'Same day' election and euro vote

Tony Blair is facing increasing pressure from inside his government to take the bold step of staging a referendum on the euro on the same day as the next general election.

The move would prevent the Prime Minister from having to call a risky vote on ditching the pound in a year or two, with public opinion still largely against joining the new currency. Pro-euro ministers are urging Mr Blair and Chancellor Gordon Brown to consider the radical step as the best way of maximising the chances of a "Yes" vote.

They argue Labour supporters voting for a third successive term of office for their party would see it as a loyalty test to endorse a government-backed campaign for euro-entry. Such a move would be unprecedented and not without risk because it would allow Iain Duncan Smith's party to turn the election campaign into a simple battle over the single currency.

However, supporters of the "same day" argument claim this was effectively what William Hague tried to do last June - and led his party to a second successive landslide defeat.

Staging a euro referendum on the same day as a general election, possibly in spring 2005, would mean polling followed a blockbuster European summit in 2004 which will aim to "widen and deepen" the EU.

Mr Blair could campaign on a platform of joining Europe in its new era. By contrast, not signing up to the currency could mean risking decades on the sidelines.

A Treasury assessment of whether Britain has passed the five economic tests will dictate whether or not a referendum is called.

This must be completed by June 2003 with some proeuro figures such as Europe minister Peter Hain claiming a referendum could be held as early as next year.

But others close to the Chancellor, are now arguing that Mr Brown could take a "middle way", announcing the results of the assessment, claiming some hurdles to British membership still exist and promising a fresh study, again to be completed within two years.

That would then permit a "same day" referendum and general election in 2005.

For many months now, Mr Brown has been sending out cautionary signals about euro membership and has moved to slap down ministers who have "talked up" entry too enthusiastically. However, it is thought he may be persuaded of the logic of staging a joint election and referendum.

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