Politics: Channel of division: How Europe has split British politics

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The Commons sceptics

William Hague's Shadow Cabinet is dominated by Euro-sceptics led by John Redwood, Michael Howard, Ian Duncan Smith, and Peter Lilley.

If Mr Hague slips, Michael Portillo would challenge for the crown, but is trimming. The Euro-sceptics are underpinned by an effective grass roots force, through Cafe (Conservative Action for Europe) which includes Lord Tebbit, Ian Duncan-Smith and the former whipless Tory rebels: Sir Richard Body, Nick Budgen, Chris Gill, Teresa Gorman, Tony Marlow, Richard Shepherd, Sir Teddy Taylor and John Wilkinson. Labour's Euro-sceptics are members of the European Safeguards Committee, formerly run by ex-MP Peter Shore; the torch is now carried by Denzil Davis, Tony Benn, Alan Simpson, and many members of the Campaign Group of left-wing Labour MPs. Other sceptics include the Bruges Group and the Referendum Movement.

Britons fear Euro

Most people want to remain in Europe but an equally clear-cut majority oppose involvement in a Single European Currency.

Mori found that 50 per cent were opposed to monetary union, compared to just 39 per cent in favour.

Only 22 per cent of people wish to sign immediately.

An overwhelming 67 per cent of people were against joining a United States of Europe with a federal government.

Only 19 per cent said they supported this.

Part of the reason might be the belief that joining would sign Britain up for ever; 65 per cent said they felt Britain would not be able to leave once it had joined.

Sixty per cent believe joining a single currency would result in the transfer of control over the setting of tax rates to politicians in Brussels.

A similar percentage of people feel British taxes would be used to reduce unemployment in other member- states.

Business opponents

Although they may be small in number, the Euro-sceptic firms have plenty of clout.

The Institute of Directors, led by Tim Melville-Ross, is firmly Euro- sceptic, as is Dixons, under the arch-Euro-sceptic, Stanley Kalms.

The Governor of the Bank of England, Eddie George, told the Labour Campaign Group: "It's the wrong time, and the wrong place ... but it's alright by Helmut ...". But "steady Eddie" says in a glossy brochure to be published on Thursday for Britain's presidency that British firms are right to prepare for the euro.

The Commons enthusiasts

The big hitters on the pro-European wing of the Tory party have decided to come out fighting behind Tony Blair, Gordon Brown and Euro- enthusiasts in the Cabinet, after being silent in the general election.

They are dominated by Tory stars of the past - Michael Heseltine, Kenneth Clarke, Lord Howe, John Gummer, and Sir Edward Heath. But they are convinced they speak for the heart of the party some of them joined half a century ago. They have the backing the Tory Positive European Group, and the Tory Mainstream group, and a cross-party network through the European Movement. No members of the Cabinet admit to being sceptics but Robin Cook and John Prescott are cautious supporters.

Britons want to keep ties

The most recent opinion poll suggested that, despite being an island nation, most people think Britain needs to remain part of Europe.

Most Britons believe its future lies with some involvement in Europe. Mori found 58 per cent would rather stay in the EU than pull out. Only 35 per cent said they felt Britain was better off without this bond with its European partners. Some 28 per cent are encouraged and influenced by the CBI, which has come out in favour of closer European links.

From a purely party political position, Labour's more Euro-friendly stance does not seem to have alienated it from the electorate. The survey, taken in November, found that 56 per cent would vote Labour if there were an imminent election. The Conservatives would get 30 per cent of votes, the survey suggested. Most Britons are attracted by the possibility of lower interest rates, although the vast majority feel this is unlikely to be a result of closer links.

Businesses warming to Euro

Big Business is firmly behind the moves towards

economic and monetary union, judging that a single currency will bring exchange stability and make it easier to sell goods in Europe.

The CBI president, Sir Colin Marshall, chairman of British Airways, gave backing to the Chancellor's policy of joining when the time is right. Businesses which support this line include BP, BAT, Vauxhall, Guinness, and Northern Foods.

The Tory Party chairman, Cecil Parkinson has been warned by a pro-Euro delegation that the Tories would lose all credibility if they went into the next general election with the CBI backing Labour, instead of its natural allies in the Conservative Party.