MEMORANDUM, CRITCHLEY TO WALLER

Australian High Commission, London, 4 May 1967

Confidential

Britain and the EEC

The British Prime Minister’s statement in Parliament on 2nd May that the Government had decided to make an application under Article 237 of the Treaty of Rome for membership of the European Economic Community […] contained little element of surprise; this outcome had been freely predicted by political correspondents for several weeks. The basic decision to seek entry seems to have been taken by the Prime Minister some months ago, and the series of discussions which have taken place in the Labour Party and in the Cabinet seem to have been designed to sell the idea to the majority of the Party under the facade of consultation, and to neutralise as far as possible the anti-Marketeers both in and outside the Cabinet.

2. Mr Wilson’s statement reflects the continuing dilemma that he faces in addressing himself simultaneously to two audiences; on the one hand, he needs to convince Parliament and the Labour Party in particular that essential British and Commonwealth interests can and will be safeguarded, while on the other hand he does not wish the British application to be hedged around with so many conditions that it will be easy for de Gaulle or others to find means of blocking the present British initiative. The statement is therefore vague on the conditions attached to the British application; this is the point picked out by the headline of the ‘Le Monde’ report of the statement. The statement expresses the hope that the negotiations will be swiftly followed through, that they should not be complicated by lesser issues (many of which could best be handled after entry) but should relate to the small number of really important issues identified in recent discussions with the Six. These were:–

1. The operation of the CAP and its effect on the cost of living and on British agriculture.
2. The impact the present system of financing the CAP would have on Britain’s budget and balance of payments.
3. Important Commonwealth interests, mainly in the field of agriculture, for which it was Britain’s duty to seek safeguards. (In practice these might be limited to the special problems of New Zealand and the Commonwealth sugar producing countries of the Caribbean.)
4. Capital movements.
5. Regional development policies.

The Prime Minister expressed the view that there was nothing in the Treaty of Rome nor in the practical working of the Community which need render these issues insoluble.

3. Although the Prime Minister cited these as important issues, he gave no indication where the British sticking point would be on any of them (if indeed it exists at all); he did not commit himself in any way on the maximum conditions that would have to be obtained if the British application for membership were to go forward. He merely said agreement should be reached on the issues listed ‘if the House and the country are to be satisfied that essential British and Commonwealth interests are being safeguarded’. Clearly, what may satisfy Parliament on this score may not convince other Commonwealth members that their interests are in fact being safeguarded.

4. It is highly unlikely that the Cabinet agreed to a set of minimum conditions for entry and is keeping them confidential for tactical reasons. Almost certainly the outcome has been a victory for the pro-Marketeers and the opponents of British entry have had to be satisfied with the vaguely phrased formula of the statement which several commentators see as largely freeing the Government from firm commitments. It may well be, as the ‘Guardian’ has suggested, that Mr George Brown threatened to resign unless the terms for application for entry were unqualified. In any event, the perfunctory nature of such consultation with the Commonwealth as took place before the Government’s decision was announced on 2nd May does not encourage us to assume that Commonwealth interests will be a consideration of much weight with the British negotiators.

5. Nevertheless, Ministers still seem to be at odds over safeguards. No doubt a number would argue that the agreed formula cannot be interpreted as an unconditional application. Certainly there must be serious misgivings in the Cabinet over the conditions that may have to be accepted. On May 1st, the ‘Guardian’ gave the following table of opinion within the Cabinet:

As the ‘Guardian’ points out, the dividing line is likely to become marked when the actual terms of entry become apparent. At this stage there could be resignations.

6. Now that the Prime Minister and the Government have firmly committed themselves to the cause of British entry, they will be under increasing pressure to achieve a conclusion to their negotiations which can be presented as a success in the domestic political forum, even if it involves the sacrifice of certain positions which previously they might have regarded as essential. They will be aware of the political damage the Tories suffered as a result of the last rebuff in 1963; a repetition of that occurrence would face Mr Wilson with a serious setback to his personal prestige and that of the Labour Government, even if it could be demonstrated to arise from a cause entirely beyond Britain’s control. The ‘Economist’ noted in a recent article that the Labour Government has largely completed the programme of legislation on which it fought the last two General Elections. Entry into the EEC thus provides the Government with an initiative on which to focus its activity for the next two years; if this initiative were to run aground, the Government could be left awkwardly stranded at a critical time in election terms, and with little scope for developing new policies on which to fight the next election. I also believe that Mr George Brown is personally committed to achieving entry in the shortest practical time.

7. […] Mr Brown has set himself the target of getting into Europe by 1969. The current arrangements for financing the Common Farm fund1 extend only to the end of 1969. It is my guess that the British Government hopes that as a member in 1969 it could successfully encourage the Community to seek alternative sources of finance for the European Agricultural Guidance and Guarantee Fund, and thus ameliorate the main economic disability for Britain in joining.

8. It is notable that after Mr Wilson’s announcement the Foreign Office press briefing to local correspondents on the evening of May 2nd emphasised speed and maintaining momentum in seeking Britain’s entry. On the other hand the briefing for Commonwealth correspondents by Mr Bowden on the following morning was more concerned with Commonwealth interests but it was relatively vague and, […] offers us little, if any, encouragement.

9. We can therefore draw the conclusion that the defence of Australian interests will not constitute a sticking point for the British negotiators; the phrase ‘Kangaroo meat’ has been used to sum up the time-consuming and unimportant matters of detail which will not on this occasion be permitted to hold up the progress of the British application and which can be looked at once Britain has gained entry. In none of the recent statements on problems the Commonwealth would encounter as a result of British entry have we seen references to the position of Australia, although New Zealand is regarded as being in a special category requiring assistance. The view in the Foreign Office seems to be that Australia has diversified its trade considerably since 1962, and would not suffer significant loss as a result of British entry. Some of our contacts have suggested that the absence of official Australian statements during recent months implies that we are not greatly concerned at the prospect of British entry. Our assurances to the contrary have carried little weight. The BBC television report on 2nd May said in a survey of the reactions of other countries that Australia was now in a better position to face British entry than at the time of the previous negotiations, and accompanied this by a still photograph of Mr Holt, implying that it was an official statement.

10. There still remains some opposition to British entry in Parliament; a small number of Conservatives and a larger number of Labour members (perhaps as many as 70). There seems no doubt that Parliament will give its approval to the application going forward. Even among the anti-Marketeers, the idea of the Commonwealth as an alternative to British entry into Europe seems to have few supporters, and the consequences of British membership for the Commonwealth is not now regarded as an important issue. This is another aspect of the general lack of interest in the Commonwealth and in events outside Europe which I have noted in other contexts, such as British defence arrangements East of Suez. The principal opposition to British entry comes from those who are worried about the effect on the balance of payments, British agriculture and the cost of living, and from the more doctrinaire Socialists who believe that the EEC with its alleged emphasis on market forces would make the establishment in Britain of a planned socialist society impossible. They also see the EEC as the economic counterpart of NATO, which would perpetuate the cold war and the division of Europe. In so far as they are concerned about the effect on the Commonwealth, it is the African countries which attract their sympathy.

1 Meaning the Common Agricultural Policy (CAP).

[NAA: A1838, 727/4 PART 37]