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Mandelson at centre of 'ditch the pound' row
Joe Murphy, Political Editor2 Dec 2008
Gordon Brown and Peter Mandelson today appeared at odds over the euro after a bombshell claim that ministers were ready to dump the pound.
It emerged that the Business Secretary told a Progress Group rally on Saturday that it was still his "goal" for Britain to adopt the euro.
Although he stressed that he was not agitating for an immediate change, his remarks took on greater significance this morning when the president of the European Commission claimed senior members of the Government were ready to move Britain into the euro-zone.
José Manuel Barroso said that in private conversations "the people who count in Britain" were thinking about joining. "I'm not going to break the confidentiality of certain conversations, but some British politicians have already told me, 'If we had the euro, we would have been better off'," he told French radio station RTL.
His comments caused shockwaves at Westminster because any move to adopt the euro was assumed to have vanished when Gordon Brown, a long-standing sceptic, became Prime Minister.
Suspicion soon fell on Lord Mandelson for giving Mr Barroso the impression that a rethink was on the cards - but a spokesman for the peer denied it was him.
In his remarks on Saturday, Lord Mandelson said: "I hold to the view that our aim, our goal, should be to enter the single currency." He added that the Government was "obviously not going to take on that challenge" during the current recession. Mr Barroso claimed the UK was now "closer than ever before". He boasted that the recession had weakened faith in the pound.
"I know that the majority in Britain are still opposed, but there is a period of consideration under way and the people who count in Britain are currently thinking about it," he said.
Downing Street said its position on the euro remained unchanged. After a titanic struggle with Tony Blair in Labour's first parliament, Mr Brown was credited with single handedly blocking entry to the euro-zone by erecting his famous "five tests" that would have to be met before Britain could join.
Current policy is that the Government "sees benefits in euro membership" but will not join unless the tests, such as convergence of interest rates and impact on employment, were met.
Lord Mandelson was the loudest Cabinet cheerleader for the euro in Tony Blair's day and organised a doomed attempt to soften up British opinion for dumping the pound.
But since Mr Brown gambled on inviting his old foe to join the Cabinet, they are said by Labour insiders to be on remarkably warm and trusting terms and have been mapping out plans for the next election together.
The value of sterling compared with other currencies has fallen during the credit crunch, and the Government has had to spend massively in recent months to try to support the economy.
A Downing Street spokesman said: "We have no comment on this. Our position on the euro is the same - it has not changed." Shadow foreign secretary William Hague said he would table questions about what talks had been held on the euro.
Reader views (51)
It will never be the right time to join the euro for the British people. To do so would be the last hurdle knocked down by the biggest most corrupt and undemocratic institution known to the history of mankind. Rather than go deeper into Europe we should move swiftly to securing 'associate' status with the EU; retrieving, retaining or increasing the total control of British affairs by British governments.
- Mike Fox, United Kingdom, 03/12/2008 12:30
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Interesting to note that the Brits still believe that they are being ripped off by the EU. In fact, it is the Germans who foot the bill. This will not change for decades to come.
- Prof. Dr. Medenbach, Paris France, 03/12/2008 11:24
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Sorry, I'm living in France - can someone remind me again: who is the Prime Minister of Britain . . . ?!
- Roz, Chamonix, France, 03/12/2008 10:56
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Why bother joining the Euro. Surely all economic genii Brown and Darling have to do is borrow a few billion...or trillion. But then again it would be a good smokescreen to cover up their incopetence.
- Mark, london England, 03/12/2008 10:40
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Europe costs the british taxpayer too much money, we pay for everyone else. Our prices for energy and food are the highest and our pensions are the lowest in europe, why? Europe rips off britain and our governments let them. We need to get out and soon.
- Maggie, London, 03/12/2008 09:37
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we must say no to the euro keep the pound dont sell out
- Ambientboy, london, 02/12/2008 17:15
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A known fraudster (obtaining money by deception) appointed to the Lords by an unelected prime minister, telling us what is good for us. You couldn't make it up - except that it's the reality of what the Labour Party has deliberately inflicted on us.
- Osming, London, 02/12/2008 14:30
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One simple question how many euros to the pound would it take to make those against joining change their minds? (NB Perhaps The Standard should find a way to ask this question!)
