Don't attack Gordon Brown - let's convince him

Europhiles would be doomed to lose a referendum secured by bludgeoning the Chancellor

I feel for Peter Mandelson. The lunch club of women political correspondents is notorious for its enthusiasm to provide wider currency for remarks that were made over the chardonnay.

I was fortunate in that my own rendezvous with them fell on the day when Iain Duncan Smith had called his celebrated press conference to demand that the Conservative Party unite or die. Thereafter I was in little danger that any incautious remark by me could compete for the front pages. But on a slack news day, it is not a forum in which to place too much trust that respect for the anonymity of comments made off the record will weigh more heavily than the news value of a good story.

On the substance of his arguments for the euro, I am in agreement with Peter.

The economic case for joining continues to strengthen. Since the euro was launched, Britain's share of European trade relative to members of the eurozone has faltered and our share of inward investment has plummeted. Every marginal decline in our trade means a loss of jobs in Britain. Every drop in inward investment means a loss of transfer of new technology and modern management to Britain.

Meantime the euro has established a credibility for itself on the international market. Since its launch almost as many corporate bonds have been issued in euros as in dollars, more than doubling the proportion that used to be issued in all the previous European currencies added together.

The political case against delay is equally compelling. At the last general election the fiercest dispute between the two main parties was over William Hague's pledge to rule out joining the euro for the whole of the current parliament. He even roamed Britain with a magnified digital calendar warning of the number of days left in which to save the pound.

Perversely, if the Labour Government fails to hold a referendum on the euro in this parliament, we will ourselves have delivered on Hague's pledge which we went to such lengths to ridicule throughout the election campaign.

The consequences of inaction can be measured in the opinion polls. The public faithfully reflect the absence among their political leaders of a campaigning commitment to the euro.

Those who urge caution on the Prime Minister because the polls are hostile miss the obvious lesson of the last five years. So long as the Government puts caution first and fails to campaign on the case for joining the euro, support for a "yes" vote will ebb away among a public that only hears the "no" case argued with conviction.

The fundamental flaw at the heart of government policy on the euro is that it is a recipe for inaction. It need not have been. The famous five tests were originally presented as the necessary conditions before we put into practice our commitment in principle to take Britain into the euro. But the Treasury has ever since presented the five tests as the sole determinant of not just when, but whether Britain should join the euro.

The result is that any cabinet minister who rashly speaks up in support of the government's agreed position that in principle we should join the euro is briefed against for singing off the hymn sheet. I remember a particularly sharp rap over the knuckles for once daring to agree with the consistent majority in the opinion polls who believe it inevitable that Britain will join the euro.

Government will only escape this paralysis if it sets a date for Britain to enter the euro. It needs a target to provide a clear objective for government policy and a motive for ministers to get out in the country and explain why Britain will be better off inside the euro. If the forthcoming statement concludes we should not join now, it should be clear and firm on when we can join.

Which brings us back to Peter 's alleged observations on the personality of the Chancellor, which so impressed his lunch companions. Those of us convinced that Britain should join the euro need to resist the temptation of regarding the Chancellor as the obstacle.

Drawing up teams of those who support Tony Blair or those who want Gordon Brown as captain misses the point. We will only carry a majority among the public in the grandstand if both Blair and Brown are seen to be playing on the same side. A referendum secured by bludgeoning the Chancellor into submission would be one the eurocamp would be doomed to lose.

The challenge is a more complex and subtle one. How do we convert Gordon Brown to the conclusion that it is in his interest to endorse the euro?

This need not be a hopeless undertaking. Gordon Brown's thoughtful speech to the CBI displayed that he is ambivalent rather than sceptical on Europe.

The speech was regrettably more forceful about the shortcomings of Europe than about its strengths. In Britain we need to remember with a touch of humility that it is we who have to fulfil the conditions to join the euro, not Europe that has to fulfil the conditions before we will let them join us.

Nevertheless, no euro enthusiast would disagree with Gordon Brown on the urgent, unanswerable case for reform of the Common Agricultural Policy. It is an outdated, expensive and socially regressive policy of protectionism. Its prime victims are poor farmers of Africa and Asia who cannot sell to Europe, and poor consumers within Europe who are forced to pay double the world price for a basic commodity such as sugar.

There is a tide for reform of the CAP ready to be seized. But Britain will not be credible as a leading force for reform of the CAP or anything else in Europe if we announce that we are indefinitely postponing a decision on the euro.

If Gordon Brown wants to go down in history as a political figure who reformed Europe on the broad canvas he painted this week, then he also needs to be the Chancellor who strengthened the influence of Britain by taking it into the euro zone which now defines the core of Europe.

He personally has much to offer the movement for reform. There is a consensus that fundamental reform of the Stability and Growth Pact is essential to focus it as much on the growth of jobs in factories as on stability in the financial markets. With the credit of the more successful framework for stability which he has created for Britain, Gordon Brown could be an influential architect of the next Stability and Growth Pact. But only those countries who have committed themselves to the euro will be taken seriously when they offer advice on how it should be run.

My worry is not that Britain will fail to join the euro, but that we will leave it too late and join from a position of desperation rather than strength. In those circumstances Gordon Brown will be fated to watch his successor complete a task that he avoided and hear himself be blamed for the higher price of delay.

It is a commonplace that Tony Blair sees taking Britain into the euro as crucial to his place in history. The objective for the pro-Europeans must be to convince Gordon Brown that joining the euro would be a triumph and an opportunity for him, too. If we let a decision to join the euro be defined as a defeat for Gordon Brown, then we have lost the referendum before it has begun.

The author was Foreign Secretary from 1997 to 2001