Euro referendum ‘could finish Blair’
LONDON: Tony Blair would be forced to quit as Prime Minister if he lost a referendum on the single currency, Lord Owen said recently. The former Labour foreign secretary and a leading member of the “no” campaign said defeat would destroy Mr Blair’s reputation.
“You cannot go to the country on a major issue as Prime Minister and be defeated and then expect to carry on in the same way - that is the risk of a referendum,” he said. “It really does destroy the personal authority of a Prime Minister if they lose.” He was participating in a television talk show. He said Mr Blair understood the risks. “Oh yes, he knows that. It wouldn’t happen immediately, but within six to nine months he would no longer be Prime Minister.” “There’s no doubt that in that situation, Gordon Brown - who will probably, sensing the mood, distance himself from the Government during a referendum campaign - would be the person who people would tend to turn to.”
His brutal assessment of the possible consequences of a referendum came amid fears of £15 billion worth of tax increases if the Government joined the euro. Economists expect interest rates and the value of the pound would have to fall to bring the economy into line with the euro-zone. Cheaper money and a devalued currency would in turn threaten higher inflation. A report prepared by Goldman Sachs which has been passed to the Treasury is understood to paint a stark picture of how much taxes would have to rise to keep the economy from overheating. —LDT