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  • Published in Analysis
The flag of the European Union

The flag of the European Union

Chris Bambery takes a look at the UK's troubled relationship with the EU, both in the past and in the present

For the whole of my 60 years Britain has had no clear strategic approach to the development today’s European Union. The divisions within the British elite have been submerged in the main but have broken into public all too regularly. Beyond that it has damaged the Tory Party like no other issue. As I write David Cameron has promised his ministers can have a free hand as to how they campaign in the upcoming referendum of Britain’s membership of the EU. The fear must be that the Tory Party, largely Eurospectic and to the right of Cameron, will slip his leash and engage in civil war.

The history of Britain’s tortuous relationship with the European Union is the history of Britain’s relentless decline, and the inability of its ruling class to arrest that decline, above all, since the end of the 19th century and the end Britannia’s dominance of the world economy.

Identifying Germany as the dominant threat (Whitehall had already discounted any possibility of confronting the United States) the majority section of the ruling class, striding both main parties, the Liberals and Tories, favoured an alliance with France and Czarist Russia. In the wake of World War One, and Britain’s involvement which followed that strategic decision, there was a rejection of involvement in any further alleances with continental powers.

Following the collapse of the 1916-1921 Lloyd George coalition government (caused by imperial over reach) there were two responses: the dominant Tory approach was to step back from direct involvement in European alliances and try to maintain Britain’s great power status relying on the Dominions and Empire. The second approach, espoused by the Labour Party and the anti-Lloyd George Liberals was to look to an alliance with the USA. This was based on their war time acceptance of President Woodrow Wilson’s failed attempt to create a new international order. Overlooking the fact that for Wilson this was based on US global hegemeony, the likes of Labour leader Ramsey MacDonald saw the future based on an alliance between the two great “democracies,” the US and the UK (this would have been news for residents of India, Egypt or Palestine!).

That split fed into the failed British response to the rise of fascism. The Tories under Baldwin and Chamberlain stuck to the first approach, both saw the USA as much of a menace as Nazi Germany, but added appeasing Hitler in the hope that by feeding him Central European territory his appetite would be satisfied.

The minority current around Churchill, and his few Tory supporters, and Labour wanted to resist Hitler controlling Europe and looked to renew an alliance with the USA. The cost would be the effective dismantling of the British Empire.

In 1945 Britain emerged as a victor, one of the three great Allied powers. In reality it was bankrupt and in hock to the USA. By 1945 it was the junior partner in the war in Western Europe and virtually excluded by Washington from any say in how the war with Japan was to be concluded.

For just over a decade the British elite could cling to the illusion that they presided over a great power. True they had been forced to quit India and to scuttle from Palestine, but they still ruled a large area of the globe.

True too that at the close of the war the USA had forced them to dismantle the Sterling Area, a protected trading zone including Canada, Australia, New Zealand and countries outside the Commonwealth and Empire like Argentina. But sterling remained a currency in which many of those states still held their foreign reserves (that ended in 1967 when the Pound was devalued).

The onset of the Cold War began serious discussions about the economic and political integration of Western Europe, encouraged by the United States, which with its major military presence and with plans for the creation of NATO underway, felt secure in its position.

In 1947 16 Western European states, largely dependent on the US Marshall Plan for economic aid, met in Paris to discuss the economic reconstruction of Europe. The US pressed for closer economic integration, the British Labour Party foreign secretary, ex-union boss Ernest Bevin argued, successfully, for a more informal arrangements operating on a case by case basis.

The British saw the NATO and the Council of Europe, both established in 1949, as the main way to forge European links but for both Labour and Conservative governments cross-Atlantic integration was more important than European integration. 

Bevin himself clung to the belief Britain could remain on the world stage as an equal with the USA and the USSR, by utilising the resources of the Commonwealth, through co-operation between Western European states and via the alliance with the USA, what he termed the three pillars of UK foreign policy. The British ruling class saw themselves as “of” Western Europe, but not “in” Western Europe.

In 1951 Labour was defeated at the polls and Winston Churchill was returned at the head of a Conservative government, with Sir Anthony Eden as foreign secretary. Both men were even more gung ho in wishing to assert Britain’s great power status.

The outgoing Labour government had taken Britain into another long and costly war in Korea, trailing behind its American ally. It had also committed itself to the construction of an atomic bomb, tested after it left office in 1952, and to maintaining high levels of defence spending the country could not afford. The gap between Britain and its former allies was demonstrated when the Americans tested the hydrogen bomb that year followed shortly afterwards by the Soviet Union. Britain took another five years to catch up.

By 1953 British military spending consumed 28.5 percent of the total government budget.

The reality of Britain’s economic decline could not be brushed under the carpet. After six years of “peace” rationing was still in place, and in 1952 the meat ration was actually cut! Between 1950 and 1955 Britain’s exports fell by five percent, those of West Germany rose by 50 percent. The UK economy was not growing at the same speed as it European rivals and there was a persistent balance of payment deficit. Above all high levels of military spending meant too much of British industry was committed to military orders rather than to export markets. It also meant too little investment affecting productivity levels.

