Brown picks at old Tory wounds
Friday 18 July 1997
By picking at the Tory wounds over Europe, the Chancellor of the Exchequer was able to portray its leadership as anti-business - while embarrassing moderate members of the party, who would endorse much of Mr Brown's argument for an open approach to the euro.
Mr Brown said that the new line taken by William Hague, rejecting a single currency under his leadership, while calling for a referendum on the Treaty of Amsterdam, represented a new dogmatism.
"Today," he said, "The Conservative Party are repeating the Labour mistakes of 1983. Then, it was suggested by the CBI that Labour's policy of disengagement put 2.5 million jobs at risk.
"That was when 44 per cent of our exports went to EU members. Now it is 58 per cent of our trade, and, by the same logic, nearer 3.5 million jobs depend on the single market ...
"The idea that we could become a Hong Kong of Europe as a trading post or as a tax haven servicing major trading blocs - the Tory idea of a greater Guernsey - only needs a minute's consideration to be rejected."
Having rejected the negative Tory stance, Mr Brown said that the country required constructive engagement with Europe, and the biggest challenge to be faced was that of the single currency.
The Chancellor recited the Treasury mantra, "that while nothing has been ruled out, there are formidable obstacles to the UK joining the single currency in the first wave."
But he added that British industry would be affected whether or not Britain joined the euro, and he pointed to the significant advantages of a single currency in a fully-developed single market - the elimination of exchange rate risk, more transparent pricing, a reduction of transaction costs, and lower long-term interest rates, which, in turn, would promote investment, growth and jobs.
However, Mr Brown said a hard-headed assessment would be required of Britain's national economic interest.
That meant a judgement would have to be taken on the basis of certain tests: would membership improve long-term investment; what would be the impact on financial services; would economic structures be compatible with the constraints of permanent membership; and would there be sufficient, inbuilt flexibility to take any strains?
Mr Brown said his "bottom line" was whether membership would promote higher growth, stability and a lasting increase in jobs. But he added: "Our concern about the single currency has always been that Britain should only join if the economic conditions are right, not on the basis of a timetable that has been set politically."
He said that "when" the time came to make a decision - the word "if" was not used - it would be reached in the British way, coolly, and the people would be consulted by referendum.
"To make the right decision for Britain," Mr Brown said, "we need an open and intelligent debate. Until now, the debate on our economic role in Europe, and especially Economic and Monetary Union, has been dominated by extreme views on either side. Dogma competing to be heard above prejudice. This is not the way to protect and forward British national interests."
Donald Macintyre, page 21
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