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Hain calls for early euro vote

The pound could be scrapped within three years, the Europe minister Peter Hain has said.

In a move which has provoked claims that Labour is planning to "steamroller" the British people into the euro, Hain says the chancellor could make a decision on his crucial five tests this autumn.

Interviewed by France's "Le Figaro" newspaper, Hain outlines an entirely new timetable to single currency membership.

To the dismay of cautious cabinet ministers Hain suggests that Brown could give the green-light to a referendum in the spring of 2003, with full euro-zone membership by late 2005."The chancellor has already stated that the analysis of the five economic tests will be completed by June 2003," Hain said.

"I don't think that he will wait until this 'buffer' date before presenting his findings to the government. I don't know when he will submit his findings, whether it's in the autumn, the winter or next spring.

"If the result is positive and if the government follows the chancellor's advice, then we'll need around four months to get the referendum through parliament. Then there will be the campaign. Between the government's decision and the referendum, you're looking at six months."

Reports suggest that the pro-Europeans in the government are determed to lock the UK into a euro-zone ahead of the next general election.

They are said to be concerned at the political implications of any plans which could result in a general election coming after a euro referendum but before the introduction of notes and coins.

Hain insisted that the government could move quickly after a positive referendum result.

"Once the government had secured a 'yes' vote, the programme to replace the pound with the euro would probably take two to two-and-a-half years to roll out," he said.

"However, the process could also be speeded up, because we could draw on the experiences of our European neighbours who are already in the euro."

Assuming a referendum victory after "a hard fight", Hain argues that the UK has no option but to sign up to the single currency or face a "marginalised" future in an enlarged Europe.

"If we are the only country outside the euro, we will be isolated," he said. "I'm not saying that the euro is inevitable. But the alternative to joining will be an isolation which will be anything butsplendid."

And attacking the Conservatives, the minister for Europe branded euro-opponents as "enemies of Europe".

"The enemies of the euro are also the enemies of Europe. What they want is the withdrawal, pure and simple, of the United Kingdom from Europe and an association with the American bloc," he said.

The Tories have accused the government of trying to bully people into the single currency and shadow foreign secretary, Michael Ancram branded the interview "a crude attempt to steamroller the British people into taking a leap into the dark".

"He has insulted 70 per cent of the country, people who are happy to co-operate with the rest of Europe but who are determined to keep control of their own jobs and mortgages," he said.

Lib Dem spokesman on the economy Matthew Taylor welcomed Hain's comments and called on Gordon Brown to make the euro timtabel a priority.

"It's not steamrollering, it is a simple truth which the chancellor should admit. Setting a timetable for a referendum, to allow the British people to decide one way or the other, should now be a priority for the chancellor," he said.

Published: Wed, 20 Feb 2002 01:00:00 GMT+00