Its easier to be against joining when the pound is worth more but becomes more difficult when the question becomes - Why did we not join earlier.
- Melvyn Windebank, Canvey Island, Essex, 02/12/2008 13:15
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"We would all be better off if we joined the Euro"
??????????????
Why?
If the pound is falling it helps keep our exporters in a job etc, etc.
- W R Stevenson, London SE26, 02/12/2008 12:57
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It only goes to prove that the Honours Lists should be between the Queen and her people. Mandy grabs a title and sells the country. What a joke.
No one wants to set limits on this European Ripoff! Shame you this government.
- Maria, London, 02/12/2008 12:45
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If we adopt the dreaded euro I shall take all my millions out of banks and take the cash elsewhere. I am NOT letting the crooks in euroland have control of my money!
- Vanessa, London, 02/12/2008 10:17
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Oh no, Lord Meddlesome. What we are going through is a temporary blip.
New Labour will be relegated to the sidelines very soon, and the necessary repairs can be started.
Never make long term decisions that are unnecessary.
The problem is not the pound, the disaster is New Labour and its totally inept management of the recovering economy that they were handed in 1997.
What is totally suprising is that it has taken them nearly 12 years to destroy the country.
- J R J, Ballagarey, 02/12/2008 09:38
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Put simply, if we adopt the euro, the City will be finished (as opposed to being on its knees). Try to imagine all those people on the morning's commute into Liverpool St., vanished. Of course there are some people in government who'd consider that a 'result'.
- Susanna Smith, Newmarket, Suffolk, 02/12/2008 09:22
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Mandelson is known throughout the EU offices as a self-centred, self-opinionated prick. I am sure that he doesn't care what they think, but sooner or later, by sucking up to Brussels for his own glory he will screw the UK and himself. He is also not an economic visionary and should refrain from making out that he has any idea as to how the UK will manage to survive the rapacious demands of the continental state pension funds. The man is a menace.
- Ian, Vancouver Canada, 02/12/2008 06:04
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Economic logic dictates that in the long run Britain will adopt the Euro, whether its populace wishes it or not. Economic forces are notoriously lacking in respect for national sovereignty.
Of course there is a lot of emotional resistance, and Barroso's remark was tactless and premature given the political sensitivity of the issue. But that doesn't change the facts: it's only a matter of time before Britain joins the Euro. I expect to see that happening within 10-15 years from now.
Of course Britain should only join if it is in Britain's interest, and right now there are good reasons to postpone a British adoption of the Euro. Britain's economy isn't as converged with those of Germany and France as it should be to benefit from the same interest rates. In addition the current Government is well en-route to break the 3% norm for budget deficit. And last but not least, the EU still isn't the ideal economic zone which is the natural prerequisite for a single currency.
So, there are objective reasons why Britain should not join just yet. However I see Britain's economy converging ever more closely with that of the mainland. And more to the point: its manufacturing and trade is ever more closely linked with that of the mainland. Exchange rate risks are an unnecessary luxury.
Unfortunately the more conservative forces will see to it that Britain will join at the latest possible moment and under worse conditions than it could have. It's a pity, but why worry? Que sera, sera.
- Golodh, London, UK, 02/12/2008 04:51
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There are some people who are opposed primarily for emotional reasons and there are those opposed primarily because of economic reasons and some for both. Each reason is a perfectly valid mode of thought and it annoys me when some say that emotional reasons in particular are not worthy of debate.
Also there is huge economic reason to stay out of the euro; by keeping the pound we can use our own rules, set our own interest rates, determine levels of tax and regulation, decide who we want and who we don't and give incentives where we think necessary. It is for these economic reasons, amongst others, that London has become, arguably, the worlds major financial center. And this has had massive trickle down effects on the real economy across the country. Due to being less competitive we would lose a lot of business to other European financial centers and the inability to set interest rates would be catastrpohic like it has been at various points for all the other major economies of the Eurozone thus diminishing our role on the global stage even further.
Out of Europe (but still friendly with Europe i might add) we have the 5th largest economy in the world, we are important, bristling with talent, ingenuity, skill and often lead the way in the competition for ideas and moral authority in the whole spectrum of areas. In Europe, all this will be diluted and indeed if the EU has its way spread out across the rest. Decision making and our influential independent voice would be lost.
