The economic problems facing Great Britain are so numerous and so urgent that Gladstone, Keynes, Adam Smith and St Francis rolled into one would find it hard to affect them’
Going to work I ran into Len Neal. I asked him how he was, to which he replied, ‘Like everyone else, waiting for the collapse’.
This is a battle for economic survival.
Speaking at a rally at Musselburgh in May, the Labour MP for West Stirlingshire, Denis Canavan, launched a furious attack on the role of business organisations in the referendum. ‘Workers’, he complained, were being ‘subjected to extreme pressure … to vote Yes.’ The ‘intimidation tactics’, he claimed, ‘had already started’: ‘propaganda leaflets’ were raining down upon the workforce, threatening job losses if they refused to toe the line. Such ‘blackmail’, he thundered, was reminiscent of Victorian times, ‘when employers instructed their workers how to vote at elections’.4
Canavan was right about the scale of activism. Employers mobilised for the referendum on an unprecedented scale, canvassing not just their workforce but their shareholders, customers, employees’ families and those on company pensions. Of Britain's top 200 companies, it was estimated that at least 150 played an active role in the campaign.5 The CBI alone spent £50,000 on campaign literature, media training and a twenty-four-hour operations room. Giants like Barclays, ICI, Imperial Tobacco, Rolls-Royce, W.H. Smith and Rio Tinto–Zinc were joined on the front line by paint-makers, leather workers, shoemakers and the knitting industry, as well as by consumer organisations, trade associations and agricultural bodies. This was a levée en masse by Britain's commercial sector, of a kind never before seen at a national election.
Activism could take many forms. Supermarket chains, like Sainsbury's and Marks & Spencer, published articles in their customer magazines, showing how much of their meat, fruit, cheese and wine was sourced from the Continent. Companies set up workplace displays, distributed literature to employees and inserted material in the pay packet. The chairman of Guest, Nettlefold and Keen (GKN), Britain's largest engineering group, wrote ‘a personal memorandum’ to all employees and their families, warning that withdrawal ‘would torpedo the company’. ‘Membership’, he wrote, ‘is not a political issue, and what I have said about the danger of coming out is not a threat. It is hard commercial reality.’6
Business also wrote the cheques for the wider pro-Market campaign. Britain in Europe raised about £2 million from business – more than the total spent by the national parties in the two 1974 elections. British Petroleum gave £25,000; the shipping company P&O £20,000; and Allied Breweries £15,000. Other large donors included Chrysler, Debenhams, EMI, Shell, W.H. Smith and United Biscuits. The biggest gifts came from the City: £26,000 from the Stock Exchange, more than £100,000 from insurance companies and a colossal £200,000 from the clearing banks. Despite the efforts of an anti-Market organisation, ‘British Business for World Markets’, the NRC raised less than £9,000 in total during the campaign, with only a handful of donations above £100.7
For business to intervene so directly in a national election was unusual, and some employers were queasy about canvassing their workers. At a time of economic crisis, however, many felt a positive obligation to tell their workers what was at stake. The Institute of Directors told members that they had ‘a clear duty’ to ‘be bold in expressing their views’: ‘The Boardroom must lead.’ Addressing the Institute of Grocery Distribution in April, the supermarket tycoon John Sainsbury warned that the referendum would ‘affect the whole future of our nation in a way that no General Election can ever do’. Retailers must put aside ‘the natural instinct of the shopkeeper to shy away from political issues’, for ‘it is our livelihood which is involved’.8
In a decade marked by dire industrial relations, employers found themselves facing off once again against the trade union movement. Clive Jenkins, general secretary of ASTMS, described the referendum as ‘a World War Three situation’, and promised to fight membership with every weapon at his disposal. The TUC formally urged a No vote, while the Transport and General Workers’ Union (TGWU) provided the backbone of the campaign to ‘Get Britain Out’. Unusually, however, it was the employers who emerged triumphant – presaging, perhaps, the victories of the 1980s. This chapter explores why business fought so hard, the manner in which they sought to influence the vote, and why the response from organised labour proved so ineffective.
‘Crisis ‘75’
The referendum came at a grim moment for the economy. A stock market crash, the oil shock and surging inflation had fostered an apocalyptic mood in industry that was exploited by both sides in the campaign. Shirley Williams, the secretary of state for prices and consumer protection, warned that Britain was engaged in ‘a battle for economic survival’, while the Institute of Directors thought the economic situation ‘uniquely grave in character’.9 When Britain's biggest car manufacturer had to be rescued by the government, one commentator likened it to the war in Vietnam. The ‘Leyland collapse’, he wrote, ‘hangs ominously over our industrial future like the fall of Saigon over the future of the free world.’10
That context, with politicians warning of a return to rationing, gave business both a licence and an imperative to intervene.11 The National Association of Scottish Woollen Manufacturers, for example, displayed giant posters in the workplace, warning employees that ‘your future is imperilled if Britain leaves the EEC’. A spokesman told journalists ‘almost apologetically’ that ‘we don't normally dabble in politics’. ‘We are only doing this because it's our bread and butter.’12
The weavers were not the only businesses to ‘dabble in politics’. Companies like British Steel and the chemicals and textiles giant Courtaulds published articles in their staff newsletters, usually in the last issue before the vote so as to deny the unions a chance to reply. Employers organised seminars and meetings, where they could make the case for membership, and some broadcast messages over the tannoy. IBM displayed pro-Market material on company noticeboards, while the British Mechanical Engineering Confederation published a twenty-seven-point paper on the ‘overwhelming case for staying in’.13
Businesses also provided rapid rebuttals of anti-Market claims. When Tony Benn alleged big job losses in the car industry, the Society of Motor Manufacturers and Traders insisted that no jobs had been lost from membership. Instead, it blamed Britain's poor strike record and import penetration from Japan, both of which it hoped would be ameliorated in the EEC.14 The dairy company Unigate set up a ‘Truth about Food Information Office’, to respond to anti-Market attacks on food prices.15
Fundraising was organised on almost military lines. The supermarket boss John Sainsbury and the construction magnate Alistair McAlpine led a fundraising team that included the chairman of the National Coal Board, Derek Ezra; the financier Cyril Kleinwort; the chairman of Vickers, Alfred Robens; and the former Chancellor of the Exchequer, Peter Thorneycroft.16 Donations ranged from the very large (£35,000 from Commercial Union, £25,000 from Debenhams, £20,000 from Cadbury Schweppes) to the relatively small (£1,000 from Penguin Books, £500 from Ladbrokes and £50 from Moss Bros). Money poured in from every sector of the economy: construction (Rugby Portland, Redland, Wimpey); oil and gas (Shell, Mobil, BP); the food and drink industry (Cadbury's, Hovis, Tate & Lyle, Rowntree Mackintosh, United Biscuits, Nestlé); motoring (Ford, Rolls-Royce, Chrysler, Datsun); the recording industry (Decca, EMI, Rank); breweries (Allied, Whitbread, Pilkington's); and engineering (Lucas, Vickers, Westland). Even the pet food company Spillers gave £10,000.17
Campaigning focused in particular on employment and the threat to jobs in the event of withdrawal. GKN, which employed 85,000 people in the UK, predicted a 20 per cent cut in output and the loss of 17,000 jobs. Lucas Industries, which made components for the automobile and aeronautical industries, anticipated 8–10,000 job losses, while Automatic Products, a motor components group based in Leamington, warned that ‘job security will be at risk if we come out’.18 As The Economist noted,
The arguments are those of the breadbasket. If Britain pulls out, the employers say, it will find itself with a smaller market, less investment and consequently fewer jobs. Put at its crudest (and most employers try to avoid doing this) those who vote ‘no’ on June 5th may be voting themselves out of a job.19
