Realpolitik and the European Union. Chapter 2. Early years: France, the EEC, and the UK

Early years: France, the EEC, and the UK.

A simple starting point is to observe that  Europe and the EU are not the same thing. The EU has expanded from the founding six, to nine, then twelve, to fifteen and now to the present 28, including the UK.  It is in effect a Treaty, an international organization, with member states and an ambition to merge several into a single sovereign, thereby concentrating all the elements of an historic Europe in itself. It seeks to overcome the continent’s political fragmentation, which its advocates identify as the source of past wars, particularly the two world wars of the first part of the twentieth century.

The EU is not the only institutional game in town. The prime motive for the reconstitution of a European society after 1945 has been to create a polity from which war is excluded.  The first and enduring effort to create a European polity was put in place by the Attlee government as the prime European partner to the United States. It was predicated on the creation of multilateral organizations: the UN, the Council of Europe, General Agreement on Tariffs and Trade, the re-generation of the Bank of International Settlements, the Organisation of European Economic Co-operation, the North Atlantic Treaty followed by NATO in 1950. These institutions covered a variety of functional areas of significance to participating states, from human rights to trade, finance and security, but were all designed to help states better fulfill their multiple functions through international co-operation. They operated on a presumption of co-operation, and in particular on the accountability of member state governments to national parliaments.

In 1950, the French government came forward with a very different concept of regional integration with the proposal for a supra-national coal and steel community (ECSC). The ECSC, the project of Jean Monnet, the indefatigable “inspirer” (in de Gaulle’s description) of European supra-national integration, is the ancestor to the defunct EDC, Euratom, and the Rome Treaty, with its subsequent development through the Maastricht Treaty of 1992, and the Lisbon Treaty of 2009. The guiding idea here was that Europe’s problems were due to the existence of national states. Their existence, the argument ran and runs,  tends to fragment the European market space; drive up costs through duplication; perpetuate intra European rivalries in a variety of ways; ensure that the rule of law is politicized; and perpetuate, it is argued, Europe’s continued dwarfing on the world stage. Most importantly, nationalism was seen as the prime cause for the wars of the first part of the century. Hence the view that nation states had to be subsumed into a large entity with a federal/supra-national endpoint, a United States of Europe (USE). National parliaments, in this perspective, were part of the problem, not pillars of the system.

In 1950, the French government came forward with a very different concept of regional integration with the Schuman Declaration, name after the French Foreign Minister, to create a supra-national coal and steel community (ECSC). The Federal Republic and the UK responded in very different ways to this initiative.


The Federal Republic and European supra-nationalism.

The Federal Republic responded positively to the Schuman Declaration. But it did so circumspectly. There were a number of reasons for this, all present in the Basic Law, approved in May 1949, with the signature of the western occupying powers.  From the start, the German legal order has sought to maintain a delicate balance between the achievement of sovereign equality with other states; the rights of its citizens to shape policy through elections; and a commitment to a “united Europe” in the context of a world order. The preamble to the Basic Law stated that the determination of the German people was “to promote world peace as an equal partner in a united Europe”, and added in Article 24 that in pursuance of this objective the federation would transfer sovereign powers to international institutions, and consent to limit its sovereign powers in order to secure a peaceful and lasting order in Europe and among the nations of the world. At the same time, the Basic Law guaranteed “fundamental” rights, including the statement that all state authority “shall be exercised through elections”– provisions which were greatly enhanced after the passage of the Lisbon Treaty in 2009 in an amended Article 23 after concern that the extension of EU laws were curtailing the constitutional rights of German citizens.

The wording of the Schuman Declaration definitely met the requirement in the Basic Law that policy should be directed towards the consolidation of a peace system in Europe. “The pooling of coal and steel production, it stated,  should immediately provide for the setting up of common foundations for economic development as a first step in the federation of Europe, and will change the destinies of those regions which have long been devoted to the manufacture of munitions of war, of which they have been the most constant victims. The solidarity in production thus established will make it plain that any war between France and Germany becomes not merely unthinkable, but materially impossible.”

The ECSC also met the provision in the Basic Law for Germany to achieve equality of sovereign status with other states. In subordinating German steel and coal production to the ECSC, the Bonn authorities were able to drop the production quotas imposed by the occupying powers, setting a precedent in the German public mind, that incorporation into the western multilateral diplomatic networks entailed an enhancement of German liberties, rather than a curtailment. This became quickly evident in the failure of the ECSC High Authority to regulate production: the German steel industry disregarded the quotas set, and grew by leaps and bounds to meet demand for German reconstruction. Meanwhile, the coal industry, under challenge from cheap oil, drifted into crisis, and by the end of the 1950s, the organization has been eclipsed by other Monnet initiatives.

Equality of sovereign status was achieved in the Germany Treaty of 1952, which ended Germany’s status as an occupied territory. The Treaty gives the Federal Republic the status of a sovereign power, with certain restrictions  that remained in place until 1991, and the achievement of German unification. The Germany Treaty came into effect in 1955.

The ECSC, the project proposed by  Jean Monnet, the indefatigable “inspirer”(in de Gaulle’s description) of European supra-national integration, is not enormously significant in its own right. Seen from the perspective of Chancellor Adenauer’s intent to anchor Germany westwards, to achieve equality of sovereign status for Germany, and to ensure that support among the western allies to the principle of eventual unification within the constitutional order of the Federal Republic, the ECSC was one, small but significant step along a long path which led over four decades later to German unification, and the shift of the German capital from Bonn to Berlin.

Its significance is as ancestor to the defunct European Defence Community(EDC), Euratom, and the Rome Treaty, with its subsequent development through the Maastricht Treaty of 1992, and the Lisbon Treaty of 2009. Most importantly, nationalism was seen as the prime cause for the wars of the first part of the century. And its guiding idea was and is that Europe’s problems were and remain  due to the existence of national states. Their existence, the argument ran and runs,  tends to fragment the European market space; drive up costs through duplication; perpetuate intra European rivalries in a variety of ways; ensure that the rule of law is politicized; and perpetuate, it is argued, Europe’s continued dwarfing on the world stage. Hence the view that nation states had to be subsumed into a large entity with a federal/supra-national endpoint, a United States of Europe. National parliaments, in this perspective, were part of the problem, not pillars of the system.

This ambition was spelt out not in the ECSC Treaty(it  was far too controversial to have a chance of figuring as part of the Treaty, even of its preamble), but in a separate document. At the signing of the Treaty of Paris, establishing the European Coal and Steel Community (ECSC) on 18 April 1951, the six signatory states affirmed in a separate document that this date represented their new Europe’s birth: “By the signature of this Treaty, the participating Parties give proof of their determination to create the first supra-national institution and that thus they are laying the true foundation of an organised Europe.” In this way, the ECSC also gave birth to the central method of integration, which is to seek to conjure powers away from the member states in pursuit of an open ended project to create, eventually, a United States of Europe.

The UK and the bus analogy.

The UK stood aside from membership ECSC; in  the French inspired projects for a  European Defence Community(EDC, and for the Euratom Treaty, on the grounds that supra-national aspirations would prove incompatible with parliamentary sovereignty. The intent of the Euratom Treaty was to provide the six member states with a supra-national source of energy to mitigate growing dependence on oil from the Gulf, and to forestall a German bid for nuclear power. Similarly, the UK did not join in the less ambitious project resulting in the Rome Treaty,founding the European Economic Community(EEC), and signed in February 1957. The Treaty aimed to create a common market between the six founding member states, and like the ECSC, it came to serve  as template and ancestor to the European Union.

An abundant literature has since prospered whereby the UK “missed the bus” of European integration. [1] The tone may be illustrated by a quote from Sir Roy Denman: “In the euphoria of Allied victory in 1945, writes Sir Roy, Britain could have had the leadership of Europe for a song. Britain missed that chance and almost every other since. British ministers did not understand the desire of the continental countries, after five years of defeats and occupation, to unite”.[2]

Two points may be made here: one relates to the crucial links between UK domestic and foreign policy; the second, to the changing context of European affairs in the cold war.

First, UK constitutional design and foreign policy have been tightly linked for over a thousand years. [3] Both have been fashioned by the European connection. Over the millennium, through the Norman invasion, Magna Carta, the Stuart monarchy and most importantly, the 1688 Glorious Revolution, which laid the foundations for Britain’s constitutional monarchy, the executive power of the state has been constrained by parliament and courts. Externally, strategy was to protect “the liberties of Europe” (the Protestant religion into the eighteenth century, and small states into the nineteenth) and pre-empt Europe’s unity under a hegemon. The great challenge for the UK came after 1945, when the tactic for European unity altered from methods of hostile takeover, to ones of supra-national integration.

Second, Denman maintains that British ministers did not understand continental countries. This is contentious. The British government was given 24 hours notice to accept or reject the proposal-a take it or leave it proposal. The Labour government of the time rejected the formula on the grounds that coal had just recently been nationalized, and because it considered supra-nationalism to be incompatible with the British constitutional settlement. This was taken as a major mistake by supra-nationalists in the UK as elsewhere in western Europe. They believed, and their intellectual heirs still do, that the  intergovernmental design of the early post war Europe infringed the supra-national tenet that if the European states, particularly Germany, were to reassert their sovereignty, the cycle of war and destruction would return. Supra-nationalists, on other words, do not have faith in German constitutional democracy-also a consistent trait. Similar ideas prevailed in Washington DC. The virtue of the Schuman plan, in US eyes, was to propose merger with the other five founding states in the name of peace, while restoring France to leadership in post war Europe.[4]

A tale of three revisions

Towards the  end of the 1950s, the UK began to question inherited certitudes: the Empire, mortally wounded by the fall of Singapore in 1942, was falling away; France contested the British claim to leadership in a post-war Europe; extensive nationalisations under the 1945 Labour government had not yielded a dynamic economy; UK growth rates lagged those on the continent, (see Table) which attracted inward investment from  US corporations.

