Uneasy Money

Since the Brexit vote last week, I have been trying to sort out my disparate thoughts about the EU. In doing so, I have been thinking about the early history of the EU and its origins in the early 1950s and the convoluted process by which Britain came to join what was then called the European Common Market. In the process I have also been thinking a lot about the fascinating but disturbing figure of Enoch Powell who became the foremost opponent of Britain’s entry into the Common Market and the reasons for his opposition. What follows is my reconstruction of the early process by which the Common Market came into existence and Britain’s entry into the Common Market in 1972 and Powell’s role in both Britain’s entry and in the first attempt only a few years later to undo that entry. I will try to carry the story a bit further in my next installment and, if possible, draw some of the many threads of the narrative together and offer some judgments about what really is wrong with the EU and maybe even what could be done about it.

The EU, as of now including 28 states, began its first incarnation with the Treaty of Paris in April 1951 as the European Coal and Steel Community (ECSC) comprised of six states — France, West Germany, Italy, Belgium, the Netherlands and Luxembourg – in which coal and steel would be traded freely within the community but with a common tariff applied to imports of coal and steel from outside the community. The Treaty also created four supranational bodies to administer the agreement, an executive body (the High Authority), two legislative bodies (the Assembly and the Council) and a Court of Justice. The members of each body were appointed by the governments of the six countries.

The UK, under a Labour government that had recently nationalized the steel and coal industries, was disinclined to join an institution that would constrain its authority to manage the physical and human resources under its control and therefore opted not to join the ECSC. The Labour government was voted out of office in October 1951, Winston Churchill, at the age of 77, becoming prime minister for the second time. Churchill was pro-European, having often given voice to the ideal of a united Europe, even speaking favorably in general terms about a United States of Europe. However, Churchill, still hoping to preserve what could be salvaged of the remnants of the British Empire and emotionally tied to a special relationship with the United States, was no more eager to take concrete steps to join the ECSC than his Labour predecessor.

The 1957 Treaty of Rome expanded the ECSC into a broader European Common Market encompassing all cross-border trade within the six member estates, eliminating all internal tariffs on imports and exports within the Common Market and creating a customs union with a uniform tariff on all imports from outside the community. In the mid-1950s, even after Churchill’s retirement, Great Britain, still in the thrall of its dwindling empire, which it quixotically hoped to recreate in the guise of a British Commonwealth whose member states would enjoy preferential access to each other’s markets, could not bring herself to sever the fraying ties to her former empire to join the soon to be created European Community. So the British government, now led by Harold Macmillan, chose not to participate in the negotiations to draft the Treaty of Rome and did not seek to join once it was created.

However, the rapid growth of the six economies of the Common Market produced a change of British opinion about entry into the Common Market. Among the first English politicians to argue that the UK should abandon its pretensions to being a great power and instead promote economic expansion by joining the Common Market was a brilliant young Conservative MP named Enoch Powell. Fluent in at least a dozen languages, a classical Greek scholar who had once been the youngest classics professor in the British Empire, Powell, an autodidact in economics, had become the most articulate Parliamentary advocate of free-market economic policies, though such views were then regarded as almost embarrassingly out of date even among staunch Conservatives. Powell thought that attempts to maintain a vestigial Empire as a Commonwealth were pure humbug, a costly illusion diverting resources that could be put to much more productive use if left under the control of private enterprise. Powell was not alone in favoring entry into the Common Market, but he was more radical than most in favoring a complete reorientation of British economic and foreign policy toward the Continent.

So in 1962, the Conservative government headed by Harold Macmillan, in which Powell served as minister of health, applied for admission to the Common Market in 1962 only to have its application, along with those of Denmark and Ireland, vetoed by Charles de Gaulle with the concurrence of Prime Minister Adenauer of West Germany, because de Gaulle, deeply mistrustful of the British and especially the Americans, feared that Britain would be more loyal to the US than to Europe. In 1967, Britain again applied for admission to the European Community, this time under a Labour government headed by Harold Wilson, but once again the application was vetoed by de Gaulle.

After de Gaulle’s departure in 1969, his successor George Pompidou was more amenable to British entry into the European Community, creating an opportunity for a third British attempt to enter the EC; the other five members were also eager for British entry, so that continued French opposition would have placed France and Pompidou in an awkward position. In 1970, the Conservatives, now led by Edward Heath, defeated Labour. Heath had been elected leader of the Conservatives by a vote of Conservative MPs in 1965, the first selection of a Conservative leader, the leader having formerly been chosen by an informal process understood only by a few well-placed party leaders. Heath narrowly defeated his main opponent, Reginald Maudling, by a small margin. Enoch Powell came in a distant third with only 15 of the 298 votes cast. Maudling was an economic interventionist and an advocate of what was then called an “incomes policy” to control inflation by using statutory or informal controls over wages and prices to limit the growth of money income. As a minister in Macmillan’s government, Heath had been deeply involved in the negotiations for entry into the EEC, and he was known to be a strongly in favor of British entry into the EC.

