Politics: Brown paves the way for the euro

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The Independent Online
GORDON BROWN yesterday gave the clearest signal so far that he wants Britain to join the European single currency when he told MPs he will publish a national change-over plan this year for Britain to adjust to the start of the euro.

Underlining the Treasury's support for the euro, Margaret Beckett, the President of the Board of Trade, and trade minister Lord Simon are to head a campaign called Britain Preparing for Europe to highlight the preparations the UK is making for the changeover to the euro from 1999.

Although Britain will not join in the first wave, Mr Brown left no doubt in the Commons that he is keen to do so, while keeping to the formula agreed with Tony Blair last year, for Britain's entry after 1999 providing joining the euro is in Britain's economic interests and there is agreement in the Cabinet, in Parliament, and a "yes" vote in a referendum.

In the meantime, he told MPs he would not let Britain be left behind when the euro is started.

"I am determined to ensure that Britain will continue to be the best place in Europe to develop business opportunities after 1999," he said.

"In or out of the euro, preparing for the introduction of the euro is of vital importance. The Government is working closely with business to ensure that when the euro arrives in 1999, business will be able to use it in the UK from 1999," Mr Brown added.

Firms will be able to use the euro in dealing in company accounts, in company taxes and the UK banking system. Local and national businesses as well as international financial markets will be able to trade in the euro in the UK, he said.

The drive to the euro will be stepped up today when Britain will vote in favour of the establishment of the euro by 11 European countries, led by France and Germany, at a European finance ministers (Ecofin) council, which the Chancellor will chair, in Brussels.

The European finance ministers will also agree a detailed timetable for the introduction of tax and spending rules for the 11 countries who are to join the euro to reinforce the stability pact for the single currency.

Britain will emphasise the need for strict policing of the disciplinary rules, which includes automatic fines on countries with excessive debts, but it will go further by backing economic reform.

Treasury sources said the Chancellor was pleased with the shift to the agenda for job creation inside Ecofin. "A year ago we were arguing about whether the euro was going to be round, square or triangular.

"Now they are talking about things like the creation of jobs and the economic environment, which we have been campaigning for since we arrived," said a source.

In complete contrast to Mr Brown, Peter Lilley, the Conservative spokesman on Treasury affairs, warned against Britain supporting the launch of a soft euro currency "pushing the pound even higher, hitting exports even harder and driving manufacturing into recession".