Select Committee on Public Administration Written Evidence

Annex B


Tuesday 18 March 1975

  The day of the Cabinet decision on Europe and the day of the parliamentary decision, the day of the dissenting Ministers' declaration, of the signature of the motion on the order paper, and indeed probably one of the key days in the history of Britain.


  It was the first time that this key question had ever been discussed, and it came after the end of renegotiataion because it had been referred to a different committee from the ECS which had considered our renegotiation strategy. He[?] said it posed the whole question of whether the Community is to be supranational or a community of soveriegn states.

  Jim Callaghan said, "Now, how many laws were passed last year that had direct effect in Britain? Does anybody know? Douglas Jay had said Three thousand." Ted said he didn't know but it was certainly over two thousand last year, so Willy Ross said, "Well, when we get statutory instruments, at least the Secretary of State signs them."

  Crosland said that he wasn't concerned with sovereignty because he thought sovereignty had passed anyway to the power workers and the hospital workers, but he was concerned about the cost of gratuitous harmonizations which he found he had to deal with. He said he would like this matter put to Ministers to try and stop it.

  Alf Morris said he was concerned about the powers of the Commission.

  I said, "Sovereignty is not the same as omnipotence, nobody is omnipotent. The Americans aren't sovereign, they were actually beaten by the Vietcong, they can't do what they wanted. Sovereignty means democracy in the sense of power to make your own laws, not even the power to enforce them, because that might depend on circumstances not within your control."

  I said that there were three options open to us. One was to protect our parliamentary democracy, which would offend the Community; another was to abandon parliamentary democracy which would offend the Manifesto; the third option was to fudge it.

  I said that this was the most important constitutional document ever put before a Labour Cabinet. The whole political history was contained in this paper. It recommended a reversal of hundreds of years of history which had progressively widened the power of the people over their governors. Now great chunks were to be handed to the Commission. As to the Commission, it was theological. There certainly wasn't the sort of argument that occurred when Conference only asked for its views to be respected by Cabinet. Yet we were quite happy to give it to the Commission. I said I could think of no body of men outside the Kremlin who had so much power without a shred of accountability for what they did.

  I said that the Community would destroy the whole basis on which the labour movement was founded, and its commitment to democratic change. That was one of the reasons why we had a small Communist Party, why the ultra-left was so unimportant, it was because you could say to people "Change your MP and you can change the law". That was where the attack on democracy was coming from. If we accepted this paper, we'd be betraying, in a very special sense, our whole history.

  Michael said, "We're being asked to accept everything we opposed when we were in opposition. Take the tachygraphs, these little machines you put in lorries to measure mileage. We'd opposed that in opposition, but it was imposed on us. The theology of the Common Market is written into the whole centre of their Treaties. We are conniving at the dismemberment of Parliament. We are destroying the accountability of Ministers to Parliament, and if we have a European Parliament elected by 1978, it will destroy our Parliament. It will encourage Scottish and Welsh separation because they'll say "If you can do that, what about helping us to govern ourselves?" This would dissipate the powers of the British Parliament, people think we're crazy to dismember our Parliament at the most dangerous moment in our history.

  Jim said that it wasn't the first time that a document of this importance had been before a Labour Cabinet. It was all set out in the 1967 White Paper. Sovereignty of Parliament was not an issue, it wasn't even in the Manifesto.

  This led to a protest from Michael who said that it was a draconian curtailment of the powers of Parliament. Harold said that that was from the first manifesto. Michael said that the authority of Parliament was used in the October Manifesto. "Well," said Wilson, "these are the differences between the old and the new testaments."

  Jim said, "Sovereignty is not new, nor should we say we should have raised it when we didn't. As to taxation, the limit is 1% by the Commission." He disagreed most strongly with me when I said that there was more of a danger from the Commission than from Mick McGahey, certainly the International Socialists. He said, "Well, the Communist Party may have gone over the top, but the International Socialists are penetrating the authority of Parliament".

  Jim said he too was worried about things like the "standardisation of rear-view mirrors which he said was offensive, he thought there may be too many commissioners, but the time to study the Commission would be after the referendum. "We don't want to give Parliament the power to hold things up." (This is typical of Jim who regards the power of Parliament as something derived from Ministers instead of the other way round.) "Sovereignty was destroyed by interdependence," said Jim and he was confident in what Elwyn Jones, Lord Chancellor, had said, that the power was there if the people felt strongly enough.

  Harold Lever said, "Tony Benn is a legal pedant," and as for Nick McGahey versus the Commission, he didn't share that view. He said that debates on whether this was irrevocable were silly. The decision to come out would be even more disastrous.