Both Churchill and Eden had worked hard in the closing stages of the war to ensure France was promoted to great power status. Like Britain it wanted to retain its Empire and to operate as a world power, not under full American control. It grasped sooner than Britain that this was not the case (her defeat in Indochina was a chilling reminder of this, with worse to follow in Algeria). 

France’s interest in Germany’s future was more acute. Initially it flirted with plans to undo German unification of 1871 to ensure Germany could not emerge as a power again. But as it became apparent that was not going to happen and that Washington saw West Germany as a bulwark against the Soviet Union it demanded a switch of mind in Paris. Cementing West Germany into a united, democratic Western Europe now seemed a better way to achieve French aims. 

In May 1950 the French foreign minister, Robert Schumann, issued his famous Declaration for the creation of a “supra-national” Western European body. The immediate step was to co-ordinate the steel and coal industries of France, West Germany, Italy, Belgium, Holland and Luxemburg. The resulting European Coal and Steel Community was the forerunner of the EEC. The USA backed the Schumann plan.

The extension of this, creation of the European Economic Community (today’s European Union) in 1955 saw the British ruling class split. The Conservative finance minister, “Rab” Butler, backed by the Treasury, won the British Cabinet to the idea that if the six Western European nations who’d signed the Steel and Coal Pact, created a free trade area Britain would be able to negotiate a special relationship with it, based on association but not membership. In other words it would gain access to the Common Market but be exempt from the club’s rules, maintaining Britain’s special position in Europe and the world. Butler was shocked when the new EEC laughed the idea out of court!

Britain’s policy towards Europe was now in chaos.

Worse was to follow a year later with the debacle of the Anglo-French-Israeli Suez Canal invasion after the Egyptian government had nationalised the waterway. First, faced with a run on Sterling the Eisenhower administration refused requests for economic help unless Britain ceased operations, throwing Britain’s belief in the “special relationship” into doubt. Secondly, it demonstrated the reality of Britain’s role in the world. Thirdly, when London succumbed to Washington’s blackmail, it left the French believing they could no longer trust the British.

Paris now switched to a policy of working in tandem with Germany,  keeping as close as possible to its traditional enemy. Thus was formed the central axis which dominated the EEC/EU until the 2008 financial crash when Germany decided it would act independently as the hegemon of Europe. France saw its alliance with Germany and support for a unified Europe as the way to police its decline and to maintain its leading role in Europe. It would take some time before that penny dropped in London.

What Suez did do was force Whitehall to confront the fact that high levels of military spending were an impediment to economic growth. Britain was forced to opt out of the missile race and began the process of withdrawal from military commitments across the globe.

In July 1961 the Conservative Prime minister, Harold Macmillan announced Britain would apply for membership of the EEC. It seemed an abrupt about turn. MacMillan had moved post-Suez to repair Britain’s relations with Washington, and they pressed for British entry to the EEC. Macmillan grasped British trade with the Commonwealth was declining and that the anaemic British economy might benefit from the dynamism of its Western European rivals.

The application was delivered as the holiday season began and it took two months for negotiations to begin. The US indicated support for Macmillan but that only increased the suspicion of France’s president, Charles de Gaulle.

Opposition to the move came from a minority of Tory MPs who opposed any weakening of links with the old Empire and from the opposition Labour Party. Its leader, the right winger Hugh Gaitskell, combined nationalist rhetoric, invoking “1000 years of history,” with a more astute warning that the pro-market nature of the EEC would threaten the Welfare State created by Labour in 1945.

Eventually the negotiations became too protracted, de Gaulle announced they were going nowhere and then vetoed the application. 

It left a bitter taste in Britain. Big business was at this stage divided. Aside from the Commonwealth Britain was the biggest overseas investor in the US and sections of British capital saw North America as more important than Europe.

The election of a Labour government in 1964 was followed by a series of crisis. A devaluation of Sterling in 1967 led to Commonwealth countries ending their policy of holding their foreign reserves in British pounds. Cuts in defence spending led to a withdrawal of British forces from east of Suez.

Despite the fact Labour was opposed to the EEC once in office it too applied to join, in 1967, only to be subject to another veto by de Gaulle.

In 1970 the Conservatives were returned to office under Edward Heath who led the British negotiating team. He re-applied for EEC membership and with de Gaulle out of office this time he succeeded. Even so he could not rely on Conservative MPs to vote acceptance through parliament and needed the votes of 69 Labour MPs, who defied the party line.

The Labour leader, Harold Wilson, could only reconcile the different positions of his MPs by promising that if re-elected he would hold a referendum on British membership of the EEC. In 1974 he was re-elected, and with a majority of his Cabinet favouring maintaining membership, called a referendum for the following year, promising he’d renegotiate Britain’s membership terms. He managed to produce a cosmetic package which meant nothing.

A special Labour conference voted 2:1 for quitting the EEC. The referendum campaign which followed saw the bulk of the British elite campaign for Britain to stay in. The opposition came from mainly left wing Labour figures who united with the free marketeer, anti-immigration former Tory MP, Enoch Powell.

