Labour 'split over honesty on euro'

Michael Portillo: The cabinet is divided over the euro

The Conservatives have launched a fresh attack on the government, saying the cabinet is split over whether to be honest with the public about Labour's policy on the euro.

The shadow chancellor, Michael Portillo, accused Gordon Brown of wanting to take the UK into the euro "without telling a soul".

But he said the chancellor was faced with a group of cabinet colleagues, including Stephen Byers, Robin Cook and Peter Mandelson, all of whom want the government to open up the debate on the single currency.

Portillo's goals

Full employment

High national income

Stable prices

Efficient use of resources

Stable community

Freedom of choice

Prime Minister Tony Blair was caught in between the middle of the two camps, he said.

Speaking to the Institute of Economic Affairs in London, Mr Portillo said: "Tony Blair reminds me of that famous song: 'torn between two lovers, feeling like a fool; loving both of you is breaking all the rules.'"

But Trade and Industry Secretary Stephen Byers denied any cabinet rift.

He said: "The cabinet are of one view over the euro. The chancellor said that if and when the five financial tests are met, then the matter will go to the people with a referendum. Myself, and the cabinet, all support that view."

Blair writes on euro

In an article published on Tuesday, jointly-written with the Spanish President Jose Maria Aznar in the Financial Times, Mr Blair seemed to express support for the single currency.

"The euro is changing the face of Europe," he wrote. "Europe's economic fundamentals are sound: sounder than they have been for over a generation."

Hague unwell

Making the speech instead of Tory leader William Hague, who has 'flu, Mr Portillo once again underlined the Conservative commitment to keep the pound for the next parliamentary term.

He went on: "We now know that the cabinet are split down the middle about how honest they are going to be about it to the British people."

On his opposite number, he said: "The chancellor would like to abolish the pound without telling a soul.

"The government should have the courage to argue its case."

Liberal Democrat economics spokesman Matthew Taylor joined the debate saying: "Tony Blair is easing himself off the fence on the euro, apparently in the hope that Gordon Brown won't notice."

Full employment

Mr Portillo also used the speech to commit his party loosely to the traditional left-wing goal of full employment.

He said: "When I talk about the goal of full employment, I mean the right of the people to expect their government to create the economic conditions in which full employment can exist.

"Achieving full employment will depend on putting right the failures of education and training."