| Previous Section | Index | Home Page |
Dr. Alan Whitehead (Southampton, Test): Does the right hon. Gentleman accept that exchange rates, which vary for reasons other than those that he suggests, also provide the shocks and are not the unilateral shock absorber that he describes?
Mr. Portillo: Yes, I accept that. It is why I am pleased that we have an independent Bank of England. I am also pleased that I was the person in the Conservative party in the position of accepting an independent Bank of England as a good thing. It is one thing that has provided us with a little more stability. However, the hon. Gentleman has to understand the context. Even if we were part of the euro, it would continue to oscillate against the dollar and other currencies. Those people who believe that stability is available and can be grabbed as a great boon are economically ignorant.
Mr. Portillo: I want to make progress.
On the political factors, most elections in most countries are held on the subject of economics. I want to stress that to Labour Members. When people vote, they are voting on two different programmes—one that is rather more to the left and one that is rather more to the right—and they make a choice. When people in Ireland go to the polls and want to vote against high inflation, how do they do it? It does not matter whether they vote for Fine Gael, Fianna Fail or the Labour party, because the policy is not made by the Government of Ireland; it is made by the European Central Bank. If people in Germany object to unemployment or being in recession year after year and want to vote against it, it does not matter whether they vote Social Democrat or Christian Democrat, because those parties do not make the policy; it is made by the European Central Bank. Who votes for the European Central Bank? Nobody.
Mr. Laws: And the Bank of England.
Mr. Portillo: I am pleased that somebody has mentioned the Bank of England. I cannot believe that even people in opposition do not understand that the Chancellor of the Exchequer who stands at the Dispatch Box is the man who is responsible for the inflation target in this country. He is responsible to this House for that target and he sub-contracts to the Bank of England the mechanistic task of setting the interest rates that will achieve it. He is responsible to us and we are responsible to the people who elect us, but no such conditions exist in Europe and nobody has any plans to put them in place.
Everybody admits that there is a democratic deficit in Europe, but nobody seems to have any solution to that problem. That is not surprising, because, in order to fill the democratic deficit, there would have to be a European political polity. There would have to be common European political institutions and common specific political values shared between Europeans. On going to the polls year after year, we would have to vote on common points and for common candidates, parties and programmes, and none of those things exists.
The hon. Member for Edmonton (Mr. Love) asked whether I could imagine ever changing my mind about these issues. If all these things changed, we could look at them again, but he will understand that the creation of institutions in Europe that would truly reflect European democracy will not happen overnight. Indeed, such things will not happen in many decades. As a parliamentarian, he should be extremely concerned that economic decision making, which until now has been not only the preserve of democratic societies, but the most important political issue within them, has passed to an institution that is not accountable or democratic, and that nobody knows how it will be made democratic and accountable in the future.
The Chancellor of the Exchequer was right to oppose the Prime Minister. I believe that he knows perfectly well that Labour Governments have often fallen in the past on trying to fix the exchange rate. He is a historian and he understands that perfectly well. He also understands perfectly well the political point that he is not prepared to admit to us and the people of this country—that if we join the euro, he will give up political power. In other words, he will no longer be the person who makes the key economic decisions. He knows that perfectly well and he is not prepared to give up power. At least, he will not do so until he has a new and different address to move to. Perhaps that will not be so very far in the future.
The Chancellor of the Exchequer has, by opposing the Prime Minister's economic policy, dished the Prime Minister and led to a collapse of the Government's economic policy. He has demoralised the Prime Minister to such an extent that we now see a complete absence of radicalism from him across a range of domestic issues, and, thanks to the Chancellor, who in this particular has been right—he has been right to oppose the Prime Minister—he has achieved the broader political result of leaving this Government absolutely becalmed, with nowhere to go and no sense of direction.
4.3 pm
Keith Vaz (Leicester, East): What a depressing speech from the right hon. Member for Kensington and Chelsea (Mr. Portillo). I cannot imagine which country he could have been talking about. We have a country that is run by an excellent Chancellor of the Exchequer and the most economically successful country anywhere in Europe. I hope that the right hon. Gentleman picks up his mood before he appears on television this evening in his weekly programme. I shall have words with my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) otherwise, and make sure that she comments on his speech.
