'THE EURO REVOLUTION ON OUR DOORSTEP'

29 AUGUST 2001

We went to Ireland for our holiday this year. We had a week in the South West, in Cork where the people are friendly, the views and walks magnificent, and even the weather sunny. The little towns and villages dotted along the coast have supported themselves through fishing over the years, and now welcome visitors in a growing tourist trade.

But the most striking thing about Cork this year was not the weather or the food but the advertisements heralding the arrival of the Euro. At the beginning of 1999, the Republic of Ireland qualified for entry to the Euro. Since then their exchange rate has been fixed against ten other European currencies, and all bills and prices have progressively been printed in Irish pounds and Euros.

As of January 1st 2002 Euro notes and coins will become legal tender. So the banks and government are explaining to people that they will have six weeks when they can use both old and new currency, and a mere three months until the 'punts' kept safely under the mattresses must be cashed in.

What struck me is that there is a revolution taking place on our doorstep - and we hardly know it is happening. Irish citizens are, as of January 1st , going to be able to use their currency when they go on holiday all over continental Europe, with none of the hassle and cost of exchanging their money.

I think this is going to have more of an impact than we realise. The London-Dublin air route is now the busiest in Europe, and we don't even need a passport to get into the Irish Republic. Southern Ireland will be more integrated with the continent than the UK - and to all appearances thriving from it.

That's why I just don't understand the position of those like the Tory leadership favourite Iain Duncan Smith who say we should never join the Euro. Every conversation I have with businesspeople in South Shields who rely on selling their goods in competitive markets tells me that the 'never' position threatens to sacrifice our economic well-being on the altar of dogmatic anti-Europeanism.

The evidence from around the world is not just that economies are becoming more closely linked, as the growth of financial and trade flows means that decisions in one part of the world have profound implications for places and people miles away. We know that from the impact of foreign investment decisions on the North East.

But it is also true that more and more countries are seeking the economic security that they believe comes from attaching themselves to the major currencies. Although the pound is an important global currency, it risks being squeezed between the bigger currency blocks. That is one reason why it is right in principle for us to seek to join the European single currency.

But just as it is wrong to say 'never', it would be foolish to say yes 'whatever'. We have to get the economics right. The government has said it will assess the economics of Euro entry by the middle of 2003. So the decision may be upon us sooner than we think. But I thought I picked up an interesting indication of opinion at the first all-member meeting I held for all Labour Party members in July. Someone asked me about Euro entry, and we had a straw poll of the people present. The large majority thought it would be in our interests to join the Euro.

In the end, it will be a matter for all of us. The government has promised a referendum before entry. If you book your next holiday in Ireland, you will get a taste of what life could be like.