There were three major strands to revision, all informed by the then  fashionable doctrine of “declinism”-the belief that Great Britain’s best days were done:

  • Redefining foreign policy to focus on the EU
  • the refashioning of British political culture
  • constitutional revisionism.

The two personalities to become closely identified with this ambitious programme were Edward Heath and Roy Jenkins, both from humble backgrounds; both in opposite political parties; but trained as undergraduates in Balliol College, Oxford, one of the prime cradles of the pre-war liberal tradition.

GDP in Europe 1950-2000, $ billion 1990 int’l prices[5]

1960       1970       1990       2000

UK              347.8      675.9        944.6    1,205

France          206.7      679.4      1,026.5   1,252.6

Italy             167.1      628.3         925.6   1,083.

Germany   221.1       804.5       1,172.5

Germany                                                  1,556.7

The paradox in British post war politics is that liberal ideas on Europe can be said to have triumphed while the old Liberal party of Gladstone and Lloyd George was marginalised politically. As the League of Nations proved unable to preserve the peace and prosperity of Europe, British liberals in the inter-war began to promote a United States of Europe (USE). Arthur Salter, Jean Monnet’s close companion, proposed applying Prussia’s method of creating a Zollverein to the unification of Europe.[6] Lionel Robbins, based at the London School of Economics, wrote in 1939 that “unless we destroy the sovereign states, the sovereign states will destroy us”.[7] That year, Lord Lothian, soon to become UK Ambassador to Washington DC, advocated one European state with its own currency, trade and defence policy.[8] Through the cross-party Federal Union, set up by the Fabian Society, they sought to broadcast  ideas as an alternative to Hitler’s racial New Order.

But as in 1914, liberal opinion split over the urgent matter of war and peace. Some, such as Geoffrey Dawson, the editor of The Times,  attached their flag to the mast of appeasement; the young Edward Heath, as an undergraduate at Balliol College, Oxford, campaigned to resist the dictators, if need be, by force.  Heath always maintained that Churchill after 1945 supported a united Europe.[9] As he told the Conservative Party conference in 1988: “As far back as 1940, our leaders had the vision to see a Europe which was going to be united”.  [10]

The prevalent post-1945 British position on international law may be defined as liberal internationalist. This states, in the words of Walter Russell Mead, that: “Liberal internationalists…believe passionately that only international law can save us from chaos and , hopefully, war. A strong body of international law, enforced by international courts and obeyed by national governments is the way to make law less likely and less dreadful when it occurs; it can also deter torture, human rights violations and a whole host of other bad things. Liberal internationalists want the world to become a more orderly and law abiding place. Ideally many would like the United Nations or some other international organization to evolve into something a little biit like a world government: the European Union on a global scale. But failing that, liberal internationalists would like to see better enforcement mechanisms for documents like the Universal Declaration of Human Rights. They would like “the laws of war” to become ever more clearly codified and ever more effectively enforced. They look to the day when power shift from national governments to international bureaucracies and institutions”.[11]

 Revising foreign policy.

The catalyst for rethinking foreign policy was the invasion in October 1956 of Egypt by Israel, the UK and France.[12] President Eisenhower opposed the operation, and the attack was roundly condemned in the United Nations. In France, the setback over Suez, following France’s defeat in Vietnam at Dien Bien Phu, prompted a redeployment of French energies to Algeria, leading to General de Gaulle’s return to power; the establishment of the Vth Republic; withdrawal from Algeria; and the creation of a French led EEC, equipped with customs union and common farm policy. A similar evolution occurred in the UK. Prime Minister MacMillan accelerated the process of decolonisation; trimmed expenditure on major industrial projects; and moved to open negotiations for full membership with the EEC.

As in previous centuries, the UK’s foreign policy was shaped first and foremost by events on the continent. In a study submitted to the Cabinet in February 1960, [13] the future of Europe was defined as dependent on which way de Gaulle acted. If France pressed ahead with EEC integration, the UK by 1970 could face a new world power. The emergence of this power would strengthen European security, but would pose major problems for the UK, not the least being that “the United States with their traditional attachment to the idea of European unity, might even feel obliged to support the Six against us, to the great detriment of Anglo-American co-operation.”

Alternatively, the report went on, France may prefer a more national path, in which case the UK by 1970 would not have to face  a successful EEC. But such an outcome would be detrimental to NATO. “Not the least of the dangers then confronting us would be the possibility that the West Germans would exchange the failure of their West European policies for an understanding with Moscow,” prompting possible US disengagement.  The conclusion was for the UK either to reach an economic accommodation with the EEC, and/or to try to bind the Americans into “a re-invigorated OEEC. of which they would be full members.”

