March 9, 2016
This blog post shall consider the lessons we can learn from the UK’s original engagement with the Common Market (as it was then known). Following initial scepticism, the UK applied to join the Common Market in the 1960s and eventually acceded in 1973. There was then a referendum in 1975, in which the electorate voted overwhelmingly to remain ‘in’, on marginally renegotiated terms.
The arguments for Brexit begin with these events. Today’s Eurosceptics make four, interconnected, points, some of which appear to have acquired the status of received wisdom even beyond the Eurosceptic community:
- In 1973, the UK agreed to join a loose free trade area. There was no suggestion that we would otherwise suffer any loss of political and economic sovereignty, or be ‘ruled from Brussels’.
- Even this change in our national status demanded, as a matter of constitutional principle, that the British people be given a voice in a referendum.
- However, that referendum was fought on a false prospectus. The European project was, in truth, a much more extensive attempt by a metropolitan elite (in London and Brussels) to grab power for itself. So there must be a further referendum.
- The UK has a bright future outside the EU. Freed from the shackles of European bureaucracy, it will have the best of both worlds. On the one hand, European countries will be compelled to trade with us, because of our economic strength. On the other hand, we will be able much more easily to do business with Asia and the rest of the world.
I will argue that this ‘received wisdom’ bears little relationship to the circumstances in which the UK joined, and then voted to remain within, the European Economic Community (EEC). Of course, much has changed since the 1970s. Then, the EEC had nine member states. The current European Union is an economic and political union of 28 countries. Many of those countries were then behind the Iron Curtain. Indeed, in the 1970s, many of the present Member States were emerging from Fascist dictatorship (Greece, Portugal, Spain) or remained subject to rule from Moscow (for example, the Czech Republic, Estonia, Poland and Romania). However, as with all such questions, there is considerable continuity, in the facts and in the arguments.
Free trade only?
In truth, no one could really have believed that the EEC was simply an arm’s length trade arrangement. After all, the Treaty of Rome enshrined the ‘four freedoms’, requiring the unrestricted circulation of goods, persons, services, and capital. It placed competition at the centre of the European framework. This capitalist utopia clearly involved more than a free trade area. The architects of the EEC contemplated the creation of supranational bodies: as Jean Monnet pointed out in 1962, one could not operate a common market without ‘common rules applied by joint institutions’. By the 1970s, there were moves afoot towards monetary union and tax harmonisation, with a view to promoting industrial integration. Indeed, the concept of freedom of capital movement itself envisaged economic and monetary union.
Moreover, these concepts necessarily entailed some loss of national sovereignty in favour of a supranational authority. In particular, the European Communities Act 1972, which provided for the UK’s accession, enshrined the supremacy of European Law. The celebrated English jurist, Lord Denning, explained in 1974 that EEC Law was ‘like an incoming tide…it cannot be held back’. Supporters (including at one time even free-marketeers like Enoch Powell) realised that this was a major constitutional change. It involved, and required, ‘full economic, military and political union of the free states of Europe’. Nicholas Ridley, a close associate of Powell then and later, favoured ‘a United States of Europe’; it was, he said: ‘essential for the economic survival of our people that we adopt a more federalist route.’
This opening up to European influences would, supporters believed, bring both benefits and challenges. There would be access to larger European markets, and likely economies of scale for British companies. However, joining would also provide a new discipline for industry. As Nigel Lawson (then an orthodox Conservative pro-European) argued in 1965, the choice for the UK was between backward looking protectionism, and ‘the cold douche of competition’. The former would merely entrench inefficiency. The latter would exercise a powerfully Darwinian effect since: ‘free movement of labour and capital would open up the closed nature…of British industrial life; the increased competition from Europe would force businesses to wake up or go under.’
It is primarily the Right who have suffered subsequent agonies over ‘Europe’. In 1990 Ridley resigned from Thatcher’s Cabinet after complaining that the European Monetary System (EMS) was ‘all a German racket designed to take over the whole of Europe’. Furthermore, he was not ‘against giving up sovereignty in principle, but not to this lot. You might just as well give it to Adolf Hitler, frankly.’
However, their thinking in the 1960s and 1970s had been very different. One element certainly was a slightly fuzzy notion that war in Europe ‘must never happen again’. Most Conservatives also agreed with Ridley’s then view that it was ‘essential for the economic survival of our people that we adopt a more federalist route.’ This required access to European markets and to the rigour of European competition. The Confederation of British Industry (CBI) was enthusiastic, on the basis that a single market would be easier for multinationals. In short, the idea that the UK joined what we thought was a merely a loose trading bloc – nothing more – is demonstrably false.
Why a referendum in 1975?
Referenda on issues of foreign policy (or, indeed, other issues) are not a hallowed part of the unwritten British constitution. After all, the UK joined NATO, became a nuclear power, dismantled its Empire and conducted numerous wars without conducting referenda. These were all thought to be decisions that could safely be entrusted to Cabinet government, answerable to Parliament.
Consistent with this, the UK joined the EEC in 1973 without a referendum and after a parliamentary vote. At the 1970 election, the Conservative Party’s formal position was that it would seek to negotiate acceptable terms for entry. Having negotiated, the government announced in 1971 that it would seek to join. This process was not without political risk. Thus, at the 1971 Conservative Party conference, the Prime Minister Edward Heath demanded and won a card vote in an unprecedented experiment in Conservative democracy. Nonetheless, in the key Commons vote in 1971, 39 Conservatives voted against the government. Heath had to rely on Jenkinsite Labour MPs (a social democratic faction who followed Roy Jenkins).
The UK duly joined the EEC in 1973. Thereafter, the Conservatives identified themselves as the Party of Europe. By 1973, virtually all Tory MPs were members of the Conservative Group for Europe (CGE). This group was the dominant force in the European Movement, an all-party and grassroots organisation calling for closer integration and co-operation at the European level: 65% of European Movement speakers were also members of the CGE. Most in the Conservative Party dismissed the idea that the UK could have a purely free-trade relationship with the EEC and nothing more, like Norway: they saw this as simply unrealistic for an economy of the UK’s size. Party propaganda contrasted Tory enthusiasm with Labour backsliding. The point was also made that the EEC cost very little: a net contribution of no more than 1% of total public spending. In general, Conservative politicians expressed solid support for the EEC, or made modest suggestions for improvement; according to Peter Walker, ‘the UK’s best future lies in strengthening the European Community’.
There was, therefore, little pressure for a referendum in Conservative circles. In the meantime, however, Labour had been moving sharply to the Left. After losing office in 1970, the Labour Left had sought to develop a radical new industrial policy, to overcome the perceived failings of the 1964-70 government. The key features of this new approach were increased nationalisation, a National Enterprise Board, and the development of planning agreements between government and industry. This formed part of an ambitious Alternative Economic Strategy (AES), which also envisaged controls on movements of capital and, critically, imports. The AES was fundamentally incompatible with the central tenets of the EEC.
The Left, in particular Tony Benn, began to promote the idea of an in/out referendum. This would aim to overcome the divisions within the Labour movement and the unfavourable parliamentary arithmetic for the Left, who were in a small minority in the Commons. There were at least four strands of Labour opinion, only one of them strongly pro-EEC. For the Left and many in the unions, this was a straightforward issue. The EEC was a capitalist club, which would seek to stop a Labour government from carrying out its socialist policies. The Left would play the leading role in the No campaign in the 1975 Referendum; Benn continued to ‘loathe the Common Market’ thereafter. The nationalist Labour Right was equally hostile: membership of the EEC would mean, as Hugh Gaitskell had said in 1962, ‘the end of a thousand years of history’. A third faction, led by Jenkins, was equally impassioned, but to contrary effect: they saw ‘Europe’ as the central issue in British politics, upon which they were prepared to split and, ultimately, leave Labour. There was a fourth, small group who (like Tony Crosland) did ‘not feel enthusiastic’, but somewhat grudgingly supported membership. This group may have been small, but most of the party’s leadership, such as Harold Wilson, Jim Callaghan and Denis Healey, belonged to it. The EEC was an immensely divisive issue for Labour, and one that seemed to distinguish the Left, of all sorts, from the Conservatives. Thus, in the 1975 Commons vote on the referendum, Labour split three ways, whereas the Tories almost all voted for continued membership.