- Bob The Builder, england, 02/12/2008 00:47
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Right - sterling has just lost about 20% of its value against the Euro this year, so entering now makes it an absolutely disastrous time to fix our entry rate. Even economic pygmies such as Mandelson, Brown and Darling must understand this fundamental truth. More to the point, the fact sterling has lost 20% of its value emphasises the incalculable benefit of having an exchange rate that is allowed to float freely; we can make our economy more competitive by depreciating the exchange rate relative to the Eurozone. That benefit has been lost to all countries in the Eurozone and some will suffer longer, more severe, recessions as a direct result.
- Steve, Surbiton, 01/12/2008 22:52
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Frankly I cant think of anything that would anger the British people more than the sacrifice of the pound and for us to finally loose our independence to a Castholic Dominated EU. 82% are Catholic. . Explitives can not describe how I feel about this including our Protestant nation being submerged in a Catholic Beurocratic Tyranny of unending laws foistered on us. The EU is Corrupt! According to the EU's own Auditors who have refused to sign of the EU books for the 14th Year running because up to 95% of the budget is unnacounted for, missing.....Stolen?. This budget contributed by all 27 member nations amounts to £trillions and the British portion over 14 yrs amounts to £168Billion, £12billion a year= £35million a day.
They have passed 140,000 laws in the British peoples name all voted into being by foreigners that have no democratic or protestant traditions. How long can this go on? Nearly 80% of the country wants no part of this yet the Government soldiers on without a mandate. Its an insult to us all. This much maligned and despisided leader heading a government that long ago lost its credibilty must be replaced. But not with yet another landslide but with multiple parties that vote for the people not a party.
- Jas, Camberley UK, 01/12/2008 21:48
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Barrosso: "I know that the majority in Britain are still opposed, but...the people who count in Britain are currently thinking about it". SAYS IT ALL. The totalitarian Eurocrats really are a danger to our self determination. People who count indeed! We need an election to show him and those like him who counts! And end useless, expensive, dangerous EU membership once and for all!
- John, wirral, merseyside, 01/12/2008 21:38
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Why do people object to adopting the Euro? Is it because they understand any of the arguments for and against or because of some outdated nostalgia for the days of Empire and misplaced nostalgia? I don't know for sure but I suspect the latter. I for one could see some benefits - my husband runs a business from home and would be able to increase his sales in Europe considerably if we entered the Euro. And I'm sick of having to change money every time I travel to France or Italy. Reading the comments on this page I suspect support for entering the Euro is a bit of a minority view but just because Peter Mandelson is in favour of something (I'm no fan of his, believe me) doesn't make it wrong. Why can't politicians speak to the electorate like adults, and spell out the good and bad points, then offer us a referendum so we can decide? It worked for the Irish, and that was years ago (and their economy doesn't seem to have suffered too much).
- Lw, london, 01/12/2008 20:24
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Does Mandy want another Civil War in the UK? Force a foreign currency on us Brits, and that's what we'll be looking at. We don't want it Mandy! Get the message and get it good. The UK has stood alone from the rest of Europe and prospered as a result. OK, so we've been in the myre a few times, but we've got through, and since when has any European Nation come to our need when we needed it? I think history will answer that question. What next? Mandy wanting us to 'ditch' the Union Jack in favour of a tacky European duster?
- Joannie, London, England, 01/12/2008 19:26
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The sooner we join the euro the better. We should have joined at 65p to the euro. One day we will join at parity. This will cost every man, woman and child 30% of their future. This is far too important an issue to leave to the politicians. They do not have the guts and to stand up to the loud mouths and tell the truth. We will all pay a terrible price for this. I now believe it is time for a government of national unity to make the important decisions that are necessary and ignore the general public who are gullible and led by the media.
- Patrick Lyne, Enfield, 01/12/2008 19:24
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Britain is losing manufacturing jobs to the rest of Europe because of the continued usage of the pound. If you are a manufacturer producing goods for pan-European distribution, you are far more sheltered against exchange rate fluctuations by locating your business within the Eurozone and exporting to the handful out countries outside of it, than you are to place yourself in one Britain and leaving yourself exporting (and at the mercy of the currency markets) to the rest of Europe.
