A pity he has to have a referendum
Published 26 February 1999
The advance billing of Tony Blair's speech this week matched the substance precisely. His Commons statement on the single currency was a stepping up of gear rather than a change in policy. It was a moment of some significance, but there is still a long way to go before Britain is in a position to sign up to the single currency.
Indeed Blair's policy approach to a single currency has been pretty constant since he became leader. As long ago as March 1995 he stated in a Commons debate that he saw no constitutional barrier to entry. In the same speech, made soon after he became leader, he declared that, in the Major government's fatal divide over EMU, he was on the side of the chancellor, Kenneth Clarke.
It is something of a mystery how the Sun was so successfully wooed soon after such a speech. Probably Rupert Murdoch, like most people, paid no attention to what had been said in parliament. But it is there in Hansard, a clear statement of intent by Tony Blair. In October 1997, Gordon Brown made an expanded version of the speech when he explained why the government was ruling out a referendum in the first term. The speech was described as "historic" by the Treasury spin-doctors because it stated that there was no constitutional bar to entry. The only criteria would be economic. In fact, it was a re-affirmation of Labour's policy when the party was in opposition.
Now we arrive at Blair's statement in the Commons on Tuesday. It was a speech of two halves. The first part could almost have been made in a referendum campaign in favour of the single currency. The second outlined qualifications. The difference is that the second half could not have been made in a "No" campaigning speech, for the qualifications were raised in a precise context: if his doubts could be met, Britain would join.
Nonetheless the qualifications were not added for reasons of political expediency, in some desperate attempt to sway the Eurosceptic press. Blair believes that the EU needs to be less burdened by regulation in order for the single currency to be robust. What is more, while he declared that the early days of the currency had been a success, he genuinely wants to wait and see a little longer. While he has just about made up his mind, and is finally ready to take on the Eurosceptics, there is a scintilla of doubt. For the time being he is expressing the truth, as he sees it, when he says that entry is "conditional not inevitable".
So we have reached the curious position in this long-drawn-out saga that a government with a three-figure majority and still hugely popular is moving, as it always has, towards a single currency, backed by the charismatic end of the Tory party and the Liberal Democrats. Commons votes on the single currency, which will be required over the next few months to authorise payments for the costs of preparation, will show big majorities in favour (as they would have done in the 1992-97 parliament). And yet there is still some uncertainty about when we will join and the context in which it will happen.
For the referendum, not parliament, will determine if and when Britain joins. Blair specifically stated that a referendum early in the next parliament was likely. I would not put a bet on it. For while Blair has stepped up a gear, he will not know the full scale of the challenge ahead, and nor will the rest of us, until the battle over the single currency is fully engaged.
We are still some way from such a position. Ministers have stated that they see no constitutional barrier against entering the single currency, as if that was an argument for joining. But that is the conclusion to an argument, not the argument itself. Ministers have leapt a stage. Why do they see no constitutional barrier? Why are they so sure that the single currency is not a stepping-stone towards political union, which they say they oppose? What are the precise arguments for ignoring the constitutional implications that so startle the Eurosceptics?
There are answers to these questions, but they are complex and, in some cases, far from clear-cut. Blair addressed them in general terms in his statement, by pointing out that pooling of sovereignty and integration is a worldwide phenomenon that can strengthen the individual countries involved. But the sceptics will have plenty of populist cards to play in the coming years, as the recent misinformed hysteria about the harmonisation of taxes demonstrated.
The outcome of a referendum early in the second term would also be affected by the result of the next election and the nature of the preceding campaign. The election is already being billed as a one-issue contest, but this will only happen if the polls and focus groups suggest that a single currency has become very popular. The government is not going to risk a second term by singing the praises of EMU if the voters are hostile. But if Blair has not come out fully in favour of entry by the time of the election, it would be unrealistic to hold a referendum almost immediately afterwards, even if there is a hint of equivocation in the election.
The early months of Major's second term are a reminder of how quickly a government can come unstuck. By the early autumn of 1992, Major could not have won a referendum on the future of garden gnomes, let alone a single currency. There is no guarantee Blair can win a referendum on a single currency either.
Blair may yet come to rue the day he persuaded a reluctant Brown to back the idea of a referendum on EMU. The clumsy device hovers over British politics, preventing an elected government from acting in the best interests of the country. Promising a referendum is easier than holding one. Blair is playing this issue with great dexterity, but how much better it would have been if the decision had been left to parliament to decide.
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