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CBP 7253 PDF
CBP 7253 PDF
The 1974-75 UK
Renegotiation of EEC By Vaughne Miller
Membership and
Referendum
Inside:
1. Background
2. Labour referendum pledges
3. UK-EEC negotiations
4. The referendum
5. Further reading
Contents
Summary 4
1. Background 5
2. Labour referendum pledges 6
2.1 Labour’s 1974 manifestos 6
2.2 The Government informs the EEC Council 7
3. UK-EEC negotiations 11
3.1 Method and process 11
3.2 Results of the renegotiation 11
Parliamentary approval 18
Views in Europe 19
Public opinion 19
4. The referendum 20
4.1 White Paper on the EU referendum 20
4.2 The Referendum Bill 21
4.3 Referendum campaign and literature 21
5. Further reading 26
Cover page image copyright: EU flags by Gannon. Licensed under CC BY 2.0 / image
cropped
3 The 1974-75 UK Renegotiation of EEC Membership and Referendum
Number 7253, 13 July 2015 4
Summary
The Labour general election manifestos in February and October 1974 promised a
renegotiation of the UK’s terms of membership of the European Economic Community
(EEC or Common Market), followed by a referendum on the UK’s continued membership.
Having won the elections first without a majority and then with a narrow majority, in
1974 and 1975 Labour Prime Minister Harold Wilson and his government negotiated
concessions for the UK from other European governments. The main areas of UK concern
were:
- the Common Agricultural Policy (CAP),
- the UK contribution to the EEC Budget,
- the goal of Economic and Monetary Union,
- the harmonisation of VAT
- Parliamentary sovereignty in pursuing regional, industrial and fiscal policies.
The 1975 referendum campaign was announced on 7 January 1975 and a White Paper on
the referendum was published in February 1975, which was debated in Parliament in
March 1975.
At the Paris Summit of Heads of State or Government in December 1974 and the Dublin
European Council in spring 1975, the UK Government successfully negotiated with the
other eight Member States the introduction of the Community’s regional policy, a
budgetary correction mechanism and market access for New Zealand dairy products.
The Cabinet endorsed the results of the renegotiation on 18 March 1975. The House of
Commons endorsed them on 9 April 1975.
The European Referendum Bill 1974-75 was introduced on 26 March 1975 and passed its
Second Reading on 10 April (312 to 248 votes). It received Royal Assent on 8 May.
The referendum was on 5 June 1975. With a turnout of 64%, 67% voted in favour of
staying in the EEC and 33% voted against.
This paper also indicates comparable stages in the present Government’s proposed
renegotiation of the UK’s relationship with the European Union.
5 The 1974-75 UK Renegotiation of EEC Membership and Referendum
1. Background
The Labour government of Clement Attlee after the end of the Second
World War did not support moves towards the creation of the European
Coal and Steel Community (ECSC). The Labour Party maintained this
position throughout the 1950s and early 1960s, and was opposed to
the Conservative Government’s application for membership of the
European Economic Community (EEC, also known as the Common
Market) in 1961. But at the March 1966 general election, the Labour
Party manifesto stated that EEC membership was an aim, “provided
essential British and Commonwealth interests are safeguarded”. Harold
Wilson, who became Prime Minister in October 1964, said in August
1965 that the EEC’s agricultural policy was the main obstacle, because,
unless it was changed, it would have “a most serious and damaging
effect on Commonwealth imports and upon our balance of
payments”. 1
But by May 1966 the Labour government was saying the UK wanted to
be part of an expanded EEC. In the 1970 general election, Labour was
committed in principle to EEC membership, but the Conservatives won
the election and Prime Minister Edward Heath applied for membership
the following year. As Leader of the Opposition, Harold Wilson was
highly critical of the terms of entry negotiated by Edward Heath, and
promised to renegotiate the British terms of entry if Labour was
returned to power.
The Conservative Government, initially backed by the Labour
Opposition, supported parliamentary approval of the decision to accede
to the EEC rather than public approval via a referendum. However, in
March 1972 Labour joined Conservative eurosceptics calling for a
consultative referendum before entry.
Edward Heath took the UK into the EEC in January 1973, bringing its
membership (with other new members Denmark and Ireland) to nine.
On 4 March 1974 Harold Wilson became the Prime Minister of a
minority Labour Government and he was returned to power with a
majority of three in the election on 10 October 1974.
Both Labour’s 1974 election manifestos promised a renegotiation of UK
terms of entry, which would be subjected to a national referendum to
determine whether the UK should remain in the EEC on the new terms.
After winning the February 1974 election, Harold Wilson sought to fulfil
his election manifesto promise by asking other EEC leaders for certain
concessions for the UK.
1
Joining the CAP. The Agricultural Negotiations for British Accession to the European
Economic Community 1961 – 1973. Ed. Sir Michael Franklin, Peter Lang AG, 2010.
Number 7253, 13 July 2015 6
- A “rigid programme” leading to permanently fixed parities and In July 2012 the
Economic and Monetary Union by 1980; Conservative-led
coalition Government
- The concept of a European Union, which Mr Callaghan launched a Review of
described as “quite unrealistic and not desired by our peoples, the Balance of
certainly not by the British people”; Competences between
the EU and UK. The
- The cost of the Common Agricultural Policy, which for the UK as Review concluded in
a high importer of food was particularly burdensome; late 2014, finding that
in general the balance
- Trade with the Commonwealth and developing countries in of competences was
industrial and agricultural sectors, and the generalised about right and that
preference scheme; the UK had often
helped shape the EU
- Aid and regional assistance, and whether existing rules agenda; but also that:
interfered with British power over its economy to pursue
- Subsidiarity and
“effective regional, industrial, fiscal and counter-inflationary proportionality are not
policies”. always sufficiently
implemented; EU should
He called for “fundamental changes” to the Community budget: focus on areas where it
adds genuine value.
12. We are not asking for charity. We seek a fair deal. In 1973,
only paying 8.5% of the Community budget in accordance with - Need for greater
the transitional key, we were already the second largest net democratic accountability
contributors. At the end of our normal transitional period we shall of EU institutions; national
be paying over 19%, well over the 16.5% which is our likely share parliaments should have
of GNP at that time. If the full ‘own resources’ system were to be greater role in decision-
applied to us with no changes in 1980, we should find ourselves making.
paying still more, perhaps several percentage points more, of the
Community budget — in even sharper contrast with the relatively - Need for less and better
EU regulation, more
low share of GNP we can then expect to have. I am sure you will effective implementation
agree that something must be done about that. Britain cannot and enforcement of
accept a permanent drain across the exchanges of several existing legislation.
hundred million pounds sterling a year.
- Rights of all Member
The Government’s initial approach, Callaghan explained, was to seek States must be protected
changes to EEC policies and decisions, with Treaty changes only “if it as Eurozone integrates.
should turn out that essential interests cannot be met without them”,
or if existing rules “interfere with the powers over the British economy,
which we need to pursue effective regional, industrial and fiscal
policies”. In January 2015 the
Prime Minister wanted
The matter of Treaty amendment was unclear. According to the account "full-on treaty change",
of the negotiations by Nicholas Spreckley, former head of the Foreign but by June reports
suggested he would
Office’s European department, published in 1976, 2 the Foreign
accept reforms in a
Secretary hoped to avoid Treaty change, while many in the Labour Party "legally binding and
assumed that Treaty amendment, or amendment of the UK Accession irreversible" process,
Treaty, was unavoidable. There were concerns that any likelihood of leading to a later Treaty
Treaty change might endanger the process of renegotiation: “There change.
Other EU Member
would be confrontation with the other countries and it would not be States are reluctant to
possible, as the Secretary of State wished, to tackle the renegotiation agree to Treaty changes
objectives step by step”. 3 It was suggested that only the budget might to suit the UK because
require a Treaty amendment and that the CAP reforms could be of the risk of the UK
electorate voting to
leave the EU.
2
FCO, The Common Market Renegotiation and Referendum 1974-1975, Report by
Nicholas Spreckley, Part I, 1976.
3
FCO, The Common Market Renegotiation and Referendum 1974-1975, Report by
Nicholas Spreckley, Part I, 1976.
