Performance of the Economy

The views of corporate businessmen

It is worthwhile scrutinizing both the views and the actions of these corporate businessmen since they are the only significant allies of that group of politicians, currently represented by Kenneth Clarke MP[3] and Gordon Brown MP, which actually wants Britain inside the forthcoming Economic and Monetary Union. Because of Margaret Thatcher’s period as Prime Minister in the 1980s, Britain has been revitalised. Our progress from a strike-ridden, virtually unmanageable society to one with largely strike-free industries used to delivering on time and within budget is remarked on by every visitor with a memory span of 20 years or more. However the Heathite group of retired politicians and their business allies, a small group of corporate bosses led by a body oddly misnamed the Confederation of British Industry (CBI), (whose current president and its European committee chairman are both Irish citizens), has caught up neither with the new vitality in our factories nor with the huge shift in views all round the world against the idea of corporatist solutions to anything. Such people are endowed by the BBC’s flagship current affairs programmes such as “Today” and “The World at One” with a spurious authority about the relationship between the various schemes of European integration and Britain’s economic well-being. Thus, in 1991 at the time of the Maastricht negotiation, twenty-three prominent businessmen among whom were the chairmen of ICI, Courtaulds and GKN, all major exporting companies investing across the world, wrote to The Times of 13 December: “We . . . believe that the agreement on Economic and Monetary Union reached at Maastricht is crucial to the well-being of the nation and must be now firmly endorsed.” On 16 September 1992 Britain left the European Exchange Rate Mechanism which the Maastricht Treaty defined as the first of three stages of monetary union. The immediate effect was a significant decline in the DM/£ exchange rate from about 2.95 to around 2.40, which decline was universally welcomed by those self-same exporting companies whose chairmen had signed the Times letter in December the previous year. However this first massive inconsistency with their views of nine months before did not prevent many of the same individuals signing another letter to The Times of 2 November 1992, which illustrated even more confusion in their minds about the purport of the Maastricht Treaty: “In the light of continuing uncertainties about how the ERM will develop and of our opt-out clause on economic and monetary union, we see that issue (ie re-entry to the ERM) as separable from the issue of treaty ratification.” Given that the prime aim of the Maastricht TreatyRef 1 was to provide a plan and timetable for Economic and Monetary Union (Title 1 Article B, Title 2 Article 2, Articles 102a-109m, Article G, Title VI) that membership of the ERM is the first stage and that the second stage to which the treaty legally commits this country began on January 1 1994, it may be wondered if they had ever read the treaty on which they so confidently advised the nation. In fact, poor reading ability is as rampant among corporate bosses as it is among the products of our state primary schools. Thus Sir Patrick Sheehy of British American Tobacco (BAT) asserted (The Times, February 12 1995) that Britain would have: “more control of interest rates in Europe than we do now” when in fact the Treaty (Protocol 3 Article 7) explicitly forbids governments to have any contact with the projected European Central Bank in Frankfurt, which is alone charged under the Treaty with setting interest rates for the whole of the Euro Currency zone. On 5 September 1995 yet another group (this time 16) of corporate prominenti wrote to The Financial Times calmly asserting that: “many aspects of monetary union remain to be resolved” and chiding those of us who have actually read the Treaty with: “a serious misunderstanding of the process of monetary union”. The Financial Times on September 7 kindly allowed me to point out that Protocol 3 (on monetary union) alone runs to nine chapters and fifty-three articles. It lays down every important feature of monetary union except the location of the central bank and the name of the currency – both of which of course had been decided by the time of the Financial Times letters.

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