Blair faces 'anti-euro coalition'

Tory leader Iain Duncan Smith today predicted that a ‘‘popular coalition’’ of the British people would unite to face down Tony Blair if the Prime Minister sought to take the UK into the single European currency.

He was speaking two days ahead of the introduction of the euro as the currency of 12 EU states, amid widespread speculation that Mr Blair will use the appearance of euro notes and coins on January 1 to launch a bid to persuade voters of the merits of the currency.

European Commissioner and former Labour leader Neil Kinnock was today quoted as saying that British shops would soon ‘‘accept euros as easily as they do pounds and pence’’.

Mr Duncan Smith accused Mr Blair of attempting to wage a ‘‘phoney war’’ in support of the euro without being willing to nail his colours to the mast.

In an article in the Independent on Sunday, he wrote: ‘‘The Prime Minister lacks the courage to back up his stated desire to join the euro with clear argument.

‘‘Instead he relies on furtive manoeuvring to bamboozle the British people.

‘‘He has started the phoney war, but he will find that he has taken sides against many of his own supporters.

‘‘When the referendum comes, everyone who shares our confidence in Britain’s future will join together in a popular coalition to safeguard our prosperity.

‘‘He will find that the British people will put their tanks on his lawn.’’

In his New Year’s message, Mr Blair said: ‘‘With so much of our trade and so many of our jobs tied up in business with the rest of Europe, it is massively in our interests that the euro succeeds. In any event, it is vital since so many companies will trade in it and it will affect our own economy, that we are prepared for it.

‘‘It remains the Government’s policy to join the euro provided that the five economic tests we have laid down are met and the British people give their consent in a referendum.’’

But Mr Duncan Smith said that joining the euro would ‘‘permanently blight our competitiveness’’ by ensuring that British interest rates were set according to Europe’s needs, not those of the UK.

Euro entry would mean a gradual move towards a single tax system for the EU, because ‘‘everyone knows that a true single currency requires a single tax system’’, he said.

He challenged the Government to say what it would regard as an acceptable exchange rate with the pound for entry to go ahead.

Eurosceptic Tory backbencher John Redwood called for British entry to be ruled out, arguing that it would be bad for the euro itself.

He said: ‘‘There is an overwhelming case against us joining. The euro is much more likely to succeed if we stay out.

‘‘When sterling joined the exchange rate mechanism, a dry run for the single currency, we helped sink the scheme and put back a single currency for several years.

‘‘Let’s not do that to our partners again, for this time it will not be so easy to unscramble.’’

:: Britain’s young people are evenly split on euro entry, but think it is certain to happen in the long term, according to a poll released today.

The survey for the Sunday Mirror found 38% of 18-25 year olds in favour of Britain joining, against 36.5% who were opposed.

But a massive 85% thought euro entry was inevitable, compared to just 10% who said it was not.