In recollections of the 1997 general election, Europe will be remembered as the issue which ultimately drove a wedge through the Conservative Party, destroying its reputation for competence (Marquand, 1998) and helping to ease New Labour into power. Although Europe featured more prominently in respect of attention than in previous elections, Labour was exceedingly cautious throughout about making commitments that would bind the UK more deeply into the European Union (EU). Yet within months of acquiring office the issue was dominating the political and economic agenda. For a government keen to tout its claims of modernity and progressiveness it has become an unavoidable issue, presenting a notable challenge to a party that appears resistant to making a firm commitment to European integration whilst being positive in its references to the process. This paradox will be investigated in view of the reality that policy on Europe intersects with the two most critical issues to the Labour leadership: economic policy and party unity (Shaw, 1994), the twin pillars on which party renewal and modernization have been constructed.