Europe 'is Britain's opportunity'

PRIME MINISTER Tony Blair today left little room for doubt that he intends to push ahead with a referendum on the euro. He warned that Britain could not afford to squander the opportunity to be a great European power. The Prime Minister said: 'It is time for us to adjust to the facts. Britain's future is in Europe.'

He said that the history of Britain's involvement in the EU was 'one of opportunities missed in the name of illusions'. And he gave example after example of how the UK had been left out when it came to influencing the major decisions on Europe.

Speaking to the European Research Institute in Birmingham, Blair said: 'The tragedy for British politics and for Britain has been that politicians of both parties have consistently failed, not just in the Fifties but on up to the present day, to appreciate the reality of European integration. In doing so, they have failed Britain's interests.'

He described how in 1950, Herbert Morrison, Home Secretary and Peter Mandelson's grandfather, had rejected a forerunner of the European Union, the Coal and Steel Community, in which member states pooled resources. Blair pointed out that being outside this organisation had failed to save British miners' jobs in the Sixties and Seventies.

The Prime Minister went on to describe how Rab Butler, Tory Chancellor in 1955, dismissed negotiations over the Common Market as 'archaeological excavations'. The result was Britain being left out in the cold. Blair added: 'We said that it wouldn't happen. Then we said it wouldn't work. Then we said we didn't need it. But it did happen and Britain was left behind. We were left behind because it succeeded. The six founder members had created something which worked. It worked by making them richer. It worked by making them a force to be reckoned with in the world.'

Blair said that even when Britain signed up to the Maastricht Treaty, all the effort was devoted into securing an opt-out on the single currency and the social chapter. The issue of sovereignty is at the heart of the debate, he said. 'When we isolated ourselves in the past, we squandered our sovereignty - leaving us sole masters of a shrinking sphere of influence.'

Inside Europe, Britain should push for economic reform and modernisiation to achieve the goal of full employment. Blair said the EU needs to strengthen transport networks, liberalise the electricity and gas market, unify financial markets and improve education. 'This is critical for Europe's future success - and for the success of the single currency,' he warned.

He made it clear that the Government would ensure that the five economic tests set by Chancellor Gordon Brown and the Treasury have to be satisfied before recommending membership in a referendum. Blair said: The conclusion of this argument is not that we go in regardless of the economic conditions. It is that if the economic tests are met, political or constitutional barriers should not prevent us from joining. And of course the final decision rests with the people in a referendum.'

Blair's speech links the need for economic reform and modernisation with the need to keep the international coalition firm against terrorism. Brown, who is thought be far more cautious over signing up to the euro, is in London preparing for his pre-Budget report next Tuesday. He is not due to make any speech today or over the weekend on the issue of Europe or the euro. But the Chancellor's officials took pains to deny one report this morning suggesting that Brown had reassured colleagues that he wanted to join the euro. They also denied speculation that he had told colleagues that he had seen the dangers in a delay over a referendum because investors might not like an indefinite postponement.

It follows a week which has seen both the Chancellor and the Prime Minister at pains to deny a rift between them over the issue, but speculation is not likely to disappear quickly.

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