Major keen to retain an option on EMU

Monetary union: Prime Minister says nothing can be ruled out
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Indy Politics

Political Editor

John Major yesterday reaffirmed his intention not to rule out British membership of EMU in the next Parliament despite strong pressure from Tory right-wingers to do so.

Although there are mounting doubts among senior British politicians in both the main parties about the likelihood of the 1999 timetable for a single currency being met, the Prime Minister said in the Commons it was "still" Government policy not to rule out British membership in the next Parliament.

The Prime Minister's declaration, in exchanges with Tony Blair, the Labour leader, followed his remarks in an interview with the Independent last month that he did not want to "surrender" his influence in negotiations in Europe on the consequences of EMU for countries outside as well as inside a single currency.

The prospect of a White Paper, setting out Britain's negotiating position for the 1996 Inter-Governmental Conference on the EU's future further increased yesterday when Malcolm Rifkind, the Foreign Secretary, told the Commons that ministers were now actively considering whether to publish one early next year.

Mr Major's remarks came a week ahead of the Madrid summit, at which Mr Major is expected to press his case that the economic results for countries outside EMU - including the possibility of competitive devaluations - have not been sufficiently thought through.

It also comes on the eve of a fresh campaign by John Redwood, the former Welsh Secretary and Mr Major's leadership challenger in the summer, to persuade the Government to make a further gesture towards the Euro-sceptic right, by explicitly pledging that a Tory government would not join a single currency in the next Parliament.

Mr Major has frequently cast doubt on the likelihood of a single currency before the end of the century. On the Labour side both Mr Blair, and in a BBC Radio interview yesterday, Robin Cook, his foreign affairs spokesman, have also suggested the 1999 timetable could well slip. Mr Cook suggested on the Today programme that delay might well be necessary in order to meet the widened economic convergence criteria which a Labour government would be seeking.

Although some ministers on the right believe that further discussions on the subject will have to take place within the Cabinet - and that the Prime Minister could still in the end make such a pledge - Kenneth Clarke, the Chancellor, is thought to be strongly opposed to such a move. Mr Major is said at present to accept the argument that it would lessen British influence over an issue which is of fundamental importance, even if the UK stays out of EMU.

After saying that Mr Major had made a "very important statement" by not ruling out membership, Mr Blair pressed the Prime Minister to say whether that was the "position of the whole of your Government, including the Euro-sceptic members of the Cabinet?" Mr Major replied: "Of course it is the position of the whole Government."

John Stevens, Tory MEP for Thames Valley, said in London yesterday said yesterday "monetary union is the test of whether Europe is serious about being competitive."