The New Statesman Essay - The only answer is "Yes"

Sceptics pretend that we still have a choice over Europe. It is a dangerous deception, argues Hugo Y

Let us look forward a few years. Prime Minister Blair has been comfortably re-elected. It is, say, 2002. The referendum on sterling's disappearance is under way. It is not a referendum the public has asked for. The average voter in Sedgefield or Richmond, Dunfermline or Wokingham, does not spend time puzzling over exchange-rate theory or gauging the consequences for British exports of asymmetrical inflation targets. Nor is it happening because politicians have decided that the public should brace up and get interested in these questions prior to the irreversible decision. It is happening because of a political fix.

What will it be about? It may begin by being about the technical question on the paper. Should we change our monetary arrangements and join the euro? Doubtless there will be fine scrutinies of trade flows past and future and learned arguments about whether one interest rate can ever suit Britain as well as Germany, let alone Greece. But before the referendum has even started such conundrums will recede. The argument will have become political. Not just political, but existential. For two reasons.

First, the economic case is essentially unprovable either way. Although there can be a rational discussion about timing, nobody can get nearer than striking a balance of economic probabilities. There are persuasive reasons for expecting, without being certain, that Britain's economic performance would improve when inside the single market that a single currency zone makes more efficient. Equally, there are persuasive, but not decisive, reasons for anxiety that a single interest rate covering 15 economies will bring some problems. I belong to the Mervyn King school. King, the deputy governor of the Bank of England, said it would be 200 years before an intellectually sound statement of the economic consequences of the euro could be safely ventured.

That has not deterred the prophets of Euroscepticism from making the most adamant assertions about the inevitable disaster the euro would bring. Nor has it dissuaded the government from sticking to its five economic tests, as if the passing of these will represent proof positive that all our anxieties can be laid to rest. There will never be such proof either way. These claims on certainty - from both sides, as both of them know - already have the covert purpose of disguising the politics in the economics. For Gordon Brown, holding us in suspense as we await his oracular pronouncement on the tests, the economics excuse him from engaging with the other issues. For Eurosceptics, asserting that the economics are impossible is a convenient way of not addressing their contradictions and confusions about the political destiny of Britain and Europe.

The second reason is that the British public will soon see through the fastidious pretence that the referendum is all about whether our currency should be put in the pot with a lot of other currencies for the greater good of the British and European economies.

Whatever the outcome, the declaration it makes will be much more momentous. If the answer is "Yes", the British will have opted to be a fully functioning player in the destiny of Europe. That decision may have taken Britain 30 years of nominal EU membership to brood about, trying the patience of her partners, and chronically losing influence among them. But it will, I think, at last be final: the resolution of the plot that we kept losing for five decades.

If the answer is "No" . . . well, what then? The decision will be equally momentous. But to what end, exactly? What will it mean? Something larger than a technical decision to stand back from this incidental little folly called economic and monetary union. But what? To ask the question immediately invites an inquiry into the real object of the Eurosceptic rage that now surrounds us: an interrogation that many sceptics have spared themselves.

If Britain says "No", some immediate consequences are indisputable. We will remain indefinitely outside the euro-11 committee of Ecofin and renounce any role in the European Central Bank. Actually, the euro-11 will probably then be the euro-14, as Denmark, Sweden and Greece seem likely to join before 2002. They will begin to have some of the coherence of an economic government in our largest trading area.

Only marginally less immediate will be the changed perceptions of the international economic world. Business and government in the US, in Japan, in the rest of the EU itself, which presently make investment decisions on the basis that sterling is fully expected to join the euro, will change their assessment. Britain will be downgraded from "pre-in" status to the category of "forever-out". This will not be a temporary decision. The nation will have made a great political statement of rejection of the project to which the EU has devoted itself with great seriousness for a decade.

It will be the start of a great distancing. Both in Europe and on the offshore island, every other aspect of Britain's European aspirations will be called in question. Leave aside the domestic consequences for a prime minister thus defeated, which will weaken him, perhaps terminally. His entire European agenda will be destroyed. A European defence initiative? Forget it. More qualified majority voting on the environment or the CAP? Washed away in the anti-Europe declaration that has just been solemnly made. A future for the prudent give-and-take with which Blair has replaced the warrior stance of the Thatcher-Major years? The roar of rejection the British people had given would obliterate it.

This is the scenario to which a significant part of the body politic is now looking forward. It is relentlessly propounded by the majority of the press, and has been for the best part of a decade. It is the declared position of the second major political party. It has the country, supposedly, in its grip, and therefore has the government thoroughly alarmed. A "No" vote for the euro is the expectation that shadows, even dominates, our politics.

Yet who are the prophets of this case? Here are people who offer themselves as beacons of principle and patriotism - standing against the conspiracy that is Europe and the misbegotten policies of British crypto-federalists over the past 30 years: images lovingly filled in by editors and journalists. This self- definition deserves more serious scrutiny. Their record and reasoning should not be given exemption from normal rules of intellectual integrity.

