Norman Fowler: Tories must not let the euro stop them electing the best leader

'You cannot enforce unity on the issue of the single currency – nor should you try'

If it was not for the "European issue", there would be no doubt who the next Conservative leader would be. There would be no contest. Ken Clarke would be elected almost by acclamation.

He not only has unrivalled experience in top Cabinet jobs like Chancellor of the Exchequer and Home Secretary, he also has the political skills and unflappable temperament necessary for a party leader.

Add to this the views of those who have worked closely with him. Back in l979, he was my number two at the Department of Transport. In l98l, when I was given the job of Social Services Secretary, he came with me as my Minister of Health.

He was tough, but dedicated to improving the health service. He was absolutely loyal and never a plotter. To crown it all, he was even then a superb Parliamentary performer who commanded the attention of the Commons.

Few leadership contenders have served such a long and successful apprenticeship. All the evidence of the opinion polls is that the electorate – just to remind ourselves that they are the people who will determine when there is another Tory government – like his good humour and his transparent honesty. He has an authority that is acknowledged even by his political opponents.

Against all this, one argument is put – as it was by Michael Ancram last week and again in the Newsnight debate between the two candidates for the party leadership on Wednesday night. In short, it is that Clarke's views on Europe disqualify him and only Duncan Smith can restore "unity".

Yet what are these views? Ken Clarke is no federalist wanting to take us into a European super-state, as he made clear in the television debate. Like most of us in the Tory party, he believes in a Europe of nation states.

Nor should anyone believe that he will be a soft touch in European negotiations. I remember his controlled aggression twenty years ago when we battled on transport. He remained pugnacious in the national cause throughout his 18 years as a minister.

In reality, then, the issue is not Europe: it is the euro. Like many Conservatives, I personally have serious doubts about the effects that the euro could have and therefore about joining it at the present time. But that does not persuade me into the Duncan Smith camp. For what Iain is saying is that we should not join as a matter of principle. We should "never" join.

That is a new and unwelcome path for the Tory party to take. It alarms many who, like me, have serious reservations about the euro. Both John Major and William Hague were careful to avoid a "never" policy – and with good reason.

Our policy on Europe since l979 has essentially been pragmatic, not ideological. We have sought the British interest. The debate on the Single European Act while Margaret Thatcher was in office was a classic example. Although amnesia seems to have struck some of my old Cabinet colleagues, there was no doubt about the argument at the time. The Cabinet accepted that if Britain was to win the advantages of the single market, concessions would have to be made in other areas.

On the euro, there is no conceivable reason why we should slam the door shut and say that the prospect cannot even be contemplated. Who does that convince? Certainly not the electorate. It is a dangerous error to believe that there is a vast new constituency out there who will flock to vote Conservative if we say "never".

So, for my part, I am quite content to have the issue decided by referendum. We should be clear. There will be Conservatives on either side of the argument, whoever wins the leadership. You cannot enforce unity on the issue, nor should you try. As l975 showed, it is perfectly possible for a referendum to be held with different members of the Cabinet (let alone the Shadow Cabinet) taking different views.

But the real tragedy of this leadership election would be if the issue of the euro was to blind us to all else that needs to be done. The first job of the Opposition is to oppose, and as we endlessly debate the euro the Government gets away with murder. The decline of the manufacturing industry, the state of the economy, health policy and foot-and-mouth are all issues where the Government is now vulnerable.

We need an Opposition that will go into attack and a leader who will take the battle to the enemy. There will be no question of ducking debates. Every opportunity must be taken to join in debate with the Labour Government by an Opposition leader who hits the ground running.

At the same time we must develop credible alternative policies on, for example, our public services, and set about reinvigorating our party machine. We have a particular challenge in our big cities where our support has fallen away and where too often, as in Sheffield, the public have turned to the Liberal Democrats when Labour local government has been rejected.

It is a massive task for the new leader. I served with Iain Duncan Smith in William Hague's Shadow Cabinet and it is not my purpose in any way to belittle him. I do believe, however, that following two huge defeats the party would be profoundly mistaken to turn its back on a leader of proven worth who already has a substantial national following. The issue of the euro should not prevent us electing the best leader.

Lord Fowler was the Chairman of the Conservative Party 1992-94