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Pressure grows for euro vote delay

A new poll of British businesses has increased the pressure on ministers to delay any euro referendum until the next parliament.

With Gordon Brown and Tony Blair set to decide on their five economic tests by June, a poll of British Chambers of Commerce members found businesses wanting more proof that joining the single currency would benefit Britain.

Published on Wednesday, the poll found that 49 per cent wanted the government to "wait and see" before joining, even if the five tests were satisfied.

In contrast, 35 per cent supported dropping the pound as soon as possible, while just 13 per cent would not support such a move under any circumstances.

"A positive outcome to the five tests will not be decisive in convincing the business community, particularly smaller businesses, that the time is right for Britain to join the euro," said Isabella Moore, president of the BCC.

"If the government wishes the UK to adopt the euro within this parliament, then it is going to have to produce more evidence of the benefits of euro entry. However, the survey shows that few businesses want to rule out euro entry altogether."

Only a third of businesses have made preparations for UK entry to the European single currency, while 40 per cent have prepared for the euro as a foreign currency.

Although businesses predicted benefits from British entry, there were also fears of possible pitfalls.

Of those questioned, just over half expected improvements in exports while just under half expected an improvement in business competitiveness, and 43 per cent predicted a rise in inward investment.

However, the majority of British businesses felt that regulation would increase, just over half expected a rise in taxation and 63 per cent thought that the government's control over the UK economy would be weakened.

"The results show that there are low levels of understanding amongst businesses of the likely impact of euro entry. This is a cause of concern and needs to be addressed," said Moore.

Conservatives said the survey was a blow for the government.

"The majority of businessmen and women in Britain don't want to join the euro even if the government says said its so-called economic tests had been met," said Stephen O'Brien, shadow Treasury spokesman.

"This survey is a blow to Labour's hopes of taking us into the euro. Business thinks that if we joined we would lose control over the economy, be more heavily taxed and more heavily regulated."

Published: Wed, 8 Jan 2003 01:00:00 GMT+00