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Lord Shaw of Northstead: I thank the Minister for giving way. According to the reference from Brussels, Pedro Solbes claims that Brussels has the authority, under Article 99, to enforce economic policy co-ordination among member states to protect the common interest. Do the Government of the United Kingdom take that view?

Lord McIntosh of Haringey: My Lords, if we consider the powers that ECOFIN could express at its meeting next week, it is most likely that it will express only an opinion, which would not be binding. The next step would be a recommendation, which would have to be considered by the European Commission. The power to take over the economic policy of a member state is a very long way away, and nothing that I have said in support of multilateral surveillance and peer review implies that we would support it.

I should like briefly to refer to the European Central Bank, about which there has been a great convergence of view among witnesses who gave evidence to the committee and Members today. It is important that the European Central Bank should be as open and transparent as possible, because that is the way in which it will gain the trust of the European public and of financial markets. That is a key feature of the United Kingdom Government's current monetary policy framework. I agree with the noble Lord, Lord Peston, about that matter, not because I presume to criticise the European Central Bank but because I agree with his praise for the Monetary Policy Committee.

To some extent, matters have improved since the publication of the report. The ECB has for the first time published its staff macroeconomic projections, which were included in a short memorandum to the committee, received by members either on Friday or this morning. Those figures, with the projected HICP inflation in the range of 1.8 to 2.8 per cent and real GDP of 2.6 to 3.6 per cent in 2001 contribute very considerably to our understanding of European economic conditions.

I am not sure that I can agree with the noble Lord, Lord Peston, about accountability to democratic institutions. I certainly cannot agree with those who suggest that because there is a European Central Bank, there also has to be a European central government. I contest the view that further economic

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union of the kind achieved by the euro inexorably leads to a single political government. That is not the view of the government of any member state. In those circumstances, accountability to the democratic institutions comprising the euro-zone is rather a long way from the accountability of the Monetary Policy Committee to the Government of this country.

In conclusion, I refer to the Treasury's response to the House of Lords committee. It was suggested that the Treasury still nurses a grudge about the rejection by this House of Lloyd George's people's budget of 1909. Although I still bear a grudge about the rejection of the 1909 people's budget, I do not believe that that view is very widespread in the Treasury. The point that I want to make is, "Never mind the width, feel the quality". It is not just a matter of whether the final response is two pages long. One has to consider together the very substantial written memorandum that the Treasury produced before giving oral evidence, the oral evidence that was given to the committee on 11th July and the requests for three further notes, producing an additional supplementary memorandum at the end. Although the noble Lord, Lord Tomlinson, accuses us of answering none of the conclusions, if we take the Treasury's contribution as a whole to this debate it becomes much clearer that our response has been entirely proportionate.

I do not want to be critical of the conclusions of the Select Committee. However, perhaps I may read a few parts of the press release that was issued when the report was published in December:


    "So far, we have examined what is happening in those countries which have joined the euro already, flagging up both the successes and the problems which they have encountered. With the evidence we have received, we are publishing a wealth of features and figures, from which readers can draw their own conclusions...and it is almost impossible to disentangle the effects of the single currency from the other forces at work...All the euro-zone governments from whom we received the evidence assured us that the euro had been successful for them...We recognise that there are also dangers...As for the fall in the value of the euro, so far it has actually benefited the economies of euro-zone countries, but if it continues it could damage the credibility of the euro as a currency".

Those are admirable sentiments. However, I am not sure that your Lordships would have expected the Treasury to comment at that level of generality. If we take the--

Lord Tomlinson: My Lords, I thank my noble friend for giving way. Nobody asked the Treasury to comment on a press release. The press release is inevitably at a certain level of generality. Will my noble friend now say why the Treasury did not see fit to answer the report, which was of much greater substance. We thought that the standard of literacy and understanding in Her Majesty's Treasury would exceed that to which the report had to be reduced in order to communicate it to the media.