Heath included Powell in his shadow cabinet giving him the defense portfolio; he remained in that position until April 1968 when Powell gave a speech calling for a halt to non-white immigration from Commonwealth countries. The speech known as the “rivers of blood speech,” because Powell quoted a passage from Virgil alluding to a vision of the river Tiber foaming with blood. Powell’s intention in quoting that passage was not clear, but it was widely interpreted as a prediction of a coming race war, and the speech was condemned even by Conservatives as racist, a charge Powell denied. But the rhetoric of the speech, even if it wasn’t motivated racial animosity or prejudice on Powell’s part, was clearly inflammatory. Heath quickly dismissed Powell from the shadow cabinet, and Powell never again held a leadership position. However, the speech transformed Powell from a relatively obscure, overly intellectual and eccentric figure in the second rank of the British political hierarchy into perhaps the most popular politician in Britain, becoming a sort of folk hero to large segments of the British white working class who immediately began demonstrating in large numbers in his support.

Despite his expulsion from the front bench of the Conservative Party, and ostracism by many of his colleagues, Powell remained a Conservative MP and stood in the 1970 election in which the Conservatives, led by Heath, won a surprise victory, a victory credited by some to Powell’s popularity with white working-class voters who would have otherwise have voted for Labour. The personal popularity that Powell achieved through his attack on non-white immigration and his references to a breakdown in law and order and a recital of white grievances against non-whites mirrored a similar campaign being undertaken across the Atlantic by another frustrated candidate for high office, George Wallace, who was successfully launching a third-party bid for President in 1967, under the banner of the American Independent Party. Wallace had run for President in 1964 as a Democrat, gaining shockingly high vote counts in primaries in a number of Northern and Border states like Wisconsin, Michigan, Ohio and Maryland. Certainly Powell could not have been unaware of Wallace’s popularity with white-working class voters owing to his skillful use of inflammatory and racially-charged, if not explicitly racist, law-and-order, anti-elitist rhetoric, and it would be naïve to suppose that political calculation was absent from a mind as powerful and as concentrated as Powell’s when he made his April 1968 speech about non-white immigration and adopted an alarmist rhetorical strategy in composing that speech. Though Powell did indeed choose the path of political incorrectness, he hardly chose the path of political inexpediency. His only miscalculation was in supposing that Heath would lose the next election and that the Conservative Party would then turn to him.

Substantively there was little difference between Heath and Powell in 1970. Heath had largely embraced the free market position that had once made Powell an outlier even in the Conservative Party, and he had pledged to stop further non-white immigration from the Commonwealth, though he refused to bar immigration by the family members of existing immigrants, nor would he take any steps to repatriate legal non-white immigrants, as Powell advocated. And on the question of entry into the Common Market, Powell in 1968 had not yet repudiated his earlier stance in favor of entry into the European Community. Heath’s unexpected election therefore largely dashed Powell’s hopes of becoming leader of the Conservative Party.

Although there seemed to be a consensus in the 1970 election in favor of entry into European Community, that consensus was more apparent than real. In fact, the Labour Party, which had historically opposed entry into the Common Market until the Wilson government, despite the being forewarned that a French veto would inevitably follow, applied for entry in 1967, was deeply divided on the question. Wilson continued to support entry, but a majority of the party was actually opposed, viewing the Common Market as a basically capitalist institution and an obstacle to implementing their economic program. And although the Conservatives seemed united in supporting entry, few Conservatives supported entry into the EC as unreservedly as Heath; most Conservative supporters were conflicted, viewing entry as a purely pragmatic decision, with advantages only marginally outweighing disadvantages, making a final decision sensitive to the terms on which entry could be secured. Only the Liberals, holding just six seats in the new Parliament, and a small number of Conservatives and Labourites shared Heath’s unqualified enthusiasm for entry.

