Straw: Iraq war would not derail euro plans

Plans for a referendum on British membership of the single currency would not be derailed by military action in Iraq, Jack Straw, the Foreign Secretary, said yesterday.

He insisted the vote would go ahead if the Government judged its economic tests for entry had been satisfied.

His comments contradict speculation on both sides of the euro argument that the economic and political uncertainty caused by British involvement in strikes on Baghdad would lead to any referendum being shelved.

In an interview in today's Financial Times he would not be drawn on whether the Government would call a referendum or whether it would join US-led attacks on Iraq.

But he said: "You're asking me: Is the timing of any referendum on the euro dependent on a 'Big if' about military action in Iraq? Well, no."

Mr Straw pointed out that the Government had promised to reach its judgement on the single currency tests by next June. He added: "That being so by what process would we suddenly say: 'Well, by the way, we've decided we're not about to keep to this rubric about the euro, instead we will allow extraneous issues to come in?'

The Foreign secretary also reiterated his commitment to the principle of British membership of the new currency. "I can see many advantages of it. I was using the euro this summer when we were in France and I was struck that even in rural France, people have simply taken to that ... I don't think Italians have lost their sense of themselves as a fact that they have a different currency. Neither have the French."

Opponents of the euro have argued that Tony Blair would find it impossible to unite the public and the Labour Party behind both a war involving British troops and a referendum. Its supporters have also admitted grave doubts over the feasibility of the events coinciding.

They fear it would be impractical under the circumstances for Mr Blair and other senior ministers to focus on making the case to a sceptical public for abolishing the pound.

Mr Straw said Chancellor Gordon Brown's assessment on whether the British economy had come into line with the so-called Eurozone was the "$64,000 question – it remains to be answered". And he warned that if Britain joined on a "false prospectus" without proper convergence it would increase tensions within the European Union. He also insisted that Britain's standing within the Union would not be harmed if the country retained the pound.

However his remarks are bound to irritate the Treasury, which has remained doggedly neutral. They come at a time when the pro-euro campaign faces new uncertainty. Derek Simpson, the new leader of Amicus, has said he wants his union to reconsider its policy of funding Britain in Europe. And a poll this week revealed that support for the euro had barely grown despite British holidaymakers having their first experience of the currency.