Annex A
SECRET
THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC
MAJESTY'S GOVERNMENT
CC(75) l4th
Conclusions
CABINET
CONCLUSIONS of a Meeting of the Cabinet held
at 10 Downing Street on
TUESDAY 18 MARCH 1975
at 9.30 am
PRESENT
The Rt Hon Harold Wilson MP Prime Minister
The Rt Hon Edward Short MP
Lord President of the Council
(Items 1 and 2)
The Rt Hon Lord Elwyn Jones
Lord Chancellor
The Rt Hon Denis Healey MP
Chancellor of the Exchequer
The Rt Hon Michael Foot MP
Secretary of State for Employment
The Rt Hon Shirley Williams MP
Secretary of State for Prices and
Consumer Protection
The Rt Hon Anthony Wedgwood Benn MP
Secretary of State for Industry
The Rt Hon Roy Mason MP
Secretary of State for Defence
The Rt Hon William Ross MP
Secretary of State for Scotland
The Rt Hon Merlyn Rees MP
Secretary of State for Northern Ireland
The Rt Hon Harold Lever MP
Chancellor of the Duchy of Lancaster
(Items 1 and 2)
| The Rt Hon James Callaghan MP
Secretary of State for Foreign and
Commonwealth Affairs
The Rt Hon Roy Jenkins MP
Secretary of State for the Home Department
The Rt Hon Anthony Crosland MP
Secretary of State for the Environment
The Rt Hon Eric Varley MP
Secretary of State for Energy
The Rt Hon Barbara Castle MP
Secretary of State for Social Services
The Rt Hon Peter Shore MP
Secretary of State for Trade
The Rt Hon Reginald Prentice MP
Secretary of State for Education and Science
The Rt Hon John Morris QC MP
Secretary of State for Wales
The Rt Hon Fred Peart MP
Minister of Agriculture, Fisheries and Food
The Rt Hon Lord Shepherd
Lord Privy Seal
The Rt Hon Robert Mellish MP
Parliamentary Secretary, Treasury
Minister for Planning and Local Government
|
| The Rt Hon John Silkin MP |
|
SECRETARIAT
Sir John Hunt
Mr P D Nairne (Items 1-3)
Mr B C Cubbon (Items 1-3)
Mr E J G Smith (Item 2)
Mr J S Scott-Whyte (Item 1)
CONTENTS
| Item | Subject | Page
|
| 1. | PARLIAMENT AND EEC LEGISLATION
| 1 |
| 2. | EEC RENEGOTIATION | 5
|
| 3. | EEC REFERENDUM |
|
| Guidance on Procedure between Announcement
of Government Recommendation and Referendum
| 10 |
PARLIAMENT AND
EEC LEGISLATION
1. The Cabinet had before them a memorandum by the Lord
President of the Council (C(75) 32) reporting on the consideration
given by the Legislation Committee to the role of Parliament in
the context of the renegotiation objectives.
THE LORD PRESIDENT OF THE COUNCIL said that the Legislation
Committee had thoroughly considered this matter at a series of
meetings over the past 12 months. The essential question was the
extent to which membership of the Community entailed limitations
on the sovereignty of Parliament and how far any such limitations
could be removed or lessened consistently with continued membership.
This issue arose from the unique character of the Treaties of
Rome and Paris, which involved the acceptance of certain types
of Community Instrument as directly applicable law in the member
states, Parliament could undoubtedly exercise its ultimate sovereignty
by repealing the European Communities Act 1972, thereby taking
us out of the Community. Indeed the commitment to the referendum
demonstrated this. The continuance of the direct applicability
of Community law in the United Kingdom depended ultimately, therefore,
on the continuing assent of Parliament to our membership of the
Community. The Luxembourg Communique, on unanimity within the
Council of Ministers in matters of vital national interest, provided
a safeguard for the United Kingdom; and it was for the Government
to decide how far to allow its' exercise of the veto to be subject
to Parliament's instructions. The Legislation Committee were agreed
that it was essential not to obscure the fact that Parliament's
control of day-to-day legislation in some areas had been diminished
by accession to the Community. This situation could be dealt with
in one of two main ways. The first was to eliminate directly applicable
Community legislation for the future by amendment or of derogation
from the relevant Treaty provisions or by agreement within the
Community that the use of these provisions should be renounced.
A minority in the Committee had felt that this objective should
be pursued as a condition of continued membership. The majority
did not favour this course since it would represent a major departure
for the Community from its established methods of working; and
it would hinder the rapid and effective implementation of agreements
arrived at in the Council, jeopardising in certain cases the continuance
of common policies. Moreover, to embark on this course at this
stage would amount to a new renegotiation demand which was likely
to be considered by other member states as inconsistent with membership.
