10th December 2015 in the House of Lords
The Commonwealth and the EU
By Sir Stephen Wall GCMG LVO
Dean Acheson famously said decades ago that Britain had lost an Empire but had not yet found a role.
The story of Britain and the Commonwealth and of Britain and the EU is a good illustration of that. The publicity for this evening suggests that there is for Britain today a choice: do we go with the numerically larger and faster growing Commonwealth or with the EU which, in relative terms, is economically less important than when we joined over 40 years ago?
So the Commonwealth and the EU is really the story of Britain, the Commonwealth and the EU. For, without Britain, Commonwealth interests would not have featured on the EEC/EU agenda and, without British membership of the EU it is questionable whether Britain would, in practice have been able to play the role we have at the heart of the modern Commonwealth.
Now, as when Britain was seeking to work out her place in the post war world, the question is: how do we see ourselves, how do we see our place in the world and how do we define and advance what we perceive as our national interest.
In 1945, as now, our Government was seeking two main things in the post-war world: security and prosperity. The fact that Britain then sought to secure those advantages on a global stage was not just a product of our Imperial history (which in 1945 was, just, still an Imperial present), or a sense of vindication and pride which, quite justifiably, we felt as one of the victorious powers – albeit one which had paid a very high price for ensuring its survival and that of much of the rest of Europe.
It is not surprising that, in the search for security and prosperity, in that post-war world, Britain saw the sources of its advantages as lying outside Europe – or at least as going beyond Europe. We were a nuclear power; we had a large colonial empire which gave us influence over a large geographical area; we had big and reliable armed forces; we were strategically valuable to the world’s new, friendly super power, the USA and its best ally in facing up to the world’s new, unfriendly super power, the Soviet Union. We enjoyed tariff preferences on our trade with Commonwealth countries; we aspired to restore London’s position as a prime international capital market.
Part of my purpose this evening is to demonstrate that the pattern of British engagement was never straightforward. Thus, at the height of our imperial power just before World War One, Britain’s largest export market was not the empire but continental Europe. Admittedly, much of our export trade was re-export of goods made from imported imperial raw materials but the pattern of that trade depended on Europe taking the lion’s share of our higher value exports.
That pattern started to change in the years immediately before World War II as European, especially German, protectionism – and our own abandonment of free trade – reduced the share of British exports taken by Europe. American protectionism, even more drastic, severely reduced our access to the American market.
In the immediate post-war world of 1945 and beyond, those trends became more entrenched. We imposed import quotas on European and N American goods to protect our balance of payments. Commonwealth products, by contrast, had free, or privileged, access. So, Australia, with fewer than 10 million inhabitants, was, for a time, Britain’s largest export market.
By the mid 1950s, that pattern of trade was little changed. But the warning signs were there. In 1955, West Germany recaptured, and then surpassed, its pre-war share of European markets, mostly at Britain’s expense. Growth rates across Western Europe were already outstripping our own. In Australia, India and South Africa, import substitution policies, backed by import quotas, were having an impact on Britain’s ability to export successfully. In 1956, the share of British exports to Sterling Area markets fell from 50% to 45 %. The existence of the sterling area was becoming less important to British economic prospects as we sought international currency convertibility.
All this coincided, on the back of the creation of the post-war Coal and Steel Community with the movement in continental Europe which was to lead to the formation of the EEC in 1957.
At the heart of the EEC idea was a Customs Union, something which was unpalatable to the UK because it implied protectionism against external trade, including not just with the Commonwealth, but also the US and it implied control mechanisms with supra-national connotations.
There was no monolithic view within the Government which Eden headed in 1955. Some, like Peter Thorneycroft at the Board of Trade, were vehemently opposed. Macmillan, as Foreign Secretary, was more favourably disposed. The Treasury’s Permanent Secretary, Sir Edward Bridges, minuted to Rab Butler, the Chancellor, warning against the European plans: “Britain’s interest certainly does not lie in this direction and we should not be led astray by the kind of mysticism which appeals to European Catholic federalists and occasionally, I fear, to our Foreign Secretary”. Macmillan was more hard headed than Bridges gave him credit for but fears of what a supranational organisation would do for British parliamentary sovereignty led into what became the ‘Commonwealth First’ group which later opposed British membership.
Basically, Britain dithered. This new potential organisation was potentially too significant to stay out of. But, with luck it would fall apart. Or we could try to transform it into something more palatable. In 1956, by now Chancellor, Macmillan sent a minute to Bridges: “What then are we to do? Are we to just sit back and hope for the best? If we do that, it may be very dangerous for us; for perhaps Messina will come off after all and that will mean Western Europe dominated in fact by Germany and used as an instrument for the revival of power through economic means. It is really giving them on a plate what we fought two wars to prevent”.
