Endless debates about whether Britain should adopt the single currency divert attention from more important matters

No director-general of the Confederation of British Industry has ever said a truer word than Digby Jones, when he warned this week that the sterile debate over whether Britain should adopt the euro has distracted attention from the more immediate issue of making the single market work.

The debate has become endless. I gave my first talk on the subject to a bemused audience of German retailers in Munich in 1988 while the Delors committee, which laid down the initial blueprint for economic and monetary union, was still sitting. The euro is up and running, even though it is conventional to regard its exchange rate as "too low". It is the UK aspect of the debate that is so interminable.

Wim Duisenberg, president of the European Central Bank, was quite right to say that it would take several years - if at all - for the UK to become sufficiently similar to the present 11 euro members to meet either the Maastricht requirements or the British government's own convergence conditions.

Of course, if there were an overwhelming desire on the part of the British government and the governments of Germany and France for the UK to join, the technicians at the ECB could be overruled. But no such enthusiasm seems at all likely. Gordon Brown, the British chancellor, seems happy to carry on with the present internal framework of monetary policy; and it would be extremely difficult for Tony Blair to overrule Treasury warnings here.

Gerhard Schröder, the German chancellor, has far too much on his plate to want to lead a crusade for British membership; and he will in any case be careful of going on another Third Way jaunt with Mr Blair after the sad reception of their joint Neue Mitte pamphlet.

If the issue were shelved for five years, the British government and British companies could concentrate on other issues. The European Union itself could attend without distraction to the more important matter of enlarging the Union to the east so that it would at long last be truly European. It could also switch its energies to promoting another trade round and to ironing out the many frictions which still prevent the single market from operating as it should.

There is no need for a British prime minister to swear on the Bible that he will not advocate euro membership for five years. All he needs to do is to give this assurance on the basis of present evidence and foreseeable circumstances.

One can almost hear the sigh of relief going up throughout the land if he did so. An incidental advantage for the government is that if the euro went on hold, it would be difficult for the Conservatives to make "surrender to a Federal Europe" an issue at the next election; and Labour would be able, as it so much desires, to fight that election on its domestic record. (That is, however, an incidental advantage and not a reason why an outside commentator should urge it.)

On present indicators, convergence seems as far away as Mr Duisenberg thinks. Sterling is about 20-35 per cent above a realistic exchange rate on most economic models; and even if the switch in trade towards high technology and service products has made these estimates out of date, it is inconceivable that any British government would take sterling in at recent rates equivalent to DM3.20-DM3.30 to the pound. At the very least, it will have to fall to around DM2.90; and even then many industrialists and economists would be outraged.

The strength of both the dollar and sterling are explicable on the assumption that the present interest rate relationships will continue to hold. US interest rates are on an upward path; and UK rates are likely to rise next week. ECB rates could rise either today or a month or two after.

Nevertheless, pressures towards higher rates are far from uniform. They are at present much stronger in the two English speaking countries than in the euro-zone, where there is still quite a lot of slack, with unemployment nearly 10 per cent and underlying inflation extremely low. The US, by contrast, is in the middle of a raging boom, which dictates a tighter policy, quite apart from fears about a Wall Street bubble. And the UK is moving more slowly in the same direction.

There is, however, a chance that a superficial convergence may arrive. It is just when some pattern of events is written off by respectable observers that it is most likely to happen. The most likely trigger would be a Wall Street setback. This would bring down the dollar, and sterling with it, against the euro. But in order to prevent a stock exchange correction from spreading to the rest of the economy the US Federal Reserve would reverse engines and relax as far as it dared. So, to a lesser extent, would the MPC.

On the other hand, the upturn now under way in euro countries could turn out surprisingly strong. Monetary policy is very relaxed there, whether judged by the money supply or indicators that take account of the stimulus from a depressed euro. If the ECB has eventually to tighten more than now expected and the Fed and the Bank of England were to cut rates, we would see, first, a fall in sterling to a more negotiable level and, second, a convergence of British and euro interest rates.

But this would be more like two ships passing in the night than moving in convoy. Indeed, a big movement of euro and British interest rates in opposite directions would underline how different the business cycles remain in the UK and the euro-zone.

As anything that can be misunderstood will be misunderstood, let me say that Britain could manage a policy for non-inflationary growth just as well with the ECB regime as with the MPC. If a political deal could be done, there would be a case for brushing aside the Maastricht requirement of a two-year membership of the Exchange Rate Mechanism - or its equivalent of two years of exchange rate stability.

Moreover, if sterling is abolished, rather than put into an exchange rate regime, there is no reason why the conversion rates into euros should not be decided by governments. But as I cannot see any of this happening, it is more important to kick the euro issue into touch.