But with all parties nominally supporting entry in the 1970 election, the question of entry into the European Community was not an issue and was not debated. The official Conservative position was relatively circumspect, favoring negotiations to secure entry, but making no pledge to enter, so that Heath could not claim convincingly that his election provided a popular mandate for bringing Britain into the EC on whatever terms he negotiated. But entry into the EC had become the chief policy goal of Heath’s political career. Charles de Gaulle having retired from public life in 1969 and succeeded by his protege Georges Pompidou, Heath’s task in securing entry into the EC consisted in securing Pompidou’s assent to British entry. Unlike de Gaulle, Pompidou did not regard the idea of Britain being part of the EC as inherently repugnant, but if Britain were to enter it would have to be on French terms, meaning that Britain would have to accept the existing Treaty of Rome without change. The Treaty of Rome had been drafted with by the six original members with a view to provide protection for their large agricultural sectors by keeping out cheap agricultural imports to support high prices for domestic agricultural products. Britain, on the other hand, with a far smaller agricultural sector than those of the six, was an importer of agricultural products from Commonwealth countries, providing cash payments to domestic farmers. Accepting the common agricultural policy of the EC as it existed would require Britain to shift from low-cost Commonwealth imports to high-cost EC imports of agricultural products, imposing a net transfer from the British economy to the six original members, especially to France with the largest agricultural sector in the EC. That acceptance was the price for British entry into the Common Market

Pompidou’s assent in principle to Britain’s application for entry once Heath accepted the Treaty of Rome and all existing EEC regulations with no substantial changes meant that Britain’s entry into the Common Market was assured. Less than a year after meeting with Pompidou, Heath signed the Treaty of Rome on January 22, 1972, and a bill was introduced in Parliament assenting to Britain’s entry under the agreed upon terms and accepting the Treaty of Rome and EEC regulations. With a Conservative Parliamentary majority, the support of the Liberal Party and many Labour MPs, the bill passed easily. But Enoch Powell voted against, having begun speaking out against entry into the Common Market the previous year. Powell’s argument was that, under appropriate economic policies, Britain could thrive as an independent trading nation and therefore had little to gain, and much to lose, owing to the Common Agricultural Policy, by joining the European Community. Beyond the economic argument against joining the Common Market, Powell had two more fundamental objections: 1) that entry into the EC implied a surrender of British sovereignty because powers that had historically been exercised by Parliament such as the power to set taxes and enact legislation, were being transferred to the European Commission, and 2) that so momentous a decision should not be made without giving the British people an opportunity to express their opinions on the matter, and the Conservative Party, having won a Parliamentary majority promising only to negotiate for entry into the EC, had no mandate to take Britain into the EC without a further expression of support from the voters.

While Powell’s opposition to entry into the EU can certainly be understood as a natural outgrowth of his nationalistic and Tory conception of England and Britain, the timing and the abruptness of Powell’s attitude toward the Common Market invites the inference that Powell, in making opposition to entry into the Common Market the central cause of the last phase of his political career, was influenced by a political calculation. After all, when Harold Macmillan first proposed British entry into the Common Market, a decade before Powell declared his opposition to entry, Hugh Gaitskell, leader of the opposition, had made a similar argument to Powell’s: entry into the Common Market would replace Parliament with a supranational body as the supreme sovereign authority of the British nation. Powell had surely understood what Gaitskell was arguing in 1962, but he didn’t abandon his support for entry into the European Community until his hopes of becoming leader of the Conservative Party were dashed by Heath’s election. It is probably more likely that Powell had been insincere in favoring entry before 1971 than that he was insincere in opposing entry after; as long as he hoped to become leader of the Conservative Party, he may well have intended to reverse his public stance on Europe after becoming leader. But it is hard to believe he was not insincere in holding at least one of his two positions on entry into the Common Market.

It is characteristic of Powell that he framed the question of joining Europe as a matter of high principle: preserving British identity as self-governing, autonomous nation state, whose Parliament was the ultimate law making and governing institution of the realm, not subservient to any foreign external authority. For Powell the supremacy of Parliament was akin to a metaphysical imperative, even a religious duty, and to compromise that imperative would have been a betrayal of all he believed and stood for. Reading such rhetorical absolutism, one again comes back to the question how Powell could have explained or justified his own earlier support, however lukewarm or insincere, for British entry into the Common Market.

For Powell, unwavering opposition to joining the European Community was the ultimate expression of his Toryism, but considered from another perspective, his absolutist mentality was profoundly unconservative. Elevating the single abstract principle of Parliamentary sovereignty and supremacy above and beyond all other principles and considerations was characteristic of a metaphysical extremism that runs strongly counter to the conservative disposition described by Michael Oakeshott in his essay “On Being Conservative.” Indeed, Oakeshott, perhaps the leading academic British conservative of his generation, was loath to express any opinion about British entry into the Common Market notwithstanding his own reservations about federalism as a mode of government, believing that sovereignty is indivisible, a very British idea that baffles us Americans. Some claim that Oakeshott was actually opposed to entry into the Common Market, but even so, Oakeshott’s reticence in voicing that opinion seems very much at odds with Powell’s absolutist frame of mind wherein opposition to joining the European Community became the overriding object of Powell’s life to which all other considerations were subordinated.

