Adam Evans. Political Quarterly. Volume 89, Issue 1, January-March 2018.
both during and since the 2016 referendum on the UK’s membership of the European Union, concerns were raised about the absence of contingency planning within Whitehall. Throughout the referendum campaign, the government made clear that it was not undertaking planning in the event of a vote to leave, with the exception of some planning within the Treasury about the potential impact on financial stability. This position, which was strongly criticised by a number of parliamentary inquiries, was in contrast to the planning undertaken within Whitehall ahead of the 1975 referendum.
This planning was the subject of some comment in the press and online in the run‐up to the 2016 referendum. Nonetheless, there has been little in the way of a more detailed analysis of the contingency planning undertaken in 1975. Using archival evidence of the government’s preparations, this article seeks to shine further light on the contingency plans for a majority ‘no’ vote in 1975.
The Road to the Referendum
On 1 January 1973, twelve years and two vetoes after the first bid for entry was launched, the UK formally became a member of the European Communities (though commonly referred to at the time, and for the remainder of this article, as the ‘Common Market’, the Community or the EC). While membership of the Common Market had been pursued by governments of both political colours since 1961, within two years of joining, the question of the UK’s membership was put to the country in what was the first nationwide referendum in the UK’s history. The referendum was the by‐product of internal dissent within a Labour party that was divided between supporters (of which Roy Jenkins was a prominent member) and opponents (led by Tony Benn, Barbara Castle, Michael Foot and Peter Shore).
The Wilson Government in 1967 had applied for entry to the Community, only to then be rebuffed by de Gaulle (as he had done with Macmillan’s bid in 1963), and finally launched the third (and successful) application, following de Gaulle’s death, in 1969. However, after Labour’s defeat at the 1970 general election at the hands of the determinedly pro‐European Ted Heath, senior Labour figures such as Harold Wilson, James Callaghan, Denis Healey and Tony Crosland all became far more equivocal in their support for entry, while the party conference in October 1971 saw delegates, in the words of Roy Jenkins, vote by a ‘predictably massive majority against entry on the terms negotiated’.
With Wilson and Callaghan—neither of whom were enthusiastic pro‐Europeans at the best of times—shifting their positions, and with the vote of the party conference fresh in their minds, the party leadership put down a three line whip against the terms of entry negotiated by the Heath administration. This prompted sixty‐nine pro‐Europeans, led by the party’s deputy leader, Roy Jenkins, to defy the whip and vote with the government.
Amid these tensions arose the idea of a referendum on membership of the Common Market. An idea championed by Tony Benn, whose position on the European question had evolved from supporting to opposing British membership, a referendum was initially rejected by his colleagues. However, by the spring of 1972, a referendum, once described Callaghan as a ‘rubber dinghy into which we may all have to climb’ had become Labour party policy. This initially took the form of seeking to amend the European Communities Bill so as to make its implementation dependent on a successful referendum. However, with the successful passage of the Bill in 1972 and the UK’s entry in 1973, the party’s position shifted to support a renegotiation of the terms of entry that would then be put to the public either at a referendum or a general election.
Following the inconclusive February 1974 election and the establishment of a minority Labour administration, the process of renegotiation began under the direction of the new Foreign Secretary, James Callaghan. After two key rounds of discussions—at Paris in December 1974 and the European Council meeting in Dublin on 10–11 March 1975—the renegotiation was completed with concessions provided to the UK, including a budget correcting mechanism and market access for New Zealand butter. Following the approval of these terms by a majority of the Cabinet and by the House of Commons, the Prime Minister recommended their approval at a referendum to be held on 5 June 1975.
With the renegotiated terms accepted by the government and the House of Commons, preparations began within Whitehall for the possibility of a majority ‘no’ vote at the forthcoming referendum. At the heart of these preparations was Patrick Nairne, the Second Permanent Secretary at the Cabinet Office. Nairne had been considering ‘the task of referendum contingency planning’ since at least 24 March (a little over a week after the conclusion of the European Council summit at Dublin Castle) and, at the beginning of April, he organised a meeting of senior civil service colleagues for a preliminary talk on contingency planning arrangements.
