Time for the Tories to go on the offensive

Iain Duncan Smith should be bold enough to recognise that he will have to take the occasional risk

"Only Iain can unite the party on Europe. The independent nation state remains the cornerstone of accountable government. The Danish rejection of the single currency, the Irish referendum vote against the Nice Treaty and the riots in Stockholm and Genoa are all clear signs of growing unease about the way that important decisions are being removed from national democratic control... Iain's policy on the single currency is both clear and tolerant. The party will campaign against the single currency in a referendum."

Those were the words, on Europe, of Mr Duncan Smith's personal manifesto to the Tory membership in last summer's campaign against Kenneth Clarke for the party leadership. Since then, the Tory party has maintained an uneasy although reasonably successful truce on the subject of Europe and the euro. But the basis of this truce, observed up to now by all factions, has been "don't mention Europe". While there have been occasional sporadic forays into the subject, silence has been the general objective.

Thus far the policy has worked in so far as the bush fires of the civil war which engulfed the Tories last year have been extinguished. But this week's interview given by the Prime Minister to the BBC indicates that Mr Blair is clearly preparing the way for the prospect of a positive assessment of the "five economic tests" within the next 12 months and the probability of legislation for a referendum in 2004 or even earlier. The Tory response is that Mr Blair is playing games and "distracting" the public's attention from the "real issues" of the public services. They may well be right. But their response is inadequate. Battle will have to be engaged before the die is irrevocably cast if Mr Duncan Smith's one flagship policy that is already published is not to be overwhelmed.

This "distraction" on the euro is for real and clearly amounts to more than just Mr Blair's previous word games on the subject. Something was different about the Prime Minister's body language – especially when he was challenged on his discussions with Gordon Brown on the matter. For the first time I detected a hint that perhaps the two participants in this drama – the only two who matter – may have already reached some kind of concordat concerning their future careers.

When Mr Blair was asked about his dealings on the matter with Mr Brown he acknowledged that "we discuss it the whole time". There seemed from this to be just a hint that a deal was in the air. "Give me the euro, Gordon, and I will give you the succession" must surely have been suggested during some of these private pow-wows.

If Mr Blair succeeds on winning a referendum on the euro, followed by victory at the next election, the stage is set for his subsequent retirement and Mr Brown's easy move by handcart from Number 11 to Number 10. There is clearly a plan and already Mr Brown may well have been squared. If the Tory response continues to be silence then their strongest suit could be frittered away.

The Tory strategy has, so far, made sense. While the early months of Mr Duncan Smith's leadership were characterised by a period of reflection and introspection, it was understandable to want to avoid any more damaging splits with the likes of Kenneth Clarke and the other pro-Europeans. The silencing of Bill Cash and other aggressive Eurosceptics has brought peace and relative calm to a previously traumatised party. A concentration on the public services has shown that the party has discovered other tunes from the discordant notes it struck last year. The language between pro- and anti-Europeans inside the party is understanding and courteous.

But Mr Duncan Smith should be bold enough to recognise that at some point – and that is fast approaching – he will have to take the occasional risk. No leader of the opposition ultimately gets into government without such risks. This week Kenneth Clarke felt bold enough to renew his case for the euro. He wrote in measured and friendly terms: "Iain is right to concentrate the party's efforts on immediate concern to the British people... I will give him every support I can... But that does not mean that the European issue should not engage Conservatives at all."

Mr Clarke is right and Mr Duncan Smith should feel that the new atmosphere of tolerance and civilised debate between grown-up Tories, which he has helped to foster between all wings of the party, gives him the right, as leader, to raise his own voice. Otherwise the debate runs the risk of becoming increasingly one-sided.

So far, he has resisted opportunities during Prime Minister's questions to make an issue of the euro and responses to Mr Blair's half-yearly statements on European summits have been decidedly and deliberately low key. It was amazing that, this week, the hostile questions on the euro were put, not by Tories, but by the Labour backbenchers Kelvin Hopkins and Denzil Davies. But this cannot continue indefinitely and certainly cannot wait until the Chancellor announces his decision on the economic tests next summer.

If those tests are declared by Mr Brown to be passed, events will move at an alarming speed from the point of view of those opposed to the euro. The legislation implementing the euro will, presumably, be introduced in the session of parliament beginning in November next year. Tories on all sides of the argument cannot filibuster or delay the bill. Firstly, parliamentary procedures now provide limited opportunities, and secondly, it would be tactically wrong to attempt such a manoeuvre. All parties are, in any event, committed to a referendum and both sides of the argument within the Tory party are also signed up to the referendum.

So the period of time to shape and harden views will be relatively short. You can bet that the momentum behind a "yes" vote will be given an enormous boost from the moment the Chancellor makes his initial announcement giving the Tories little chance to build their own case. The psychological boost to a "yes" campaign of having a previously sceptical Chancellor being the one who removes the roadblock will be the chief tool of the campaign for entry. "If Gordon says it's OK then surely that's good enough for everyone else" will be a powerful clarion call to 'soft' sceptics.

So the Tory front bench must move up a gear and ensure that the next 12 months are not lost to their cause. Michael Ancram, their foreign affairs spokesman, Michael Howard, the shadow Chancellor and David Davis, the party chairman, should be co-ordinating a sharper campaign. They will not endanger party unity since they have learnt to talk in a civilised way to those such as David Curry and Ian Taylor who take a contrary view. One of the few benefits that came out of last year's civil war was that all protagonists seem to have learnt how to behave in a responsible manner. But Mr Duncan Smith has been in post for long enough and should now be confident to make his case from the front.

The stakes for both main party leaders of winning or losing the referendum are high. If Mr Blair wins he can contemplate retirement to international duties. If he loses he is finished. Equally, if Mr Duncan Smith loses the referendum his future must also be questionable. The stakes could not be higher: the future leadership of both may be decided, not at the next election, but in the referendum campaign. Time is running out.

mrbrown@pimlico.freeserve.co.uk