Brown's euro blueprint: delay its introduction for seven years

By Andrew Grice
Wednesday 22 January 2014 05:20

Euro notes and coins would not become legal tender in Britain until 2010 under a proposed timetable for joining the single currency drawn up by Gordon Brown.

The Chancellor wants to delay a euro referendum until after the next general election, and his planned transition to the euro could push the introduction of notes and coins beyond the following election, expected in 2009 or 2010.

Under the plan, the exchange rate between sterling and the euro would be "locked" if the public voted "yes" in a referendum held in the next parliament. There would then be a gap of between 24 and 30 months to prepare for the full introduction of the currency.

Details of Mr Brown's preferred timetable have emerged in discussions between the Treasury and Downing Street about the Commons statement he will make in the next few weeks. The Treasury is expected to give a verdict of "not yet" on the ground that there is not enough convergence between Britain and the 12 countries in the eurozone.

A decision has not yet been reached on the Chancellor's plan. He will discuss his Commons statement with Tony Blair after the Easter break, but the Prime Minister is likely to press him to accept a more speedy transition to the single currency. Mr Blair wants to keep open the option of reviewing the tests again in a year or two so that a referendum could take place before the next election. That could allow Britain to join in 2006. But Mr Brown wants to close the door to a referendum this parliament. He believes that re-running the tests would create uncertainty and provoke allegations that the Government's decision was taken on political rather than economic grounds, making it much harder to win a referendum.

Close colleagues of Mr Brown insist he is not opposed to entry and believes Britain will join eventually. They point to his decision, announced in this month's Budget, to commission a study on how to expand fixed-rate mortgages to bring the housing market more into line with the eurozone.

Supporters and opponents of the single currency are stepping up their campaigns leading up to the decision about the Government's next moves.

Britain in Europe, the embryo "yes" campaign, has issued an assessment of the economic tests, claiming that all five have been passed. It says: "The Government must have the courage to stick to its convictions. It must not let Britain down. It is time to hold – and win – a euro referendum."

But the Transport and General Workers' Union has published a survey suggesting that hostility to the euro is hardening and that 80 per cent of people oppose joining before the next election. Bill Morris, the union's general secretary and an ally of Mr Brown, said: "The Government should listen to the voice of the public: the price is too high and the time is not now for the euro."

In an interview in The Sun yesterday, Mr Blair denied that he was taking Britain into a federal EU superstate, saying he would not give up Britain's veto on foreign and security policy.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments