In his Leader’s speech at the 1991 Labour Party Conference, Neil Kinnock quoted the people’s poet Idris Davies: “He that forgets his history lives in the slough of slavery”. Kinnock was fighting to lift the burden of Tory rule from the people, but those days bear no comparison to the destruction that Tory Brexit and austerity have caused. I was my CLP’s delegate at that Brighton conference; I had finally been able to join the Labour Party once it re-adopted a pro-European policy in 1989. Labour had remembered our history, and for the next 25 years the idea of abandoning the great project for peace in Europe, rejecting our closest trading partners, undermining our economy and losing our major role in Europe and the world was a fringe pursuit rightly regarded by the mainstream as insane.
Why am I, in particular, so sure that Britain’s economy needs Europe? My whole career was rooted in European integration. After working for Hungarian Professor Tommy Balogh, the Economic Advisor to Prime Minister Harold Wilson, in 1966 I joined the Statistical Unit in the Economics Department of the European Free Trade Association (EFTA) – where I worked myself out of a job by assembling the statistics for a study published as The Division of Europe in 1970.
This study made it clear that the growing trade split in in Western Europe was deeply damaging to the EFTA countries, especially the UK, but also to the countries of the then European Economic Community (EEC).
The post-war economic split in Europe
Winston Churchill spoke of an Iron Curtain descending on Europe, and it was not just political. It ended trade and economic cooperation between western Europe and the eastern countries which formed a bloc called COMECON, splitting Europe from East Germany to Albania in the former Yugoslavia. This blow to Churchill’s vision of a united Europe was countered by the establishment of the European Coal and Steel Community (ECSC), followed by the EEC (‘The Six’). This ‘ever closer union’ was formalised by the 1957 Treaty of Rome and made up of the strongest-growing European economies at the time: Germany, France, Italy and the Benelux countries – Belgium, Netherlands and Luxembourg.
The UK may have been initially excluded from the EEC because of the animosity and differences in attitude to Germany between Churchill and General De Gaulle. Later, negativity from France led to Prime Minister Harold Macmillan’s initiative to create EFTA (‘The Seven’) in 1959.
EFTA was a ragbag of the left-out countries, with the UK very much the dominant economy. Sweden, Switzerland, Finland (an associate member) and Austria were reluctant to join the EEC during the Cold War because of their policies of neutrality, and Portugal was excluded because it was still a dictatorship under Salazar. Denmark has a large bacon market in the UK, with Sweden also a major market it needed to stay close to, as was the case for Norway before it acquired North Sea oil wealth. Iceland completed the Nordic contingent on 1 January 1970, making EFTA ‘The Nine’.
Towards European unity
When I joined the EFTA staff in the summer of 1966, the UK, Denmark and Norway had recently made applications to join the EEC, (the UK rebuffed by General De Gaulle’s famous ‘Non!’) and in 1967 Sweden sought negotiations compatible with neutrality. Switzerland, Finland, Austria and Portugal also expressed interest, but although the Commission was in favour, agreement could not be reached among EEC member governments and the attempt failed in 1968. In its Annual Reports of the time, EFTA expresses disappointment at failing to achieve its ‘long-term aim of a single market in Western Europe’.
EFTA continued developing its own economic rules and policies in parallel with and in reflection of the EEC, with Fisheries Policy the most challenging. But convergence of the two blocs was always paramount. Hence, also in 1966, EFTA launched a study of the split in Western Europe, and in 1968 the work on its own member countries was enlarged to cover the effects of the creation of the EEC, with the realisation that member governments in both blocs needed to be convinced of the damage caused by division. Instrumental in this project was the then President of the Board of Trade, Labour MP Anthony Crosland, who visited EFTA’s new headquarters in 1968.
The sick man of Europe
In the 60s and early 70s, the UK was beset by severe balance of payments difficulties and had become known as the ‘sick man of Europe’, a term previously applied to pre-WW1 Turkey. In 1967 PM Harold Wilson had to devalue the pound, a major blow. Since the advent of flexible exchange rates, this now happens surreptitiously, while balance of payment figures are virtually inaccessible to the general public, and seemingly unmentionable by the media. By leaving the EU and self-sanctioning its major trade links, the UK has placed itself at the mercy of the international financial markets it needs to borrow from.
It is back in exactly that same perilous economic position it experienced when it was previously outside the EEC, as clearly signposted by the statistical analyses in the Division of Europe Study all those years ago. The lessons of history were forgotten, but now we are cut off from the markets of not just six countries, but 27, with a further ten applicants. And this time there is no North Sea oil to look forward to.
The other former and current EFTA countries, along with Ireland and Spain, are all safely inside the European Union, or at least the European Economic Area, too smart to shoot themselves in the foot, or perhaps not burdened by a wealthy overclass intent on keeping its tax-avoiding offshore bank accounts.
Learning the lessons all over again
Earlier this year, Neil Kinnock set out the lunacy of leaving the EU in ‘Lessons from the Seven Lean Years of Brexit’ for the London School of Economics Blog. On 17 September, Keir Starmer was reported to have described Johnson’s Brexit deal as “far too thin”! Of course that extraordinary understatement is constrained by the inadvisability, just ahead of a general election, of telling floating voters in marginal seats what a terrible mistake they made when they voted Leave. Yes, his only job now is to win, but once elected he cannot serve the country without heeding his predecessor’s comments.
Only a Labour government or a Labour-led government can begin to dig the country out of the hole it is in. But the Labour leadership must recognise reality: Rejoin is imperative and inevitable.
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