By Lord Butler

04 Feb 2016

David Cameron’s dilemma over the EU referendum bears striking similarities – and some notable differences – to that faced by Harold Wilson in 1975, says Robin Butler

The dilemmas faced by the prime minister as he approaches the referendum on the EU membership recall those faced by Harold Wilson in the lead-up to the 1975 referendum.

I was one of the private secretaries in 10 Downing Street in 1975, and was in a position to watch closely Wilson’s footwork. My responsibility was economic issues rather than European and foreign affairs, which were principally dealt with by Patrick Wright, now Lord Wright of Richmond. The principal private secretary, Robert Armstrong, now Lord Armstrong of Ilminster, was also closely involved in the re-negotiations, not least because he was principal private secretary to Edward Heath when the UK’s entry to what was then the European Economic Community (EEC) was negotiated. I was private secretary on duty in London over the crucial weekend of the Paris European Council, which opened the way to the re-negotiation of the terms of the UK’s membership. 

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There were, of course, differences between the issues faced by Mr Wilson then and those faced by Mr Cameron today. For one thing, the UK’s economic situation was very different. The hike in the world oil prices had hit our economy hard; inflation and unemployment were high and rising, and union militancy had brought about the downfall of the Conservative government. So, while the referendum was an important event, there were other problems pre-occupying the British public.  

Secondly, the EEC was much smaller, so there were fewer partners to negotiate with than the 26 today, and the disparities in wealth between the members were smaller than they now are. In consequence, freedom of movement was not such an issue. The focus was more on the imbalance between what the UK paid into an EEC dominated by the common agricultural policy and what we got out, and the effect on our relations with the Commonwealth, particularly over trade.  

Thirdly, the European project was less developed and its tentacles around the lives of its nation members less extended. Finally, only two years or so had passed since the UK’s accession, and so the experience of both the government and the British people generally was more limited. 

The division over Europe was one between, and within, the political parties rather than among the public. Even pro-Europeans within the Labour Party took the view that the terms of membership negotiated by the previous Conservative government were disadvantageous to the UK, while other Labour members were against membership on any terms. Conversely, divisions within the Conservative Party existed but were less developed than they are today.

Nevertheless, there were similarities with the present day. The principal one was that there were strongly held differences within the governing party, in that case the Labour Party, and within the Cabinet. There was also reluctance among the other members of the EEC to make substantial concessions to the UK, in that case because the terms of the UK’s membership had been so recently and so toughly negotiated.

In approaching the referendum, Harold Wilson had three objectives. One was to hold the Labour Party together. It was with that objective that he conceded the referendum in the first place and subsequently the “agreement to differ” which allowed members of the Cabinet to campaign on different sides. The second was to secure as great an improvement as he could in the terms of the UK’s membership, particularly on those aspects of which the Labour Party had been critical. The third, which was not apparent in the negotiations at the time but of which I am confident in retrospect, was that he always wanted the outcome to be the UK’s continued membership of the EU. David Cameron no doubt has similar objectives, although the balance between them may be different.

On the third objective – the UK’s continuing membership of the European community – Harold Wilson showed his hand much less than David Cameron has done. True, Cameron has said that, until he has completed his negotiations, he rules nothing out. But he has also said that he hopes to achieve a result that will keep the UK as a member. Harold Wilson did not go that far until the very end of his negotiations. In consequence, right up to that moment, the Europhiles and the Eurosceptics in the Cabinet were competing for his support. This made it easier for him to keep both camps toeing the line.

It was in the final stages of the negotiation that I saw what a deft political operator Harold Wilson was. Over the weekend preceding the start of serious negotiations at the Paris European Council in December 1974, Wilson entertained the German chancellor, Helmut Schmidt, at Chequers. On the following Thursday, at the weekly Cabinet, he told his colleagues what his bottom line was to be in Paris and added that, if he could not get these ambitious-sounding concessions, he would recommend a “no” vote in the referendum. Since the Eurosceptics in the Cabinet – principally Michael Foot, Tony Benn and Peter Shore – thought the achievement of these concessions unlikely, they left the Cabinet meeting in a buoyant mood.

On the evening before he flew to Paris for the Council, Harold Wilson had a longstanding engagement to address the London Labour Mayors’ Association.  I doubt whether his audience were aware of the part they were playing in his strategy. At any rate, in his speech he put his statement to the Cabinet the other way round – “If I can get these concessions, I will recommend a ‘yes’ vote”.  He then flew to Paris.

I was the duty private secretary that weekend. As soon as Messrs Foot, Benn and Shore read the reports of the prime minister’s speech in the press they saw the trap opening before them. He had left for Paris. My telephone started ringing but it was too late for them to talk to the prime minister. In any case, they had to recognise that what Harold Wilson had said to the Labour mayors was simply the corollary of what he had told the Cabinet. 

I have no doubt that he had canvassed the support of Helmut Schmidt over the previous weekend. He concluded from his conversations at that meeting that, though it would not be possible to achieve all the changes proposed in the Labour Party’s election manifesto, it would be possible to achieve changes that could be presented as justifying a vote for staying in Europe.

The negotiations in Paris took a decisive step forward. The heads of government decided to set up a Regional Fund, of which the UK was to receive a quarter of the proceeds. This was something that Labour MPs had been pressing for. The heads of government also laid the foundation for a “correcting mechanism” in the budget. The formula was a complicated one, based on the national income and growth rate of a member state relative to its EEC budget contribution. This was designed to help the UK.

The negotiations were completed at the next meeting of the European Council in Dublin in March 1975. This concentrated on the details of the budget adjustment system and the tonnages of New Zealand cheese and butter which the UK would be allowed to continue to import. The intricacies of the latter must have caused eyes to glaze over, to the extent that the Belgian prime minister complained about the heads of government being “reduced to the level of auditors in a supermarket chain”. Nevertheless the outcome enabled Harold Wilson to claim a negotiating success and it was no surprise when he announced on his return from Dublin that it allowed his government to recommend continued membership of the EEC. The re-negotiation did not require any amendments to the EEC Treaty.

The Labour Party remained split. The Cabinet were divided between 16 for accepting the revised terms and seven against. In a Commons debate following the Dublin Council, a majority of Labour MPs voted against the government’s decision to recommend continued membership, but the Conservatives (now led by Margaret Thatcher) were almost solid in supporting the terms. So the Commons as a whole endorsed continued membership by a large majority, as did the Lords. Thereafter it was a foregone conclusion that the country would support the government’s recommendation, which they duly did in the referendum on 6 June 1975 by 67% to 33%, on a 65% turnout.

Harold Wilson had achieved his three objectives. The anti-marketeers in the Labour Party accepted the result and the party did not split; the terms of the UK’s membership were improved, although some subsequently claimed that the improvements were largely cosmetic; and the UK remained a member of the EEC. People say that, in his second term as prime minister, Wilson was not the force he had been in his first term, but in this episode he showed his mastery as a political tactician. 

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