European Council

Lord Dykes Excerpts

Monday 21st June 2010 Lords Chamber

[Lord Dykes]

My Lords, I thank the Leader of the House for repeating the Prime Minister’s Statement in the other place. He highlighted the fact that, on a number of occasions, the Prime Minister repeated that we were going to play an active and engaged role in working with our colleagues to solve the international financial and economic crisis that affects all countries. Even if, under the coalition agreement, we are not for the moment committed to joining the euro—and a lot depends of course on what happens to the euro—does the noble Lord agree that the logic of the single market means that a single currency is really necessary later on? Conservative Ministers frequently enunciated before 1997 that you could not have a genuine single market without a single currency. That reality prevails.

Does the noble Lord not agree that we in this country should be careful not to be too complacent or gleeful about the apparent crisis in the eurozone, given that we have the only currency that was driven out of the preliminary arrangements before the euro was created? A notable and spectacular devaluation ensued; in fact, we have had seven devaluations since the war. That was always the easy way out, rather than solving problems with a disciplined currency system. Does he agree that this is as much a crisis of the banking statistics and asset bases of the commercial and investment banks as it is of sovereign debt, and that we need to deal with both on an active basis? Will he therefore emphasise that the UK Government are supporting the suggestion of the Spanish Government that stress-test figures should be published in the second half of July showing the different states of various banks in the member states, within and without the eurozone, including, I think, five or six banks from the United Kingdom? Furthermore, as the Prime Minister was, quite rightly, warmly received in Brussels, does the noble Lord agree that that adds to the arguments for his party rejoining the EPP, as the shadow Leader of the House suggested?

[Lord Strathclyde]

My Lords, I can give my noble friend no encouragement whatever that we are about to join the euro any time soon—an answer that he may find rather disappointing. However, all the evidence over the past few years indicates that we were entirely right not to join the euro, as the former Prime Minister, when he was Chancellor, ensured would be the case. That was the right decision then, it is clearly the right decision now, and we shall continue with that. However, that does not mean that we should not play an active and engaged role, as my noble friend Lord Dykes said, and we will continue in the way that we started. Indeed, my right honourable friend the Prime Minister was very much welcomed in Brussels for his positive attitude and constructive approach to a whole range of extremely difficult issues that face Europe. I say to my noble friend, as I did to the noble Baroness the Leader of the Opposition, that the EPP issue is not one that we shall reopen.