The fact of directly applicable law as an essential part of the
Community's operation should be made clear to the electorate before
the referendum, thus in effect enabling a decision on this issue
to be taken through the medium of the referendum. The Committee
were agreed that, whatever the outcome on the main issue, the
Government should strengthen the arrangements for Parliamentary
scrutiny and debate of legislative proposals before their adoption
by the Council.
The Legislation Committee were divided on the desirability
of enacting a statutory declaration of the ultimate sovereignty
of Parliament. The majority considered that such a declaration
would be a misleading nullity which would be contrary to normal
constitutional practice and would give rise to suspicion in the
Community and to misconception at home. Another supplementary
option was to tighten the conditions in Schedule 2 to the European
Communities Act for the use of subordinate legislation to implement
non-directly applicable obligations, though Parliamentary time
would then have to be found for additional primary legislation.
A limited amendment of this kind would be peripheral to the main
debate on sovereignty and would not provide an amending Bill of
any substance. Finally, there was the suggestion that the scrutiny
procedures should be put into a statutory form. In his view it
would be unsound to attempt to frame Parliamentary procedures
in a statutory form.
In the circumstances he had come to the view that the right
course was to concentrate on improving the arrangements for Parliamentary
scrutiny of Community proposals and the arrangements for debates
in Parliament before the Government entered into decisions or
commitments in the Council of Ministers. Work could be urgently
pursued to this end, though it would be necessary to have regard
to the recommendations of the Select Committee on Procedure.
In discussion it was argued that consideration of the issue
of Parliamentary sovereignty should not have been separated from
the handling of other renegotiation issues; the Cabinet was only
now considering fundamental questions which might otherwise have
been raised with the Community at an early stage in the process.
The right of the Community to impose directly applicable legislation
and to impose taxes under the "own resources" formula
were the most serious of all the changes involved for the United
Kingdom in Community membership. Directly applicable regulations
were an obsolete feature of the Community related to a period
when it was regarded as potentially a supranational organisation;
the directive, which a1lowed more scope for Parliamentary initiative,
was the form of legislation more suited to the Community's modified
aspirations. The system of directly applicable law, made by the
Community was a gross infringement of sovereignty in the sense
that political sovereignty rested in the power of a nation to
make its own laws. The application of the veto was not relevant
to the role of the Commission; and we had had to accept the existing
laws of the Community on entering into membership. The transfer
of Parliament's legislative powers to the Council of Ministers,
and even more so to the Commission which was not elected and not
accountable to the people of the United Kingdom, represented the
most serious attack on Parliamentary democracy with which this
country was faced. The relationship between Parliament and the
Government in relation to European Community business would result
in a dismemberment of the authority of the House of Commons. Moreover
the threat to Parliament from Community membership was compounded
by the prospect of a directly elected European Assembly; and it
would be aggravated by the establishment of directly elected Assemblies
in Scotland and Wales.
On the other hand, it was pointed out that the issue of sovereignty
had been considered by the Labour Cabinet in 1967 and that the
implications of Community membership had been spelt out in detail
in the White Paper "Legal and Constitutional Implications
of United Kingdom Membership of the European Communities"
(Cmnd 3301). The renegotiation process had been conducted in full
knowledge of these implications. It had been essentially concerned
with the revision of the terms on which we should be able to display
our national sovereignty within the Community in dealing with
the policy issues which concerned us. Many of the changes secured
were directly related to the protection of United Kingdom sovereignty
in regional and industrial matters. The Commission had no power
to impose direct taxes outside the limits already laid down in
the "own resources" system. Despite the Treaties of
Rome and Paris our power to make our own laws remained; Parliament
could, if at any time it so wished, repudiate all our obligations
under the Treaties and recall the powers which it had delegated
to the Community institutions. The exercise of sovereignty was
a political rather than a juridical issue; and, if Parliament
was dissatisfied with the performance of the Government within
the Community framework, it could exercise its powers to criticise
Ministers or even to enforce a change of Government. It was desirable
to allow the Parliamentary procedures for Community business to
continue to be developed with a view to achieving a balance between
the power of Ministers to act and the power of Parliament to hold
them to account. This meant developing arrangements which would
enable Parliament to express its view on the right issues, in
the right form at the right time. For this reason, and on wider
grounds, it might be desirable to initiate a major review of the
conduct of Parliamentary business in the early future.
