The Official History of Britain and the European Community, Volume III

The Tiger Unleashed, 1975-1985

Stephen Wall

• Publisher: Routledge
• Year: 2018
• Topic: History
• eBook ISBN:
  9781351228008
• Subtopic: British History
• Index: History

Volume III of The Official History of Britain and the European Community covers the divisions over Europe of the Labour Government (1975–79) and the controversies surrounding Britain's relations with her EEC partners under Margaret Thatcher.

As the UK prepares to leave the European Union, this book is the story of the stresses, quarrels, compromises and ambitions which contributed to an unhappy relationship between the United Kingdom and her European partners. Immediately after the 1975 referendum, when the British people voted by a large majority to stay in the European Community, the divisions in the Labour Party over Europe, which had caused the referendum in the first place, resurfaced as if nothing had changed. They dogged the beleaguered Government of James Callaghan and contributed to the defeat of the Labour Party in the General Election of 1979.

Margaret Thatcher proclaimed herself a pro-European Prime Minister but her premiership, too, was governed by a succession of crises in Britain's relations with her partners as Thatcher fought to redress the unfair budget deal Britain had been forced to accept on accession, and then to secure her vision of a reformed, outward-looking, economically liberal Europe. This is also the story of personal relationships between Thatcher and the successive leaders of Germany, France and the United States. It is told through the contemporary accounts of the period, in the words, ideas and emotions of politicians and officials at the heart of Government.

This work will be of much interest to students of British politics, European Union history, diplomacy and International Relations in general.

1 The Spoils of Victory: 1975–1976

“The United Kingdom is in Europe, virtually for good” opined The Times on the morning of Saturday, 7 June 1975, and that comment reflected the general mood. By a two-thirds majority, the British people had voted in a referendum two days earlier to stay in the European Community that their country had joined a little over two years previously. The people, said Conservative leader Margaret Thatcher, “have looked at what really counts and they have voted that way. It is really thrilling.” As the relatively new Leader of the Opposition, Margaret Thatcher had played a significant role in the campaign. Prime Minister Harold Wilson was less euphoric, commenting, doubtless with relief after the years of internal division over Europe within the Labour Party, that “fourteen years of national argument are over”. His opponents in the Labour Party (indeed in his own Government) agreed with him. The most controversial of them, Tony Benn, accepted the outcome: “I have always said that the referendum would be binding. There can be no going back”.¹

The referendum had been used by Wilson to manage what might otherwise have become an irreversible split within the Labour Party over Europe. The Labour Government had, as one commentator observed, brought in the people to defeat Labour vested interests that could not be defeated in any other way and, in doing so, Wilson himself had in effect called in the Conservative Party to redress the balance in the Labour movement.²

In the House of Commons, on 10 June, Wilson noted not only the high turn-out in the referendum and the clear and unmistakeable nature of the decision, but also the consistent pattern of voting over almost every county and region of the United Kingdom. “The debate”, he concluded, “is now over.” Margaret Thatcher joined “with Mr Wilson in rejoicing”. Jeremy Thorpe, the young, charismatic leader of the Liberal Party, caught the mood when he observed that “sometimes those who have been against us have been as much help as those who have been for”.³

It had always been uppermost in Wilson’s mind that, whatever the referendum outcome, he would have to deal with the wounds in his own Party and repair the damage between pro- and anti-Marketeers who, from within the same Cabinet, had campaigned on opposite sides. He effected only a minimal Cabinet reshuffle, moving Tony Benn from Industry to Energy and Eric Varley from Energy to Industry.

At Cabinet on 9 June, Wilson affirmed the Government’s intention to play a full and constructive part in the European Community, including in its institutions. This would mean, so long as they agreed, that members of the Parliamentary Labour Party (PLP) should take up their seats in the European Assembly. The Foreign Secretary, James (Jim) Callaghan, was invited to prepare a paper for Cabinet in order to indicate the way in which the Government should approach the main issues of Community business. The more constructive the Government’s stance, Wilson said, the less likely it would be that the Government would be forced into a defensive posture on the less easy issues and the more likely they would be to handle matters to their advantage.⁴

Just such a paper was, needless to say, already drafted within the Foreign and Commonwealth Office, and duly landed on the Prime Minister’s desk four days later. It was characteristically cautious: Britain’s EEC partners were greatly relieved at the referendum result, but might now be inclined to expect too much of Britain, especially on institutional questions. Britain’s economic situation would impose constraints. The best way, therefore, to avoid giving the impression of foot-dragging would be to look for areas where the UK could play a positive part, and then to give a lead. The Community’s external policies offered the best opportunity, and the Foreign Secretary had, he wrote to Wilson, asked officials to study the scope for improving the arrangements for political cooperation (i.e. coordination of foreign policy). Not only, the paper argued, was this desirable in itself but it would help the Government to deal with the expected recommendations from the Belgian Prime Minister, Leo Tindemans, who was due to report to the December European Council on the future evolution of the Community. Tindemans was likely to focus, in particular, on progress towards direct elections to the European Assembly, to which the EEC was committed by its founding Treaty. Callaghan did not wish to be rushed into conceding an early move to direct elections. The first step must be to get delegated Labour members to take up their seats under the existing system, whereby members of the Assembly were nominated from their national parliaments. Thereafter, “we must make a thorough examination of the position we want to take up on the substance and timing of the matter, taking account of such wider factors as our devolution policy”.