However, as Harold Wilson, Labour’s leader from 1963 to 1976, shrewdly noted, the idea of a referendum provided a lifeboat into which the whole Labour Movement could clamber. The Left could be accommodated whilst at the same time the leadership could secure their goal of unenthusiastic commitment to the EEC. After the two general elections in 1974 (in which the Tories lost office, largely over other issues), Labour ‘renegotiated’ British membership. In truth, this was a cosmetic exercise. It then called a referendum in 1975. Labour’s leadership recommended a Yes vote, with many in the Labour movement taking a different view. The referendum proceeded on the basis of an ‘agreement to differ’, with Labour Cabinet members participating in both the Yes and No campaigns.
A false prospectus?
There is certainly some truth in the notion that the Yes campaign was a project masterminded by the political elite. Pro-Europeans had not sought the referendum in the first place, but they were content with how things went. After all, as Jenkins pointed out, the voters, ‘listened to the people they were used to following.’
Those ‘people’ were lavishly financed. The Yes organisation, the UK in Europe, had funds exceeding £1 million, mainly donated by large companies like ICI and Shell. By contrast, the No campaign raised only £9,000, with only one business donation exceeding £100.
The Yes operation was also quite broadly based. It had the support of Jenkinsites, nearly all Conservatives, right-wing trade unionists and the CBI. The Tories strongly supported continuing membership and sought to deepen the Party’s commitment to ‘Europe’. Their new leader, Margaret Thatcher, helped to launch the campaign of the Conservative Group for Europe. Even a Tory veteran like Lord Hailsham, the former and future Lord Chancellor, criss-crossed the country in support of a Yes vote, sharing platforms with Jenkinsites, trade unionists and Liberals. British business was strongly in favour of staying in: companies wanted to retain tariff-free access to expanding European markets.
The press, especially the Tory press, was equally committed to a Yes vote. The Daily Mail, The Sun, and The Telegraph depicted this as an argument between economic progress and European integration on one side and ‘doctrinaire Marxist socialism’ on the other. Even The Express conceded that ‘the most sensible vote is a Yes vote’. The Yes argument stressed the UK’s golden economic future in Europe. The antis emphasised sovereignty. The press dismissed such concerns: was it not the case, said an editorial in The Sun, that ‘the whole history of our nation is a history of absorbing, and profiting by any European influences that came our way’?
The result (2 to 1 Yes) was widely seen as a great victory for this broadly centrist coalition. The outcome was a disaster for the Left, who had demanded the referendum originally. The vote was clearly in favour of European integration and against the ‘socialism in one country’ advocated by the proponents of the AES. Post-referendum, the Conservatives pressed for the creation of an Alliance of Centre-Right parties, to be known as the European Democratic Union, which was founded in 1978. The Declaration of the Union pledged the parties ‘to work towards a truly democratic, ever closer union…believing in the socially-oriented market economy, as well as social solidarity and partnership’. The Tories also sought common ground with parties who were committed to ‘ever closer union’. In particular, according to Chris Patten, then the Director of the Conservative Research Department, the German Christian Democratic Union: ‘were our natural colleagues in the European venture…we definitely saw ourselves as working hand-in-glove with them.’
In keeping with this approach, the Conservatives strongly supported the introduction of direct elections for MEPs. They contrasted their own enthusiasm for these elections with Labour’s ‘delay and obstruction’. Obviously, however, this additional democratic mandate could only afford more legitimacy to Europe, as Powell pointed out. This posed no problem for most Conservatives, who favoured an essentially Christian Democratic approach, involving ‘ever closer union’ and ‘social solidarity’. The Conservatives also recognised that these developments formed part of the greater project of ‘Europe’. The leadership was regularly briefed on these developments. With the referendum safely won, Thatcher met the Belgian Prime Minister, Leo Tindemans, who was preparing a report to the European Council to discuss Belgium’s proposals for European union. She assured him that the Conservative Party was ‘European in spirit and in will’, having been advised that the Conservatives must not appear to be ‘foot draggers’ on such matters as strengthening EEC institutions and securing economic convergence. Privately and publicly, the Party accepted that many problems ‘beyond the range of national governments [could] be most effectively dealt with at the European level’. This would involve monetary cooperation, opening up of markets across Europe, and help for industries and regions.
