Dr Ashok Kumar

Labour Party | Middlesbrough South and East Cleveland

'Yes' to the Euro

Quite simply, the single most important decision this government will, in its lifetime, have to take will be to back entry into the Euro. When will it be taken? The news that Gordon Brown considers that the famous five tests - tests of how entry into the Euro will affect inward investment, living standards and the viability of the City of London – have not yet convincingly shown that entry at this time is feasible, do not detract from the point that at some time in the very near future, that decision will eventually have to be taken.

And, at that time, I will be campaigning for Britain to enter the Euro.

Entry into the Euro can be justified on solid economic grounds, and nowhere is this more crucial than in an area like the North East that still relies heavily on manufacturing and on manufacturing companies that – over the last three decades – have been attracted into the region from overseas.

But there are other factors that are as equally important. Firstly, entry into the Euro would finally mean the end of 200 years of isolation from mainland Europe, an isolation that sprang from this nation's dash for a colonial empire. Before that period in our history, we were what we had always been – the pre-eminent maritime trading nation on the offshore coast of mainland Europe. Those same historic trade patterns – almost organic in their simplicity – are now re-emerging and it is no accident that it is the estuaries of the East Coast – the Tees, the Tyne and the Humber – that are now the great entreports of the nation, reflecting the fact that our largest trading partners are now on the European mainland.

Secondly, UK entry into the Euro would mean both a huge boost to a currency that is now one of the most important in the world, and act as a weapon for economic justice. Reflect on one stark fact. With the accession of the ten new members from central and Eastern Europe, an accession that means that for all intents and purposes, Europe is once again one trading bloc, its combined GDP will be equal to the United States, with a population – and consumer base – that is, amazingly, some 60% greater.

This is a huge new power base for a currency, a power base that can mean that it can begin to rival the dollar as the unit of world currency, and that could well begin to replace the dollar across large parts of the globe. Given that European nations, by and large, adhere to a democratic world view that recognises that free trade can only really properly thrive in a global system dedicated to trade justice, many of the social and economic ills brought about by neo-liberal US support for dollar trade would begin to be to be eradicated. For literally millions of people now condemned to sweatshop conditions in the great new industries of the Pacific Rim, this could mean liberation in a very meaningful sense.

But, in the final analysis, entry into the Euro has to be dictated by national economic interest.

And it is not just the national interest - there is a strong regional interest too. 70% of all the goods exported from NE companies go to Europe, 34% of all the small and medium sized employers in this region have some form of European trade link, 142,000 regional jobs depend on European exports and there are over 140 companies headquartered in other EU countries who have now established branch plants in the North East.

There is only one answer in this debate. If we are to survive and prosper as a trading and manufacturing nation we have to be inside the tent. There are strong reasons for this; the pace of economic consolidation at national and regional levels is intensifying, and Europe is where our markets are. Big manufacturers like Ford, Nissan and employer bodies such as the CBI have all said 'yes' to the Euro. But, unlike other supporters of the Euro, such as some of the larger Trade Unions, the endorsement of Industry to the Euro reeks more of a cautious nod than of a full-blooded affirmation.

From my experience, vital regional employers - such as the steel and chemical employers - have always vouched their support for Britain's entry into the Euro, but they have never demonstrated that support in any real public capacity, nor made any pro-active attempt to debate and discuss the case for the Euro with their workforce. Whenever I have previously raised this issue, local managers in those industries have always "passed the buck" back to our government.

There are two issues that those arguing for entry into the Euro have to overcome. The first is the obvious one of sovereignty. On this I have to be very blunt. This country – and indeed all other countries - have not been 'sovereign' in the pure sense of the word for many hundreds of years. We are all interdependent members of other political alliances – like NATO - that have the ability to impose duties and obligations on us. Nor are we sovereign in trade matters either. The largest companies straddle the globe, and effectively attempt to dictate terms and conditions to nation states. And, in turn, bodies like the World Trade Organisation represent those nation states so that trade can be regulated multilaterally. Quite simply, the issue of sovereignty is a chimera.

The second issue is the lack of knowledge on the Euro. The fact is, is that the "Euro debate" is perceived as a stale, boring and laborious argument, an argument best left to political anoraks. It is therefore clear that to sharpen its focus, that argument must move from the abstract to the empirical. We must make that debate relevant, and that means we must simplify the language used in that debate. The argument over the Euro cannot be talked about incessantly in the dry language of applied economics. Neither can the legwork of the argument be left solely to government.

And this is why I call on local industry and local trade unions to make a greater contribution to this vital dialogue. Regrettably it has only been in the last few weeks that any sense of urgency amongst local industry on this issue has surfaced. Of course, everyone is aware that the Labour government is pro-Euro. However, it seems to have escaped many pro-Euro industrial managers that this support does not necessarily guaranteed the UK's entry into the Euro. In fact, given present opinion poll findings, and the emergence of traditional 'mid-term blues' at the recent local elections the exact opposite may be far more likely. If the scenario of remaining outside the Euro occurs, it is obvious that the U.K's potential for economic influence in Europe will be severely impaired.

Of course, a decision either to delay entry or not to enter at this time would not mean immediate economic catastrophe. But it will certainly mean that many of our local companies now trading with Europe will find the going harder, that future fluctuations between the exchange rate of the Euro and sterling will make exporting a more perilous affair, and that the possibility of more inward investment from non EU companies wishing to have a manufacturing centre within the Eurozone will prove to be non-existent, and that we will see an acceleration of companies leaving our shores to re-locate their manufacturing bases on the continental mainland.

Put simply, entry in the Euro has to be our objective. It fits with the historic trading patterns of this country. It fits with the economic destiny of this country. It fits the needs of our region. It fits with the emerging strength of Europe as a future global economic powerhouse and it fits with a world view that seeks to see global justice as one of the cornerstones of world trade.

For those stark, simple reasons Britain – and the North East – has to be part of Europe, and not merely a perpetually querulous neighbour of a prosperous mainland.