No hurdles to stop us joining the single currency, Brown tells the City

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The Independent Online
Gordon Brown, the Chancellor of the Exchequer, sent a clear signal yesterday that there would be no practical obstacles to eventual UK membership of the single European currency. Diane Coyle, Economics Editor, listened to the Chancellor address a City symposium at the Bank of England.

The Chancellor announced that the next Finance Bill would contain measures dealing with technical tax problems identified by business. The Inland Revenue issued a statement setting out detailed proposals for change.

In addition the Department of Trade and Industry is considering amending the Companies Act to make it easier for companies to redenominate their shares in Euros.

Mr Brown said the Government would use the UK's European presidency to launch an information campaign on the single currency, financed by the EU. He said: "We are the first British government to declare for the principle of monetary union."

He added "Clear and unambiguous economic benefits to the country will be the test." The decision would be determined by what was good for jobs and prosperity, not by dogma, he told the audience of City executives

"If anyone says they are prepared then they are lying," commented one senior investment banker.

The Chancellor was speaking at the Bank of England's second annual symposium on the City's preparations for EMU. The Bank is keen to ensure that Britain's non-participation in the first wave will not harm the City.

John Townend, head of a new Euro preparation division within the Bank, said: "Provided we complete the technical preparations, the City will thrive on the Euro, even on the outside."

He said it was essential to ensure that financial institutions in the UK were ready for trading, payments and settlements in Euro-denominated financial instruments from 1 January 1999 - just 240 working days away.

David Clementi, Bank of England Deputy Governor, will next month lead a "roadshow" selling London's merits as a centre for Euro banking to financial centres such as new York and Tokyo.

EMU is very much flavour of the week. Today also sees the launch of a broader initiative by employers' organisations to prepare British business for the start of the single currency.

Speaking on the eve of a joint Confederation of British Industry and British Chambers of Commerce EMU conference, Adair Turner, director-general of the CBI, said: "Although the UK will not be among the first wave of European Union countries to join EMU on 1 January, UK companies still need to be ready to do business in a single currency Europe."

Separately, Eddie George, Governor of the Bank of England, told a House of Lords committee that the unresolved dispute about who would head the European Central Bank threatened its credibility.

Mr George said a head from a major country like France could be perceived as trying to exert national influence.