Geoffrey Howe is guilty. Whatever he actually said about Liverpool’s problems during some early Thatcher Cabinet meetings, he was culpable for his failure to draw the obvious conclusion. The city was finding it impossible to compete with London and the South of England. In different circumstances, this could have been rectified by devaluation. Liverpool would then have used a weaker currency: let us call it the Scouse.
In a single country, that option was not available, so there was only one alternative. Despite Geoffrey Howe’s reservations, Liverpool received large subsidies from taxpayers elsewhere in Britain: fiscal transfers. Yet even under that generous regime, it continued to struggle.
So how on earth did Lord Howe conclude that the whole of Europe could use the same currency and the same interest rate, with minimal fiscal transfers? There is one possible answer. Geoffrey Howe may well have believed that monetary union would lead inexorably to fiscal union and thus to political union. If so, we should inquire why he – and the other Eurofanatics – failed to share that insight with the British public, whom they were trying to persuade of the merits of the single currency. We should also remind Lord Howe and his friends that before adding the roof, it is a good idea to build the walls.
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