The euro campaign has begun. But when will Tony Blair join it?

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The Independent Online

The referendum campaign on the euro is already under way. The problem is that the minister for Europe, Peter Hain, is the only one taking part. Increasingly Mr Hain's tone is that of a hardened advocate, as if he were spearheading a campaign that was already reaching a dramatic climax. On platforms around the country he sings the benefits of the euro, and declared last week in an interview that those who were against the single currency were opponents of Europe. As the months go by, the minister is upping the ante. Presumably he is upping the ante for a purpose.

Sometimes Mr Hain suggests that the purpose is to "put the case for Europe". This is when he is being less candid. Britain is already in Europe, and there are few calls for it to pull out. Mr Hain's one-man referendum campaign is aimed at promoting the euro itself, and has the backing of Tony Blair. The minister would have been sent packing by now if he was bizarrely rampaging around the country and the rest of Europe without prime ministerial permission. After the election Mr Blair told him to push at the boundaries of what can be said about the euro.

Mr Hain keeps pushing. As well as attacking opponents of the euro last week, he spoke of a possible timetable that envisaged a referendum being held early next year. The Europe minister is playing solo for now, but it is clear that he expects to be joined by some bigger guns before very long.

His expectations are soundly based. In Downing Street there is more than a detailed timetable for a referendum in place. The Prime Minister has started to have general discussions with his ministers about the nature of the referendum campaign and most specifically how it can be won. The early thoughts in Downing Street point in the direction of a campaign in which there are few glitzy rallies and very little of the razzmatazz associated with previous New Labour campaigns. Instead there will be a move back to more public meetings combined with much local activity and canvassing. Mr Blair is keen to avoid a campaign that gives the impression of leaders cut off from the voters, speaking at a distance from a stage. The big fear for No 10 is that a referendum campaign will be portrayed as the pro-euro establishment elite versus the people.

These are only early, sketchy plans, but the fact that they are taking place shows the way the Prime Minister is moving. Mr Hain and others are preparing the ground for a referendum in this Parliament. All that stands in the way of a historic campaign is the Chancellor, Gordon Brown, and his five economic tests.

Or does he stand in the way in quite such a decisive manner? In my view, one of the great myths about this whole affair is that Mr Brown has a veto on whether or not there is a referendum – and that he will swat away the minister for Europe and deal even more brutally with Mr Blair.

The mythology suggests that, as "the guardian" of the economic tests, the Chancellor could kill off a referendum by concluding the conditions have not been met. If Mr Blair persisted, he could threaten to resign. The resignation of a Chancellor would hardly be the most auspicious way to launch a campaign.

It will not work out like that. Mr Blair will not be summoned to the Treasury at the end of the review to say, "Hi guys ... what's the verdict?". The review will be guided partly by lengthy discussions between the Prime Minister and the Chancellor on a sofa in Downing Street before any conclusion is reached. More importantly, I do not believe Mr Brown would resign over the issue or is even inclined to threaten resignation.

He would probably prefer to postpone a decision on the single currency until a third term, by which time the economic benefits would be, in his view, more tangible and a referendum more winnable. But he does not feel so strongly that he would go to the stake over the issue. His reservations are of a different order from those of the right-wing Eurosceptics who are in a permanent frenzy about Europe, let alone the euro. Mr Brown knows that it will be in Britain's interests to join at some point. If No 10 were to insist on a referendum in this Parliament, I suspect the Chancellor would go along with the decision.

There are plenty of senior figures – some of them are in Downing Street – who are convinced that Mr Brown's caution on the euro stems from his leadership ambitions. This view is irrational. If anything, the Chancellor's ambition would be helped by an early successful referendum, as a triumphant Mr Blair might well depart from the scene soon afterwards. What is certain is that if he resigned from the Government, it would finish him off. It would be seen widely as an act of destructive self-indulgence. Anyway, Mr Brown does not want to be on the back benches, the hero of the relatively small number of Labour MPs who oppose the single currency. My guess is that he will not even threaten to resign.

Perhaps the Prime Minister himself prefers to believe in the mythology of Mr Brown's veto. Certainly he is doing all he can to make it as easy as possible for the Chancellor to come on board. He moved Robin Cook from the Foreign Office after last year's general election for a single reason. Every time Mr Cook opened his mouth on any issue relating to the euro the Chancellor went apoplectic. This was as much to do with the fact that Mr Brown finds Mr Cook unbearably annoying as for anything Mr Cook actually said. So Mr Cook had to go to be replaced by the more emollient Jack Straw. Similarly, the reason that Peter Mandelson is silent on the euro is that every time he speaks on the issue Mr Brown sweats with fury. Mr Mandelson has been told very firmly by Mr Blair to keep his head down and his mouth shut.

But Mr Brown's moodiness is a diversion. The bigger obstacle to a referendum is Mr Blair's own niggling doubts about whether to take such a risk – economically and politically. He wants to go down in history as the leader who took Britain into the euro, but there is no guarantee he will win. Overblown perceptions of a veto in the Treasury obscure the harsh and challenging truth. In the end it is a question only the Prime Minister can answer. He has started an unofficial referendum campaign under Mr Hain. Is he bold enough to call the referendum?

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