Any delay on euro vote 'would be disastrous'

Any decision to delay a referendum on the euro until after the next general election would be disastrous for British industry, John Monks, the general secretary of the TUC, warned yesterday. A clear intention to join the single currency would help companies across the country by bringing down the "overvalued" pound.

In his New Year message, Mr Monks said industry risked the loss of 150,000 manufacturing jobs in 2002 and the Government had to make "tough choices" in the next year, starting with the euro.

"I do not expect a referendum in 2002 but, unless the Government pushes ahead with the process of its economic tests and starts a serious hearts-and-minds campaign, the conclusion will be that no referendum will take place before the next election," he said. "That would be disastrous.

"If the decision is put off again, the international investment community will conclude, probably rightly, that New Labour simply hasn't got the bottle to face down the Eurosceptics, and that will have serious economic and political consequences."

His warning came as leading Conservatives condemned a call by Peter Hain, the minister for Europe, for British shops to take the single currency. In an interview in The Independent yesterday, Mr Hain said he wanted visitors from eurozone states to be able to spend euros in Britain from 1 January.

In a later interview, on BBC Radio 4's Today programme, he said: "I'd like to see as many British businesses as possible benefit from the euro by taking it, as many are doing, including retail outlets such as Dixons whose heads are actually Eurosceptics and opposed to the single currency. This is a private sector-driven thing; it is not a government-driven thing."

Mr Hain, who believes Britons would also benefit from dual-pricing in pounds and euros, said: "All I am saying is that the euro is here; it will be operative across the Continent in five days.

"It will not only be evident on the streets and the shops of Paris but also in London, because lots of shops including Virgin and Waitrose and Dixons and Marks & Spencer and others are saying we would rather French people spent their euros in London than Berlin." Other retail chains, including the Body Shop, Russell & Bromley and Clarks, say they too will accept the euro from 1 January.

Britain In Europe, the pro-euro campaign group, said that keeping the notes and coins off Britain's high streets would prove impossible. "Oxford Street is leading the way in Britain by welcoming the euro," said Simon Buckby, the group's campaign director. "Anti-Europeans might try to keep Britain out of the euro, but they cannot keep the euro out of Britain."

John Redwood, a leading Conservative Eurosceptic, said the currency would be rejected by the British public in a referendum. The MP for Wokingham said: "The euro certainly isn't in Britain and is not going to be because the British people are far too sensible to go through another disaster [like] the last time we were linked to Europe through the exchange- rate mechanism."

Mr Monks' concerns were echoed by Charles Kennedy. The Liberal Democrat leader called on the Government to stop "dithering" over a referendum and said he was "convinced that the euro will be a success. Britain has much to gain – lower prices, lower interest rates, lower mortgages, more trade. That is why even captains of the Eurosceptic team in industry have decreed that their own businesses will take euro notes and coins."

Digby Jones, the director general of the CBI, called for economic reform in Europe to prepare for recovery from global slowdown. In his New Year message, he said there were worrying signs Europe was shunning free-market reforms agreed at the Lisbon summit.