Is the Chancellor of the Exchequer a political and economic sadomasochist? I’m not inviting you to see the man who would be prime minister as some sort of Miss Whiplash character. But my question is real. I ask because of one four-letter word – euro.
How can it be that Gordon Brown is happy to let the levers of economic and monetary power in Europe slip through his fingers and into the hands of the 12 eurozone finance ministers? Why does he seem happy to alienate himself from so many European political figures whose support and friendship he will need if he ever becomes prime minister? Why is he content to tie the hands of key sections of British industry and commerce as they fight for profits and jobs against their eurozone competitors? In short, why does he give the impression of preferring self-flagellation and the mantra of the blessed five tests to decisive leadership on Europe and the euro?
I ask this in all seriousness because the guardian of those sacred five tests has some real problems. The longer the referendum on the euro is put off, the greater the impact of the sixth test – the cost of staying out. Each day’s delay damages the ability of many British companies to compete – sometimes with fatal consequences. It is an act of economic sadism to shoot British industry in the foot in this way.
But it’s not just pain being inflicted on others. It’s personal, too. The eurozone is not marking time, waiting for the British cavalry to come over the hill. Before every meeting of EU finance ministers, at which Brown meets his 14 opposite numbers, another meeting takes place. The 12 eurozone finance ministers meet to take decisions on economic and monetary policy. The Chancellor has little or no influence over these decisions. Yet they affect the British economy now, and they are shaping the euro that Britain will one day join.
There is another downside. Brown’s legendary dislike of the Brussels machine reinforces the sense that he is not a team player, and cares little for the euro and all that goes with it. First impressions are lasting impressions. Britain is not the only country in which there is interest in what sort of prime minister Brown would make.
Yet when the Chancellor does turn his intellect and persuasive powers on to things European, he can be very effective. In the debate over the “withholding tax”, Britain was at one stage totally isolated in opposition. Yet, against 14 other ministers, Brown, backed up admirably by Brussels-based British civil servants, turned the issue on its head. In the end, the Austrians and Luxembourgers were isolated in their support for the tax.
Doing little to bring forward the day when Britain joins the euro is irresponsible. Doing much to delay that day is foolhardy, dangerous and short-sighted. For a Chancellor who prides himself on power, control and influence, abdicating leadership over the euro is cutting off his nose to spite his face – political masochism. Particularly when most people, from the Chancellor down, know that joining the euro is inevitable. If you don’t believe me, go into a supermarket, or your local pub, and try the following test. Ask ten people if Britain should never join the euro. A couple, at most, will raise their hands. Then ask them if Britain should one day join the euro. Three or four hands will probably go up. Then ask them if they think that Britain will one day join the euro regardless of what they think. Most, if not all, hands will be raised.
The British people are the ultimate European pragmatists. They subconsciously know that Britain’s future is in Europe. Yet our S&M Chancellor, who understands the mood of public opinion, continues to undermine the influence he will have in the future should he become prime minister.
Perhaps Brown and Tony Blair are just playing a very sophisticated game, a good cop/bad cop exercise in softening up the British electorate for the referendum. Probably only the two men themselves know whether this is the case or not. But the longer the decision to hold a referendum on the euro is delayed, the less is the influence that Britain has. The longer the timing of the referendum looks in doubt, the greater the temptation for inward investors to go elsewhere.
Geoffrey Howe, one of Margaret Thatcher’s most successful foreign secretaries, once said that “Britain always gets it right on Europe, but usually 20 years too late”. On the euro, we don’t have two years, let alone 20. In effect, we are now down to just two months. The choice for Brown is clear. Does he want to be remembered only as a successful Chancellor who sorted out the public finances? Or will his historical legacy be as the Chancellor and statesman who not only saved public services, but who also secured Britain’s entry into the euro, and his own place as prime minister?
I am told that sadomasochism can be a pleasurable and rewarding pastime for those who pursue it. But its economic and political equivalent is quite different – no pleasure, no reward, and ultimately only pain and suffering.
Simon Murphy MEP is former leader of the European Parliamentary Labour Party