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Mr. Tom Clarke: Will the hon. Gentleman give way?
Mr. Taylor: I should be grateful to the right hon. Gentleman if I could get under way.
Mr. Clarke: Will the hon. Gentleman give way?
Mr. Clarke: I am extremely grateful to the hon. Gentleman. First, I thank him for his kind remarks, but, secondly, all my remarks related to the third paragraph of Her Majesty's Gracious Speech.
Mr. Taylor: I am grateful to the right hon. Gentleman for that clarification, as is the House. Nevertheless, I hope that he welcomes the privatisation of the CDC, the proposal for which I was delighted to see in the Gracious Speech.
When I was a Minister at the Department of Trade and Industry I did quite a bit to achieve a leap forward for the CDC. On a visit to Havana, I was face to face with President Castro. CDC negotiations to do something to help Cuba--that exemplaire of potential capitalism under President Castro--had run into the sand. I decided to push them through as best I could, and I persuaded President Castro to remove the only remaining obstacle to the agreement with the CDC, which was the reduction of some taxes. President Castro said, "Is that what you recommend?" I said yes, and he turned to his Finance Minister and said, "Reduce taxation; we are going to sign this deal tomorrow."
That is the way that things can be done in an enlightened regime, and the CDC is still active on the island of Cuba. I hope that its new-found freedom, which was referred to in the Gracious Speech, will give it even more power to do deals. I genuinely think that the CDC does some excellent work around the world, and is clearly no longer confined to the territory of the Commonwealth.
I was not minded to refer too much to the euro, but I was galvanised by the now-absent right hon. Member for Llanelli (Mr. Davies), who decided that the European Movement was in a state of agitation because we seemed to be co-ordinated. I was also inspired, in the opposite way than he intended, by the Chief Secretary, who failed to respond to my intervention.
The reality is that it is not the European Movement that is becoming agitated; as usual, those of us who are part of it are calm and collected as we approach the first day of the euro. The people who are agitated are those who have suddenly realised that the euro is a serious, practical currency which is about to be dealt in within what is effectively 80 per cent. of the single market--the single market that we created as Conservatives, under the great leadership of Baroness Thatcher.
We created the single market, and 80 per cent. of it will have a single currency within a matter of days, yet too many people seem to think that that is something that we do not need to bother about because it is only another foreign currency, or they believe--even more alarmingly--that it is something that we have to froth at the mouth about.
Unlike the hon. Member for North Durham (Mr. Radice), I am not referring to The Sun, but to that real third-rate broadsheet, The Sunday Telegraph. It not only frothed at the mouth, but, so weak are the grounds for its argument for opposition to the euro, it decided that it had to put on the front page of last Sunday's edition an opinion poll that was largely conducted between January and April 1997. That is hardly something that would usually be contemporary enough to get on to the front page of what used to be a quality newspaper.
Far from The Sunday Telegraph headline being accurate, it revealed that, even on the terms that it expressed about its own opinion poll, opposition to the euro had reached its lowest level for quite some time. In other words, opinion was gradually moving in favour of at least considering the euro.
I know that public opinion is still against by a larger factor than I care to contemplate, but let us ask ourselves why. For a start, very few of the positive arguments about the euro have been put forward. Secondly, the Government--to be fair--are saying that they could conceive of entry and that it is a possibility, and that they have a few criteria--five, at the moment--which, although they are subjective rather than objective, could be met at any stage. Those criteria give them a fig leaf that enables them to say, "Perhaps we have to watch this for a little bit longer."
Although they are at least doing that, the Government refused to state explicitly in the Queen's Speech or in the debate--so did the Chief Secretary, when challenged by me--that their policies on the economy are designed to enable this country to make the decision to join the euro, if the other economic conditions and circumstances are correct.
Whether one is for or against the euro, we can all agree that entry will not occur by accident. There must be clear political will for it to occur, and the policies that will enable us to converge. We must prepare not only industry--which is at least mentioned in the Gracious Speech--to start dealing immediately in what will be one of the most powerful reserve currencies in the world and something that will rapidly condition the way that our domestic economy is run, but the technical aspects, which are part of conversion and preparedness.
Many companies are saying to hon. Members on the Conservative Benches--and to hon. Members on other Benches as well--that they want a clearer steer from the Government. They do not want nice, comfortable waffle and they do not want the Government to say, "Perhaps industry should take the lead, because we do not want to offend the Murdoch press." Companies want the Government to be explicit about their intentions and how they will deliver them.
How will the Government so change their fiscal policy to accommodate the fact that, if they are serious about entering the euro within a matter of years, interest rates are likely to fall? Indeed, they will have to, unless continental rates converge towards ours, something that
Oskar Lafontaine may provoke. I am afraid that myhon. Friend the Member for Louth and Horncastle(Sir P. Tapsell) has left the Chamber. He concentrated on the role of Oskar Lafontaine in the European debate, but I am referring to practical matters. If interest rates in the United Kingdom are to fall, what fiscal measures will be put in place so that the economy can deliver growth and stability, which the Government have said are their benchmarks for economic management?
The other vital factor--
Sir Teddy Taylor:
Will my hon. Friend give way?
Mr. Taylor:
We have a 15-minute limit on speeches, but bearing in mind our long-standing friendship, of course I shall give way to my hon. Friend.
Sir Teddy Taylor:
Is it not the case that there are low interest rates in Europe and rather higher ones in Britain because unemployment is high in Europe and not so high in Britain? Is that untrue?
Mr. Taylor:
I am grateful to my hon. Friend, who leads me right into my next point. The euro is not destined automatically to succeed. Those of us who are prepared to contemplate entry do not also say that it must succeed because we would like it to succeed. That would require a series of clear political decisions which could influence its ability to succeed. Perhaps the euro will drift sideways, or perhaps it will fail. Failure is widely understood by those on the Conservative Benches not to be in Britain's national interest.
My hon. Friend the Member for Rochford and Southend, East (Sir T. Taylor) is right: some key decisions will be made. How will the economic and stability committee--the Euro XI--make up its mind about how management of the fiscal elements of policy should be set alongside the European central bank's management of monetary affairs? What signals will be given? Will the central bank decide that it will target an external exchange rate for the euro?
Those are big questions, and there are many more. How will labour flexibility be used? What adjustments will be made between regions and countries within a single monetary policy zone? Those of us who are in favour of the euro do not deny that those questions exist. We are saying to the Government, "What is your position on each of those issues?" If we intend to join, we must make sure that the character of the euro is something with which we are comfortable. We must make our voice and our views heard in the European Union, although we are not part of the Euro XI committee.
There will, of course, be differences between Opposition Members and Labour Members in regard to the answers to some of those questions. In what must inevitably be a short speech, I shall not go into what those differences might be; but, regardless of whether differences arise over the way in which the economy, the Euro XI committee and the central bank should govern themselves, we must contribute to the debate. A letter published in The Independent on 30 November,
which I signed, along with the Chairman of the Civil Service Select Committee--who also chairs the European Movement--states:
Over the next day or two, the European issue will continue to bubble, but by the beginning of January many people in this country will realise that something that will increasingly influence the way in which they conduct their business, and the way in which we conduct our domestic economy, is something that the British Government are fudging, in terms of commitment. Perhaps I am wrong; perhaps the Secretary of State for Trade and Industry was right to tell the Confederation of British Industry that it was "only a question of when". I should like the Minister who replies to tell me that the Secretary of State was right.
Perhaps the Secretary of State's predecessor is anxious to intervene and tell me that now, given the loyalty that exists between Ministers and their successors. I hope, however, that a clearer commitment will be given. The only reference to the euro in the Gracious Speech is a reference to the need to prepare British industry for it--and, as we have seen from an advertisement in the Financial Times last week relating to more than 100 business men and the 150 who have followed, British industry wants a good deal more from the Government than it is currently receiving. If it does not receive more, there will be considerable tensions during the next few months. Moreover, as ICI's chief economist has pointed out, if we are likely to be out of the euro for a protracted period, that will have a severe effect on British investment decisions, which can mean only one thing: more British companies will decide to locate within 80 per cent. of the European single market, rather than in the United Kingdom.
I would have liked to say more about the role of technology. The Government have done a constructive job in highlighting some of the issues that I tried to highlight when I was a DTI Minister, relating to the role of technology in the economy. Electronic commerce is incredibly important, and, if we do not do what is necessary to provide the right framework, the nation will suffer economically--in terms of every aspect of the economy. I know that Conservative Front Benchers are a little more hesitant, but I welcome the move to try to provide a framework for digital encryption and digital signatures. Without those, we shall not benefit from the advances that may be made by the United States and other competing economies.
"On the key issues now emerging--whether to adopt an external exchange-rate policy for the euro, how to operate the growth and stability pact and whether or not tax approximation may be desirable in a single currency zone--Britain's voice must be at the centre, not the margin, of policy formation."
The possibility of such an influence is a much clearer indication that the Government intend to join the currency. I urge Ministers not just to say, "Here is a positive European in the Conservative party: we can pat him on the head", but to give me--a Conservative who is also a positive European--some concrete answers. Some of us are anxious to be given such answers. If others are not prepared to ask the questions, I am. They are difficult questions, and they need careful consideration.
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