A quarter of a century ago Norman Lamont became the first senior Conservative to warn that Britain might one day be obliged to choose, quite reasonably, to leave the European Union.
In this interview, conducted on Monday, Lord Lamont recalls how until then, the idea of withdrawing from the EU “had been akin to believing that the Earth was flat”.
And he describes how, while serving as Chancellor of the Exchequer from 1990-93, he came to realise, from talks with his opposite numbers in other European capitals, that they were determined to create a political and not just an economic union: “I realised I had been deceiving myself.”
Lamont therefore went on to warn, in a speech delivered on 11th October 1994 to a fringe meeting organised by the Selsdon Group at the Conservative Party Conference in Bournemouth:
“We deceive the British people . . . if we claim that we are winning the argument . . . the 11 other members want a European Union that is a European state.”
The Times reported that the former Chancellor had “shattered” the Tory truce on Europe, and had taken aim at the Prime Minister, John Major, who earlier that year had described the idea of leaving the EU as “unthinkable”. As Lamont told the fringe meeting,
“It has recently been said that the option of leaving the Community was ‘unthinkable’. I believe this attitude is rather simplistic.”
Lamont here relates that in 1994, he was acting on his own: “I was very much on my own after Black Wednesday,” 16th September 1992, when the pound was forced out of the European Exchange Rate Mechanism and the economic credibility of the Major government was destroyed.
Indeed, after Lamont spoke, “one of the people who attacked me was Bill Cash”, for Tory Eurosceptics were at this point careful not to call for British withdrawal.
Lamont defends David Cameron for calling the EU referendum – “I think he gets a very unfair press” – and attributes the vote for Leave to the realisation of older voters “that basically the country had been lied to” when it was assured that the EU was a purely economic venture.
The former Chancellor is delighted that Britain is out of European political union, is content to leave Boris Johnson to negotiate the details of Britain’s future trading arrangements, but calls on the Prime Minister to remain wedded to free-market economics: “I didn’t much like the helping hand that was extended to Flybe…I don’t want Boris the big spender to undo the good that George Osborne did.”
ConHome: “What happened in 1994? You’d first raised the idea of leaving the EU at a meeting earlier that year of the Conservative Philosophy Group, at Jonathan Aitken’s house in Lord North Street.”
Lamont: “Yes, I do remember Jimmy Goldsmith was there, and Zac was there. I know Rodney Leach was there, together with Jessica Douglas-Home.”
ConHome: “And what impelled you to take that line?”
Lamont: “Well I began to think about Europe when I was Chancellor. I mean I did think about it obviously before, but my doubts really grew – I often recount my very first meeting with one of my opposite numbers in Europe in New York in 1990, with a man called Pierre Bérégovoy who subsequently became Prime Minister of France.
“He was a Frenchman, but here he was in New York, telling me that we were inevitably going to have a United States of Europe.
“Now I of course spent a lot of my time as Chancellor negotiating our opt-out on the Maastricht Treaty from the single currency. But it was that experience that put me over the line, because I’d always worried whether Europe was political rather than just economic, but good friends of mine like Kenneth Clarke would say, ‘It’s all rhetoric – they don’t mean it.’
“And when I came face to face with this, I was shocked. I realised I had been deceiving myself.
“And OK, we had I think a perfectly sensible and rational policy of having a series of opt-outs, opt-out from the single currency, opt-out from the Social Chapter, opt-out from Schengen.
“But the question was, can you really just go on and can you guarantee that these opt-outs won’t be eroded, will Labour reverse them, could we be driven further down the road towards – I mean I try to avoid using the phrase ‘federal Europe’ – but a political Europe.
“And what I said in my speech at the party conference was that we had a choice. We could have opt-outs, or we could withdraw.
“But I also said, which I had come to believe, that I felt the economic advantages of the so-called Single Market were vastly overstated. To this day, I am still influenced by the fact that Switzerland, not a member of the European Union, is more integrated with the European economy than we are.
“And I note how the United States sells more to the Single Market and increases its share of the Single Market faster than we have, despite not being a member.
