The Budget next week will provide a further chapter in Britain's complicated and often difficult relationship with the rest of Europe.

In his statement, Gordon Brown will report on the progress being made on the economic reform agenda within Europe. The chancellor sees reform as essential if we are to move towards sustainable and durable convergence and thus enable a Britain within the single currency to achieve high and stable levels of growth and employment with strong public finances.

But next week's progress report will have added significance. A further Treasury assessment of the five economic tests for euro entry and whether they have been met will depend on the extent of progress on the reform agenda. To put it bluntly, little or no progress on reform will mean no assessment.

There is a danger in this position. It is that the progress of reform test is seen as a way of putting a hurdle in the path of joining the single currency. Indeed, I am sure there are some who would like it to be exactly that.

I do not put Mr Brown into that camp. Having worked with him in the Treasury I do not regard him as a barrier to Britain's joining the euro. But he will recommend joining only if he is convinced of the long-term benefits of doing so. This has to be the right approach - putting the national interest ahead of what might be a desirable political objective.

However, that does not mean we cannot be more pro-active in putting in place a process that keeps open the option of joining the euro, subject to the support of the people in a refer-endum.

We are now at the stage where a twin-track approach is necessary. A clear timetable for assessing the five economic tests needs to be set out and alongside this there has to be a concerted effort to demonstrate the potential benefits of joining the single currency.

A timetable would demonstrate that the government is serious about the possibility of joining. The carrying out of a further assessment should no longer be subject to conditions. What is needed is a specific date or occasion - such as the Budget or the pre-Budget report - when a report will be made on the outcome of the assessment.

Simply providing a timetable for the assessment to take place, while welcome, will not in itself be enough. The case for joining needs to be made constantly and with confidence. The government must move away from its present position of "prepare and decide" to one of "campaign and convince".

The chancellor himself would need to be at the forefront of a national campaign. He would need to explain that the success of the British economy would not be at risk if we were to join the euro when the economic conditions were right. On the contrary, the potential benefits for Britain of membership of the single currency are becoming increasingly clear.

It has been estimated that lower transaction costs would be worth about

Pounds 1bn a year, with small companies enjoying proportionately greater cost reductions than larger ones. Diminished exchange rate volatility would bring gains for all companies, but especially in the manufacturing sector.

With the advent of the single currency, there has been an expansion of trade within the eurozone. The Treasury calculates that, with Britain in the euro, trade with the eurozone could increase substantially - perhaps by as much as 50 per cent over 30 years.

In relation to interest rates, the Treasury's view is that business should experience a cut in the cost of borrowing on a sustainable basis, with a long-term boost to cross-border investment flows and foreign direct investment in the UK.

Looking more broadly at the consequences of euro membership for trade and output, the Treasury calculates that national income could rise over a 30-year period by between 5 per cent and 9 per cent. This would increase potential output and national wealth by up to Pounds 3bn a year.

These are the potential benefits of joining the euro, and the British people need to be made aware of them. The government must recognise that you cannot win an argument unless you go out and make one.

Just as there are risks to joining before a clear and unambiguous case has been made, there are also dangers in delay once sustainable and durable convergence has been achieved. Once this happens the public needs to be ready to support membership. The task of preparing it for this must start with next week's Budget.