Cabinet ministers said last night that the momentum towards British membership was now unstoppable, after Mr Blair told the Commons that Britain "should join a successful single currency provided the economic conditions are met".
The Prime Minister described his historic statement as "a change of gear" rather than a change of policy. But Downing Street conceded that policy had changed because the Government would amend legislation now going through Parliament to allow the Department of Social Security, Inland Revenue and Customs and Excise each to spend "tens of millions of pounds" ensuring that their computer systems were prepared for the euro.
Ministers hope this will encourage the private sector to follow suit, although they refused demands from small businesses for cash help towards the changeover. Mr Blair said that companies would not be forced to act, but suggested it would be in their interests.
The national changeover plan unveiled by Mr Blair suggested that it would take Britain about three years after a "Yes" vote in a referendum to abolish the pound. With a general election expected in the spring of 2001, followed by a referendum that autumn if Labour retained power, the plan would introduce euro notes and coins between two and two-and-a-half years later. The pound would disappear six months after that.
Mr Blair told MPs that the British people would not get a real choice on whether to join the euro unless active preparations were made now. He said both the intention to join and the economic tests he reiterated were real.
These conditions could yet give Labour an escape hatch if the single currency faltered or Britain's economy failed to converge with the rest of the European Union. However, pro-Europe MPs in all parties hailed Mr Blair's statement as a landmark from which it would be difficult to turn back.
William Hague's attack on the statement was undermined when senior Tories, including Kenneth Clarke and Michael Heseltine, gave a warm welcome to Mr Blair's plans.
Last night, the Confederation of British Industry was disappointed that Mr Blair failed to set a target date for joining the euro. But Sir Clive Thompson, its president, said: "The changeover plan is a sensible step forward, with practical guidance on what needs to be done."
The Institute of Directors and the British Retail Consortium both criticised the costs the plan was likely to impose on business and the short changeover period it envisaged. Stephen Alambritis, of the Federation of Small Business, said: "Small companies feel they are being asked to pay for something they don't want." None would spend money on preparations ahead of a yes vote, he predicted.
John Monks, general secretary of the Trades Union Congress, called the plan "an impressive piece of work" , while Ken Jackson, general secretary of the AEEU engineering workers' union, said the Government's commitment to membership in principle was welcome. "What we need now is the date of an early referendum so that British industry can plan without uncertainty," he said.Reuse content