They mostly have a past that they prefer to forget. Just as William Hague opposes the euro as a matter of principle, but only for another six or seven years, many of his predecessors now talk about the European Union with a loathing that could easily distract one from remembering that, as ministers not long ago, they strode its corridors, worked its committees and offered not a single indication that this was a world from which they wished to depart. Many of today's anti-Europeans were strongly in favour of Britain's entry into the community. Norman Lamont worked for it; Bill Cash supported it; David Owen left the Labour leadership and then the Labour Party on account of it. These were not ignorant Europeans. They seemed to know exactly what it meant. As a young man, Cash was deluging his lawyer friends with letters reminding them - as a pro-European - that the Treaty of Rome, when it came into force, would constitute a superior law to English law. Now his faction regards that as an unpardonable attack on British independence. Likewise, Lamont asks us to understand - requesting our sympathy - that he only found out what the founders and builders of the European Community really meant when he was negotiating, as chancellor of the exchequer, the treaty of Maastricht.

These do not seem to be people of very solid judgement. But they are models of judicious consistency compared with Margaret Thatcher. Here was the leader who took Britain further into Europe than any leader since Ted Heath. She did, admittedly, conduct a form of warfare with Brussels. But her record - based on negotiating tactics brilliantly summarised by Douglas Hurd in three words: No, No, Yes - is thoroughly integrationist. She half-invented and enthusiastically signed the Single European Act. She presided over the curtailment of national vetoes. She approved Britain's entry into the ERM. She did not dissent, at the time, from a verdict on the treaty of Maastricht, apparent throughout the Tory press, which found the Daily Mail, for example, looking forward to the single currency as one day "worth having" and to Britain playing its part in "shaping an ever closer European union".

These are unrecognisable sentiments today. Lady Thatcher has become leader of the faction that scapegoats Europe as the source of every British problem and puts the exit option on the table. Confronted by her record on the Single European Act, all she can do is retreat into paranoia. The most famous small-print scrutineer ever to occupy Downing Street says the Foreign Office misled her. She now repudiates, as do so many once-serious Tory politicians, the beliefs and actions of a long career.

The great rejection - the object of Eurosceptic politics now - is not unimaginable. There is a case to make that integration has had its day; that fragmentation makes more sense; that Britain should no longer be tied to the political and economic dinosaur that Europe is. We should head for the open sea, perhaps. Or become the 51st state. Or go it alone, as a Hong Kong-type entrepot. It certainly can be said - and the Tory MP Michael Spicer, for example, has said it - that there is "a fundamental difference in the philosophy which lies behind the British constitution and those of her Continental partners", which means this union between us is heading for ruin.

This is breathtakingly ambitious. If true, it needs working out in great and careful detail. Yet if you scour the Eurosceptic literature, you find nothing that measures up. The pamphlets and polemics have been torrential. Critiques abound of every aspect of the union, Brussels, the court, the parliament, the commission. Ridicule and hatred pour forth daily from the press. But academic, let alone political, utterances seldom reach the bottom of the great question.

There are glancing proposals for this or that - withdraw from the court, repatriate the powers, repeal the Single European Act, restore the supremacy of the House of Commons and now veto any treaty that doesn't include a clause providing for serial opt-outs for every member that fancies them. All those things have been said by leading Conservative politicians in recent years. But there is a startling indifference to consequences. They haven't begun to consult with the collaborators - American or European - who might be needed to give this picture some credibility. They've said nothing constructive to the British people whose destiny they're playing with, beyond the hot air about "giving you back your country", as the leader told the recent Tory party conference.

Other schools reject the case for the stakes being as serious as I describe. David Owen and his friends, for example, think the argument can be confined to the narrow technicality: they want Britain to be fully of Europe, but they never want the euro. As it turns out, Lord Owen is even more opposed to a common foreign and security policy than he is to the euro. But some of his allies think it is enough to reject the euro as an economic cuckoo in the nest which would suck the life out of British economic independence - and whose rejection would have no other impact on a happy relationship that would proceed, undamaged, through the 21st century.

These people want the referendum not to be held. They think this is the best way of ensuring Britain doesn't enter the euro, without putting to the test their own claim to have nothing in common with Rupert Murdoch and the coarse, mendacious Europhobes he lets loose in the Sun. They fear the contest, either way. They know Blair might win it. They half understand that, if he loses, Britain would be spitting in the face of their so-called Europeanism. So their strategy is to join those who want to scare the Prime Minister away from his chosen course. They want to have it both ways and think this can best be done by putting off the choice.

But if the government decided, after the election, not to hold the referendum soon, everyone would know it didn't intend to hold it later, closer to the next election. The Owen diagnosis is therefore a pretence: the honest longing, perhaps, of those who see many defects in the single currency, but the deluded aspiration of people who are not prepared to face reality - that if the choice for the euro is not made, Britain will be on course for exclusion first from the engine-room and then from the deck of the European Union.

