Why did Blair refuse to name Brown in his memoir as real reason for UK not adopting the Euro? - La Treizième Étoile: A blog on EU politics
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Why did Blair refuse to name Brown in his memoir as real reason for UK not adopting the Euro?

Thursday, 23 September 2010
As politically-minded British booklovers will have noticed, the long-awaited memoirs of Britain’s former Prime Minister Tony Blair hit the bookshelves at the start of this month, and while inevitably containing many ‘revealing’ details about his ‘feud’ with Gordon Brown it was details about Mr Blair’s regret about not taking Britain into the ‘heart of Europe’ that interested me most.

The 624-page book, ‘A Journey’, offers some intriguing insight on this matter, in particular how much Mr Blair’s government ministers were ‘delighted’ when France voted to reject the European Union’s draft constitution in 2005 and that he “fancied the fight” of a referendum in the UK on whether to sign up to the EU constitution, but he was never given the chance.

Mr Blair, who served in Downing Street from 1997 until 2007, wanted to join the Euro single currency from very early on in his premiership, but reveals that it was a fear of British public opinion – not the opposition of Gordon Brown, his Chancellor for a decade – that made him pull back.

Unless it was economically plain that it would be good for Britain, it was simply not politically sellable,” he writes. “The political problem was the economics.

Since I devoted a chapter of my dissertation to investigating the real reasons for the UK to not adopt the Euro during Mr Blair’s premiership, I believe what he wrote in his book deliberately avoids expanding on the turbulent relationship and disputes between the two. On the basis of numerous other sources, Brown was the biggest and first obstacle to overcome and even if public opinion was a determinate factor, there is little indication that it deterred him.

Private memos from Blair’s inner circle at this time stress the importance he gave to joining other European powers in adopting the Euro single currency. Blair saw adopting the Euro as the principle motor to fulfil his aspiration of British leadership in the EU, and even across his cabinet there emerged a feeling of ‘inevitability’ that Blair would take the UK into the single currency.

He was determined; so much so that even a post-it left on the front of a large dossier on the single currency reading "This is the big one: never before has a Prime Minister voluntarily risked a commanding majority, on an issue about which the country was lukewarm, the Treasury and his own party sceptical" did not dent his enthusiasm. In an interview on BBC Newsnight in May 2002, he declared he wanted to be remembered as "the man who took Britain into the Euro because it was in the national interest". Not to join, he added, would be a "betrayal".

From reading other political memoirs and accounts, it became clear that Blair seriously considered standing down as PM and handing his Chancellor Brown the reins in exchange for ‘positive movement’ on the Euro.

In her book, ‘An Honourable Deception?’ for example, Clare Short recalls being asked to relay this exact message to Brown, and then his subsequent response: "he [Brown] would not contemplate recommending that we join the Euro in order to advance his own position rather than advance the economic interest of the country".

As you would expect from a Chancellor in the job for more than a decade, Brown was very able at economics and was much more interested in the economic reasons for joining rather than the political advantages and did not allow Europe to define his politics. Brown was enthusiastic so long as it benefited Britain.

But here Ed Balls enters our story. Then Brown’s economic advisor, Balls was very anti-EMU and had previously written a paper in 1992 in which he described it as an "economically and politically misconceived project" that "would not deliver the stability, growth and full employment that Britain and Europe need’ further advising against letting ‘economic schemes run ahead of political realities".

Influenced by Ball’s scepticism, the pair sought a way of addressing the issue without ruling it out definitively and without making any commitment to join while also keeping Blair happy. Their invention: the Five Economic Tests, of which all needed to be satisfied in order to convince the Treasury it was time to progress to a referendum. The tests were devised and assessed in 1997 – unsurprisingly the UK did not fulfil any of the criteria. It achieved all of its objectives, except one – it did not please Blair.

Fives years later and with no reassessment made, Blair announced there would be one in 2003 and sensing the outcome would not be much different he reportedly demanded Brown’s resignation in April 2003 in a fit of frustration. Brown duly offered it to him but when tempers had cooled, they returned to their roles as though nothing had happened, "much in the way that dysfunctional partners in marriage would do".

Blair had to begrudgingly accept the tests would not all be passed, but he nonetheless was keen to ensure that the results showed the UK significantly closer to passing the tests than it had been in 1997. According to Anthony Seldon’s 2004 account, Blair suggested some of the tests could be passed ‘conditionally’, an amendment that Brown duly accepted - after all they did not alter the conclusion. And so on 9th June 2003, Brown announced that four out of the five tests had not been passed.

Considering the course of events, it was clear Brown had won the battle, not the public opinion and euroscepticism. David Blunkett, then Home Secretary, agreed with this sentiment and wrote in his diary (released as ‘The Blunkett Tapes’) that day: “Gordon’s statement was understandably highly technical, but not very educative with regard to wider understanding…I think the issue is dead, at least for some years to come”.

Without Blair around, Brown faced no pressure to call another assessment for entry, so he did not. There has been no reassessment of the Five Tests since, nor calls for another, and that is likely to remain the case for many years to come since current Chancellor George Osborne announced during his emergency budget in June that the Euro Preparation Unit is to be abolished.

As he reveals in ‘A Journey’ Blair clung to the hope the economics would change but “they didn’t and, for me, that was that.” But despite all the arguments over the years, why did he not just sack Brown and proceed anyway. He writes: “I came to the conclusion that having him inside and constrained was better than outside and let loose or, worse, becoming the figurehead of a far more damaging force well to the left.

But then why did he not write it was Brown who caused him to back down over the Euro? Hopefully we shall not have to wait for the second instalment of his memoirs to find out.

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