Twelve years later, after two failed attempts to join the EEC in 1961-63, and again in 1967, much of this policy was implemented. Heath, whose maiden speech in 1950 in the House of Commons had been precisely on the subject that the UK should participate in the Schuman Plan, led the British delegation in the first attempt; Jenkins was a major figure in the Labour government in the second attempt. As Prime Minister, Heath launched the third, and, with the backing of Labour rebels led by Jenkins, finally successful bid to enter the EEC on January 1, 1973.

Redefining the British left: 1951-1970 .

By the end of the Labour administrations of 1945 to 1951, the limits of what could be achieved nationalizing as much as possible of the UK economy became more evident. Once in opposition,  Labour party intellectuals launched a rethink on the meaning of socialism, mirroring discussions in the European Communist parties of the period that led eventually to the phenomenon of Eurocommunism. Their inspirations came from the writings of the Italian communist leader of the 1930s, Antonio Gramsci, to whom capturing the commanding heights of the economy came a distant second to capturing the commanding heights of culture. The two main advocates for a new culture in the UK were Tony Crosland and Jenkins, both contemporaries in the Oxford of the 1930s. In his best selling book “The Future of Socialism”, Crosland dubbed his vision as one of “socialist hedonism”.[14] For Jenkins, the objective was to achieve a more “civilized society” through legislation inspired by an “optimistic humanism”.[15] Both may claim paternity to Tony Blair’s New Labour project.

Jenkins is best remembered for his period as Home Secretary in 1966-67, during which he pushed through reforms, few of which  were popular among Labour voters: working class Labour members opposed his support for de-criminalising homosexuality. His easing of the abortion law met with resistance from Catholics; he pushed through abolition of the death penalty against widespread disapproval in the country; he altered the ancient requirement of unanimous verdicts by juries to opposition in the legal profession; and he set up the Race Relations Board, calling for immigration, “ not as a flattening process of assimilation, but as equal opportunity accompanied by cultural diversity, in an atmosphere of mutual tolerance”.[16]

Jenkins’ concept of multiculturalism in the UK is very much what India’s Congress party leaders used in the 1930s to call British India’s “divide and rule” policies, ie. different laws for different “groups”, rather than one law for all citizens.[17] This was one sense in which Jenkins colonized the UK; the other was as an ardent supporter of Heath’s determination to have the UK ruled by the combined executive  of the EEC.

Jenkins was an early convert to the UK’s membership of the EEC. His biographer tells the story of how he arranged a meeting between Jean Monnet and Hugh Gaitskell, then the leader of the Labour Party. The occasion was a resounding failure. “I think I fondly imagined that Monnet would lucidly meet all Gaitskell’s points and dissolve his doubts”, Jenkins is quoted as saying. Instead he (Monnet) brushed them aside as trivial and urged Gaitskell to “have faith”. Gaitskell replied coldy , “I don’t believe in faith. I believe in reason and you have not shown me any”.[18]

Jenkins, though, had the faith of the convert. Membership would boost the UK economy, and allow the UK to work among equals rather than “waste our substance trying to keep up with the power giants of the modern world”. [19] Living within the UK’s means informed his opposition to building the supersonic Concorde aircraft, to be jointly manufactured with France, and as Minister of Aviation, he abruptly cancelled the TSR2, Britain”s “lost bomber” in the phrase of Damien Burke, the historian of the aircraft .[20] A similar rationale informed his support of the UK’s withdrawal east of Suez, and as Chancellor of the Exchequer, he became converted to the idea of European monetary union.

Tinkering with the constitution.

It is difficult to exaggerate the combined impact that entry to the EEC and the unfolding of the broader cultural revolution had on the UK. In the 1950s, half of Scottish MPs were Conservative, and the country was among the most church going in the world. By the 1970s, church going had collapsed; relations between the sexes were transformed; traditional industries across the UK  were in retreat. Prime Minister Wilson’s Labour government had opened the party’s gates to radicals, bent on class war. Heavy industry, largely state-owned, was characterized by overmanning; under-investment; poor design, and a loss of market share.

Heath attempted to introduce  statutory law to the area of labour relations, and met with mass strikes by the trade unions, which were the prime source of support for the Labour party and at the time run by communist or ex communist-party members, sympathetic to Breschnev’s Soviet Union. One clear motive of joining the EEC was to bring more discipline to corporate affairs by  market opening. Membership split the Labour party between Jenkins’ social liberals, and working class radicals, aspiring to “socialism in one country”.