Number 7253, 13 July 2015 10
3. UK-EEC negotiations
3.1 Method and process
The negotiations and discussions were carried out by the Prime Minister
David Cameron set up a
at Heads of State or Government level, 4 by Ministers in the Council of Europe Cabinet
Ministers and by both in bilateral meetings with other EC governments; Committee to consider
also by EU diplomats and senior civil servants. 5 issues related to the EU
referendum. Its
In the UK a Cabinet committee was set up to handle the renegotiation, membership is:
under the chairmanship of the Prime Minister. It included the Foreign - Prime Minister, David
Secretary, James Callaghan and other departmental ministers, some of Cameron
whom were anti-Marketeers (e.g. Tony Benn, Peter Shore). - Chancellor of the
Exchequer, George
A Referendum Information Unit headed by an FCO official, Martin Osborne
Morland, was set up to brief the press and provide the public with - Foreign Secretary,
Philip Hammond
factual information on the renegotiation and the referendum.
- Home Secretary,
The period between the two 1974 elections was difficult for the Theresa May
renegotiation. Nicholas Spreckley recorded in his 1976 report (p.86): - Work and Pensions
Secretary, Iain Duncan
Britain’s partners felt little inclined to give away any points over Smith
the budget, or indeed any other renegotiation item, when they - Business, Innovation
knew that a further General Election was imminent. It was far and Skills Secretary,
from certain that the Labour Party would be successful in Sajid Javid
obtaining a better majority or even in retaining power, and it was - Chancellor of the
clearly a waste of time for the other countries to begin serious Duchy of Lancaster,
work and make real concessions in a negotiation which in four or Oliver Letwin
five months’ time might no longer be necessary. - Parliamentary
Secretary to the
3.2 Results of the renegotiation Treasury and Chief
Whip, Mark Harper
The main achievements of the renegotiation were achieved at the Paris - Minister for Europe,
Summit in December 1974 and the European Council in Dublin under David Lidington
the presidency of the Irish Prime Minister, Liam Cosgrave, on 10-11
Mats Persson (of think-
March 1975. tank Open Europe) was
Member States reached agreement on the budget correcting appointed as an adviser
on Europe.
mechanism and on access and pricing provision for New Zealand dairy
produce. The Prime Minister said in a statement on 12 March 1975
cc509-22) that the Government had “now taken our discussions within
the Community on renegotiation as far as they could go”. The Cabinet
would review what has been achieved over the last year in the
renegotiation as a whole, on the basis of the objectives set out in the
Labour Party manifestos of February and October 1974.
The new terms were agreed in the Cabinet on 18 March by 16 to 7.
On 18 March (HC Deb 18 March 1975 cc1456-80) Harold Wilson set
out to the Commons what had been asked for and what had been
achieved at the renegotiation (main points in bold):
4
The first summit meetings between 1961 and 1974 were before the formal
establishment of the European Council.
5
Michael Butler, for example. For a detailed account of the negotiations, see Stephen
Wall’s book, The Official History of Britain and the European Community. Volume II.
From Rejection to Referendum, 1963-1975, published in 2013.
Number 7253, 13 July 2015 12
OBJECTIVE ONE
The manifesto called for: Major changes in the common
agricultural policy so that it ceases to be a threat to world trade
in food products, and so that low cost producers outside Europe
can continue to have access to the British food market. My right
hon. Friend the Minister of Agriculture gave precision to these
objectives in his statement to the Council of Ministers on 18th
June, on which he reported to the House on 19th June. He asked
for:
1. The establishment of firm criteria or pricing policy, taking
account of the needs of efficient producers and the
demand/supply situation.
2. Greater flexibility, taking account of the need for appropriate
measures to deal with special circumstances in different parts of
the Community.
3. Measures to discourage surpluses and to give priority to
Community consumers in the disposal of any surpluses which
arise.
4. Improvement in the marketing régimes for some major
commodities, particularly beef, with a view to avoiding surpluses.
5. The improvement of financial control.
6. Better access for certain commodities from outside the
Community, with particular regard for the interests of
Commonwealth producers and of the consumer.
Now as to the outcome.
On the supply of food at fair prices, in the three CAP price
settlements since the Government took office the Minister of
Agriculture has succeeded in keeping price increases below cost
increases, and thus in real terms reinforcing the downward trend
in CAP prices. This would benefit consumers and taxpayers and
also is designed to reduce the risk of surpluses.
