Right of Reply: The chief executive of Business for Sterling replies to Geoffrey Howe's plea for Britain to join the euro

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The Independent Culture
GEOFFREY HOWE does not bother to make an economic case for giving up the pound (The Independent, 31 December 1998). He simply falls back on the language of fear: it is inevitable; we will have no influence; so we must join. No mention of the risks, nor the underlying political agenda which is driving the whole project.

But there are powerful economic reasons for Britain to keep our own currency. Our business cycle is different from that of Germany and France. A "one size fits all" European interest rate would be more likely to suit the Continent than us, and the wrong interest rate could be devastating for the British economy.

Our membership of the Exchange Rate Mechanism, urged upon Britain by, among others, Geoffrey Howe, gave us interest rates that were too high. Unemployment doubled, and we set a new record for business bankruptcies. At least we could get out of the ERM. But membership of the single currency would be irreversible.

We cannot and do not want to be excluded from the EU and the Single Market. But if we remain outside Euroland we have a better chance of avoiding the worst aspects of the European Economic model - endemic unemployment; crippling social costs; and an overgrown public sector and the high taxes that go with it.

The threat of tax harmonisation is not exaggerated. It is a clear and present danger to low-tax Britain, as would be the proposed withholding tax on savings, which would be lethal for London's Eurobond market.

The euro is no panacea for Europe's problems - and it could well make them worse.

The truth is that for Britain the economic benefits of joining a regional currency zone would be modest compared with the risks. It would be wrong for us to take this gamble, and even more wrong for the Government to spend public money on preparations for entry before the British people have decided.

Britain can and will prosper, in Europe - but out of Euroland. We will be using the euro as freely as the dollar, and we will be in control of our own affairs.