Historical revisionism was also part of the process of bringing the UK to join the EEC.    Edward Heath’s words are illustrative: “We should stop hankering, he wrote, after an imperial past which will not return, and make the most of our membership of the EU in which our new hopes for peace and prosperity lie”. [21]

In this view, nationalism was a recent creation from the nineteenth century, an ersatz religion to cover the sins of industrialization, and a prime cause of the wars of 1914 and of 1939.[22]  At a pinch, it was possible to argue, with Linda Colley, that the UK was an artificial creation of the Hanoverian era. [23] But the reality was and is that the UK’s constitutional settlement, and its history as embedded in the traditions of the country, were at least a few centuries older than the rhetoric of historical revisionists allowed for.[24] As the Supreme Court judgement of January 2017 recorded : “In England and Wales, the Bill of Rights (of) 1688 confirmed that “the pretended power of suspending of laws or the execution of laws by regall authority without consent of Parliament is illegall”. [25]

To the generation of political leaders who took the UK into the EEC, the pooling of sovereignty- the idea of co-managing the affairs of Europe- was a price well worth paying. As the key architect of entry, Heath adduced four main reasons for membership. Foremost was to cement the peace system put in place after 1945;[26] second, to influence the development of Europe from within the EEC;[27] third, to implement a policy long favoured by the United States;[28] fourth, to have Whitehall participate in the action of the European Union. Such a union, wrote Heath in his autobiography, “is implemented and carried on day by day through the action of governments, which take the decisions”.[29]

The revolution in British constitutional practice is that, with entry, the EEC/EU Council of Ministers became the  UK’s legislature. By joining, Whitehall ministries acquired additional discretionary powers to co-legislate with other member states’ representatives in the Council of Ministers and through the EU ambassadors, assembled in the Committee of Permanent Representatives (COREPER). Westminster was sidelined.  The extent to which membership meant fundamental revision of the UK constitution became increasingly evident as EU legislative activity accelerated (see discussion below under “a contested legal system”).

Between 1958 and 2010 the range of areas open to EU action rose sharply. [30] Annually, the number of EU laws reached a peak of over 14,000 instruments in the early 1980s and there was a lower peak in the mid-1990s, with the enactment of the remainder of a raft of legislation to complete the internal market. The volume has generally fallen since then. The former Commission President, Jacques Delors, predicted in July 1988 that within ten years 80% of economic legislation, and perhaps also fiscal and social legislation, would be of EC/EU origin. Using statistics from national law data bases and the EU’s EUR-Lex database, it is possible to estimate the proportion of national laws based on EU laws. In the UK data from these sources suggest that over the twelve-year period from 1997 to 2009 6.8% of primary legislation (Statutes) and 14.1% of secondary legislation (Statutory Instruments) had a role in implementing EU obligations, although the degree of involvement varied from passing reference to explicit implementation. Sectoral studies suggest that the agriculture forms the highest area of EU influence and defence the lowest. The British Government estimates that around 50% of UK legislation with a significant economic impact originates from EU legislation.

The UK as “awkward partner”.

Heath’s ambitions were quickly dashed by events. The immediate impact of EEC membership was a surge in food prices, in an already inflationary environment. Heath lost office in early 1974. The UK soon developed a reputation in the EU as an “awkward partner.[31] The description is generally understood as an expression of British nationalism, barring the path towards an “ever closer union”.[32] The reputation is only partly justified. Over its forty four years of membership, the UK remained an active and influential pro market member state in the EU. [33] On major issues, it did more to promote the growth of the EU than to impede it.

  • Prime Minister Edward Heath, the architect of the UK’s entry to the EEC, signed  the UK up to the full integrationist agenda.[34] President Pompidou, for one, definitely thought that, once in the EEC, the UK could be relied on to champion a Europe of the states, and oppose supra-national ideals.[35] He clearly did not realize that Heath was more supra-national than the Pope.
  • The June 1975 referendum on the Common Market was won by a resounding 65% of the vote in favour of staying.
  • In 1977, Roy Jenkins, a senior Labour pro-EEC leader, took the post offered him as President of the Commission, where he helped to lay the groundwork for a return to negotiated exchange rates, for enlargement to Greece, Spain and Portugal, and for market liberalisation.
  • In 1985, Prime Minister Margaret Thatcher accepted the wider use of majority voting in the Council of Ministers, and appointed Lord Cockfield to head the “1992” market opening strategy, under the Commission presidency of Jacques Delors.

This active membership was initially less equivocal than the commitment of the other two large member states, France and Germany. Section 2 of the 1972 European Communities Act (ECA), asserts that EU laws override national laws where they conflict,  and that Whitehall has the powers to give effect in national law to EU law via secondary measures.[36]  This corroborated the interpretation of the Rome Treaty by the judges of the European Court of Justice(ECJ) , in the course of the 1960s, that EEC law took direct effect over national law and even had supremacy over the constitutions of the member states. [37] By contrast, Germany’s Constitutional Court only came round to conditional acceptance of the ECJ’s position in 1986. The French  Conseil d’Etat accepted the  doctrine in 1990, also conditional on other provisions of the French constitution.

But Heath and his successors never succeeded in winning over the British public to the  cause of European integration. [38]  Heath had himself asserted that EU membership did not entail “an erosion of essential national sovereignty”, [39] – and he was correct, but not in the sense that the British public understood his words. It was true that the British parliament’s sovereign powers sanctioned EU supremacy, but the result was to distort the fundamental constitutional settlement that underpinned the country’s unwritten constitution, which had been carefully negotiated in the years 1689 to 1707, (the year of the union between Scotland and England).