Powell’s antagonism toward Heath was further inflamed when Heath abandoned the anti-inflation policy his government had followed in its first two years, adopting the strategy of monetary and fiscal expansion combined with wage and price controls that, a year earlier, Richard Nixon had implemented to win re-election after his initial strategy of fiscal and monetary restraint produced disappointing results. As had Nixon, Heath initially succeeded in promoting an economic expansion, but the policy soon ran aground, because, with inflationary pressures rekindled by monetary expansion, labor unions, refusing to accept the limits Heath wanted to impose on wage increases, called strikes. The most damaging strike was by the coal miners, which led to a curtailment of electricity production that forced the government to impose a three-day work week to conserve electricity.

Meanwhile, the Labour opposition gradually coalesced around demand for a referendum on entry into the Common Market proposed by the left-wing Labour MP Tony Benn. While continuing to support entry into the Common Market, Harold Wilson pledged that if returned to power, a new Labour government would renegotiate the terms of Britain’s entry, and put the renegotiated terms to a vote of the British public, a pledge that caused the pro-European deputy leader of the Labour Party, Roy Jenkins, to resign his position, eventually leaving the Labour Party with a handful of other pro-European Labourites to start a new Social Democratic Party (which subsequently merged with the Liberal Party).

Locked in a confrontation with striking coal miners over their strike for wage increases above the statutory limits of the Government’s incomes policy, Heath, in the winter of 1974, called a general election to secure a mandate for enforcing the statutory limits on wage increases for the miners, framing the election as a contest between a popularly elected government and a narrow special interest group over who would govern the nation. Almost alone among Conservatives, Powell had spoken out consistently against Heath’s economic policies and especially against entry into Europe. When the election was called, Powell denounced the move as pretextual and unnecessary, an increase in miners’ wages being justified by the steep increase in energy prices precipitated by OPEC the previous October. More shockingly, Powell declared that he would not stand for re-election to Parliament, being unable to support the policies that the Conservative Party was committed to implement if returned to power. And then even more shockingly still, Powell, just four days before the election, implicitly endorsed Labour as the only party that would renegotiate the terms of Britain’s entry into the European Community, and submit the terms of entry to a vote of the British public.

Powell’s last-minute virtual endorsement of Labour may well have been critical to the outcome of the election. Although Conservatives won the most seats in the new Parliament, they fell short of a majority and could not reach an agreement with the Liberal Party to form a coalition government, allowing Harold Wilson to form a temporary minority government. A new election was called for the fall, and Labour gained a slim majority in Parliament, a second defeat in succession leading to Heath’s ouster from the leadership in February 1975 by Margaret Thatcher, an outcome that was undoubtedly deeply satisfying to Powell, especially as he had played a crucial role in Heath’s undoing. However, if his ultimate aim was to keep Britain out of the Common Market, his satisfaction was short-lived, because when the question of entry into the European Community was finally put to a vote, 67% of British voters cast their votes in favor of entry.

While Thatcher strongly opposed Heath’s economic policies, though as a minister in Heath’s government she had never spoken out against them, she did not criticize Heath’s position on the Common Market. Powell was returned to Parliament as a pro-Unionist member from Northern Ireland in the November 1974 election, but he was no longer a member of the Conservative Party and no longer had any influence in the party. So when Mrs. Thatcher became leader of the Conservative Party, the only politicians who wanted Britain to leave the Common Market were Enoch Powell, a lone voice representing pro-Unionists in Northern Ireland and the far left of the Labour Party. The far left would eventually gain control of the Labour Party after Mrs. Thatcher was elected Prime Minister, but a significant Euro-skeptic faction in the Conservative Party would not come into being for another decade.

But the point with which I want to end this post is simply that although in 1976 a large majority of the British public seemed to have acquiesced in British membership in the European Community, and opposition seemed to be confined to a substantial segment of the left-wing of the Labour Party and a single charismatic figure who seemed to be permanently estranged from the Conservative Party, the consensus favoring membership was largely accidental and was not based on any clear principle of integration into Europe or any clear economic advantage. Edward Heritath’s enthusiasm for entry into the European Community was almost as unique as Enoch Powell’s abhorrence of it. Most of the support for British entry into the European Community was purely contingent and opportunistic, a fact that de Gaulle had perceived in the 1960s when he twice vetoed Britain’s entry. Given Britain’s ambiguous relationship to Europe, her ambivalent feelings about belonging to Europe, and the unclear balance of economic advantages and disadvantages, Britain’s entry into the European Community lacked any strong basis either in principle or in economic advantage.

It is a twist of history that Britain would up in the European Community only because Edward Heath was elected Prime Minister in 1970, and his election in 1970 might not have occurred but for Enoch Powell’s 1968 speech opposing non-while immigration into Britain, which caused a sufficient swing to the Conservatives give them an unexpected majority and to make Heath the Prime Minister, thereby depriving Powell of the leadership of the party which had been his life’s ambition.