Euro test on the backburner
The Chancellor of the Exchequer yesterday effectively ruled out any decision on UK membership of the European single currency in this Parliament.
Gordon Brown in his eighth Budget speech said the Treasury’s five economic principles would not be reassessed again until Budget 2005.
The Chancellor told MPs: “Last year, we identified the housing market, housing finance and other inflexibilities in capital, product and labour markets as major barriers to meeting two of our five tests for euro membership.
“Today, we are publishing – alongside the Budget – a detailed report on flexibilities in Britain and Europe – and I can inform the House today that while the government does not propose a euro assessment be initiated at the time of this Budget, the Treasury will again review progress at Budget time next year and report to the House.”
To the chagrin of the pro-euro lobby, the issue has been put firmly on the backburner, as a referendum would be virtually impossible to administer before the general election, forecast for spring 2005.
Matthew McGregor, campaign manager of the No Campaign, said: “Even under the new ‘rolling assessment’ timetable, the earliest opportunity for the government to hold a vote is 2008.”
Philippe Legrain, chief economist at pro-euro campaigners Britain in Europe, said the procrastination was another “missed opportunity.”
“It’s in Britain’s long-term national interest to join the euro. We’re missing out on trade, investment, economic growth the longer we stay out.
“We’re convinced the Chancellor will eventually see the weight of our argument.”