What, then, of the No campaign? As we have seen, the Left dominated this but there was also anti-EEC feeling on the Right. These voices were very marginal. Their argument was overwhelmingly about sovereignty; according to Powell, ‘the economic case is neutral at best’. The real issue was about ‘the down-grading of the UK from a nation to a province’. Furthermore, Powell’s supporters tended to put their case in an eccentric, even alarming, fashion. Supporters of the EEC were aiming for ‘another disastrous accommodation with Europe’ comparable to Munich; Heath was ‘a middle-aged bachelor and occasional choirmaster’, under the influence of bankers who had ‘recently come from the Continent’. During the referendum campaign, The Sun depicted Powell, wild-eyed, aboard a pirate raft with Benn and Foot. The anti-EEC forces were, ‘by any standard a motley assortment’, according to historian Anthony Forster. After 1975, they became more so, and more dominated by the Left, who did not accept that the battle over Europe was over.
The demand for a second referendum proceeds, therefore, from some dubious premises. Referenda are not immutable features of our constitutional arrangements, even on important issues of foreign policy. The 1975 referendum had been devised to solve a particular internal problem for Labour. It was won and lost on a broad range of arguments, in no way limited to the benefits of free trade.
There are further relevant distinctions between the 1970s and now. If the vote had been No in 1975, it would have been relatively straightforward to disentangle the UK from the other eight member states, after an involvement lasting only two years. Separation in 2020 from 27 other states would be a very different matter. Therefore, the 1975 question – ‘Do you think the UK should stay in the European Community (Common Market)?’ – is hardly appropriate in 2017. A No vote would require an extensive renegotiation of the UK/EU relationship, and there would then need to be a vote on that new relationship. Furthermore, in 1975, Britons voted Yes overwhelmingly and almost everywhere. Only Shetland and the Western Isles voted against the EEC. If, as appears very likely, Scotland, Wales and Northern Ireland voted to stay in, and England to leave, what would be the outcome? This was not an issue in 1975.
A golden future outside the EU?
It is implicit in the calls for Brexit that the UK’s prospects will be brighter outside the EU. Of course, no one can say with any certainty how the UK would have fared outside the EU between 1975 and the present. Nor is it possible to predict how the UK will be in, say, 50 years’ time either inside or outside the EU. In the event of exit, the UK would have to renegotiate its relationship with the EU and with the wider world, and the outcome of those discussions can only be a matter for speculation. However it is instructive to recall the circumstances that had led to the 1975 referendum.
In 1961, Heath led the British application to join the EEC. He told the UK’s prospective partners that: ‘we desire to become…whole-hearted and active members of the European Community…and to go forward with you in the building of a new Europe.’
This represented a volte-face for the Conservatives and for the British governing classes. When the Common Market, the forerunner of the European Union, was first mooted in the 1950s, the UK had been disdainful. After the 1955 Messina conference, at which ministers of the six member states of the European Coal and Steel Community planned the creation of the European Economic Community, an observer left ‘happy because even if you continue meeting you will not agree; even if you agree, nothing will result; and even if something results, it will be a disaster.’
Political leaders and the Foreign Office were uninterested in the issue. There was little debate over the decision to stay out in 1955. In November 1955, the Economic Policy Committee of the Cabinet, not the full Cabinet, decided not to join, with neither the PM nor the Foreign Secretary attending the key meeting. Exports to the Six were thought less important than trade with the Commonwealth. The UK’s initial response to the formation of the EEC was to establish the European Free Trade Association (EFTA) with the ‘outer seven’ nations as a rival free trade area.
