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Lord Mackay of Ardbrecknish: My Lords, I can assure the noble Lord that I shall deal with those points in my summing up.
Lord Eatwell: My Lords, if the Minister cannot answer that question, can he clarify something else that Mr. Rifkind said today? On "The World at One" Mr. Rifkind said, referring to the single currency:
- "We are very much against joining in 1999".
However, the noble Lord, Lord Mackay, told this House on Monday that the Government's policy was,
- "we will ... enter EMU only if we believe that it is in our national interest".--[Official Report, 17/2/97; col. 455.]
Which is it? Are we keeping the issue open?
Lord Mackay of Ardbrecknish: Yes.
Lord Eatwell: I hear the Minister saying "Yes". We are keeping the issue open. But the Foreign Secretary says that we are very much against joining in 1999. The Minister appears to be reluctant to answer these questions. Perhaps he is trying to decide which side he is on.
At five o'clock this evening the BBC reported that at least three Cabinet Ministers, including Mr. Brian Mawhinney, had lined up behind Mr. Rifkind. It did not tell us how much support the Chancellor enjoyed. Perhaps the Minister will support the lonely Chancellor. I am sure that the officials in the Box would be ready to provide a sign-up list for those on the Government Benches who wish to do so.
After all, to his credit the Chancellor has maintained a consistent argument in support of the Government's refusal to say whether or not they will enter the single currency. He has argued that by refusing to say yes or no at this stage he has preserved Britain's bargaining position. He has played his cards close to his chest. The Foreign Secretary has totally destroyed the Chancellor's bargaining position. The Chancellor can no longer claim in negotiations that Britain is neutral on the issue.
The Foreign Secretary has said that Britain is very much against joining in 1999. The Chancellor can no longer claim that Britain has the right to be fully consulted on the organisation of the European Central Bank and the future of ECOFIN; no longer can he claim that Britain has an equal voice in discussions on the stability pact. The Foreign Secretary has kicked away the chair on which the Chancellor has been sitting. No longer is he sitting at the conference table; he is sprawled on the floor.
What has the Prime Minister had to say about it all? Has he supported his Foreign Secretary or his Chancellor? When asked to comment on the statement of the Foreign Secretary, did the Prime Minister use the word "hostile"? No. Did he say that it was a slip of the tongue? No. Did he say that he was very much against joining in 1999? No. The Prime Minister said that in his view we should enter the single currency only if it were "positively beneficial" for Britain. Let us consider that statement. Can one imagine the Prime Minister saying that Britain should enter the single currency if it were not positively beneficial? Can one imagine Mr. Major saying that, although he knows it is harmful, we should enter the single currency all the same? Of course not. Everyone on all sides of the debate agrees that if something positively beneficial can be done for the British economy it should be done. If it is not positively beneficial it should not be done.
The statement of the Prime Minister is meaningless. It is the statement of a Prime Minister with no policy other than procrastination. He is the Micawber Prime Minister, hoping for something to turn up to rescue him from the Conservative Party. At a time when his Foreign Secretary and the Chancellor of the Exchequer violently disagree with each other--or are at war, as the noble Lord, Lord McNally, said--on the most vital issue facing the country since the Second World War and his government are in total confusion, the Prime Minister is incapable of providing the leadership that the nation deserves.
All that the country can be sure of is that the Prime Minister will follow wherever his party leads. He is a weak man, with no policy other than procrastination.
He is terrified of his own party and incapable of providing leadership on the most vital economic issue facing this country. The Prime Minister has today demonstrated beyond all reasonable doubt that he is incapable of leading his party, let alone the country. His party has today shown beyond all reasonable doubt that it is incapable of providing this country with the government that it deserves. It should go--now.8.24 p.m.
Lord Mackay of Ardbrecknish: My Lords, we have certainly had a debate this evening which is different from the one that we normally have on these matters. I welcome it because it allows us to cover new ground. I am more than happy, as will be obvious in a few minutes, to lead from this Dispatch Box, if indeed I am the only Government Minister who speaks about such matters from such a platform this evening. Whether or not that is greatness being thrust upon me I am not entirely sure.
I start with the comments of the noble Lord, Lord McNally. There have been a number of extremely good debates in this House on the European issue and the single currency. I was not present at the debate one or two Fridays ago. That may have been a little below par. Perhaps it was because the Liberal Party made the mistake of calling a Division, which, if I remember rightly, it failed to win. I say to the noble Lord, Lord McNally, that among those very good debates there have been some interesting observations by his noble friend, Lord Owen--if indeed the noble Lord, Lord Owen, can still be counted as his noble friend. The noble Lord, Lord Owen, made a very interesting speech, as did the noble Lord, Lord Dahrendorf, in a debate last summer in which he expressed very considerable doubt about the single currency. Only on Wednesday 5th February the noble Lord, Lord Ezra, came to his feet in one of the many question and answer sessions on these matters. He accused me of misrepresenting the views of the Liberal Democrats when I suggested that it would sign up for anything in Europe and whether it was good or bad for Britain did not much matter. The noble Lord, Lord Ezra, said that it was his party's view that we should keep an open mind, which he believed was also the Government's view, and if the situation was such that it could join it would do so. I welcome the noble Lord, Lord Ezra, and his party to my train in this regard. I believe that it is a change of stance that more closely resembles the position I have taken from this Dispatch Box for the past two or three years on these important matters.
