Blair’s missed Euro referendum could have stayed Cameron’s hand

The best myths die hard. Once again, as the UK ceases to be a signatory member of the EU Treaty, the myth that Britain did not swap the pound for the euro thanks to Gordon Brown’s five economic tests resurfaces. This time in the Observer where Tony Helm, its respected political editor, wrote that “Gordon Brown had, with his adviser, Ed Balls, designed a fool-proof means of blocking Blair from joining the euro, through his five tests.”

Ed Balls joked with me that he could never remember what the five tests were and for anyone in government at the time, the process was a classic Whitehall scheme for blocking a decision while going through the motions of examining rigorously whether it might be made.

The real decision on the euro was taken before the 1997 election when Tony Blair matched John Major’s promise of a referendum on entering the single currency. But Blair was far too wise ever to risk a populist plebiscite on anything as sensitive as abolishing the pound.

After 1997, I worked for Blair on Europe as a parliamentary private secretary and Minister at the FCO. I was Labour’s link-person with sister parties in the EU and travelled in Europe explaining Labour’s policy.

Euro entry was always vaguely in the air but holding a referendum was never seriously discussed in No 10, or the FCO. William Hague, the new Tory leader, began calling for referendums on the EU Treaties of Amsterdam and Nice, and Paddy Ashdown and Charlie Kennedy were also pro-referendum obsessives.

But Blair knew that calling any referendum on any aspect of EU partnership or integration in Europe would have only one result — a No vote. All the off-shore owned press would have lined up against it, the down-and-out Tory party would have been brought back to life, many businesses, especially in the City who liked the floating and devaluing pound, would have poured money into a campaign. A block of Labour left-wingers like Jeremy Corbyn, as well as anti-EU veterans like Peter Shore, would have campaigned to defeat Blair.

Alastair Campbell called in Robin Cook’s special advisers and told them to “get all that European stuff out of Robin’s speeches”. Joining the euro remained a nebulous never-never project as far as most government insiders were concerned.

Gordon Brown and Ed Balls bought some time but everyone knew what the outcome of the five tests would be — Not Now, Not Maybe, Not Ever, as long as a referendum had to be held.

Blair was later forced into offering a referendum on the EU Constitutional Treaty in 2004 because Charlie Kennedy supported Michael Howard’s call for one and a good number of Labour MPs would have voted for the plebiscite.

France saved Blair by voting down the constitution in 2005. Perhaps if Blair had held a referendum then and lost, as President Chirac did in France, that might have taught David Cameron that holding plebiscites on Europe could only produce one outcome.