Euro row for unions
BBC, September 1, 1999

A major row is brewing over trade union support for the euro ahead of the TUC (engelska LO) conference. Some trade union leaders, including John Edmunds of the GMB and Sir Ken Jackson of the AEEU, are urging the government to do more to promote plans for Britain to join the single currency. Other unions, like the Transport and General Workers Union, and Unison, the public sector workers unions, are more sceptical.

Sir Ken (i England kan fackföreningsledare bli adlade) told the BBC's Today programme that continuing uncertainty over the UK's membership is threatening the economy. He believes that the strong pound, which has threatened to cripple UK exports, would stabilise if a firm decision to join the single currency was taken. He warned that otherwise an economic downturn could force the government to cut back on public spending. "We must decide whether we want to be a main player in Europe. "If we are, we have to be a full and active partner. We cannot play around on the fringes," he said.

But Geoffrey Martin, of Unison, the public sector trade union, warned that UK membership of the euro risked repeating the fiasco of British membership in the ERM in 1992 - when fixed interest rates and a high pound pushed the UK into recession.

"There is a huge danger that this will just be a rerun of the ERM .. the trades union movement needs to take a long, hard look at the full range of issues before we take that kind of gamble ever again," he said.

Strange bedfellows
The pro-euro trade union leaders are forging an unlikely partnership with the leaders of some of Britain's largest companies who are also pressing for an early decision on UK membership in the single currency. Sir Clive Thomson, head of service company Rentokil Initial and president of the employers organisation the CBI, believes that British business would benefit from inclusion in the euro. But he also wants to insure that Europe embraces the principles of the free market, including labour market deregulation, which are anathema to the unions.

Political storm
Meanwhile John Prescott, the Deputy Prime Minister, who was involved in the anti Common Market campaign in the 1970s, has criticised union leaders "ego inflation" for trying to tell the government what to do. "There's a lot of ego inflation that goes in these areas. I'm not so sure that the issues are anything to do with the presentation of the arguments," he said earlier in the week. "Most of my political life, the early stages anyway, I opposed entry into the Common Market."

But Sir Ken said he had been active in the European movement too long to take those criticisms seriously. "That is a long time to keep an ego up," he said.

Government dilemma
The government is on the horns of a genuine dilemma in regards to the euro. Although Tony Blair is believed to support the single currency in principle, the UK economy has been performing surprisingly well despite the world recession. The euro, meanwhile, has dropped sharply against the dollar since it was launched, leaving doubts about its credibility. And public support for membership of the single currency has plummeted, making it more difficult for the government to win the referendum that it has pledged to hold before taking any decision to join.

The pro-European pressure group that is meant to bring together politicians, businessmen and union leaders in favour of the single currency, Britain in Europe, has been forced to postpone its launch twice. And the government task force on preparations for the euro, designed to look at the practical steps that would need to be taken before a decision is taken, has not met for months.