It was Powell with his British nationalism which set the tone. The Labour left combined opposition to the EEC on the basis it was a big business club, with its slavish love of the British parliament, and its unwritten constitution. Trailing behind Powell they helped ensure the subsequent debate on Europe has been virtually monopolised by the right.

In the end the referendum produced a two thirds majority for British membership. That, you might think, was the matter settled; but no.

During the 1980s and 1990s the Labour Party moved to a pro-European position. But the Tories became consumed by internal arguments over Europe.

Today Margaret Thatcher is held up as a symbol of British opposition to a united Europe. In reality she was one of the architects of the 1987 Single European Act. By sweeping away barriers to free trade across the European Union Thatcher and her supporters saw this as part and parcel of the “reforms” she was pushing through at home. In her enthusiasm she backed removing the right on member states to veto decisions in the voting through of the act.

Thatcher too was instrumental in promoting the economic aspects of the 1992 Maastricht Treaty (passed after she was forced to resign in 1990) with its restrictions on budget deficits and welfare spending. She positively loved such free market measures but baulked when it became clear the other EU states wanted all this to be accompanied by closer political integration and, with the fall of the Berlin Wall, the spectre of German hegemony of the EU frightened her.

Growing numbers of Tory MPs followed in her wake and quickly moved further, taking up Enoch Powell’s earlier position. For them the vision was of a free market Britain negotiating free trade agreements globally. The idea of the European Central Bank, seen as being under German control, deciding monetary policy was seen as a threat to the City of London to play its global financial role.

Thatcher’s successor as premier, John Major, took Britain into the European Monetary System, a system of fixed financial rates designed to pave the way into a single currency. In September 1992 on Black Wednesday the financial markets started a run on the pound to test the government’s resolve. The speculators won and the Major government quit the ERM, devaluing the Pound in effect.

That ruined the idea of the Conservatives being economically prudent but it also unleashed civil war in the party as Major was blamed by growing numbers of his MPs and by Cabinet colleagues.

That civil war has never really ended. Meantime Britain’s decline has continued, despite claims by the current UK government of an economic “miracle.” Britain has become more and more isolated within the European Union and its “special relationship” with the USA post-Iraq looks thread bare.

The problem for the British elite is they are not in full control of the debate on Europe. The Conservative Party is its preferred champion but a growing percentage of Tory MPs do not reflect elite concerns, rather they are fixated on opposition to the European Union. On their right there is now the anti-EU, anti-migrant United Kingdom Independence Party, which polled 12.6 percent of the vote in the May 2015 UK general election, though returning just one MP. 

It is also becoming clear that there is no clear UK PLC line on how to vote. True a majority of employers favour staying in but there are growing numbers who support quitting, particularly if David Cameron cannot secure agreement that the City of London will not be subject to further EU regulation. A number of hedge funds are financing the No campaign because they loathe EU restrictions on their activities put in place post-2008. Those in business circles supporting No paint an image of Britain negotiating its own free trade agreements with the EU, US, China and India. It’s a fantasy island vision based on a gross exaggeration of Britain’s place in the modern world.

In the 1960s and 1970s a section of big business had counterposed Britain’s close economic relationship with the USA as an alternative to joining the EEC, Britain was the biggest overseas investor in the USA. Today that Atlanticist vision is as dead as the idea Britain can rebuild links with its ex-colonies. Dead economically because the USA is not interested and dead politically in the wake of the 2003 Iraq invasion, which means no major party could boast of its undying loyalty to Washington.

The evolution of the EU since the 2008 financial crash also leaves Britain in a difficult place. The EU responded by imposing austerity measures and intensifying the “race to the bottom,” where member states were encouraged to compete as to which had the lowest labour costs, most pro-big business agenda and lowest corporate taxes. Increasingly too Germany has exerted its own interests. Fearing being sidelined its ex-buddy France trails along behind here.

Far from a united Europe coming into creation there is a core area of Holland, Belgium and Austria grouped round France and a peripheral zone of Eastern and Southern Europe. Britain, like France, lies between the two. Yes it has the City of London and its financial sector but it a low wage, low skill economy suffering low investment and, consequently, the lowest productivity in the G8 nations. The future does not look bright!

The European Union is a neo-liberal project based on aversion to any form of popular democracy. It is the major champion of free market measures and the driving force in creating anti-immigrant racism and Islamophobia. Cameron and Farrage are bit players in comparison.

Anti-capitalists and socialists have every interest in weakening the EU as it rides roughshod over the peoples of Europe, and in championing our vision of a Europe united on the basis of solidarity, welfare and peace. A No vote would not mean the UK quitting the EU, the referendum’s on Cameron’s re-negotiated membership terms and the unelected European Commission will, on past form, reject the ballot result and require another vote! But it would intensify mightily the divisions both within the Tory Party and the British elite. Reasons for us to campaign for a No vote based on rejection of neo-liberalism, militarism, austerity and the complete absence of democracy at the very heart of the EU.

Chris Bambery

Chris Bambery

Chris Bambery is an author, political activist and commentator, and a supporter of Rise, the radical left wing coalition in Scotland. His books include A People's History of Scotland and The Second World War: A Marxist Analysis.

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