TONY BLAIR does not make casual remarks about British membership of the single European currency. In an interview with The Economist earlier this year he remarked that “It is impossible for any British politician in a senior position to say anything on the euro that is not interpreted by our media in a ridiculously exaggerated way.” For that reason he refused to speculate on how close Britain was to meeting the “five economic tests”, which are meant to determine whether the government recommends that Britain joins the euro.

So it was no accident when Mr Blair said on a recent trip to South Korea that, under current circumstances, he would vote “no” in a referendum on euro-membership. This is a definite tactical shift, with significant practical consequences. It makes the already-receding prospect that Britain will join the single currency within the next three years even more remote.

An insight into Mr Blair’s political calculations are provided, curiously enough, by the diaries of Paddy Ashdown, a former leader of the Liberal Democrats, which are currently being serialised in the Times. Mr Ashdown’s diaries record the discussions he had with Mr Blair, when the Labour leader was still in opposition. Mr Blair was outlining how he would try to keep open the option of electoral reform, while preventing it becoming a major issue in the forthcoming election. He told Mr Ashdown: “I would respond to questioning along the lines of ‘If I was asked in a referendum how I would vote today, I would vote no’ and leave it open as to whether I might change in the future.” This verbal formula is almost exactly the one that Mr Blair has now employed over the euro.

Mr Blair’s intention may simply be to make it harder for the Tories to make the euro a central issue in the next general election, which is likely to be held in May 2001. Downing Street spokesmen are insisting that there has been no change in the formal position—the government will assess the economic conditions shortly after the next election.

But in practice it will now be much harder for Mr Blair to recommend a “yes” vote, without pointing to some significant economic change that has made him decide that euro-membership is now a good idea. A series of recent announcements of job cuts by Japanese manufacturers in Britain—including Matsushita, Sony and Hitachi—will strengthen the case that parts of British manufacturing industry are being hit by exclusion from the euro-zone. But some of the Japanese are relocating to Eastern Europe, which is also outside the single-currency area, and British unemployment is still at 5.3% compared with 9% in the euro-zone. While that remains the case—and the euro continues to fall in value—the single currency is likely to be a hard sell in Britain.

Indeed Mr Blair’s statement—as well as being an electoral tactic—is also a sign of despair over the prospects of winning a vote on the euro. The numbers of Britons saying they would vote against membership has risen steadily ever since the currency’s launch. The latest MORI poll showed 56% against joining and just 27% in favour. MORI’s boss, Bob Worcester, who just a few months ago published an optimistic pamphlet on how the government might win a euro-referendum, now says that victory for the “yes” campaign is a virtual impossibility, even in the next Parliament.

The likeliest scenario is that a referendum on the euro will recede ever further into the future. Lord Owen, a former Labour foreign secretary who is campaigning against British membership, has said that his goal is not to win a euro-referendum, but to create a political climate in which it is impossible to hold one. So far, he is doing well.

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