Clarke and Brown's common currency

The formal position of both main parties on European Monetary Union will almost certainly be identical

How peculiar some events will appear to future historians. When the Cabinet last month agreed to state formally that it was "highly unlikely" that Britain would join a single currency on 1 January 1999 it was the main news item of the day in most newspapers. It led the TV bulletins. And rightly so. This was genuinely high politics. It had been preceded, after all, by intensive bilateral talks between John Major and Kenneth Clarke on the eve of the Cabinet meeting that finally approved the statement. The text was negotiated line by line, word by word. Clarke was depicted as having made a concession. The Sun cheered.

Which was odd, given that in the real world the statement itself changed nothing. It was an extravagant, almost surreal, understatement of the true position, namely that there is about as much chance of a Conservative government joining a single currency on 1 January 1999 as there is of finding developed android life on Pluto. But even at a theoretical level the statement did not really change anything. The Government had not expressed a view about joining the first wave of a single currency if it is delayed, as Kenneth Clarke and quite a lot of other knowledgeable people think it will be; the statement did not even rule out joining on 1 January 1999. And it did not inhibit a Tory government from joining during the course of the next Parliament.

Yet despite all that, this quaint and painfully negotiated restatement of the obvious had consequences. One was that the Tory Euro-sceptics hailed the statement as a victory, and the Tory party started to relax a little about Europe; it was subsequently made clear to candidates that it would now be OK for them to express outright opposition to a single currency in their election addresses. Most important of all, the Euro- sceptic press, the Daily Telegraph and Express especially, chose to interpret the event - or non-event - as enough of a repositioning for Major to attack Labour as the "party that would sell out the pound". And for their editors to resume supporting the Prime Minister they had once reviled. Which was no doubt one of the purposes of the whole exercise, trick of the light as it was. And there is likely to be one other consequence: a light, final adjustment of the tiller by Labour before election day.

Such an adjustment won't blur what has become a clear European fault- line between the two biggest parties. The central point of yesterday's engagement on BSE, electorally more fundamental than the voting figures or the charges of incompetence against Douglas Hogg, was to stick the Government with the expensive consequences of dissipating its political capital in the EU. For the hard-line sceptics, BSE is the drum on which to beat out the message of renegotiation and withdrawal from Europe; for Blair and Ashdown, whatever their disagreements about yesterday's tactics, it is exactly the contrary: a living demonstration of what happens when you are not, to use John Major's own phrase, "at the heart of Europe". Labour's incipient credibility with big business is now entwined with fears that a post-Major Conservative Party could in time convert to the cause of withdrawal from the EU. There are industrialists who are agnostic about EMU but terrified of that.

Much as some Tories would wish them away, there are limits to how nakedly nationalistic a campaign even they can fight. True, the elevation of Lord Cranborne to the unprecedented electoral role of "Chief of Staff" puts one of the Cabinet's six hard-line Euro-sceptics at Mr Major's side for the duration of the campaign. But the eclipsing of the voter-unfriendly party chairman, Brian Mawhinney, is twofold: the pro-European Michael Heseltine will be central to the campaign as well. And Mr Major recognises, by all accounts, that the still-combustible Mr Clarke has made his last concession to the sceptics. Mr Clarke has always depicted his stubborn refusal to allow his colleagues to rule out EMU in the next parliament as having the object of making the Tory party fit for pro-Europeans to live in, but he may have performed another patriotic service too: to have jammed his suede-clad foot into a door that might otherwise have shut, in a jingoistic election campaign, on an incoming Labour government too.

Neverthless Labour's flank may not yet be wholly covered. Blair's real position is close to the Tories' formal one - and to where the polls and focus groups suggest the voting public is too: wary of the consequences of EMU but strongly in favour of keeping the options open. But at least some of his Tory opponents will try to raise the baseless spectre that Labour will, as its first act, plunge into EMU without considering the consequences - whether because it is ideologically addicted to Europe or because it doesn't trust itself to run a prudent economy on its own. It would be surprising therefore if at some point before polling day Gordon Brown, the shadow Chancellor (like Mr Clarke the most pro-EMU of his colleagues), did not make explicit what is already implicit: that he agrees with the Euro-sceptic Robin Cook that entry in January 1999, while not impossible, isn't likely.

Blair is comfortably pro-European. The shadow Chancellor, with the leader's wholehearted approval, will make a strongly pro-European speech in New York this week. But Blair's pro-Europeanism is pragmatic and economic, rather than romantic or ideological. For example, he won't, I suspect, be much impressed by the argument that we must go into the first wave of a single currency simply because Britain in the past has made the "mistake", from the Messina conference on, of being a consistently second-wave country when it comes to Europe. Equally, however, he won't try to trump the Tories by ruling out EMU in the first wave. After all, whatever the differences within the Shadow Cabinet about EMU, they are about economics not constitutional principle. Even Robin Cook has accepted, as Michael Howard never could, that EMU membership is possible in the next parliament. The formal position of each of the parties therefore will almost certainly be identical. The difference is that in the Tory party only a minority now believe in it.