LABOUR divisions on the single European currency deepened yesterday when the former leader of the party's Euro-MPs called for an immediate Government campaign in favour of scrapping the pound.
Alan Donnelly, who resigned as a Labour MEP for the North-East of England last year, challenged the refusal of Gordon Brown, the Chancellor, to make an assessment before the next election of whether Britain had met the economic tests for joining the euro.
In an attempt to prevent membership of the single currency becoming an election issue, Mr Brown has declared he will not give "running commentary" on the five tests, which he set in October 1997.
Mr Donnelly said the public should be told how Britain was converging with "euroland" in order to prepare it for the prospect of joining the single currency. He said: "We cannot wait until after the next election to have an in-depth debate among the public. There is now such compelling evidence for Britain's membership we shouldn't give the impression that we are nervous or unsure."
He was speaking at a press conference in Westminster marking publication of an academic study by Prof Andrew Rose, international business professor at the University of California, which claimed that Britain's trade with the eurozone nations could eventually triple if it joined the single currency.
The boost to output could be 20 per cent over the next two to three decades, although he acknowledged that he had "ignored" the political considerations of joining a currency union. But the report's conclusions were challenged by three economists who are sceptical about the single currency.
Prof Patrick Minford, Prof Roger Bootle and Ruth Lea said the study drew almost exclusively on currency unions between one major economy and several tiny economies - though European economic and monetary union was made up of developed economies of medium or large size.
"This absurd study is irrelevant to the British debate. It is not credible to use the trading relationship of Italy with the Vatican, or New Zealand with the Pitcairn Islands, to argue about the impact of a single currency on Britain, the world's fourth largest economy."
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