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Michael Portillo, Shadow Chancellor
"Responsible politicians have to take the broadest view"
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Wednesday, 21 June, 2000, 09:55 GMT 10:55 UK
The euro: Ask Michael Portillo

It is the biggest issue facing this generation of the UK's politicians: should Britain join the euro?

Shadow chancellor Michael Portillo is clear where the Conservatives stand: they want to keep the pound - at least, for the duration of the next parliament. He answered a selection of your questions on Europe and the euro.


Alec Greenlees, England: Does joining the euro keep you awake at night? If not, why should I worry about it?

Michael Portillo: The implications of the euro do raise a lot concerns and we all need to take it seriously. But literally speaking, worrying about the euro doesn't keep me awake at night.

I have been through enough to realise that at some point you have to turn off, and while I put all my efforts into forwarding our arguments about the single currency in my day job, I do have a life outside politics and I think it is important to keep it that way.


Austin Spreadbury, United Kingdom: There is no time limit on any of the political or constitutional objections to joining EMU. Why then is there a time limit on the period for which the Conservative Party promises to keep the pound?

Michael Portillo: Because there is a time limit to how long the next government will be elected for. At the next election, people will be electing a government for the next five years and they have a right to expect politicians to make it clear what they would do for those five years. We have made it clear that if that Government is a Conservative Government, Britain will keep the pound.


Matthijs Leendertse, The Netherlands: What is the Shadow Chancellor's reaction to a report by the OECD that stated that the Euroland economy and the British economy are on their way to meet the convergence criteria laid out by the current British government?

The Financial Times reported that "..the British economy is more in tune with that of the euro zone than some of the countries that have joined the single currency" Does the shadow Chancellor still see an economic case for the UK not to join or is the position of the conservative party regarding joining the single currency merely based on emotions?

Michael Portillo: Membership of the euro is meant to be permanent. It would be a mistake to join on the basis of limited short-term convergence.

And there's a lot more to convergence than what the Financial Times reported. Cyclically and structurally Britain's economy remains far more in step with America than with those on the Continent. We have more mortgage debt which is affected by changes in interest rates.

Britain's trade patterns also differ significantly from those of Euroland. That's why, as the OECD report pointed out, there has been a longstanding tendency for our exchange rate to move in tandem with the US dollar, rather than the euro.


Ronald Evans, United Kingdom: Will the Conservative Party have a referendum on the single currency so that the people can decide if they want to go into it or not?

Michael Portillo: People expect clear leadership from their Government - the sort of leadership that Tony Blair has failed to provide. People know that if they vote for the Conservative Party at the next election, they will be voting to keep the pound.

I think people would be thoroughly bemused if we then called a referendum and asked people to vote 'no'. They'd want to know why we couldn't just say 'no' ourselves. What we have said is that no government should give away any more of the rights and powers of the British people to Brussels unless the people say so in a referendum. Sadly, Labour don't agree.


John Wilmott, UK: Hasn't it been the hallmark of Tory thinking that they are the party of pragmatism, not ideology. If the business community thought it imperative that we join, would the Tory party oppose no matter how compelling the proposition. Would they reject it out of hand and not judge it on its economic merits...

Michael Portillo: Being pragmatic is about dealing with the world as it is, rather than speculating about hypothetical situations. The fact is that the majority of businessmen in this country don't want to join the euro - and with good reason.

Converting all of their computer systems, tills and payrolls to deal in euros would cost a fortune - and they'd have to do this regardless of whether they actually traded with Europe and knowing that in the eurozone they would be subjected to a one-size-fits-all interest rate that would nearly always be wrong for them.

And Europe's leaders have also made it clear that they think joining the euro should mean Britain's taxes being harmonised up to European levels - not something that I often hear businesses calling for!


Martyn Harrison, United Kingdom: Your party say that one of the reasons you are against a ban on fox hunting is that it will cost jobs. Yet why then are you on the issue of the UK joining the euro are you prepared to sacrifice thousands of jobs, is this not double standards? Is it yet again a case of 'it is a price worth paying' providing you are not paying it of course?

Michael Portillo: Not at all. We do not believe that thousands of jobs are being lost as a result of us not being in the euro. The dire warnings that our financial services industry would lose out and overseas investment would dry up if we stayed outside the single currency have proved to be false.

What is putting jobs in this country at risk, certainly in the medium term, is this Government's policy of chipping away our competitive edge by heaping higher taxes and ever more regulation on businesses. That is why we have been focusing on the damage being caused to the economy by Labour's stealth taxes and extra red tape.


Andrew Collingwood, UK: Lots of people in this country are not taking into account the many positive issues that are raised by the adoption of the euro, and are instead just adopting a xenophobic fear of the UK joining an amalgamated Europe.

Are the Conservative party just jumping on the bandwagon for easy votes rather than taking into account what is financially best for this country. If we do not adopt the euro, British businesses could be left behind, and ignored by the rest of countries in Europe which have adopted the euro.

