Parliamentary reaction: 'This isn't wait and see - it's hope and pray'

Click to follow
Indy Politics

Gordon Brown's five tests were the consequence of "frantic efforts by the Chancellor and the Prime Minister to cover up their differences", and not "the result of any real assessment of Britain's national economic interest", Michael Howard, the Shadow Chancellor, argued yesterday.

In a bravura performance, which drew the loudest cheers from the Tory backbenches in years, Mr Howard claimed the Chancellor's statement was a political fix designed to "paper over the cracks" in his relationship with Tony Blair.

Mr Howard poured scorn on the tests, which he said - in a reference to the notorious leak on the euro from a Brown aide - were "written on the back of an envelope, in the back of a taxi, to fix the damage done by the Chancellor's spin doctor in the back of the Red Lion pub".

The shadow Chancellor delighted the Conservative Party with a series of biting digs at the strained relationship between the Prime Minister and his Chancellor.

"This Prime Minister will pay any price to do down his Chancellor," he said. "There they sit; united in rivalry. Each determined to frustrate the other. Each determined to scheme against the other. Each determined to do the other down. So there's no clarity in policy. There's no consistency of purpose."

Mr Howard argued that the five tests could never be "clear and unambiguous" as claimed by Mr Brown. He said the data in the Government's 18 volumes would be liable to change with shifting economic circumstances.

"How an earth are we to know whether a similar assessment in two or five or 10 years' time would reach a similar conclusion?" he asked.

The shadow Chancellor drew loud guffaws from the Tory benches, and stifled sniggers from some Labour MPs, when he pointed out that some of the analysis of the single currency was "based on studies of currency unions involving Angola and Mozambique, Burkina Faso and Chad, the Vatican City and San Marino, and Tuvalu and Tonga."

He argued that entering the eurozone was like a "straightjacket of a one-size-fits-all interest rate when it's not the right rate for our economy.

"This is the Government which promised to 'prepare and decide' - but now it's not prepare and decide, it's not even 'wait and see', it's just hope and pray," he said.

The MP for Folkestone and Hythe derided the five tests as "an exercise in deceit: the deceit that they had the national economic interest at heart, the deceit that they wanted an objective assessment of what this country needs, the deceit that they were united."

The Chancellor responded furiously to Mr Howard's speech and attacked him for sitting in the Cabinet during the Tory withdrawal from the Exchange Rate Mechanism.

"He was in the ERM Cabinet that lost one million jobs. How can he come to this House to lecture us about economic stability and putting the national economic interest first?" Mr Brown said.

"He is against the euro on grounds of dogma. Even if it were in the national economic interest to join, even if it were good for jobs, he would refuse to join. He said in 1997 he was against the euro in principle."

Matthew Taylor, the Liberal Democrat Treasury spokesman, said the Chancellor "was saying 'no' but dressing it up in a warm kind of 'almost yes' as if we are poised at any moment to join". Mr Taylor said the studies showed that joining the euro would mean more growth and better-paid jobs and "an end to rip off Britain.

"Joining the euro could save an average mortgage-payer £15,000 over a 25-year mortgage - £50 a month," he said.

The MP for Truro listed the commodities that would be cheaper in Britain if it joined the euro. "TVs, computers, mobile phones, perfume, toothpaste - even chips are cheaper in France and Germany," he said. "And that is why three out of five tests are clearly passed: jobs, investment and the City."

Mr Taylor attacked the Tories for ruling out entry to the euro. He also accused the Government of adopting the old Conservative position of "wait and see".

Kenneth Clarke, the former Tory chancellor, made no secret of his pro-euro credentials and said Mr Brown was asking the country to wait to join the single currency.

"Is your principal concern over convergence or the housing market?" he asked the Chancellor. "May I ask that your studies over that will not take too long because we have the same proportion of owner-occupiers in this country as the average across Europe. How near are we to satisfying the tests? Surely it must be very near and can I look forward to Budget Day next year when you and I might be at last beginning to campaign together for those views we have in common?"

Mr Brown said Mr Clarke was a late convert to the tests. He said the problem for housing was inflationary pressures on the market and not the proportion of owner-occupation.

Stephen Byers, the former trade and industry secretary, praised the Chancellor's "positive stand" and called for ministers to campaign to convince the public that the euro would be good for Britain.

"While it is clearly right to delay the holding of a referendum until it is in the national economic interest to join the single currency, that does not stop the Government setting out the benefits of joining the single currency," he argued. "Will the Government now begin to come out and campaign, and convince the British people of the benefits of joining? Will it move away from the present position of 'prepare and decide' to one of 'campaign and convince'?"

Ian Taylor, a pro-European Tory MP, asked the Chancellor if he had evaluated the cost of failing to decide whether to join the single currency. "It may be only a year away that you are now delaying it, but nevertheless those costs are tangible in terms of investment and uncertainty," he said.

Mr Brown said the Government had examined the consequences of joining in 1999 and decided it would not have been in the UK's economic interests.

Martin O'Neill, the Trade and Industry Select Committee chairman, asked how Mr Brown intended to influence reform of the the growth and stability pact and the European Central Bank when Britain was not part of the eurozone. He said this could be a "major obstacle" to influencing change.

The prominent anti-Europe Tory MP Sir Peter Tapsell, who opposed Britain's ERM entry in 1990, asked: "Is it really necessary for you to ask the British people, even in principle, to slash their throats a second time?"

Denzil Davies, a former Labour Treasury minister, asked the Chancellor if he thought the euro was a successful currency.

Mr Brown said it was introduced successfully even though opponents predicted that it would not work. "We have a far stronger euro over what is a weaker dollar," he said. However, Mr Brown added that the benefits of joining must be shown to the British people.

The pro-European Tory Andrew Tyrie, who is a member of the Treasury select committee, said Mr Brown's statement sounded like it had been drafted somewhere in the corridor between No 10 and No 11 Downing Street.

"After this statement, after the extraordinary events of the last few weeks with the titanic struggle on the drafting of the statement taking place between No 10 and No 11, can you assure the House that you're still in control of this decision?" he asked Mr Brown.

But David Heathcoat-Amory, the eurosceptic former Tory Treasury minister who is the party's delegate on the Convention on the Future of Europe, said the Chancellor's statement disguised a message that joining the euro would be bad for Britain.

"Stripped of its rather desperate camouflage your statement today boiled down to saying that for Britain to join a low-growth, high-unemployment, rigid monetary system wouldn't be a very good idea," he said.

John Hume, the former leader of the SDLP, argued that a single currency was the logical next step of membership of the single market, adding that Northern Ireland, which borders Ireland, knew the difference it made to trade.

David Curry, the pro-European Conservative MP for Skipton and Ripon, said it would be in the national interest for Britain to play a leadership role in the European Union after more countries join.