Various alternatives were looked at (EFTA, NAFTA and GITA). Other wrecking tactics were tried: could any new continental organisation be absorbed into the OEEC, the organisation set up to manage Marshall Aid? Could the Common Market be subsumed and diluted into EFTA? None of these ideas proved politically practicable. When, a few years later, President de Gaulle, vetoed Britain’s application to join the European Community, one of his justifications was that Britain had sought to wreck the fledgling EEC and only when that attempt had failed, and our economy started to show its comparative weakness, did we then knock on the door seeking entry. He would have Britain naked first, de Gaulle told the Swiss Ambassador in Paris.
So Britain stayed out, hoping that the new organisation might founder but faced, in the years between 1957 and the eventual decision of 1961 to apply, with some uncomfortable realities: the economic and political success of the new organisation; the threat to British leadership posed by Franco-German reconciliation under de Gaulle who had returned to power in France in 1958; the realisation after the humiliation of Suez that influence in Washington came, not from distancing ourselves from Europe, but by joining the EEC. Even the Commonwealth argument began to change: how could Britain lead the Commonwealth – especially a more diverse one as independence gathered pace – unless Britain was economically strong and she could not be economically strong outside the EEC. The process of economic diversification within the Commonwealth had already begun.
On 21 July 1961, Cabinet finally decided to apply to join, or rather to make an exploratory application. That decision had been preceded by talks with leading Commonwealth countries conducted by Duncan Sandys, the Commonwealth Secretary. Their acquiescence was hardly enthusiastic: grudging acceptance in the case of Nigeria, the same, accompanied by demands for consultation from Canada and Australia; a wry observation from India that UK accession to the EEC would mean the effective end of the Commonwealth. And a passionate plea from New Zealand that, without special protection for her exports, the NZ economy would collapse.
At the crucial Cabinet meeting, Sandys made one of the decisive interventions: “If I had to choose”, he said “between Europe and the Commonwealth, I would choose the Commonwealth”. But, he argued, the Commonwealth would be weakened by a decline in Britain’s economic position, and that weakening would be prevented by EEC membership. But special arrangements would be indispensable for NZ and arrangements on soft wheat exports from Australia and hard wheat exports from Canada would have to be made.
So the decision was not seen as either or. But nor was it purely economic. It was about Britain’s place in the world.
In a pamphlet which he wrote in 1962, entitled Britain, the Commonwealth and Europe, Macmillan wrote: “We have to consider the state of the world as it is today and will be tomorrow and not in outdated terms of a vanished past. Macmillan went on to describe a world dominated by two super powers: the USA and the USSR. “To these may soon be added”, he wrote “the sleeping giant of China, whose combination of a rapidly multiplying population and great natural resources must increasingly be reckoned as a potent force in world affairs”.
Macmillan’s view of the European Union was, like the organisation itself, framed in terms of economic prosperity for political ends. That was to be the centre piece of his pitch to a sceptical de Gaulle, most famously at Rambouillet in the cold fog of a December day in 1962. In the morning, they shot pheasants and, over lunch and in the afternoon, Macmillan tried to persuade de Gaulle that, with Britain in Europe, there would be a European power for good in the world, not subservient to the United States, but a partner sharing mutual values and a shared interest in defence. De Gaulle did not buy it and he outlined then the reasons which he later detailed with brutal candour, at a Press Conference in January 1963 when he vetoed Britain’s application. Part of it was personal (two cockerels); part of it was rooted in continental European history (the Carolingian empire reborn) and a large part – far more than was perceived at the time – in hard headed French national interest. And de Gaulle put his brutal finger on the issue at the core of Britain’s dilemma. For at the heart of his argument was that the whole point of the EEC was to be protectionist i.e. a liberal trading system internally, enforced by protectionist barriers against the rest of the world – especially in agriculture on which France depended both economically and politically. It was not so much Britain’s attachment to the United States which de Gaulle resented as the fact that Britain’s global, particularly Commonwealth, trading interests meant that it could not successfully anchor itself alongside the continent.