The noble Lord, Lord McNally, was critical of Britain's economic performance. He aired before us some statistics which he believed showed us in a bad light. If one looks at the Commission's 1997 annual economic report, which was written as a result of submissions last year by the United Kingdom and other countries, it states that the UK recovery was of longer duration than that in the rest of the EU and was sustainable with inflationary pressures subdued. It
cites the United Kingdom Government's policies as the cause of this favourable outcome, in particular the macro-economic policy setting and the supply side reforms. It notes that fiscal consolidation resulted in a significant turnaround in the public finances and that, post-Budget, the deficit was expected to meet the 3 per cent. criterion in 1997. Further, it expresses the view that the Government should meet their target of 2.5 per cent. underlying inflation.The report also notes that the UK labour market continued to strengthen. It states that this strong performance could be attributed to the Government's deregulatory labour market measures. The Commission further recognises that the UK's unemployment rate of 7.9 per cent. was much lower than the EU average of 10.9 per cent. More recent figures for November 1996, using Eurostat and OECD bases for collecting those statistics, put the UK at 7.5 per cent., whereas Germany is at 9.3 per cent., Italy at 12.2 per cent., France at 12.5 per cent. and Spain at 22.3 per cent.
While I do not believe that all economic indicators can show a green light at the same time, unemployment is a serious economic measure because it affects the wellbeing of lots and lots of our fellow citizens. I believe that our success in reducing unemployment over the past four years is very significant. It is interesting that the Commission has drawn particular attention to that.
I was delighted to hear the noble Lord, Lord McNally, express appreciation of the amount of trade that the UK did with the European Union. He is absolutely right. But we also do a lot of trade with the world. One cannot forget that aspect. To a certain extent, in trading matters we look both ways. As I have said on a number of occasions, it is not an either/or operation, which is why it is so important that fellow members of the European Union are economically successful and prosperous. We depend upon them to sell a lot of our goods and services. Equally, we depend on the rest of the world. We are a very big player in international trade. I do not believe that the noble Lord, Lord McNally, would disagree if I said that we should not allow Europe to become inward-looking and forget that it must trade with the rest of the world. That is very important.
The noble Lord, Lord McNally, made some remarks about inward investors. But, by Jove, they are still coming in significant numbers. We continue to see announcements of significant inward investment coming not only from other parts of the world but from Europe. Companies such as Siemens, which I have previously mentioned at the Dispatch Box, are coming to this country and setting up in north east England, where they are very welcome. They are deciding that Britain is the place to manufacture.
As regards the international aspect of the City, London handles more international currency business than all the other EU countries put together. London will continue as a major international financial centre whether or not we are in EMU and whether or not EMU comes into existence. The noble Lord said that we were indulging in wishful thinking if we thought
that EMU would not happen. We have always made it clear that we understand the strong commitment to EMU in other member states. But we believe that the decision as to whether to join should be for us to make in the interests of the British economy.One of the problems about today's debate was well illustrated in a report for the Economic Intelligence Unit written by the noble Lord, Lord Currie. I am sorry that he is not present, but I shall not quote anything that he will find embarrassing. One of the many interesting comments he made was:
- "It ought to be clear at least that issues as big as these"--
that is, joining a single currency--
- "require the most careful consideration. The questions involved are complex and reasonable people may well disagree about them. Yet all too often the debate on EMU is conducted in terms of headlines and slogans from entrenched and unalterable positions, often without regard to the facts".
While the noble Lord, Lord McNally, may point a finger at some Members who normally sit behind me, I can also point a finger to some of the Euro-fanatical friends by whom he is surrounded. The matter requires a great deal of serious consideration.
From the point of view of the British economy, it is interesting that the noble Lord, Lord Currie, states elsewhere in the article:
- "Labour market flexibility will greatly help with the implementation of EMU, but is necessary with or without EMU for a successful and dynamic European economy".
That is a message that my right honourable friend the Prime Minister took to the Continent recently in his speech and it is a message that my right honourable friend the Foreign Secretary is taking to the capitals of Europe as he makes his speeches. The noble Lord, Lord Currie, goes on to state:
- "EMU could hinder business: for instance, by encouraging Europe-wide comparisons in wage negotiations, or by promoting further social legislation as part of a broader trend towards federalism. These dangers need to be guarded against".
I could not have put it any better myself.
I turn to the comments made by the noble Lord, Lord Eatwell, who seems to have had an interesting day reading the press. I too had an interesting day reading the press. I found of considerable interest the article by the noble Lord, Lord Desai, which was published in the Sun--
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