If the UK and Eurozone economies are sufficiently aligned, then joining would be advantageous. But all the evidence to date is that they aren’t. E.g. Brown’s Five Economic Tests which were never passed.
The pound has varied between 1.1 and 1.6 euros, over the last 25 years, which would be the right level to fix at? Although Sterling would be gone, the effect of relative competitiveness is effectively frozen at the rate you pick. The pound had a sharp devaluation in 2008 after the financial crash which arguably assisted the recovery, that would no longer be possible in a future event.
As a country with a sovereign currency, government can work together with the central bank. In the Eurozone they can’t tailor things to the same extent as one country may want a rise whilst another needs a fall.
The poster child for this is Greece. Who have many problems that the UK doesn’t necessarily have. But several of Greece’s issues over the last couple of decades have been exacerbated by the inability to do the usual thing of devaluing their currency and resetting the relationship with their trading partners.
A reduction in costs from not having to convert currencies when trading is small beer compared to the massive potential costs of losing those economic levers.
With all due respect, a lot of what the politicians say about it is twaddle. How much of what you have written is taken from what politicians say?
Remember, members of the house of parliament, that is MPs, are supposed to be lay people. Granted, some do actually know a lot more and may be very knowledgeable in their own area.
If you use the argument that you want something (say the economy) to be sufficiently aligned, you are actually just making an excuse not to do it instead of being clear and transparent and saying you don't agree.
Any fool can come up with any number of so called 'tests', and then use the 'failure' as an excuse.
The value of the pound will fluctuate. That's the whole point of a floating currency exchange system. And there is unlikely to ever be a 'right' level at which the U.K. would join, because that would require people here to agree to what that level should or would be. And those agains are never going to agree with those that want to join.
The 'relative competitiveness' is not fixed. Our economy is not fixed. Prices of goods, services, labour and any and everything change constantly. As does the actual rate of inflation for individual goods, services and labour (rather than the official rate like CPI which is a 'basket' of items, so is subject to averaging).
Furthermore, prices of goods, services, labour etc. are in part related to the cost of fuel, and fuel (natural gas, oil, oil deprived fuels, lubricants, plastics etc.) are traded at international rates.
Devaluing your currency is not a win. The relative value of the currency affects imports and exports. If the value swings in one direction, exporters do better and importers do worse. If it swings in the other direction, importers do better and exporters do worse. Long term, both directions are worst for us as a country. The real answer is actually the policies of the government and what they actually do to fix the actual problems. Devaluing your currency will not fix fundamental internal problems in a country. One of which is a government spending more money than which they have tax income. Both the Conservatives and Labour are guilty of this or have been in the past.
Another is allowing the infrastructure or services (NHS for example) to degrade or become worse. The Conservatives are very guilty of these later points. They go on about getting people back to work but don't want to do much to improve the NHS so that workers who can't work due to medical reasons can be treated sooner. If you are waiting for months for treatment, that's months that you are off work.
The birth rate and immigration also have an effect (if the birth rate is low, immigration is a good thing for the economy and therefore the country).
When you point older generation, be careful.
Sorry, I did not mean all the older generation. I should not have been so generic.
Obviously it won't cure the harm that had already been done: The people who came here under FOM are already here and already need houses and infrastructure etc., and that's not going to change quickly: That can only get fixed over time as we build enough houses etc. to accommodate the people who are already here. The point is that stopping FOM prevents even more harm being done in the future, since it means that we don't have hundreds of thousands more people coming every year into the future under FOM rules, thereby putting even more pressure than already exists on housing.
Instead we have even more people from non-EC countries. The fundamental facts are that (1) you can't stop immigration using the methods put forward by the current government, the Conservatives are just using it for political reasons, (2) as a country, we need immigration, (3) people come here for a better life, to earn money and given the amount of effort they put into their journey, don't expect whatever any government does to make any significant difference.
Rather than wasting money on trying to stop illegal immigration, it would be far more productive to spend that money on processing legal immigration, on council housing, on the NHS, on schools and on other infrastructure.