This meeting marked the beginning of an inter‐departmental, cross‐Whitehall effort aimed at producing, as requested, a report to the Foreign Secretary covering the main issues that would arise from a majority ‘no’ vote. This inter‐departmental endeavour involved a Whitehall whip‐round with departments asked to provide papers ‘setting out a checklist of the decisions which ministers would need to take [in the event of a vote to leave the EC] in our respective fields’. These papers would then be used to populate and inform a paper on the ‘modalities of withdrawal’ that was being prepared under the aegis of the Civil Service ‘no’ contingency planning group.
This planning group, chaired by Patrick Nairne, consisted of senior civil servants from the key departments that would be affected by a vote to leave, namely: the Ministry of Agriculture, Fisheries and Food; the Department of Trade; the Treasury; the Foreign and Commonwealth Office; the UK’s Permanent Representation to the European Community; Her Majesty’s Revenue and Customs; and the Cabinet Office. The restricted size of this planning group was in part influenced by the Treasury which had only agreed to proceed with contingency planning with the proviso that there would be some restriction on circulation of papers and that economic/financial contingency planning would be left to the Treasury.
At the first meeting of this group on 25 April, the objectives of contingency planning and preparations were outlined. It was agreed that the planning should aim to provide for ministers a ‘preliminary analysis and definition of the main policy options in fields like agriculture and trade, and an indication of the programme of work which would be required after the referendum result’. All in all, the ‘prime object of contingency planning’, as discussed at this meeting, was:
- to identify the major problems of law and policy arising from the decision to withdraw;
- to identify the issues on which decisions would be necessary or possible in advance of consultations with the Community, and the lines on which consultations should be undertaken with the eight [remaining members] and the United States; and
- to prepare a statement to be made as soon as possible after the referendum result.
The contingency planning group met again on 2 May and 7 May, under the chairmanship of Nairne, to consider the position paper for Callaghan, while a similar group met on 30 May, with a different chair, to consider draft statements that would be made to Parliament in the event of a vote either way at the referendum.
Key Themes from the Contingency Planning
The Complexity of Withdrawal
One of the first themes to emerge during the process of contingency planning was the sheer complexity that would result from a vote to withdraw. While the UK had only been a member of the Community for a little over two years by the time the contingency planning operation was underway, it was abundantly clear that withdrawal would not be a simple operation to perform.
As the contingency group discussed at their meeting on 7 June, a vote to withdraw would see the UK in an ‘unprecedented situation’. In a letter to a fellow senior civil servant, on 1 May 1975, Patrick Nairne highlighted the nature of the challenge that would face the UK government, and the country, in navigating withdrawal. According to Nairne, withdrawal would be a ‘highly complex problem’ that would require immediate (in response to the referendum result), medium (withdrawal would ‘require time’) and longer‐term responses regarding the future of the UK. As he noted, for both the UK and the Community, ‘the legal and procedural situation would be unprecedented’.
Among the factors contributing to the complexity of withdrawal was the UK’s reliance upon, and integration within, European food supply chains. Forty per cent of the UK’s food supplies, for example, were reliant upon the European Economic Community (EEC). There would be a need to establish new tariff regimes with the EEC and to negotiate new trade arrangements, as well as new agreements with third parties, including the Commonwealth. Last, but by no means least, was the fact that, unlike the current process of withdrawal from the EU via Article 50 of the Treaty of Lisbon, there was no obvious mechanism in 1975 for withdrawal from the Community.
Withdrawal by 1 January 1976?
Given the concerns about the complex challenge that withdrawal would represent, it was unsurprising that civil servants were similarly worried about the ability to execute a swift withdrawal. At the heart of the civil service’s considerations on how much time withdrawal could take was the ‘basic choice’ that would face the UK government in the event of a ‘no’ majority vote: a choice between ‘aiming for a complete withdrawal by 1 January 1976 as proposed by dissident ministers [principally Benn, Castle and Shore], and a longer process designed to minimise the disruption of withdrawal and to provide for the simultaneous negotiation of successor arrangements’. As the notes of the meeting of the contingency planning group on 7 May acknowledged, the latter option would likely ‘raise the difficult problem of continued fulfilment of Community obligations’.
