Morris fires first shot in battle over euro entry

The fragile alliance among unions over the euro fell apart yesterday when one of the Labour Party's main allies said entering the eurozone could undermine public services.

The fragile alliance among unions over the euro fell apart yesterday when one of the Labour Party's main allies said entering the eurozone could undermine public services.

Bill Morris, general secretary of the Transport and General Workers' Union said "the mask of unity" should be cast aside and a serious open debate should begin.

On the eve of the annual conference of the Trades Union Congress, Mr Morris, a close ally of Gordon Brown, the Chancellor, said any attempt to enter the single currency too early would mean "hello euro, bye-bye public services''.

He added: "Pretending to have a united front doesn't do the debate any good. We have reached the moment of truth."

He indicated that his union would be prepared to take strike action to protect his members' interests if entry to the eurozone meant the kind of price inflation seen on the Continent.

The view was expressed with considerably more stridency by Bob Crow, general secretary of the RMT rail union, who said: "Dragging us into the euro will mean more privatisation, the destruction of our social services and an end to democratic control over our economy – and it will cause massive industrial unrest."

He was backed by Dave Prentis, general secretary of Unison, the TUC's biggest affiliate, who said signing up to the euro would be a "disaster" for public services. He said: "We are not anti-Europe, but against the single currency on its current terms. We think that the Chancellor should adopt a sixth economic test, which looks at the impact on public services. The terms should be renegotiated."

Mr Morris said his union, with the RMT, would be voting against a pro-euro declaration signed by the ruling general council of the TUC and due to be presented to delegates on Wednesday.

The statement, which is thought to reflect the Prime Minister's view rather than those of the Chancellor, says that exclusion from the euro reduced Britain's ability to influence events.

Most unions support the idea that Britain should join the single currency provided the economy passes the five tests set by the Chancellor in 1997. But some union leaders are substantially more enthusiastic than others and Mr Morris has registered his belief that a referendum should not be held until the next parliament.

He said his union would oppose the TUC statement because it attempted to bounce the union movement into an early referendum. "If we enter the euro at the wrong time and the wrong rate it will create major problems for the stability of our economy and our ability to invest in quality public services – and it will also lead to higher prices."

He warned that "artificial" price rises would lead his union to submit higher pay claims.

Commenting on the Treasury's commitment to investigate the impact of the euro on prices, Mr Morris said there was evidence to suggest that companies used the introduction of the single currency across Europe to increase prices. "In Britain we are benefiting from a stable economy with a stable inflation rate – why should be put all this at risk to enter the European single currency?"

He said that early entry into the euro was a distraction this country could "ill afford" and that the Government should concentrate on providing world-class public services to guarantee a third term in office.