The Euro was Tony Blair’s lost opportunity

Labour Party

Peter Hain in his excellent memoirs Outside In recounts one of the greatest lost opportunities in post-war British politics.  According to the article on Hain’s book in the Guardian today, Tony Blair set up a secret group to do the necessary background work for a successful referendum on Britain joining the Euro.

Blair was, it appears, intent on the UK joining the single currency in 2002 or 2003. In the middle of 2002, according to Hain, the Prime Minister “talked discreetly to key pro-Europe individuals about raising funds for communications research, focus groups, opinion polling and detailed research.” Pro-Euro business figures raised £200,000 very easily for this enterprise.

A small, select and seemingly secure group which included the pollster Philip Gould and Blair aide Pat McFadden, now an MP, was formed to look at the whole question. Secrecy was paramount as Gordon Brown would never have agreed to join the Euro and had therefore to be kept away from these initial discussions.

Secret cabals in politics are rarely a good thing – they have no actual power and are unlikely to be kept under wraps for any significant amount of time. Something ended up going horribly wrong with Blair’s Euro group in that the whole project was stymied when Gordon Brown devised the five economic tests for joining the Euro and then declared the UK had not met them.

 You cannot help wondering whether Brown had heard what was going on and devised a way to kill any idea of a referendum on joining the Euro stone dead.

Despite current orthodoxy, I remain convinced that Brown’s opposition to the Euro was extremely short-sighted.  Given that the UK economy is so tied up with the Eurozone and Britain gains considerably from the EU single market, being in or out of the Euro makes little difference economically. Indeed George Osborne has recently agreed another tranche of funding to contribute to the additional $500 billion the International Monetary Fund says it requires to protect the world economy from the European debt crisis.

The UK quite simply cannot ignore the Eurozone in its hour/day/week/month/year of need. What is more, there is little difference between UK and Euro interest rates.

Britain is also suffering as much as the Eurozone with rising unemployment and poverty. Indeed, this Tory-led coalition is increasing the burden on the sick and vulnerable and would, I am certain, be doing the same whether or not we were in the Euro.

Economic arguments aside, what is truly unacceptable about Britain’s status as a non-Euro country is that we are unable to be a major player in the European Union while we sit outside the single currency, a fact thrown into even starker relief by David Cameron’s walking out of the recent European summit during the small hours of 9 December last year.

In order to be a power in the world, the UK has to be a power in the EU. Unpalatable as this may be, it is undoubtedly the case. In the 21st century the world power is the EU, not Great Britain. True, the United States remains up there, but our transatlantic links are weakening and Britain is very much the underdog in the modern “special relationship”. That leaves the emerging powers of China and India, both of whom are racing well ahead ofBritain in the world power stakes.

Thus being outside the Euro has huge national and international implications forthe UK. Outside the Euro with David Cameron we really are not much more than Norway. I have never bought the UKIP argument that it would be good to be like Norway. Excellent country that it is, it is not really significant in the scheme of things, does not take part in major international decisions and appears to be content to sit at home avoiding power and responsibility.

As a British patriot, I do not want the Norwegian option for our country which ruled the waves only 100 years ago. I want to be where it matters. That is at the heart of the European Union with a seat at all the tables and the power due to us as one of the second largest EU member states after Germany. In order to be where we should be, Britainhas to be a member of the single currency. It’s as simple as that. We ignore this at our peril.

It was, therefore, a tragic shame that Tony Blair did not take us into the Euro. Apart from giving Britain a place in the world, it would also have sealed his legacy, a legacy which became so damaged by the Iraq war. As a strong Blair supporter, I believe he deserves to be better remembered than seems to be the case at present. This may have been the reality not just something on my wish-list if Blair had found the courage to put our country well and truly at the economic and political heart of Europe.