UK ignorant on euro
Treasury survey shows that only 11 per cent of firms know single currency start date
Sunday 31 May 1998
The survey of 1,300 companies found that only 11 per cent of boardrooms know that the European single currency starts operating on 1 January next year. And a mere 5 per cent have take any steps to prepare for the impact it will have on the business environment across the whole of Europe.
Chancellor Gordon Brown has responded to the high level of unreadiness by ordering an acceleration of the Government's information campaign directed at businessmen, despite the risk of Opposition charges that he is softening up Britons for eventual adoption of the euro.
He told a meeting of the EMU Standing Committee: "The results of this survey show the urgency of better information on the euro reaching small- and medium-sized business firms.
"The launch of the single currency will have a profound effect on British business. Firms need to start preparing now as the countdown to 1 January begins."
Ministers were dismayed at the results of the survey carried out by the Treasury's Euro Preparations Unit, which covered a 1,000 firms with fewer than 50 employees, and 300 with 50-200 workers. Despite 60 per cent of Britain's trade going to Europe, the investigation showed an extraordinary lack of grasp about the impact of the single currency.
The Treasury has set in train a series of initiatives designed to advise business on what they must do to prepare for the single currency. The unit has set up a euro website, a telephone hotline, and a succession of seminars in the regions.
The next seminar will be held in Glasgow on 8 June, and will be hosted by Helen Liddell, Economic Secretary to the Treasury, and Scottish Minister Brian Wilson. Another will be held in London on 23 June, hosted by Barbara Roche, the DTI Minister with responsibility for small firms.
The 10-member EMU Standing Committee, which is chaired by the Chancellor and brings together the DTI, the Bank of England, the ministries covering Scotland, Wales and Northern Ireland, plus the CBI, the Chambers of Commerce and the Financial Services Authority, has also discussed the state of preparations across the economy for 1999, and how best to compile an outline plan of the steps that would be needed if the UK does decide to join the euro.
This development will also be seized upon by the Chancellor's critics as evidence that he is preparing the ground for British entry by a Labour government after the next election, subject to a referendum on the issue.
However, a Treasury spokes-man insisted: "This government has made it clear that business here will be affected whether we are in or out of the euro. Our survey shows that businesses think there is no need to prepare because we are out - but just because we are not joining at the start doesn't mean that we should not be preparing. The survey shows the urgency of getting information to business."
Ruth Kelly, MP for Bolton West and a Labour member of the Treasury Commons Select Committee, said: "This investigation shows it is absolutely essential that businesses are prepared for the start of the euro. They are clearly going to lose out if they are not ready."
Companies trading in Europe will have to change their accounts systems and computer systems, and be prepared to take payment in euros.
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