A letter to the Editor of the Daily Telegraph which was published on 16th May 2003.

Lord Simon of Highbury’s advocacy of Britain abolishing the pound on the grounds that it will assist inward investment in competition with euroland (report, May 14th) sits oddly with the record of his own term as chairman of BP when the vast bulk of its investment went into North America and the Far East, especially China, as it continues to do.

Likewise, claims by Sir Nick Scheele of Ford and others (Business, May 13th) that abolishing the pound will introduce vitally needed “stability” hardly squares with his company’s sourcing its engines for European markets from its factories in Brazil, a country whose currency has changed its value against the dollar by about 70 per cent in seven years and changed its name three times in the past 10.

Rick Waggoner, chairman of General Motors, who has just announced £80 million of actual, not theoretical investment, for Vauxhall’s Ellesmere Port plant, is surely right when he commented that the real issue is not the pound/euro exchange rate, but labour competitiveness.

This was borne out last week when a local engineering factory closed with the loss of 270 jobs, basically due to the fact that the competitive Chinese factory pays £15 a week compared with £330 a week here – a difference of 22 times.

This massive difference is engaging the attention of just about every manufacturing company in the land.  Compared with this, the few per cent variations in the pound/euro exchange rate are a total irrelevance.

A letter to the Editor of the Daily Telegraph which was published on 16th October 1997.

Even if Vauxhall now disowns the remarks of Mustafa Mohatarem, an American citizen and employee of General Motors (report, Oct. 15) that “a lot of manufacturing jobs that are tied to sales in Europe are tied to Britain joining EMU” there is still undoubtedly an orchestrated campaign by sectors of big business to push Britain into abolishing its own currency.

The remarks underline not only the deliberate eliding of the different concepts of common market and common currency, but also bring into sharp relief the practice of foreign businessmen interfering in British politics.

One wonders if Mr Mohatarem will now be sent to Canada to tell the Canadians they must abolish their currency so that General Motors will continue to manufacture cars there for the North American Common Market, or to Mexico where GM are busy building plants.

The fact is that all the major car manufacturers, including Ford and BMW whose UK chairmen have also been giving us the benefit of their “advice”, invest globally for global markets irrespective of currencies: car engines come from Brazil to Europe, and go from Britain to the rest of the world, not just Europe.

The bosses of the car companies know this perfectly well, but neither economics nor consistency have ever been corporate businessmen’s strong suit: a year or so ago their view was that the pound would be weak compared with the euro, now they are all afraid that the pound will be too strong.

In 1990 they were virtually unanimous that Britain should join the ERM: two years later they were delighted at the fall of the pound relative to the mark when Britain left the ERM.

In 1996 Sir Michael Perry, then chairman of Unilever, was asked by the House of Lords European Committee what action Unilever would take if Britain did not join the single currency.  He replied, “We operate throughout the world with governments and economic conditions which vary . . . we would not change anything we do”.  Car manufacturers will continue to do exactly the same, whether Britain is in or out of EMU.