Tony Blair had 'secret group preparing for euro referendum'

Planning was kept secret to avoid Gordon Brown's disapproval, Peter Hain discloses in autobiography

Tony Blair and his aides sanctioned a secret group inside Labour, including the-then Europe minister, Peter Hain, to prepare the ground for a euro referendum during his second term in office.

The group was secret partly to avoid Gordon Brown's disapproval, Hain discloses in his autobiography Outside In, to be published on Monday. The episode shows how determined Blair was in 2002 and 2003 to join the euro.

Hain reveals that in the middle of 2002 he "talked discreetly to key pro-Europe individuals about raising funds for communications research, focus groups, opinion polling and detailed research" to be conducted by the Labour pollster Philip Gould, who died last November.

Substantial funds were required and the operation had to be done very carefully, and at arm's length from Brown, he writes.

Hain feared exposure about organising a "shadow" euro campaign and knew Brown would not approve. He says the purpose was not to undermine Brown, even though the chancellor "would have felt that the credibility of his economic judgment had been called into question".

Hain felt the preparatory work was necessary whatever the eventual timing of the referendum. Blair told him on a small jet when they were returning from a European summit in early spring 2002 that the referendum has "got to be in this parliament". Hain recalls that Blair "was absolutely clear that the politics of it necessitated that". He says: "It was a question of getting the economics right and obviously squaring Gordon Brown."

Pro-euro business figures raised £200,000 remarkably easily and commissioned some in-depth public attitude research.

Gould and Stan Greenberg, an American pollster and communications expert who had worked for the Democrats, made presentations to a small group including Peter Hyman, Blair's deputy chief of staff. The research showed that, although the euro referendum was winnable, it would be really tough, Hain writes.

He recalls enlisting Peter Mandelson who "paged through a copy of the Sun full of anti-euro material, saying how cleverly it chimed with the focus-group work, and how much it was in tune with the anti-euro sentiment in the population.

"Despite being the best qualified to run a Yes for Europe campaign, he would also have become the best target for opponents – which he readily acknowledged. Nevertheless I couldn't envisage running a Yes for Europe campaign without Peter Mandelson involved in some key way."

Hain discussed with the group whether to launch a yes for the euro campaign "quite independently from the Labour party and certainly from the government".

He writes: "It could be modelled on the Yes for Wales referendum campaign that I had initiated back in 1996 with the help of Leighton Andrews, [a Welsh Labour politician] whom I also involved in this project. I envisaged a very lean organisation without a formal constitution or membership or any of the costly administrative paraphernalia of a permanent body like Britain in Europe."

"The dilemma was how to maintain control over an organisation that had to be independent of Labour."

Hain also discloses he discussed the project with a Blair aide, Pat McFadden. He told Hain he didn't think he could approach people whose expertise he needed unless Brown knew and approved. "Otherwise there would be a huge bust-up if Brown's camp found that a No 10-sanctioned initiative was under way," Hain says. Sally Morgan, director of government relations under Blair, was also uncertain, according to Hain.

Hain writes that McFadden warned him from bitter personal experience that "if it came to a bust-up between Brown and Blair, you often get hung out to dry", which made him even more concerned not to get into that position.

"Although Blair's people – Hyman, Gould and others including Mandelson – were keen, in the end it was me who would take the rap. Since Sally Morgan later told me she couldn't get Tony Blair's agreement for approaching Gordon Brown, preparatory work would have to be done on a much more discreet, more limited basis, with Pat McFadden sitting in his room at home drawing up a strategy – which is was how things were left in the spring of March 2002."

The planning was aborted after Brown declared the UK economy was not ready to join the euro due to insufficient convergence between the two economies.


Patrick Wintour, political editor

The GuardianTramp

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