Euro: the decision must be `no'
By RICHARD SPRINGConservative MP for West SuffolkTHE latest polls show the public is as sceptical as ever about the Euro, with 62% of people are against replacing the pound.
By RICHARD SPRING
Conservative MP for West Suffolk
THE latest polls show the public is as sceptical as ever about the Euro, with 62% of people are against replacing the pound. Nevertheless, there are those within the Government who seem determined to join a single currency as quickly as possible.
I am not a theologian, but I cannot foresee the circumstances when it would be in Britain's interest to join the Euro. I am opposed on the grounds that joining would be an unacceptable loss of sovereignty. The Chancellor of the Exchequer does not consider the sovereignty issue to be relevant, and claims the only criteria are economic. In any event, I believe that the economic argument against joining the Euro can be won convincingly.
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The first of Gordon Brown's economic tests is convergence. 'Is there sustainable convergence between Britain and the economies with a single currency?' In other words is Britain's economy similar enough to that of the Eurozone to be easily absorbed?
I believe that any interest rate set by the European Central Bank would not be right for Britain. The Bank of England has a hard time setting a rate suitable for both the urban North and Midlands and for counties such as Suffolk. This difficulty can only be exacerbated on a Europe wide scale.
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One example is that unemployment is 10.6% in Germany and 11.9% in Spain, whereas in Britain it is half that. Clearly very different states of affairs, needing different rates of interest. In the case of Germany, it cannot cut interest rates – it has no control and is sliding deeper into recession, a clear warning to us.
The second test states 'is there sufficient flexibility to cope with economic change?' The answer to this is no. The Euro zone is pursuing a system of more and more tax harmonisation with less and less room for competition at state or national government level.
Thirdly the Chancellor asks what 'would be the effect on investment?' The most recent national statistics show inward investment up 10%. The UN annual report in September 2002 showed that the UK has risen from fourth to second in the world investment league table. The UK is doing pretty well outside the Euro zone as the independent Bank of England confirms.
What would be the impact on our financial services industry? In truth, there is no evidence of loss of business from the City of London. The real threat may come from membership of the Euro as it would make the City vulnerable to harmonisation pressures and reduce its traditional tax freedoms.
Finally the Chancellor asks "will the Euro be good for employment?" Britain has lower unemployment than other countries in the Euro zone and has had for some time.
I am against the Euro as I believe that by joining we are giving away an unacceptable amount of sovereignty. In reality this a political decision that is camouflaged as an economic one. The Euro is a key part of a project to create a politically united Europe.
I believe the only real test that the Government considers is whether they can win a referendum. I, for one, would welcome the opportunity to vote against entry on both sovereignty and economic grounds, as would most British people at a referendum.
The Government is deeply divided , and the clashes in the Cabinet are well documented. Fewer and fewer people here support the single currency and that is why Tony Blair will simply not risk defeat of his cherished ambition to ditch the pound, in a referendum, in the foreseeable future.Springr@parliament.uk