Two days before the referendum, the Foreign Office released the names of six international companies, mostly in the chemicals sector, who proposed to cancel investment in the event of a No vote. BP Chemicals, for example, warned that a £100 million investment in Grangemouth was contingent on staying in, while the US company Monsanto declared that a nylon plant on Teesside would be cancelled if Britain withdrew.20 Rowntree Mackintosh, the confectioners, made plans to move production to the Continent, so as to remain within the EEC's tariff wall, while the tobacco giant Rothmans International warned that it would close its main UK factory following a No vote.21
Meeting ‘Mr Europe’
Activity was co-ordinated by the Confederation of British Industry, which was celebrating its tenth anniversary. The Confederation had been pro-Market from the outset: at its inaugural meeting in 1965, the CBI Council had identified a closer relationship with Europe as ‘a first task of the new organization’.22 The director-general, Campbell Adamson, had spoken in 1971 of his ‘unwavering dedication to the European ideal’ (including ‘some form of political confederation’), and described the work of integration as ‘the prime task of this generation’.23 When Heath signed the Treaty of Accession in January 1972, the CBI hailed ‘the start of a new and revolutionary relationship’; and from April to June, it took to the country, criss-crossing the UK in a special ‘Impact Europe’ train. The train served as a mobile conference centre, educating businessmen and women on the new context for trade. ‘The Community’, visitors were told, would be ‘an economic super-power’, able to ‘compete with the United States’ and ‘superior to the Soviet Union’.24



Figure 5.1 ‘Impact Europe’. The Confederation of British Industry's mobile conference centre, which criss-crossed the country in 1972 helping business prepare for entry to the Common Market.
The CBI disapproved of the renegotiations and warned the government against ‘any course of action that could lead to Britain leaving the Community’.25 In January 1975, while the negotiations were still ongoing, its president, Ralph Bateman, wrote to members, asking them to provide funds for the campaign. He also asked that they nominate a single individual – a ‘Mr Europe’ – who could liaise with the central office. Companies were urged to ensure that ‘the Europe dimension’ was included in all reports, accounts and advertising, making clear to ‘shareholders, employees and the general public … what the implications would be of our withdrawal’. Firms were encouraged to use workplace displays to communicate ‘the advantages for exports and also for job availability in Britain and Europe’. There were regular meetings of ‘Mr Europes’, so that they could compare notes and report on the temperature of workplace debate.26
Electoral politics presented a complex set of challenges for the CBI. On the one hand, the future of Britain's trade relations was of legitimate interest to a commercial organisation, and there was little doubt of its mandate. When the CBI polled its 12,000 member organisations, only seven claimed that membership had been bad for business. An ORC poll for The Economist, which questioned 653 companies of varying sizes, found that 95 per cent favoured staying in, while just 2 per cent wished to withdraw. Chambers of Commerce produced similar results, with votes of 97 per cent for membership in Dundee and Tayside and 96 per cent in Birmingham.27 When the Institute of Directors consulted its ‘Chairman's Panel’, it recorded ‘one of the most enthusiastic [responses] that the editors of this magazine have ever seen’. Every single one of those who answered on the record (about two-thirds) argued for membership.28
Yet the CBI was wary of allegations that it was trying to ‘buy’ a national election. Mobilising the business sector risked antagonising the trade unions, while giving purchase to left-wing claims that Europe was a ‘rich man's club’. The Economist thought that working-class figures like Vic Feather should take the lead, for fear that pressure from the boardroom might look like ‘a businessmen's ramp’. Nothing was more likely to energise the unions than a campaign to enrich their bosses – particularly if it brought electoral pressure to bear on their members.29
For this reason, there was nothing so ostentatious in 1975 as a CBI train. Indeed, the CBI engaged in little overt campaigning of any kind, though senior figures did appear on BIE platforms. Instead, the organisation acted as a clearing house and information network, supplying the materials its members needed for their own activities. Companies were sent a steady stream of posters, leaflets and ‘talking points’. Firms could commission letters and articles for company magazines, or hire TV cassettes for display in the workplace. Consultants were hired to monitor and respond to newspaper coverage, while telegenic CEOs were given media training. The CBI also circulated annotated critiques of anti-Market material, which could be used to rebut concerns on the shop floor.30
What businesses most needed was information, and this was the CBI's forte. Every ‘Mr Europe’ received a tasteful, lime-green folder, stuffed with booklets, posters and fact sheets. These were supplemented by weekly bulletins, constructed around a question-and-answer format that could be used as a prompt for workplace discussions: ‘Will staying in Europe help safeguard jobs?’ ‘Will staying in the Community help our exports?’ ‘What has industry gained so far?’ Briefing notes were distributed on everything from metrification to the arguments used by anti-Market speakers.31
The CBI also offered legal advice and guidance on how to avoid inflaming the workforce. Unlike the Institute of Directors, it warned against inserting material in pay packets – or, indeed, communicating with workers in any form outside the usual channels. It discouraged use of the tannoy to address workers, and offered guidance on the legal ramifications of giving staff time off to vote.32
An early problem for the CBI was the reluctance of large firms to get involved. Even companies that were enthusiastically pro-Market spoke of campaigning ‘quietly’ or ‘sotto voce’, for fear of angering the unions. (‘Regrettably,’ one chairman observed, ‘there is a great tendency nowadays for people to believe that whatever the employers want cannot be in their interests.’) In consequence, it was small and medium-sized businesses that took the lead in the early phase of the campaign. To the surprise of some, ‘smaller non-unionised companies’ seemed ‘prepared to stick their necks out far further’ than large ones, and were better placed to do so without stirring resistance on the shop floor.33 When The Economist polled 653 firms in April and May, it found that 94 per cent of smaller companies favoured membership, compared to 97 per cent of larger ones.34 The CBI Smaller Firms Council warned that withdrawal would ‘damage living standards and jeopardize job security’, and it worked hard to mobilise activity.35
Winning in Europe
The CBI spoke of the promise of Europe in almost chiliastic terms: ‘a single integrated industrial and economic entity, free of tariffs and other barriers to trade, with its fiscal, legal and financial environment harmonized to facilitate the operations of industry and commerce of a fully continental magnitude’.36 Yet it was surprisingly difficult to find solid evidence of these benefits. Of the 653 companies surveyed by The Economist, more than half reported that ‘membership so far had had little effect on profits and sales’.37 Writing in May 1975, the Financial Times could find ‘little evidence that any of the main City institutions’ had ‘so far gained a significant direct benefit’. ‘Immediate advantages’ were ‘not easy to find’ and there seemed ‘little prospect of a large upsurge in business’.38
By contrast, the costs were all too obvious. As tariff barriers came down, firms struggled to compete with more efficient Continental rivals, driving the UK balance of trade in manufactures with the Six’ from a small surplus in 1971 to a deficit of over £1,000 million in 1974.39 Import penetration was causing real pain, and there was concern about the level of investment flowing out of Britain to the Continent. The trade secretary Peter Shore claimed that, from 1971 to 1973, £1.4 billion of British capital had been invested in western Europe, while only £150 million had flowed back the other way.40
Enthusiasts argued that this was a temporary setback until domestic producers responded to competitive pressures. Even in 1971, when accession talks were still ongoing, the CBI had warned that the positive effects of membership would not be felt until the 1980s.41 The benefits it anticipated thereafter focused on three areas: trade, investment and the defence of the free market.
