The Impact of Europe on British Politics
Local Government & devolved governments
John Major & the Maastricht Treaty
Labour accepts Europe – the new Labour Governments 1997-2010
In 1961, Britain applied to join the European Economic Community despite having spent the previous 15 years determined to keep out of any process of European integration. Various factors persuaded the Conservative Prime Minster, Harold Macmillan, to change British policy:-
The EEC was far more successful than British politicians and officials had ever expected. Between 1958 and 1971 UK output increased by 43% but that of the EEC by 98%.
Britain had tried in 1957, when the EEC was being formed, to negotiate special terms of entry for British goods without actually having to join, but the six members of the EEC showed no interest in this.
The alternative free trade area that Britain had helped set up, EFTA, failed to provide anything like the same size of market. The application of new technology to industry needed a large market and a level of public subsidy which only the EEC jointly could provide. Sterling had declined as a world currency and involvement in Europe might well reduce the probability of the sterling crises that had affected the British economy.
The failure of Britain’s attempt to invade Egypt, after the Egyptian President nationalised and then closed the Suez Canal led to the realisation that Britain was no longer a world superpower.
The United States, looking for more influence in the Middle East, disapproved of the action, prevented Britain from borrowing from the IMF the funds it needed and threatened to sell its sterling bonds to undermine the pound.
Britain capitulated and the Prime Minister, Anthony Eden who had opposed any loss of sovereignty to the EEC, was forced to resign, in 1957, and was replaced by Macmillan, who had no fixed anti-European views.
The United States was in support of British membership of the EEC. They hoped that Europe would take over NATO responsibilities in West Germany, thus saving US resources, and wanted to deal with a single European voice in foreign and economic affairs.
Britain came increasingly to depend on the US to keep its status as a nuclear power. Britain’s own Blue Streak missile system had been abandoned in 1960 and she had to use American Skybolt missiles.
Macmillan developed a good relationship with President Kennedy and reached an agreement to purchase from the United States the superior Polaris missiles. Macmillan became concerned that the United States might increasingly by-pass Britain and discuss world issues with France and Germany, while the Foreign Office also began to shift its position from an anti-Europe to a pro-Europe position.
As decolonisation proceeded in the 1950s, the Commonwealth became more diverse and failed to provide the economic benefits that Britain had expected. Its members began to develop stronger trading patterns in their respective regions.
In 1961, South Africa left the Commonwealth because of the hostility of its newer members to apartheid and the question of British arms sales to South Africa and pressure for sanctions began to divide the Commonwealth.
Macmillan was at the height of his prestige in the Conservative Party in 1961, having won an increased majority in the 1959 general election.
He chose as his Europe Minister, Edward Heath, not especially noted as a pro-European, although his maiden speech in 1950 had been in favour of British involvement in the negotiations that led to the European Coal and Steel Community, and Heath became a fervent supporter of British entry and a determined negotiator on Britain’s terms of entry.
Between them, Macmillan and Heath set out to convince the Conservative Party, whose instincts were nor naturally pro-European, of the need for British entry.
Macmillan also placed pro-Europeans, Christopher Soames and Duncan Sandys, in the Agriculture and Commonwealth Relations ministries that would be key in the negotiations. Conservative MPs in agricultural constituencies were apprehensive of the effect of entry to the EEC and the needs of the Commonwealth, as the inheritor of the Imperial tradition, and the loss of sovereignty were major concerns of MPs, while Butler and Hailsham, amongst the leading figures in the Government, were also uncertain.
Although there were perhaps 30-40 anti-Europeans in the parliamentary Party Macmillan was able to get the House of Commons to vote for the start of negotiations with only one Conservative MP against.
The negotiations on British entry were long and tortuous but then, unexpectedly, in January 1963 the French President, General De Gaulle vetoed the British application arguing that Britain was an insular and maritime nation with worldwide trading links and little engagement with agriculture.
He rejected any idea of special arrangements for the Commonwealth or Britain’s agricultural industry. De Gaulle was deeply suspicious of American influence in Europe and saw Britain as too close to the United States.
The negotiations established Heath as a leading politician and, with younger Conservative MPs and party members becoming pro-European, he was able to win the Conservative leadership in 1965 and ensure that the Conservative Party nationally was in favour of entry to the EEC and carry this policy out when the Conservatives returned to power in 1970.
