Blair is listening to the wrong people on Europe

`It is vitally important for the future prosperity of this country and the enterprises that make it up, that Britain continues to play a full role in Europe including, if necessary, committing at the earliest possible date to the single European currency'

For business, there really is only one issue in this election - Europe. Pensions, education and the future of the national health service - all vitally important national questions but ones which none the less shrink to insignificance alongside the momentous decisions which approach on Europe.

Unfortunately, it is also the issue our leading politicians least like to talk about. So I went along to a press awards ceremony earlier this week at which Tony Blair was speaking hoping to put to him this question. Did he really believe all that Eurosceptic, jingoistic clap trap he had written in the Sun that morning, where he had talked of "slaying the dragon" of a European superstate? Or was his position more accurately reflected in what he says privately to the pro-Europe business lobby - that he is broadly in favour of monetary union and wants Britain to be a part of it?

I never got my chance, for after a few publicity shots with an eight pint glass of Guinness, which was sponsoring the event, he was monopolised for the rest of lunch by Sir David English, former editor of the Daily Mail and now chief executive of Associated Newspapers. The two seemed to be getting on like a house on fire. But if Mr Blair was hoping to persuade Sir David that the Mail too should back New Labour, he had another think coming.

By the end of the week the Mail had rounded up a group of business leaders to fire off the customary "reds under the bed" pre-polling day letter. This set-piece of Conservative Party election strategy normally adorns the letters page of the Times. Whether it was Rupert Murdoch's support for Mr Blair or something else, this time round the letter has been placed with the Mail.

They were the usual suspects: Lord Hanson (Hanson plc); John Neill (Unipart); Sir Stanley Kalms (Dixons); Sir Graham Kirkham (DFS Furniture); Christopher Miller (Wassall) etc, etc. But their message was a slightly different one. Both parties claim to advocate an enterprise economy, they rightly point out. So which party should people trust best to pursue enterprise policies? Clearly not Labour, they say, because though it claims to be a convert to the cause of free market economics, it supports the EU Social Chapter and the minimum wage. You just cannot trust Labour, was their message.

This was also Mr Blair's theme at the press lunch - not Europe itself, you understand (far too sensitive a subject, that one), but New Labour's Achilles' heel, the idea that it is unprincipled and would do and say almost anything to achieve power. As you might expect, Mr Blair was articulate and compelling in challenging the charge.

All the same, the evidence rather points the other way. I come at the perception not from the anti-European stance of the Mail's business leaders, but from a pro-European stance. Mr Blair's position on Europe, as aired in this election campaign at least, is just one of the manifestations of this tendency.

Publicly Mr Blair says what he thinks the electorate wants to hear; privately he says something different. I was chatting to one leading City supporter of the single currency recently (yes, there are a few) who was so incensed by Mr Blair's public position on Europe that he accused the Labour leader of "betrayal". Intemperate language like this is rare among such people. But he was right. It is not just old Labour that feels betrayed by the New. Judged by Mr Blair's public comments, there may now be as little to chose between the two main parties on Europe, other than the social policies complained of by the Mail's businessmen, as everything else.

We must continue to presume that this is not the case, that Mr Blair is only saying what he thinks necessary to win. But if he is, then he can hardly complain about being thought unprincipled. It is vitally important for the future prosperity of this country and the enterprises that make it up, that Britain continues to play a full role in Europe including, if necessary, committing at the earliest possible date to the single European currency.

The business community is a many-headed beast which rarely speaks with one voice. But talk to Britain's leading multinationals, its world class companies, and they will generally agree with this view. Andrew Buxton, chairman of Barclays, is surely right to imply as he did this week that it would be lunacy to enter the single currency while the pound is so high. What he seems not to appreciate, however, is that if the markets thought the pound would definitely be in, then sterling would weaken and the problem would evaporate.

The future is not in "slaying" Europe, but in taming the dragon and making it dance to our own tune.

Nobody who reads these columns could have been left in much doubt about our position on Andrew Regan's bid for the Co-operative Wholesale Society. Not to put too fine a point on it, we have believed and said right from the start that the whole thing stinks. Only our lawyers have prevented us from using the word "dishonest" to describe it before. Thanks to Mr Justice Lightman we are now freed from any such constraint.

None of this has stopped Mr Regan and those associated with him from trying to persuade us otherwise. Of all the calls I've received in this hopeless endeavour, the most astonishing came yesterday from the public relations company representing Travers Smith Braithwaite. This was the City law firm which advised Hambros on a bid which involved documents plundered from the CWS and subsequently "cascaded" through the City to just about everyone who cared to take a peep.

Now look here, I was told. You must understand that all this stuff put out by Melmoth and Keelan is just a distraction, a sideshow from the major issue. Which is what, I asked? The appaling underperformance of the CWS, the desperate need to do something about it.

Excuse me, but who, apart from those who hoped to profit from it, could give a damn about the underperformance of the Co-op? The CWS is a mutually owned institution not answerable to shareholders or their disciplines. The attempt to make it so was not undertaken out of any great sense of public interest or purpose, but merely for the sake of a fast buck at someone else's expense.

The main issue here is nothing to do with the underperformance of the Co-op, which is a complete irrelevance. It is to do with the the fact that in the search for new sources of income and profit, scant regard was paid to normally accepted commercial rules and practices. Just who was to blame and to what extent will have to await the judgement of regulators. But no amount of complaining about the Co-op's performance can distract from the fact that Hambros and a large number of other top drawer City firms failed to ask the right questions either of themselves or their clients.