This indirect Commonwealth interest was to surface strongly again when Harold Wilson was elected Prime Minister in 1964. The hostility of the Labour Party to EEC membership (end of a thousand years of history) had been partly about Party politics, partly about sovereignty but also about ties to the Commonwealth. Wilson was particularly concerned with NZ. Speaking to the House of Commons in 1961, Wilson recalled a meeting, immediately after the end of WWII between the British Secretary for Overseas Trade and his New Zealand opposite number: “I expected a bargaining session as difficult as any other. Instead, the leader of the NZ delegation opened the proceedings with words I shall never forget: ‘We have not come to ask you: ‘What can you give?’, but simply ‘What do you need?’ When you stood alone, you preserved our freedom for us. Now, tell us what butter, what meat, what grains you need and – whatever the sacrifice ay be for the New Zealand people – we will supply it’”. “I submit to the House”, Wilson said, “that we cannot consistently with the honour of this country, take any action now that would betray friends such as those. All this and Europe too, if you can get it…But if there has to be a choice we are not entitled to sell our friends and kinsmen down the river for a problematic and marginal advantage in selling washing machines in Dusseldorf”.
Yet, in Government, Wilson and his Cabinet took exactly the same decision de Gaulle again vetoed the British application. When, after the defeat of the Labour Government in 1970, Prime Minister Heath picked up the negotiating mandate he was faced, in the negotiations for EEC accession, by a difficult choice: either a reasonable budget deal for Britain, or a deal on continued access to the UK markets for New Zealand dairy or meat products. That the British Government chose the latter, thereby making the budget issue a sore point in Britain’s relations with her new partners for a decade and more, is a reflection of the fact that Parliamentary and public opinion would not have supported accession at the expense of New Zealand.
The same thing was true for Harold Wilson when he was returned to power in 1974 on a promise to renegotiate the terms of Britain’s membership of the EEC. Indeed, I would argue that, out of the six renegotiation goals which the Labour Party set out in its February 1974 manifesto, on only one: “better safeguards for Commonwealth and developing countries”, was substantive change actually achieved. And within those safeguards were two elements: (a new trade and aid agreement between the EEC and the Governments of 46 countries, 22 of them from the Commonwealth) and, once again, the prominence and priority given to NZ interests. Jim Callaghan, former Chancellor of the Exchequer, continually pressed on Wilson the prime importance for the UK of the budget issue but Wilson cared more about New Zealand and thought the British people would care more about New Zealand than about money, even their own money as this was. So a renewed deal on New Zealand dairy access to the EEC market trumped issues such as the budget deal for Britain, fears of a single currency and the importance for the UK of the Regional Development Fund and the European Social Fund.
Indeed, in the document, Britain’s New Deal in Europe, which the Labour Government sent to every household in Britain following the renegotiation and in advance of the referendum, it was the EEC and the wider world which occupied pride of place on the centre pages.
Interestingly, although the NO campaign document said that Commonwealth links were “bound to be weakened much further if we stay in the Common Market”, the main burden of the argument was that “the Common Market…sets out by stages to merge Britain with France, Germany, Italy and other countries into a single nation”. On both counts, their crystal ball seems to have been, well, to put it charitably, cracked.
The Yes campaign document (entirely separately run from Government), on the other hand, had a lot to say about the Commonwealth arguing that continued membership:
- Makes good sense for jobs and prosperity
- Makes good sense for world peace
- Makes good sense for the Commonwealth
- Makes good sense for our children’s future
Australia, Canada and NZ, it argued, do not want the UK to leave. Not a single one of the 34 Governments of the new Commonwealth, it stated, wants Britain to leave.
You will see that the argument I am seeking to make is that successive Governments in the post-war world did not necessarily make the right choices. Indeed, Britain certainly paid a price for not being one of the rule-setting founder members of the EEC. But they were wrestling with a fast changing, dangerous world in which the Soviet Union had established an empire of tyranny on our continent, and threatened our very survival, Britain’s economy had been drastically weakened by the war, large amounts still had to be spend on defence, the relationship with the old Empire was being turned on its head by decolonisation, and the usually quarrelling countries of Western Europe were, to our surprise and dismay, no longer quarrelling but forging ahead politically and economically. The Commonwealth was one very important – but not alone the determining – factor in the decisions that were taken.
Nor, I would argue, have Commonwealth interests been neglected since. Protection of Commonwealth interests, be it New Zealand (still going on in the late 1990s), or South Africa in a free trade deal, or Canada over fisheries, when the UK incurred Spanish wrath, or sugar interests in the ACP, or Caribbean banana interests in the EU stance vs., the USA in the WTO, remains a high UK priority. Cashmere.