Does the Conservative Party want this? Here we enter a realm obscured, until recently, by mists of confusion, insincerity and subterfuge. Some Tories sincerely do not want Britain to leave the European Union. Bill Cash wants Britain to stay in. So, I'm sure, does William Hague. Hague knows that even the Tory party that survives under him, let alone the party as it used to be and must hope to be again, would not tolerate exit. Nor would the voters.

Iain Duncan Smith, John Redwood and Michael Portillo would, I venture, be delighted to see Britain exclude herself for ever: a possibility rendered more available if the euro should visibly collapse. The Conservative policy is heavily contingent on the one economic fact that would, if it happened, be unambiguous: the disintegration of an economic zone to which Britain sends more than half her exports.

Ostensibly the Tory leader doesn't have a policy that leads to exit. He says the euro would drain Britain of her bodily fluids, both economic and political, and keeping out is a matter of principle - yet unlike most matters of principle, this one is time-limited. It all could change within the decade. But actually Hague is saying something similar to exit. The line now is that there must be a renegotiation of the Treaty of Rome, to make it possible for members to pick and choose what they get committed to. This is an adventurous idea. No other country wants to renegotiate the treaties. Nobody else is seeking a major onslaught against the court, the parliament and the commission. It would be a case of one against the rest - though one of the strands of Tory thinking is that such a process would bring the whole of Europe to its senses, persuading other member states to see the need for the EU to rebuild itself, as the Daily Telegraph said, "on a completely different basis".

There is only one word for this approach. I call it frivolity. Behind the tumult and the shouting of Eurosceptic politicians is a terrible lack of seriousness. They know what they're against, but are unable to convey any idea of what they're for. They don't even admit the obligation to do so: reviewing my book on the history of the union, Portillo sounded incredulous that anyone should ask the question. "Are we obliged to submit an option, other than survival, against the suggestion that our nation state should be wound up?", he wrote. He belongs to a long line of senior Tory ministers who have been driven, by the issue of Europe, to desert the most fundamental norm of the politician's transaction with the voter: intellectual honesty.

What you find when you scan the rhetoric are not coherent arguments taken to their conclusion but the working out of a prior visceral prejudice. Ancestral voices speak louder than future interest. The mystic chords of memory overwhelm the sense that the British identity could gain, not lose, by incorporating a European dimension. And any opportunist argument will do.

Sometimes it's about the pound: ignoring every argument the other way. Some of it's about British independence: refusing to address the myriad ways Britain already is not independent. Some of it's done by distraction: the large case, for example, that the euro was the wrong priority in the first place - as if this disposes of the reality the euro has become, and therefore the need for Britain to decide whether or not she wants to be at the centre of the EU. Or - most triumphantly of all - the dishonest sceptic's hand-wringing, head-shaking contention that, while he or she is a lifelong European who speaks Italian like a native, all further integration of the EU will be hopelessly divisive and must therefore be rejected.

For far too long, opponents of Europe, begging every question and ignoring most lessons of a 50-year history, have got away with intellectual murder and been allowed to control an agenda that digs deep into the past, not the future.

But the friends of European union are prone to similar mistakes. On the brink of the euro, they want to hold back and reconsider where Europe is going, how its flaws can be corrected, whether a whole new fresh start shouldn't be attempted before we, the British, get further involved. Shouldn't the vision be recast? Doesn't the reshaping of Europe after the end of the cold war demand a radical rethink of the EU? How shall we respond to enlargement? And so on. These are fair questions. But at this juncture they are self-indulgent retreats from the only question that is pressing. If we wait until they're answered before placing ourselves at the centre of Europe, we will never get there.

If we do that, we will have run away from a destiny that has become inevitable. People don't like the inevitability argument. It bothers Tony Blair, and up to a point he's right. There's a much more positive case to make. The neglect of that more persuasive case - in part because of the arrogance of those who won the referendum in 1975 - contributed mightily to the lassitude, verging on hostility, the British show for Europe.

On the other hand, the inevitability argument is right. Why be ashamed of it? It isn't proof of a nation's feeble-minded passivity, but of the adult acceptance by the British that the status quo established 25 years ago cannot be fundamentally challenged. Must we keep struggling to find a new story when the old one is now so well embedded in our lives?

What Europe can mean for good, on the continent and the offshore island, needs to be better proclaimed. Blair has started doing this. The reluctance to do it - seen in all pro-Europe Tory ministers for many years and still in many Labour ministers now - is part of the tyranny of scepticism: the bullying by the press, inducing a timidity in making the case, which has drained the Europe cause of most of its idealism; as if, among other things, one of its founding purposes, the avoidance of war, has become a laughable irrelevance.

Euroscepticism, inadequately challenged, bequeaths us this irony. Under present terms of political trade, there can be no mature British debate about the future of Europe until the great national question has been decided. It is a reason to start the dismantling without apology, and without delay.

This is an extract from a lecture for People's Europe and the LSE European Institute given at the LSE on 14 October