Kinnock warns against delaying euro entry

29 May 03
Future investment in public services will suffer if Britain fails to join the euro, European commissioner Neil Kinnock has warned. In an interview with Public Finance , Kinnock, who is vice president of the commission, said there was 'a crazy ar

30 May 2003

Future investment in public services will suffer if Britain fails to join the euro, European commissioner Neil Kinnock has warned.

In an interview with Public Finance, Kinnock, who is vice president of the commission, said there was 'a crazy argument' in some quarters that the public sector would suffer if Britain joined the euro.

However, he said, the opposite was true. 'There is this talk, including among some trade unions, that public services would be disadvantaged if Britain goes into the euro. This is not the case, and it will be a disaster for the public sector if we delay joining for a long period of time.'

Commenting on alleged rifts between Prime Minister Tony Blair and Chancellor Gordon Brown, Kinnock said discussion should not be seized on as an example of a rift.

But he warned that a referendum before the end of the current Parliament would be 'preferable'. 'If that is not possible, then a clear signal should be sent that a referendum will take place in the early period of the next government,' he said.

If Britain does not sign up to the euro, any future investments in public services will depend on the stability of the pound, Kinnock said, leaving the public sector facing cuts in funding if anything went wrong.

'All I ask people to do is to reflect on the last 45 years and see the awful damage inflicted on public services and investment by fluctuations in the pound. Whenever there was tension between continuity of investment in public services and the sensitivity of the pound, the pound always won, which is why we have always had such underinvestment in critical areas like health, education and transport.'

He said the public sector 'has an absolute vested interest in currency stability' and the way to guarantee that stability was to join the euro. 'The way to safeguard future investment is to be part of a very big currency like the euro instead of being a very small boat between two great ocean liners, the euro and the dollar.'

Neil Kinnock will be speaking at the closing summit of the CIPFA conference on June 12

PFmay2003

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