Tony Blair is under cabinet pressure to adopt a more positive stance on the single currency by declaring that joining the euro would protect British jobs by bringing down the value of the pound.
Pro-European ministers fear Britain will be denied huge investment projects by multi-national companies worried by the strength of sterling. They believe that industry's current problems give the Government an opportunity to spell out the benefits of euro membership and to swing public opinion behind it. Ministers understood to be sympathetic to a more positive stance include Robin Cook, the Foreign Secretary, and Stephen Byers, the Trade and Industry Secretary, who has admitted that big inwardinvestors are pressing Mr Blair to say "Yes" to the euro immediately if he wins a second term.
Europhile ministers insist that Labour's policy of deciding whether its five economic tests are met early in the next Parliament will not change before the election. But one cabinet source said: "We have high interest rates and a high value for sterling; they would be lower if we were in the eurozone."
Although Mr Blair has adopted a cautious approach to euro membership, he believes privately that the threat to investment projects will put under strain William Hague's opposition to the euro.
The calls for a change of tone will be welcomed by supporters of the single currency, who are worried that Mr Blair's failure to give a lead on the issue now may prevent Labour winning public support for joining after the election.
However, the ministers' demands will be opposed by Gordon Brown, the Chancellor, who believes that stating the advantages of joining the euro could play into Mr Hague's hands, and wants to neutralise the issue at the next election.
A Treasury source said last night that the Government would not have credibility in the City if it hinted at joining the euro without outlining a clear timetable and providing evidence that Britain's economy was converging with the rest of Europe. "We have heard the argument being put by some people, but you can't make such a historic decision in response to short-term pressures," he said.Reuse content