  Harold Wilson said, "The British Parliament has the power to come out at any time." I asked if he'd be prepared to say that publicly. "Well," said Harold, "we can discuss that later when we come to the handling of the statement."

  Elwyn Jones said, "Political sovereignty is the power to make our own laws and Parliament could repudiate the Treaty at any time. Parliament has handed over part of its law-making powers already. In opposition, it was the exercise of the power that we had ceded that we criticised. British influence can be exercised in future by the Foreign Office. Government can continue to declare war. Parliament can continue to throw out the Governments that fail. We have given limited powers to the Commission, Parliament can take away what it has given. A legal framework is difficult and disturbing. The practice is more important than the legal machinery. (This coming from the Lord Chancellor, I might add)

  Reg Prentice said that he accepted Paragraph 2b, ie. the surrender of sovereignty and improved scrutiny. "We need to strengthen the power of Parliament over the pressure groups at home," he said, "and we must institutionalize our external interdependence, but of course, the juggernaut lorries can and must be stopped, but we mustn't be too neurotic about a seepage of powers away from Parliament."

  Barbara Castle said that it was because she knew about this that she had opposed it in 1967. The philosophy and theology of the Common Market was to remove the distortions to competition, and that is what the free movement of capital and labour were all about.

  Bob Hellish said that Parliament was completely inadequate. He knew as a Party manager that the statutory instruments were frustrating, we needed a review of parliamentary procedure. He couldn't believe it would affect our sovereignty. The powers of the Commission were strong but Parliament is a farce, it will have the final say, and Britain will always have the veto over laws they try to pass over it.

  Peter said, "There is anxiety, and I regret there haven't been earlier discussions. Sovereignty is the right to make your own laws, and the minutiae are not the real issue. Freedom of movement of labour is very important, and the Courts will enforce our law at the moment but they won't later."

  "Well," said Harold Wilson, "the free movement of labour had never been an issue."

  By then it was just after 11.00 and we went down and had tea. I had my coffee and I had my mug of tea and I thanked Harold for it, and it was then he told me that he had sent over to get it. We went back into the Cabinet.

  Ted Short said that Gunderlach, one of the new Commissioners, had cut down on harmonization. He said that Parliament could not divest itself legally of its own sovereignty. He said Parliament has the right to bring the UK out at any time, and if we tried to change the sovereignty, it would change an essential feature of the country, of the Community, namely the direct applicability of their law in Britain. Could we amend the Common Market Act? He said, as to the sovereignty, statutory declaration of sovereignty would be purely cosmetic, therefore we couldn't do anything because it would have no effect. We could strengthen our procedures, and, therefore, he would favour radical proposals for strengthening Parliamentary procedure.

  That was the end of that discussion. It was quite clear that it was going to be absorbed and wrapped up in a later discussion, and I learned nothing about the views of my colleagues. But as is already evident, the effect of a referendum and the Common Market discussion is to produce some very deep discussion about the meaning of Government. I really wonder whether many of my colleagues have thought about it. I've had so long to think about it, with the experience of the peerage battle and all that, that I feel I am a jump ahead.

  Harold said, "Well, we now come to the main question. Should we accept the terms or not? I recommend that we should stay in and that is the view of the Foreign Secretary though he will speak for himself. We have substantially achieved our objectives. The Community has changed de facto and de jure, and the attitude of the Commonwealth has changed too. The Commonwealth wants us to stay in, and the Commonwealth trade patterns have changed; though I regret it. If we had a free trade area for the UK, the conditions upon us would be even stiffer or as stiff, and I am only persuaded 51% to 49%, indeed I had anxieties right up to the last few days, but I recommend that we stay in."

  Jim Callaghan said, "In supporting you, I would like to say something about the development of Europe. I am unashamedly an Atlanticist, but we are living in a regional world and we must use the regional organisations. The Soviet Union does not find our membership of the EEC a hindrance to detente. Indeed, I think secretly, they might like us in to control the Germans. The 77 non-aligned countries who are now banded together at the United Nations could destroy the UN and we are better in a regional group to withstand them. As to the prospects for democratic socialism in the Community, four of the countries are Labour, or have labour representation in the Government: Holland, Denmark, Germany and the Republic of Ireland, and now Britain. The market economy is really as an idea quite fly-blown, and the withdrawal of Britain would strain our relations with Ireland."

  He quoted Benjamin Franklin who said something like this, "When I first looked at the terms for this Constitution I was not persuaded of it. As wisdom came, I came to see that I was wrong."