The first centred on the sheer size of the Community. The EEC offered a ‘highly developed home market of 260 million people’ – five times the size of the UK – which was prosperous, technologically sophisticated and growing rapidly. Exports to the Community were worth £5.5 billion in 1974, roughly one-third of British sales overseas and an increase of 37 per cent on the previous year. Sales to the Community had increased by 134 per cent since 1970, more than double the increase to the Commonwealth over the same period and 50 per cent higher than the increase to all non-EEC countries.42
For the CBI, the Community was not just Britain's ‘biggest market’, it was also her ‘most natural market’. It was widely assumed that the world was coalescing into regional trading blocs, each with its own tariff walls. In such a world, ‘countries of the size and economic strength of Britain’ would ‘have virtually no say’.43 Echoing an argument that had been popular in the Edwardian period, Margaret Thatcher told a meeting of Conservative students that ‘political and economic power in the world today is based much more on continents than on oceans – and on populations the size of America, Western Europe, the Soviet Bloc, and now Japan. Where power resides, there must British influence be exerted.’44
The scale of the European market was also expected to facilitate modernisation. Membership, claimed the CBI, would ‘give our industry the security to build up investments and to achieve economies of scale, leading to lower costs, stronger competitive power abroad and better job prospects at home’.45 This, it was hoped, would facilitate the transition to those high skilled, high value and ‘high-technology industries on which future living standards depend’. Companies exploiting ‘advanced technologies’, like aeronautics and the nuclear industry, could no longer function ‘on a purely national basis’. To ‘operate profitably’, they needed ‘a larger market’ with ‘uniform legal, fiscal and financial rules and regulations’.46 Outside the EEC, Britain would become a low-skill, low-wage economy, reduced, in the words of the Labour MP Betty Boothroyd, to ‘taking in the world's washing’.47
For Britain's struggling heavy industries, a second benefit was the possibility of European funding for new equipment or retraining. British Steel, for example, received £64 million of European money in the first two years of membership, while smaller, independent steel manufacturers got £28 million. The latter were so desperate to stay in that they requested a special treaty, allowing them to remain in the European Coal and Steel Community even if the national vote went the other way. Such payments also funded retraining programmes for workers made redundant by restructuring.48 In Northern Ireland, 13,500 workers benefited from a training scheme paid for by £3.3 million from the European Social Fund.49 £837,193 was spent on retraining 2,440 steelworkers made redundant in Lancashire and Cumberland. Other beneficiaries included 6,000 miners who had their homes modernised, courtesy of a twenty-five-year ECSC loan worth £1.7 million, at just 1 per cent interest. ‘These’, wrote the Sun, were ‘just a few practical examples among hundreds.’ In ‘a world of rising unemployment, the Common Market is truly the best prospect open to beleaguered Britain’.50
A third benefit was the clout the Community could exert in international negotiations. The recent General Agreement on Tariffs and Trade (GATT) round had offered an uncomfortable reminder of how little weight Britain now carried in such forums. If British industry wished to shape the rules of world trade, it would need to do so in co-operation with others. This weighed heavily with sectors like shipping, which had little direct stake in the Continental market. In 1975, the UN Council on Trade and Development proposed new rules, which would have secured 80 per cent of the carriage trade to the two countries between whom goods were being traded. This threatened to wipe out carriers with no national base in either country, with devastating effect on British shipping. The General Council of British Shipping concluded that the proposal could only be stopped through concerted action at a European level.51
Alongside these direct benefits, two indirect considerations weighed heavily. The first was the need for a thriving UK market, whether or not a company traded with the EEC. Shell, for example, reminded shareholders that the UK was its largest market outside North America. Britain's prosperity was ‘a matter of vital concern to us, and that prosperity in our view depends upon continuing membership of the European Community’.52 Imperial Tobacco donated £25,000 to BIE on the basis that its sales relied on ‘the more buoyant British economy that continued membership of the Community will ensure’. Sainsbury's, too, reminded employees that it could ‘only sell what our customers can afford to buy’. High inflation, low productivity and a currency crisis would squeeze profits more than any regulation from Brussels.53
Secondly, though less commonly acknowledged, some firms saw the Community as the best guarantor of a liberal trading regime in Britain. Casting a jaundiced eye over the appointments of Benn and Foot, the Director warned readers that Britain was in the grip of the most left-wing government in its history, some of whose ministers ‘wish to destroy utterly the free enterprise system’. Sir Marcus Sieff, chairman of Marks & Spencer, used his annual address to shareholders to defend the ‘role of free enterprise’, warning that ministers’ preoccupation with redistributing wealth rather than creating it ‘could both impoverish us and destroy our way of life’.54
For Sieff and his colleagues, the European Community provided some security for the survival of an open economy.55 The chairman of Tarmac published an advertisement in the Financial Times, warning that the alternative to membership was ‘a siege economy’ of the kind found in eastern Europe, ‘backed by powers of Government direction known only in wartime’. When the Director surveyed its members on the effects of withdrawal, one predicted ‘a Left-wing dictatorship … with a strong Right-wing reaction, with results the like of which the country has not seen since the days of Charles I and Oliver Cromwell’.56
From this perspective, the referendum was not simply a vote on the Common Market; it was a test of confidence in British industry and in the UK as a capitalist economy. The chairman of Lovell Holdings warned that withdrawal would trigger a collapse in international confidence, ‘a run on the pound and an accelerating dip into depression’. ‘My company will go down the slippery slope with everybody else.’57
The CBI did not deny the deteriorating trade deficit with the Continent or the imbalance between inward and outward investment. It insisted, however, that the deficit had ‘NOTHING to do with membership of the EEC’. Rather, it blamed the surge in commodity prices, which had hit Britain especially hard as ‘a major importing country’. That had been exacerbated by the so-called ‘Barber boom’ of 1972, which had stoked demand at a time when industry lacked the capacity to respond. Continental exporters had rushed to fill the gap, kneecapping the balance of payments with no benefit to home producers.58 This was a view supported by the National Institute of Economic and Social Research, which was generally sceptical of the merits of membership.59
