Pounding the euro

In the euro/pound debate public opinion is favouring ‘Little Englanders’ more than ‘Brussels Puppets’. And even though a referendum is at least three years away, the campaigns to convince consumers are launching this autumn. Will those who sho

Only last week Tony Blair said there had been no change in policy on entry into a single European currency. He told the media that when there was a change – or if the timetable for a referendum on entry slipped beyond the expected 2002 – he would tell everybody.

So it would surely be no problem to ask Downing Street what is the policy – what are the five economic conditions laid down by the Government in 1997 for entry into a single European currency?

“That’s a policy matter,” said a Downing Street press officer, “try the Foreign Office.” The section that deals with European Union issues said: “I couldn’t help you with that, it’s a Treasury lead.” But Downing Street said the Foreign Office could help. “Hang on a minute I will ask a colleague.”

Five minutes later another voice came on the telephone. “This is really a Treasury matter but I will try to help.” The voice disappeared back into the Whitehall ether only to return a few minutes later to list the five conditions: sustainable convergence; flexibility to cope with change; the effect on financial services; the effect on employment; and the effect on investment.

But what do they mean? How do you measure the conditions? What is meant by the flexibility to cope with change? “If you want anything more you will have to speak to the Treasury.”

The Treasury directed the enquiry to its Website and a statement from Gordon Brown in October 1997. Could the Treasury specialist give a brief explanation of the conditions? After all not everybody has Internet access. “That is why we publish things,” he said.

As a metaphor for confusion over the euro it couldn’t be more stark. If those working in government departments closely identified with the debate on the euro don’t understand it – or are unwilling to help the understanding of it – then how will the millions of people who will be asked to vote in a referendum (promised early in the next Parliament if Labour is re-elected) know which way to jump?

In the period until any referendum is called both the pro and anti euro campaigners will seek to fill the information breach. Both sides intend to launch autumn campaigns even though there will be no referendum for at least three years.

Just hours after Blair’s speech – which effectively launched the Britain in Europe initiative and claimed that opposition to the euro was tantamount to wanting wholesale withdrawal from Europe – one of the anti-euro groups, New Europe, announced that it was hiring an advertising agency.

It wants to create a campaign that will be part recruitment drive and part public awareness effort. It also wants an agency that can explain its position to the public.

Eurosceptics have often made it easy for opponents to portray them as little Englanders – not least because some are. Meanwhile, pro-Europeans tend to be portrayed by their opponents as Brussels’ puppets. These simplistic stereotypes are likely to be wheeled out again during the next round of campaigning over the euro.

Pro-Europe, anti-euro

Although it is of little comfort to New Labour, a third way is emerging. Groups such as New Europe – which is trying to distance itself from the crude “save the pound” brigade of eurosceptics – and Business for Sterling position themselves as supportive of existing links with Europe, but opposed to entry to the euro on both political and economic grounds.

They would not appreciate the comparison, but their position mirrors William Hague’s “in Europe but not ruled by Europe” mantra which will be the basis of the Conservative campaign at the next general election.

Their reasons for opposing the UK’s entry to the euro include losing control over the setting of interest rates, a claim that unemployment will rise and other structural differences between the economies of the UK and the rest of “Euroland” which makes entry counter productive. Both groups also see it as a prelude to full political union in a federal Europe.

Over the next two years the two groups are likely to form the bedrock of any “no” campaign in a euro referendum.

New Europe director Janet Bush, previously economics editor at The Times – part of Rupert Murdoch’s eurosceptic stable – says the group represents a pro-European cross-party constituency. It was born out of a frustration that the debate was polarised so that to oppose the euro you had to be a little Englander on the right wing of the Conservative Party.

But theirs could be the most complex of all messages to communicate – pro-European but anti-euro. It is certainly a positioning that advertising alone will struggle to convey to a mass audience. Advertising can only affect elections at the margins. It can provide a call to action, but it can’t explain complex economic and political issues. Any referendum advertising would have to be boiled down to “vote yes for a cheaper mortgage” or “no if you want to keep the pound”. The benefit would have to be stressed.

“It is up to us as a group to put across the positive aspects of Europe rather than just say the euro is rubbish,” says Nick Mendoza, chief executive of Forward Publishing and de facto marketing director of New Europe. “It is important to let people feel it is OK not to want the euro without feeling guilty. Being a eurosceptic is supposed to be a Tory issue but it is not – it is about all parties and the Government is trying to keep a lid on it.”

But how do you explain the differences – and complex economic and political arguments – to a population which shows little enthusiasm for Euro polls and hardly bothered to vote in June’s European election? Both sides will have to cope with apathy. For the pro-camp it will be worrying that the majority of those who did vote supported William Hague’s simplistic “save the pound” campaign.

Since Labour’s poor showing in June 10 European Parliament elections Blair has come under increasing pressure to throw his weight behind a more pro-European line. His speech last week was the opening shot in a campaign to breathe life into the lobby group Britain in Europe which will campaign for entry to the euro “when the economic conditions are in place”.

