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House of Lords

Monday, 13 September 2004.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Newcastle.

Lord Steinberg

Leonard Steinberg, Esquire, having been created Baron Steinberg, of Belfast in the County of Antrim, for life—Was, in his robes, introduced between the Lord Harris of Peckham and the Lord Ashcroft.

Lord Alliance

Sir David Alliance, Knight, CBE, having been created Baron Alliance, of Manchester in the County of Greater Manchester, for life—Was, in his robes, introduced between the Lord Owen and the Lord Razzall, and made the solemn affirmation.

European Monetary System

2.50 p.m.

Lord Dykes asked Her Majesty's Government:

    What recent assessment they have made of the economic opportunities that would be available to the United Kingdom upon joining the European monetary system.

The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My Lords, the assessment of the five economic tests, published on 9 June 2003, states that, with the five economic tests met, Britain in the euro would enjoy the benefits of greater trade, investment and employment. However, sustainable convergence and sufficient flexibility have yet to be achieved. As the Chancellor announced in this year's Budget,


    "while the Government do not propose that a . . . assessment be initiated at the time of this Budget, the Treasury will again review progress at Budget time next year and report to the House".—[Official Report, Commons, 17/3/04; col. 324.]

Lord Dykes: My Lords, I thank the Minister for that Answer. But does he agree that it sometimes takes an awfully long time for this country to do important things? The Government are facing some complex tasks, including the approach of the general election and, of course, the referendum on the European constitution—very complicated matters. But, from now on, will the Government at long last begin to address the important matter of conveying to the British public the growing success of the euro as an

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international currency both inside and outside the euro-zone and the growing disadvantages that we now face in not joining and in stubbornly refusing to join?

Lord McIntosh of Haringey: My Lords, I cannot agree that we are not continually addressing these matters. The assessment that we published in June last year was extremely—some would say excessively—detailed in 18 volumes, and we still believe that that assessment was the right thing to do at the time. We do not believe that it is necessary or desirable to continue to make public statements updating that basic assessment. Every six months we carry out a study on flexibility and we shall continue to do that.

Lord Lawson of Blaby: My Lords, the European currency has now been in operation without the participation of the United Kingdom for more than five years. What is the Treasury's estimate of the net economic cost to date of our non-participation? Or is this yet another matter which the Chancellor has declined to divulge to the Prime Minister?

Lord McIntosh of Haringey: My Lords, if the noble Lord, Lord Lawson, wishes to pay attention to the tittle-tattle in the newspapers by former employees, he is welcome to do so. But clearly the assessment that has been made cannot be entirely quantified, and there is no single answer to the question that the noble Lord, Lord Lawson, asked. As the noble Lord, Lord Dykes, said, these are complex matters and they are not to be solved by sound bites.

Lord Barnett: My Lords, when the Chancellor initially announced the five economic tests, he said that the most critical one was sustainable economic convergence. Can my noble friend tell us quite how one can ever get sustainable convergence?

Lord McIntosh of Haringey: My Lords, we probably could not obtain sustainable convergence as defined by economists, but if we did it in a more common sense way—I shudder to think what is happening behind me—and used the analysis which was used in June last year, we would be able to see when there is sustainable convergence, and we could see at that time that there was not.

Lord Taverne: My Lords, as far as concerns one of the present weaknesses of the euro-zone—namely, fiscal discipline—do the Government agree that the most recent proposals of the Commission, which put the emphasis on peer pressure, are rather more sensible than a regime of strict rules, severe penalties and no enforcement? Is it not the case that one of the most important matters would be for the Government to stress the importance of the "no bale out" provisions of the Maastricht Treaty, thereby strengthening the pressure from market forces?

Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Taverne, is beyond me in some of the detail, but in principle I agree with what he says. On

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3 September the Commission published an analysis of the stability and growth pact following the decision of the European Court of Justice. Three of the four recommendations of the Commission communication are in line with the Chancellor's view of the prudent interpretation of the pact. I think and hope that that is what the noble Lord, Lord Taverne, agrees with.

Lord Tomlinson: My Lords, does my noble friend agree that it is still the Government's position that they are agreed in principle to joining a successful single currency? If that is the case, why are the Government not doing more to explain the benefits for those countries that are already participants in a single currency that they deem to be successful?

Lord McIntosh of Haringey: My Lords, I agree that the Government are in favour in principle of UK membership of a common currency if the conditions are right. However, to convey a message, it has to be relatively simple and understandable. I acknowledge that to say as we do that three of the five economic conditions have been met and two have not is not the easiest thing to communicate in simple terms.

Lord Pearson of Rannoch: My Lords, do the Government accept the recent analysis from the much respected German Bundesbank, which finds that no economic benefits have accrued to the German economy or to other European economies from the single currency or, indeed, from the single market? If so, would they agree that joining the EMS is, at best, pointless?

Lord McIntosh of Haringey: My Lords, no. The most recent assessment of the situation regarding the euro area, which is the European Commission and IMF estimate last Friday, is that the euro area as a whole is achieving a moderate recovery. They are upgrading estimates of growth for 2004 and downgrading estimates of inflation.

Baroness Noakes: My Lords, does the Minister agree that the interview given by the Chancellor last Friday to the Financial Times made a cast-iron case for staying out of the euro, at least for the foreseeable future?

Lord McIntosh of Haringey: My Lords, no. I have it in front of me. I would be glad to debate it in detail with the noble Baroness, Lady Noakes, but certainly it does not convey that impression to me.

GPs: Referrals to Personal Injury Lawyers

2.58 p.m.

Viscount Goschen asked Her Majesty's Government:

    Whether it is appropriate for general practitioners to be paid for referring patients to personal injury lawyers or claims management companies.

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The Parliamentary Under-Secretary of State, Department of Health (Lord Warner): My Lords, we would find any such practice distasteful but this is a matter of professional medical conduct for which the General Medical Council is responsible. The council's guidance to doctors, called Good Medical Practice, states,


    "You must act in your patients' best interests when making referrals and providing or arranging treatment or care. So you must not ask for or accept any inducement, gift or hospitality which may affect or be seen to affect your judgment".

Viscount Goschen: My Lords, is it not wholly unacceptable to have two professional regulatory bodies at odds with each other on this issue? As the Minister said, the GMC has been extremely clear in its views that this practice is unethical and improper, whereas the Law Society earlier this year amended its own regulations for this practice to allow fee sharing despite the fact that the GMC had ruled it unethical. Will the Government now urge the Law Society to change its regulations back again to outlaw this ambulance chasing?


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