However, it soon became apparent that this arrangement was lopsided: the UK was part of a free-trade area with a population of 89 million (including its own 51 million), but stood outside the EEC’s tariff walls and a population of 170 million. A dramatic change of policy followed. From 1961 onwards, there were increasingly desperate efforts to join the EEC under Harold Macmillan and then Wilson. The UK now adopted the role of supplicant, seeking access to markets in economies that were growing much more rapidly. Between 1958 and 1972, GNP per head grew 178% in West Germany, 185% in France and 180% in Italy, but only 140% in The UK. Those who took an interest in European matters were clear that the future would involve closer economic unity, including regional, industrial and energy policy. Talk of EFTA or Commonwealth alternatives was ‘wishful thinking’. More than international cooperation was required: it was necessary to move to ‘trans-national integration’. The European Movement campaigned strongly for Europe, supporting ‘a single European economic entity’. Lord George-Brown (once Labour, but by the 1970s moving rightwards) said that’those who talk of looser ties and a union of nations would merely turn the clock back.’
Those who wished to turn back the clock settled on the need to preserve British sovereignty. On the Left, this was with a view to implementing the AES. It was thought, quite rightly, that it would be impossible to pursue this programme within the capitalist EEC. This case remains a valid basis for a Brexit, but only for those who believe that it will be possible to impose controls on the movement of capital and goods in a globalised world.
On the Right, where much of the anti-EU sentiment now resides, opposition in the 1970s came mainly from the reactionary fringe. Thus, the Monday Club, a right-wing Tory organization formed in 1963, raged against cultural decay and the dying of the imperial light. They were concerned about the ‘systematic denigration of the racial, cultural and institutional particularities of the great historical nations of Europe’ by advocates of entry to the EEC. The other source of opposition to mainstream European (and immigration) policy was, obviously, Powell. However, for all his notoriety (and impassioned support in some quarters), Powell was becoming increasingly marginal. Even among Tory activists, Powell’s support appeared to be dwindling. Thus at the 1972 Conservative Party Conference, his motion criticising the admission of the Ugandan Asians was defeated by more than two to one: a London councillor said that he had won his seat in 1970 by involving immigrants, with: ‘no thanks to the Monday Club or Mr Powell or their cohorts of petty, spiteful, small-minded backwoodsmen.‘
When Powell began his political career in the 1940s, he had sought to persuade Churchill that it would be possible to save India with a few British Army divisions. His career effectively ended in 1974, when he left the Conservatives and urged his supporters to vote Labour so that there could be a referendum. The Monday Club/Powell evocation of the glories of Empire looked far-fetched in the 1970s, and, surely, quite incredible in the modern world. Most Tories dismissed such anxieties over nationhood. The idea of the UK going it alone or in alliance with the Commonwealth seemed a backward-looking fantasy.
Forecasting the future is notoriously tricky. Views can legitimately differ as to how the UK would have fared outside the EEC/EU over the last 40 years, and how things may develop in future. However, those contemplating Brexit should do so with a proper appreciation of how we have got to our current position.
There was no question, in the 1970s, of merely joining a free trade area. Politicians and public alike were aware that the European project was much more extensive than this. The opponents of membership made much of the loss of political and economic sovereignty. Nonetheless, democratically elected representatives in Parliament voted to join the EEC, without a referendum. The subsequent referendum was held principally for internal Labour Party reasons. Moreover, the UK did not stumble blindly into the EEC in 1973, nor vote to stay within the Market in 1975 on a false prospectus. Entry appeared to a broad swathe of opinion the only viable option. The alternatives – socialism in one country, retreat to Empire, Powellism – did not seem very attractive. Some loss of sovereignty was thought a price worth paying.
Since then, socialist and imperialist arguments have largely disappeared from political discourse. However, remarkably, Powellism – extreme free-market nationalism – has taken on a new lease of life in the hands of Farage and others who openly admire him. It is surprising that Labour social democrats and Tory Christian democrats (admittedly both dwindling bands) have not been more willing to commit themselves to the arguments which their predecessors made so successfully against Powell in the 1970s.
About The Author
Adrian Williamson QC has practised as a commercial barrister since 1985. He completed his PhD at Cambridge in 2014, supervised by Professor Martin Daunton. This is now published as Conservative Economic Policymaking and the Birth of Thatcherism, 1964-1979 (Palgrave Macmillan: 2015). He has also published on the Bullock Report on Industrial Democracy.History and Policy