Blair rules out early euro vote

TONY BLAIR has squashed demands for the Government to adopt a more positive policy on the European single currency.

In a setback for pro- Europeans, the Prime Minister has ruled that Britain will not set a target date for joining the euro - a course favoured by the Confederation of British Industry and some of his own ministers.

Mr Blair is adamant that his Government will not change the policy it announced a year ago, which in effect put off the crucial decision on single currency membership until after the next election. His stance means pro-euro ministers have abandoned hope that he will call a referendum on the issue before then.

The Prime Minister is said to be "unhappy" at the speech made at last week's CBI conference by Peter Mandelson, the Secretary of State for Trade and Industry, who suggested it was a matter of "when" rather than "if" Britain joined the euro.

Speculation that Mr Blair was warming towards a more positive policy was fuelled when Gordon Brown, the Chancellor, announced that a national changeover plan on how Britain would switch to the single currency would be published in January.

Allies say Mr Blair is determined to stick to the more cautious policy he agreed with Mr Brown last year. His view will dismay pro-European businessmen, who hoped the Government would be persuaded to fix a date early in the next century, by which time Britain intended to take part provided its five "economic tests" had been met.

But one senior government source said: "The Prime Minister is not going to budge on this. He thinks it would pre-empt the decision and be seen as a sign that we would go in under any circumstances."

Mr Blair's "softly, softly" approach will be seen as stemming from his desire not to alienate Eurosceptic newspapers before the next election. One pro-euro businessman said: "It is time the Prime Minister gave a lead ... Some of us who have put our heads above the parapet are getting pretty fed up."

Yesterday, Mr Brown reflected Mr Blair's caution when he said it was "realistic to assume" there would not be a referendum on the euro until after the next general election.

The Chancellor told BBC Television's On the Record programme the decision should be made on the grounds of "national economic interest".

He said public support was growing for the Government's "right and sensible" policy that the five economic tests should be assessed in the next Parliament.

"The Conservative Party would make it on ideological grounds, other people would just jump in tomorrow because they think it's right in principle," he said.

The Chancellor also denied that his economic forecasts, set out in his draft Budget last week, were over-optimistic, but he did admit Britain was facing "difficult times" ahead.

Mr Brown, who will be quizzed about his forecasts by the Commons Treasury Select Committee today, conceded his figures could be blown off course by the world recession.

His admission comes as the CBI's latest poll of small and medium-sized manufacturing companies, published today, found business confidence, new orders and job prospects at their lowest since 1991.

Small business gloom, page 17