There were, however, a group of 30 or 40 Conservative MPs opposed to entry. (Ronald Butt’s article in Government and Opposition, Vol. 2 No 3, 1967 explains the conversion of the Conservative Party to Europe in the 1960s)
The question of British involvement in Europe was, during this period, more of a problem for the Labour Party.
Many on the left of the Party saw the EEC as an organisation designed to support capitalism and felt that membership would make it impossible for a Labour Government to carry out any sort of socialist economic policy.
Others, not necessarily, on the left saw it as a club of wealthy nations who would use the high tariff wall to keep out goods that the developing nations need to sell to them in order to prosper.
The Labour leader in 1961, Hugh Gaitskell, had no fixed views on European entry, though he was strongly in favour of Commonwealth ties, but many of his supporters on the right of the Party, such as Roy Jenkins, were pro-European.
He had largely ignored the issue until forced by Macmillan’s proposal for entry to develop a position. However, he was fighting battles with the left on nuclear disarmament and the common ownership commitment in Clause IV of the Party Constitution and, for the sake of party unity, did not want to fight a third one over Europe.
Gaitskell hedged his bets, concentrating mainly on what the terms of entry would be, and Labour abstained on the House of Commons vote on the 1961 application and Gaitskell said, at the 1962 party conference, that they must be careful before abandoning ‘a thousand years of history’.
Harold Wilson became leader when Gaitskell died in 1963 and was equally sceptical about European entry and looked at the issue in terms of party unity and electoral advantage, believing that a more sceptical view on Europe distinguished Labour from the pro-European Conservatives.
He was ready to promote the Commonwealth link and once said we should not, ‘sell our kinsmen down the river for a problematic and marginal advantage in selling washing machines in Düsseldorf’.
However, Wilson’s Foreign Secretary from 1966 to 1968, George Brown, was pro-European and persuaded Britain to make a second application to the EEC in 1967, which De Gaulle again vetoed.
Georges Pompidou succeeded De Gaulle as French president and seemed more amenable to British entry but before the Labour Government had taken any decision on another application they had lost the 1970 General Election and Heath became Prime Minister.
Heath was now determined to secure British entry.
He saw Europe as the vehicle for a new world role so that economic growth within the EEC and a stronger relationship with the other members would allow Britain to have the resources to play a role in the Gulf and Far East and give more help to developing countries.
Unlike other Prime Ministers, he did not go out of his way to develop a special relationship with the United States and, in any case, the US Treasury Secretary had imposed a 10% tariff to keep out goods from other countries and ended the Bretton Woods system, which had kept world currencies stable since 1945, by floating the dollar and effectively devaluing so that imports were more expensive.
Heath, having had experience of the previous discussions, set up an EEC Unit in the Cabinet Office to see the negotiations through.
Negotiations were still difficult and hinged on several key issues:
1. The size of Britain’s contribution to the Community Budget was the main issue. The biggest area of Community spending was the Common Agricultural Policy, which was now well established, and so Britain as a new member could not expect advantageous terms. When Britain suggested, at the outset, that its contribution should be 3% of the Community Budget, Pompidou commented that the British were well known for their sense of humour.
2. The length of the transitional period before the EEC tariff wall would apply to manufactures and food entering Britain. In the end 5 years was agreed on each.
3. The role of sterling and the speed at which Britain would run down its sterling balances.
4. Fisheries policy which was complicated especially as other EFTA fishing nations were applying to join. This was gradually sorted out for Britain but Norway was unhappy and decided not to join the EEC.
5. Arrangements for Commonwealth goods and especially New Zealand dairy products and West Indian sugar.
Heath decided to take no chances about a French veto this time and had a long meeting with Pompidou to convince him that Britain was ready to play a part in Europe.
All problems over the negotiations were then lifted with Britain agreeing to a contribution of 8.6% of the budget initially, rising over 5 years to 19%, and the British position on Commonwealth goods and sterling was accepted by the French.
The deal is often presented as a bad one for Britain and later Prime Ministers wanted to renegotiate the contribution but from the perspective of 1971, before the oil crisis hit in 1973, expectations of greater British economic growth did not make the contribution seem that onerous and, to gain entry, it would have been difficult to expect more.
