Be bold, Prime Minister, and promise a referendum

This week in Madrid, European Union leaders will aim to agree on the name for a single European currency. With the French government literally fighting in the streets to maintain its commitment to monetary union (Emu), it is no longer possible to see the single currency question as an abstraction or a badge of European political correctness. John Major can take pride in the opt-out he negotiated, which gives the UK a freedom of manoeuvre no other member state enjoys. He can also take satisfaction in the way his worries about the difficulties along the way to Emu are being borne out. But this is, nevertheless, the moment for him to be bold.

The best way of consolidating the strength of his position at home while staying fully engaged in the practical discussions of Emu, which are now hotting up, would be for him to announce his promise to hold a referendum on Europe. This would be a firm commitment that he would not take the United Kingdom into a European single currency without securing the agreement of the British people in a referendum.

The Prime Minister does not need to say any more than he has already said on whether a single currency makes sense, whether it is likely to happen or whether there are circumstances in which British participation could ever be desirable. Still less does he need to change anything in the opt-out arrangements he negotiated so skilfully at Maastricht. The commitment to a referendum would sit naturally with the strong diplomatic position he already holds, and would make clear that he was not going to go any further for now in ruling out or ruling in British participation. It would give him the moral and political high ground at home for the stormy period leading up to the election. And it would be popular.

The circumstances for a referendum would be clear and the wording simple. The people would be consulted if, and only if, the Government were itself to recommend that joining the final stage of economic and monetary union would be in the national interest. Unless the Government were so convinced, the occasion would simply not arise. If the Government had decided it wanted to proceed, it would then ask for a straight yes or no from the voters.

So this would not be a referendum on membership of the EU, which was decided democratically long ago and which public opinion broadly accepts. Nor would it be about the outcome of next year's intergovernmental conference (IGC) which, despite Franco-German efforts, is likely to be too technical and complicated to merit a popular vote. More to the point, any referendum about the IGC would, in all likelihood, be overshadowed by people's concerns about the single currency, irrespective of whether it featured in the question or not. People instinctively understand that a single currency matters more than any amount of institutional tinkering in Brussels. All the public opinion research says they would like to have their say in such a momentous decision. Who is to say they are wrong to want to be consulted?

This approach would be more honest and sustainable than the proposal which is surfacing in some quarters that joining a single currency should be ruled out for the next parliament. It may be right that monetary union will not happen until well into the next century, whatever comes of the unrest in France. If it did happen sooner, it also looks improbable as of now that the UK would be politically ready for membership, even if it met the economic criteria. But much of the support for ruling out for one parliament comes from those who believe, quite honourably, that it would be wrong in any circumstances.

So ruling Emu out for now would be supported by a coalition of those who rejected the principle altogether and those who saw ruling out for one parliament as electorally rewarding. Voters might be drawn to this - but they might equally find it opportunistic or cynical. Ruling out Emu now would also make a nonsense of the Prime Minister's achievement in preserving our options.

It would be much more attractive for the Conservative Party to be populist and principled at the same time - a combination not always possible in political life.

Irrespective of what individual cabinet members might think now, the commitment would be that a referendum would only happen on the basis of a positive proposal coming from a Conservative prime minister acting under full collective cabinet responsibility. There would be no shift now towards a more favourable or less favourable view of the single currency. But in the hypothesis that the Government would one day recommend in favour, it could only be with Prime Minister and Cabinet working together in the national interest.

This proposal would displease some supposed anti-Europeans and some soi- disant pro-Europeans. The real antis hate even the hypothesis that a Tory government could ever recommend joining a single currency. Many pros feel it would make it even more difficult to get Britain into Emu. Some from both sides dislike the use of referendums for constitutional reasons.

They should all recognise the context. The debate about Europe has been poisoned, not only within the Tory Party but around Britain and across the Continent, by the feeling that political elites, in their enthusiasm for Europe, have run too far ahead of the people. This is one factor, though not the only one, behind the tumult in France. It is also the feeling that Sir James Goldsmith, and those calling for a belated referendum on Maastricht here, are seeking to harness.

Those who dislike the single currency should welcome the idea that any such proposal would be subject to the ultimate test of popular acceptability - a serious and reassuring hurdle. The enthusiasts should recognise that if monetary union was shaping up well on the Continent, and a broad enough basis of support existed here between government, business and the rest, the chances of a "yes" vote would be fair. This is what happened with the referendum on Common Market membership in 1975, even though the early polls showed strong majorities against. Some of the more street-wise supporters are beginning to realise that a referendum might well be the only way of joining Emu. Conversely, if they could not command popular support, a single currency proposal would not deserve to succeed.

As to the politics, making the commitment now could only strengthen the Prime Minister's hand. He has prepared the way for it in the past without going the whole hog. It is true that he does not need to make the commitment, and he has not ruled it out nearer the time should the case arise. But to commit to a referendum now would play well within the Conservative Party. Tony Blair and his party would be forced to follow.

More than that, it would be good for Britain. We could continue to feed hard-headed, sensible ideas into the Emu debate. We would continue to be taken seriously. And in demonstrating that Britain was determined to face up to its choices, if and when they arise, in an open, honest and democratic way, our commitment would in turn be good for Europe.

The writer was, until July, special adviser to Douglas Hurd in the Foreign Office