Grandees tell Blair to stop stalling on Europe

TONY BLAIR is urged today by a powerful all-party alliance of senior politicians to come off the fence on Europe by declaring that Britain will definitely join the single currency.

In a letter to The Independent, they warn the Prime Minister that he will be in a stronger position to resist moves to harmonise taxes across Europe if Britain makes a commitment to join the euro. The signatories include Kenneth Clarke, the former chancellor; Lord Howe of Aberavon, former foreign secretary; Lord Hattersley, Labour's former deputy leader; and Lord Jenkins of Hillhead, a former Labour chancellor and one-time SDP leader.

Their intervention comes amid a growing cabinet debate on whether the Government should strike a more positive note about the single currency when it is launched by 11 other European Union countries in less than five weeks. Some ministers want the "national changeover plan", which will be published in January, to change the Government's policy from being one of "if" Britain joins to "when" - but Mr Blair is not yet convinced.

Today's letter from officers of the European Movement will strengthen the hand of the ministers who support early British entry, including Gordon Brown, the Chancellor, and Peter Mandelson, the Secretary of State for Trade and Industry.

"In or out of EMU [economic and monetary union], the impact of a euro zone five times the size of our economy will be enormous," says the group. "The danger is that by self-imposed exclusion our competitiveness will suffer ... [and] our political influence on major economic decisions in Europe will be gradually eroded."

The group welcomed last week's similar call by 114 senior British businessmen. Another 150 businessmen have since backed their statement and Sir Bryan Nicholson, chairman of Bupa, who organised the initiative, said: "The vast majority of British firms want Britain to join a successful single currency because it will mean a much more stable economic future for Britain."

Sir Leon Brittan, the vice-president of the European Commission, echoed the warning that Britain would have a better chance of resisting a common EU tax policy if it were signed up to the euro, saying it would be able then quite easily to stop "this head of steam".

Joyce Quin, minister for Europe, dismissed reports that Britain could be forced to raise its tax rates as "scare stories".

But the Tory leader, William Hague, accused the Government of misleading the public. He said Mr Brown signed documents on tax harmonisation with his EU counterparts, then told people he would block the moves when he returned home. "This is going beyond the acceptable limits of political and economic union," he said.

Mr Blair's caution will be reinforced by a British and Social European Attitudes poll yesterday showing the number of people supporting EU membership fell from 77 per cent in 1991 to 55 per cent last year.

Letters, Review, page 2