Business also acknowledged its own competitive weaknesses. No longer shielded by tariffs, British goods were being rejected by consumers in favour of cheaper and better imports from the Continent. For the CBI, the logic of this position was not to continue the deterioration of British industry behind tariff barriers, but to respond to the energising effects of competition. The hope was that competition would stimulate modernisation, investment and productivity, so that British goods could compete not just in Europe but across the world. In this sense, entry represented a cold turkey treatment, ripping out the tubes of subsidy and protection that had enervated home production. Short-term pain was inevitable if the patient was ever to recover.60
Pro-Marketeers denied that the flow of outward investment marked a flight of capital to safer havens. On the contrary, they presented it as part of a necessary process by which industry could equip itself for Continental markets. The long preoccupation with colonial and trans-Atlantic trade meant that many companies had little experience of trading in Europe. They responded with a wave of Continental acquisitions, buying companies with the supply chains and distribution networks that they themselves lacked. In 1972, the year before entry, investment in the ‘Six’ reached a colossal 30 per cent of total UK investment. This, it was argued, should be seen not as capital flight but as an investment in British export markets that would pay dividends in years to come.61
Industry Voices
The experience of the textile industry illustrates the complex mix of costs and benefits involved in membership. Britain was home to four of the five biggest textile firms in Europe, employing more than 900,000 people, but the industry had been in headlong decline for much of the century. Low-cost producers in Asia had bitten deep into its markets, while the EEC had built up its own wool and cloth industries behind the protection of the external tariff barrier. The Wool Textile Delegation calculated that exclusion from the Community had cost the UK two-thirds of its trade in yarn and two-fifths of its trade in cloth with the Six. With full access to EEC markets, it hoped to claw back an additional £50 million in trade by 1977, enough to support more than 5,000 jobs.62
Few sectors campaigned harder than textiles. The chairman of Whitehead (Dyers) Ltd, a finishing company based in Shipley, told workers it was in their ‘vital interest to vote Yes. The alternative could well be the closure of this company and the loss of your job.’63 Outside the Community, adverts warned, ‘5,000 wage packets in West Yorkshire would become too expensive to fill. The chance of one being yours is just 1 in 14.’64
Yet the industry's enthusiasm for the EEC was in some respects surprising. This remained a global industry, which drew its raw materials from Australia, South America and India and sold the finished products to Europe, Japan, the US and the Middle East. Britain's balance of trade in textiles deteriorated significantly after entry, as Continental suppliers ate into vulnerable domestic markets. The catastrophic decline of the cotton industry in Lancashire was widely blamed by workers on the EEC, and was a central feature of the anti-Market campaign there.65
Two factors swung the industry behind membership. Firstly, manufacturers believed that they could win the competitive battle in the EEC, given the right framework for investment and modernisation. Britain still accounted for more than a fifth of turnover within the European textile market, and its trade in high-quality finished goods was growing. Trade journals like Men's Wear argued that exports of goods like Burberry or Aquascutum raincoats would offset the growth of French and Italian labels in British stores.66 Most commentators felt that the future for the industry lay in the high-end, sophisticated products required by the Continental market, following changes in fashion to which local suppliers could respond most quickly. While new plant was sorely needed, it would be easier to finance in the expectation of a Continental ‘home market’.67
Secondly, manufacturers in textiles – as in shipping – looked to the political influence of the Community for shelter in a hostile global environment. As the largest textile producers in Europe, British industrialists quickly came to dominate the major EEC bodies. By 1975, the three groups representing cottons, man-made fibres and wool were all headed by UK manufacturers, while the president of the British Textile Confederation, Alan Clough, also chaired the European umbrella group Comiltextil.68 This amplified the UK's voice in world trade negotiations. For example, when the GATT agreed a 6 per cent increase in textile imports from the developing world to the EEC, a burden-sharing agreement was negotiated that limited Britain's share to a half of 1 per cent. Outside the EEC, manufacturers feared that they would be exposed to the full force of international competition. The Yorkshire industry expected 5,000 jobs to be lost outside the Community, while the Association of Jute Spinners and Manufacturers predicted 1,000 job losses in Scotland. Courtauld's, one of Britain's biggest textile manufacturers, warned that the effects of withdrawal on its operations would be ‘nothing short of catastrophic’.69
Similar concerns animated the paper and board industry. The EEC was a key market for the sector, taking around 44 per cent of British exports. Sales had grown rapidly since 1973, with the volume of exports to the Community doubling in the first two years of membership. More important, however, were concerns about import penetration from cheap Scandinavian goods. Under previous EFTA agreements, Scandinavian paper could enter British markets free of duty. Within the EEC, imports could be spread more evenly across the Community, easing the strain on British suppliers.70
The motor industry, which donated handsomely to BIE, was another for whom the case for membership was not self-evident. From 1972 to 1975, Continental manufacturers had increased their share of the UK market from 17 per cent to almost 20 per cent. Companies like Renault saw the UK as a growth area, with aggressive plans for expansion. By contrast, imports from outside the EEC accounted for less than 13 per cent of market share, but were expanding faster. Japanese manufacturers like Datsun had tripled their sales in three years, and non-European imports had more than doubled over the same period. British manufacturers looked to the EEC both for protection against Japanese goods and for an enlarged export market for UK cars. In a series of remarkably sanguine projections, the Society of Motor Manufacturers and Traders predicted a market for more than 500,000 British cars and 80,000 commercial vehicles by 1985, almost tripling the value of UK exports. Datsun protested vigorously against the prospect of tariffs, but – like its American rival, Chrysler – still donated £5,000 to BIE. Even for non-European manufacturers, access to European markets and the ability to integrate their British and Continental activities outweighed the threat of tariffs.71