Lord McIntosh of Haringey: My Lords, I considered taking paragraphs 1 to 19 of the report and seeking conclusions at a lower level of generality. I accept my noble friend's criticism that a press release is at a higher level of generality. I considered that point. I also

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considered whether it would be appropriate for me to read out sections of the conclusions of the committee's report, and to ask the question--no more than that--whether it would have been appropriate for us to give detailed responses, which could have been anticipated, to points that are fairly and generously put in the committee's report, but which, because of the restrictions that the committee placed on itself, are inevitably still of a level of generality, such that in our view no useful purpose would have been achieved by adding to the very substantial contribution that the Treasury made to this report as the work proceeded.

Lord Tordoff: My Lords, I am grateful to the noble Lord for giving way. As chairman of the Select Committee, I am quite upset by this response. It is said that the Treasury welcomes the opportunity to respond to the main conclusions. It is not said whether it feels that it is a good, well thought out report. Therefore, except in so far as it relates to paragraph 3, it is not a response. It is the duty of government departments to respond, in a given period and in some depth, to Select Committee reports.

I accept that the Minister and the Treasury might not want to go into too much detail on these issues, but the Select Committee has every right to expect a considered response. During the six years I have had the job, this is the first time that we have not had a proper response from a government department.

Lord McIntosh of Haringey: My Lords, I take most seriously what the noble Lord, Lord Tordoff, says. I do not want to open up a division between the Treasury and this House and I apologise if I have been in any way dismissive in my comments. I take that back; that was not my intention.

However, I take the view that it would have been almost patronising to put into a Treasury response the phrase, "Yes, this is a well written report"; the kind of response the noble Lord, Lord Tordoff, suggested would be appropriate. We take the committees of this House more seriously than that. If one takes the whole contribution of the Treasury to the process of the report and adds to that the short note which appears at the end, it will be found that the Treasury has behaved responsibly in every respect.

I am sure that Treasury Ministers will want to consider the views exchanged in the past few minutes and will want to respond to the chairman of the European Union Committee, sending a copy of the response to the chairman of Sub-Committee A, dealing with the issues that were raised.

I have brought this upon myself because at the end of the debate I raised a note which caused controversy. This has not been a controversial report or debate. The work of the committee was welcomed by all noble Lords who have taken part and the Treasury agrees with it. We join those who congratulated the committee on its work.

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7.2 p.m.

Lord Tomlinson: My Lords, I thank noble Lords for participating in this interesting debate. I welcome their views and in particular the wide appreciation of the report. I especially welcome the specific points of dissent from the report. We shall all reflect on those issues. I welcome the large number of noble Lords from all parts of the House who appear to be impatient for United Kingdom membership of the single currency. However, I again point out that my welcome is personal, as United Kingdom membership is outside the scope of our report. I confirm the score counted by the noble Lord, Lord Saatchi, as 13 to three. That reflects a wide range of interests in all parts of the House.

There was a great deal to welcome in the debate and I want to address my noble friend Lord McIntosh perhaps more gently than I did in my somewhat abrasive previous intervention. A new standard has been set in basing a report to a Select Committee on what was said by the Treasury in evidence in written submission. We want to know what it thought of our deliberations after we had reflected on its evidence, not all of which was necessarily fully accepted.

I address my noble friend Lord McIntosh in the spirit in which he responded to the debate. He said that the Government would accept that the points listed at paragraph 8 are reasonable criteria for success. My noble friend could say that in the debate, but the committee would have been assisted if the Treasury could have said that in its response. If the Government believe it, they should say it.

My right honourable friend the Prime Minister on his visit to Warsaw spoke about the need for better connection between the people of Europe. In the spirit of compromise finally expressed by my noble friend Lord McIntosh, I suggest that we should at first be a little less ambitious and begin that process by connecting the views of our Treasury to our Parliament. I commend the Motion to the House.

On Question, Motion agreed to.


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