Pro-euro bosses' letter to Blair

A letter from 26 business leaders has arrived on Tony Blair's desk, warning that the British economy will be badly damaged if the Government rules out a referendum on the euro in this Parliament. This is the letter in full.

Dear Mr Blair

We are writing to make clear our concerns about the implications for business if the Government rules out membership of the euro for the lifetime of this parliament. Such a decision would be damaging for British-based businesses, British employees and the British economy as a whole.

Since the Chancellor's statement on the euro in October 1997, the working assumption of business has been that Britain is a 'pre-entry' country. If it becomes apparent that this is no longer the case, the Government must be aware that this will constitute a significant change in the business climate of this country. Although in many respects, Britain is a good place to do business; non-membership of the euro is damaging that position.

Inward investment in Britain has already fallen substantially. According to the United Nations, Britain attracted 29% of foreign direct investment in the EU over the 20 years to 1999. But since the launch of the euro in that year, the share has fallen to 16%. The UN estimates that it collapsed to 5% in 2002.

By removing the barriers of separate currencies, the creation of the euro has led to a rapid increase in cross-border trade in the euro-zone. Germany's trade with the EU has leapt from 27% of national output in 1998 to 32% in 2001. France's trade with the EU has risen from 28% of GDP to 31%. Overall, the average rise in euro-zone countries is 3 percentage points. Meanwhile, Britain's trade with Europe has stagnated.

The weight of independent economic evidence suggests that the conditions for entry are right. Commercial reality strongly dictates that the risks of staying outside the euro far outweigh any risks of joining. The European single market has moved on and we are no longer full members. We hope that the Government will have the courage of its convictions and recognise that membership of the euro is in our long-term national interest. To do otherwise would have serious consequences for Britain's future prosperity.

Lord Marshall of Knightsbridge, Chair, Britain in Europe.

Nicholas Brookes*, Chief Executive, Spirent.

Martin Broughton, Chairman, British American Tobacco.

Dinesh Dhamija, Chairman, ebookers.

Vernon Ellis*, International Chair, Accenture.

Sir Richard Evans, Chairman, BAE Systems.

Niall FitzGerald, Chairman, Unilever.

Sir Chris Gent*, Chief Executive, Vodafone Group.

Robert Guy, Adviser to the Board, N.M. Rothschild & Sons; Chair, The City in Europe.

Lord Hollick, CEO, United Business Media.

Johannes Huth, Managing Director, Kohlberg Kravis Roberts.

Sir Michael Jenkins*, President, Boeing UK.

David Jordan, Chairman & Managing Director, Philips Electronics UK.

The Rt. Hon Sir Richard Needham, Deputy Chair, Dyson; Vice Chair, NEC (Europe).

Anthony Nelson*, Vice Chairman, Citigroup; Chair, Gateway to London.

Sir Bryan Nicholson, former President, CBI 1994-96.

Sir Gulam Noon, Chairman & Managing Director, Noon Products.

John Porter, Chairman, Telos Group.

Mike Rake*, International Chairman, KPMG.

Sir Nick Scheele, President and Chief Operating Officer, Ford Motor Company.

Lord Simon of Highbury, former Chairman, BP; Vice-Chair, Britain in Europe.

Sir Martin Sorrell, Chief Executive, WPP Group.

Peter Sutherland*, former Director General, World Trade Organisation.

John Travers*, Senior Partner, Cushman & Wakefield Healey & Baker.

Robert van der Merwe, Group President, Kimberly-Clark (Europe).

Alan Wood, Chief Executive, Siemens.

*signing in a personal capacity