The question of whether to join the euro has so completely disappeared from political discourse in the UK that it is a struggle to recall how live an issue it was just 10 years ago.
But one of the most impressive cross-party political coalitions came together in 1999, to launch the Britain in Europe movement, whose avowed aim was to secure a ‘yes’ vote in a referendum which everyone expected the Labour government to call, to ask if the public if they wanted to see sterling subsumed by the euro.
The politicians assembled at that launch included Tony Blair, Gordon Brown, Michael Heseltine, Ken Clarke, and Charles Kennedy. There was also an impressive line up of business leaders, some of whom had never stuck their necks out for a political cause before, but whose firms would see the cost of doing business in Europe dramatically cut if they were dealing in a single currency.
Danny Alexander, who was director of Britain in Europe, believes that if Tony Blair had called a referendum after the 2001 general election, he could have won. But the decision was never made. While Blair was attracted by the political case for keeping the UK in the heart of Europe, Gordon Brown looked at the economic implications of wedding a strong pound to a relatively weak euro, and did not like what he saw.
There was also ferocious opposition, coming principally but not exclusively from the Conservative Party. Its leader, William Hague, launched a new campaign in June specifically to secure a ‘no’ vote in the expected referendum, posing for photographs in front of a poster which declared that “The pound is only safe with the Conservatives.”
Some opponents forecast that, if it was ever launched at all, the euro would be a disaster. Professor Tim Congdon, one of the treasury’s independent advisers, pronounced in 1996: “It is a fantasy and it is just not going to happen. Neither the EU nor a subset of its members will have a single currency on January 1 1999, January 1 2002, January 1 2003 or indeed at any date in the relevant future.”
But Norman Lamont, the former Chancellor, foresaw that the euro experiment would get off the ground, and spent months negotiating Britain’s right to stay out of it, believing that membership would be the end of Britain's existence as a self-governing nation state. John Redwood, a former Tory Cabinet minister, similarly warned that if we joined the euro, we would living in “a country called Europe.”
The present strength of the euro does not alter the fundamental argument about sovereignty, but it does mean that the pro-euro camp, which has been so quiet for years, may be heard again – particularly if, as rumoured, Ken Clarke returns to the Tory bench to face that other inveterate pro-European, Peter Mandelson.
A survey for YouGov discloses tomorrow that leaders of British small businesses believe the euro has been a success by a margin of four to one. The poll found a clear majority believed it was a sustainable currency and believed Britain should keep open the option of membership.
According to the poll, conducted for the thinktank Business for New Europe, 56 per cent of business leaders thought it had succeeded since its launch, compared with 14 per cent who think it had not.
The former Europe minister, Denis MacShane, a fervent pro-European, thinks the government was right not to attempt to join the euro in the past 10 years, because to have kept the pound forever frozen at its high value at around 1.50 euros would have permanently weakened Britain’s export industries. “It is economic illiteracy of the high order to claim that the over-valued pound sterling between 1996 and 2006 was ever a candidate for Euro entry. I regret the bad-mouthing by Whitehall of the Euro which showed poor political judgement but a possible UK entry was always a red herring,” he said.
“But one day Britain will join and with Peter Mandelson and perhaps Ken Clarke in top positions it may be sooner than the anti-Europeans imagine.”