Countdown To The Euro: Blair treads softly on new currency

"WE HAVE to fight back against all this nonsense," Tony Blair told one of his closest advisers as he surveyed another day of damaging headlines about how an EU-wide tax policy was going to be imposed on Britain.

According to aides, the Prime Minister recognised that his twin-track strategy of appeasing Britain's Eurosceptic newspapers while the Government adopted a pro-European policy was no longer tenable.

"He finally realised that we were not going to get anywhere in Europe unless we took on the Europhobe press," said a government source. "For him it was a very serious moment."

A referendum on whether Britain should join the single currency is still some years away, but the starting gun for the campaign will be fired on 1 January when the euro is launched by 11 other European Union countries.

The "yes" and "no" camps already exist in embryonic form and they agree that 1999 could be critical in shaping public opinion ahead of the referendum that Mr Blair is expected to call shortly after the next general election. The pace of the great debate will quicken in January when Gordon Brown, the Chancellor, publishes a national changeover plan setting out what steps Britain needs to take to prepare for euro entry.

Pro-euro businessmen and the Liberal Democrats hope Mr Blair will use the occasion to change the Government's policy to one of "not if, but when" - in effect, a declaration. Yet Mr Blair is unlikely to harden the policy of the Government, which is committed to monetary union in principle but insists the key tests on whether to join will be economic. "There will a more pro-European tone, but the policy won't change," one minister said.

Nevertheless, supporters of a single currency concede the Prime Minister is edging slowly in their direction: they welcomed his fightback against the Eurosceptic press during the recent controversy over a common EU tax policy.

Some businessmen are sceptical about the Prime Minister's keenness to take on such Eurosceptics as Rupert Murdoch, Conrad Black and Lord Rothermere.

Ministers close to Mr Blair believe, however, he has crossed the Rubicon. "The Government's duty is to lead opinion, not follow it," said one.

Mr Blair knows that saying "yes" to the euro now would provoke divisions in the Cabinet and the Labour Party. He is attracted by a "slowly, slowly" strategy in which public hostility to the euro dissipates after a successful launch. Keeping his options open will allow Mr Blair to argue that opponents of the euro could safely vote Labour at the next general election, knowing they could then vote "no" in a referendum.

Another factor the Prime Minister would be considering is the elections to the European Parliament in June - a big test of public opinion. The Tories will fight strongly on European issues. William Hague needs to make big gains to bolster his position as Tory leader, and his allies believe he can unite his party around his policy of ruling out single currency membership during this Parliament and the next. The Tories should do well; the introduction of proportional representation will help them. But the key question will be whether the pro-European heavyweights, like Kenneth Clarke and Michael Heseltine, keep their heads down.

Labour will develop a "pro-Europe, but pro-reform in Europe" strategy, in the hope of preventing the Tories from painting it as a federalist party which swallows all the medicine prescribed by Brussels.

The lesson of the 1975 referendum, when the British people voted by a margin of 2-1 to stay in the then Common Market, bodes well for the "yes" campaign. The "no" camp will try to prevent the debate being turned into one about Britain's engagement in Europe.

Although the "no" campaign will probably have more money at its disposal, it may suffer from internal differences. There are more than 30 organisations in the Eurosceptic camp. A more formal structure may be set up later this year, but one participant admitted: "It will be very difficult to get everyone to work together."

In contrast, the putative "yes" campaign is applying the "command and control" strategy which served Labour so well at the last general election.

What the public makes of the great euro debate is another matter. At present, they are "switched off". But they will certainly notice the frantic activity of the next six months.

The Pros

Leaders: The all-party European Movement (Giles Radice, Labour MP); Lord Hollick, newspaper proprietor (left); Kenneth Clarke, former Tory chancellor; Peter Mandelson, former cabinet minister; Paddy Ashdown

Position: Want early declaration by the Government that it intends joining single currency

Strengths: Strong all-party base; business back-up

Weaknesses: Tony Blair reluctant to come off fence

Prospects: Will run disciplined campaign; successful euro launch would strengthen position

The Antis

Leaders: Baroness Thatcher; William Hague; European Foundation (Bill Cash, Tory MP); European Research Group (Sir Michael Spicer, Tory MP); Democracy Movement (Paul Sykes, businessman, left); Austin Mitchell (Labour MP); Business for Sterling (Lord Stirling)

Position: Divided between "never" and "not for two Parliaments" (Hague)

Strengths: Will play on people's EU doubts; backers' money

Weaknesses: Thirty-plus groups

Prospects: May be battling against tide of history

The `Not Yets'

Leaders: Lord Owen (left, former Labour foreign secretary and SDP leader); Lord Prior (former Tory cabinet "wet"); Martin Taylor (former chief executive, Barclays Bank)

Position: Britain should not join euro now, but still play a positive role in the EU

Strengths: Cannot be tarnished as anti-European; respected group of elder statesmen

Weaknesses: Difficult message to project; must avoid looking like band of yesterday's men

Prospects: May be outflanked by "yes" and "no" campaigns

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: New Business Development Manager / Sales - UK New Business

£24000 - £36000 per annum: Recruitment Genius: Join a fast growing, UK based I...

MBDA UK Ltd: Mission Planning and Control Solutions Systems Engineer

Competitive salary & benefits: MBDA UK Ltd: What’s the opportunity? A pro-act...

MBDA UK Ltd: System Design Capability

Competitive salary & benefits: MBDA UK Ltd: What’s the opportunity? The small...

Recruitment Genius: Time Served Fabricator / Welders - Immediate Start

£25000 - £35000 per annum: Recruitment Genius: Fabricator welder required for ...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific