Mr Michael Portillo who appearances to the contrary is not wholly foolish has

Mr Michael Portillo, who (appearances to the contrary) is not wholly foolish, has seen this. That is why he has from the beginning been against any promise of a referendum on a single currency. It is hard to understand why Mr Clarke, who is at least as acute politically as Mr Portillo, has not seen it as well.Part of the explanation is, I suspect, that Mr Clarke enjoys being depicted as the Europhiles' friend. If this did not happen, the proposal would be put to the people, supported by a united cabinet, by Parliament and, we may be fairly sure, by the bulk of supposedly respectable opinion.

Certainly it would be possible for the Commons to reject the recommen- dation. But that would almost inevitably mean the fall of the government. As I have indicated in this column several times, correctly anticipating last week's announcement, a referendum in the form in which it is proposed can be of benefit only to Mr Clarke and the Europhiles.To begin with, the Cabinet must be in favour of joining the single currency This must then be approved by Parliament. Why then all this fuss? There is not the slightest need for it, except a psychological one inside the Tory party.It is difficult to see why Mr Kenneth Clarke should have donned his combat- gear as he was reported to have done, at one minute threatening resignation, at the next withdrawing his threat, or claiming to have been misunderstood about it. For a single currency to be a pressing concern to the Conservatives, there must be, first, such a currency in existence and, second, a Conservative government The former is more likely than the latter. This can hardly have been so, for the referendum gave them precisely what they had always wanted, Britain in Europe. What had gone before was, as Lord Jenkins explains in his memoirs, more crucial to the formation of the SDP: the disgust, including the self-disgust, brought about by the whipped votes against the Heath government on minor points, after 69 Labour members had already supported it on the principle of entry.The referendum promised by Mr John Major is certainly intended likewise to prevent any breakaway from the Conservative Party.

The party in office is behaving over Europe in exactly the same way as the Labour Party in opposition used to over a variety of topics. It was then cleverly adopted by Wilson to serve completely the opposite purpose: not to get us out of Europe but to keep us in and, additionally, to unite Labour.Someone wrote last week that it was Labour's referendum which had laid the foundations for the breakaway of Lord Jenkins and the others to form the Social Democrats. All these pay interest at a variable rate.Britannia's 7 per cent fixed-rate Tessa is also highlighted, as is a Tessa offered by Bristol & West, whose returns are linked to the performance of the stock market. As a result of an improvement to the tax breaks on these policies, which came into force this weekend, insurers are in effect dropping their prices, albeit while reducing cover for some. This insurance is called permanent health insurance, or sometimes income replacement or income protection insurance. It is an important area for the self-employed to consider because state benefits are limited for the self-employed and those that may be available (such as means-tested income support) will provide only a low income.From the new tax year (which started yesterday), policy payouts will be wholly tax-free. Previously they were tax-free only for the first year of any paid claim.

As a consequence, insurers have seen fit to reduce their own payouts, thereby allowing them to charge lower premiums. The net effect for such policies is a reduction in the after-tax benefit for the first year of a claim, but broadly the same level of after-tax payout thereafter.Income protection can be complicated. "Get a range of quotes and read the small print because they are not always straightforward policies," says Phillip Cartwright of financial advisers London & Country.The cost depends on various factors including your age, sex, the type of work you do and health history, and can vary significantly from one insurer to another. There has been no repetition of the defence row of 1959-64 or the European (then called the Common Market) dispute of 1970-75. This ended with the referendum of 1975, which was the inspiration of Mr Tony Benn.