I say that because we debate European matters in both Houses of Parliament in a way that some of our other friends do not. Statements are made by Ministers returning from Council of Ministers' meetings in Brussels on almost every sphere, including fishing, the environment and finance. Indeed, my right honourable friend the Prime Minister himself does so when he returns from Heads of Government meetings. That process is not always replicated in other member states.

I believe that we should at least pride ourselves on the fact that we in this country are trying to have a debate. That debate tends to divide parties just a little. Dare I say that to the noble Lord, Lord Eatwell, who tried to have a bit of sport at the expense of my party? I answer questions in this House day after day on the European Union. It is clear that the noble Lord's party is not entirely and completely united. Just in case the noble Lord, Lord McNally, feels too self-righteous, I commend to him some remarks I made only last night during a most interesting debate introduced by his noble friend Lord Dahrendorf. I had occasion to remind the House of some comments made by the latter noble Lord about EMU and the single currency in an interview with Der Spiegel. That suggests that the noble Lord's party is not entirely united on the question of whether European monetary union and the Euro is entirely a good thing. At the risk of being accused of attempting to reach consensus, I believe that we can all agree that our parties are not entirely united on whether or not European monetary union would be a good thing.

I should like to return to the question of a single currency because I believe that that was the central point of the contributions made by both noble Lords. However, I should like, first, to try to answer one or two of the cross questions put to me by the noble Lord, Lord Eatwell. I would hate to get the reputation of not answering questions. Indeed, I always try to answer questions. If the noble Lord does not always receive the answers that he would prefer, I suggest that that is slightly different from saying that I do not answer the questions.

The noble Lord asked me a number of questions and I am sure that he will not mind if I say that I may not be able to remember, or, indeed, answer, all of them. The noble Lord reprimanded me on certain environmental measures saying that they were not in the Red Book. But environmental and social measures are contained in the Red Book: for example, the promotion of high employment; a high standard of living; a better quality of life; sustainable growth and respect for the environment; environmental measures introduced in the Budget this year; the reduced duty on fuel which produces lower emissions of gases; the continued rise in the duty on road fuels by an average of at least 5 per cent. above inflation with higher rises for super unleaded petrol where there is a lot of evidence of environmental damage; and the new tax on the waste disposed of in landfill sites introduced to use market forces to reduce environmental damage. Therefore, environmental factors are contained in the Red Book.

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I was also asked about the Government's fiscal strategy; indeed, I have been asked about that on a number of occasions by the noble Lord, Lord Eatwell. So it is not a new subject for us to fence with over the Dispatch Box. Our objective--I have said this before--is to bring the PSBR back towards balance over the medium term and in particular to ensure that, when the economy is on trend, the public sector borrows no more than is required to finance its net capital spending.

As regards the 3 per cent. growth forecast being too optimistic, I should point out to the noble Lord that my right honourable friend the Chancellor of the Exchequer sticks by the Budget forecast that the economy will grow by 3 per cent. this year. Growth is supported by stronger consumer spending and by accelerated business investment. In particular, we believe that the fundamentals are in place for growth to continue. We have low inflation; we have sound public finance; and, above all, we have competitive businesses.

There is one point that I should like to make to the noble Lord who thought that structural funds could be diverted from Liverpool to Lille, and so on. I cannot remember the rest of what he said, because I lost it at that point due to the fact that I was trying to work out how to answer him. I should say that structural fund expenditure is allocated and fixed until 1999. There can be no possible diversion until that time. But, at that point, who is to know what other countries will have joined the European Union, the economies of which would actually require the use of the structural funds on a priority basis?

The noble Lord, Lord McNally, mentioned the City of London. I believe that he was unduly pessimistic. I say that because the City is a centre of international financial excellence and we expect it to continue to rise to the challenges of the future whatever they bring, in or out of EMU. London handles more international currency business than all the other European Union centres put together. It is the overwhelming choice as the European headquarters for major international investment banks. Moreover, we have recently seen the tendency of some pharmaceutical companies and banks to move offices and headquarters to London to take advantage of the situation--

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