Blair rules out euro referendum in 2003 even if targets are met

By Andrew Grice
Monday 20 January 2003 01:00

Tony Blair has ruled out calling a euro referendum this year even if the Government's five economic tests for joining are passed.

The Prime Minister believes public hostility to the single currency is so deep that it cannot be turned around in the four-month campaign envisaged in the Government's National Changeover Plan. He wants a much longer campaign lasting between six months and a year.

Mr Blair, who is determined to take Britain into the eurozone, still hopes to call a referendum before the next general election.

Gordon Brown is more cautious than Mr Blair and there is a growing expectation among ministers that the Treasury's assessment of the five tests, to be completed by June, will deliver a "not yet" verdict.

The growing prospect of a war with Iraq has also encouraged Mr Blair to hold back from a euro referendum. A delay might also suit Mr Brown, who wants to see reforms to the European Central Bank before Britain takes the plunge.

Mr Blair does not want to rule that Britain is unable to join until after the next election, as Labour did in the last Parliament. If Mr Brown says the tests have not been met, Mr Blair wants to revisit them next year to leave time for a referendum before the election, expected in 2005 or 2006.

If the Treasury produces a "yes" verdict this year, a referendum would not take place this autumn, as previously thought, but would be delayed until next year.

The Prime Minister has decided to "play it long" in the hope that this will boost his chances of reversing a 2-1 majority against joining the euro. One Blair aide said yesterday: "We have to allow a significant time to pass between the assessment and a referendum."

A minister close to Mr Blair added: "The process is serious and must be seen to have credibility. If we move straight from the assessment into a campaign, it would be too crude and look like a fix."

For the same reason, Mr Blair has ruled out making a direct case for euro membership before the assessment is complete. He fears this would be seen as prejudging the tests.

The Prime Minister's approach will disappoint advocates of the euro who believe that an all-party referendum campaign, led by Mr Blair and Mr Brown, could transform the debate and win a "yes" vote.

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