Euro: benefits for all
By CHRIS MOLELabour MP for IpswichI AM always struck, when showing constituents around the Houses of Parliament, by the pictures in the Princes Chamber which adjoins the House of Lords and is behind the monarch's throne.
By CHRIS MOLE
Labour MP for Ipswich
I AM always struck, when showing constituents around the Houses of Parliament, by the pictures in the Princes Chamber which adjoins the House of Lords and is behind the monarch's throne. Surrounding Henry VIII and the Duke of Suffolk are a range of their relatives and family such as Ann of Cleves (Germany) and Philip III (Spain).
The first palace of Westminster was built by a Norman, William Rufus, which means British politics has been at the heart of Europe for more thanr 900 years – and there we will inevitably remain. The question is: how do we get the best for Britain from being fully engaged with Europe?
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But, in the 21st century, the British people are more pragmatic and want to know what's in it for them if we join the single currency – the euro. Well, apart from the obvious joy of not having to exchange currency for those holidays on the Costa Brava, I think we Brits are most likely to be motivated by the lure of cheaper cars and cheaper mortgages.
Cars are not the only product where price transparency will mean a better deal and greater choice for consumers, but the likelihood that we could save several thousand on a new car is really attractive. The European Union has already been challenging the servicing and repair monopolies of some dealerships, but it is the potential to see exactly what the same model of Volkswagen Golf costs in Belgium compared to what retailers in Suffolk are charging that will really put prices into a downward spiral.
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Mortgages are the other major outlay for most families and the higher interest rates in Britain mean we pay more to our banks than do our European neighbours. Official euro interest rates, at 2.75%, are lower than Britain's 3.75%, and the editor of Your Mortgage magazine said in July 2000: "If the UK joins the euro it will mean a massive cut in Middle Britain's mortgage bills."
What's more, according to experts at the Centre for Housing Research and Urban Studies in Glasgow: "For countries, such as the UK, with histories of devaluation, it is the economic management of the euro that should lower real interest rates, as the risk of currency devaluation is reduced."
The government is right not to rush into the decision on the single currency. The five economic tests are important to ensure the UK economy retains its current strength. But too much damage has been done to our manufacturing sector because of the strength of the pound relative to the euro.
Around 55% of our exports go to countries in the euro-zone and up to 3.5 million jobs depend on our trade with the EU – more potentially with enlargement.
Sadly, Sterling's volatility outside the euro has been cited as a factor in 3,500 job losses a month since the launch of the euro – and most of these have been in the hard pressed manufacturing sector.
Add to this the condition of entry at the right exchange rate and Britons will vote with their wallets, in their own interests, in a referendum on the euro. That is why it is a matter of when, not if.