Leading Article: Calm point in a storm

WHILE Norman Lamont's travails persist, Douglas Hurd continues calmly to argue the merits of the Government's European policy. Alone among those immediately involved, his reputation remains intact. Mr Lamont's future is in doubt. The Prime Minister has much to do to reassert his damaged authority. He made a start yesterday by announcing his intention to bring the Maastricht Bill to Parliament for ratification before or immediately after Christmas. His remarks were usefully supported in a speech by Mr Hurd, who pointed out that 'it is against our fundamental interests so to isolate ourselves from the continent of Europe that policies are organised there which crucially influence our security or our prosperity but in which we have no say'.

That same argument did much to swing Britain's 1975 referendum in favour of continued membership. Then Britain's departure from the Community was thought likely to consign the country to peripheral, mid-Atlantic status, in both political and trade terms. Now, the perceived danger is of being left behind while the strongest EC economies move rapidly towards a single currency.

Hence the Foreign Secretary's warning that those who 'in the excitement of the moment would turn their back on European monetary co-operation have to weigh the risks of combinations forming on the Continent, perhaps in a year or two rather than now, which would gradually drain the strength away from our own financial sector'. In other words, all Tory MPs who favour Britain remaining permanently outside the exchange rate mechanism should think of the impact it might have on the City and on Britain's invisible exports. All the arguments that have made members of the European Free Trade Area such as Austria, Sweden and Switzerland seek membership of the EC would make successful economies keen to join - and invest in - a single currency zone.

Mr Hurd made two other relevant points. The first was that the Maastricht treaty has become a lightning conductor. Those who voted against it in the French referendum did so for a variety of reasons, he pointed out, ranging from the farmers' dislike of Common Agricultural Policy reforms to fear of increased

immigration.

He might have added that the same could be said of the Conservative Party. The treaty itself greatly extends the role of intergovernmental co-operation at the expense of the EC's main institutions, the Commission and the Council of Ministers, and Britain can opt out of the final phase of monetary union. Yet the Europhobes have seized on it as a symbol of their hatred of the post-Thatcher era. The treaty is, Mr Hurd argues, in Britain's interests, and therefore should be ratified.

He warns that 'if we are the authors of its destruction, then our chances of influencing the course of the Community will be sharply reduced. We are winning the arguments: now is not the time to knock over the table.' Both Mr Hurd and the Prime Minister are obliged, unlike the Tory Europhobes, to operate in the real world. They do not want to see Britain marginalised by its main trading partners and gradually drained of its remaining influence and authority. That is why Mr Major was so firm yesterday about bringing the Maastricht Bill back to Parliament, and why the Conservative Party has no realistic choice but to heed Mr Hurd's warnings.