In further discussion there was criticism of the way in which
the Commission had promoted unnecessary harmonisation in comparatively
minor matters (though the Commission had recently behaved more
sensibly in this respect) These were not matters suitable for
the exercise of veto powers. If we remained members of the Community,
it was desirable to direct Community energies away from these
channels. We could also seek a number of other changes in the
role and structure of the Commission, including a reduction in
the number of Commissioners (and consequently in the activities
of Commission staff) and in the scale of Commission expenditure.
Certain other member states had similar ideas.
THE LORD PRESIDENT OF THE COUNCIL, invited to reply to the
discussion, said it was clear that Parliament could not divest
itself ultimately of its sovereignty and was in a position to
bring the United Kingdom out of the Community at any time by repealing
the European Communities Act 1972. His own view remained that,
while we remained members, any proposal we might contemplate making
in order to change the concept of directly applicable Community
law could not be expected to succeed since it would alter the
essential character of the Community. None of the other possible
amendments of the European Communities Act would be satisfactory.
A statutory declaration of the sovereignty of Parliament would
be seen to be purely cosmetic. To restrict the power to implement
Community directives by subordinate legislation would not meet
the real concern which had been expressed and would unnecessarily
involve the Government in finding time for additional primary
legislation. To embody the scrutiny procedures in statute would
import an unsound and unnecessary rigidity into Parliamentary
arrangements. If the referendum decision were to remain in the
Community the Government should however continue to strengthen
the scrutiny procedures, and it might shortly be desirable to
give a reconstituted Procedure Committee of the House of Commons
a wide-ranging remit which would cover the European Community
field in the context of examining the whole of the arrangements
for conducting Parliamentary business.
Took note, and agreed to take this discussion into
account in their consideration of the outcome of renegotiation
as a whole.
EEC RENEGOTIATION
2. THE PRIME MINISTER said that the Cabinet must now
reach a decision on the outcome of renegotiation. His own recommendation,
in which he was joined by the Foreign and Commonwealth Secretary,
was that the United Kingdom should remain a member of the European
Economic Community (EEC). In their view the objectives for renegotiation
of the terms of British accession to the EEC as set out in the
Labour Party's Manifesto for the General Election of February
1974 had substantially been met. The decision whether or not to
remain members of the EEC should however take into account not
only the renegotiated terms but changes which had occurred and
for which we could claim some of the credit—in the working
practice of the Community. It was now operating much more under
the political direction of the Governments of member states, It
was also very relevant that the Commonwealth countries, some of
whom were diversifying their trading pattern in the light both
of British entry to the EEC and of other political factors, almost
unanimously believed that their interests were best served by
the United Kingdom remaining a member of the EEC. If we were to
leave the Community we would obviously seek to negotiate a free
trade arrangement with it but the experience of Sweden showed
that onerous conditions would be attached to it. In our case,
given the nature of our trade, the conditions might be more onerous
and we should of course be in no position to influence them from
within. We had great power to continue to change the Community,
and in all the circumstances he had come to the decision that
it would be best for Britain, for Europe, for the third world
and indeed for the whole world for the United Kingdom to remain
a member of the EEC.
In discussion it became evident that a large majority of
the Cabinet agreed that they should recommend that the United
Kingdom should remain a member of the EEC. They agreed that the
Ministers concerned had succeeded in securing marked improvements
in the terms of our membership of the EEC. While it was not claimed
that the objectives set out in the Manifesto of February 1974
had been fully met, there had been considerable and unexpected
success in many fields and further improvements could be pursued
in the course of continuing EEC business. The improvements were
in marked contrast to the terms obtained by the previous Administration.
The fundamental principles of the Common Agricultural Policy (CAP)
had not been changed, but many improvements had been made in the
way it operated and the new arrangements for beef, though instituted
only for the current year in accordance with Community practice,
represented a considerable breakthrough. The Government's objectives
on the import of sugar from the developing Commonwealth had been
met in full, and the improvement in the EEC's attitude to the
Commonwealth and the developing world had been one of the principal
successes of renegotiation. Similarly the position was now much
improved in relation to the Community budget, capital movements,
and Value Added Tax. The Government's regional, industrial and
fiscal policies were in general well safeguarded, but the marker
we had put down on the control of private steel investment would
need to be followed up.
The following reasons were also advanced in support of this
view:
(a) Although we wanted to strengthen the "one world"
framework, we had to recognise that regional groupings existed.
We should use our membership of the EEC and our influence on its
policies, to move away from the sterile confrontation which had
been taking place in United Nations bodies between the blocs of
the developing and the developed world,. Under our influence the
EEC had already become more outward looking, particularly towards
North America and the developing world.