Callaghan also identified energy policy as an area where Britain’s own strong position (as North Sea oil came on stream) provided an opportunity to lead Community policies in a realistic and fruitful direction. “As you will have gathered”, Callaghan concluded, “the main drift of this is that we should be active and not passive; should give a lead in areas where our interests and our experience fit us to do so; and as there will be some institutional areas where we cannot agree with others, hope than an active policy will divert criticism”. Wilson did not respond, but his Private Secretary recorded that he had not dissented, which implies that he had at least glanced at a document which, in reality, told him nothing he did not know already know.⁵

Tindemans duly visited London on 30 June 1975, telling Wilson and Callaghan that he was interested in three main questions: In what fields should common European policies be developed? How should the institutions and the relations between them be developed? What should the final objective be? Of these three questions, the second was, said Tindemans, the most difficult. Most people, in Britain and in other European countries, were in favour of more common policies in energy, foreign policy and defence. But he had so far received very few satisfactory replies as to what the relationship and relative powers should be between the European Council, the European Commission and the European Parliament.

The conversation between the three men proceeded amicably, and Tindemans was in any case there to take soundings, not to propound a thesis. Even so, he would have gone away with a very different perspective on the Community from the one he would have received from many continental Governments. Wilson asked about Economic and Monetary Union (EMU) which the EEC was formally committed to achieve by 1980. Tindemans commented that the date had always been over-ambitious. Wilson “agreed that the objective had proved to be over-ambitious”, which was not, of course, the same thing.

Callaghan set out a typically British intergovernmental view of how the Community should be managed. The Commission was “a fifth wheel on the coach. Its competences derived from the Treaty but the Council was constantly encroaching on them since only the Council had the political strength deriving from the votes behind them.” Callaghan disputed the provision whereby the Commission alone could make legislative proposals. The Council too should have that right. The power that had already been lost by the Commission would be absorbed and exercised elsewhere, and that “elsewhere” should be the Council of Ministers.

Tindemans noted that there were differing views around the Community. The French regarded the Commission as a kind of Civil Service, whereas others in the Community were strongly in favour of the Commission having its full powers as originally conceived. Callaghan thought this was a reflection of a difference of view between large and small Member States. The smaller Member States regarded the Commission as protecting them from the larger ones. He himself shared the French view.

Callaghan also favoured joint meetings between the different formations of the Council of Ministers, with a view to preventing Agriculture Ministers from taking decisions unacceptable to their Governments as a whole. Wilson recalled that, at one European Council (Paris) German Chancellor Helmut Schmidt had virtually accused his own Minister of Agriculture of being responsible, not to the German Cabinet, but to an EEC-wide farm bloc.

Tindemans noted a trend, as the Community prepared for direct elections to the European Parliament, to look for candidates who were fully independent and not members of their national Parliaments. Callaghan doubted if that would be acceptable in Westminster, where MPs would see directly elected members of the European assembly as a challenge to their own position. Westminster would guard its position very jealously. In any event, under the British constitution, the chain of authority would still be from the UK Parliament to Cabinet and thence to the Council of Ministers. If Europe was to work, authority had to be exercised where the power lay.⁶

This conversation took place as the European tectonic plates were shifting. On 19 July 1975, the British Ambassador in Bonn, Sir Nicholas (‘Nicko’) Henderson, reported a conversation with German Minister of State Hans-Jürgen Wischnewski. Wischnewski had spoken in the gloomiest possible way about what he called the underbelly of Europe. The Soviet Union was giving support in every way possible to the communist bid for power in Portugal (where the longstanding dictatorship had been overthrown in a military coup a year earlier). Money was being channelled to the Portuguese Communist Party through the German Democratic Republic. As regards Spain (where the regime of General Franco was teetering as the old man’s health failed), there were one hundred thousand underground members of the Communist party poised to take over. The situation in Spain might become even more rapidly worse than that in Portugal. Nor was Wischnewski sanguine about the outlook for Yugoslavia when Marshal Tito went. He thought that the Russians would be gloating over the prospect of undermining NATO without having to lift a hand.⁷

Henderson’s report was timely. The Swedish Prime Minister, Olof Palme, had just issued an invitation to Socialist leaders to meet in Stockholm to discuss the situation in Portugal. Callaghan’s Special Adviser, Tom McNally (in the days when only one Special Adviser per senior Cabinet Minister was the norm) had written a paper, which was sent on to Wilson, on the issue of Communism and West European Social Democracy. After tracing the history, McNally foresaw difficulty in obtaining a concerted Western approach to what were, in reality, a number of separate but related problems, varying according to the individual circumstances of each country, the differing strengths of individual national Communist parties and the varying moods of public opinion. France was a classic case of the difficulty of generalisation. The French Socialist Party had done all the dangerous things. It had worked out a common programme with the Communist party and had gone into an electoral alliance with it. It had offered to bring the Communist party with it into government. By the end of the 1960s, the French Socialist party had been moribund and in danger of extinction. Yet, now, it was the second Party of France, Socialist leader François Mitterrand was the acknowledged Leader of the Opposition and the Party had reasserted itself at national and local level. Indeed, it could be argued that the French Communists, by making the ‘alliance of the Left’ with the Socialists, had actually resuscitated the French Socialist Party and, in so doing, gratuitously provided itself with a rival for the allegiance of the French working class.

