What is this Great Britain that our politicians want to "save"? Our record on education, health, poverty and much else is pretty ordinary

It takes some guesswork to understand why Tony Blair and Gordon Brown are so uninspiring when it comes to making the case for taking Britain into the euro. The conclusion, though, seems inescapable. They are embarrassed. Their unease was implicit in the Chancellor's otherwise upbeat Budget. The problem doesn't lie in some unmentionable flaw in the argument for going in. Rather, it is that the best argument, the clincher, shows up flaws in British governance itself.

On Britain's attachment to Europe, the PM is clear. It's all in his recent Ghent speech, a nice put-down of Margaret Thatcher's Bruges rant. His strategy is to show that we are in the European Union to the hilt, that this is entirely to our advantage and that we can surely turn Europe our way if we give ourselves the proper leverage. The final emphasis, then, is on tilting Europe Britain's way. On reforming Europe. On getting it to pursue the Third Way. He was at it in fine style at Europe's e-summit in Lisbon.

While all this has a positive ring, it also has a background hum that plays to the very British mulishness on Europe that Blair, thank heavens, abhors. Hear that hum, too, in his reluctance to discuss the euro itself, a currency that the OECD, the industrial world's economic specialists, concludes has made a solid start in its first year, providing a "golden opportunity" for long-lasting expansion, rising living standards and falling unemployment.

Yet Blair is keeping alive the negative myth about Europe: a myth that claims that to embrace the European thing is essential for the British interest, but that nothing whatever will change in the British way of life and government.

In truth, wouldn't we be better off if Europe did change some of our ways? Here is where the argument grows delicate for Messrs Blair and Brown. It is not easy to set about shifting public opinion by mobilising an argument that makes you look - well, ordinary. For ordinary is how the Britain that the Europhobes aim to "save" can look in comparison with the record of some of the Continental countries that they love to scoff at.

Britain's economy is doing well, no question. Unemployment is low, well below levels in other major European countries, starting with Germany and France. Expansion proceeds apace, though not as fast as in France. Only the US gives business as free a hand to lift profits as Britain does. The pound sterling, the flagship Victory of the Europhobes, is strong, while the euro, despite its OECD pass mark, hesitates. Inflation in Britain is under control, even though our sharply higher interest rates suggest that it is a bigger worry than it is in countries that have fused their currencies into the euro.

So far, nothing to be ashamed of. It would be idle, though, to ignore that some of the economic glow is varnish sprayed on thick by an unprecedented boom in the US; or to ignore that Brown's Budget, targeted on health and education, is a brave if panicky start to confronting problems that won't be righted in a hurry.

Look closer and you will find that there are fundamental areas where, compared with euroland, we are not so strong. These areas are vital because they cover the ground on which a successful society must measure itself.

It would be difficult for the PM to go before the British public and observe that major countries now embracing the euro have one way or another grown richer than we are. Yet average personal income in Britain stands below that of all euro countries except Spain and Portugal, latecomers to the union. By the essential measure of productivity in the workplace, Britain lags well behind France, Germany and Italy, not to mention the average for the euro area as a whole. That is why Rover is on the rocks.

Hard, too, for Blair to talk about Britain's record on poverty. One-third of Britons fall below the EU poverty line, a threshold set at 60 per cent of average national income before handouts. Even Spain and Portugal do better than this.

Hard to blow our trumpet about education when Britain, according to a recent Guardian series, lags behind just about every developed country in investment in teachers for the state sector. The best Continental countries have between ten and 12 pupils per teacher; in our state schools, the figure is 19. Britain's private schools (where the average class size is ten) provide a uniquely superior alternative to state education - but only for the affluent. The rift shows that something is peculiarly awry, given that French and German children go through their state system as a matter of course, however elevated their family aspirations and income. The state education evidently doesn't hold them back; a larger proportion than in Britain continues into higher education.

Hard to talk up our health system (true, no one is attempting this contortion) when few Britons have a civil word to say for it. It costs less than equivalent but differently run systems in major euro countries. In France, public healthcare is arguably over-accessible. But the most striking difference is this: Continental systems pass the test of popular esteem, which is surely the first requirement of a public service.

Hard to talk about transport . . . But let's not go on. People in euro countries pay more taxes than we do - yet what they get in return more than compensates for the displeasure of paying them.

Blair is right to say that the EU provides the framework for Europe's and Britain's prosperity; that Europe's global trade interests and Britain's are one; that close to 60 per cent of British trade is with the rest of the union; that over three million British jobs depend on it; and that America's ultimate interest in Britain likewise depends on the strength of our role in Europe. This is all sound reasoning. But it does seem overly economic, like the Blair-Brown pretence that joining the euro is conditional on our getting right a bunch of economic variables.

The trouble with refusing to present the euro as a major political step is that such skittishness does nothing to check popular negativism in Britain. Once concentrated with tabloid-fed fervour against "Brussels", the grudge now seems to extend to Europe in general, the European currency in particular. There are too many reasons for it - historical, cultural, mystical, caricatural - to go into. A mental blur between the euro and the EU itself has set in.

So while it will be edifying for our voters to know of the euro's "solid start", they should also know that people who have taken to using the common currency for business, which means all our most successful European partners, are acting as though liberated by it. Exporters are jubilant. Any anxiety over the euro's ups and downs (mainly downs of late) in the currency markets is cushioned by recognition that such fluctuation has no effect on purchasing power at home. Europeans seem confident that it will, in time, bounce back. BMW's grouse that Britain's absence from the euro undermined its chances of running Rover successfully may not warm British hearts to the European currency, but it makes a point.

Drop the hostility and Britain will give itself the chance to benefit from, yes, damn it, even to imitate, those things that other Europeans do better than we do. Meanwhile, the Germans and the French willingly recognise a British lead in new technology, services, entertainment, general creative nuttiness and civility (slipping) which they rush to borrow from. Chancellor Gerhard Schroder and the French Prime Minister, Lionel Jospin, have already taken a container of Blairism on board. Taxes are coming down. Regulation is falling away.

What is good for the goose, then, should be good for the gander. If Messrs Blair and Brown would swallow some pride, and turn down the volume on how Europe must be like us, there is a fair chance that British opinion would soon start seeing the common currency as a boon.

The writer is the western Europe correspondent for the New Statesman

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