Michael Portillo: There's nothing xenophobic about opposing further European integration. I'm proud of my Spanish heritage and there's much that I admire in European culture. But that doesn't mean that I want Britain to be absorbed into a country called Europe, with high taxes and heavy-handed regulations. That would be bad for British jobs and bad for British democracy.

If British business is competitive, there is no danger of it being 'ignored' by the rest of Europe. You can't ignore a good product at a competitive price. More than anything, business wants stability. Stability is endangered when interest rates are set regardless of Britain's needs - as we saw when we were in the ERM.


John Grealis, UK: Do you not feel that the Tory Party should be saying we will NEVER join a single currency because it is an abdication of sovereignty NOT the weasel words you are using at the moment which are clearly designed to keep some of the more committed pro-Europeans in the party eg. Clarke, Heseltine, Heath?

Michael Portillo: There's a long-standing constitutional principle in this country that no Parliament can bind its successors - that no government can tell a future government what it can and can't do. At the next election, we will be asking people for a mandate to do a number of things over five years. One of those things will be to keep the pound, which we think is important for both economic and constitutional reasons.

The problem with politicians using weasel words and playing internal politics with the euro is located firmly in the Labour Party. It's becoming laughable when Gordon Brown strikes passages from Robin Cook's speeches, only for Robin Cook to make the same comments a few days later and get his friends to tell the press about them. Under William Hague, the Conservative Party has an agreed policy on the euro, which it is sticking with.


Matthew Shaw, UK: Often when I listen to the Conservatives talking about the single currency, I wonder if slogans like "Keep the Pound" are the best way of convincing people of your case. Don't you think there should be more of a focus on the economic arguments (which many people find compelling)?

Michael Portillo: It is often the case in politics today that slogans and short soundbites are reported in the media rather than a detailed analysis of the issues at stake. I for one have always found this frustrating. But as anyone who has seen William Hague on his Keep the Pound tour will know, we have been spelling out the powerful economic and political case for keeping the pound.


Matthew Wegner, England: Can you say for certain whether the Conservative Party stance on never joining the euro would change if the party gets elected to government in the next election.

Michael Portillo: Our policy is settled. The Conservative Party believes we should keep the pound. I can guarantee that if we have a Conservative Government after the next election, that Conservative Government will keep the pound.


Helen Troy, UK: What exactly do you mean by "full employment", given your pledge that the Tories backed it? Do you just mean lots more deregulated jobs, badly paid and with reduced employment protection compared to now?

Michael Portillo: When William Hague and I talk about the Conservative party's goal of full employment, we mean the right of the people to expect their government to create the economic conditions in which enterprise can flourish and jobs can be created.

We also mean the corresponding duty of everyone who is able to work, to seek to do so rather than expecting the community to support them in idleness - which is what our Can Work Must Work policy is designed to reinforce.


Richard Cramp, England: Based on the recent, large job losses in manufacturing do you continue to believe that staying outside of the euro is a viable option?

Michael Portillo: The weakness of the euro has been a problem for exporters. But this Government has made their problems worse. Higher taxes and increased regulation are all taking their toll and making life extremely difficult for our manufacturers. What they need is a return to the competitive environment that Labour have spent three years eroding.


Matthew Reeve, England: If every country in the EU excluding Britain were to join the Eurozone, would you be in favour of complete withdrawal from the EU, or would you assume that the EU would again kowtow to our demands for 'special arrangements'?

Michael Portillo: The moderate majority of people in this country want Britain to be in Europe, but keep the pound. That's what I want, too.

Tony Blair wants people to believe that we can't stay in Europe unless we scrap the pound. That's just not true. The rest of the EU agreed in back 1992 that the UK could stay out of the euro indefinitely whilst continuing to play a full part in the EU and to enjoy access to European markets. So no-one should confuse being in the EU, which is good for Britain, with being in the euro, which would not be.


Maggie Blyth, GB: You didn't want a minimum wage saying it would be bad for business but were proved to be wrong. My point being that as you were wrong on that issue it must surely be possible that you can be wrong to be so anti Europe. Mind you when the Conservatives were in Government I would far rather be ruled by Europe than by them!

Michael Portillo: We have accepted that, at the level at which it has been set, the Minimum Wage has not had some of the consequences that we feared. I am happy to hold my hands up and admit that. However, I stick to my guns over my concerns about the euro.

I also don't think the vast majority of people who have legitimate concerns about Britain joining the single currency can be branded anti-European. But from the tone of your question, I think we will have to agree to disagree on that one!


Colette Burgess-Wahl, UK: Why should I vote for you? Hate your politics but loved your TV stuff when you visited your family. Almost human. If you are interested in converting a voter, reply, if it's one of your underlings, forget it.

Michael Portillo: Thank you for your kind remarks about the film. It was privilege to have the chance to make it. In my politics I want to create a society of opportunity and prosperity. I'm not sure what it is you don't like about that!

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