Turning to Portugal, McNally argued that it should serve as a lesson when considering the far greater prize of Spain. In Portugal, the conspiratorial nature of communism had allowed for the take-over of key sections of society. The Soviet Union was both more decisive, and less squeamish than the West, in its use of funds. The Social Democratic parties of Western Europe had been slow to respond to initial Portuguese appeals for help. It was fortunate that the British Labour leadership had close personal links with Mario Soares, the leader of the Portuguese Socialist Party, without whom there would have been no focal point for opposition to a Communist takeover.

McNally assumed that the German figure of 100,000 communists ready to move into action in Spain was guesswork. Nevertheless, Portugal had shown that the West could well face a similar situation in Spain, with a well-disciplined Communist party being given massive funds by the Soviet Union.⁸

That the Franco regime in Spain was still alive and capable of kicking was brought painfully to the fore when, in September, Franco rejected appeals from Pope Paul VI and the European Community to spare the lives of five men convicted of terrorist offences. At the Labour Party Conference in Blackpool, Callaghan detailed the steps he had taken to seek clemency. “There must”, he said, “be no aid and no comfort to the existing regime; there must be no prospect of any closer ties with Europe in any form; there must be no ending of Spain’s self-inflicted isolation … Spain is a country on the move … I firmly believe that the new Spain will shortly emerge from the sterile cocoon in which Franco has encased her … Let us send a simple message to the Spanish people: what you are experiencing is the death throes of a dictatorship. When the long night is over, your friends stand ready to welcome you and to work with you to build a new Spain based on human rights and democracy.”

Callaghan (without consulting or even informing the Prime Minister in advance) summoned the British Ambassador in Madrid, Charles Wiggin, to London for consultations. At a meeting of EEC Foreign Ministers ten days later, Callaghan supported the European Commission’s proposal to suspend trade negotiations with Spain. “We got it through, against great French opposition”, Callaghan told Wilson in a telephone conversation. “Sauvagnargues [the French Foreign Minister] has no political tips to his fingers at all.”⁹

A month later, in November 1975, Lord Mountbatten suggested to the Prime Minister that he should have a word with the Spanish Ambassador in London, Manuel Fraga, before the latter left London to return to Madrid. To do so in Downing Street would have been politically awkward in the light of the stance the Government had taken towards Franco’s Government. So, Lord Mountbatten offered to host such a discussion in his own home. The Prime Minister would call on Mountbatten. The Spanish Ambassador would also be present.

In its briefing for Wilson’s meeting, the Foreign Office, in expectation of Franco’s death and the planned accession of the young Juan Carlos to a restored monarchy, advised that the period after Franco’s demise would be extremely confused and difficult. The aim of British policy should be to encourage liberal tendencies in Spain, while not demanding rapid progress and taking care not to offend Spanish pride by appearing to patronise or interfere in domestic affairs. Fraga himself was said to have a considerable following in Spain on the Centre and Centre-right, and was likely to wield considerable influence on events (he became Deputy Prime Minister and Interior Minister in the first democratic Government following Franco’s death). He was also known to have strong views on Gibraltar and to favour the establishment of a timetable for the eventual transfer of sovereignty to Spain. “He fails in his calculations”, observed the FCO, “to make enough provision for accepting the views, and if necessary the veto, of the Gibraltarians. Successive British Governments have told the Spaniards that they should be wooing, not antagonising, the Gibraltarians.”

At the meeting itself, on 12 November, Wilson let Fraga do most of the talking. When Fraga referred to Spain’s future relations with the EEC, Wilson told him that the UK and her fellow members of the Community were ready to extend the hand of friendship and cooperation to Spain and to help them achieve a democratic society. The one issue on wh...

Table of contents

• Cover
• Half Title
• series Page
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• Acknowledgements
• List of Abbreviations
• Notes on Principal People
• Introduction
• 1. The Spoils of Victory: 1975–1976
• 2. Callaghan: The Lapsed Heretic: 1976
• 3. The Problematic Presidency and Old Wounds Reopened: 1977
• 4. Britain, France and Germany: The End of the Affair: 1977–1979
• 5. The Tiger Unleashed: May 1979–May 1980
• 6. Uneasy Truce: 1980–1981
• 7. Conflict: 1982–1983
• 8. Thatcher Victorix?: 1983–1984
• 9. Thatcherism on a European Scale: The Single Market, 1984–1985
• Conclusion
• Appendix 1
• Appendix 2
• Bibliography
• Index