Peter Oborne

Why Gordon Brown can’t recommend euro entry this side of the election

Why Gordon Brown can't recommend euro entry this side of the election

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The late Tony Bevins, whose final public act was to resign on grounds of principle as political editor of the Daily Express the moment Richard Desmond bought the paper, was a close student of New Labour. Not long before he died he set out, in a series of articles which still repay close study, its chief characteristics. New Labour advanced, so Bevins held, by a series of curious, indirect, sideways jerks. Bevins nevertheless insisted that New Labour had clear objectives. The irregular method of progression, he maintained, was merely designed to confuse the enemy. Bevins approved of, or at any rate excused, this stratagem because he shared Tony Blair's own belief that openness and candour would prove wholly fatal to the New Labour project.

The Bevins thesis has the merit of explanatory utility. It accounts for much that would otherwise remain mysterious about the stuttering trajectory of New Labour's relationship with the euro. It sheds light on – even though it does not excuse – Tony Blair's misleading declarations of love and fidelity towards the pound in the Sun newspaper during the 1997 general election campaign. It makes sense of the Prime Minister's preposterous announcement, made when the five tests were unveiled in October 1997, that the 'time for indecision is over'. Bevins's hypothesis even sets this week's orgy of competitive dissimulation between the Prime Minister and his Chancellor in its proper context.

In essence, the persiflage over the euro during the last few days has been about only one thing: saving Tony Blair's face. It has been obvious for some time that economic and political considerations made entry to the single currency a quixotic venture during this parliament. But the Prime Minister has been made uncomfortably aware of the numerous assurances he has made to pro-Europeans over the last six years. During the course of his crablike meanderings, Tony Blair has misled a great many people. To list them all here would fill up not merely the remainder of this column, but every other page of The Spectator as well.

But take the example of Paddy Ashdown, the former leader of the Liberal Democrat party. Back in October 1997, on the day the five tests were announced, the Prime Minister rang up Ashdown and assured him breathlessly that a referendum on the euro was still on the cards before the 2001 general election. A credulous Ashdown expressed his pleasure at this news. Last Monday the Prime Minister was again assuring pro-Europeans that the referendum could be held before the next election. Once more he was insisting that 'the time for indecision is over'. Once more credulous pro-Europeans were dutifully expressing their pleasure at the news.

But there will be no referendum this side of a general election, and it is increasingly doubtful that one will ever be held. One of the week's minor mysteries – which may not be cleared up for many years – is whether Tony Blair grasps the intractable realities of the situation. It remains unclear whether he is deliberately deceiving the European leaders and others he spoke to last Monday afternoon about Britain's chances of entering the single currency, or whether he has contrived to deceive himself as well. Even six years into his premiership, it is often impossible to say with total confidence whether Tony Blair is breathtakingly cynical or breathtakingly naive.

But the raw politics is clear. There were two objectives last week: one about substance and one about style. The substantive agenda was ruling out the euro. The style agenda was about ruling it in. For the strategy to work, the Prime Minister needed collaborators, and he found them in the unlikely pairing of Gordon Brown and Colin Marshall, chairman of the Britain in Europe movement. Both men have this week done grave, and maybe irreparable, damage to their reputations in order to save the Prime Minister's skin.

To take the Chancellor first. Monday afternoon's announcement was a humiliation for Gordon Brown. His statement contained so many contradictions that he is in danger of turning into a figure of fun. The magisterial Treasury analysis of the five tests demonstrates with great clarity the long-term barriers to convergence between British and Continental economies, of which the most stark is housing finance. There is no way that real measures to address these divergences could be implemented, let alone take effect, before the coming election. And yet the Chancellor has agreed to look again at the five tests in next March's Budget. Ed Balls, the chief economic adviser to the Treasury, went to the extreme lengths of informing lobby journalists in the wake of the Chancellor's statement that there was a real chance that the verdict could have turned favourable by then. Balls managed not to smirk as he gave his assurances – essential if Tony Blair's face is to be saved. But almost as he spoke, other Treasury figures were undermining his remarks by highlighting the housing-finance issue as the real story.

Gordon Brown cannot recommend entry to the single currency this side of an election and remain credible. He has done so much damage to his reputation by even entertaining the possibility of a reassessment that questions arise about ulterior motives. Sources close to the negotiations between the Chancellor and the Prime Minister in the run-up to the euro announcement insist that Tony Blair did indeed, at one stage, float the idea that he might step down in favour of Gordon Brown after a referendum. It is perhaps notable that neither man denied that a deal had been struck when the question was aired at the Downing Street press conference on Tuesday. Nevertheless, a deal remains intrinsically unlikely, because of the damage it would do to Gordon Brown if details ever emerged.

The second victim is Colin Marshall, who as chairman of British Airways bore the responsibility for the tailfin fiasco. Marshall declared in the BIE New Year statement that Tony Blair would fight – and win – a euro referendum this year. On Monday the booby was undeterred, declaring that he was delighted with the announcement and that Britain was now on course for a referendum. His BIE campaign has been a tragedy, a case study in how not to run a pressure group. Many pro-Europeans believe its real purpose has been to act as apologist for Tony Blair's own caution and equivocation, rather than campaign for the single currency. BIE has allowed itself to be turned into the dupe of the government, and it will be enjoyable to hear Marshall explain himself when a pre-election referendum if formally ruled out next year.