The case for the Euro

Speech by Peter Chapman delivered to Liberal Democrat local party on Wed 15th Oct 2003

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I want to talk to you about the euro but I shall start by mentioning the Brent East by election, yet again!

At our recent Federal conference in Brighton, people wondered whether it was a turning point in the fortunes of this Labour government, whether it will be downhill all the way to the next general election.

The Hutton Inquiry was compared with the Westland affair under the Tories which exposed lying and manipulation in high places and the resignation of cabinet ministers.

However I think the real turning point for the Tories came earlier, on Black Wednesday, on September 15, 1992 when sterling was ejected from the Exchange Rate Mechanism. Looking back on it voters saw that it was the moment when they stopped trusting the Tories to manage our economic affairs.

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I want to talk about that day to emphasize that currencies are important to the lives of ordinary people. I knew someone who had an outdoor equipment shop in the Lake District. He also had a little wholesale business, importing tents and distributing them to other shops. He had taken various orders, priced in sterling, but not received the goods when the value of sterling collapsed. He had to pay for the tents in Swedish kroner and he lost money on every order. A little later he had a heart attack and had to abandon his business.

The debate about joining the euro is not just a debate between economists which the rest of us can barely follow.

In the modern world all of us are affected by currencies. Firstly, millions of us go abroad on holiday and change money to spend. This summer a hundred pounds has been worth about 142 euros but most of you will have received only 135 euros from your bank - that's 95 pounds - so you have lost out there.

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Secondly, 50% of our overseas trade is with eurozone countries and as sterling fluctuates up and down it means that the jobs which depend on that trade become less secure.

Then there is the money we earn from foreign tourists coming to the United Kingdom. They find it expensive here. Thousands of us go to Calais every single day on shopping trips. I know, it's difficult to believe the number of British cars in the car parks of the Calais supermarkets unless you have seen it yourself.

In one way or another currencies and the value of sterling matter to us and affect our lives, but they cause uncertainty and expense which we Liberal Democrats want to avoid.

Let's go back to Black Wednesday, eleven years ago. It wasn't only sterling which had a crisis that day. Italy had to devalue its currency and the whole Exchange Rate Mechanism was severely battered. Britain under the Conservatives retreated to an isolationist stance, tried to pull up the drawbridge and IDS, the Maastricht rebel, was later to say we want nothing more to do with Europe.

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The other EU countries, however, sat down to look for solutions to the problem, joint solutions which would be of benefit to everyone. So began the euro project which is now functioning and giving twelve countries as diverse and far apart as Finland and Greece the advantages of stability, growth in trade and increased investment in their industries.

Meanwhile Gordon Brown has taken over where the Tories left off. He mocked John Major for his "wait and see" policy. "The time for indecision is over" he said in 1997. Six years of sitting on the fence later he still won't go for it. We have no idea when we will get the promised referendum from this Labour government but we Liberal Democrats want to be ready for it.

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We want to tell the British people firstly that they will get practical advantages from the single currency: at work because their jobs will be more secure; when they are out shopping, because prices will be lower; and when they are on holiday because they won't have to change money. Secondly we do not want the United Kingdom to be isolated in Europe, lacking influence because we are not playing our full role. And finally we want the British people to know that extra trade will make us all richer and allow us to pay for the improvements in public services which we so desperately need.