The group was to have been launched in July. But campaign manager Simon Buckby, who joined just three weeks ago, postponed the launch “because the carts and horses needed to be in the right order”. He will oversee a launch this Autumn. Its opponents claim the launch was delayed because of Labour’s defeat in the June poll and the group will inevitably be accused of acting as the Labour Party’s proxy despite its cross-party support.

Fanatical minority

Pro-euro groups have been around for several years. The European Movement held talks with ad agencies including McCann-Erickson three years ago about a campaign to support the launch of the euro. But it has been lacklustre. In recent months with the arrival of the two new groups, plus the continuing threat of Yorkshire businessman Paul Sykes, chairman of the Democracy movement, to throw as much as £20m into a campaign opposing the euro, the pro-Euro campaigners have lost ground.

Buckby admits that the creation of Britain in Europe, which has grown out of the European Movement, is partly as a result of the new groups. “They have had a free run for too long but now battle has commenced,” says Buckby. “There is a hysterical fanatical minority that want not just to stop the UK joining the euro, even if it benefits the economy, but also have a hidden agenda of getting out of Europe completely. We will campaign to play a leading role with our EU partners and maintain a credible option to join the single currency if the conditions are met.”

Buckby refuses to be drawn on whether he sees New Europe and Business for Sterling as part of this “fanatical minority”. His priority, he says, is to create a professional campaigning organisation. Buckby previously managed the Labour Party ad account at BMP during the 1997 general election and was most recently social affairs correspondent at the Financial Times.

Any pro-euro campaign will concentrate on similar territory to its opponents, but paint a picture of lower inflation, prices and even mortgages due to lower interest rates. In fact many of the arguments will be the complete reverse of those of the opponents.

Another factor thrown in last week is the capping of expenditure on referendum campaigns. Under Home Office proposals the Yes and No campaigns in any referendum will be eligible for state funding of up to £600,000. This could force the anti-euro forces to unite behind a single campaign.

Hardening of opposition

Their spending in the year ahead of a vote will be capped at £5m – far more than has ever been spent on a European poll in the UK – and the Government will be forced into a neutral position for 28 days before any vote. In theory the funding cap will also prevent Paul Sykes from spending the threatened £20m in the run up to any poll, although he is expected to take legal advice on the capping.

If there was a referendum in the morning, the UK would not be signing up to the euro on Friday. Both sides describe the battle over the euro as crucial but the advantage now appears to lie with the anti-euro campaigners.

In a situation like this it could be the side that shouts loudest which has the best chance of winning the public’s attention. Those opposed to membership believe they have the upper hand at the moment with opinion polls suggesting that there is a hardening of opposition to the euro. But there is little qualitative research to say why the public is hostile – the reasons could range from economic concerns to the fact that Germany always wins at football. Later this autumn the battle will really begin.

The players

PRO-EUROBritain in Europe

Will formally launch in the autumn but has the support of Tony Blair along with former Tory Chancellor Kenneth Clarke and deputy prime minister Michael Heseltine – who has called for the referendum ahead of the next election – plus leading Liberals. It will form the basis of any Yes campaign when, and if, there is a referendum. A private company, it has grown out of the European Movement. Its board includes the BA chairman Lord Marshall.

Funding – corporate donors.

ANTI-EURO Democracy Movement

Bank-rolled by the controversial former Tory candidate and businessman Paul Sykes. It started life as James Goldsmith’s Referendum Party but changed name and dropped its participation in Parliamentary elections in October 1998. Opposes euro entry and campaigns at grassroots level to create local anti-euro activities. Claims a membership of 110,000.

Funding – the estate of James Goldsmith, membership and Paul Sykes.

UK Independence Party

Is seeking the complete withdrawal from the European Union. It won three seats at the European election. “We are seeking an amicable divorce from the European Union,” says spokesman Christopher Skeate.

Funding – voluntary donations although now it has three MEPs it is also, ironically, eligible for European funding.

THE THIRD WAY New Europe

Launched on March 1 1999 it positions itself as a “respectable”, cross-party, pro-European group opposed to entry into the euro. Its advisory council includes Lords David Owen and Denis Healey plus former Barclays chief executive Martin Taylor. Chief executive Janet Bush is the former economics editor on The Times. The group also has a marketing committee which includes Neil Mendoza, the chief executive of Forward Publishing, and Steve Hilton of Good Business. Hilton previously worked for the Conservative Party, Saatchi & Saatchi and M&C Saatchi on the last two general elections when one press ad famously featured Tony Blair sitting on the lap of the then German chancellor Helmut Kohl. Seeking an ad agency – M&C Saatchi would appear to fit the bill and has the contacts – but New Europe will not have the funds for a mass campaign until closer to any referendum.

Funding – individual subscriptions.

Business for Sterling

Believes that the UK should be in Europe but not in the single currency. Although launched in June 1998, it is only in the past six months that it has come to prominence with figures such as Dixons’ chairman Stanley Kalms and Lord Hanson on its advisory committee. Opposes the euro on economic grounds. Chief executive Nick Herbert says the group was created as a response to the CBI’s support for euro entry. It claims the support of both the Institute of Directors and Federation of Small Business. It is employing conventional marketing techniques from direct mail to 1 million businesses to tactical ads.

Funding – corporate and individual subscriptions.

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