  Willy Ross said, "We cannot ignore the Manifesto, Parliament has lost its power, the only power left would be to come out. Anything less than that, the Courts would decide. The Commission is still completely independent, and we have not changed their power at all. In 1967 the Cabinet did not accept membership. It just decided to apply to see what the terms of membership might be. The Manifesto only listed our main objectives, and we didn't change the CAP and the power of the Commission is unaffected. On fishery policy, the anxiety in Scotland was that under the Common Market rules, people would be able to fish right up to the shore. The Scottish National Party has won all the constituencies round the coastline on fishery policy grounds."

  Harold Wilson said, "Well, that has never been raised at all in the last twelve months."

  On the terms, Willy quoted the Foreign Office paper. "Regional policy is another problem, once in, it will grow. The greater degree of oversight from Brussels is being urged and we read from an article in the Times in which George Thomson said he had a development plan for Scotland, and it would all be monitored. As to steel, the cost of coming out, it could be argued, might .be serious but it sounded like the story of the lady in the brothel who was told it would be more expensive if she came out," a most improbable comment I might add from Willy Ross. He went on, "I am not satisfied, though it's a matter of balance."

  Ted Short said, "I've been awarding points as a schoolmaster on the eight matters of renegotiation. CAP 3 out of 5, budget 4 out of 5, EMU 3 out of 5, regional and industrial policy 4 out of 5, steel 1 out of 5, fiscal policy 4 out of 5, capital movements 5 out of 5, Commonwealth 5 out of 5. So 29 out of 40, or 72.5%." He thought Jim Callaghan should be awarded a doctorate in renegotiation. He wants us to stay in and we'd take advantage of the agreement to differ if Cabinet decided to come out.

  Harold Lever said, "You know, this is not a great divide. This is the beginning of a new relationship with Europe." He favoured staying in.

  Shirley Williams favoured staying in, and said "We could stop the Commission, and indeed we did when they tried to harmonize our milk and beer . . . The Prime Minister and the Foreign Secretary have achieved a great deal in the Third World." "And with Judith" said Harold. He's always trying to implicate her. "Oh yes," said Shirley.

  She went on, "On the market economy, in fact they had gone much further on the continent than we had, and in industrial democracy, they had gone much further in Germany than in Britain. They spend more on the public services, all higher than us. On the mixed economy, France and Italy have a larger public sector than us and they see it not as an ideological matter but as a practical advantage to their country. On democracy, they're doing well too."

  Bob Mellish said that the Common Market was here to stay and we should stay in. Then it came to my turn to make my main final speech. I said, "Prime Minister, I fear that the Cabinet is about to make a tragic error. It recommends that Britain stay in. I recognize that Jim has done his best and probably got the best terms that are compatible with continuing membership, but we have not achieved our manifesto objectives and indeed we did not even try."

  "We deferred the real issues, the really difficult issues, like the authority of Parliament and regional and industrial policy until after the renegotiation was over. We have confused the real issue of parliamentary democracy for already there has been a fundamental change. The power of electors over their law-makers has gone, the power of MPs over Ministers has gone, the role of Ministers has changed. I hope we won't be told this is all theology and not law because the history of the world has been written by theologians and not pragmatists, and as to the law I remember the efforts I had to spend, ten years of campaigning to get the courts to accept the supremacy of the Commons over the Lords at a time when two judges said that a peerage was an incorporeal hereditament affixed in the blood and annexed to posterity. That was a huge battle just to establish a simple democratic point."

  I said, "The real case for entry has never been spelled out. It is that there should be a fully federal Europe in which we become a province, and in fact it hasn't been spelled out because people know it isn't acceptable. We are at the moment on a federal escalator, moving as we talk, going towards a federal objective we do not wish to reach."

  "In practice, Britain will be governed by a European Coalition Government that we cannot change, dedicated to a capitalist or market economy theology. This policy is to be sold to us by projecting an unjustified optimism about the Community, and an unjustified pessimism about the United Kingdom, designed to frighten us in. If Jim quotes Benjamin Franklin, let me quote what Benjamin Franklin said. "He who would give up essential liberty for a little temporary safety deserves neither safety nor liberty." The Common Market will break up the UK because there will be no valid argument against an independent Scotland with its own Minister and Commissioner, still enjoying the Common Market with the rest of the UK and England. We shall be choosing between the unity of the UK and the unity of the EEC."

