Leading Article: Hague can save the People's Europe

UP AND down the country, thousands of people are angry. So angry that many of them will converge on York this weekend to protest, rally, condemn, wave banners and hear angry speeches. What is it this time? Not fox hunting or beef on the bone, but the single European currency. Oh that, you might say. Whatever happened to the euro? It prompted the late James Goldsmith to make "the most important video you will ever watch", delivered free to millions of homes in the run-up to the election. It was about sovereignty, our future as an independent nation state, the end of a thousand years of history. It was the issue which split the most successful party in the democratic world from top to bottom, forced a sitting prime minister to beg his own party not to "bind his hands" in the middle of an election campaign, and sent the Conservatives crashing to humiliating defeat.

Then ... well, then it went quiet. Tony Blair's strategy has been to send the issue to sleep, bathed in the soothing balm of pragmatism and a willingness to join in principle - but not yet. Meanwhile, Tory wishful thinking that the project was bound to go belly-up before E-day has evaporated, with the Big Moment now only nine months away.

William Hague's dilemma is now acute: big business, which has long been his party's core source of funding, broadly welcomes the euro. Little England, which has long been his party's ideological bedrock, swears to die in the last ditch holding out against it. They are gathering under the banner of the Anti-Maastricht Alliance and the slogan "Save Our Pound" to lobby European finance ministers in York today.

When Mr Hague became leader the party yearned for clarity, so he went with the Little Englanders. But now that gamble looks an increasingly shaky bet for the long term. And he has found himself tied in knots over the wording of the policy: opposed to joining the single currency for 10 years, opposed for two parliaments, opposed at the next election. The ultras do not like it because they are against the euro in principle and for always. Businesses do not like it because they do not want to get left behind. And the general public do not understand it.

It is clearly time for the Conservatives to find a new approach. The stage was set by Mr Hague's unlikely advance guard, Michael Portillo. Last year he was used to trail caring Conservatism before Mr Hague's conference speech. Last weekend he sounded like a Private Eye parody apology on David Frost's soft sofa. He may have given the impression, he almost said, that supporters of the euro were wicked federalists plotting to take away Britons' birthright by stealth. He now wished to make it clear that he "respected the point of view" of those who believe the euro will unite Europe and avoid future wars. He still disagreed with it, but "if that is the enterprise they have embarked upon, I wish them well."

This week the elements of a new policy were floated in the press. It was suggested that Mr Hague would drop any fixed timetable for opposition to the euro and set out instead the tests for membership. In addition, he would shelve the idea of a referendum of party members on the issue. Conspicuously, none of this was contradicted by the Tory leader's speech to small business people yesterday.

The question is: is this a plausible strategy? Our answer: not really. For the rag-bag of the Anti-Maastricht Alliance, it is a simple sell-out. It does not matter how tough and impractical Mr Hague's criteria are, merely by setting out the conditions under which he would support Britain's theoretical entry into monetary union, he would be repeating the one error their heroine Margaret Thatcher admits to making - that of moving into the grey zone marked "when the time is right".

That will not satisfy Lord Tebbit, with his vivid comparison of Economic and Monetary Union to the Titanic, nor Lord Shore, accusing Gordon Brown of trying to sell a "poison package" to the British people.

It paves the way for a rapprochement with business leaders - except for Euro-sceptic millionaire Paul Sykes, who is paying an opera singer to serenade the Chancellor and his fellow ministers with "Land of Hope and Glory". But most businesses would probably prefer to deal with a Labour Government that was more constructively engaged with the euro currency zone.

None of this, however, is nearly enough. Mr Hague urgently needs a bigger theme with which to transcend the divisions of his party and the apathy of the majority of the public.

Luckily, Mr Blair's softly-softly approach to Europe provides him with precisely such an opportunity. Why should the Tories not seize the rhetoric of a People's Europe and make it their own? Why not outflank Labour by proclaiming the goal of a democratic Europe? After all, as a party of recent government, they know all about how the institutions of the European Union are governed by deals and trade-offs behind closed doors. The one criticism that supporters and opponents of European integration agree on is the "democratic deficit" - that the EU's ruling bodies are too remote from the continent's peoples.

The sceptics are right to point out that the Danish government went on holding referendums on Maastricht until it got the "right" answer (they have another one shortly on the Amsterdam treaty revisions). They are right to point out that the German people are opposed to the euro.

There is no doubt that the European Parliament is a deeply flawed democratic assembly. For all the brave talk about opening up the Council of Ministers, it remains an obscure series of closed meetings.

The People's Europe theme is consistent with moderate Euro-scepticism. A truly democratic Europe would have hesitated for much longer over a single currency. It would have had a long and open debate over the extent to which the European Central Bank should be under political control.

It is not too late to propose a new constitution for Europe: far from it. With the imminent end of the Helmut Kohl Era, and the expansion of the EU by up to 10 more members, now is precisely the time, especially for a party freed from the constraints of office, to move boldly beyond an acceptance of the state of Europe as it is.

Labour seems to have settled too easily into the technocratic consensus of Brussels cabals, with simultaneous translation. If the Tories show imagination, they have the chance to lead the European argument once again.