Cook supports single currency and heals rift

Robin Cook, the shadow Foreign Secretary, yesterday went a long way towards healing the rift in the Labour leadership over economic and monetary union by backing Britain's entry into a single currency.

Speaking to business leaders in London, Mr Cook gave his most upbeat assessment of the benefits of monetary union and forecast there was a 75 per cent chance that the single currency would proceed.

Mr Cook, hitherto regarded as lukewarm towards EMU, told the Confederation of British Industry's monthly council meeting: "If a single currency proceeds I personally very much doubt whether it is possible in the medium term for Britain to stay out. In the long term, and if it proceeds and succeeds, it will not be an option for Britain to remain outside."

He said a question mark remained over whether a single currency would start on time in 1999 but he highlighted the attractions that Labour saw in EMU.

Mr Cook's comments align him more closely with the shadow Chancellor, Gordon Brown, the shadow cabinet's most enthusiastic advocate of EMU, and will help Labour present a united front on the issue.

He told CBI leaders that if Britain remained outside a single currency it would make sterling more vulnerable to attack by currency speculators.

He said it would be perverse to stay out on the grounds of defending Britain's sovereignty if entry was in the country's economic interests. On the other hand it would be perverse to sign up simply as a symbolic act of Britain's support for Europe.

Mr Cook claimed that whilst the debate within the Conservative Party over EMU was a political one, Labour would take a "hard-headed" decision on whether or not to support a single currency based on the economic arguments.

Europe, he said was the centre of gravity of economic power and the reason that Britain had attracted more inward investment than any other country in the European Union.

The Government, he added, was pursing a mirage if it thought that launching a "Jihad" against Brussels would win votes. By appearing to be reluctant members of the Community it was undermining Britain's wider interests. "This is not a posture that gives us any leverage within the EU," he said to murmurs of "hear, hear".

He also called on business to join Labour in helping develop the same kind of consensus approach to Europe that existed on the Continent. "One reason we don't do as well is that we are too busy arguing among ourselves to put forward a united policy."

Mr Cook denied that Labour was "playing chicken" by refusing to say ahead of the election whether or not it would take Britain into a single currency. He said Labour's position in promising a referendum on the subject was consistent with that of the other two main parties.

Mr Cook promised meanwhile that trade would be given top priority in a future Labour government's foreign policy. Labour, he said, would consider appointing businessmen as ambassadors in selected countries which were key export markets for Britain.

He also pledged to increase the number of commercial secondments into the Foreign Office and offer more support for small and medium-sized companies in export markets. One option, he said, would be to set up dedicated business centres in overseas markets such as Germany had done in Singapore.

Sir Colin Marshall, president of the CBI, said he was very encouraged to hear that Labour would put trade at the top of the agenda.