New Statesman & Society, leader 5 April 1996
John Major and Kenneth Clarke have stolen a march on the Tory anti-Europeans with their deal on a referendum on the single European currency. Now the ball is in Labour's court
You've got to hand it to Kenneth Clarke. Last week, he appeared to be heading for the back benches in protest at John Major's insistence on committing the Tories to a referendum on joining a single European currency. Now, after this Tuesday's deal with Major on the terms for such a referendum, he looks by far the most effective political operator in the cabinet.
Although Clarke has conceded that the Tories should promise to hold a single currency referendum in certain circumstances, he and Major have contrived to ensure that those circumstances will be as favourable as possible to securing the result both want: popular endorsement of monetary union once the government decides that the conditions are right. The Eurosceptics' bluff has been called.
The deal is that the Tories will go into the next election promising a referendum, but only if the government has decided to join a single currency during its next term and parliament has legislated accordingly. Collective cabinet responsibility will be maintained, which means that cabinet opponents of joining will have to resign if they want to campaign for a "no" vote. It's a set-up even more likely to produce a large "yes" majority than the arrangements for Labour's 1975 referendum on continued membership of the EEC.
Of course, as Labour has said, all this has more to do with papering over Tory cracks than with laying down a credible policy on monetary union – but it would be foolish for Labour not to take it seriously. At the very least, it means that the Conservatives will go into the election temporarily united on Europe. More important, it could be an effective vote-winner. For the first time in years, Labour is now on the defensive on Europe.
So what should Labour do? For a start, match the Tories' promise of a referendum on joining a single currency. Labour has been playing with the idea for the best part of 18 months, and both Tony Blair and shadow foreign secretary Robin Cook have made it clear that a Labour government will hold a single currency referendum if the electorate is not faced with a clear choice in a general election among parties holding different views on the issue. It is now time to endorse a referendum without this qualification. Even if there is a growing sense in Labour circles that Britain will not have to decide on whether to join a single currency during the next five or six years – with some senior figures now reckoning that a single currency is not feasible for 20 years or more, if at all – it would be a mistake to allow the Tories to steal a march on the party on such an easy populist issue.
This said, there are real questions about what sort of referendum Labour should advocate. The party's Europhobes – who still haven't quite died out – would like to hold the vote before any negotiations start, but that's hardly a serious option because it would run directly counter to party policy of agreeing to a single currency in principle, but making sure the conditions for it are right.
A thornier question is whether cabinet collective responsibility should be upheld during a referendum campaign that takes place after negotiations have been successfully concluded. There's no problem in theory with allowing cabinet members to do what they want. That, after all, was what happened in 1975. But Tony Blair is all too aware of the damage done by the deep Labour divisions over Europe that the 1975 campaign opened up – and which will almost certainly dictate that Labour adopts an arrangement similar to that embraced by the Tories, with the cabinet bound to arguing for a "yes" vote.
If the conditions for monetary union are right, that will be no problem. But what are the "right" conditions? Labour has made much of the importance of "real economic convergence" on top of the criteria for inflation, government debt and public-sector borrowing laid down in the Maastricht treaty – which is enough to keep all but the Europhobes happy in the run-up to the election. It has not, however, defined what it means by "real economic convergence" – and that means there is plenty of room for fierce internal Labour disagreements once the party comes to power. As with the Tories, a referendum is useful for Labour, but by no means a panacea.
John Major and Kenneth Clarke have stolen a march on the Tory anti-Europeans with their deal on a referendum on a single European currency. Now the ball is in Labour's court
