THE IDEA of a common European currency was supported yesterday by Norman Lamont, the former Chancellor. John Major believes it could stem a Continental rush towards monetary union.
But Sir Edward Heath, the pro-Europe former prime minister, insisted that revival of Mr Major's earlier proposal for a 'hard ecu' to operate alongside the pound and other currencies was unworkable. The suggestion is unlikely to mollify many anti-Maastricht Tory rebels.
Early indications yesterday were that in the changed monetary climate, Britain's EC partners would not rebuff the Prime Minister as comprehensively as they did in the Maastricht treaty negotiations when he proferred the hard ecu as an alternative to a single currency.
Mr Major wants to pre-empt a rush towards monetary union in the wake of the effective demise of the exchange rate mechanism. But the suggestion, which goes to Cabinet next month, is unlikely to heal the party split over Europe.
Mr Lamont told BBC Radio 4's The World This Weekend that the proposal was a voluntary approach to monetary union that businesses could use if they wished to protect themselves against currency fluctuations.
Unlike the ecu which is already in limited use, the value of the hard ecu would be guaranteed. It could evolve into a single currency if it became popular.
While not all Tory rebels are adamantly opposed, some took the opportunity to re-emphasise that a single currency was not voluntary under Maastricht. Michael Spicer, the MP for Worcestershire South, said: 'All these ideas for avoiding that fact are pie in the sky unless the treaty is reversed at some point.'
Sir Edward told BBC television's Breakfast with Frost: 'What is the point of having a common currency and having all the complications of 12 other currencies?' Businessmen wanted a single currency, the single market made one essential, and the timetable for achieving it should be speeded up, he insisted.
While sympathising with the Prime Minister over the anti-Maastricht 'bastards' in the Cabinet, Sir Edward also made clear his disapproval of discussions by the Government of possible changes in the welfare state three months before the Budget. That comment coincided with Mr Major's warning in the News of the World that universal benefits might have to be targeted on the 'really needy'.
Row looms, page 18
Gavyn Davies, page 19
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