Blair to raise stakes in the euro debate

An increasingly confident Mr Tony Blair will today stress his belief in the inevitable success of the European Union and his …

An increasingly confident Mr Tony Blair will today stress his belief in the inevitable success of the European Union and his determination that Britain must be part of it.

In doing so he will dramatically raise the stakes in Britain's European debate and expectations that the country will be asked to decide on the euro before the next general election.

The Prime Minister is not expected to signal any formal change in government policy on membership of the single currency in his speech at the opening of the Institute of European Studies in Birmingham this morning.

However, the devotion of a second keynote speech to the subject in just four days will be taken as the clearest possible signal of his increasing enthusiasm for a referendum on the euro during the lifetime of the present parliament.

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Mr Blair will again tell his audience that a government decision on a referendum must await completion of the assessment of the treasury's famous five economic tests, now due within eighteen months.

However, he will stress that the debate should turn on the economic tests and not on the basis of what he considers outdated Eurosceptic ideology.

And having told the German SPD conference on Tuesday that Britain's European "destiny" was central to her efforts to build a more peaceful and stable world, Mr Blair will today lament a history of "missed opportunities" in the conduct of British negotiations with Europe and insist that the UK play its full part now in the EU success story.

Mr Blair will be speaking against the welcome public assurance that the Chancellor, Mr Gordon Brown, regards him as his "best friend" in politics, and that Mr Brown's perceived caution on euro membership is not driven by his desire to replace Mr Blair as prime minister.

Mr Brown offered those assurances yesterday in an interview with the London Times after a week of damaging reports suggesting his relationship with Mr Blair had reached an all-time low.

Clearly seized of the need to mend fences, the Chancellor went out of his way to praise ministers - Ms Estelle Morris, Mr Stephen Byers, Mr Alan Milburn, Mr Alistair Darling, Mr Geoff Hoon and Mr David Blunkett - whose talents he was said not to rate, or with whom he is believed to be engaged in disputes over spending priorities or the future leadership of the Labour Party.

Mr Brown brutally dismissed Dr Mo Mowlam's suggestion that his disputes with Mr Blair were "crippling to government", referring to "those people who try to relegate huge national issues that everybody understands are big questions for our country into issues of personal ambition", and declaring "frankly I find that offensive".

And of Mr Blair himself, the Chancellor said: "Tony Blair is the best friend I've had in politics."

Specifically addressing the perceived split between the two over the euro, the Chancellor said: "The policy we pursued is the policy we agreed in 1997.

"I do not think there is a word I have said that he would disagree with, not a word he has said that I would disagree with."

He continued: "Everybody knows my pro-European position. But to somehow relegate decisions on issues affecting Europe, or international development or the health service, to calculations about personal ambition seems to me to be quite offensive."

Meanwhile, there was continuing speculation that Mr Brown's dominant influence in Scottish Labour politics will suffer following yesterday's election of the distinctly "Blairite" Mr Jack McConnell (41), as First Minister.

With the backing of Labour's Liberal Democrat coalition partners Mr McConnell easily won the vote in the Scottish Parliament, with 70 votes to 34 for the SNP leader, Mr John Swinney; 19 for the Conservative leader, Mr David McLetchie; and three for the independent backbencher, Mr Dennis Canavan.