The Glorious Revolution of  1689 laid the foundation for the constitutional monarchy. It was predicated on the idea of an executive power accountable to the electorate, and constrained by common law, trial by jury, and by habeas corpus. Many of these conventions ran directly contrary to the notion of laws and directives imposed from outside the UK, over-riding UK courts and Parliament on a daily basis.

The full implications of what Heath wrought took nearly two decades to become evident. He lost office in early 1974. For five years, Labour presided over a stagnant and high inflation economy, lost the general elections of May 1979, and stayed in opposition for 18 years. Margaret Thatcher entered 10 Downing Street, determined to revive the country’s fortunes. This entailed harsh economic measures at home; she sent the British fleet 6,000 miles to south Atlantic, ending with the return of the Falkland islands to British control. In the EEC, the Prime Minister battled to reduce the UK’s budget contribution, which was finally settled at the Fontainebleau summit of summer 1984. In this, Heath considered Thatcher quite justified in insisting on what he considered to have been an inequitable deal made on the UK’s entry.[40]

For her pains, she was re-elected with massive majorities in 1983 and again in 1987, as a transformed economy began to boom. A more bombastic press heralded the resurgence of a transformed and patriotic culture.[41] With the budget dispute settled,  the UK’s EEC policy began finally to yield returns. At home, privatisation proceeded apace; labour relations were finally incorporated into statutory law, and the City of London was transformed by the “Big Bang” reforms of October 1986.


Gdp per capita(real) growth    US per capita PPP=100[42]

Pre-1979      Post 1979         1960     1977       1998

UK       2.32            2.03          74              68           66

FRG    3.34           1.19              73          80               77

France 3.6              1.27            64          77              69

USA    1.8           1.9                   100       100          100

Within a decade, London moved to undisputed leadership as the prime European financial centre. The market-oriented reforms begat a host of semi-autonomous agencies to regulate markets: at the end of Thatcher’s reign, 200,000 officials were played in 50 such agencies. [43] The UK economy picked up pace, growing faster than France or Germany, compensating for some of the lost ground from the slower relative growth of the previous decades.

Over the same period, however, French policy, was moving to revive Jean Monnet’s vision of an integrated Europe. Chancellor Kohl was a committed European federalist, and ready to oblige.  To Delors, the internal market was a step on the way to  United States of Europe (USE). Much as senior Whitehall officials shared his ambitions for political union,[44]  the British public most definitely did not. Nor did their Prime Minister.

The rift between Delors and Thatcher came to the fore in the years 1988 to 1992. When Delors forecast that within a decade, 80% of legislation would come from Brussels, Prime Minister Thatcher uttered her famous “No, no, no” in the House of Commons. Within a few days, she was politically defenestrated by a broad coalition of Delors’ supporters in London and across the EU. Conservative party unity shattered. Members of parliament hostile to the Delors’ vision formed the Bruges Group, named after Thatcher’s speech to the College d’ Europe, calling for a “Europe des patries”. The Maastricht Treaty, laying the foundations for monetary union,  spurred the creation of  UKIP (the United Kingdom Independence Party).

The full implications of EU membership for the UK  became clear when the ECJ struck down an Act of Parliament, the 1988 Merchant Shipping Act, as incompatible with EEC/EU law. As Lord Denning, a former senior judge, stated:  “No longer is European law an incoming tide flowing up the estuaries of England. It is a tidal wave.”[45]  Subsequent developments validated Denning’s assessment. In 1998, the Blair government incorporated the Human Rights Convention of the Council of Europe into British law. In response to Conservative party calls for the UK to withdraw, [46] Judge Dean Spielman, the President of ECtHR, warned that the UK could not withdraw from the Convention on Human Rights without jeopardising its membership of the European Union. [47] As Lord Hope stated in an Appeal Court judgement, “Our constitution is dominated by the sovereignty of Parliament. But our Parliamentary sovereignty is no longer, if it ever was, absolute..Step by step, gradually but surely the English principle of the absolute legislative sovereignty of Parliament which Dicey derived from Coke and Blackstone is being qualified.”[48]

The UK, though, did stand aside from monetary union, and from the Schengen accords on free movement of people. Though there was a powerful lobby in favour of the UK signing up to the Euro, it never got close to winning the political battle, let alone to win the intellectual argument that it was a wise step to take to merge national economies with very different structures, performances and records into a single currency area.

The peak of UK public support for the EU project came in the early 1990s. But when sterling crashed out of the exchange rate mechanism in 1992, followed by the EU treatment of UK farmers during the “mad cow” disease, support flagged, as can be seen in the following figures. By 2014, there was still a clear majority for staying in the EU.

Attitudes towards Britain’s continuing membership of the EU, 1983-2016 in %.

1983      1985    1987   1989   1991   1997   2014

Continue           53         56         63       68       72       54       57

Source: British Election Study.