There Is No Alternative
Neither the CBI nor its members had much faith in the alternatives to the EEC. The hopes once vested in the Commonwealth had been disappointed long before the introduction of the external tariff barrier. As recently as 1954, the Commonwealth had taken 49 per cent of British exports and supplied 48 per cent of its imports; yet by 1972, the last year before British entry, those figures had dropped to 19 per cent each.72 The EEC had overtaken the Commonwealth as a trade partner in 1962, and membership had accelerated the shift in trade patterns. By 1974, the Commonwealth accounted for just 15 per cent of British trade, less than half of the EEC's 33 per cent share.73
If the Commonwealth was a declining asset, nor was there much confidence in a deal with the United States. ‘The decisive objection’, for the CBI, was ‘the lack of American interest’; but even had such a deal been on offer, the partnership would have been so unequal as to be overwhelmingly dominated by the US. Britain, it was argued, would have more control over its destiny – and so more ‘sovereignty’ – as an equal partner within the Community than as a supplicant at the American table.74
A third alternative, which was advocated vociferously by Antis like Douglas Jay, was for a European free-trade area that would dismantle tariff barriers while jettisoning political integration. The CBI made clear that it had no interest in such a deal. In its 1975 report on British Industry and Europe, the organisation openly applauded the ambition for ‘political unification’:
In the longer term, whether the UK remains a member or not, the Community will move towards industrial, economic and monetary union. This in itself will entail some form of political unification, and it is clearly in Britain's interest not only to welcome such a development but also to ensure that she can influence it.75
What the CBI wanted was not just ‘a free trade arrangement’ but ‘a true common market where goods can be bought and sold freely across national boundaries’.76 That meant setting common rules, which British business should play a part in writing. Glass producers, for example, feared that different industry standards in Britain and on the Continent would disadvantage British companies within complex international supply chains. Pilkington Brothers, for instance, produced parts for European car manufacturers, as well as the aerospace and railway industries. Outside the EEC, it feared, British firms would be unable to shape industry standards.77 ‘If we leave,’ warned the CBI, ‘British manufacturers will have to accept rules and standards they have had no part in framing. The result will be frustration, duplication of productive effort, and a reduction of our competitive ability.’78
Faith in the City
No sector of the economy was more enthusiastically pro-Market than the City of London. The major banks, insurance houses and stockbrokers donated tens of thousands to BIE. The Stock Exchange alone gave almost £26,000, while firms like Sun Alliance, S.G. Warburg, Norwich Union, the Prudential, Morgan Grenfell and N.M. Rothschild also gave lavishly. The largest single contribution came from the high street clearing banks – Barclays, Lloyds, the Midland Bank and Natwest – which made a combined donation of £200,000. The Stock Exchange Council, the Committee on Invisible Exports and most of the major financial houses made public statements in support of membership, while the stock market rose and fell in line with the opinion polls.79 Towards the end of May, when a freak poll suggested a surge in the No vote, the FTSE lost six points in half an hour. Two days before the vote, by contrast, when it was clear that membership would continue, the index reached its highest figure for eighteen months.80
In some respects, this enthusiasm was surprising. The City's financial networks had tended to be imperial and trans-Atlantic, rather than strictly European – a legacy of its history as the clearing house of empire. Continental financial markets were underdeveloped by international standards, and the London stock exchange had a turnover equivalent to the rest of Europe's bourses combined. The financial press found little evidence of short-term benefits from membership, though there was not yet much fear of regulation from Brussels.81 On the contrary, there was some enthusiasm for the idea that financial regulation might be lifted out of the hands of the UK government. The stock market crash of 1974 had left the City in febrile mood, with confidence shaken further by the change of government. With the Labour Left on the rise and Harold Wilson talking menacingly of ‘the weevils at work’ in the City, optimism was a rare commodity on the trading floors of the Square Mile.82
At the same time, the Community offered an enticing opportunity for one of Britain's few globally competitive industries. After the US, Britain was the world's biggest exporter of ‘invisible’ services, with 20 per cent going to the EEC. Membership gave the City access to a large, but still inchoate, market for financial services, with the opportunity to shape the development of common financial policies. This was particularly appealing to the insurance industry, which viewed the Continent as its most important market outside the USA. Since 1970, insurers had engaged in a series of acquisitions and mergers, designed to strengthen their presence on the Continent. Eagle Star, for example, had merged with the Compagnie de Bruxelles to form the Groupe Eagle Star-C.B. The new Belgian entity ran a profit in 1974, as did the company's Dutch subsidiary, while a new French partner halved its operating loss. Commercial Union purchased the second largest Dutch insurance group, Delta-Lloyd, while Guardian Royal Exchange, Royal Insurance and Phoenix also made Continental acquisitions.83
The movement of capital was not all in one direction. Lloyd's of London changed its rules to permit foreign ‘names’, in a bid to draw in European finance. A number of Continental firms arranged listings on the London stock exchange, and several City firms began to make markets in Continental equities, even if they were not yet officially quoted in London.84 Most promisingly, the Eurobonds market that had begun to emerge in the 1960s was located chiefly in the City; by the start of the twenty-first century, 70 per cent of all Eurobond issuance and secondary trading would take place in London.85
The big prize for British firms was the prospect of a Europe-wide capital market, shaped by British policymakers and dominated by the London houses. This required a political presence within Community institutions, ‘organising and influencing proposals for harmonisation’. Britain, it was argued, could play an important role in liberalising Continental markets, creating opportunities that UK firms would be well placed to exploit. As the Financial Times reported,
it is in the committees and consultation groups where the City feels that much of the best and most fruitful work has been carried out in the past two years. These have been slow to produce results; but their effect on the ultimate aim of opening up the EEC to free competition could be substantial.