  "It will impose appalling strains on the labour movement, however responsibly we may argue it. No-one in this whole discussion has mentioned the TUC with whom we signed the Social Contract, or the National Executive, or Conference who are joint partners in the Manifesto and to whom we should report back. It will block off the path to peaceful change with consequences we cannot foretell. It will create a new myth that the future of Britain can be solved by others. In fact we all have to build the new Britain ourselves. I feel strangely cheated that after each colony has escaped from the British Empire, when only the English are left, we are handed over to Brussels to govern. I believe that we want independence and democratic self-government and I hope the Cabinet in due course will think again."

  Michael came after me and said, "We've given up so much. The Commonwealth view is not our view. We shall dismember Parliament and the UK. Western Europe is a coalition system, and we shall be caught adopting it. It will permit the operation of coalition policies over party, and the British don't want coalitions. We must present this fundamentally, the cost of coming out is used, but it is a defeatist movement. Gaitskell said that we should make that clear."

  Denis Healey said that it would be a mistake to present the issue as Michael and Tony Benn had suggested. The consequences outside would be serious, and economic problems are more important. He said this is a matter of judgement and choice between evils on a balance. In real life it was a mistake for the British not to have gone to the Messina Conference which started the Treaty and the movement to European unity. The Commission was set up with the Treaty of Rome and it would have been better if we'd been there at the start. Leaving now would not end the matter and there would be pressure for reversal of the decision and for our continued entry later. That's why I approved the application.

  As to the renegotiation, he said we have improved it in practice, and there's growing support in the Common Market for our approach. The decision to leave now would be more damaging than the decision not to join. We had no sympathy from the White Commonwealth if we left, we'd have no sympathy from the US which is turning inwards, and the idea of a North Atlantic Free Trade area is out. Europe is a bargaining counter with, the US and there'd be a long period of uncertainty if we decided to leave, and industry needs certainty. We'd have to negotiate with a hostile Common Market and even EFTA and the Commonwealth and the USA. It would not be a disaster but a risk, and he hoped we wouldn't overplay the disaster if we leave, or we would have no credible posture with the British people to vote for withdrawal. The consequences would be too dangerous, and therefore he hoped the people would vote to stay in and improve it from the inside.

  Tony Crosland said he agreed with Denis, he was an agnostic, sceptical about large markets, he thought there were strong arguments for staying in, partly because the Common Market was going anti-supranational, partly because of the effect on investment, partly because we would be deceiving the country, and partly because the psychology of the UK would go back to a sort of Churchillian myth that we were the greatest and most important country in the world. Therefore he had to accept the Common Market exists, and it's going to concern us, it is an important force for good and it would be crazy to come out.

  Reg Prentice said, "I was against and now I am for staying in. The onus of proof has shifted. We have to consider the investment effect. There would be a disastrous effect on the economy if we came out, political matters mattered most. I am a one-world man and regional groupings help the third world. The EEC exists and we're in it. It would be a danger to detente if we came out. The. third world with the world food crisis was our great problem and we would make a bigger effort to deal with it if we were in."

  Eric Varley said, "I was against in 1967, never inflexibly, and I'm sure that the improved terms will help the UK if the referendum goes for membership. I would certainly hope to make it work if it did, but for my own part I shall be voting no. We are being asked to take too much on trust. There have been no fundamental changes in the Common Agricultural Policy of the Economic and Monetary Union. I'm worried about Parliament, but my main worries are about energy and oil, because if the Treaty of Rome is applied to the Continental Shelf, and the Community have asked to study the application, then we'll be in difficulties. I asked the officials at the Department of Energy to look at the pros and cons and the North Sea Oil is under study. The Treaty may apply, and then in 1990 we'd have to look at our depletion policy and then we couldn't resist Common Market pressure to maximize production."

  He went on to say, "We can survive outside. I regret the long campaign which will strain the Party, but I am opposed to our remaining in."

  Peter Shore said that the balance of advantages was unfavourable. "Parliamentary institutions would suffer, the unity of the United Kingdom would suffer, the relationship with the world as it is nearer to the Commonwealth, the English speaking world than to the continent. That is how the British people feel."

  As to the regional and national argument, Peter said, "The EEC disintegrates when it comes up against real issues like the energy problem. Our base is not in Western Europe. It is too weak, too small and too old fashioned. In real instances it makes the problems worse. France is no friend, she has frustrated our approach to the world energy problem through the Agency. I do not think you can have this degree of intimacy without a real community, we are friends and allies with our neighbours on the continent but we don't have that degree of intimacy with them. We can survive without, and prosper and contribute more."

  Malcolm Shepherd said, "It has been a privilege to listen to the debate and I hope the same spirit will illuminate the referendum, and the Government and the Party would come out of it stronger." He said he had always been a supporter of entry, he had lived abroad a lot of his life, he did not like the old terms but he was 85% for the new terms. We were now in and the price of leaving would be too great.

