POLITICS
HOW THE TREASURY MADE GORDON RELAX
Sion Simon on the real reason why the Chancellor is less keen on the euro
STRANGE rumours about the Chancel- lor's attitude to the euro have been circulat- ing in Westminster for about a month and a half. A few days ago they finally made their way into print. I have not written about them myself until now because the best sources have consistently, and in my view sincerely, insisted that they are not true. Nevertheless, now that the monkey is out of the box, it behoves us to examine what species of primate it may be. People have been saying — some of them Brownies, some of them Blairites, some of them jour- nalists with connections to both camps that the Chancellor is beginning to cool on the euro. Which is not to say that he has become opposed to it in principle, rather that he has been moving towards a more cautious view on timing; so cautious, indeed, that he has come to regard joining the single currency as a project which may possibly fit better into Labour's third, rather than its second, term.
This is big stuff. Any political plan which looks that far into the distance is not really a plan at all, but a vague aspiration. Com- mitments to the principle of a single cur- rency, like honest intentions to join when the perfect time arises, are not worth a straw once the timetable slips.
Hitherto, the 'Brown cools on euro' story, such as it is, has lacked a convincing expla- nation. I'm not sure that there is one. But the best argument rests on the notion that the Chancellor has gone more 'Treasury native' in his 27 months in office than is commonly realised. In the main this is an irrelevant charge, because Mr Brown, that son of the Manse, was born Treasury native. Though fluent in the language of radicalism, his soul is made of Sabbath Day observance, his mind formed by a hot-house education. So the metamorphosis from Red Gordon to Puritan Chancellor has been much less trau- matic than one might have thought. it has been less a question of him assimilating uncomfortable Treasury orthodoxies, and more a matter of the Sir Humphreys smoothing his rough edges, soothing his paranoia about process, and making him feel more comfortably part of the machine.
In the great Labour tradition Brown arrived at the Treasury wearing the belief on his sleeve that its permanent denizens were incompetent fools whose efforts to undermine and destroy him would be to no avail. He and his three political staff were going to run the economy, and they would brook no interference from any blasted civil servants.
But the real Brown is such a congenital Treasury man, that, two years on each side has completely co-opted the other. Offi- cials cannot believe their luck that they are currently represented (for that is how they see it) by the most powerful Chancellor of the modern era. Added to which, he is instinctively Treasury orthodox from his tip to his toe. They dislike all public expendi- ture, particularly investment in capital pro- jects and in entrepreneurship, and so does he; they abhor the financial independence of other government departments, Brown has succeeded in centralising expenditure decisions at the Treasury to an unprece- dented extent. On the macro questions of monetary and fiscal prudence, Brown is at one with the Treasury tradition.
From Gordon's point of view, he has sim- ply extended his team. He divides the world straightforwardly into two camps: acolytes and enemies. The Chancellor now sees the Treasury as a bustling hive of supporters, helping him wage constant war against the common foes of other ministers and other departments. Everybody is happy.
Except in the case of the euro. The Trea- sury is Eurosceptic. This is partly due to an understandable imperative to protect its own power, but more deep-seated is the definitive Treasury belief that you can't have Johnny Foreigner interfering with the British economy: those dago types are too hot-blooded to make the cool calculations required. And then there is the overwhelm- ing caution: they have examined in infinites- imal detail, and are prone to fret about, everything that could possibly go wrong if Britain did join the euro.
The second and third of these three atti- tudes do not sit comfortably with Brown's. There is a wide streak of Scottish Jacobin- ism in this man who sometimes feels more alien in London than he would do in Paris or Madrid. And his habit is usually to take a decision, rather than to defer it. It is pos- sible, however, that arguments about the economic imprudence of joining too soon, so often put by his now-respected col- leagues, are beginning to convince him. Perhaps, having bonded so closely with his new Treasury buddies, he really has gone native on the euro in a way that would have been inconceivable three years ago.
If this hypothesis were correct, it would surely weigh heavily on the government's policy. For while it is clear that, ideally, the Prime Minister would like to join the euro shortly after the next election, it is no longer quite so obvious that he will take the risk. What has changed since the euro 'poli- cy' was framed in the autumn of 1997 is that public opinion seems to have hardened against it The PM was particularly alarmed by the Tories' victory in the European elec- tions; and initially accepted their interpreta- tion that it was a damning verdict on Labour's Europeanism. Even though the Eddisbury by-election, and more mature reflection, have since demonstrated that Mr Blair's initial reaction was unduly pes- simistic, nevertheless the mood in Downing Street remains more cautious than one might have guessed from his gung-ho, but predictably vague, speech on Tuesday.
The death-or-glory boy is Alastair Camp- bell. For the Prime Minister's press secre- tary, getting into the euro is just another practical, tactical challenge to be met. He still favours a snap referendum, called amid the warm afterglow of the second Blair victory, when it wouldn't make sense for a people which had just overwhelmingly re-elected the Great Leader to reject a pol- icy on which his entire credibility was known to hang. Have a short campaign, soon after the election, throw everything you've got at it, and win. Simple.
But while such recklessness comes easily to a blitzkrieg merchant like Campbell, it is not necessarily so appealing to Mr Blair himself. It goes without saying that the cal- culation is nothing to do with economics or the national interest, and everything to do with whether the referendum can be won. The advice currently being given by Blair's pollster, Philip Gould, is that as things stand it would be too risky to find out. If Mr Brown really has changed his mind, it becomes even harder to imagine when Mr Blair will ever take the chance.
The author writes a weekly column in the Daily Telegraph.
Previous page
