Start preparing for Euro now, says Blair
Tuesday 23 February 1999
But the National Changeover Plan for the euro unveiled in the Prime Minister's House of Commons statement will disappoint businesses looking for a clear lead from the Government on when to start their preparations.
Mr Blair's statement will be seen as the clearest signal yet that Britain will join - but he will reject calls to set a target date. It is therefore likely to anger both the pro- and anti- sides of the business community.
Experts believe the Government's own bill for converting from pounds to euros could be in the region of pounds 1bn, based on the cost to the City of its preparations for the launch of the single currency on 1 January this year.
However, Treasury rules prevent the Government from spending any public money on converting computer systems to euros before the referendum. A letter circulated to departments explicitly bars spending on computer equipment, staff, pilot projects or consultants ahead of a "yes" vote.
This will frustrate businesses looking for details of how much the Government will spend and when, before they are prepared to spend any of their own money.
Ruth Lea, head of policy at the eurosceptic Institute of Directors, said: "Nobody should start making any costly adjustments before a referendum." The Changeover Plan will suggest that it would take Britain three years to introduce the single currency if the public votes "Yes" in a referendum shortly after the next general election. Mr Blair has pencilled in a general election for the spring of 2001, followed by a referendum in the autumn. This would mean that the pound would be abolished in 2004.
The length of time the plan allows between a yes vote and membership is a key issue for business, represented on the committee drawing up the plan by the Confederation of British Industry and British Chambers of Commerce.
It is expected to outline a three-year timetable, which is accepted by retailers' and banks' trade associations but not by all businesses. It could prove even harder for government departments like the Inland Revenue to convert within three years.
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