If I look back to the world as seen by the Foreign Office which I joined in 1968, and to our preoccupations throughout much of the succeeding 35 years that I spent as a diplomat, there were three big foreign policy issues and one big domestic one. The foreign policy issues were, first the security threat from the Soviet Union, which was real and persistent right up to the 1980s; the second was Britain’s place in Europe and the third was the end of empire and its consequences. For one of the things which gave us a continued prominence beyond our size and wealth and reach was that many of the intractable problems of that period were the residue of empire: Cyprus, the Malay insurgency, South Africa, Rhodesia, Gibraltar, the Falkland Islands, Belize and Hong Kong.
The resolution – if that is the right term – of those post-colonial issues and the collapse of the Soviet empire, and the fact that we became one of many countries in the European Union, removed the magnifying glass and has enabled us to see ourselves, and be seen, as we truly are. At one level, we are obviously no longer a world power as we once were. But the other crucial factor which accompanied the changes we underwent in global importance was the big domestic one I mentioned and that, I would argue, was the parlous state of our economy from the mid-1950s to the mid-1980s. As a diplomat arguing Britain’s case abroad, I was acutely aware of constantly having to explain away our position as the sick man of Europe in economic terms. We had thirty years in which we seriously underperformed compared with most of our European partners, and the US and Japan. It was partly because of our economic weakness that, when de Gaulle cast his second veto, keeping us out of the EEC in 1967, he encountered relatively little flak from the other 5 EEC members: they were secretly relieved that a country as economically weak as ours was not about to join. Whatever else has happened so far, including 2008, we have not, since the 1980s, been an uncompetitive economy compared with the economies of our European partners. Rather the contrary.
We have not yet perhaps fully resolved our post imperial malaise. Unable to be a super power ourselves, we take comfort in being the closest ally of the world’s biggest super power, the United States. Look no further than the Iraq war of 2003. Tony Blair’s now famous letter to Bush of July 2002: “Of course, we are with you come what may” is not so much a judgement about the requirements of a coherent policy on Iraq, as a statement of where Britain under Tony Blair was trying to position itself vis a vis the United States in the post 9/11 world. Some of the same psychology is at work now in respect of Syria.
So, it is against that background that we face, probably in the next nine months, the decision about our European future.
As was the case nearly 70 years ago, none of NAFTA, EFTA or GITA looks like viable alternatives. Nor would a single Commonwealth interest be served by our leaving. I cannot imagine Tata wanting to export from Britain across a WTO tariff barrier, or to have to lobby for its UK interests in other Member States, or the European Commission or the European Parliament without the support, the votes, the MEPs of Britain. Because once we were out we would be out. In any case, the European Union already has, or is negotiating, free trade agreements with 90% of the Commonwealth countries. That includes the six Commonwealth countries that account for over 80% of Commonwealth trade. The UK’s exports to the rest of the Commonwealth have been growing on average by 10% a year: much more so in the case of South Africa and Australia and, in the last decade, by ten times that much with India. The EU market remains nonetheless the UK’s prime market. A recent academic study has suggested that, outside the EU, for Britain to make up for even a 10% drop in the value of our exports to the EU we would have to increase our exports to the rest of the Commonwealth by 40%.
I cannot imagine that any Commonwealth country would choose to negotiate a trade deal with the EU without having the UK there as a sympathetic friend. Nor can I imagine that we would want to have to negotiate individual trade deals with other Commonwealth countries without the leverage that EU membership gives us. It is after all a competitive world.
As the economic strength of many Commonwealth countries grows, so of course will their relative weight in trade and other negotiations. But I see nothing in favour of an argument which suggests that the UK’s relative weight is strengthened by being outside the EU altogether or being associated with the EU through EFTA and relying on the EU to negotiate the trade deals in which we would have no say but which we would be obliged to implement.
And it is not, of course, just about economics. I recall, when I was working for John Major that, at the CHOGM in Harare, one of the Caribbean premiers commented that the Commonwealth was the only international organisation where, if one of its members commented that something “just wasn’t cricket” everyone would know immediately what was meant. Of course the Commonwealth plays to our imperial nostalgia when we see those photos of the Queen or the Prince of Wales seated at the centre of such a large array of countries from across the globe who are still there primarily because of a common heritage, however painful some of its origins may have been. Just as a photo of David Cameron at an EU summit reminds us that we are now just one, albeit still one of the biggest, of 28 member countries. In that European school photo we can no longer pretend to be the head prefect. But would we feel better if, month in, month out, when our European partners met to discuss Ukraine, or Syria, or terrorism, or global warming, or energy policy, or financial services – we were out of the picture, literally and metaphorically, altogether?
Of course, the Commonwealth is much more than a family photo and, in or out of the EU, we would still want to play our part in the framework of cooperation, education, political and Parliamentary exchanges etc.which it represents.
