Brown spells out plans to shadow the single currency

British business will be operating a shadow currency to the euro when EMU starts in 1999. Gordon Brown, Chancellor of the Exchequer, yesterday spelt out the extent to which the euro will become the common currency of business as the debate raged over mone

Mr Brown yesterday announced a sweeping package of measures designed to prepare businesses for monetary union in 1999 including allowing them to convert shares to euros and pay taxes in the new currency.

The moves will be seen by Euro-sceptics as further evidence of how Britain will shadow the single currency to the point of de facto adoption, while remaining outside the first wave of member states.

The measures are the clearest indication yet of the Blair administration's belief in the merits of EMU and its determination to ensure British business is not disadvantaged, even though the pound will not enter until 2002 at the earliest. The DTI is to consult business on the possibility of amending the Companies Act to make it easier for British firms to issue shares in euros and convert existing shares to euros. Companies will also be able to file accounts in euros and set up bank accounts in the currency.

Adair Turner, director general of the CBI, said that adoption of the euro by business would have "a pervasive effect on public opinion". Provided it was a success then it would push opinion in favour of a single currency.

The Government also plans to give selected banks a "seal of approval" enabling customers to select ones that permit accounts to be operated in euros without punitive charges. Other legislative steps are also being examined, said Mr Brown, to make the euro easier for firms to use. The measures, he added, formed part of the Government's "prepare and then decide" strategy on EMU.

"In less than 14 months from now a German business selling products to France or the Netherlands will be able to do so without exchange rate risk, with lower transaction costs and with more transparent prices, something that in itself will pose a big challenge to a British competitor hoping to supply the same order," the Chancellor said.

That was why it so vital to begin preparations now for the single currency. These preparations, he added, were "too important to leave to dogma or internal party politics and too important to leave aside for years more of indecision and drift."

The advisory group of business leaders, trade unions and consumer groups set up to advise the Government on EMU preparations will report to Mr Brown in December and he will publish its findings in the New Year. There will then follow a series of conferences throughout the country to make businesses aware of the practical steps that need to be taken.

Meanwhile, the Treasury yesterday sent out information packs to Britain's top 1,000 firms detailing business preparations for the euro. "We have moved from talking about preparations to making them in practice," the Chancellor told his audience.

Separately, Wim Duisenberg, the Dutch president of the European Monetary Institute and one of the frontrunners to chair the European Central Bank, indicated that Britain would not necessarily have to rejoin the Exchange Rate Mechanism as a precursor to entering the single currency. He said there were other ways of demonstrating stability and said it remained essential that UK economic policies were aimed at further convergence.

William Hague, the Tory leader, entered the conference prepared for a "bare-knuckle fight" with the CBI over his party's opposition to the single currency and walked out with the loudest and longest ovation of all. On a day when economic and monetary union totally dominated debate, everyone from the Spice Girls to Ted Heath got a mention as the arguments over Europe swung one way and then another.

Employing some of the most uncompromising language heard at a CBI conference since Sir Terence Beckett's famous challenge to Mrs Thatcher in 1980, Mr Hague painted an image of financial and social ruin if Britain were to enter EMU.

A single currency, he warned, could mean employees having to accept cuts in wages for the first time since the Great Depression as vicious unemployment black-spots sprang up across the continent. His party, he said, had paid the political price for Britain's humiliating exit from the Exchange Rate Mechanism on Black Wednesday and had apologised to the millions of people who had lost their jobs, their homes and their businesses. "I have apologised for the ERM. I never want to apologise again for following the dictates of fashion."

Mr Hague went on to dismiss the arguments of the pro-European lobby that Britain could not afford to be out of a single currency if the rest of Europe went ahead. "The danger for Britain is not that we will somehow be left behind in Europe. The real danger for us is that Europe could be left behind in the rest of the world."

The Tory leader conjured up an image of the straitjacket of a single currency binding Britain into a world of uncompetitive, inflexible, bureaucratic labour markets, outpriced and outperformed by the rest of the world and incapable of adjusting interest rates to accommodate domestic economic conditions.

"Unlike the ERM the single currency is for all time. British business could find itself trapped in a burning building with no exits. British business needs a hard-headed assessment of the risks involved in a single currency before we consider joining it. And that assessment is only just beginning," he said.

Mr Hague said that EMU supporters pointed to the US as an example of a successful single currency but this ignored the fact that there was a high degree of labour mobility in America while the Government could automatically transfer billions of dollars from prosperous to poor states through federal taxation and expenditure. By contrast Britain had "a long way to go before we can say to people: get on your hovercraft and look for work".

Outlook, page 23

News
people
News
people And here is why...
News
peopleStella McCartney apologises over controversial Instagram picture
Life and Style
Laid bare: the Good2Go app ensures people have a chance to make their intentions clear about having sex
techCould Good2Go end disputes about sexual consent - without being a passion-killer?
PROMOTED VIDEO
Arts and Entertainment
Richard Burr remains the baker to beat on the Great British Bake Off
tvRichard remains the baker to beat as Chetna begins to flake
News
i100
Sport
footballArsenal 4 Galatasaray 1: Wenger celebrates 18th anniversary in style
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
tv
News
people
News
The village was originally named Llansanffraid-ym-Mechain after the Celtic female Saint Brigit, but the name was changed 150 years ago to Llansantffraid – a decision which suggests the incorrect gender of the saint
newsWelsh town changes its name, but can you spot the difference?
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Kristen Scott Thomas in Electra at the Old Vic
theatreReview: Kristin Scott Thomas is magnificent in a five-star performance of ‘Electra’
News
Destructive discourse: Jewish boys look at anti-Semitic graffiti sprayed on to the walls of the synagogue in March 2006, near Tel Aviv
peopleAt the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity
Life and Style
Couples who boast about their relationship have been condemned as the most annoying Facebook users
tech
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Italian couples fake UK divorce scam on an ‘industrial scale’

Welcome to Maidenhead, the divorce capital of... Italy

A look at the the legal tourists who exploited our liberal dissolution rules
Time to stop running: At the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity

Time to stop running

At the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity
Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

The vintage series has often been criticised for racial stereotyping
An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

An app for the amorous

Could Good2Go end disputes about sexual consent - without being a passion-killer?
Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

Llansanffraid is now Llansantffraid

Welsh town changes its name, but can you spot the difference?
Charlotte Riley: At the peak of her powers

Charlotte Riley: At the peak of her powers

After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
She's having a laugh: Britain's female comedians have never had it so good

She's having a laugh

Britain's female comedians have never had it so good, says stand-up Natalie Haynes
Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

Let there be light

Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
Great British Bake Off, semi-final, review: Richard remains the baker to beat

Tensions rise in Bake Off's pastry week

Richard remains the baker to beat as Chetna begins to flake
Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

A look to the future

It's time travel fashion at Louis Vuitton in Paris
The 10 best bedspreads

The 10 best bedspreads

Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
Arsenal vs Galatasaray: Five things we learnt from the Emirates

Arsenal vs Galatasaray

Five things we learnt from the Gunners' Champions League victory at the Emirates
Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence