[A-List] UK eurozone membership: New Labour debate

["Keaney Michael" <Michael.Keaney@xxxxxx>]

Brown urges caution on the single currency and warns of entry risk
By Paul Waugh Deputy Political Editor
The Independent, 01 October 2002

Gordon Brown urged yet more caution on British membership of the euro
yesterday as he signalled that the whole pro-European cause would be put
at risk by a botched entry to the single currency.

The Chancellor also used his speech to the conference to assert his
authority over plans for foundation hospitals, declaring that they would
remain "fully within" the NHS, with borrowing circumscribed by the
Treasury.

Hours after flying back from an International Monetary Fund meeting in
Washington, Mr Brown made clear the Government would not breach its
fiscal rules or abandon its public spending plans despite lower growth
forecasts in the wake of the world economic downturn.

With UK growth forecasts estimated to fall from the 2.5 per cent
projected in the Budget to a possible 1.7 per cent, his aides gave a
clear hint that borrowing may have to rise to make up the shortfall.
Independent analysts predicted that borrowing may have to rise by
£4bn. Treasury sources stressed that Britain was still "on course to
sustain our recovery" and there were "no public spending implications".

Mr Brown's caution on the euro was underlined when he dropped a key
section of his speech earmarked for the benefits of membership of the
single currency, such as lower transaction costs, lower interest rates
and expanded trade.

Instead, the Chancellor appeared to add a further hurdle to British euro
entry when he said he would not do anything that jeopardised the
pro-European cause. He said if the five economic tests he set out
several years ago were met, in principle the Government backed adoption
of the euro.

But the tests were of "central importance" to the decision. "If the five
tests are met, we will recommend joining the euro, and the final
decision will be put to the British people in a referendum. And I give
this commitment: nothing that is proposed will put our pro-European,
pro-growth, pro-investment, pro-employment values at risk." Mr Brown
said he wanted to match not just the achievements but also "the scale of
the ambitions" of the 1945 Attlee Government.

He also unveiled plans for 2,000 "enterprise areas" where the Government
would make it easier to create businesses and jobs by eliminating stamp
duty and slashing the cost of investing and hiring staff.

-----

Peter Hain: Labour's left must line up for the euro
>From a speech at the Independent's fringe meeting in Blackpool by the
Minister for Europe
The Independent, 01 October 2002

The history of the Labour Party's policy on Europe is littered with
missed opportunities and wrong policies. Clement Attlee's Labour
government failed to ensure Britain was one of the founding fathers as
the new Europe emerged from the ashes of war. We stuck our heads in the
sand under Hugh Gaitskell and allowed Macmillan to miss out at Messina
on the Treaty of Rome in 1957.

Only when the economy hit the rocks did Harold Wilson admit that we
needed to be part of Europe. But we'd missed the boat and he led his MPs
into voting against the Tories in 1971. For the next 10 years,
Eurosceptic rhetoric dominated Labour, until Neil Kinnock, John Smith
and Tony Blair gave consistent pro-European leadership - all the time
opposed by Labour's left.

Like most people, I'm not fanatically pro- or anti-euro. For me, it's a
practical issue about Britain's interests. Gordon Brown's economic
assessment of the conditions for joining the euro will be rigorous and
hard-headed. Rightly so. Entry should be recommended only if the five
tests are met.

So why are some trade unions now opposing the euro even before that
assessment is made? And why on earth should the Labour left want to line
up in the "no" campaign alongside the anti-Labour hard left, Margaret
Thatcher and Norman Tebbit?

Instead we should unite to shape a European Union committed to full
employment, social justice and equal rights. A dynamic Europe based upon
competitive enterprises with high-quality skills and technology, and
underpinned by the stability of the euro.

The left has a great opportunity to engage in shaping a modern vision
for Europe. My question to others on this left is: whose side are you
really on?

-----

Euro vote could be won in a year, says former Blair aide
By Nigel Morris Political Correspondent
The Independent, 01 October 2002

Tony Blair could stage and win a single currency referendum within 12
months, a former senior adviser to the Prime Minister forecast last
night. Jon Cruddas, now a Labour MP who preaches caution on the euro,
predicted an early poll if the Treasury's five economic tests were met
by June.

He told a fringe meeting organised by The Independent, called What is
Britain's Role in Europe?: "I think there will be a referendum next
year.

"I do think there is a very soft middle in all of this, that the
Government, if it has a rigorous economic analysis, can drive through
and corral people into supporting it. I think there will be a referendum
and it could well be positive."

Charles Clarke, the Labour chairman, also hinted at the possibility of
an early referendum if Gordon Brown, the Chancellor, provides a positive
assessment of his economic tests.

He called for an early decision on entry because the uncertainty over
the euro was damaging British politics and the Labour party.

Mr Clarke said: "It is important to take this important decision for the
future of the country.

"People have been waiting for this decision and all kinds of problems
characterised by caricature has been aroused by this in ways which I
feel are extremely damaging to the body politic as a whole." Peter Hain,
the minister for Europe, lambasted the Labour Left for threatening to
line up with the hardline Tories to oppose British membership of the
single European currency.

In a scathing critique of Labour's historic tendency to "whinge on the
fringe" over Europe, he said the British Left now had a "historic
opportunity" to shape the future of the continent from within.

Mr Hain painted his party's hardline euro-sceptics as extremists
prepared to throw in their lot with "anti-Labour" forces.

He added: 'Now on the euro we see a 'no' campaign led by Iain Duncan
Smith and other right-wing Conservatives, sadly, with some sections of
the Left fellow-travelling too, including some trade unionists and
Labour members, Greens, hard-left groups and some Liberals.

"Why on earth should the Labour left line up in the 'no' campaign
alongside the anti-Labour hard-left, Margaret Thatcher and Norman
Tebbit?'

He refused to be drawn on tactics for any single referendum, but assured
delegates that ministers would work hard to make sure reluctant voters
would make their mark.