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Labour’s re-negotiation in 1975: Real or bogus?

An earlier re-negotiation that was used to mislead voters


This question is of interest because it might also be asked of David Cameron who has recently engaged in a very similar pre-referendum re-negotiation.

In Mr Cameron’s case, the answer will have to wait a while, until after the referendum when some of the other participants in the exercise feel free to speak candidly, when the decisions of the European Commission and the European Court tell us whether the EU has, as Mr Cameron claims, been ‘reformed’.

In the case of Harold Wilson, prime minister at the time of the Labour Government renegotiations, the question has been settled, once and for all, by Peter Kellner in an article published on 15 November 2015 entitled, ‘A split on Europe, a sweating PM: Britain has been here before’. What follows are excerpts from his article:

Forty years ago, at the time of the last referendum on Europe, I was a young journalist on The Sunday Times. One of my tasks was to monitor the government’s attempts to negotiate a new deal with Brussels…

In the October 1974 general election Labour won a small overall majority. Harold Wilson, the prime minister, promised to negotiate a better deal for Britain from the Common Market — or European Economic Community (EEC) — and put the outcome to an in/out referendum. Then, as now, backbenchers in the governing party were evenly divided and the prime minister was desperate to hold his party together.

The negotiations were completed at a summit in Dublin on March 11, 1975. Wilson declared: “Our renegotiation objectives have been substantially though not completely achieved”…

Had the negotiations made a real difference? On the quiet, researchers at Transport House, Labour’s headquarters, were asked to analyse the deal in detail. Their secret report concluded that it made little difference. On one key objective, Britain’s future payments to the Common Market’s budget, Wilson was accused of making things worse: “The formula finally agreed in Dublin is on the whole decidedly less favourable to Britain than that proposed earlier by the commission.”

This damning report was presented to an internal party meeting on March 19. While it was well known that different cabinet ministers held opposing views, the report and the details of that meeting were kept from public view — until a contact in Transport House passed to me the report and the minutes of the meeting. These minutes showed that the public pretence of courteous differences within the cabinet were a fiction. [James Callaghan, Roy Hattersley, Tony Benn and Peter Shore had had a ‘blazing row’.] On April 6, 1975 The Sunday Times carried my story under the front-page headline “Documents reveal gulf in Labour”.[1]

[The ministers in favour of remaining in the European Communities] offered broad-brush reassurance that in practice everything would be fine … [while those in favour of leaving] quoted the unsettling small print.

Whatever view one took about the merits of voting to stay in or leave, the Transport House analysis and the minutes of the March 19 meeting demonstrated that Wilson had been wrong to say he had “substantially” achieved his objectives.

In my youthful naivety, I thought my story would have a big impact on the referendum, then just two months away. Here was specific, irrefutable evidence from inside the government party that undermined the prime minister’s position.

I was wrong. My story had no effect at all. The “leave” campaigners leapt at what I had disclosed; everyone else ignored it. The “stay” campaigners could not dispute the critique of their position and did not try; they just carried on with a soft-focus campaign that promoted the hope of a peaceful Europe working together.

As for the general public, the dream counted for far more than the detail.’[2]

This article suggests that there should be proper scrutiny of the EU and David Cameron’s renegotiation this time around.

What the government then told every household

The question asked in the referendum held on 6 June 1975 was ‘Do you think the United Kingdom should stay in the European Community (Common Market)?’

The government produced a pamphlet that was sent to every household in Britain, accompanied by statements by the Yes and No campaigns. Copies of these documents are available on the Civitas website.[3]

The government pamphlet explained that after long, hard negotiations, ‘we are recommending to the British people that we should remain a member of the European Community.’ It claimed Harold Wilson had won ‘significant improvements’ in the terms of membership which ‘can give Britain a New Deal in Europe.’

Specifically, the pamphlet claimed that:

  • The CAP would work more flexibly to the benefit of both housewives and farmers in Britain.
  • Britain’s contribution to the Community has been reduced, but it declined to say what it would be, and Britain stood to get back from the Community up to £125m a year.
  • The threat of economic and monetary union had been removed.
  • Commonwealth countries wanted us to remain a member.
  • Parliamentary sovereignty was not threatened, and ministers representing Britain in the European Communities could veto any proposal for a new law or a new tax.

If we say no, the pamphlet argued that there would be:

  • A period of uncertainty.
  • A risk of making unemployment and inflation worse.
  • Britain would no longer have any say in the future political and economic development of the Common Market.
  • We would just be outsiders looking in.

Judging by the number of references to the subject, the most important consideration was that the UK would be a net recipient of various European Commission funds:

‘Inside the Market we can work to get more European Community money spent inside Britain…

More from the Social Fund for retraining workers in new jobs. Since we joined we have benefited from this Fund to the tune of over £20 million a year…

More from the Community’s new Regional Fund, which already stands to bring us £60 million in the next three years…

More from the Farm Fund when world prices are high. For instance, up to now we have obtained £40 million from this Fund to bring down the price of sugar in the shops…

More from the Coal & Steel funds and the European Investment Bank. Since we joined, arrangements have already been made for loans and grants of over £250 million…’

The pamphlet said nothing about where these funds which were to be distributed to the UK came from, and not a word about the UK contribution to the European Commission budget, nor about how much that sum had been reduced.

It is difficult to imagine a more one-sided referendum campaign. The Yes campaign had the support of all three major parties. It used their resources as well as those of the civil service. It had the support of all the ex-prime ministers, innumerable members of the political, economic and cultural establishments, the CBI and even a good section of the Church of England. The European Commission helped by providing free flights to Brussels for nearly 1,000 pro-European speakers. All national newspapers were on their side. The only national publications which opposed entry were the communist daily Morning Star and The Spectator. The BBC claimed to be neutral, a claim which the No campaign strongly contested.

The Yes campaign also had ample funds. Its treasurers later recalled, ‘when the campaign started, money just rolled in’, mainly from business. The umbrella organization of the Yes campaign declared it had spent £1.85m, while the No campaign had less than a tenth as much, just £133,000. The Yes campaign was also helped by the fact that the referendum coincided with just about the worst economic crisis in the UK since the war, with a record rate of inflation which hit 27% in June and with a record trade deficit.

The result of the referendum was that 67.5 % of votes were in favour of staying in. When asked in a TV interview why the public had voted as it had, Roy Jenkins, then Home Secretary and later the President of the European Commission, replied, ‘They took the advice of people they were used to following.’[4]

Notes 

[1]The documents concerned whether or not the UK government had regained the power to restrict capital movements to protect the balance of payments, to protect Labour’s full employment policies, and whether it had complete control over the price of North Sea oil and could discriminate in support of regional development policies.

[2] Keller, P, A split on Europe, a sweating PM: Britain has been here before, www.thesundaytimes.co.uk/sto/newsreview/features/article1632760.ece

[3] Civitas, ‘The 1975 Referendum’, http://www.civitas.org.uk/eu-facts/the-1975-referendum.

[4]Lahr. J (ed.), The Diaries of Kenneth Tynan (2001) p.248, entry for 6th June


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