Progress had already been made on a directive opening up the market for non-life insurance, and work was ongoing on the lucrative market for life insurance. The danger of withdrawal was not simply that this work would go to waste; it was that a thriving European financial market might emerge outside British influence, which first closed off the Continent and then ate into British markets further afield.86
The banking sector also saw strong potential on the Continent, though progress had been slowed by the entrenched position of local banks. Barclays, which viewed the EEC as a refuge ‘in a world beset by economic and political storms’, warned that withdrawal would mean ‘loss of official access to the EEC Institutions, loss of unofficial contact within the Community at all levels, abrogation of current EEC legislation and isolation from future developments’. Britain would lose its ability to ‘influence … the EEC's legal banking framework’; and rather than ‘persuading the EEC to accept many of the UK's long established principles’, the UK would become ‘further estranged from European banking practices’.87 Withdrawal, warned the Committee on Invisible Exports, would require an ‘unscrambling of financial arrangements’ that could set back penetration of the Continent for years.88
Any weakening of the wider British economy would also have consequences for financial services. As the Financial Times put it, the City ‘would find it very hard to prosper as a major financial centre in a declining offshore economy, probably plagued by increasingly rigid controls on trade and capital flows’.89 The chairman of Royal Insurance impressed this point upon shareholders at the annual general meeting in May.90 The insurance industry's ability to raise capital depended partly on the wider buoyancy of the British economy; and if a vote for withdrawal triggered a sterling crisis, it risked further draining confidence in Britain's ability to meet its liabilities.91 Denis Mountain, the chairman of Eagle Star, warned that withdrawal ‘would do untold damage to Britain's trading position and to our industrial base’, with serious consequences for insurers.92
‘Out of Europe – and into the World’
Even business opinion was not, of course, uniformly pro-Market. A small number of businessmen spoke out against membership, including the former chief executive of Jaguar, Geoffrey Robinson; others simply kept their heads down.93 In Scotland, which was less reliant on Continental markets, a poll of 1,600 companies by the Scottish Council for Development and Industry found that almost one in five thought the issue unimportant. Some firms, like Kodak, refused to campaign despite endorsing membership, on the grounds that it was wrong to canvass workers on a political issue.94
Nonetheless, the overwhelming commercial support for membership was an obvious problem for the Antis. Christopher Frere-Smith accused business organisations of exerting ‘immoral pressures’, which made employers frightened to speak out and workers afraid to disobey their bosses. Barbara Castle wrote furiously of ‘the employers’ brainwashing in every factory’, while C. Gordon Tether, who wrote the ‘Lombard’ column for the Financial Times, accused pro-Market bosses of breaching electoral law.95 Enoch Powell went further, mocking the right of Britain's lazy, feather-bedded and hapless business class to advise on the economy at all. ‘These are the people’, he told a rally in Blackpool, ‘who used to swear by all the gods there are that they would be ruined … if ever the pound sterling were floated.’ ‘In their own businesses they couldn't see their hands in front of their faces … What makes them so reliable in foretelling what is best for Britain?’96
Antis liked to imply that only the ‘fat cats’ of British industry (a term that took off in the late 1960s) favoured membership, while smaller and more agile companies looked to the wider world. Yet they struggled to find concrete examples. The only anti-Market body of any consequence was ‘British Business for World Markets’ (BBMW), founded in Yorkshire in 1971. Its leading spokesman was James Towler, chairman of the Shipley electronics firm Ultrasonics Ltd, who believed that Britain's trading future lay with the Middle East and the commodity-producers. BBWM commissioned a series of reports by Dr Brian Burkitt, an academic at the University of Bradford, the most important of which was Britain and the European Community: An Economic Re-Appraisal. The report sold out almost immediately, but the group was unable to arrange a new print run. Instead, it was reduced to sending out a press release that merely described the report. BBWM made little impact outside Yorkshire, and even Towler's writing focused as much on constitutional as on economic questions.97
For some on the Left, the very fact that business favoured membership was enough to condemn the idea. Business, on this view, was drawn to the Common Market principally in the hope of ‘protection’ against ‘the power of the British working class’. A truly socialist economics would have to repudiate the criteria by which capital measured success. As a trade unionist put it in May, a crisis of capitalism was something to be welcomed, and ‘the days of capitalism would be infinitely shorter outside the Common Market than inside’.98
A more developed critique came from Douglas Jay and Peter Shore, both of whom had held economic portfolios in Labour administrations. Jay had been financial secretary during the Attlee government and was president of the Board of Trade in Harold Wilson's first administration, while Shore was the secretary of state for trade and a former head of the Labour Party Research Department. Both were gifted popularisers: Shore was one of the most effective public speakers in the Cabinet, while Jay had worked as an economics journalist before entering Parliament.
Shore attacked the Yes campaign at source, arguing that the growth rates enjoyed by the ‘Six’ had been misunderstood. It was not simply that these countries had been rebuilding from a low base, after the destruction wrought by the War. They had also been constrained by artificially high internal trade barriers after that conflict. Dismantling those barriers naturally provided a stimulus. Most also boasted large agricultural populations, providing a reserve army of labour that could bolster economic growth. Britain, by contrast, possessed no reserve army of labour and had well-established trade patterns outside Europe. Shore stressed that he was not an isolationist – a position he dismissed as ‘great folly’ – but he denied that the future lay with regional blocs. At a time when Europe was losing its pre-eminence, he argued, it made sense to be flexible in making trade arrangements, working where appropriate with oil producers in the Middle East or with new partners in Asia and Latin America.99
Jay, likewise, stressed the importance of global trade. Britain's prosperity, he argued, had always rested on its ability to source food and raw materials from the cheapest markets. That was especially important at a time when ‘economic power has shifted from the European Continent to the Arab oil States’. Jay acknowledged that it was in Britain's interests to secure low tariffs for its manufactures, but not at the cost of food and commodities. The ‘best solution for Britain’, he argued, would be to withdraw from the EEC while rejoining EFTA, participating in ‘a West European Industrial free trade area’ while retaining the right ‘to buy food and materials on whatever terms they wished’.100
That critique was developed in a document published by the Dissenting Ministers in May. Portentiously entitled ‘The Economic Consequences of the Treaties’, the document consciously evoked John Maynard Keynes’ seminal work on The Economic Consequences of the Peace in 1919. Mostly written by Benn and his advisor Frances Morrell, it described Accession as ‘an act of economic surrender’. Membership, it warned, would have three deleterious consequences. First, it would commit Britain to ‘buy expensive Continental food’, pushing up labour costs. (‘That is why the French want us in.’) Second, it would give West German industry unrestricted access to the British market, while denying Britain the policies of industrial development and state investment that would allow it to ‘fight back’. (‘That is why West Germany wants us in.’) Thirdly, it would force the UK to share its oil reserves, rather than using them for domestic reconstruction. (‘That is why all the EEC countries want us in.’) Barbara Castle thought the document a ‘mish-mash’ of ‘exaggerated’ claims, but all three featured prominently in the campaign.101
