Time still not right for euro entry says Brown

It was the poorest kept secret in politics – but now it has become a matter of record that the time is yet not right for Britain to join the single currency.

Gordon Brown delivered his assessment to a packed Commons today and said that, whilst the decision must be 'not yet', the government was convinced that entering the world's second-largest economy would benefit the UK economy.

However, Mr Brown said that the economic argument, in terms of his five economic tests, had not been made. Indeed, only one of those tests, that on financial services, passed the government's criteria.

A bill to pave the way for a referendum will be tabled in the autumn and the next assessment on the tests will be made at the budget announcement next year.

The Lib Dems said that indecision on the euro would be costly. The party claimed that every year outside the euro would see exports and jobs threatened, spiralling price rises on the high street, and would strangle the UK's share of inward investment.

Liberal Democrat Shadow Chancellor Matthew Taylor said: "In 1997 the Chancellor promised ‘the time for indecision is over’.

"Six years later the government still can’t make its mind up - the Chancellor is all mouth and no trousers on the euro. The ridiculous political power struggle between Tony Blair and Gordon Brown over when to join means inaction, low investment and higher prices.

"Convergence requires the economic and political will, to make the change, like every country that has joined has done. The Government needs to set a clear timetable, steering the economy to allow the British people the chance to decide."

The Tories were dismissive of the Chancellor's speech, saying that it was "the beginning of the end" for the Labour government.

The lobby group, Britain in Europe claimed today that the 18 government studies distributed to the Cabinet – amounting to 1,800 pages of data – provide strong evidence to support entry into the euro.

Philippe Legrain, chief economist of Britain in Europe, said: "Joining the euro is clearly in Britain's national economic interest. The Treasury has today confirmed that it would boost trade with the euro-zone by up to 50%, raising income per person by 9.25% in the long term. That means joining the euro would make the average Briton £1,700 richer. We cannot afford to pass up such a golden opportunity.

"For six years anti-Europeans have never ceased telling us that the euro would bring us no benefits, claiming that the Treasury agreed. Now both arguments have been destroyed. It's official: the euro will make us richer."

(GMcG)