Grandees tell Blair to stop stalling on Europe

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TONY BLAIR is urged today by a powerful all-party alliance of senior politicians to come off the fence on Europe by declaring that Britain will definitely join the single currency.

In a letter to The Independent, they warn the Prime Minister he will be in a stronger position to resist moves to harmonise taxes across Europe if Britain makes a commitment to join the euro. The signatories include Kenneth Clarke, the former chancellor; Lord Howe of Aberavon, former foreign secretary; Lord Hattersley, Labour's former deputy leader; and Lord Jenkins of Hillhead, a former Labour chancellor and one-time SDP leader.

Their intervention comes amid a growing cabinet debate on whether the Government should strike a more positive note about the single currency when it is launched by 11 other European Union countries in less than five weeks. Some ministers want the National Changeover Plan to be published in January to change the Government's policy from being one of "if" Britain joins to "when" - but Mr Blair is not yet convinced.

Today's letter from officers of the European Movement will strengthen the hand of the ministers who support early British entry, including Gordon Brown, the Chancellor and Peter Mandelson, the Trade and Industry Secretary.

"In or out of EMU, the impact of a euro zone five times the size of our economy will be enormous," says the group. "The opportunities are clear. The danger is that by selfimposed exclusion our competitiveness will suffer from increasing economic instability and higher interest rates and that our political influence on major economic decisions in Europe will be gradually eroded."

They warn Mr Blair that Britain's voice "must be at the centre, not the margin" of EU policy-making on key issues such as tax harmonisation, exchange rates and whether tough rules on budget deficits should be relaxed to combat unemployment.

The group welcomed last week's similar call by 114 senior British businessmen. Another 150 businessmen have since backed their statement and Sir Bryan Nicholson, chairman of Bupa, who organised the initiative, said: "The vast majority of British firms want Britain to join a successful single currency because it will mean a much more stable economic future for Britain."

Sir Leon Brittan, the vice-president of the European Commission, echoed the warning that Britain would have a better chance of resisting a common EU tax policy if it were signed up to the euro. "If Britain were actually in the single currency, it would be able quite easily to stop this head of steam," he said.

Joyce Quin, Minister for Europe, dismissed reports that Britain could be forced to raise its tax rates as "scare stories".

But William Hague accused the Government of misleading the public. He said Mr Brown signed documents on tax harmonisation with his EU counterparts and then told people he would block the moves when he returned home.

"This is going beyond the acceptable limits of political and economic union," Mr Hague said.

Mr Blair's caution about adopting a more positive line will be reinforced by an opinion poll yesterday showing the number of people supporting EU membership fell from 77 per cent in 1991 to 55 per cent last year. The survey by British and Social European Attitudes found that 28 per cent favoured withdrawal from Europe.

Letters, Review, page 2