There were two themes that played themselves out in UK relations with the EU over the two decades following the Maastricht accords. Prime Minister John Major promised to keep Britain “at the heart of Europe”, while negotiating opt outs from currency union and the “Social Chapter”, inspired by France and Germany to keep their respective welfare systems. Major also ensured there was no mention of a “federal” endgame in the Maastricht Treaty, and that foreign and defense policy would remain provinces of the member states.

The other position on Maastricht was spelt out by William Cash, [49] the Conservative party MP, that “..if integration in the EC increases, so will Germany’s weight within it, … It is already clear that economic and monetary policy would be profoundly German in nature, but so would “the common defence and foreign policy. If a European Union of this kind were ever to be formed, it would either introduce new tensions and resentment when countries found their policies increasingly dependent on the most powerful country, and thereby lead to the break up of the Community; or if it did somehow succeed, the future union would in effect be a greater Germany, balancing uneasily between East and West. Britain, he ends his peroration, wants to work together with Germany in a fair and balanced relationship based on free trade, co-operation and democratic principles. She does not want to be forced into a legal structure dominated by her”.

[1] Perhaps the best known is Edmund Dell, The Schuman Plan and the British Abdication of Leadership in Europe (Oxford, OUP, 1995).

[2] Roy Denman, Missed Chances : Britain and Europe in the Twentieth Century , Cassell, London, 1996. p.2.

[3] Brendan Simms, Britain’s Europe: A Thousand Years of Conflict and Cooperation London, Allen Lane, 2016.

[4] William I. Hitchcock, France Restored: Cold War Diplomacy and the Quest for Leadership in Europe, 1944–1954. University of North Carolina Press,  1998.


[6] Arthur Salter, The United States of Europe and other papers, New York, London, Reynold and Hitchcock, Unwin, 1933.

[7] “Only by …pooling some part of national sovereignty in a common organism which represents not the national institutions or the governments, but the people of all the member states…”. Lionel Robbins, in The Economic Causes of War, reprint, New York, Howard Fertig, 1968. Original 1939. p.105.

[8] Walter Lipgens, Wilfried Loth, Documents on the History of European Integration : Plans  for European Union in Great Britain and in Exile, 1939-1945, Volume 2. Mouton de Gruyter, 1986. p.38.

[9] Edward Heath, The Course of My Life, London, Hodder and Stoughton, 1998. pp.145-148.

[10] Quoted in John Campbell, Edward Heath: A Biography, London, Pimlico, Random House, 1994. p.710.

[11] Walter Russell Mead, Liberal Internationalism: The Twilight of a Dream, The American Interest, April 2010.

[12]  Erskine B. Childers, The Road to Suez, MacGibbon and Kee, 1962.

[13] F.P.(60)1. February 24, 1960. Future Policy Study, 1960-70,

[14] Tony Crosland, The Future of Socialism, London, Jonathan Cape, 1956

[15] Roy Jenkins, The Labour Case, Penguins Spcial Series, London, Penguins, 1959;

[16] John Campbell, Roy Jenkins: A Well-Rounded Life, pp.272-2.

[17] Chapter 2 “The logic of Division”, in amachandra Guha, India After Ghandi : The History of the World’s Largest Democracy, London, MacMillan, 2007. “Within England, the growth of liberal values placed a premium on the sovereignty of the individual; but in the colonies the individual was always subject to the community”.p. 27

[18] Campbell, p.223

[19] Ibid. p.189.

[20] Damien Burke, TSR2, The Crowood Press,

[21] Edward Heath The Course of My Life, p.726

[22] This s literature was heavily influenced by Marxist thinking about the withering away of nationalisms-considered an epiphenomenon of industrialization. Benedikt Anderson, Imagined Communities : Reflections on the Origin and Spread of Nationalism, London, Verso, revised edition1991; E.J. Hobsbawm, Nations and Nationalism since 1780: Programme, Myth and Reality, Cambridge University Press, 1994. Revised edition.

[23] Linda Colley, Britons: forging the nation.1707-1837. Yale University Press, 3rd revised edition, 2009.

[24] See for instance G.R. Elton, The Tudor Constitution: Documents and Commentary, Cambridge University Press, 1960.; F.W. Maitland, The Constitutional History of England, Cambridge University Press, first published 1908; Sir David Lindsay Keir, The Constitutional History of Modern Britain since 1485, London, Adam and Charles Black, 1969(first published 1938. Keir was formerly Master of Balliol College, Oxford).

[25] The Supreme Court, Hilary Term 2017, UKSC 5, On appeals from : 2016 EWHC 2768 (Admin) and 2016 NIQB.85. paras 40,41.

[26] “Why was the Common Market formed in the first place?, ”asked Heath,  “Quite simply, in order to stop a third European war this century.” Cited in Michael McManus, Edward Heath: A Singular Life, London, Elliott an Thompson, 2016. p175

[27] Ibid.

[28] John Campbell, Edward Heath : A Biography, London, Pimlico, Random House, 1994.p. 336.

[29]  Cited in Edward Heath, The Course of My Life, London, Hodder and Staughton, 1998. p.359.

[30] Source: House of Commons Library, How much legislation comes from Europe? Research Paper, 10/62. October 13,2010

[31] Stephen George, An Awkward Partner: Britain in the European Community, London, Oxford University Press, 1998.

[32] For instance, Hugo Young’s books : One of Us: Life of Margaret Thatcher , London, MacMillan, 1989;  This Blessed Plot: Britain and Europe from Churchill to Blair , London, MacMillan, 1998.

[33] House of Commons, Voting Behaviour in the EU Council, SN/1A/0646

[34] The Supreme Court, Hilary Term 2017, UKSC 5, On appeals from : 2016 EWHC 2768 (Admin) and 2016 NIQB.85. paras 60,61.

[35] Eric Roussel, Georges Pompidou, 1911-1974, Paris, Editions Perrin, p. 389.

[36] European Communities Act 1972. Part 1 Section 2.

[37] Judgment of the Court of 17 December 1970. 
Internationale Handelsgesellschaft mbH v Einfuhr- und Vorratsstelle für Getreide und Futtermittel. Case 11-70.

[38] Ken Clarke, Kind of Blue : A Political Memoir, London, MacMillan, 2016. p.81.

[39] John Campbell, Edward Heath : A Biography, London, Pimlico, Random House, 1994.p. 360

[40] Edward Heath, A Course of My Life, p. 698.

[41] Roy Greenslade, “A new Britain, a new kind of newspaper”, The Guardian, February 25, 2002.

[42] David Card, Richard Freeman, “What have two decades of British economic reforms delivered?” Washington D.C.NBER Working Paper 8801, 2002, Tables 1.8, 1.2.

[43] Peter Hennesy, Muddling Through: Power, Politics and the Quality of Government in Postwar Britain, London, Gollancz, 1996..p. 295.

[44]  Stephen Wall, A Stranger in Europe: Britain and the EU from Thatcher to Blair, Oxford, Oxford University Press, 2008. p. 219.

[45] Bruges Group: The ECJ: Judges or Policy Makers? London, Bruges, Group, 1990.

[46]  Home Office, Criminal Justice System Review: Rebalancing the criminal justice system in favour of the law-abiding majority. pdf

[47] « UK’s withdrawal from human rights law would be ‘political disaster’, The Guardian, June 4, 2013.

[48]  HOUSE OF LORDS OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT IN THE CAUSE Jackson and others (Appellants) v. Her Majesty’s Attorney General (Respondent) [2005] UKHL 56.p.49.

[49] William Cash, Against a Federal Europe: the Battle for Britain, London, Duckworth, 1991. Pp.82-3.

About Jonathan Story, Professor Emeritus, INSEAD

Jonathan Story is Emeritus Professor of International Political Economy at INSEAD. Prior to joining INSEAD in 1974, he worked in Brussels and Washington, where he obtained his PhD from Johns Hopkins School of Advanced International Studies. He has held the Marusi Chair of Global Business at Rensselaer Polytechnic Institute, and is currently Distinguished Visiting Professor at the Graduate Schoold of Business, Fordham University, New York. He is preparing a monograph on China’s impact on the world political economy, and another on a proposal for a contextual approach to business studies. He has a chapter forthcoming on the Euro crisis. His latest book is China UnCovered: What you need to know to do business in China, (FT/ Pearson’s, 2010) ( His previous books include “China: The Race to Market” (FT/Pearsons, 2003), The Frontiers of Fortune, (Pitman’s, 1999); and The Political Economy of Financial Integration in Europe : The Battle of the Systems,(MIT Press, 1998) on monetary union and financial markets in the EU, and co-authored with Ingo Walter of NYU. His books have been translated into French, Italian, German, Spanish, Chinese, Korean and Arabic. He is also a co-author in the Oxford Handbook on Business and Government(2010), and has contributed numerous chapters in books and articles in professional journals. He is a regular contributor to newspapers, and has been four times winner of the European Case Clearing House “Best Case of the Year” award. His latest cases detail hotel investments in Egypt and Argentina, as well as a women’s garment manufacturer in Sri Lanka and a Chinese auto parts producer. He teaches courses on international business and the global political economy. At the INSEAD campus, in Fontainebleau and Singapore, he has taught European and world politics, markets, and business in the MBA, and PhD programs. He has taught on INSEAD’s flagship Advanced Management Programme for the last three decades, as well as on other Executive Development and Company Specific courses. Jonathan Story works with governments, international organisations and multinational corporations. He is married with four children, and, now, thirteen grandchildren. Besides English, he is fluent in French, German, Spanish, Italian, reads Portuguese and is learning Russian. He has a bass voice, and gives concerts, including Afro-American spirituals, Russian folk, classical opera and oratorio.
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