Mr Brown must be more direct: realism means accepting the inevitable

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The Independent Online

It is time for government policy on the euro to shift, and by more than one iota. The smallest letter of the Greek alphabet, etymologically the same as "jot", has been the standard cliché of Tony Blair's spin doctors over the past four years. Yesterday, the Prime Minister's official spokesman recycled it again, telling journalists that the Chancellor of the Exchequer's Mansion House speech "does not shift Government policy one iota".

That does not quite square with the fact that copies of the speech were circulated at Cabinet as a sort of prompt sheet for the line to take on the single European currency. If policy has not changed, why not simply circulate copies of the Chancellor's speech to the House of Commons in October 1997?

The answer is that the mere passage of time changes policy, and simply restating "yes but not yet" can mean something quite different in 2001 from what it meant four years ago. Then, the Government was declaring for the first time that it was in favour of joining the euro in principle. Now, the same formula inevitably lays a heavier emphasis on the conditions and less on the commitment.

It would not be too cynical to suspect that one of the reasons for Gordon Brown's euro-scepticism is tactical. So long as the issue hangs, unresolved, over British politics, the Conservatives seem condemned to irrelevance. They are trapped by their fundamentalist isolationism, which bears only a superficial resemblance to the pragmatic scepticism of the British public. But that is the worst way to decide government policy on an issue of such central importance.

There are many other forces pressing on Mr Blair and Mr Brown to which they ought to respond instead. The first, and most important, is the problem of alienation from the whole idea of a united Europe, as seen on the streets of Gothenburg last week, in the outcome of the Irish referendum and in British apathy about politics at all levels. The right response goes wider than the euro, of course: it involves renewing the idealism and vision of the European Union's founders, and giving serious consideration to new ideas for bridging the democratic gap, such as yesterday's plan for the Commission president to be directly elected. That may be too centralised for British tastes, but why should each country's representative on the Commission not be directly elected?

Inevitably, most of the forces that are driving Britain into the eurozone are economic. Few noticed the speech, also delivered at the Mansion House on Wednesday, by Sir Edward George, the Governor of the Bank of England. But what he said about the relative values of the pound, the euro and the dollar was highly important. The pound needs to be "substantially" lower against the euro before Britain joins, he said, but this should not be achieved by pushing the pound down against other currencies as well – that would import inflation. The recent fall of the pound against the dollar has not helped. What is needed is for the euro to rise against other currencies generally – "as at some point it surely must". In other words, the conditions for joining the euro will be met, but we do not know when.

If only Mr Brown could have brought himself to be as direct. Until he does, the City will be buffeted by wave after wave of speculation as to whether Britain is going to join.

The ground is shifting under the argument on the euro. It is time for the Prime Minister to adjust the Government's stance in response, and not just by an iota or two. Let him set out the full alpha to omega of why it would be in our nation's interest to sign up. There is little governments can do to bring about the optimum circumstances for joining, but it must be our Government's responsibility to prepare people for the decision when the moment arrives, which could be sooner rather than later.