BRUEGEL POLICY CONTRIBUTION ISSUE 2015/08 JUNE 2015 THE UK’S EU VOTE: THE 1975 PRECEDENT AND TODAY’S NEGOTIATIONS EMMANUEL MOURLON-DRUOL Highlights • The United Kingdom's European Union Referendum Bill, introduced in the House of Commons on 28 May 2015, legislates for the holding of a referendum before 31 December 2017 on the UK’s continued EU membership. UK prime minister David Cameron is opening negotiations with other EU member states to try to obtain an EU reform deal that better suits UK interests. Both the negotiations and the out- come of the referendum pose major challenges for the UK and the EU. • It will not be the first time that a UK government has staged a referendum following a renegotiation of its terms of EU membership. The first such referendum took place on 5 June 1975 after nearly a year of renegotiations, and the ‘yes’ won with 67.2 percent of the vote. Notwithstanding obvious differences, the conduct of today’s renegotiations should bear in mind this precedent, and in particular consider (a) how much the UK government can get out of the negotiations, in particular with respect to potential Treaty changes; (b) why political marketing is central to the Telephone referendum’s outcome; (c) how the UK administration’s internal divisions risk derai- +32 2 227 4210 ling the negotiations; and (d) why the negotiations risk antagonising even the UK’s [email protected] best allies. www.bruegel.org Emmanuel Mourlon-Druol ([email protected]) is a Visiting Scholar at Bruegel, Fellow at the Adam Smith Business School, University of Glasgow and Visiting Professor at the Université Libre de Bruxelles. The author wishes to thank Grégory Claeys, Matt Dann, Stephen Gardner, Mathias Haeussler, Pia Hüttl, Angela Romano, André Sapir, Nicolas Véron and Guntram Wolff for helpful comments on earlier versions of this paper, and Allison Mandra for excellent research assistance. BRUEGEL POLICY CONTRIBUTION THE UK’S EU VOTE: THE 1975 PRECEDENT AND TODAY'S NEGOTIATIONS 02 THE UK’S EU VOTE: THE 1975 PRECEDENT AND TODAY’S NEGOTIATIONS EMMANUEL MOURLON-DRUOL, JUNE 2015 THE FIRST UK EEC MEMBERSHIP REFERENDUM Invited again to join the EEC on its formation, the OF 1975 UK also declined. The Messina conference of June 1955 explored ways in which European A When did the UK enter the EEC? economies could deepen their cooperation. The Messina conference also created an intergovern- Founded in 1958, the European Economic Com- mental committee, chaired by Belgian foreign min- munity enlarged to include the United Kingdom on ister Paul-Henri Spaak, that was tasked with 1 January 1973. The UK entered along with Den- drafting the basis of what would become the EEC mark and Ireland in the first ever enlargement of (July 1955-April 1956). The Committee published the EEC. For the UK, it was a rather belated its final report in April 1956. The UK government entrance, since the UK had applied twice before, was invited to the Spaak Committee. The official in 1961 and 1967, suffering French president UK position on these developments was benevo- Charles de Gaulle’s veto on both occasions. lent support, in spite of an avowed scepticism about any form of integration. The UK government At the beginning of European integration in the hoped to steer the negotiations in the way it early 1950s, the UK had the choice on several favoured but proved incapable of doing so, and it occasions to participate as a founding member, did not think the negotiations would succeed. but each time declined to do so. Throughout the Showing little interest in the discussions, the UK 1950s and up to the present day, the reasons for government sent a low-level civil servant – Board this UK opposition were similar: the question of of Trade under-secretary Russell Bretherton – to the UK’s world role and its relationship with Com- such a critical ministerial meeting. The UK even- monwealth countries; a preference for loose inter- tually withdrew from the talks and decided not to governmental mechanisms over supranational participate in the EEC. integration; a greater interest in free trade over economic organisation and sectoral policies (Mil- The UK decision was based on a misinterpretation ward, 2002; Young, 2000). of the discussions in Messina and in the Spaak Committee. London underestimated the project The UK refused to join the European Coal and Steel that was being discussed and most importantly Community (ECSC) in 1951. The ECSC is often con- dithered between two strategies, one focusing on sidered the postwar starting point of European Europe (the Free Trade Area) and one global in integration because it introduced an important nature (trade liberalisation through the World institutional novelty, that of supranational institu- Trade Organisation’s (WTO) predecessor, the Gen- tions. It also marked a formal step