To ask the Chancellor of the Exchequer what distinction he makes between United Kingdom monetary policy and membership of the exchange rate mechanism in the context of stage two of economic and monetary union.

Article 3(1) of the protocol to the Treaty on European Union (Cm 1934) setting out the statutes of the European Monetary Institute provides that monetary policy would remain the responsibility of national authorities in stage 2 of economic and monetary union. It would remain a matter for national authorities to decide whether they wished their currency to participate in the exchange rate mechanism.