In early 1974, the Heath government was facing serious difficulties caused by the miners’ strike, the three-day week and the energy crisis that followed the huge hike in the world price of oil. As a way out of his difficulties Heath decided to hold a snap election on the somewhat spurious question of 'Who Governs Britain?' The issue of Europe was hardly raised in the campaign, until Enoch Powell dropped the bombshell that he would be voting Labour. Since his dismissal by Heath from the shadow cabinet in 1968 for his 'Rivers of Blood' speech on immigration, Powell had made several further speeches highly critical of Conservative policies, not just on race and immigration but also on economic matters and the threat to British sovereignty posed by the EEC. He seemed to have had a particular animus against Heath and the tone of his speeches was often vitriolic towards his party’s leader. In reaching his decision to vote Labour, Powell argued that reclaiming British parliamentary sovereignty, that is the ability to govern ourselves, was of such supreme importance that it overrode all other issues. A vote for Labour, who made a manifesto commitment to renegotiate British membership and hold a referendum, offered an opportunity for Britain to withdraw from the EEC, albeit at the high price of a Labour government.
Powell was a deeply controversial politician; his repeated advocacy of large-scale repatriation of non-white Commonwealth immigrants had caused outrage amongst the liberal establishment which then, as now, included a sizeable proportion of the Tory leadership. Powell’s supposedly 'extreme' views rendered him almost a pariah amongst parliamentary colleagues and he was denounced as a populist agitator by most of Fleet Street. Unlike his speeches on immigration, those on the EEC received relatively little publicity and his concerns over the loss of sovereignty fell on largely deaf ears, not just of politicians but the media also. Although the political establishment loathed Powell, his views on immigration struck a chord with a sizeable proportion of the electorate and he was widely thought to have helped win the 1970 election for Heath in several marginal constituencies. Powell’s decision to vote Labour would have been an important contributory factor in Heath losing the February 1974 election.
On returning to power, Harold Wilson’s government carried out some rather desultory renegotiations of the British terms of EEC membership. The outcome was widely seen as not much different from that which Edward Heath had obtained. Wilson never gave the impression of having strong views on Europe (or much else). He supported joining in the 1960s, but when opposition within his party surfaced in the early seventies he switched sides and opposed Heath’s application for membership. In reality his party was deeply split on the issue. Wilson’s attempt to overcome this problem was to agree to the suggestion of Tony Benn to hold a referendum on the question of whether Britain should remain in Europe.
During the 1975 referendum the Wilson Government supported EEC membership as did both the Conservative and Liberal parties. Wilson suspended collective cabinet responsibility on the issue to allow about a third of his cabinet opposed to membership to join the anti-EEC campaign. Three leaflets were sent to every household in the country, one from the pro-EEC campaign, another from the anti-EEC campaign and a third from the Government recommending that Britain should remain in the EEC. Thus two of the leaflets supported continued membership but only one was against. Although, both the pro and anti campaigns were given equal broadcasting time, it could still be argued that the campaign was a little one sided, since all the major parties supported membership as did the leaders of industry and business, the TUC and most of Fleet Street. The pro-campaign had considerably more money and successfully presented itself as mainstream and moderate, whereas the anti-campaign was branded as extremist and eccentric, dominated by such divisive figures as Powell, Benn and some of the more militant left wing trade union leaders.
At the time of the 1975 referendum the EEC was widely perceived as little more than a common market, the term by which it was then usually referred. So much of the debate concentrated on the benefits that would accrue to Britain by increased trade with the prosperous countries of Western Europe. At that time external tariffs were appreciably higher than today and fears that Britain could be excluded from the important European market were skilfully exploited by the pro-membership campaigners. The issue of sovereignty was played down - the Government in its leaflet stressed that ministers could veto any proposal that was against British interests. Many people who voted yes in the referendum subsequently complained that they had been deceived, as they thought they were only agreeing to remain in a common market and, had they realised that they were joining a full blown political and monetary union, they would have voted differently. Edward Heath, albeit many years later, answered this by correctly pointing out that closer political and economic union had always been a goal of the Treaty of Rome. Moreover, from the opposing perspective Enoch Powell had raised the danger to our sovereignty in many of his speeches. However, during the referendum this appeared to many a very distant threat that may never be realised. Thus the perceived trading benefits of EEC membership appeared highly persuasive and Britain voted to stay in the EEC by a two to one majority.
The referendum vote to stay in the EEC put the question of Britain’s membership on the backburner for the next fifteen years. In 1979 the Conservatives under Margaret Thatcher returned to power. Although she fully supported EEC membership her enthusiasm for Europe was far cooler than that of Edward Heath. This became apparent at one of her first meetings with European leaders when she ruffled quite a few feathers by stridently demanding that Britain’s contribution should be renegotiated and our money returned. Although her viewpoint was eminently reasonable since Britain was proportionally the largest budget contributor, she was heavily criticised both at home and abroad for being out of step with the spirit of European co-operation - in the euro-jargon she was perceived as being insufficiently communautaire. After protracted negotiations her government succeeded in obtaining a rebate which Britain still retains albeit reduced.
Following its 1979 election defeat the Labour Party entered into a period of internecine feuding between its left and right wings. This reached a critical point with the election of Michael Foot as leader in 1980 and the consequent departure of the 'Gang of Four' who founded the SDP under the leadership of Roy Jenkins, who had recently returned to British politics at the end of his term as EEC President. With a significant proportion of the pro-Europe leadership gone, Labour adopted a policy of EEC withdrawal as part of its radical plans for a socialist siege economy. The Labour Party was to remain hostile to the EEC until the end of the decade.
In contrast, the Conservative Party throughout the 1980s was proud to describe itself as the 'Party of Europe' and anyone in the Party questioning the validity and purpose of the European mission was given short shrift. Membership of the EEC was seen in a positive light and contrary views were largely suppressed. During this period Margaret Thatcher signed the Single European Act, which further strengthened the powers of the European Community (EC) over our affairs. The quiet dropping of the word 'economic' from the title went almost unnoticed but it was deeply symbolic. By 1986 the EC had expanded to twelve members with the accession of Spain, Portugal and Greece. However, within a few years the unity of the Tory Party would start to be undermined with the creation of the Exchange Rate Mechanism (ERM)