Deceptive Harmony: The Conservative should fear a referendum over Europe

Is the Tory party gradually coming to its senses over Europe? Sir Leon Brittan, vice President of the European Commission and an ardent advocate of advocate EMU claims to thinks so. At a Blackpool fringe meeting yesterday he suggested that the argument was beginning to turn his way. Sir Leon is a notorious optimist. But it's still a case worth examining.

By promising Tory backbenchers a free vote on EMU William Hague has licensed a significant minority of pro European MPs to follow the lead of Kenneth Clarke in campaigning for a yes vote in a referendum. The passionately pro-EMU David Curry, along with Sir George Young and Stephen Dorrell refused to accept a Shadow Cabinet decision, taken in their absence, to rule out the single currency for the next decade, substituting the distinctly elastic "for the foreseeable future". Peter Lilley in an emollient-sounding passage on EMU in his speech yesterday acknowledged the sincerity with which some "good Conservatives" believe in British entry. When Hague privately saw the Tory MEPs last month he was singularly undoctrinaire. He had never, he reminded them, ruled out a single currency for ever. The hard core of delegates moving from one Europhobic fringe meeting to another is probably no more than 250. The pro-European Tory left, emboldened by the unexpected momentum of Clarke's July leadership campaign, are claiming fresh supporters and a new sense of purpose. Finally, one of the brightest new MPs, Andrew Tyrie, who is anything but a Clarkeite, will make a speech next month pleading with the party to resume its pre-election stance of "wait and see".

All this is seductive. But Sir Leon is being a good deal too optimistic. Hague's leadership is not yet consolidated. The Portillos, the Pattens, the Clarkes still loom ominously over his shoulder. Few of his colleagues yet speak of him with total confidence. This remains a party dangerously at ease with itself. Blood isn't being spilt about Europe, on the fringe and on the conference floor because many of the rank and file are now confident the policy is in their own hands. This is still a party in which a rostrum speaker can declare that continentals are "different" because they "eat horses" and be wildly applauded rather than howled down. Yes, here and there, are little shafts of humility in defeat - a recognition that if Euroscepticism was the Tories' trump card, Labour wouldn't have won so big, least of all in those constituencies where candidates opposed the single currency outright. A few senior Eurosceptics doubt that the Tories could credibly campaign for withdrawal once Britain was in. But the centre of gravity is elsewhere.

Even last week's modest success by the Shadow Cabinet's pro-European rump now looks fragile. Michael Howard, John Redwood, and Ian Duncan Smith are seeking to overturn it at the next meeting - securing at the very least a formal, cast-iron commitment to oppose EMU in a referendum this Parliament, and that the next manifesto, if Britain hasn't already joined EMU, will be firmly against the single currency. Peter Lilley's smooth words yesterday may make it that much more difficult for Labour to portray the party as crankily extreme. But they belie the reality: that many in the party are now willing Blair to call a referendum in which they believe, whether self-deludingly or not, they can defeat the Government.

This is mildly bad news for the Government. If Sir Leon's optimism is misplaced then it follows that the risks of an early referendum are all the greater. The Tories would lose a lot of business support, perhaps permanently, and in the long term catastrophically. But they would have on their side Rupert Murdoch (the Sun was at it again yesterday, trying to taunt Blair into backing off EMU) and Conrad Black. This won't stop the Government declaring at the end of the year, that while it won't join on January 1, 1999, it is in favour of doing so as soon as the conditions are right. No-one, probably Blair included, yet knows when he would call a referendum. It could be as earlier as next year. But nothing that has happened in Blackpool makes a referendum before the next general election likelier than it was. If you are going to "bet the ranch" on EMU entry, it may be better to wait until the ranch's lease is up for renewal anyway.

But if it's bad for the Government, it's worse for the Tories themselves. First. there is the danger of a split party. Tory Euro-sceptics who hope that Clarke is about to give up the House of Commons and shuffle off to some big job in international finance should think again. Indirect overtures were made to him about the possibility of becoming boss of the European Bank of Reconstruction and Development, which he politely rejected. Nor is there anything in the rather forlorn attempt by some members of the Shadow Cabinet's Eurosceptic majority to argue that since Clarke has now said he is against single currency entry on January 1, 1999, he is on their side. Clarke remains as in favour of the principle of the single currency as he ever was. He therefore remains a pivotal figure of this Parliament. If Blair were to call a referendum on EMU, he would be an essential part of the "yes" campaign. Most daunting of all for the Europhobe forces, PR could turn a licensed disagreement about EMU into a real split, with Clarke ending up at the head of a pro-European party of the centre right. He isn't in favour of PR himself, and he isn't a Peelite splitter by temperament. But he is nothing if not capable of reacting to changed circumstances.

Worse still, however, is the danger of long-term disconnection of the Tories, first from business, and then from the electorate itself. Blackpool was crowded yesterday the bright young hopes of the Tory party from Michael Portillo down, reinventing themselves spectacularly as gentler, more permissive conservatives. But this won't count for much if the Tories' European policy breaks the party's link, first with business and then with the electorate. The great advantage of the "wait and see" imposed on the party by Clarke before the election was that it committed it to nothing, while clearly subordinating party doctrine to the national interest. If public opinion, nurtured by Blair, starts to warm to EMU entry, then the danger is that Europe becomes for the Tories in the 1990s what union reform was for Labour in the 1980s; and that could mean a lot of lost general elections.