No Chance for Euro Referendum

So now we know - or do we? The referendum on joining the Euro, according to some newspapers' interpretations of the Prime Minister's answer to a question in the Commons, will be held in the first two years of the next Parliament. That wasn't what he said.

I was asked to review that day's Prime Minister's Question Time on BBC Radio 5 Live, so I was watching it very closely indeed. The spin from the member of the shadow cabinet I spoke to was how glum Gordon Brown looked and how shocked he looked. Not true. I looked at it again on Newsnight, and yet again on Breakfast TV and frankly he didn't crack a smile. He was looking like the Easter Island statue, he just sat there just as solid as he could be.

Many Tories seem convinced that Mr Blair's announcement is to their benefit, and gives them the opportunity to make the Euro a winning issue in this year's election. But that assumes two things - that the Tories are capable of campaigning on the issue and that there are votes to be won if they do so. A lot may depend on the visibility of Kenneth Clarke and Michael Heseltine over the next few months: these big beasts of the Conservative party of yesteryear are emphatically in favour of the Euro, and may not be prepared to hold their peace if William Hague commits his party to an all-out campaign against it. The Shadow Cabinet will tell you, of course, that they are united on their policy, but frankly Clarke and Heseltine - and, privately, one or two others - are not. The Conservatives are divided on the Euro, but recently they have been able to paper over the cracks and present a united front; if that breaks up they risk appearing, as in 1997, hopelessly divided, and parties that are seen to be divided don't win elections.

But even assuming that that the Europhiles suppress their doubts in the cause of party unity, is this really potentially such a big vote winning issue for the Tories? Europe rarely comes to the top of the list of the most important issues facing the country, and last summer it had fallen to ninth in the ranking of issues that would affect the way people voted; although it is now ranked fifth [Political Attitudes in Great Britain for February 2001], still only 29% say it will be very important in determining how they vote. Of course a higher profile for the issue and a clearer dividing line between the parties' policies on the Euro may magnify its importance somewhat, but even so it will remain of key importance only to a minority. Furthermore, most of those who are most strongly committed to staying out of the single currency are Tories already: in January, those who said they would vote Conservative were three times as likely to name Europe as the most important issue facing the country as were those intending to vote Labour. There may be a few votes and seats to be picked up on the fringes, and perhaps a strong campaign will see off UKIP, but it really doesn't look like the issue that will break up the electoral coalition that put Tony Blair in Downing Street in 1997.

Can Tony Blair win a referendum on the Euro within the first two years of the next Parliament? The balance of public opinion is strongly against the idea at the moment, but the Government is not totally alone. For one thing, as a recent MORI survey for the Corporation of London has demonstrated [Corporation of London], on balance the City is in favour of Britain joining the Euro. Furthermore, although the instincts of the public are against joining, a substantial number - 44% when we last asked them, in a survey for the T&G last August [MORRIS: TRADE UNIONS PUSHING FOR EARLY ENTRY RISK LOSING REFERENDUM] - say that they could be persuaded to change their minds if they thought that the economic arguments pointed the other way. Furthermore, almost twice as many thought that joining the Euro would be bad for Britain's economy as thought it would be good. If the government could win the economic argument in the public mind, it might have quite an effect. Obviously the opinions of the majority in the City may well have a bearing in this way when the time for the referendum campaign comes.

More generally, the Government will want to be able to exploit the public's trust in them to persuade voters that the Euro is a good idea. In this country's only previous national referendum, in 1975, that is precisely what Harold Wilson and the other leaders of the pro-EEC campaign were able to do, securing a 22% swing in public opinion over six months. Eighteen months ago, it looked as if Tony Blair was in a position to do the same and might, combining this appeal with the post-election honeymoon effect, be able to win a referendum by the end of this year. Petrol, the Dome and all the other humiliations of the last year have put paid to that for the moment. But 57% still say they like Mr Blair, while only 30% like Mr Hague [Political Attitudes in Great Britain for January 2001].

But anyway, there is a lot of room for manoeuvre. In a pamphlet* I published for the Foreign Policy Centre last summer, I thought that the referendum would be in the autumn of this year and that they would win very narrowly indeed, something in the region of 52% to 48%. Clearly there will now not be a referendum this year, but a similar scenario may apply two years down the line. Tony Blair is a terribly cautious Prime Minister. Now is this conservative, cautious Prime Minister going to call a referendum that he is not sure he will win? No way, Jose! So I think it may just be that they will find towards the end of 2002, after the introduction of the single European currency and coinage on the continent and all the chaos that will cause, that - commitment or not - they can't make a decision after all. I think it will be at least another year and more likely than not the referendum will not come in the next Parliament at all, but in the Parliament after that. In 2005 or later the British public will be asked to agree to join the Euro - and, indeed, that is what the public thinks too see our poll for GrahamBishop.com [JOINING THE EURO], even if they don't like it.

Adapted from the Letter to Our Readers in the Jan/Feb 2001 BPO

* Sir Robert Worcester, How to Win the Euro Referendum: Lessons from 1975, Foreign Policy Centre, 2000, 1639.95.