UK government denies it pushed businesses into euro compliance

The UK government has denied it encouraged British business to spend millions of pounds on making IT systems ready for the euro. The comments come in response to accusations made yesterday that it forced companies to spend money on compliance before confirming whether the UK will join the single currency.

The accusations were fired in an open letter written to Tony Blair from the Federation of Small Businesses (FSB), the Institute of Directors and Business for Sterling.

A spokesman for HM Treasury said: "We have never told businesses to do anything." He insisted the government's only aim over the last year was to raise awareness and not to encourage spending.

But according to the then chief secretary of the Treasury, Alistair Darling, the $7.5m euro-preparation campaign launched last autumn, titled 'Get ready for the single currency' was not just about raising awareness. Darling was quoted in an official statement released in October: "Now is the time for business to start preparing for a single currency."

A spokesman for the FSB responded to the government's denial: "The government has put constant pressure on all companies to prepare for the euro. It really must take responsibility for that pressure and it must acknowledge that every statement they make about preparation entails huge costs for business."

The spokesman concluded that the government must make a decision on EMU so businesses can base their financial decisions on reality rather than guesswork.