Portillo slams euro funding

Euro notes and coins will be introduced in 2002.

Shadow Chancellor Michael Portillo has accused the government of trying to trick voters into scrapping the pound, claiming a referendum to join the euro would be "rigged".

The attack came in the Commons as Chancellor Gordon Brown announced an "enhanced" information campaign to help small businesses prepare for the introduction of euro notes and coins in eurozone countries in 2002.

the Labour party would not give the people of this country a fair and straightforward opportunity to vote on whether to scrap the pound

Michael Portillo

Mr Portillo said the Chancellor was trying to "hoodwink the British people into giving up their own currency".

Mr Brown insisted that if the government decided to make a case for the euro it would "put a fair question" to the people.

He said the shadow chancellor's opposition to the single currency was based on "dogma and ideology".

Mr Brown revealed the additional investment for business preparations would take Treasury spending on business preparations for the euro during this parliament to £9m, and total government spending to £24m.

Mr Portillo accused the Chancellor of trying to "hoodwink" the British people.

Mr Portillo responded: "It is absolutely clear that the Labour party would not give the people of this country a fair and straightforward opportunity to vote on whether to scrap the pound or not."

He said the government had "rigged the financing of the referendum so that those parties who wish to scrap the pound will be allowed to spend twice as much money as the Conservative Party will be allowed to spend defending the currency".

Under new legislation, the amount a political party is permitted to spend in a referendum campaign depends on its previous electoral record.

Parties attaining 30% of the popular vote will be allowed to spend a maximum of £5m.

The budget for smaller parties will be lower.

Unfairly matched

As the Conservatives are likely to be fighting the combined forces of Labour and the Liberal Democrats in the event of a referendum on the euro, the Tories believe the two sides would be unfairly matched in resources.

A Treasury spokeswoman defended the rules, saying there was "no other way to do it".

They had been recommended by the Neill committee on standards and passed by parliament, she added.

In January 2002, euro notes and coins will be introduced in the 11 eurozone countries, and the old currencies will become obsolete.

The government's euro tests

Monetary union must create better investment conditions in the UK

The euro must not harm the country's financial services industry

Business cycles and economic structures in the UK and Europe must be compatible

The euro system must prove "sufficient flexibility"

The single currency must help to promote higher growth, more jobs and economic stability

The Treasury says some businesses are still unprepared for the euro.

The spokeswoman warned that if businesses were not ready it would "cost the country a fortune in the long run".

Prime Minister Tony Blair has said the UK government expects to make a decision on whether the economic conditions are right for British entry within two years of the next election, based on five "economic tests".

'Bogus' tests

In his Commons attack, Mr Portillo accused Mr Brown of behaving "disgracefully" by refusing to answer his questions.

He said "I cannot understand... why you have so little intellectual pride that you are willing, if you possibly can, to hoodwink the British people into giving up their own currency."

The five economic tests were "bogus" and a referendum would be "slanted" he added.

Liberal Democrat spokesman Matthew Taylor complained that the Government did not include in its conditions for entry any mention of the exchange rate.

A "more competitive" exchange rate was necessary, he said.