There's a lot of vitriol around keeping the pound - but where's the logic behind it? All I see are emotive arguments that centre around a dislike for all things European, as opposed to economic rationale.
Personally I think that supporting industry in this country, and helping to keep jobs, is far more important than arguments that are no more substantive than an emotional attachment to the pound.
- Mark Lee, Vauxhall, 01/12/2008 18:50
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"And Britain, isolated from the rest of the world" That was said by a Roman writer two thousand years ago.
Join the Euro. That's what I say.
The currency of UK is largely spineless on it's own. It needs constant supporting. But the reason the pound will always be weak is that there is little underlying value in UK.
Either start working and producing things of real value or abandon all delusions about the integrity of sterling.
Right now the only person making any sense is Mandleson. We should listen to him.
- Gordon Mann, walton uk, 01/12/2008 18:44
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""I know that the majority in Britain are still opposed, but there is a period of consideration under way and the people who count in Britain are currently thinking about it," - kinda puts it all into perspective, doesn't it! "The people who count" obviously doesn't include the acknowledged majority that are against it.
The word arrogant springs immediately to mind, and even then I'm being charitable.
- Rogan, Irving, 01/12/2008 18:10
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Incredible again those Nu Labor freaks. I think the entry will be one pound for one euro. I exchanged last week and all I got was 1.1... Not far off the complete in-confidence in our UK economy or what is left of it...
- Jacqueline, Hampstead, London, 01/12/2008 17:56
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First they bring the country to the point of bankruptcy, and then they want to slip under the euro cover. I read Iceland also wants to join the euro. But the euro is not some currency for countries that need bailing out because their politicians are irresponsible, greedy and reckless.
- Delphine, Oxford, 01/12/2008 17:46
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I thought the people that counted were the electors not the elected.
- C.Percival, Chicago.U.S.A., 01/12/2008 17:42
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The Euro will eventually collapse - when has there ever been a currency without a country, apart from gold. It is a product of the sham that is the EU.
- Tony Gee, London, 01/12/2008 17:19
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this might sound crazy but has anyone looked at euro coins close up? i found a 2002 2euro coin with the german eagle on one side and 6stars with 6interlocking bars with another 6stars!and a snake learing over western europe! now how did that story go.. he who worships the beast and his image...
- Jan Szutta, United Kingdom, 01/12/2008 17:14
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Ditch the EU, it would save us a packet!
- Wen, Oxford, England, 01/12/2008 17:01
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An 'unelected has been' sucking up to his cosy friends in the Commission so as to be 'liked and thought well of' and another unelected 'third world politician' telling us what to do God help us !!! Oh sorry it is Europe after all !!! Remind me again what is Portugals contribution to the real world !!
- Dutchy Holland, glasgow, 01/12/2008 16:02
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To chicken to let us have a referendum. Lets be clear on this, if the pound is dropped in favour of the euro at the next election neither of the 2 main parties will get in, it will be the party that takes us out of the Euro zone, doesn`t matter which one it is. Even the ethnic minorites will vote thay way, and I`m one so I know.
- Sandra, London, 01/12/2008 15:42
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No Denis its Labour who are split over this issue. The Tories are against joining the euro.
British people would be much poorer if we joined the euro, our currency would get devalued before entry meaning people would end up with less money in there pocket. Now the pound is rising against the euro its unlikely the UK will join any time soon.
- Jay, London, 01/12/2008 15:18
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The only people who should decide on Euro-membership is the British public. No referendum means no chance, so unattributable hints and mood-music from Barroso means nothing.
- Mike, Slough, UK, 01/12/2008 14:54
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Last I looked "The people that matter" were the electorate. Perhaps Manuel Barroso should bear that in mind next time he tries to gloat.
- Neil, London, UK, 01/12/2008 14:48
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Nu Labor go away!
- Georgie, Islington, London, 01/12/2008 14:41
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I can't see what the fuss is all about. The Brits will invariably have the discretion of voting NO in a referendum. Can't say as much for the rest of Europe being given a referendum vote to REFUSE entry to the UK into the euro, on the grounds that it would be too graceless, ill tempered and totally disruptive. The best solution is for the UK to leave Europe altogether !
