Blair ready to step up campaign for euro

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Tony Blair will step up his efforts to persuade the British public to join the single currency when he makes a set-piece speech on Europe next month.

The Prime Minister will use his speech to the Lord Mayor's banquet at Guildhall, London, to "move up another gear" by outlining the possible benefits of joining the euro. Although Mr Blair has decided against launching a "big bang" pro-euro campaign immediately, he has quietly begun a drive to get people used to the idea that Britain may join.

Phase one of the campaign was supposed to be a speech at the TUC conference, predicting that the euro would be a success and saying that it would be in Britain's interests to join a successful single currency. The speech, intended to be delivered on the afternoon of 11 September, was cancelled because of the terrorist attacks in America but was issued to the press and had been widely trailed in that day's newspapers.

Phase two came in Mr Blair's speech to the Labour conference in Brighton on Tuesday, when he made clear he wanted to call a referendum on the euro before the next general election. The Guildhall speech will mark the third phase.

Phase four will begin in January, when euro notes and coins come into circulation in the 12 countries that have already joined the single currency. Mr Blair hopes that after millions of Britons have travelled to Europe for holidays next year, they will feel less hostile to the euro.

Peter Hain, the minister for Europe, said yesterday: "People will have the chance to see the euro, feel the euro, use the euro. There will be a familiarisation process. That will take the place of a lot of ignorance, considerable suspicion and quite a degree of fear about losing the pound for the unknown.

"People will therefore be in a much better position to make an intelligent judgement about whether they think the euro is a good or bad thing for them."

Mr Hain insisted that Mr Blair's speech on Tuesday had not altered the Government's policy that the Chancellor, Gordon Brown, would make his assessment of his five economic tests by June 2003. "By that time, people will have had a chance to make their own intelligent assessment about what it [the euro] means for them. They will know that a German making a run for the sunbed on holiday in Spain will have saved up to 5 per cent in transaction costs because there is one currency," he said.

Blair aides insisted that the final decision on whether to call a referendum would depend on whether Britain's economy had converged with the eurozone countries. Although no dates have been fixed for a referendum, the most likely date in Downing Street's view is the spring of 2003. Mr Blair believes he can turn round public opinion because opposition to the euro is "wide but not deep".

Polling conducted for pro-euro groups suggests that about 35 per cent of Britons will definitely vote against joining the single currency. Although a similar number could be persuaded to vote "yes", opponents of the euro would be more likely to turn out in a referendum. A particular problem for Mr Blair is strong opposition among women, while pensioners are more hostile than younger people.