Increasingly, price proposals are being related to the costs of
efficient producers and the supply/demand situation, and this
approach is reaffirmed in the Commission's report on the CAP
stock-taking for which we and Germany asked.
On the greater flexibility for special circumstances and improved
systems of market regulation, especially beef, the Minister has
secured changes for beef under which member States are no
longer obliged to maintain high prices for producers by buying
beef into store and denying it to consumers. Instead, they can let
it go to consumers at reasonable prices and make up returns to
producers by deficiency payments partly financed by the
Community.
In addition, special encouragement has been given for sugar
production in the United Kingdom. More generally, the monetary
arrangements have been used to differentiate the percentage
price increase between member States. There has been more
flexibility in the use of national aids.
On the requirements of measures to discourage surpluses and to
pay more regard to consumers, the downward pressure on CAP
prices is itself a safeguard against surplus production—together
with our proposals, now being pursued, for the reduction of
support buying prices for milk products and cereals when
surpluses start to arise. Then there is the recent practice, which I
13 The 1974-75 UK Renegotiation of EEC Membership and Referendum
best judges of what is required in their own country and that the
Commission will be prepared to consider changes in national aid
systems compatible with the Common Market, when they are
justified by problems of employment, unemployment, migration
and by other valid requirements of regional development policy
which constitute essential national problems. The Commission has
further accepted that urgent action by Governments may be
necessary and that treaty procedures will not hold this up.
Industrial Policy
We have not met with any serious difficulties from the EEC in the
conduct of industrial policy during the past year. We have
reported aids given under Sections 7 and 8 of the Industry Act
1972. Article 222 of the Treaty of Rome specifically permits
nationalisation; and Government participation in the equity of a
firm does not in itself raise problems under the treaty. The
Commission has accepted that in urgent cases we shall provide
aid without first giving it an opportunity to comment. In such
rescue cases a solution might be that when we prepare a plan to
restore the firm concerned to viability we should discuss it with
the Commission within the following six months. This would not
be an onerous requirement.
The Commission has not yet commented on the Industry Bill. The
proposals for the National Enterprise Board and for Planning
Agreements have much in common with arrangements in other
member States. They are in no way incompatible with the treaty,
provided that the Government's powers are not exercised so as to
damage the competitive position of undertakings in other
member States—a principle which we accept, as we have in the
case of regional policy.
I should add that, as regards State aids, we had just as stringent
an injunction on us as members of EFTA, and non-Market EFTA
countries which have agreements with the EEC have accepted
obligations just like the EEC obligations without having any part in
EEC decisions in these fields.
I believe that this meets our objective. Steel is more difficult, partly
for inherent reasons, partly because of action taken by the
previous Government when they repealed Section 15 of the Iron
and Steel Act.
I am satisfied that potential problems over prices can be resolved
by close contact between the Government and the Steel Board,
and possible difficulties about mergers are also capable of a
solution.
There is nothing in the Treaties of Rome or Paris or in practices or
policies under the treaties which precludes us from extending
nationalisation of the present private sector—even total
nationalisation of the industry.
On the control of private investment there were, until the repeal
of Section 15, powers under legislation passed by this House to
prevent investment by non-British non-Community country
steelmasters—and the much publicised mini-mill proposal at
Newport could have been dealt with if Section 15 was still in
force. It is not against the treaty in any way to use it.
My right hon. Friend the Foreign and Commonwealth Secretary
gave notice at the Council of Ministers on 3rd March that it might
be necessary to ask for treaty revision if there is no other way of
solving this problem. If, as part of the control of the economy, the
Number 7253, 13 July 2015 16
6
Political Insight, Volume 6, Issue 1, pages 25–27, April 2015, available at Wiley
Online at http://onlinelibrary.wiley.com/doi/10.1111/2041-9066.12085/full.
