Hague assault on 'straitjacket' EMU rouses CBI delegates

The CBI conference in Birmingham was yesterday told that the Government would change the law to allow companies to pay their taxes in euros from the official start date of the single currency in 1999. But business leaders reserved their loudest applause for an anti-EMU speech from the Tory leader, William Hague. Michael Harrison assesses a day of argument about the business pros and cons of the single currency.

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 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 and bureaucractic 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".

Earlier during a heated 90-minute debate on EMU, the Eurosceptic Sir Stanley Kalms, chairman of the Dixons chain of high-street electrical retailers, had used equally colourful language to spread the message. He said: "Membership of a single currency would be irreversible, irrevocable and irretrievable. The nearest analogy is castration: our voices maybe pitched higher in the councils of Europe but only at the cost of our economic virility."

EMU, he added, represented a huge step towards a federal super-state and the ultimate leap in the dark. "But this time around we could not walk away from the mess."

The biggest laugh, however, came when Jeremy Woolridge, chairman of a West Midlands metal-bashing firm, B E Wedge Holdings, said: "Personally I would rather accept the views of the Spice Girls than the CBI on the single currency. I believe they are regarded as being against the single currency." For good measure he added that the Spice Girls, unlike the CBI, had not recommended entering the ERM.

The case for a single currency was put forcefully by Unilever's chairman, Niall FitzGerald, who warned that if Britain failed to enter, it would be a repeat of the mistake made 40 years ago when it decided not to be a founder member of the European Community. "Two unsuccessful attempts to join and almost 15 years later Britain finally managed to get in - missing the chance to shape the culture of Europe's institutions ... and forced to accept programmes like the Common Agricultural Policy."

That attitude of superior, sceptical detachment had done terrible damage to British interests and influence. "Now in the 1990s, Britain is in danger of falling into the same trap all over again." Provided there was greater economic and labour market flexibility, a single currency would deliver low inflation, lower long-term interest rates, a more liquid and effective capital markets and lower transaction costs. But he also took a sideswipe at the Blair Government's decision to rule out UK membership this Parliament, saying it was driven "more by political considerations - even media considerations - than economic ones".

Afterwards, Mr FitzGerald welcomed the fact that Mr Hague was now at least prepared to enter a debate about the merits and dangers of EMU, but he said it was a pity his party had not taken that position while in government rather than wasting valuable time. Martin Taylor, the "pro- Europe but EMU-sceptic" chief executive of Barclays Bank, said that Britain was too far out of sync with continental economic cycles to permit entry.

Arts and Entertainment
Banksy's 'The Girl with the Pierced Eardrum' in Bristol
art'Girl with the Pierced Eardrum' followed hoax reports artist had been arrested and unveiled
Life and Style
tech

Board creates magnetic field to achieve lift

Voices
Stephanie first after her public appearance as a woman at Rad Fest 2014
voices

Arts and Entertainment
James Blunt's debut album Back to Bedlam shot him to fame in 2004
music

Singer says the track was 'force-fed down people's throats'

PROMOTED VIDEO
News
news

Endangered species spotted in a creek in the Qinling mountains

News
peopleJust weeks after he created dress for Alamuddin-Clooney wedding
Life and Style
A street vendor in Mexico City sells Dorilocos, which are topped with carrot, jimaca, cucumber, peanuts, pork rinds, spices and hot sauce
food + drink

Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets

Arts and Entertainment
George Lucas poses with a group of Star Wars-inspired Disney characters at Disney's Hollywood Studios in 2010
films

George Lucas criticises the major Hollywood film studios

Sport
football West Brom vs Man Utd match report: Blind grabs point, but away form a problem for Van Gaal
Life and Style
health

Some experiencing postnatal depression don't realise there is a problem. What can be done?

News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Gotham is coming to UK shores this autumn
tvGotham, episode 2, review
News
i100
Sport
Adel Taraabt in action for QPR against West Ham earlier this month
footballQPR boss says midfielder is 'not fit to play football'
News
First woman: Valentina Tereshkova
peopleNASA guinea pig Kate Greene thinks it might fly
Voices
Chris Grayling, Justice Secretary: 'There are pressures which we are facing but there is not a crisis'
voices

Does Chris Grayling realise what a vague concept he is dealing with?

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

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Customer Service Executive / Inbound Customer Service Agent

£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

ASP.NET Web Developer / .NET Developer

£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Day In a Page

Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album