I am delighted to participate in this debate. I welcome the fact that we have had so many debates on Europe and European issues over the past month. Opposition Members and those from the Liberal Democrat party—it is a shame that no more of them were persuaded to come to the Chamber—who criticise the Government and the business managers for not providing enough time to discuss European affairs will probably have overdosed on Europe in the past week. We had a big debate on the Convention yesterday and we are, of course, discussing the euro today.
I was one of those Members of the House who was disappointed with the Chancellor's decision when he announced on 9 June that the five economic tests were not met. I had very much hoped that he would say that we had met those tests and were ready to join the euro, but I trust his judgment on these issues. There is no point in having a set of tests, looking at an assessment, having the kind of monitoring and analysis that has been undertaken over the past six years and then disagreeing with the person whose responsibility it is to look at those decisions, examine the detail of the assessments and come to a conclusion. I very much value the work of the Treasury Committee and welcomed the speech by my hon. Friend the Member for Dumbarton (Mr. McFall). Everyone has a role to play in the discussion.
Although I was disappointed with the result on 9 June, I welcome what the Chancellor has said about leaving the door open on reassessment. I hope that the Chief Secretary will be little clearer about the envisaged timetable. I understand that there is to be a review of the reforms the Chancellor has announced over the past few months and that it is possible that a further assessment will be announced at the time of the next Budget. If that happens, we are on track to have a referendum in this Parliament—that is an extremely important possibility. We should try to avoid the kind of pre-announcement hysteria that greeted the Chancellor's announcement on 9 June; that went on for several months and created a great deal of instability.
Mr. Redwood: The hon. Gentleman says that he was disappointed with the Chancellor's announcement. Was that because he felt that the Chancellor was wrong in his assessment or because the Chancellor is clearly not moving the British economy to converge with euroland?
Keith Vaz: I do not think that he was wrong. As I said, I trust his judgment. As Chancellor of the Exchequer, he is far more able to make such decisions than I am, and he has an army of civil servants and an excellent Front-Bench team to assist him. I am happy that they have
made the judgment, even though I disagree with it. Having done so, however, let us have a clear timetable to facilitate the reassessment, which has not been ruled out. The Chancellor was very firm in what he said to the House on 9 June—that is, that he is very much in favour of the euro if the tests are met and if the conditions are right. That remains the policy of the Government. Certainly, when I served as Minister for Europe for two years, it was precisely the policy that I espoused—when the conditions are right, we will join. Therefore, please let us have a timetable so that we can put the matter to the British people in plenty of time for an all-singing, all-dancing referendum campaign that allows everyone to participate in the discussion. It should not be a three-week campaign—it has to last for months, because it will require us to go round the country explaining the policy and listening to what ordinary people have to say.The shadow Chancellor reminded us of the bus that I took around the United Kingdom. It was called Eunice. We went to different parts of the country to talk about the importance of the European Union. The shadow Chancellor was wrong to say that our intention was to talk about the euro: in fact, it was to talk about the benefits of being part of the European Union. The only place that we did not visit was Smith square. I would have liked to have the opportunity to convince members of the Conservative party about the benefits of membership of the European Union. My ministerial colleagues and I met thousands of people, the vast majority of whom said that they were very much in favour of the European Union. They wanted us to remain as members of the EU, but did not know enough about the euro. That is why it is extremely important that in the weeks and months until the Budget, and until we know whether there will be a fresh assessment, there should be such public engagement.
On the day after the 9 June announcement, the Prime Minister and the Chancellor said in a press conference at Downing street that it was very important that leading members of the Cabinet should go out into the country and make speeches in support of the euro. I may have missed something, but a month has passed and I have not heard major speeches of that kind. We should not be afraid. The Government are committed to the euro at the right time and under the right conditions. Cabinet members should therefore not be afraid to go out and talk about the merits of Britain's joining the euro. I agree with the right hon. Member for Kensington on one point—
| Next Section
| Index | Home Page |