The 1 January 1976 timetable had been laid out by the leading Labour no campaigners in a document entitled ‘The Strategy of Withdrawal’, on 20 April 1975. This timeframe prompted a considerable furrowing of brows among civil servants. Indeed, at the meeting of the contingency planning group on 2 May, the idea that withdrawal could become effective by 1 January 1976 was considered ‘unrealistic’ on the grounds that negotiations over food supplies could not be completed by that date, ‘nor would it be practicable to introduce a new tariff regime’ within that timeframe (food supplies were a key concern for the contingency planning group, since the European Community supplied forty per cent of the UK’s food). While at the planning group’s meeting on 7 May, it was noted that ‘the work done so far suggested that it was not technically possible to withdraw, and to bring into force successor arrangements, by 1 January 1976’. The response to these suggestions from the Foreign Secretary was particularly dismissive, with Callaghan rejecting the idea of a ‘leisurely’ timetable for withdrawal and insisting to Nairne that a vote to leave would mean immediate action to repeal the European Communities Act.
Despite Callaghan’s insistence on any withdrawal being swift, this fundamental tension between the political imperative for a quick withdrawal and the caution expressed by the contingency planning group endured to the very end. At the end of May, the group submitted its report to Callaghan. The main message of this report, according to C.W. Fogarty, an official in the Treasury, was that despite the potential political desirability—for both the UK and, perhaps, the EC‐8—of a quick withdrawal, ‘a swift withdrawal is extraordinarily difficult to reconcile with the facts of international political life and the nature of the Community’. Indeed, the section of the report dedicated to ‘Withdrawal by 1976’ noted that withdrawal by that date would ‘present formidable legal and administrative problems’ for the UK, as well as the Community.
Linking the Process of Withdrawal and Agreeing the UK’s Future Relationship with the …
Of particular importance as to how desirable and practicable a swift withdrawal would be—along the lines proposed by the anti‐Market ministers—was the issue of the UK’s future relationship with the Community. A draft parliamentary statement, prepared in the event of a majority no vote, made clear that the government would have sought not only to open negotiations aimed at ‘orderly and amicable withdrawal’ but also to ‘enter into the negotiation of future trade arrangements of a permanent nature’ aimed at establishing a free trade area with the Community.
As the contingency planning group’s report noted, the ideal situation would be for the UK and the EC‐8 to negotiate withdrawal and future arrangements ‘as one smooth operation’. However, they claimed that the government could not ‘reasonably hope’ to negotiate permanent post‐withdrawal arrangements, even if the withdrawal itself was agreed ‘in a period of six months or so’. As a result, the report warned that if the priority was to be withdrawal at the earliest possible date, then ‘the negotiation of the future trading arrangements will have to be completed after we have withdrawn’.
However, while opting for a slower‐paced process might be seen as offering a better prospect for securing the UK’s longer term relationship with the Common Market alongside its withdrawal agreement, civil servants were alive to the problem of continuing obligations and payments to the budget that might arise from this approach. The question of the UK’s continuing, as well as the honouring of its existing, obligations, in the event of a majority ‘no’ vote, was the subject of considerable discussion—and at times disagreement—within Whitehall.
On one hand, senior figures in Whitehall believed that it would be beneficial to arrange a withdrawal that minimised disruption and laid the basis for a strong future relationship with the Common Market. On the other hand, there was concern about what that would cost—both politically and financially. This potentially delicate balance was encapsulated by Sir Leo Pliatzky, the Second Permanent Secretary to the Treasury, in his letter to Harold Wilson on 20 May 1975. As Pliatzky noted, if there was to be a majority ‘no’ vote, the government could not ‘resist in principle […] [that] a transitional deal would be needed’. However, he was wary of the ‘depressing’ prospect of the UK being left with many of the negative aspects of the Common Market, for example, continued payments to the Common Agricultural Policy, yet without the benefits of Community membership. Indeed, he noted that his colleagues in the Treasury had significant reservations about the ‘detailed implications’ of such a deal, not least the possibility of continued financial payments to the Common Agriculture Policy.
Certainly, the issue of the UK’s continuing and potential future obligations to the Community was a key item of debate within the contingency planning group and one which again brought the question of the pace and nature of the UK’s withdrawal from the Community to the fore. Indeed, according to the senior Treasury official, Sir Derek Mitchell, these inter‐connected issues formed the basis of the main battle lines within the contingency planning group:
The ‘soft’ withdrawers: the Foreign and Commonwealth Office’s representatives, were advocates of a slow ‘denegotiation/renegotiation’ process with the EC‐8 in the event of a majority ‘no’ vote. They were accused by Mitchell of effectively refusing to ‘organise a search for legal devices which could get us out quickly and at least semi‐legally from the Treaties’.
