Letter to the Editor of the Daily Telegraph which was published on 13th December 1996.

As calls mount in the Conservative Party for the dismissal of the Chancellor of the Exchequer for his implied preference for abolishing the pound in favour of a foreign currency, there is an underlying assumption that it’s a pity because he is a rather good chancellor who has “delivered” growth with low inflation.

But much the most worrying feature of Mr Clarke is his inability to understand the economic system entrusted to his care.  Interviewed by John Humphrys on the “Today” programme (11 December) the lawyer Mr Clarke opined in his sweeping undergraduate way that “a currency is just a means of exchange”.

Just as he famously boasted that he hadn’t read the Maastricht Treaty, so the enormously complex system of “rights to buy” which money in its various forms represents – cash, deposits, bonds, overdrafts, etc – is airily dismissed by Mr Clarke rather as someone would dismiss the whole structure of our Law as “just a means of paying fines”.

Mr Clarke clearly actually believes that substituting the euro for the pound sterling is really just like having a different design of parking ticket.

Both he, and Mr Blair, need to have their attention drawn for example to Article 30 of the Maastricht Treaty Protocol establishing the European Central Bank (ECB) which will be responsible for the euro.

They can then explain to the British people when and how, should they get their way and abolish the pound, they propose physically to transfer to the ECB around £8,000 Million worth of gold and dollar assets, being Britain’s initial “contribution” to the new Bank’s foreign reserves.

They can also explain how, under Article 30.4, they propose stopping the ECB, should it be so minded, from stripping Britain of the remainder of its gold and dollar assets using the Qualified Majority Voting procedure laid down in Article 42.  And in case they are wondering, none of this is open to negotiation; it was all settled four years ago.

A letter to the Daily Telegraph which was published on 3rd July 1995.

In contemplating Lord Carr’s appeal for loyalty to Mr Major (June 30th), Conservative MPs should ask themselves what exactly they would be loyal to.  Economic and Monetary Union Stage 3 is not just about abolishing the pound, it is about total loss of control over every significant feature of national economic life.

Protocol 3 of the Maastricht Treaty sets out the basic tasks of the European Central Banks as (i) defining and implementing monetary policy, (ii) undertaking all foreign exchange operations, (iii) holding and managing the official foreign reserves of the Member States.  The latter provision means our handing over gratis all our national reserves of around £28,000 million to a foreign institution, over which, according to Article 7 of Protocol 3, we are specifically barred from having any influence.  Under Article 28, from which we have no opt-out, Britain is committed to paying on Jan. 1st 1999 about £700 million towards the capital needed to establish the European Central Bank.  Furthermore, Article 104c of the treaty provides that should Britain, having signed up to Stage 3, then fail to comply with a decision of the ECB, it can be required “to make a non-interest bearing deposit” or “be subject to fines of suitable size”.

Britain would be left with the financial authority of a charge-capped borough council.  How can any Conservative MP continue to support as Prime Minister someone who is apparently in two minds about whether or not our country should be obliterated as an independent nation?  John Redwood offers a clear break with the Major government’s incomprehension and muddle.

A letter to the Editor of the Sunday Telegraph which was published on 19th February 1995.

Before Sir Patrick Sheehy (Business, February 12th) writes another article advocating abolition of the pound, he should read the Maastricht Treaty, particularly Protocol 3, which defines the powers and constitution of the future European Central Bank.  He will see that, far from Britain having “more control of interest rates in Europe than we do now”, we shall have no influence whatsoever.

Article 7 of Protocol 3 says that “when exercising the powers and carrying out the tasks conferred upon them by this treaty and this statute, neither the ECB, nor a national central bank, nor any member of their decision-making bodies shall seek or take instruction from Community institutions or bodies, from any government of a member state or from any other body.  The Community institutions and bodies and the Governments of the member states undertake to respect this principle and not to seek to influence the decision-making bodies of the ECB and of the national central banks in the performance of their tasks.”

Thus, not only will government ministers be unable to even speak with the board of the European Central Bank, but the Chancellor’s much publicised meetings with the Governor of the Bank of England will actually be illegal.