Grandees issue grave warning on Europe

A phalanx of the most senior figures in the Tory party last night issued an unprecedented challenge to John Major over Europe with a stark warning that he should not tolerate any retreat into xenophobic rejection of greater European co-operation.

In a letter to The Independent, the party's old guard, including the former Prime Minister Sir Edward Heath and the former Deputy Prime Minister Lord Whitelaw, make it clear that they will give no ground to Baroness Thatcher and the party's virulent Euro-phobes.

"Britain's future lies as a committed member of an interdependent Europe, as a country which sees the European Union as an opportunity, not a threat," the letter says.

"The British instinct is to lead, not walk away. Our greatest patriots have never been little Englanders."

It was made clear last night that the signatories, including three former foreign secretaries - Douglas Hurd, Lord Howe and Lord Carrington - along with the European Commissioner Sir Leon Brittan, endorse the Prime Minister's "muscular" approach to Europe.

But with an eye on battles ahead at next month's party conference in Bournemouth, the letter says: "For us now to rule out British membership of a single currency would be to betray our national interest.

"To countenance withdrawal from the European Union would be to court disaster." Both demands have been made by the Tory right-wing, and there are real fears that Mr Major might seek to win pre-election unity by offering concessions that are utterly unacceptable to Sir Edward and the other Tory grandees.

Marking the 50th anniversary of Churchill's speech at the University of Zurich on the future of European co-operation, the letter concludes: "To commit ourselves, by contrast, to a positive role in the leadership of Europe is the most fitting tribute we can pay to Churchill's Zurich vision."

Speaking in the same Zurich hall yesterday, the Foreign Secretary, Malcolm Rifkind, warned that a single currency would divide the EU into two groups.

About half the existing members and nearly all the 12 countries seeking to join would not qualify for the single currency, he said: "Such a divided European Union was not what the Founding Fathers had in mind. We will need to give much greater consideration to its implications than has, until now, been conceded."

He also warned against blindly leaping towards ever-greater integration, "flailing for footholds that may prove precarious or illusory".

That critical approach to the single currency was raised last year by Mr Major in a bilateral meeting with the French President Jacques Chirac.

A study of the "Ins and Outs" - the implications of a single currency for those joining up, and those not - was formally commissioned at last December's Madrid summit. It is to be completed in time for the second Dublin summit, in December.

Nevertheless, Mr Rifkind's warning was seen yesterday as an attempt to pander to the Tory Euro-sceptics in advance of the party conference.

Certainly, that was the interpretation put on it by John Redwood, who said: "I am delighted the Foreign Secretary has decided to warn our European partners of the divisions currency union is causing and will cause, if they press head.

"If Britain abolishes the pound, many of us will want our country back. We want British economic policy under democratic control. Currency union is a disaster waiting to happen ... We must use every means at our disposal to make sure the nightmare does not become a reality."

Another leading Tory Euro-sceptic, Sir Michael Spicer, said Mr Rifkind's warning that a single currency would be a bad thing for Europe was "excellent, and the tougher we are on that the better".

Menzies Campbell, the Liberal Democrat spokesman, said: "It is not Europe that is being ripped apart by economic and monetary union; it is the Tory government. Mr Rifkind would be better employed lecturing his own backbenchers on the folly of Euro-nihilism."

Labour reacted with some quotations from its data-bank - including that of the Secretary of State for Defence, Michael Portillo, in May 1994, that a single currency "would mean giving up the government of the UK".

But John Bruton, the Prime Minister of Ireland, which currently holds the EU presidency, yesterday set the establishment of a single currency as a central aim for the EU.

In a state of the union speech to the European Parliament in Strasbourg he said: "Economic and monetary union must commence on time, and in line with treaty requirements. The single market, if it is to be consolidated, must be underpinned by a strong and stable European currency.

"The single currency will eliminate exchange rate risks and transaction costs for trade, tourism and investment between participating member states. It will place Europe firmly centre stage in the global economy."

Leading article, page 15

Letters, page 15