  Fred Peart said his attitude was obviously coloured by agricultural matters. The deficiency payment scheme had not even been in the 1947 Tom Williams Agricultural Act. France also, looking wider, will contain Germany. He had attacked entry in the old terms but we had achieved a lot, beef and lamb subsidies, we've defied the Council, we've liberalised sugar, and we should stay in on grounds which had been most influenced by Denis.

  John Silkin said only Harold Wilson could have kept us together over this period. It was an irrevocable decision to be made and to suggest we could change it would be like suggesting we could repeal the Treaty of Paris 1789 and bring the United States into colonial status again under Britain. It was the last chance either way. He said he would accept it as binding, we should leave the EEC because the logic of a federated Europe would involve a fundamental change in the Common Market if we wanted to stay in, our Manifesto contained minimum terms. He would vote no.

  Elwyn said he was agnostic and still had doubts, renegotiation had been beneficial, there was no leap in the dark if we stayed in now, the Commonwealth, America and the Common Market wanted us in, he didn't want a confrontation with the Common Market, the consequences of withdrawal were disturbing. If we left, our practical freedom of action would have gone, we can contain the risks to parliamentary democracy, he thought our law was more threatened at home.

  Merlyn Rees said he was not a federalist but he noticed that the French and the Germans were working better together and the youngsters today in Europe don't think nationally at all. He'd read every paper he could find and he'd come out for yes. He said the Commission worried him a bit and the Party and the Conference and the unions might take a different view but there were many Labour voters off the emotional hook now and he thought that was to the good.

  Roy Mason said, "You know my views. We have succeeded in getting some substantial changes. The awareness of a series of successes is well known, regional groupings are here to stay. We have changed the face of the Common Market, we've helped in the Third World. To begin to unravel Europe beginning with Denmark would be terrible, it would mean the UK withered on the vine. Our balance of payments, and he had spoken to the former President of the Board of Trade, would be badly affected. It would be traumatic for Britain, an embarrassment for the City, and he was for staying in.

  Barbara said, "You know my view, I've given my reasons, it is bad to ask people to stay in an organisation whose principles we do not share. As for pragmatism we have accepted that we cannot challenge the theology so we have not really tried on parliamentary control, on steel and the Common Agricultural Policy. The power on council to veto, to safeguard national interests sounds attractive but it is not as simple as that. The EEC works by compromise. Everything is a bargain, and this is a charter for coalition which would destroy the Labour Party. The EEC is an institutionalized coalition."

  Roy Jenkins said he was in favour of staying in. He agreed with Denis and said we should have gone to the Messina Conference. He himself had been wrong to underestimate the scope there had been for improving the terms. He thought it was a remarkable achievement but it would be a terrible blow if we left. He was an Atlanticist too, more at home in America than on the Continent. But Europe is a pillar of Atlantic cooperation.

  Willy Ross said he believed in the maximum strength for the UK, to prevent the division of the UK. He was unconvinced about the terms and he would vote no. If we conceded powers to Brussels we could not resist conceding them to Scotland and Wales.

  John Morris said that on forms and principles, he thought the Common Market was frightening. In practice it was more acceptable. We should try to change the Commission, we must meet the needs of Parliaments. He regretted the entry but could we do anything now but stay. It's too late to get out, he would recommend we stay.

  It was 16 to 7 for staying in. Harold said, "I hope nobody will think that has anything to do with the way I composed the Cabinet because when I formed it a year ago, there were eight for Europe, 10 against and five wobblies. Now I want to know who, of those who have expressed their view, intend to take advantage of the agreement to differ?" The replies were as follow:

    Tony Benn—Yes.

    Barbara Castle—Yes.

    Michael Foot—Yes.

    Willy Ross—Yes.

    Peter Shore—Yes.

    Eric Yarley—Yes.

  Thus it was that the Cabinet reached its view.

  Then the guidelines were passed round, very rigid saying no debating with Labour Ministers or appearing in constituencies with MPs or taking a different view without their permission, no appearing on platforms with others.

  I said, "Well, as you know Harold, I had set myself these targets but they've got to be done sensibly and it's the spirit rather than the detail."

  Harold said, "I based them on what I heard you were going to do."

  Shirley said, "What about appearing with Geoffrey Howe on the Tory side?"

  Harold said he didn't want to discuss them today "and anyone who says anything between now and then, perhaps we could discuss them again on Thursday."

  So with that the Cabinet left, it was about 1.30. I went out into Downing Street which was very crowded. I walked to the end of Downing Street, down Whitehall and back to the office.

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