(b) The cohesion of Western Europe might well be disrupted
if we were to leave the EEC; and the British people might be misled
into taking the view—which had bedevilled British policies
for decades after the Second World War—that we remained
a major world power in our own right. The Union of Soviet Socialist
Republics, though it would not say so publicly, did not consider
our membership of the EEC hindrance to detente and probably judged
that it would help to restrain any aggressive tendencies in West
Germany.
(c) The Community was not now developing in a federalist
direction; as long as we remained members we could prevent it
developing in that way. The written texts of the Community had
not kept pace with developments in practice. Although the texts
might indicate that the Community was based on free market concepts,
this did not reflect reality. A number of the member states had
mixed economies and progressive social policies, which were at
least as advanced as the United Kingdom's. We were only now at
the beginning of our own relationship with the Community and we
could bring important influence to bear in its development.
(d) A decision to withdraw from the EEC would be very
different from a decision not to join in the first place. While
membership of the Community could not be expected to solve our
economic problems and it would not necessarily be disastrous if
we were to leave, this would be a risky economic course. Indeed
it was argued that we might only survive in such a situation by
adopting policies, for a siege economy. There was no alternative
economic grouping available; previous suggestions that a Commonweath
economic bloc or a North Atlantic free trade area could be formed
would not now be practicable. Great uncertainty would be caused
during the protracted negotiations for withdrawal from, and determination
of a new relationship with, the Community; this would have particularly
serious implications for investment.
(e) The concept of directly applicable Community law,
which was novel to the British constitution, had to be accepted
as essential for the operation of the Common Market. It would
have bean easier to have ensured that its structure and political
philosophy were more consistent with the British political character
and constitutional practice if we had been involved in the Community
from the beginning. But the powers of national Governments to
restrain the Commission, and of national Parliaments to influence
the Community, should not be underestimated. For example, British
and German objections to unwise proposals by the Commission on
the harmonisation of standards had prevented those proposals from
making progress and the Commission had had to adopt a different
and more acceptable approach. Parliament retained considerable
powers in these fields by its general political control of Ministers.
Nevertheless improvements in procedures, as had been-proposed,
to enable Parliament to exert more influence on Community legislation
should be pursued urgently. It would also be necessary to consider,
if we remained members, how best to curtail the unnecessary powers
and enthusiasm of the Commission.
A number of Ministers said that they would wish to dissent
from a Cabinet decision to recommend that the United Kingdom remain
a member of the EEC.
THE SECRETARY OF STATE FOR INDUSTRY said that he would not
repeat all the arguments which had been put forward in the discussion
of individual items in the package. The Cabinet could however
be on the verge of a tragic decision. The objectives set out in
the February 1974 Manifesto had not been achieved; all the difficult
points had been deferred until after renegotiation. It was wrong
to think that Britain's economic problems could be solved within
the EEC; too pessimistic a view had been taken of Britain's prospects,
and we would be better placed to solve our problems outside the
Community. The EEC would inevitably develop in a federalist direction
(though this was for the present being disguised) and the power
of the British Parliament and electorate had already been reduced.
He feared that continued membership of the EEC would lead to the
break-up of the United Kingdom. Moreover the Labour Party would
be placed under considerable strain if the Cabinet were to go
against the view of most of the rest of the Labour and trade union
movements.
THE SECRETARY OF STATE FOR EMPLOYMENT said that he too did
not consider that the Manifesto objectives had been achieved in
several important respects. The consequences of withdrawal from
the EEC had been exaggerated; he did not accept that Britain's
problems could be solved only by our accepting an alien system,
whose legislative basis—the European Communities Act 1972—it
was not proposed to change. Policies which had stood Britain in
good stead, for example on agriculture and the Commonwealth, had
already been destroyed by attempts over the last decade to join
the EEC. Continued membership would lead to the dismembering of
the United Kingdom, and of the authority of Parliament which had
already lost much of its power in EEC affairs. If we remained
in the Community the seat of power would lie in future in a permanent
coalition in Brussels.
THE SECRETARY OF STATE FOR ENERGY said that he was not inflexibly
opposed to Britain's membership of the EEC; he acknowledged the
improvement in our terms of membership, in particular as regards
the Commonwealth. Nevertheless too much had to be taken on trust,
since the fundamental changes in the Community which we required
had not been achieved in renegotiation. He was particularly concerned
about the situation on energy. North Sea oil would be an asset
of great value to us and would be a considerable help to our survival
outside the Community; but there were already moves to apply the
EEC Treaty to the Continental Shelf. If we remained a member,
we should be exposed to pressure for Community policies, for example
on depletion. While he would vote in the referendum against continued
membership, and believed that Britain could survive outside the
Community, he would work for the success of Community membership
if that proved to be the referendum result.
