- The Observer,
- Sunday June 8 2003
In each package will be 20 documents - 18 economic assessments, one assessment of the five tests for British membership of the euro and a National Changeover Plan with practical details of how the country will prepare to join. A decision to go ahead will mean minting more than 14 billion coins.
At 9.15am MPs and journalists will be allowed to read the Treasury's reasoning about why Britain is not quite ready. Simultaneously, the documents will be put on the internet. The public will get its first taste of euro fever.
At 3.30pm Chancellor Gordon Brown will confirm the 'not yet' line to the Commons, although he will admit that the UK economy is much closer to joining than it was in 1997. The Treasury reports are full of positives about why Britain will join, he will say.
Brown will not rule out a re-assessment of the tests, nor a referendum on British membership, before the next general election. The euro decision could be made in the next two years.
The political tone will be relentlessly positive. The Chancellor will detail the steps the Government will take to prepare Britain for joining. A paving Bill for a referendum will be announced. It will be made clear that the Government wants to take Britain in.
Tomorrow evening in Madrid, Patricia Hewitt, the Trade and Industry Secretary and a leading supporter of the single currency, will make the first pro-euro campaigning speech under Tony Blair's newly agreed policy of allowing Cabinet members free rein on the issue. The following day Blair and Brown will host a joint press conference, signalling 'complete unity' on the subject.
The Government has come a long way since stories earlier this year suggested the single currency could be ruled out for a decade, and another chapter in the long, tortuous process of Britain's slow entry will end this week.
Those who argue that Britain should join immediately will say the Prime Minister should have the courage to go for it now. But the Treasury is the 'guardian' of the five tests and without its say-so,his hands are tied. How, Blair's pro-euro critics will contend, did he allow such a decision to become the preserve of a government department he does not control?
And then they will think back, back nearly 10 years to an 'agreement' drawn up between two men that cemented the relationship at the heart of the New Labour project. The Blair-Brown pact ahead of Blair's bid for the Labour leadership in 1994 was revealed in sharp detail last week. In one sentence it showed why Brown has always had supremacy over the economy and social reform. Under that umbrella sits the euro.
The agreement between the two men was put together in a document leaked to the Guardian. The document, which was to be used to brief the press on how Brown and Blair would approach the leadership election, with Brown standing aside for his younger rival, says: 'In his Wales and Luton speeches, Gordon has spelled out the fairness agenda which he believes should be the centrepiece of Labour's programme and Tony is in full agreement with this and that the party's economic and social policies should be further developed on this basis.'
Everything, Brown contended so long ago, has to be driven by the 'fairness agenda'. A successful economy is useful only in as much as it helps promote that agenda. And so Brown has been dogged in insisting that anything that puts that 'full agreement' at risk is not worth the candle. The economy is the first consideration. The single currency is simply part of that.
Brown wanted to go further. The words 'in full agreement' have been scrawled out on the document and, scribbled across the bottom of the note in Brown's handwriting, are the words, 'has guaranteed that this will be pursued'. In short, Blair could be leader of the party and even Prime Minister but Brown had control of social and economic policy. That was the deal.
The letter caused a flurry of gossip and intriguing theories across Westminster, raising once again the relationship between the two most powerful men in the Government. Even now, neither side can quite agree on what the document amounted to. Blair's friends argue that the Prime Minister did not agree to the word 'guarantee' and the final document simply re-iter ated 'in full agreement'. Brown's camp dispute that interpretation.
But where did it come from, and who gained from it? Allies of Brown immediately pointed to the reporter of the story. It was broken by the Guardian political journalist Tom Happold, who used to work for the Labour Party under Derek Draper, a close ally of Peter Mandelson.
Surely Mandelson must be behind it all, trying to destabilise the Blair-Brown relationship ahead of one of the most important political and economic decisions the Government will take?
Indeed, Mandelson's name appears at the top of the document. It was faxed to him for agreement by Sue Nye, Brown's political secretary.
Friends of Mandelson make it clear, however, that he was not involved. 'It came as much of a surprise to him as anyone else. He was 100 per cent nothing to do with it,' said one. Others say the letter is actually more helpful to Brown as it shows how his 'fairness agenda' on jobs and social justice was at the centre of the New Labour project.
Also, Happold's old party job is overplayed. After leaving Labour and before joining the Guardian internet team, he worked as a researcher on a Granada TV drama-documentary on 'the pact', a reconstruction of the famous Blair/Brown dinner at the Granita restaurant in Islington.
It was during the dinner, Brown's allies contend, that he and Blair came to an agreement. If Brown would support Blair in 1994, Blair would support Brown as his successor. Blair's camp say no such deal was sought or offered. Happold's work on the programme gave him ample access to the key players.
Wherever the leak came from, it again raised the closeness of the two men, the length of their relationship and the tensions at its core. 'These two are the basis of the Government,' said someone close to both of them. 'Without either of them, New Labour would not exist.'
Late last Thursday afternoon, the Chancellor and the Prime Minister walked out onto the terrace next to the Cabinet Room at 10 Downing Street to discuss one of the longest 'single issue' Cabinet meetings either could remember.
At 3pm that day the whole Cabinet met to discuss the euro decision to be announced by Brown tomorrow. The discussion lasted for more than two hours. John Prescott, the Deputy Prime Minister, even tried to liven up the proceedings by flicking a jovial 'two fingers' at the press outside No 10.
Brown and Blair had finally come to an accommodation. Yes, the Chancellor and the Treasury were the guardians of the five tests, but Blair had ensured that the political message would be as pro-euro as possible. When the pair had considered announcing the assessment in the Budget last March, the scenario was much more negative. Brown has moved to the centre. Blair has encouraged him as far as he can.
The Prime Minister kicked off the meeting with a presentation, saying the benefits of joining were clear. Brown spoke next, running through the assessment of the five tests - one met, two almost met and two failed - and what it meant the Government must do to prepare the country for entry.
Then came Prescott, who both camps say has played a key role in bringing together Blair's political enthusiasm for the single currency and the Treasury's caution over the economic conditions. Prescott thumped the table. Now, he said, was not time to announce another missed opportunity.
'We need to get the country into a position to say yes,' said a senior Government figure. 'It could be as early as this Parliament. We need to take the active steps to prepare this country for entry. We want to join a successful single currency.
'It will be qualitively different this time. This is a pro-European Government: we have to go out and make the arguments.'
Critics point out that, as with every other announcement about the Government delaying entry to the single currency, there are always warm political words.
'This time will be different. This country will realise that by Monday evening we are far closer to joining than we were on Monday morning.' And anyone who can be bothered can read the reasons why. All 2,000 pages of them.
