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banner Tuesday, 3 October, 2000, 16:25 GMT 17:25 UK
Portillo's 'euro-nonsense' - Clarke
Kenneth Clarke
Clarke tells the fringe the europhiles are needed
Differences in the Tory party over Europe are not as damaging as once they were, but they are still there.

Michael Portillo had just won resounding cheers from the conference floor when he declared that a Tory Britain would keep sterling and set its own interest rates.

It was what I sadly regard as blithering economic nonsense

Kenneth Clarke on Michael Portillo
The euro was "an unproven piece of political dogma", the shadow chancellor declared, "That is our view. That is the view of the moderate majority. We want to keep the pound."

If he expected universal praise, however, Mr Portillo did not get it - with the last Tory chancellor, europhile Kenneth Clarke, describing his policy as "blithering economic nonsense".

Mr Clarke also said the Tories should be aware that the votes of pro-Europeans were needed if the party was to win the next election.

Euro 'shoehorn'

In the part of his speech on the economy and Europe, Mr Portillo said that Tory economic policy depended on the UK being able to set its own interest rates.

Denmark has shown that people will not be bullied and people will not be fooled by arrogant politicians like Mr Blair.

Michael Portillo
He argued that having a single Europe-wide rate was not appropriate for most countries most of the time.

The euro tried to "shoehorn all the economies of Europe with all their diversities, all their different cycles, all their different stages of development.. into one interest rate and into one currency," he said.

Interest rates were currently too low for Ireland, leading to inflation, and too high for Germany. But neither government could do anything about it because rates were set by the unelected and "wholly unaccountable" European Central Bank.

However, the Danish No vote to the euro had showed that people need not be bullied by "arrogant politicians like Mr Blair," the shadow chancellor said.

'One-club golfer'

Mr Clarke was dismissive of such views.

Extreme Euro-scepticism has achieved no breakthrough and it will not

Kenneth Clarke
He told the BBC's Conference Live programme: "When he got to the obligatory euro bit... It was what I sadly regard as blithering economic nonsense, but I'll argue that with him separately."

He said: "The idea that the only thing you can do about inflation rates is to go and fall on your knees and ask the governor of the Bank to modify interest rates is to go back to the 'one-club golf' that I thought we'd abandoned quite a long time ago.

The phrase "one-club golf" was a reference to former Prime Minister Sir Edward Heath's description of then Chancellor Nigel Lawson as a "one club golfer" for his reliance on interest rates to control the economy.

Europhiles 'vital for victory'

Earlier, Mr Clarke had told a fringe meeting that the support of the pro-European wing of the party and the voting population was vital for the Conservatives to win the coming general election.

Adopting an extreme euro-sceptic tone could only undermine the party's broad appeal, he said.

Mr Clarke told the fringe: "The support of pro-Europeans in the Conservative Party and even more importantly the pro-European section of the population is absolutely crucial if we are going to win the next general election.

The so-called threat of a superstate is designed to arouse fears which are quite unreal

Kenneth Clarke
"The one policy we have had for two years officially that is quite clear is the Euro-scepticism of the party... and we have languished in the polls.

"Now we have broken through... as a result of the self-inflicted wounds of the Labour movement, not least the rather bizarre behaviour of my successor the Chancellor of the Exchequer on the subjects of taxation and public spending.

"But extreme Euro-scepticism has achieved no breakthrough and it will not," he said.

He said it was "time to stop pretending that entry to the single currency is a step that must inevitably lead to the creation of a superstate. If any of us really believed that, we would all have to say that we would never ever join the single currency.

"The so-called threat of a superstate is designed to arouse fears which are quite unreal," he argued.

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See also:

30 Sep 00 | Conservatives
Clarke: The lucky loser
03 Oct 00 | Conservatives
Clarke's big tent
03 Oct 00 | Conservatives
Portillo's symbolic speech
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