Union boss warns of euro price hikes

DITCHING the pound would mean soaring prices and crumbling public services, according to Chancellor Gordon Brown's closest union ally. Transport union boss Bill Morris at the weekend called on the Government to concentrate on rescuing Britain's health and education services, not the single currency.

He also warned that joining the euro would cause price rises - which would spark demands for big wage rises. Morris's remarks echoed a report from the Chancellor last week, outlining his calls for extra research into the euro's impact on prices.

The similarities between the messages caused speculation that Morris's move, on the eve of the TUC conference in Blackpool, was orchestrated by Brown. And although the TUC officially backs early entry to the euro, a poll has found that fewer than a third of trade union members are in favour of joining the single currency.

Morris, the Transport and General Workers Union chief, said there was evidence that companies had used the euro to sneak through drastic price hikes. In a warning to business, he said: 'The T&G will not allow the impact of higher prices to go unchallenged. Artificial prices will lead my union to put in higher wage claims. We will demand higher wages to compensate workers for higher prices.'

Morris also emphasised the need to use cash raised from the National Insurance rise to save the Health Service, telling journalists: 'Public services should be the number one priority.' He condemned Foreign Secretary Jack Straw and Europe Minister Peter Hain for 'running all over the country, not arguing the case for public services but arguing the case for the euro'. A number of other leaders, including those of engineering union Amicus, RMT rail union and public sector union Unison, backed Morris.

The ICM poll, reported in The Times, shows 49% of members are against entry and only 32% in favour. With just 22% saying the TUC should campaign for euro entry, a debate on the issue on Wednesday is likely to see a bitter row.

Meanwhile, the Institute of Economic Affairs said in a report published at the weekend that joining the euro would be 'strongly against' Britain's economic interests. Its author Professor Patrick Minford said any gains from entry would be outweighed by losses such as economic instability and rises in tax rates, social support and regulation.