THE British government appears to have bowed to pressure from its backbenchers on the continuing dispute over the European Single Currency with the announcement that the Chancellor, Mr Kenneth Clarke, will make a statement in the Commons today to "correct" what he called "misleading reports" on the government's position on the issue.
The Prime Minister, Mr John Major, had faced renewed calls from MPs at the weekend to allow a Commons debate on the preparations for a European Single Currency. Despite Mr Major's decision not to allow the debate, the government was apparently prompted to act by the publication yesterday of extracts from internal documents prepared by the Treasury, which appear to contradict policy assurances that the European Union would not be allowed to influence economic policy if the government chose to stay outside a single currency.
The Treasury has denied a report in the Sunday Times which claims the documents have been withheld from MPs and includes a number of Treasury recommendations which the documents admitted "will not be acceptable to Parliament", saying they were "not now relevant".
However, the Treasury document, used during recent negotiations with European finance ministers, warns that Britain would be forced to announce "mini budgets or other emergency measures" if it entered a single currency, in order to escape fines of up to £4 billion a year should it tail to meet the EU's currency criteria.
The Treasury document was accompanied by the publication of a confidential report from the European Monetary Institute (EMI), which suggested that even if Britain does not join a single currency the pound will be required to "shadow" the euro, a scenario which Mr Clarke failed to discuss recently when he summarised the EMI report for a Commons select committee.
A spokesman for the Chancellor said last night Mr Clarke wanted to reiterate to MP's that no binding decisions affecting Britain's economy would be taken at the meeting of European finance ministers on December 2nd, or at next month's Inter Governmental Conference in Dublin.
The Scottish Secretary, Mr Michael Forsyth, supported Mr Clarke's assurances yesterday when he said: "There's no question of the government making any commitment on behalf of the United Kingdom which has not been subject to Parliament's scrutiny and approved by Parliament. It's perfectly possible to discuss these matters without making a commitment."