If Shore and Jay provided the intellectual firepower for the anti-Market campaign, its foot soldiers came largely from the trade union movement. The two most prominent unions in the No camp were the TGWU, led by the redoubtable Jack Jones, and the Association of Scientific, Technical and Managerial Staffs (ASTMS), under Clive Jenkins. Jones and Jenkins served as joint president and vice president respectively of the Get Britain Out Referendum Campaign, and both enjoyed a high public profile. The TUC also recommended a No vote, under the slogan ‘Better out than in’. The National Union of Mineworkers (NUM) also backed the Out campaign, though miners in more prosperous coalfields were thought to favour staying in. The president of the South Wales NUM, the Communist Emlyn Williams, claimed that entry was a symptom of a wider crisis of capitalism. ‘Capitalism’, he declared, ‘is moving inevitably and remorselessly into a deeper crisis that will lead us to greater authoritarian rule, to the vestiges of Fascism, unless we call a halt.’102
The most active union was the Transport and General, which boasted 1.75 million members. Its research officer, Bob Harrison, was seconded to the NRC, while the regional secretary in Wales, George Wright, was attached to GBO in Wales. The union's 170 regional and district offices doubled up as campaign headquarters, while officials lent their expertise in organising meetings and recruitment. The Transport and General also provided much of the campaign material for the anti-Marketeers. Its newspaper, the Record, usually had a print-run of around 300,000, but millions of copies were produced of its referendum specials and circulated to other unions and interested parties. Much ‘Anti’ material had a TGWU branding, contributing to an impression, as the Financial Times observed, ‘that the Transport and General Workers’ Union is single-handedly running the union campaign to vote Britain out of the Common Market’.103
Unlike the CBI, the unions painted a gloomy picture of Britain's prospects within the Community. Dennis Skinner, the celebrated ‘Beast of Bolsover’ and vice-president of the MPs’ miners group, claimed that ‘Free movement of capital and labour has put four million EEC workers in the dole queue.’104 As the ASTMS pointed out, unemployment had been rising sharply in recent years across the Common Market, though unemployment rates of 3–3.5 per cent still compared favourably with the UK.105 Unemployment across the Community was running at about 4.5 million, a fact which the unions attributed squarely to EEC policies.106 A research paper produced by the ASTMS estimated that 250,000 jobs had been lost in Britain as a direct result of membership.107 Tony Benn put the figure at 500,000, while Michael Meacher opted for 750,000.108
Such estimates assumed an explicit link between unemployment and the burgeoning trade deficit, on the principle that ‘every product imported is one not produced in Britain’. The Oxford and District Trades Council accused employers of exporting ‘capital, created by the workers of this country, to countries where it can find cheaper labour, weaker unions, and production closer to the European market’. ‘Far from being the saviour of British trade’, warned GBO, the EEC had ‘revealed itself as a predator’.109 Unions had little truck with claims that overseas investment would facilitate export growth. As the ASTMS put it, ‘Every £1 invested in this way is £1 less invested in Britain.’110
While business saw Europe as the route to a high-skill, high-wage economy, the unions feared the opposite. Membership, they argued, would create a continental pool of reserve labour, with capital free to switch across borders in pursuit of the lowest wage costs. The Transport and General saw membership as part of larger package – also including the 1971 Industrial Relations Act – intended to drive down wages and employment rights. The goal, it believed, was to restore the authority of employers over their workforce, for ‘there is no stronger argument in [the] hands of employers than the threat of cutting back, re-investment elsewhere or finally closure of the firm’.111 Peter Shore warned of mass emigration, with ‘British people in their thousands moving into Western Europe to find jobs they can no longer get in this country’.112
The unions also blamed Europe for inflation. This was politically convenient, as it absolved the unions themselves from responsibility; but it was true that prices were traditionally higher on the Continent and that food prices had risen steeply since entry. Since joining, they noted, inflation had risen by 31.8 per cent, almost double the 16.5 per cent rate in the two years previously. Worse would follow, as food prices continued to adjust upwards to the Community norm.113
In all these respects, the referendum brought into collision two visions of political economy. On the one hand, the CBI welcomed the competitive pressures of the EEC in the hope of stimulating modernisation and productivity. By contrast, the unions and the Left were suspicious of a model that forced workers to compete for free-floating international capital. Benn told a meeting in Bristol that it would be ‘an act of lunacy’, amidst a ‘crisis of capitalism’, to embrace an institution founded on ‘the very principle that has led us to our present state’. Len Murray, the general secretary of the TUC, agreed: ‘Britain should not be in a Market in which the guiding principle is competition.’114
This linked together two strands of trade union commentary, emphasising respectively the economic and political costs of membership. The unions, as we shall see, placed considerable emphasis on the sovereignty of Parliament, as the means by which capital could be subjected to democratic control. By liberating market forces from the oversight of national governments, membership would reduce the unions’ ability to influence ‘social, monetary, political or industrial policy inside Britain’.115 Staying in, the TUC concluded, would mean ‘business finding it easier to dodge its responsibilities to working people’, while unions found it ‘harder to win their programme of social reform’.116
Like Shore and Jay, trade unionists dismissed the charge of isolationism or ‘little Englandism’. The slogan of the union campaign – ‘Out of Europe and into the world’ – was meant to signal a wider internationalism, turning the label of parochialism back against the Common Market. The ASTMS called the Community ‘a closed, tariff-ridden, elitist grouping of countries, living an inward-looking existence’. Trade unionists, by contrast, were ‘inherently internationalist in outlook’, building links with unions abroad and pursuing ‘closer ties between the peoples of all countries’.117
The Forward March of Labour Halted
The unions should have been a formidable ally for the NRC. The 1970s was probably the pinnacle of union influence, with roughly half the workforce enrolled in a union. Trade union activity had gutted the Industrial Relations Act of 1971, contributed to the fall of the Heath ministry in 1974 and secured a wide-ranging ‘Social Contract’ with the government. Offering a ready-made campaign machine, with a reach and membership that rivalled any of the pro-Market vehicles, the unions had been expected to be ‘the most powerful organized force against the EEC in the referendum battle’.118
Yet union pressure proved remarkably ineffective. Even industrial heartlands like Glasgow, the Midlands and the North of England produced crushing majorities for staying in. Workers, it appeared, had followed the cues of their employers, rather than of their union representatives, in what might be seen as the first of the many defeats to be suffered by the movement over the following two decades.
This owed something to the strange mix of forces in the No campaign. Enoch Powell, the Tory Right and the nationalist parties in Scotland and Wales made awkward partners for the unions, making it hard to co-operate across party lines. Jimmy Milne, the secretary-general designate of the Scottish TUC, expressed incredulity at the idea that he might work with the SNP. ‘Forgive the language,’ he told the Financial Times, ‘but they're bastards, they really are.’119 A TGWU branch secretary, who stressed his own opposition to the Common Market, condemned his union for aligning with ‘racialists like Enoch Powell’. ‘Businessmen and Tory MPs’, he added, ‘have always been the enemies of trade unionists and they always will be.’120
It was not only the personnel of the No campaign that made uneasy bedfellows. Intellectually, the unions tended to align themselves with the position drawn up by Douglas Jay, by which Britain would remain in a European customs union while eschewing political integration. Yet this would not have addressed the unions’ concerns about import penetration or the flight of capital from the UK. Nor, given the rules necessary to regulate such a market, would it have resolved the constitutional problem that political control over economic policy would have been diminished.