19 The 1974-75 UK Renegotiation of EEC Membership and Referendum
Views in Europe
The other EEC Member States were prepared to make concessions to French President
the UK, although the French foreign minister, Jean Sauvagnargues, François Hollande is
called Callaghan’s wish list “wholly contrary to the very spirit of the against EU Treaty
community”. 7 According to Sir Nicholas Spreckley: change. Economy
Minister Emmanuel
The Germans, the Dutch and the Danes seemed the most Macron rejects “à la
sympathetic to British objectives...But as so often, it was the carte” UK Membership
French attitude which was at once the most important and the of the EU. German
most critical. In these early weeks the French government took the Chancellor Angela
line that the Treaties and the principles of the Community were Merkel does not rule
inviolable. 8 out Treaty change to
accommodate UK
The French were unwilling to give at all, or “show any disposition to concerns. See Section
understand British thinking”. Germany worried about distractions from 2.3 of Commons
“the community’s progress”. 9 But German Chancellor Helmut Schmidt Briefing Paper 7214, 4
made concessions on the budget and “also went along with a diluted June 2015, for other
form of Britain’s demand for EC access to New Zealand dairy views in Europe.
products”. 10
Public opinion
The European polling agency Eurobarometer asked the question: IPSOS-MORI polls asked
how people would vote
“Generally speaking, do you think that UK membership of the European
if there were a
Community (Common Market) is a good thing, a bad thing, neither referendum now on EU
good or bad or don’t know. membership.
The results in September 1973 and May 1975 were as follows: May 2014
Stay in 54%
Neither good
Date A good thing A bad thing Don’t know Get out 37%
nor bad Don’t know 10%
7
Bloomberg, 30 March 2015.
8
Nicholas Spreckley, The Common Market Renegotiation and referendum, 1974-75,
FCO
9
Bloomberg, 30 March 2015.
10
“Richard Nixon and Europe”, Luke A. Nichte, Cambridge University Press, 2015
Number 7253, 13 July 2015 20
4. The referendum
The decision to hold a referendum was controversial in the UK The official
Parliament. Most politicians who wanted Britain to stay in the EEC did Conservative Party
not want a referendum. Edward Heath was opposed to a referendum as position supports a
referendum on EU
a constitutional device. Margaret Thatcher, elected as leader of the
membership. Before the
Conservative Party in February 1975, called the referendum “a device of 2015 general election,
dictators and demagogues”. 11 Labour was opposed to
a referendum, but the
Supporters of a referendum were mainly those who wanted to leave the acting Labour
EEC and mostly from the Labour Party. One supporter, Tony Benn, said leadership says the
a referendum would make government truly accountable to the party now supports one
electorate. by 2017. The Liberal
Democrats oppose a
Peter Kellner 12 told the Lords Select Committee on the Constitution in referendum by 2017,
2010 that “the decision to hold the 1975 European Communities but support one in the
referendum “… was wholly to do with holding the Labour Party case of further transfer
of sovereignty to the
together”. 13 EU. The SNP is
opposed.
4.1 White Paper on the EU referendum
The White Paper of 26 February 1975, “The Referendum on UK
Membership of the European Community” (Cmnd 5925) announced
that a referendum would be held after the outcome of the
renegotiation was known. 14 The Government’s own recommendations
would be explained to voters in a White Paper and a popular version
of this containing a less technical account would be distributed to
every UK household.
In parliamentary debates in March and April 1975 MPs questioned the
role of civil servants in the special information unit (the Referendum
Information Unit) set up to handle requests for information. 15 It was
criticised for being a government body and for “volunteering
information without being asked”. One MP asked: “What has it
become but a propaganda machine not for the Government but for the
[European] Commission …?” 16
The franchise would be the UK Parliamentary franchise including peers.
Special arrangements for the armed forces electorate were provided by
order. 17
Information about
Core public funding would be provided for both the ‘Yes’ and ‘No’
spending limits and
campaigns and there would be no expenditure limit on either side. Two public funding for the
umbrella organisations, Britain in Europe (BIE) (the ‘Yes’ campaigners) designated lead
and the National Referendum Campaign (NRC) (the ‘No’ campaigners), campaign organisations
for the 2016-17
referendum can be
11
HC Deb 11 March 1975 c314. She was quoting Clement Attlee in 1945. found in Commons
12
BBC journalist and President of the YouGov opinion polling organisation. Briefing Paper 7212
13
House of Lords Select Committee on the Constitution 12th Report of Session 2009–
10, Referendums in the United Kingdom, Report with Evidence, Q 46.
