Select Committee on Treasury Minutes of Evidence


Memorandum submitted by Mr Nick Sparrow, ICM Research

ENGAGING THE PUBLIC ON THE EURO

  The polls say that most people are opposed to the Euro, but few are solidly opposed or fervently in favour. So while many people are mainly against the idea of the Euro, it is possible to imagine that at some point in the future their opposition might soften. Large scale quantitative polls tell us that these people are most likely to be found in demographic groups that are least likely to take political news of any sort seriously, unless it is an issue that they feel is going to be important to them. The more interesting question is why people think the way they do on the Euro, and for that qualitative research gives us a far better insight.

  For some political issues one can easily trace a line of reasoning voters follow to reach the conclusions they do. But sometimes it is a fog of emotions, attitudes and half developed reasoning that gradually coalesce into a settled view, but it is almost impossible to say precisely how voters have reached their conclusion. Attitudes to the Euro have developed out of a number of such thoughts.

  1.  Mention the Euro and most people immediately bristle. Why? Some are instinctively suspicious that Continental Europeans want to take over, and get by this means what they have failed to achieve in conventional warfare. The feeling that Continental Europeans are not really "on our side" will have been confirmed by arguments with France and Germany over military action against Iraq.

  2.  Some others remember decimalisation, or have parents who warn them that any change in the currency is used to mask big price increases. This suspicion will have been confirmed by news stories suggesting the switch to the Euro has resulted in price increases across Euroland.

  3.  Many people will say that going into the "Euro" means going into "Europe" often using both words in the same sentence. It happens too often for it to be a slip of the tongue by a few respondents. It may be that many people see adopting the Euro as a large and irrevocable step towards a united Europe, therefore going into the Euro means going into Europe.

  4.  Some people clearly fear being left out of the Euro party. The fanfare of the initial announcement, the introduction of notes and coins in Euroland left some feeling that we may be missing out on something. Despite their hostility to the idea of the Euro some were unsure that our decision to stay out was the right one, especially given the obvious enthusiasm of participating governments.

  5.  There is a feeling that Britain was a Great but is now a small island anchored off Europe. Few can accept that Britain has the fourth largest economy in the world; they would place us in about tenth position. Therefore our ability to withstand the will of continental Europe is, for some, in doubt.

  6.  Many simply don't understand the economic arguments and openly admit to being confused. Will we get the price of their Mars bars or will they get ours? What will happen to pensions? Will they be able to come over here and raid our pension scheme? Have we got to give them all our reserves?

  The polls suggest that voters remain hostile to the idea of joining the Euro. The graph shows that opposition is at present just as strong as it has always been.


THE PRO-EURO ARGUMENT

  In the run-up to the launch of the Euro, the pro-Euro lobby expected feelings of inevitability would soften the resolve of those opposed to the Euro and that, however reluctantly, voters would begin to accept that we would have to adopt the Euro at some point, and therefore we might as well get on with it. But the Euro has been a reality for four years now, the world has not fallen apart, and the window of opportunity, to get people to agree to the Euro on the basis of inevitability, may have gone. Of course the Eurozone economy may start to sparkle and the British economy stumble, in which case opposition to the Euro may subside. But the Government here may suffer a significant drop in support if the economy does start to slide shifting the balance of power back towards a Euro-hostile Conservative party.

  The pro-Euro groups also hoped the introduction of notes and coins, and experience of them on trips abroad would encourage some to drop their hostility. But people who tend to travel abroad to the eurozone on holiday were, by the time of the introduction of notes and coins, more enthusiastic about the Euro than others. Indeed, were the decision left to them alone, we would probably join the Euro. But they did not become even more enthusiastic as a result of handling the currency, and others who do not tend to holiday in the eurozone (the majority of voters) remained firmly opposed. Therefore polls conducted before and after people had visited Euroland countries showed no signs that the public was warming to the new currency.

  Equally some voters have reasoned that pro-Euro arguments don't hold too much water. Price transparency will not, they think, lead to lower prices. Although some things are cheaper elsewhere in Europe it does not mean we will get those prices here. Eating out may be cheaper in Spain, so what! We already know cars are cheaper elsewhere in Europe, we don't need to adopt the Euro to confirm that fact and we still don't get cheaper cars here.

THE FIVE ECONOMIC TESTS

  The government has attempted to give the impression that a serious assessment is taking place on the basis of the five tests. Yet only 17% of people have ever heard of these tests, only 5% know they have something to do with Europe or the Euro and only 2% could correctly name one or more of these tests. Therefore, if the government were to announce that, after careful consideration the tests had been met, few would believe them. The most likely explanation for this apparent ignorance is a totally logical mental reaction to a piece of news that lacks credibility: it is immediately forgotten.

  The same scepticism is shared by businesses. In a survey of 1,000 managing Directors of companies of all sizes, 39% thought the government would hold a referendum if they the polls suggested they could win and regardless of the economic case. Only 17% thought they would hold a referendum if the economic case is clear but the polls suggest they would not win.

THE NO CAMPAIGN

  There is much confusion about the economic issues surrounding the Euro. But there are signs that a consensus is slowly forming around the argument that adopting the Euro means giving up control over interest rates and therefore over monetary policy. It is the one sound argument from either side of the debate that many can now understand, and gives a reasonable argument to back up historically based prejudices.

INFORMED PARTICIPATION

  Many voters feel that the Government want to take us into the Euro, in spite of the fact that the polls say most people are opposed. Perhaps this reflects the perception that the Government is preparing for entry but is not engaging the no-campaign in serious debate. This feeling is so strong that some think they will not get a chance to vote in a referendum at all despite what the Government says. Therefore, some do not pay too much attention to the debate, because they feel their views are irrelevant.

  While struggling to see how the Euro will benefit individual consumers, many people will accept that the Euro will be good for big business, especially multinationals. Unfortunately this encourages the view that the opinions of ordinary voters do not count.

  Voters are ready to accept that they are badly informed about the Euro. In any discussion many will call for someone (preferably independent of the two campaigns and not a politician) to tell them what the real issues are so that they can make an informed decision. This demand to be informed may reflect the poor standard of debate so far on the issue of the Euro, but may also be aimed at defending their continuing ignorance. Indeed many will admit they would be unlikely to read any detailed arguments both for and against adopting the Euro, no matter how carefully set out.

  Many will also say that they will start to concentrate on the issues when a referendum is called. Again this may be an excuse for their continuing ignorance. But in any event it is a campaign many people think is some way off, given the state of the polls on the issue, and the perception that Mr Blair will only call a referendum when he is sure of winning it.

  It would be wrong, therefore, to take at face value the demand by most voters to be informed and imagine that they are likely to engage in a debate in advance of a real campaign.

  Voters will engage in a debate, if the issue is of importance to them in their daily lives, if the arguments are made clearly and with passion by both sides and if people perceive they will have a chance to vote on the issue. Most have an informed view about Iraq, and whether or not we should go to war. It is because politicians on both sides have been willing to stand up and argue their case, without reference to what the polls say. The same passion is required if people are to become better informed about the Euro.

March 2003



 
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