Pragmatic ‘harder’ withdrawers: a second group, of which Sir Roy Denman, the Second Permanent Secretary to the Cabinet, was a prominent member, were of the view that in the event of a vote to withdraw it would be ‘inconceivable that Ministers would agree to observe all existing obligations […] for eighteen months [that is, a transitional period between the referendum result and withdrawal]’.
The final bloc of opinion identified was that associated with Frederick Kearns, the Second Permanent Secretary at the Ministry of Agriculture, Fisheries and Food who, Mitchell claimed, appeared to be in favour of maintaining the Common Agricultural Policy, at least for 1976, as the farming community had become used to the scheme.
Overall, Sir Derek judged that the debate, should the UK withdraw, would ‘range on the question of how far there can properly be said to be “options” as between fast and slow roads of denegotiation and where the UK interest lies amongst them’.
Europe’s Approach to Withdrawal
Of course, the process of withdrawal would not be entirely in the UK’s gift. As the Civil Service recognised, the nature, ease and timing of withdrawal would ‘depend largely on others’ and a section of the contingency planning group’s report to the Foreign Secretary was dedicated to assessing the possible attitudes among the Community to—and their potential impact on—withdrawal. For example, while there had been a suggestion among civil servants that a swift withdrawal may prove ‘extraordinarily difficult to reconcile with the facts of international political life and the nature of the Community’, there was also a recognition that ‘the eight themselves [that is, the other members] might themselves favour a very quick withdrawal’.
Furthermore, while some members of the planning group favoured a rather more gradual and phased approach to withdrawal, there was no guarantee that such an approach—which might be objected to as ‘picking and choosing amongst our obligations’—would be welcomed in Europe. Similarly, on the issues of the scheduling of any withdrawal process, any transition deal and talks on the UK’s future relationship with the Community, concerns were raised that the Community might want to focus on a swift withdrawal and relegate future relations to a subsequent agreement. There was also the worry that any transition deal might be exploited by the French and other member states in order to secure ‘special treatment’ for their agricultural products in any subsequent free trade agreement.
Overall, the contingency planning report warned that, in the event of a vote to leave the Common Market, the government would have to assume that the other member states would: seek a quick withdrawal; would insist on the UK abiding by the necessary legalities (code for the UK respecting its financial and legal obligations and commitments during the withdrawal process); would be unlikely to start substantive negotiations until the autumn (thus making it more difficult to negotiate the UK’s future relationship prior to withdrawal); and would seek to return the UK to a third party status post‐withdrawal, at least in the interim. Equally, however, the report warned that ‘much will turn on our own government’s approach’. The Community’s attitude and approach would, it was suggested, be influenced—and could be hardened or, potentially, softened—according to decisions made by the UK government, such as whether it would promise to honour its commitments and obligations or alternatively (in a far cry from concerns in 2017 about the UK as a European Singapore), to move towards a ‘siege economy’ as championed by the increasingly vocal left wing of the Labour party.
In the end, the fruits of the contingency planning never materialised. At the referendum on the 5 June 1975, around sixty‐seven per cent of voters endorsed remaining in the European Community on the terms renegotiated by the Wilson government. That does not mean, however, that it is not worth reflecting on the planning efforts of civil servants led by Patrick Nairne, particularly in light of current developments since the 2016 EU referendum.
Over the course of around a month from the end of April through to the end of May 1975, the contingency planning efforts demonstrated the complex challenge that withdrawal would have posed for the UK, even after only two years of membership of the Community. The efforts also highlighted the tensions that existed between the political imperative for a withdrawal to take effect by 1 January 1976 in the event of a vote to leave, and the civil service’s concerns as to the deliverability of such a swift withdrawal. Finally, the planning highlights just how dependent the UK’s position would have been on the approach taken by the other members of the Community. While no comparable level of planning took place in the context of the 2016 EU referendum, many of the same issues discussed in depth forty‐two years ago will face both government and Parliament in the years ahead.