in the post- eral Agreement on Tariffs and Trade, GATT). The UK second world war Franco-German reconciliation. prioritised looser, less committal forms of cooper- The UK government was sceptical of the new ation that focused on trade liberalisation, such as supranational High Authority (an embryo of the Organisation for European Economic Coopera- today’s European Commission) and of European tion (OEEC). coordination in the field, and had misgivings about the greater political ambitions included in the But the UK government did not just decide to stay Schuman Declaration of May 1950, which pro- out of the EEC, it also consciously tried to counter, posed the ECSC. Though it was invited, the UK if not torpedo, the EEC. Virtually in parallel with the therefore refused to join the ECSC. EEC negotiations, the UK government from 1956 pushed for the development of a Free Trade Area BRUEGEL POLICY THE UK’S EU VOTE: THE 1975 PRECEDENT AND TODAY’S NEGOTIATIONS CONTRIBUTION 03 (FTA) (Ellison, 2000). The design and purpose of prospects for integration, including of currencies. the FTA stemmed from the UK preference for looser free trade arrangements over economic In the early 1970s the UK government applied integration. The FTA project failed in 1958 because again and it became quickly clear that it would be of the Gaullist support for the EEC project and the successful this time. The Conservative Party won UK's inconsistent strategy (Warlouzet, 2011). The the 1970 general elections. Outgoing Labour UK in turn re-prioritised international trade liberal- prime minister Harold Wilson, who led the UK’s isation over European endeavours. To compensate second application in 1967, went back into oppo- for the failure of the FTA, another agreement – the sition. The new prime minister Edward Heath Stockholm Convention – was negotiated and decided to revive the second failed UK application signed in January 1960 to create the European and by summer 1971 most issues had been set- Free Trade Association (EFTA), comprising Austria, tled (Furby, 2010; Wall, 2012). Many factors con- Denmark, Norway, Portugal, Sweden, Switzerland tributed to this positive outcome: the resignation and the UK. But this failed to be of any economic of de Gaulle as French president in April 1969; the or political importance. coming to power of Georges Pompidou, who was much more open to EEC enlargement; improved It was only once the EEC proved to be a remark- UK government negotiating tactics; and the able success that the UK government realised favourable result of the referendum in France on that the risks of being sidelined outweighed the the enlargement of the EEC to the UK, Denmark, benefits of staying outside. The UK government Ireland and Norway, with a majority of 68.3 per- subsequently applied twice for EEC membership – cent in favour. The UK signed the Treaty of Acces- in 1961 and in 1967 – only to be vetoed twice by sion to the EEC in January 1972, and officially French president Charles de Gaulle (Kaiser, 1999; entered on 1 January 1973. However, in early Ludlow, 1997; Lynch, 2000; Parr 2005; Pine, 1974, barely a year after entry, a new UK govern- 2007; Rollings, 2008). The vetoes were justified ment, once again led by Harold Wilson, wanted to on the grounds that the UK was too different to be renegotiate the terms of its accession. accepted by the then six members of the EEC; that the pound sterling, having the role of an interna- B Why did Harold Wilson want to renegotiate tional reserve currency, did not suit European the terms of UK entry in 1974? objectives (Schenk, 2002); and more generally that enlarging the EEC at such an early stage First, the perennial question of the relationship would put at risk its institutional development and between the UK and Europe served as a back- stability. Enlargement would put off indefinitely ground for the debates. The two issues that guided the ambition of creating a political union and UK foreign policy since the end of the second would instead transform the EEC into a mere com- world war – its world role and a preference for free mercial zone. The French government found itself trade over economic and political integration – increasingly isolated as its objections seemed remained at the centre of the discussions over the unsustainable, and as the other five EEC member UK’s continued EEC membership. Under different states were willing to accept the UK as a member. guises, they continue to be valid up to the present From a UK perspective, entry to the common day. market was an ever more pressing issue because the EEC continued to successfully forge ahead: on Second, the UK suffered from severe economic 1 July 1968, the common market was achieved problems in the early 1970s that were blamed on (removal of tariff barriers), 18 months ahead of EEC entry.