In the Papers

25th February 1999

THE TIMES

Government's announced 'change of gear' on euro

The Prime Minister stated today (23rd February): "Britain should join a successful single currency, provided the economic conditions are met" [reports and leading article, February 24]. He is right. Arguments surrounding a thousand years of British history pale into insignificance compared with the future wealth and prosperity of our nation. Questions of degree of economic sovereignty mean little to the general working population: job security and living standards will always mean more.

It is on those very issues, however, that the Prime Minister has been uncharacteristically silent. He says that our economy must converge with the eurozone before abandoning the pound. But our economic cycle has been out of synchronisation with that of continental Europe's for decades. There is no evidence that we are beginning to converge. To the contrary, our economy has benefited from being in step with that of the US.

If the Prime Minister believes that being part of a single monetary bloc is better than retaining the pound - and the economic arguments for this are still very shaky - why is there no consideration of an alternative "successful single currency" which does have a track record and whose economy is convergent with that of our own: the US dollar?

The Government vigorously opposed my Parliamentary Currency Commission Bill 12 months ago. This would have set up an independent commission to investigate and make recommendations, solely on economic grounds, as to which currency bloc, if any, would be most beneficial to Britain's financial wellbeing. This would have seemed in line with the Government's claim of economic pragmatism. Did its opposition arise from the fear that the commission might recommend sticking with sterling or worse still suggesting that the euro is a second-best alternative to the dollar?