The common currency debate was more than a debate over economics, more than a debate over free trade and more than a debate over the loss of an independent monetary policy. The common currency represented, as the EEC once had represented in 1975, either the promise and potential of a modern and distinctly European future, or a trap constructed by elite tastemakers and globalists which would see British sovereignty, democracy and identity being drained away. Such divisions had convulsed every single government since Harold Macmillan’s and often it would be through either brute political force, or by consulting the British people, be it through an election or referendum, that saw impasses broken.
The potential economic benefits of joining first a trade bloc, then a customs union, then being integrated into a single market and finally a monetary union proved too beneficial for policy makers to turn down or ignore, especially as Britain’s empire was winding down whether it was peacefully (‘Winds of Change’) or violently (the Falklands Conflict).
Both major parties when in opposition have succumbed to their respective euroskeptics wings (Foot 1980–1983 and Hurd 1993–1995) before governing as distinctly pro-European (Heath 1970–1974, Heseltine 1984–1993 and Cook 1993–). As the end of the millennium approached a decision was finally required on whether the UK would join the European Currency Union and the respectively named ecu. The Birmingham Agreement had seen European leaders finally agree a date for formal introduction of the common currency and Cook had negotiated for London to host the ECB upon entry.
Labour’s 1993 and 1995 manifestos were (unsurprisingly) light on the matter of the common currency but promised that if re-elected Labour would both remain in the E.E.R.M and would support the creation of a European Currency Union (E.C.U). Cook had hoped that this vague promise of ‘eventual entry’ would allow him breathing room to hopefully approve via parliament. His sacking of Gordon Brown in 1996 gave him much needed Treasury support for his Europe policy as did the diplomatic prowess of Tony Blair, at the Foreign Commonwealth Office.
Yet, with Labour divided between Rocks (
RObin
Coo
K’s supporters who favoured soft-left policies), Mods/Modernisers (represented now by Blair after Brown’s sacking from Cabinet) and smaller factions like the Brownites and Socialist Campaign Group. Labour whips, knowing the divided situation in the parliamentary party, told Downing Street attempts to adopt the ecu unilaterally would ‘break’ the party. Any measure would require Conservative votes to pass and if Labour couldn’t rely on its 60 seat majority, then it would mark the end of effective government. And so, during a speech to the European Council, Cook announced he would be holding a referendum before 2000 and would campaign in favour of the common currency.
However, despite the potential for voters to reject the common currency, government policy prior to the referendum followed the Beckett rule, (named after Chancellor and europhile Margaret Beckett), in that it continued the long-term policy of preparing for the eventual adoption of a common currency. This rule was much derided in Europe in the leadup to the referendum but compared to the vacillation of the German Chancellor Scharping on the common currency, was mostly forgotten in the aftermath of the referendum.
So, with the support of the Patten-led Conservative Party (itself wracked with divisions and seeing a referendum as a way to neutralise the issue for good) and the Alliance Party, Parliament supported Cook’s motion and a referendum was called for May 13. The question posed to British voters was simple: “
Should the United Kingdom adopt the proposed European currency, the ecu, or should it keep the pound?”
The ‘Adopt’ campaign was led by the ‘establishment’ supported by mainstream political figures and business leaders, including Cook, Patten, Alliance Leader Simon Hughes and former PM Michael Heseltine. Cross-party support was extensive for the Keep campaign as was business and industry support for the ecu, with both the CBI and TUC backing the campaign.
The ‘Keep’ was led by controversial figures such as former Conservative MPs and government ministers such as Norman Tebbitt, Norman Lamont and Peter Lilley. The Keep campaign was bankrolled by Sir James Goldsmith of the Referendum Party (ironically the referendum asked for by Goldsmith’s party was on membership of the European Union as a whole, not one for ecu). Left-wing euroskeptics such as Tony Benn and Kate Hoey despite being strong campaigners, found themselves excluded from the Keep campaign, which led to Blair’s famous “
crackpots and has-beens” description of the Keep campaign.
Gordon Brown and Michael Portillo, two of the biggest figures against the ecu, both chose not to associate with the Keep campaign and would surprisingly offer little commentary on the matter fearing the political ramifications of clearly choosing a side. Both men were ambitious, and both saw Keep as an anchor to these ambitions.
The right-wing media meanwhile launched a brutal campaign against entry with The Sun launching the ‘
Countdown Clock’ to ‘
Save Britain’, a stark reversal of their previous support of the EEC in the 1975 referendum. Newspapers like the Daily Mirror, Guardian and Daily Express all backed the ecu, with editorials arguing that both the economic potential (a powerful argument, especially when considering the sluggish growth seen in the UK since the 1980s) of the ecu and the ability for the UK to cement itself within Europe was too good to ignore. In the multiple debates held by the BBC, BSkyB and ITN, the campaigns often argued reductive and divisive commentary with their respective messages being ‘New Millennium, New Britain’ vs Keep Control’. The difference was clear.
And in the end, the result was clear too. By 52–48, the British people chose the ecu and voted in favour of the common currency. Scotland, Wales, and Northern Ireland strongly backed adoption, while the urban and Conservative shires of the UK voted in favour as well. London overwhelmingly backed the ecu and was largely seen as the driving region in favour of adoption. The east and north England proved the most resistant to the ecu but failed to stop the tide in favour of the common currency.
Cook spoke to the nation on the morning after the result promising that ‘Keep’ voters wouldn’t be forgotten, nor would Britain lose her identity in Europe. Cook promised that now the issue of the common currency had been solved, that his government would focus on "
building up Britain", especially in deprived areas, most of which backed Keep. Cook promised British sovereignty would be "
respected and protected" in Europe and powerfully, that Britain's diplomatic and soft power would be amplified by the result. Britain would be a "
leader among equals" in Europe and would define the new millennium just as Britain had done in the last one.
