Mixed response to Chancellor's euro decision

Business has given the Chancellor's 'not yet' euro assessment a mixed response today, while the TUC has backed the move.

Reacting to Gordon Brown's statement, CBI Director-General Digby Jones said that further sustainable convergence was "necessary before ministers put the question to the country".

He added: "The process for review on convergence and flexibility will be welcome to businesses that need certainty to plan ahead. We are pleased the government is doing nothing to harm the hard-won economic stability that has made the UK the most successful economy in Europe.

"But this is not a one-way street. If EU countries want the UK to join a successful euroland, they should be redoubling efforts to make the euro-zone more globally competitive. Mr Brown is rightly making EU reform a centrepiece of UK government policy," he said.

"We in the UK are good Europeans and it is not insular arrogance to seek a Europe that is flexible in its labour markets, reformed in its pensions, financial services, agriculture and energy sectors, as well as transparent in its decision making and honest and swift in enforcement of the single market."

The Institute of Directors (IoD) said today that it had mixed views of the Chancellor's announcement on the five economic tests for entry into the euro.

Ruth Lea, Head of the Policy Unit at the IoD, said Britain had not yet attained sustainable convergence with the rest of the eurozone.

She added: “Whilst we are pleased that the Chancellor has announced that the British economy has not yet met his five tests for euro membership, we are disappointed that he will be re-assessing Britain’s economic readiness next year.

"Moreover, and crucially, we cannot see how the British economy will meaningfully attain sustainable convergence with the rest of the eurozone over the next two to three years. The Chancellor should, therefore, rule out re-assessing Britain’s economic readiness for euro membership for the lifetime of this Parliament. This would provide much needed stability for both the financial markets and for business.”

TUC General Secretary Brendan Barber welcomed the emphasis Mr Brown placed on preparing for euro entry.

He added: "If the message had gone out today that the UK was turning its back on the euro and disengaging from Europe, the risk to jobs and investment would have been very high.

"The mood music has changed decisively today. We now have a project with a purpose. The Chancellor has set out a clear series of steps towards a positive decision and a referendum. There is now a real sense of momentum.

"You can’t pick and choose from the European agenda. Open markets, a single currency and social protection are all part and parcel of the European project."

(GMcG)