THE SECRETARY OF STATE FOR TRADE said that he was opposed
to continued membership of the EEC because it was disadvantageous
to us materially, to the powers of Parliament and the unity of
the United Kingdom, and in relation to the kind of world we wished
to see. The EEC was not an effective regional grouping, as their
failure in the energy crisis and the current French attitude towards
International Energy Agency had shown. The British people did
not have the community of feeling with Continental Europe which
would be required to make a genuine Community, and our membership
of it did not assist the "one world" concept. If we
withdrew, there would be problems though they should not be exaggerated;
we could still prosper and make a better contribution to the world
as a whole from outside the Community.
THE MINISTER FOR PLANNING AND LOCAL GOVERNMENT said that
the present occasion was the country's final opportunity for settling
the issue of membership, and he would accept the outcome of the
referendum. But the logic of the EEC pointed it towards the destination
of a federal structure for a United Europe. The February Manifesto
set out only the minimum objectives in the renegotiation; a significant
element in them had not been met and had been left over for the
continuing business of the Community if we remained members. He
felt therefore that the country should decide to withdraw.
THE SECRETARY OF STATE FOR SOCIAL SERVICES said that the
Labour movement did not believe in the basic principles of the
EEC. These could not be dismissed as mere theology. We had accepted
that we could not challenge these principles, for instance in
relation to the CAP, and the Commissioner responsible had made
it clear at a recent meeting of the Council of Ministers that
national agricultural regimes were outside the Treaty and could
not be allowed. The veto was not something which could be exercised
simply on the basis of the Government's dislike of a particular
proposal. Experience had shown that our whole bargaining position
on current Council issues had to be taken into account. The Council
of Ministers was in effect an institutionalised system of coalition
government, and the Labour Party had always been united in its
opposition to the notion of coalition government. Our virility
as a nation would be weakened if we remained a member of the Community.
THE SECRETARY OF STATE FOR SCOTLAND said that although certain
changes, some of which were temporary, had been agreed in the
operation of the CAP, it was clear that the basic principles of
the CAP had not been changed; and the common fisheries policy
would mean that other EEC countries could eventually fish in our
waters, notwithstanding the extension of fishing limits which
it was expected would shortly be agreed internationally. The renegotiation
of our budgetary contributions had only been partially successful.
Although active progress was not immediately being made towards
economic and monetary union, the idea remained a long-term Community
goal. The Community's regional policies involved some Community
oversight of our regional plans. The position on steel was admitted
to be unsatisfactory. On the issue of sovereignty, the Government
would be accepting the permanent curtailment of the powers of
Parliament if the European Communities Act were not amended, and
the powers of the Commission could not be radically attacked within
the present Treaty framework. This transfer of power from Parliament
to Brussels would strengthen the internal pressures towards the
break up of the unity of the United Kingdom. Thus we had failed
to achieve the fundamental renegotiation to which the Government
were committed.
THE PRIME MINISTER then asked those members of the Cabinet
who had expressed views against the United Kingdom remaining a
member of the EEC whether they would be ready to support the majority
view or if they wished to exercise their right—which had
previously been agreed in the unique circumstances of the referendum—to
differ from the Government recommendation. All the Ministers concerned
said that they wished to exercise this right.
THE PRIME MINISTER, summing up the discussion, said that
by a significant majority the Cabinet agreed that the United Kingdom
should remain a member of the EEC. This would therefore be the
Government recommendation and he proposed to make a statement
to this effect in the House of Commons that afternoon.
Took note, with approval, of the Prime Minister's
summing up of their discussion.
EEC REFERENDUM
3. THE PRIME MINISTER said that it would now be necessary
for the Cabinet to consider the guidelines within which those
members of the Government who could not support the recommendation
that the United Kingdom should remain in the EEC should exercise
their right to differ from it. Draft guidelines had been prepared
for handing round, and they would be circulated for fuller consideration
at the next meeting of the Cabinet.
In the course of a brief discussion it was suggested that
particular difficulty would arise in connection with the proposals
about Ministers appearing on platforms either with Members of
Parliament of a different political Party or with Labour Party
supporters who took a different view on this issue. It would be
impossible to avoid an active debate: what mattered was that members
of the Government should conduct it in a comradely spirit with
each other.
THE PRIME MINISTER, summing up this brief discussion, said
that the Cabinet could not reach conclusions on the proposed guidelines
in the time remaining. They would be circulated for fuller consideration
at their next meeting. In the meantime members of the Government
should abide by the draft guidelines.
Took note, with approval, of the Prime Minister's
summing up of their discussion
Cabinet Office
18 March 1975
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