Bosses at loggerheads over single currency

Click to follow
The Independent Online
Britain's two leading business organisations came to blows yesterday over the single currency amid reports that the Confederation of British Industry was set to back European economic and monetary union.

Lord Young, president of the Institute of Directors and a former Conservative cabinet minister, said: "I have never forgotten the way the CBI came out against all our trade union reforms in the 1980s because they wanted an easy time. It could be they are looking to support the single currency because it is the easy way out, because the pound is a problem."

If the CBI endorsed EMU it would be a "step in the wrong direction" because the IoD did not believe Britain should contemplate a single currency for the foreseeable future.

Tim Melville-Ross, the IoD's director-general, followed up Lord Young's criticisms, saying EMU would be damaging for the country and its members. Although it had not canvassed members recently, its last polls showed 70 per cent opposed to EMU. "It is becoming a big company versus small company debate," he added.

A number of large companies including Unilever, whose chairman Niall Fitzgerald heads the CBI's Europe committee, are strongly pro-EMU.

But Mr Melville-Ross said: "Big companies should look beyond their own corporate interests to the wider economy. It is a narrow-minded view when big companies say a single currency is good for Europe."

The CBI, however, sought to distance itself from reports that it was poised to come out in support of Britain joining the single European currency.

It confirmed it had embarked on a private internal consultation exercise which would lead to an official view on the euro by the summer. Three options were being put to members at council meetings in a briefing document written largely by Adair Turner, director-general, and Kate Barker, chief economist.

However, the CBI insisted one of the options was for the UK to stay out of monetary union "for the foreseeable future". The other two options are thought to be to join in the first wave of countries in 1999 and to wait on the sidelines before making a decision.

There are 13 regional CBI councils, though a spokesman said the decision would be made through "consultation" and would not be put to a vote.

Andrew Buxton, head of the CBI's economic committee, refused to be drawn on which way the consultation process would go. The CBI position is to keep the option to join open while expressing no opinion in principle either way. "I've no way of pre-judging the consultation process," Mr Buxton said.

IoD Conference, page 24