Rt Hon Lord Lilley

    Peter Lilley, MP for Hitchin and Harpenden warned today that Hertfordshire County Council has been hit with a new Whitehall directive telling it to prepare to scrap the Pound and introduce the euro. This is despite there being no consent from the British people to endorse such a change.

    The Treasury and Office of the Deputy Prime Minister have issued new guidance to local councils across the country to prepare for the euro, advising councils that ‘significant resources‘ will be required to prepare now for the currency changeover, including plans for a major PR campaign. The guidance was issued without any government press release. In addition, it advises councils that they may wish to increase car parking charges, fines and charges for other council-run services, using a euro changeover to mask price ‘revisions‘.

    Peter Lilley said: “At a time when council taxes are going through the roof, the Government is burdening local councils with yet more wasteful expenditure. Despite there being no demand to scrap the Pound and the Government‘s own assessment conceding it would damage our economy to do so, Whitehall bureaucrats are surreptitiously requiring councils to spend money on preparing to issue council tax bills and car parking charges in euros.

    “Scrapping the Pound would mean higher prices for customers. On the Continent, the euro has provoked a burst of inflation for many retail goods. Even this Government guidance admits that a euro changeover could be used to increase council charges by stealth.

    “Time and resources better spent on improving local public services will be wasted on planning for something that the majority of the British public oppose.”

    Councillor David Beatty, Deputy Leader of Hertfordshire County Council, said: “We shall resist government attempts to make us waste council taxpayers‘ money before any decision has been made on this issue by the British people”.

    Notes to Editors
    The Office for the Deputy Prime Minister and HM Treasury published ‘Local authorities: Euro Preparations Guidance – Part 1‘ in June 2003 for all local authorities in the UK.

    The report advises that large amounts of administrative preparations will be required
    “Local authorities are strongly advised to commence preparations to ensure they could deliver a changeover” (p.3)… “Sufficient resources would need to be devoted to planning to ensure a smooth and cost-effective changeover” (p.6)


    Resources should be devoted to spin and communications
    “Authorities are encouraged to develop communication strategies that dovetail with national plans” (p.25) and on the issue of price hikes, advises to “factor smoothing considerations into communication plans” (p.40).

    Prices may rise for council services
    “Even after rounding according to EC rules, amounts might seem ‘odd‘ or ‘rough‘… organisations might decide to apply certain further adjustments to produce more convenient euro amounts, known as ‘smoothing‘… car parking charges, fines and some charges for retail services (e.g. public conveniences) might need to be smoothed” (p.17).

    “Coin vended services might require a euro conversion to be smoothed to an operationally practical level” (p.32)
    “Where for operational reasons (e.g. for coin acceptance in customer operated ticket machines), it would not be operationally practical for the exact equivalent of the sterling price to be charged in euro, it would be necessary for the amount to be ‘smoothed‘ in euro… [operators may wish to] combine the conversion with a suitably publicised general price revision” (p.37)

    Higher prices in eurozone

    In the eurozone, the introduction of the euro coincided with a large increase in prices for consumers. For example:

    ? In Germany, a poll for finance magazine Focus-Money found that German consumers believed that the cost of living has risen by an average of ?66 a month since the euro was introduced and the euro has made life ‘considerably‘ more expensive, with price rises across a range of products and services, from food to parking to rail fares (cited in Daily Mail, 5 April 2002).

    ? In Greece, there was a four-day national consumer boycott of shops in protest at price mark-ups. Giorgos Dimitriades from the National Bank of Greece remarked, “across the country, you hear the same story, that the lack of euro coins is to blame for the mark-ups. But what we are really seeing is a classic case of greed” (cited in The Guardian, 19 September 2002).

    ? In Ireland, an AgriAware survey found that 93 per cent of Irish consumers believed that food prices had increased since the introduction of the euro (cited in Irish Times, 11 September 2002). An ICM telephone poll carried out in September 2002 revealed that 91 per cent of people believed that their weekly expenditure had gone up since the introduction of the euro. 88 per cent hade come across situations where the cost of goods and services had been rounded up.