But the EU does some things that the Commonwealth cannot do.
It is among very few international organisations which is inherently dynamic. We, its members, change the terms of membership every time we agree new, EU-wide, laws. Majority voting means that decisions do get taken. Consensus sounds wonderful but is the enemy of decision taking. The threat of being outvoted is, moreover, a great incentive to find consensus, but not, and this is crucial, at the lowest common denominator of agreement.
The EU does not just aspire to high standards of human rights: it makes them a condition of membership. You cannot be a member of the EU and execute your citizens, or discriminate against them on grounds of their religion, or gender or sexual orientation. I am a gay man. As a gay man, I would not feel equally comfortable in all of the EU Member States. But I would not go to a single one of them in fear of my life. The same cannot be said for much of the Commonwealth. 41 of the 53 member states criminalise homosexuality. Punishments range from the death penalty, to 10 years hard labour to 20 years imprisonment plus flogging. 90% of those people in the world who are criminalised for their sexuality live in the Commonwealth. A 21st century economy is no guarantee of comparable standards of behaviour. And this is not just about human relationships. It is about the denial, to a whole class of citizens, of access to healthcare, education and employment. Unless and until the Commonwealth becomes an exemplar of the observance of human rights and genuine participatory democracy, it will, I believe, always give rise to serious reservations of allegiance and affection in our own country and elsewhere. None of which is to denigrate the efforts that have been made, not least by the government of Malta at the most recent CHOGM, and by the Commonwealth Secretary General, and individual Governments, to press for change. And it is better to have a forum in which to pursue change, rather than no forum at all. And especially welcome to have in Patricia Scotland a new Secretary General of outstanding ability, as well as one of the nicest senior figures I had the privilege of encountering in Government.
‘We have to consider the world as it is today and as it will be tomorrow’ Macmillan wrote in 1962. The publicity for my talk was one suggestion of how the world will look tomorrow. Yes, the balance of global economic prosperity is shifting. Yes, our own society, and society across much of Europe, is unrecognisably different from what it was 60 years ago: multi-cultural, ethnically and linguistically diverse, complex, problematic - occasionally frightening – but also creative and dynamic. Our island story is in large part the story of Christendom in Europe and the European Union is a modern iteration of that tradition, which is one reason why we find it both familiar and uncomfortable. Yet, in more than 40 years of membership we have changed the EU to make it more economically liberal, less protectionist, more outward looking. Most of our partners think that de Gaulle was right in his judgement that British membership of the European Community would bring about radical change. It has. More remains to be done.
But our island story is also now the stories of the people from former colonial countries, who are our fellow British citizens and who bring their own rich traditions with them. The dynamism of the Commonwealth is demonstrated by the new members that have joined without any previous connection; by its range of vibrant networks; by the fact that one of the world’s smaller islands, Malta, has just hosted the leaders of half the countries in the world and that the Head of State of another of the smaller islands in the world is accepted as its titular head.
The fact is that we have never made a choice between the Commonwealth and Europe, or indeed come under serious pressure to do so. We have managed our engagement with both in accordance with the perception and assessment of our interests. Leaving the Commonwealth might bring about its demise and would be pointless and damaging. Leaving the EU would not bring about its demise. Nor would it create a Commonwealth alternative. It would mean leaving the organisation, the EU which, otherwise, will remain, for the foreseeable future, the principal outlet for our exports and investment, and the chief vehicle for protecting and promoting our political and economic influence in the world. And nothing we do can alter the fact that the 27 other countries of the EU are our closest neighbours. As part of the same organisation, the EU, we have created a unique way of managing what would otherwise be dangerous squabbles between our different countries. Beyond that, we share common democratic values and, together, promote those shared values and common interests. We are the world’s largest single market and the world’s largest international aid donor. Imperfectly – for the EU is a supranational organisation, not a supernatural one – we seek to exercise benign soft power in the world. That, it seems to me, is worth hanging on to.
Sir Stephen was the Official Government Historian responsible for writing the story of the United Kingdom’s
Sir Stephen held senior diplomatic positions in Ethiopia, France, the United States, and Portugal, where he was HM Awith the European Union. The first volume of this, covering the years 1963 to 1975, was published three years ago.
mbassador. Among his appointments in London he was Private Secretary to the Prime Minister, 1991-93, and Head of the Europea
He is Chairman of Cumberland Lodge and of the Federal Trust and Co-Chairman of the Belgo-British Conference. He is often heard in the media commenting on international affairs.n Secretariat in the Cabinet Office 2000-2004.