European Union Bill

My Lords, I hope the noble Baroness, Lady Williams, will forgive me if I do not entirely follow her down the road of her argument and her thoughts. Of course I agree that what happens to the euro has a profound impact on us and I certainly want to see the crisis resolved in as orderly a manner as possible. I shall be extremely brief. I am not intervening in this debate simply because two other Chancellors have spoken, although I did feel under a certain obligation, like both of them, to speak when the noble Lord, Lord Kerr, had tabled this amendment—not only tabled this amendment but talked to me, dare I say it, incessantly in the bars about it and written me a letter about it. I have the greatest respect for the noble Lord, Lord Kerr. In fact, he, I and, above all, the Prime Minister, John Major, all worked hard over the piece of paper that we are debating now: Protocol 15 of the Maastricht treaty. Although I spent a large part of my life poring over this, I have spent what seems an eternity this afternoon poring over it again trying to work out what on earth it means and trying to work out how some parts that seem to contradict it actually come together. Of course I owe it to the noble Lord to consider very seriously what he said, because he gave me great support when I was Chancellor, although when I knew that the noble Lord was putting forward this amendment, the story of Talleyrand came to mind—having been told that someone had died, he asked whatever had he done that for. I confess that even having thought about this a little, I am not entirely convinced that there is a massive difference between the way that the noble Lord, Lord Kerr, wants to tackle it and the way that my noble and learned friend Lord Howe wants to tackle it. My noble and learned friend said that he was quite sure that I and my noble friend Lord Lawson needed no reminding that joining the ERM was in our manifesto in 1979. I confess that it was only when I became Chancellor that I expressed exasperation about the whole thing and the Permanent Secretary at the Treasury reminded me that it had been in our manifesto. It did not come quite so easily to my memory as to that of my noble and learned friend Lord Howe. I turn to the subject of the debate. An extremely important point is that the referendum should not be about the exchange rate. Anxiety has been caused by whether Article 143 would give rise to a situation in which the actual exchange rate at which we joined the euro—perish the thought that we ever did—would be on the ballot. It is my understanding, and I hope that the noble Lord will be able to confirm this, that it does not follow that it will have to be on the ballot paper. It is an option but not essential. As I understand it, the Government are proposing a package approach. They are intending that the negotiation of the draft content of the Article 143 decision should take place before the Government formally notify the Council that it intends to adopt the euro; that is, that the negotiations should take place first. I do not see that as a great problem and I think it can be done that way. This is something which, as I understand it, has happened before. In all honesty I do not really see the exchange rate and market uncertainty as an issue, given that we have a floating rate and that we would be proposing, if this ever happened, to move from a floating rate to a fixed rate. Even if it were known what the terms were, it could be within a range. I always listen to the noble Lord, Lord Kerr, but this could be done either way around. However, as I have said, the one thing that should not be on the ballot paper in the referendum, if there were ever to be one, is the actual exchange rate.