OK, some of the economic arguments. Much of what follows I've lifted from Lord Pearson's paper. As a matter of interest, I agree with the noble Lord that Britain should leave the EU, not just avoid EMU. Two arguments that I don't think he cites are, firstly, our constitutional (in the sense of psychological make-up) unfittedness. Unlike the other EU nations (some more, some less), we don't like the deceit of saying one thing and then ignoring it or doing the opposite. And not only do we draft in armies of bureaucrats to police Brussels' directives, we add to their detail. Secondly, there's a lot of anti-British feeling within Europe. Mainly, I think, this is because they are aware that we had to dig them out of the mire twice in the first half of last century, and their guilt and gratitude, which their pride won't let them show, finds outlet as anti-Britishness (Ireland, of course, has its own, different, reasons for anti-Britishness); that we did it both times with America's help also accounts for the anti-Americanism to which I alluded here.

EMU's basic flaw is that one interest rate must fit 11 different economies, where mobility of labour is low (probably because there is no common language), and interstate transfers on the scale practised in the USA are non-existent. (To hold the US together, interstate transfers through the federal budget can reach 20% of a state's GDP. The EU budget is at present limited to 1.27% GDP). The Europhile claim that interest and mortgage rates would fall if we join EMU is simplistic. We would certainly be forced to accept an interest rate which would be wrong for us (look at Ireland), risking inflation (look at Ireland), unemployment and, in the longer term, higher rates than if we stay out.

The UK does not have a long-term opt out of EMU, because a number of clauses have been left in the Treaty which commit us to run our economy in a 'communautaire' way, on pain of unlimited fines in the Luxembourg Court, (eg for 'exporting unemployment' or 'unfair tax competition'). Our adherence to the EU's Stability and Growth Pact ensnares us further. (That adds weight to my argument that we should leave the EU.)

The UK's economy continues to diverge from that of the EU, although it continues to converge with that of the USA. So the pound has tracked the dollar naturally, and moved away from the euro (to be more precise, the euro has moved away from the pound).

Thanks to its labour and social policies, the EU's share of world markets is declining (down 11% over the last ten years), while that of the North American Free Trade Agreement (NAFTA) is increasing (up 21% over the last ten years).

If we join EMU, our eventual share of our partners' unfunded pension liabilities could amount to at least £20,000 per person or £1.2 trillion.

Britain's trade with the EU accounted for only 18.5% of GDP and was in deficit by £8.93 billion in 1999, and is in long-term decline. British exports to the North American Free Trade Area (NAFTA) have been growing at 9.2% a year since 1992, exports to the rest of the world have been growing at 8.5%, but exports to the EU have been growing at just 7.1%. This is despite the claimed "benefits" of the Single Market to trade within the EU. All the Single Market really achieved was a greatly strengthened Brussels bureaucracy regulating and limiting virtually every aspect of business activity.

The Institute of Directors has estimated that EU membership overall currently costs the UK between £15-25 billion each year - equivalent to £1000 per household. (Daily Telegraph, 7 February 2001)

In November 2000, the House of Commons Trade and Industry Committee (which is has a Labour Majority) attacked the government for ignoring the issue of euro transitional costs. The Government, says the Committee, is "unwilling even to discuss the costs" of adopting the euro, which is perhaps unsurprising, since the consultancy KPMG puts the total cost at £51 billion, based on responses from 300 firms that estimated the cost to them of £30 million each. The British Retail Consortium estimates the retail costs for making the changeover to the euro at around 2.5% of turnover, with smaller firms suffering disproportionately high costs. And who will bear these costs? Why, you and I will, of course. In the light of their magnitude, I regard arguments, such as we've seen above, which complain about the odd couple of quid paid in commission to a Bureau de Change, as trivial.

Britain's membership of the European Exchange Rate Mechanism (ERM) in the early '90s cost one million jobs and sent 100,000 businesses bankrupt; her economy started to recover immediately she was squeezed out so unceremoniously. If you think EMU will be different, you'd better come up with some convincing arguments as to why. EMU is the ERM without the escape hatch.

There won't be a referendum on EMU unless the Prime Minister is fairly sure of winning it, but the country will go on being sucked into the quicksand of the rest of the Treaty, which we can't avoid while we stay in the EU. It's time to leave.