The problem now for Heath was to get the agreement and the subsequent legislation to give effect to British entry agreed by the House of Commons. The two main political parties were split but Labour more than the Conservatives (even the Liberals though a pro-European Party could only deliver 5 of their 6 MPs to vote in favour):-
For Labour, 120 MPs had signed a Parliamentary Motion opposing entry and another 100 had signed a letter to the Guardian in favour.
The split went right up to the Shadow Cabinet and while Roy Jenkins declared the terms acceptable, Wilson declared the terms to be unfavourable and was ready to oppose the Government in Parliament.
For the Conservatives, although Heath had the support of his Cabinet and the great majority of his party in Parliament and the country (Teddy Taylor was the only junior minister to resign), now that entry was a reality there was a significant minority strongly opposed.
The opposition was especially on the issue of sovereignty and had a powerful advocate in Enoch Powell, who had been sacked from the Conservative frontbench because of his views on immigration. Heath insisted on a card vote at Conservative Party Conference in 1971 and won by 2474 to 324. However, he had only a majority of 25 in Parliament over other parties and so it might only need 13 Conservative MPs to vote against and that majority would be gone.
The first vote would be on the principle of accepting the terms of entry.
Francis Pym, the Conservative Chief Whip, knew that there was a large group of pro-European Labour MPs who might support the Government motion and he pressed Heath to allow a free vote for Conservative MPs in the hope that Labour would do the same.
Heath reluctantly agreed but Wilson imposed a three line whip and moved towards criticising the terms of entry as unacceptable and the idea of holding a referendum for the public to take the final decision (Britain had never before had a referendum, except locally in parts of Scotland and Wales on banning the sale of alcohol). Despite this 69 Labour MPs supported the Government and 20 abstained, so that the principle of British entry was agreed by 356 votes to 244, with 39 Conservative MPs voting against and 2 abstaining.
Through 1973, European membership did not provide the benefits that Heath had hoped for.
A rise in world food prices gave the impression that the EEC was responsible, the members states could not agree on a common view on the Arab-Israeli conflict and Britain had to prevent the EEC from having any say over North Sea Oi, which was just coming on stream.
The setting up of a fund for regional development which Britain had negotiated was delayed. These factors and pressure from the Labour Party and Trade Unions led Wilson to promise a referendum in Labour’s February1974 election manifesto.
Enoch Powell made two major anti-Europe speeches during the campaign and with Wilson’s knowledge so that Labour could avoid other news stories on those days. Heath lost his majority in the election and, having failed to reach an agreement with the Liberals to support a minority Conservative Government, resigned.
Once in office, Wilson, though committed to renegotiation and then a referendum, did not look to revise the Treaty of Rome as this would be too difficult for the other member states.
The renegotiations produced marginal improvements, as much for New Zealand as for Britain, and were rejected by the Labour Party’s National Executive Committee. Wilson and Callaghan, the Foreign and Commonwealth Secretary, both influenced by the arguments of the new Social Democrat German Chancellor, Helmut Schmidt, and experiencing the EEC system from the inside, decided to support a Yes vote in the Referendum.
They threatened to resign if the national Labour Party campaigned against. However, the Cabinet was split with Benn, Shore and Foot, in particular, wanting to withdraw from the EEC and so, under pressure, Wilson agreed that Cabinet members should be allowed to campaign for either a Yes or a No vote.
The Yes Campaign, funded by business was supported by the leadership of all three political parties, although Margaret Thatcher, just elected as Conservative leader, played a limited role and left Heath to lead the Conservative Party campaign. Newspaper support for the Yes vote was almost universal with only the Communist Morning Star against.
The No Campaign was supported by those on the left of the Labour Party and the right of the Conservative Party and so it was easy to portray them as extremists, while the Yes campaign emphasised the economic effect of withdrawal.
Heath constantly made the broader point that Britain would have more world influence inside Europe and membership was worthwhile even if it involved some loss of sovereignty.
The turnout in the Referendum was 65% and the voters decided by 67% to 33% to stay in the EEC, with the Shetlands and the Western Isles the only counties to vote No. (Dan Redford’s thesis available at etheses.dur.ac.uk/4616 provides a very good discussion of the divisions in the Labour Party over Europe between 1960 and 1975)