European Union
14
The draft White paper on the referendum was considered in a Memorandum by the Referendum Bill 2015-
Lord President of the Council (Edward Short) of 17 February 1975. 16, 3 June 2015.
15
See HC Deb 11 March 1975 cc291-408.
16
HC Deb 23 April 1975 c1634.
17
For debate on issues linked to Armed Forces voting, see HC Deb 22 April 1975
cc1249-373.
21 The 1974-75 UK Renegotiation of EEC Membership and Referendum
already existed when they were given legal status under the
Referendum Act 1975.
The funding and other arrangements for the 1975 referendum are
described in Library Research Paper 97/61, The Referendum
The European Union
(Scotland and Wales) Bill [Bill 1 of 1997-98], 20 May 1997. They were Referendum Bill 2015-
also examined in the Fifth Report of the Committee on Standards in 16 was introduced on
Public Life, The Funding of Political Parties in the United Kingdom, 28 May 2015 and had a
October 1998 (Cm 4057). Second Reading on 9
June. It deals with the
There was disagreement in the Cabinet over the wording of the franchise and conduct
referendum question. The FCO wanted a long preamble to the of the referendum.
question, explaining the Government’s position; the anti-Marketeers Schedules provide
details of rules on the
wanted the words “Common Market” rather than “European campaign and the
Community”. conduct of the
referendum. It gives the
On 11 March 1975 there was a six-hour Commons Adjournment debate Secretary of State the
on the EEC membership referendum and the White Paper, and a shorter power to make
Lords debate on 12 March 1975. provisions for the date
and the conduct of the
poll, subject to approval
4.2 The Referendum Bill by both Houses after
The Referendum Bill was introduced on 26 March 1975. The Second consulting the Electoral
Reading debate was on 10 April 1975 (HC Deb 10 April 1975 cc1418- Commission.
547). The House divided: Ayes 312, Noes 248.
The most controversial
It stipulated the franchise and the authority of the Government to provisions at Second
stipulate by order the date of the referendum and make provisions for Reading were the
franchise, the timing of
its conduct, subject to approval by affirmative resolution by each House. the referendum and the
It allocated responsibility for the conduct of the referendum and lifting of the purdah
provision for the
provided for the appointment of a Counting Officer. referendum campaign.
It authorised grants not exceeding £125,000 each to the two campaigns Amendments on these
provisions were tabled
on each side of the debate (Britain in Europe and the National
during Committee
Referendum Campaign). stage. The House
The question adopted in the Bill was the one originally included in the divided: Ayes 544, Noes
53.
Government White Paper, but with “The Common Market” added in
brackets after “European Community”:
18
http://referendum75.org/content/why-you-should-vote-yes.
Number 7253, 13 July 2015 24
19
http://referendum75.org/content/why-you-should-vote-no.
20
Yes to Europe, The Conservative Guide for the 1975 Referendum Campaign.
London: Conservative Research Department, 1975. 96 p. p. 28-52; 55-66. Available
on CVCE website.
Number 7253, 13 July 2015 26
5. Further reading
There is a vast amount of literature on the background to and conduct
of the 1975 referendum, of which the following is a selection. 21
Full Hearted Consent: The story of the referendum campaign and the
campaign for the referendum, Philip Goodhart, July 1976 (information
at http://www.amazon.co.uk/Full-hearted-Consent-Story-Referendum-
Campaign/dp/0706702069)
Bruges Group paper 41, Ultimate Vindication: The Spectator and Europe
1966-79, 1 October 2000
21
This bibliography was compiled with the help of Kiely Wing.
27 The 1974-75 UK Renegotiation of EEC Membership and Referendum
Bruegel Policy Contribution, The UK’s EU vote: the 1975 precedent and
today’s negotiations, Emmanuel Mourlon-Druol, 8 June 2015
Business for Britain, Wider Europe: lessons from the 1975 renegotiation,
Oliver Lewis, 2014
Stephen Wall, 2013, The Official History of Britain and the European
Community. Volume II. From Rejection to Referendum, 1963-1975,
London, Routledge