Bold Blair moves towards final euro push

Date: 07/06/01

Looking beyond the UK election, Dick Leonard considers how the subsequent battle over a referendum on the euro might play out

It wasn't planned that way, but Britain's election campaign took the country a giant step towards joining the euro. The hitherto ultra-cautious Tony Blair has publicly expressed confidence that he could win a referendum on the issue, while William Hague undercut the 'antis' by declaring that "the real referendum" would take place on 7 June - "the last chance to save the pound".

Unless the unanimous verdict of the opinion polls is proved wrong, and Hague snatches a miraculous victory from the jaws of defeat, it is now probable the referendum will indeed go ahead, in altogether more auspicious circumstances than seemed likely even a month ago.

Yes, but don't the polls still show a more than two-to-one majority against the euro, and doesn't this mean that Blair will be taking a huge risk?

No doubt, but the same could - and indeed was - said about the then British Prime Minister Harold Wilson in January 1975, when 55% of British voters said that they would vote against British membership of the European Community "if the referendum were held today". Yet less than six months later - on 5 June 1975 - they voted in favour of Europe by a majority of two-to-one.

This marked a 22% swing in the opinion polls and the best explanation for the massive turnaround has been given by Robert Worcester, head of the MORI, and Wilson's personal pollster in 1975. Some months ago, he wrote How to Win the Euro Referendum (£10.95 from The Foreign Policy Centre, 39 York Road, London SE1 7NQ), which argued with great conviction that the same trick could be pulled off again.

More recently, Worcester has expressed reservations about his earlier judgement, but after re-reading his pamphlet I still find it convincing.

It is true some of the factors that favoured the pro-European side in 1975 are no longer present. At that time the press was unanimously favourable; this time it is likely to be predominantly against, in terms of circulation if not of intellectual weight.

The business community is now more evenly divided. A majority, especially amongst the larger companies, is clearly committed to the single currency, but the well-financed pressure group Business for Sterling has mobilised significant support among the minority. As a balancing factor, the trade unions, though less influential than hitherto, are now more committed on the pro side.

Yet Worcester's clinching argument was that, in the last resort, the voters followed the judgement of the leaders they trusted most, and the same thing can be expected to happen next time.

In 1975 the leading protagonists of British membership of the EC - Roy Jenkins, Edward Heath, Harold Wilson and James Callaghan - were getting high positive scores in the opinion polls, while the leading antis, Tony Benn, Michael Foot, Ian Paisley, Enoch Powell and Peter Shore were provoking strong negative reactions.

If anything, Blair and Gordon Brown are outscoring their oppositenumbers, Hague and Michael Portillo, even more decisively in the polls, while the leading pro-euro Tories, Ken Clarke and Michael Heseltine, are clearly more highly regarded than their party leaders.

Moreover, the anti-euro side is finding it extremely difficult to recruit any significant non-Tory politicians at all.The only well-known figure under the age of 75 to sign up has been former Foreign Secretary David Owen, now very much a maverick with no popular following.

Blair is still maintaining that the five economic tests set by Gordon Brown will have to be met before he would recommend joining the euro. Widely dismissed as 'cosmetic', the only one of the five that is susceptible to objective measurement - the convergence of economic structures - is evidently well on the way to being met.

The real test is one of political will, and Blair now at last seems emboldened to take it. The probability is that the referendum will be held in the second half of 2002, after the introduction of notes and coins in Euroland. Unless this turns out to be a chaotic disaster, it should greatly help the pro-euro cause.

By the autumn of 2002, the euro will no longer be seen as 'funny money', but will surely be in wide circulation not only in Euroland but in Britain as well. Starting with airports, hotels and tourist resorts, it will undoubtedly be widely accepted for payments, while the majority of foreign trade by British firms will be settled in euros. By then most of the absurd predictions of the Europhobes will have been shown up as erroneous.

Blair will not, of course, go ahead unless he has Brown on side. He now seems confident that he will, and Brown's previous well-publicised hesitations may have a positive effect on the voters. Having established a high reputation for economic competence, if he announces his conviction that it is now in Britain's interest to join the euro this would surely carry great weight.

It will still be a gamble. Accidents can happen, and referenda can always go wrong, as the Danish premier would be the first to confirm.

Blair's fear has always been that if a referendum was called - and lost - he would be left leading a broken-backed government.

But if he were seen to funk a challenge in which he strongly believed, would he be in any better position?

Looking beyond the UK election, columnist considers how the subsequent battle over a referendum on the euro might play out.