- Philip, Paris, Paris, France, 01/12/2008 14:24
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Ask anyone in Greece, ask anyone in Italy, do they prefer the Euro compared to their old currency. They will all say their old currency. That says it all to me.
- Sue, Orpington, Kent, 01/12/2008 14:20
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There won't be a referendum unless they know the outcome in advance. We are, as usual, being duped.
- Neil, london uk, Airstrip ONE ., 01/12/2008 14:05
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Excellent: 'the people who matter' in Britain doesn't refer to the Prime Minister or his cabinet, but to Lord Line-My-Pockets Mandelson!! He gets mentioned in the daily press almost as often as Facebook. Can we look forward to seeing him eat magots in the jungle on 'I'm a Celebrity Get Me Out of Here' . . . ? Can we vote him off something in favour of John Sergeant?!
I used to be incredibly Eurosceptic and the only General Election I voted in (deeming NONE of the candidates worth voting for in others) was for James Goldsmith's party as it offered a Referendum (just the choice, not the result). By the time I had kids a few years of Labour Government later, however: well, look where I am . . .
- Roz, Chamonix, France, 01/12/2008 13:58
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Only the very stubborn or stupid would argue that Britain has not missed a trick in staying outside the Eurozone. From a rate of 1.60 euros to the pound in 2000, it's down to 1.20 and falling. This would be an advantage for the competivity of national exports, but as they are fairly non-existent, it only adds to the trade deficit as food prices continue to rise.
- John Buckeridge, Harrow, 01/12/2008 13:42
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A nice synopsis of how the European political structure operates: the people who matter outrank the majority of voters.
So, you and I don't matter, but "Lord" MandelSpin does.
Thanks Barroso, good to know what you think of us, we'll keep it in mind if there is ever a referendum.
- St, London, 01/12/2008 13:34
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Is it no time that Lady Mary Mandelson was crowned as a proper Queen, and thus leave us in no doubt who is pulling our sceptres?
Come out of the Privvy chamber ducky
- Kedge, marlboro wilts, 01/12/2008 13:28
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Well, it makes sense of the government's borrowing binge. First take on as much debt as possible, until the pound gets totally trashed by the markets. Then join the Euro at a favorable rate for the UK, and dump the debt problem onto our European "partners" (who'll have a good idea that they are being ripped off, but their desire for the United States of Europe will override any objection to our government's profligacy )
We get one last chance to say NO to both the European federacy and Nu Labour at the next general election. Use your vote -- it may be the last ever UK national vote.
- Nigel, London, 01/12/2008 13:25
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"The people that matter"!?!?
That just shows the utter contempt we *the voters* are held in. WE are the people that matter.
- Neil, Notting Hill, 01/12/2008 13:24
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Mr Borroso, the people that count in England no longer count. Only Mac-Mugabe-Brown does!
- Mike, London, 01/12/2008 13:17
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Denis Regan - what are the 5 tests ? could you explain them to me ? and also tell me how they have been met? I will be very interested in your reply. No one that I heave ever met could understand the gobbledy gook and once when Ed Balls was on the radio explaining how the tests had not been met I fell asleep. I will await your reply with great anticipation.
- Michael, London, 01/12/2008 12:49
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To Denis,
You are mistaken. The UK no longer meets all of the criteria for admission to the Euro (namely: our budget deficit is no longer below 3% of GDP and soon debt to GDP ratio will not be below 60%). As for your highly dubious claim that we would be better off with the Euro, I suggest that that's largely a question of perspective and timing. To use your phrase, it seems that the Windbag Brown has wasted all our money funding state jobs in the Valleys and Scotland and now there is nothing left!
- Mark, London, UK, 01/12/2008 12:40
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Is there any business done in Wales?
I thought everyone worked for the state / Welsh Assembly.
Sounds like another claim for European subsidies to recreate a Celtic Tiger...Sorry that went bust, and the money (if there's any left after the multi billion Euro annual fraud and no accounts filed) will be going to countries in Eastern Europe who actually have some ambition.
- Jon, London, 01/12/2008 12:37
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It is time to ditch the pound the 5 tests have been met.the British people and business would be a lot better off if we joined the Euro now.Let the battle begin and show how the tories and windbag cameon are wholly split over this important issue.
- Denis Regan, Cardiff ,wales, 01/12/2008 11:51
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