Tony Blair, the risk-taker, may still take a final gamble by going for the euro

He believed in Iraq and he took risks accordingly. How can he not do the same with the euro without the contrast becoming clear?
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The Independent Online

There's a conventional wisdom about the Blair premiership so far. It is that in retrospect the first term looked rather bold, and the second one counter-intuitively much less so. And each time there's a new crisis, the Government's supporters are correspondingly less eager to come to its defence. That's the danger of what looks to many like drift. Once again the old question looms: "What's the big idea?" Or more pertinently: "What's the next election going to be about?"

Distant a prospect as this is, it's a good question, which will be made even better if the findings of a single poll showing the Tories ahead is actually sustained for a period. But first there is a slightly different version of the story so far. Which is that Blair has actually been rather ruthless in the second term in risking, if not sabotaging, the coalition that he seemed so zealously to conserve in the first term. While much of that term was devoted to showing that a Labour government could be economically responsible, or that a Labour Party could be - largely - disciplined and united in the way that, until the poll tax the Thatcher Tories were, Blair has used the second term in a way calculated to infuriate. John Prescott's new plan for the fire service yesterday is just one of a long series of - to the unions - provocative public service reforms. As a series of seaside conferences is about to underline.

Nor was this only a matter, as it might have looked in the first term, of picking on one interest, the better to appeal to the wider electorate. The war on Iraq angered a much, much larger constituency than the Labour left. Indeed, some of those most outraged were precisely those who had abandoned Labour for the SDP, and even the Tories in the 1980s, because Labour was too anti-American.

Haunted as he still is by the ghosts of Labour's unilateralist past, Blair may have underestimated the adverse effects of swinging so far in the opposite direction. But no one can seriously imagine that if he hadn't done, he would have adopted an alternative course. All the evidence is that he would have resigned if the parliamentary vote had gone the other way. You may think he was mad, bad or sad to have done so, but he believed in what he was doing and was prepared to take that risk.

But if the second term is about taking risks with his grand coalition in a way the first wasn't, the question - still the most interesting in British politics - is whether he is prepared to do so in the face of his opponents and a venomous opposition press, which more or less supported him on Iraq, on the one issue that they can be guaranteed to do their best to bring him down: Europe.

Conventional wisdom says this would be a fatuous question even if he were not in the middle of one his roughest periods to date. Was not last month's statement by the Chancellor his final surrender to the inevitable on the euro? Every smoke signal from the Treasury suggests that whatever Gordon Brown's intentions, he will be playing this long, perhaps very long. For all the loose talk of "timetables", it seems unlikely that the conditions set for economic reform here and in the EU could be fulfilled on Blair's watch, let alone in this parliament. Fewer and fewer people in London and Brussels believe that a referendum is on the agenda. Why he has even picked a fight with the BBC, the one organisation, according to its critics, that is riddled with unthinking europhiles.

And even if you believe, as I do, that Blair doesn't see it this way, he may simply be guilty of self-deception. Increasingly at times, he looks like the only man in Britain who really envisages that he could yet lead the "yes" campaign in a euro referendum. There is a growing disjunction between how the euro issue is seen inside Downing Street and how it is seen outside it.

There is, however, a caveat. And it's only partly to do with the road-map he has begun to create in his own mind. At the very least, he has persuaded himself that now genuinely isn't - not least because of the interest-rate gap - the right time to go in, but that next year or early in his next term might be. He appears to think that the opportunity for a leading role in a Europe of nation states has never been higher than as the EU prepares to enlarge to 25, including several that share his Atlanticist free-trade views.

He is serious when he tells people in private that the measures envisaged by the Chancellor on UK economic reform have to be in place - rather than actually bear their full fruits - for the UK, other things being equal, to be ready for entry. And he regards the announcement that Charles Clarke will make next week on skills training - and therefore labour-market flexibility - and the one John Prescott will make before the summer recess designed to loosen the housing market as not only desirable in themselves but also staging posts on the euro route.

But the other question is more a matter of temperament than intellect. What irks many on his own side was that he displayed none of the same eagerness to take the risks with those they saw as his - and their - opponents as he was with those who thought they were his friends. After all, though they sometimes seem to have forgotten it now, the Tories would have followed him through the fire for George Bush, WMD or no WMD.

My guess is that he understands that the risk-taking story of the second term will not be complete unless he is prepared to do just that. Every statement he makes and will make on the subject shows that he believes in it. You don't have to support British euro entry to see that he cannot escape from the consequences. He believed in Iraq and he took risks accordingly. How can he not do the same with the euro without the contrast becoming patently clear?

At the very least, he is said to believe that next year's Budget will have to do a lot more to advance the euro cause than this year's euro statement by the Chancellor, that the status quo is not an option. And that carries its own dynamic. For it means that even if the referendum does not happen in this parliament, Europe will then have to dominate the next general election as it so signally failed to do in 1997 and 2001: a battle between an unashamedly pro-European party and one merely seeking, as he would derisively put it, "associate membership" of the EU.

There is a growing impression that he thinks he is at last ready for that. He believes that many of the generalised press attacks on him are really about Europe. Which implies that the poison will not seep out of the system until the issue is resolved. Maybe he'll change his mind. He may not be able to use his new cabinet committee to help swing Gordon Brown into the early-referendum camp. His optimism on reform of the stability pact and on the ECB regime may be hopelessly Panglossian. The polls may show the possibilities of winning a referendum getting even worse than they are now. Timidity could again be the order of the day. But there is just a chance that risk-taking has become a habit.