Fears of industry meltdown boost support for euro

The recent spate of warning of a meltdown for manufacturing industry if the UK stays out of the euro has boosted support for the single currency, a new poll shows.

The recent spate of warning of a meltdown for manufacturing industry if the UK stays out of the euro has boosted support for the single currency, a new poll shows.

Although the British public is still hostile to euro membership, opposition is at its weakest level for about a year. A poll by Mori shows 51 per cent oppose membership against 31 per cent in favour.

This leaves a balance of opinion against euro entry of 20 per cent, compared with 36 per cent in May and the least negative since the launch of the currency at the start of 1999.

Split down according to political bias, the survey found that Labour voters backed membership for the first time in at least a year, albeit by a tiny two per cent margin. Half of Tory supporters reject the plan compared with three-quarters in May.

Salomon Smith Barney, the investment bank that commissioned the survey, said the swing reflected the impact of the warnings over jobs. A number of companies, including Ford, steel giant Corus and Toyota, had either cut jobs, announced plant closures or warned that future investment was at risk from the high pound.

Senior Cabinet ministers including Robin Cook, the Foreign Secretary, Peter Mandelson, the Northern Ireland Secretary, and Stephen Byers, had publicly argued that the high value of the pound relative to the euro was damaging to industry. This contrasted with virtual silence in the early months of the year.

Michael Saunders, its UK economist, said "The drop in public hostility to economic and monetary union [EMU] probably reflects evidence that the strong pound has a downside."

He said the pro-euro case was damaged in 1999 and earlier this year by the perception that the euro was a "weak currency". "Now the cost of the high pound - lost jobs in manufacturing - is clearer, allowing the pro-EMU camp to link lost jobs with the UK's decision to stay out of EMU," he said.

"Whether this is true or not, one cannot deny that the pro-EMU camp now have a better line of argument that previously."

Meanwhile, Sir Stephen Gomersall, the British ambassador to Tokyo, whose leaked memo warned that Japanese firms would pull out of the UK if it stayed out of EMU, said he stood by his views. Speaking in Okinawa, where the leaders of the Group of Seven industrialised nations plus Russia are meeting, Sir Stephen said he believed the UK was still attractive to investors for other reasons.