Eurozone Financial Assistance

Ian Davidson Excerpts

Tuesday 24th May 2011 Commons Chamber

[Kelvin Hopkins]

I have not always agreed with our former Prime Minister, but I agreed very strongly with his position on the euro. Of course, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) might take a more sensible approach to those things, should he be appointed. I think he is something of an outsider at the moment, but Madame Lagarde has not been appointed yet. Let us hope that he still has a chance of the job.

As the hon. Member for Rochester and Strood said, Britain was wise to stay out of the euro. Because of that, we can flex our currency when needs must. Of course, during and after the crisis, we wisely depreciated our currency. Perhaps a bit more depreciation will help manufacturing and our economy. Countries that have their own currency, such as ours, can also choose their interest rates. Two vital components of any economic management system—the ability to flex the currency and control of interest rates—are given away when countries join a single currency. Even beyond that, there are fiscal policy controls. Countries would do well to retain all the components of economic management if they want to succeed.

When countries do well individually, they can do well collectively. Destroying the economies of EU member states or other countries does not help us in any way. Getting them back into some sort of order by permitting, encouraging or helping them to recreate their currencies, and finding an appropriate parity and interest rate for that currency, so that they can manage their economies for their needs, would raise demand for our goods. The shock absorber effect of different currencies would, over time—a fairly short time, I believe—make the economies of Europe work better singly and collectively. Therefore, the recreation of those currencies is in our interest.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

Does my hon. Friend have any idea why this Government are so keen on bailing out the euro when that was certainly not in the Conservative manifesto? Is this a case of the Liberal tail wagging the Conservative dog?

[Kelvin Hopkins]

That is one mystery that will no doubt be revealed when the 30-year rule is applied. We found out some interesting things about what happened in the 1970s under the Jim Callaghan Government recently, so perhaps we will know what is happening now in 30 years’ time. I know no more than my hon. Friend about why the Government do not take a more sensible line, as is proposed in the motion.