European Union Bill

My Lords, I want to make one simple and brief point, but before I do that perhaps I may respond partly to what the noble Lord, Lord Taverne, said because I was a little puzzled by it. He is a former Treasury Minister and chairman of a think tank in the City. He was referring to the two aspects of the banking system in crisis being capital and liquidity, with which I totally agree. But he was, I think, arguing that perhaps we need more European attention to capital. That was quite a surprising thing to suggest because, as he will remember, not long before the Irish banking crisis struck and the Irish banks were revealed as hopelessly undercapitalised, we had stress tests carried out on the European banks—a separate exercise in the European Union and in Britain. The European Union banking tests revealed that no bank had a problem with capital other than one bank in Germany. That was shortly before the crisis was fully revealed in all its horror in Ireland. I agree with the noble Lord that there is a separate aspect of liquidity which the European Central Bank has, in a skilful and constructive way, provided to the European banking system. Equally, the Bank of England has also exercised its national function well. He did not make the case for further European competence or the transfer of power or competence from this country to Europe by merit of that alone. The noble Lord went on to make the familiar point about the eurozone and whether we were marginalised by not being in it. It is of course true that eurozone Ministers may make certain decisions affecting themselves in which we do not participate. We do not participate in meetings of the Federal Reserve Bank, although its decisions affect us. However, anything that eurozone Ministers decide to do that is governed by the rules of the single market or competition law continues to be governed by the rules of the single market and competition policy. He was careful to say that issues would arise if we were proposing to join the euro but the implication of his argument was that in order to gain influence we should join the euro, which I am sure he does not really subscribe to. Very few people will own up to arguing that we should join the euro today.