New Labour’s ambiguous ‘when we’re ready’ stance on European Monetary Union is driven by a desire to retain political power and not by economic concerns, say FDs.
In a poll of 200 FDs for The Big Question, a survey commissioned by Accountancy Age and Reed Accountancy Personnel, 45% said political expediency was the driving force behind the government’s EMU policy.
Only 34% believed the cabinet was thinking in terms of economic concerns, while the remainder were unsure about Labour’s motivation.
There was a plethora of cynical comments from respondents, such as: ‘The primary purpose of all politicians is to be re-elected,’ and ‘Labour have been in the wilderness for years, so they want to remain in power.’
But there were more complex arguments too, with several FDs claiming that the UK would benefit financially from being in the first wave of EMU entrants, and indecision was therefore more likely to be about political sensitivities than economic concerns.
The 34% who said the government was putting the economy first generally felt that Labour had few political worries. George McGrady, financial director of UCB Homeloans, said: ‘Considering the majority the government has, the need to retain political power is not really an issue.’
Other FDs said the political and economic issues were inextricably linked.
‘It is a question of many national interests,’ said one FD. ‘The fear of other nations, their economies, politics and cultures are all giving rise to a reluctance to go too far with integration.’
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