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Lord Shore of Stepney: I should have said "since the signing of the Maastricht Treaty". In 1990 it was just over 2 per cent. In the remainder of those years we would have been eligible for a fine. Our fall in GDP was nothing like that; indeed, there was a modest growth. The point is that it is not much of a safeguard. I accept the minor corrections made by my noble friend.
I depart from that rebuttal to deal with one or two other matters. I was gratified by the extent of the support that my amendment attracted in different parts of the Chamber. I was particularly struck by a point made by the noble Lord, Lord Howell, in his broadly supportive speech. He referred to the problem that might be faced by Ireland if that country subjected itself to a common interest rate based in Frankfurt.
I was very sympathetic to the comments of the noble Lord, Lord Boardman. His prediction that the next stage after monetary union would be fiscal union is all too correct. They will be pressing for it the moment European monetary union is finally established. I believe that the quotations of the noble Lord, Lord Monson--who is in his place--were very well chosen and not without significance. That previous almost fanatical European, Adair Turner, director general of the CBI, has now begun to come to his senses and have second thoughts about the whole matter. The noble Lord, Lord Beloff, was so right to emphasise that this matter has the support of the political elite in Europe but not of the people.
I turn to two outstanding issues. The noble Lord, Lord Tugendhat, who I understand cannot be in his place, went to the heart of the problem of EMU and the present convergence criteria. For so many at the heart of the matter is the 3 per cent. of GDP. The absence of borrowing and an excess deficit and, above all, insistence on price stability are at the heart of the arrangements for a European central bank, fixed exchange rates and so on. Basically this is a matter of political judgment. Very properly, the noble Lord, Lord Tugendhat, said that there was a price to be paid in unemployment for the degree of convergence with monetary criteria to which European countries had subjected themselves to qualify for joining the single currency. They have paid a very heavy price. To me, it is interesting and welcome to have the frank admission that that is the major cause of the massive rise in unemployment in Europe since the Maastricht Treaty was signed. There has not been much honesty about that in previous debates up and down the country. It is good to have it on the record.
That is a price which politicians must always weigh up also against excess inflation, but it is a balance and a judgment. If one is not prepared to allow the Ministers of one's own elected Parliament to make that judgment from time to time, one does not know what other aspect of democracy one would not defend from external takeover.
I believe that the criteria and the central bank, with its terms of reference, are a great mistake in the development of the European Union. The one matter that worries me about Europe--I am reasonably content with many of the events that have occurred, if I may assure the noble Lord, Lord Taverne, as to that--is that it may face many great difficulties if it has a continuing slump of the kind that it experienced in the 1930s. A great slump of that kind leads people to believe that they can do nothing to improve their lives because their governments are no longer responsive to them. What do they do? They begin to take to the streets. In France taking to the streets is almost a tradition. But occupying social security offices and burning sheep and beef have happened here also, have they not? They happened recently.
Why are the farmers so enraged? It is because they no longer feel they can obtain any response from a British government. It is a not a British government who placed a world-wide ban on the sale of British beef. It is a European government who did that. There are many people in the farming community who, while they accept that other countries have an individual right to say, "We are not going to take your beef for our own good public health reasons", find unacceptable that someone is making that judgment for the rest of the world, as it were, against their industry.
If we find ourselves in the position where the economic policy and prosperity of our country, and, above all, unemployment, seem to be no longer in the hands of elected British governments, the traditional British belief in law and order, good behaviour and an acceptance of democratic decision-making will be eroded and may break down. It will be a great opportunity then for those who represent extreme points of view, an authoritarian government and chauvinism, as distinct from a decent regard for one's own country, to have their chance and their innings.
My last point takes up the question of the decision that has to be made on 1st May. My noble friend the Minister said that the British Government's attitude is: we want EMU to succeed. We want the single currency to succeed. We want it to succeed on a firm and sustainable basis. We shall be constructive in our approach on 1st May. Well, 1st May is not far away. Therefore it requires a bit more probing.
A firm and sustainable basis? That is what the convergence criteria were laid down to achieve. In Opposition my own party made a great deal of the fact that if the thing were to go ahead, it had to be on a firm and sustainable basis. The German Government have said the same, and the Dutch Government too. But what is the situation that has emerged in the past few weeks and months? Eleven nations in Europe have said that in their judgment they have converged and so they should be part of the single currency. Two of them have, indeed, fudged outrageously. The French have conscripted their telecommunications pension fund to close the gap in their borrowing requirements. The Germans have tried to monetarise their gold reserves in an attempt to close their gap. I am not sure whether, seriously considered, they have dipped below the 3 per cent., even taking account of those extraordinary manoeuvres, but if they have, the question arises: is it sustainable? When the pressure is off this year there is a considerable chance that the 3 per cent. GDP gap will re-emerge. That is not the only criterion, is it?
The other criterion built into the Maastricht Treaty is that one's national debt in relation to GDP should be not more than 60 per cent., but with the Italians at over 120 per cent., and the Belgians the same, they would seem to be self-evidently disqualified. Therefore the matter is quite a serious one. So who is to adjudicate? Eurostat, quite frankly, is corrupt--it is prepared to wave through the French pension fund without demur--the European Commission, which should perhaps sit in judgment and give a serious and objective report; Mr. Santer, the chief
So, a great responsibility falls upon the presidency, does it not? How is the presidency going to react and behave? Is it going to be just co-operative and let the 11 through, or is it going to raise the question of honesty, genuine convergence and sustainability? We need some more information about that.
There is one report from an institution which I have not mentioned before which could be important. The European Monetary Institute, which of course is the precursor of the European central bank, is also to make a report. That report will be published on 25th March. I wonder what it will say? If it delivers a judgment adverse to a number of the self-proclaimed, "We are eligible member states", will the Government back up the EMI? Will they really act in the interests of Europe, because a weak unconverged currency, a weak euro, would surely break up, sooner or later, and have disastrous economic effects on the whole of the European Union?
The noble Baroness said: My Lords, as some noble Lords may be aware, since this order was considered and approved by this House last Tuesday, we have spotted a technical flaw which has necessitated its relaying in amended form. The error was in Article 6 of the order which seeks to ensure that the cut-off date for additions to the electoral register used for the referendum is the same as that for local elections happening on the same day. As drafted, the order provided that the last date for alterations to the register for the purpose of the referendum should be 20th March.
It has since been brought to our attention that 20th March is in fact the final date by which applications for late registration can be accepted for inclusion in the following month's local government register. Formal amendment of the register only takes place in the first few days of April. If interpreted strictly, the article might have led to some late registering voters being able to vote in the local elections but missing out on the opportunity to vote in the referendum.
I am sure that noble Lords will agree on the importance of taking immediate action to ensure that no London residents miss out on their right to vote in the referendum as a result of registering late. That is why we have taken swift action to lay an amended order and to bring it back before this House.
The only difference between this order and the one considered and approved last week by this House is that Article 6 has been amended to provide that the last date for alterations to the register should be 6th April rather than 20th March. This will ensure that anyone who applies to register up to 20th March will be able to take part in the referendum.
I apologise to noble Lords for the inconvenience of having to reconsider this order. But I am sure that your Lordships' House will accept that the Government have acted properly in seeking to put right this problem as soon as possible. I commend the order to the House.
Moved, That the draft order laid before the House on 10th March be approved [26th Report from the Joint Committee].--(Baroness Farrington of Ribbleton.)
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