Furthermore, the union movement itself was never as united against membership as TUC rhetoric might suggest. While miners in South Yorkshire campaigned for a No vote on the doorstep, miners in the East Midlands were openly pro-Market. So was the second biggest union in the region, the General and Municipal Workers’ Union (GMWU). The Union of Shop, Distributive and Allied Workers was another powerful pro-Market union, while the Electrical, Electronic, Telecommunications and Plumbing Union (EETPU) remained formally neutral after a fighting performance by its pro-Market general secretary, Frank Chapple.121
Chapple was one of a number of senior trade unionists who openly campaigned for a Yes vote. Others included David Basnett of the GMWU, Roy Grantham of APEX and, most importantly, Vic Feather. Recently ennobled as Baron Feather of Bradford, Feather had been general secretary of the TUC until 1973, and he served in 1975 as president of the Trade Union Alliance for Europe (TUAFE). Having led the fight against Heath's Industrial Relations Act, Feather could hardly be dismissed as a Tory stooge, and his Yorkshire accent and bluff, genial manner made him a valuable asset to the Yes campaign. Britain in Europe dedicated an entire broadcast to an audience with the great man at a working men's club, in which he took questions from steelworkers and trade union representatives. An ORC poll shortly afterwards found that 84 per cent of viewers knew that Feather was in favour of British membership – up from just 12 per cent a few weeks before.122 At a memorable press conference in London, he warned that Britain ‘can't go it alone’. Outside, it would be ‘knackered and I don't want to see us knackered’. Appeals to abstract notions like sovereignty were shot down in a hail of northern grit. ‘The price of oil’, he reminded voters, ‘is not determined by the British Parliament. It is determined by some lads riding camels who don't even know how to spell national sovereignty.’123
TUAFE focused remorselessly on the prospects for jobs and wages. Roy Grantham, for example, predicted ‘massive unemployment’ if ‘Britons foolishly vote No’.124 If membership would protect levels of employment, then it stood squarely ‘on the basis of trade union principles and interests’.125 The organisation skilfully exploited the idea that the EEC, like a trade union, offered strength through solidarity. Vic Feather likened those who wanted to leave to ‘a discontented trades unionist who threatened to tear up his [union] card’. Instead of retreating into isolation, trade unionists should ‘remain in Europe, play our role and change those things which need improvement’.126
TUAFE also stressed the possibilities for international co-operation, building a European social democracy that could stand on an equal basis against the multinationals. George Thomson told a meeting in April that ‘Private economic power has already gone multinational. Only concerted action on the part of the nine governments of the Community can match the power of the multinational company.’127 The GMWU made a similar case. ‘The fact is’, wrote Basnett, ‘that the world economic situation has so developed that it is not possible for the individual nation state to control its own destiny.’ The European Community offered, for the first time, ‘the possibility of a degree of control over these forces’. ‘Alone we can do next to nothing.’128
TUAFE posed a problem for the unionist mainstream, but organisations like the TUC, the TGWU and the array of anti-Market unions should have had the firepower to respond. Yet the scale of union activity in 1975 rarely lived up to its rhetoric. Clive Jenkins may have likened the referendum to ‘a World War Three situation’, but officials seemed reluctant to press the nuclear button. There was little sign of the ‘massive campaign in the streets and on the knocker’ demanded by the AUEW.129 Companies that mobilised in support of the Community reported ‘a surprisingly low – even negligible – amount of adverse comment’. At a private meeting in May, the CBI's ‘Mr Europes’ reported ‘an almost total absence of trade union activity’ in the workplace.130 Journalists visiting Mather and Platt in Manchester – where the Transport and General and the Amalgamated Union of Engineering Workers were both well represented – were surprised by the ‘apparent lack of shop-floor impact’.131 In the East Midlands, too, reporters found that activists for the TGWU, AUEW and ASTMS, though nominally working for a No vote, ‘have been inclined to get not too closely involved’.132
This lethargy was not restricted to the workplace. While the employers were donating handsomely to BIE, union coffers remained firmly closed. Staff were seconded and some premises made available, but the accounts of the National Referendum campaign record not a single significant donation from organised labour.133
For all the rhetoric of ‘Magna Carta’ and ‘World War Three’, Europe seems in practice to have been a low-salience issue for the unions. There was almost certainly a reluctance to embarrass the Labour government, and the No campaign itself was wary of being too closely associated with union influence. Richard Body later recalled ‘trying to keep the trade unions quiet’, while Clive Jenkins was ‘very conscious that he might be losing support’ for the campaign. When challenged on the lack of union funding, Jack Jones later claimed that he had feared a backlash in the anti-union press.134
Workers did not, in any case, necessarily take their political direction from the unions. Reporters commonly found that workers distinguished between the micro-economic opinions of their unions – regarding the management of their own industry and workplace – and their macro-economic prescriptions for the government. A convenor at the Hawker Siddeley works in Manchester told journalists that workers in the plant were two-to-one in favour of membership, ‘because most of the men were ready to follow Mr Harold Wilson's lead rather than take great account of the political views of their shop stewards’. It was a similar story at the engineering firm Mather and Platt. ‘What do the trade unions know about it?’, asked a worker (‘to a chorus of nods and grunts’). ‘I am going to vote as the politicians say. Both Heath and Wilson are for staying in, and they ought to know.’135
When it came to jobs and investment, local evidence seems to have trumped the more abstract claims of the unions. While anti-Marketeers warned of import penetration, capital flight and the loss of sovereignty, their opponents identified specific examples of job creation and financing: £92 million for investment in steel; £34.3 million to retrain unemployed workers; £23 million for new equipment in the coal industry.136 Literature gave specific instances of new plant and employment opportunities, or of investment from American or Japanese firms keen to export to the Continent. Examples included the Concorde project and 140 foreign-owned factories in Bristol and the South West; a £1 million television factory funded by the Japanese electronics company Matsushita (later Panasonic) in Cardiff, as a bridgehead for sales to the Continent; and Sony's decision to use South Wales as its European base.137 Yorkshire and Humberside were said to have received nearly £100 million in development grants, while projects funded in other parts of the country included £301,082 for a cheese and milk factory in County Tyrone, £184,000 for a meat-processing plant in Liverpool, £2.3 million to modernise a steel mill in Manchester and £208,422 for a slaughterhouse in Londonderry.138 Antis raged at the ‘pay-packet propaganda’ of the employers; but with businesses threatening to cut jobs in the event of withdrawal, it was not surprising that workers voted with their payslips.139
Yet the resulting Yes vote was by no means a positive endorsement of integration. Reporters in Greater Manchester confidently predicted a vote to stay in, but concluded that ‘fear is the spur’ – ‘fear of rising prices, fear of unemployment, and fear for the future [of] the country’. A woman working at Mather and Platt told journalists that Britain had no option but to stay in: ‘This country is not much good on its own now, is it?’ In nearby Altrincham, a Conservative stronghold, the mood was the same. ‘We've got to stay in,’ said one young man. ‘This country will sink without trace if we don't.’140 A poll for the NRC, a week before the vote, found that more than half of all voters expected an immediate political and economic crisis in the event of a No vote.141 In such a climate, it was hardly surprising that voters chose to ‘cling to nurse, for fear of finding something worse’. For the immediate purposes of the referendum, it was a highly effective strategy; but it would store up significant problems for the Europe debate in the years and decades to come.
