Cook puts positive spin on UK signing up to single currency

In a significant shift of tone in the British government's line on the single currency, the Foreign Secretary has delivered an upbeat assessment of the benefits of joining the euro.

Mr Robin Cook's speech, delivered at a business conference in Tokyo yesterday, set out the "real benefits" to citizens in the euro zone in terms of more jobs and lower interest rates than in Britain and is being read as a signal that the government is preparing voters to join the euro.

Criticising Mr Cook's decision to deliver the speech in Tokyo, the Conservative leader, Mr William Hague, accused the government of "saying one thing when they're abroad which they dare not say when they're here". The speech was evidence that the government wanted to abolish sterling and take Britain into the euro "whatever the consequences".

He told Sky News that Mr Cook's positive assessment of the euro's performance was "ludicrous" when the rate of unemployment in Europe was twice the level in Britain. He added: "Ireland is having difficulties in many ways because of interest rates being set to suit the interests of other countries."

The cross-party Euro-sceptic group, The Campaign for an Independent Britain, described Mr Cook's speech as "extremist" and said for the government to claim the euro was a success was "patently absurd".

Euro supporters, who have long complained that British business is suffering from the government's wait-and-see policy on the single currency, welcomed Mr Cook's speech.

Mr John Edmonds, general secretary of engineering union GMB, said Mr Cook's speech was "precisely the message we have been waiting for from the Government. If only by proxy, the prime minister is at last starting to move the argument in the right direction". The Liberal Democrats urged the Prime Minister, Mr Tony Blair, to go further and declare his support in principle for joining the single currency.

Painting a positive picture of the euro's economic trend to date while plainly ignoring its difficult early days, Mr Cook said the government would not let Britain "lose out" by staying outside a successful euro zone, subject to a referendum which will probably be held after the next general election.

Mr Cook said the birth of the euro had already signalled new economic strength among member-states in terms of more jobs and long-term investments. Identifying those trends, Mr Cook said if the euro proved stable, the government would prepare business and voters to take part: "There have been real benefits of immediate relevance to the citizens of Euroland. France is now creating jobs faster than anywhere else in the world outside the US.

"If these trends continue, the single currency will bring significant benefits to those countries that are members of it. Today I assure you that if the euro proves a stable, successful currency, Tony Blair's government will make sure that Britain is ready to take part, subject to the support of the British people in a referendum. If the euro brought benefits to its members, we would not let Britain lose by staying out."

Some economists do not recognise Mr Cook's positive spin on the euro. Mr Maurice Fitzpatrick, an economist with the accountants Chantrey Vellacott said his calculations showed the euro was "not a complete success".

While Mr Nick Herbert, chief executive of the business network, Business for Sterling, said investors cared more about the competitiveness of an economy than its currency: "It is far too early to judge the success of the euro and fatuous to claim that an eight-month-old virtual currency has anything to do with a slight upturn in the euro zone's economies after six years of stagnation."