“And I can’t see, and couldn’t see then increasingly, why we had to be members in order to benefit. One can say that a single regulatory area is a public good, and take advantage of it, while being an outsider.”
ConHome: “Who did you discuss this with at the time? And in particular, which Conservatives, possibly of an older generation, influenced your thinking? Or were you really working it out for yourself? You must have tried to talk it through with various people.”
Lamont: “At that stage I was very much on my own [laughter]. I was very much on my own after Black Wednesday.”
ConHome: “Yes, you weren’t at the centre of a great band.”
Lamont: “Well there was all the speculation about the leadership. No, I was working on my own. I had a very good PA called Rupert Darwall, Rupert and I worked closely.
“But other than that, it was quite interesting, when I made that speech at the party conference, one of the people who attacked me was Bill Cash.”
Lamont: “Because I’d advocated leaving, and they were very careful not to advocate leaving. They were in favour of renegotiation. Well, you know, renegotiation was an option which I myself acknowledged.
“I didn’t say we should leave. What I said was we may have in the future to choose.
“And I was also saying it was not impossible to thrive economically outside the European Union, which I did believe and I profoundly believe now.”
ConHome: “So Eurosceptics of an earlier generation like Derek Walker-Smith or Enoch Powell were not a particular influence on you?”
Lamont: “Enoch was, definitely. How could he not be? I knew him. Funnily enough, I made my maiden speech in the House of Commons in favour of joining the EEC.
“In 1972, I got in in a by-election, and I had an Anti-Common Market candidate I had to defeat in the by-election, and in my maiden speech I actually rather playfully quoted Enoch.
“Enoch once made a speech, which I heard, in favour of EEC membership, at Cambridge when I was an undergraduate. I referred to this, just as a joke really, and Enoch was very nice about it. Afterwards he congratulated me on the speech and so on, blah, blah, blah.
“So I voted that way, but I did have doubts on the political side which came from two sources. One, I followed what Enoch said, and he saw very clearly that Europe was going in a political direction, political union. And yet the evidence wasn’t all that clear.
“But I began to have doubts about it for two reasons. I remember shortly after I had become a member of the House of Commons, Ted Heath came back from a summit and announced that we were signing up to the Werner Plan for monetary union.
“I was absolutely shocked by this, but I think the Werner Plan envisaged it happening over 20 years or something, and although I was shocked, again, people said ‘well, nothing will happen, blah blah blah’.
“And then the second thing was, I had a constituent called Mrs Horsfield, who used to write to me all the time about this, and she cottoned on the Werner Plan, and then she cottoned on to majority voting with the Single Market.”
ConHome: “That’s really encouraging, that a persistent constituent could have that effect.”
Lamont: “She lived at Liverpool Road, Kingston-upon-Thames, but I don’t know if she’s still alive. Charlotte Horsfield I remember was her name.
“But the catalyst was just the experience of being Chancellor, and the way they refused to believe me when I said, ‘We won’t join the single currency.’
“I just could not understand that.”
ConHome: “You mean all your European opposite numbers?”
Lamont: “Yes, they were all, ‘Norman you say this, but…’. I remember in particular there was a Greek finance minister, the head of the Greek central bank, he just could not believe, he said, ‘You’ll show solidarity with Greece when the moment comes.'”
ConHome: “So what happened after you’d said at the party conference in 1994 that leaving the EU was an option?”
Lamont: “Well nothing happened. But what Matthew d’Ancona says [in his account in The Guardian of ‘how a fringe idea took hold of the Tory party’] is that it made the issue of leaving intellectually respectable, simply because I’d been Chancellor.
“Whereas it had been akin to believing that the Earth was flat.
“I remember I chose my words very carefully. I remember I said I can see no unambiguous advantage in our membership. I was saying well, you know, there may be a bit of argument that it mildly increased exports, I personally don’t believe this.”
ConHome: “What are your relations now with David Cameron?”
Lamont: “Oh, very good.”
ConHome: “And how do you think as party leader he handled the whole European issue?”
Lamont: “Well I think he gets a very unfair press. I don’t think he had any alternative but to call the referendum.
“And when people say it was the internal politics, the party management of the Conservative Party, you know, I think Balfour once said the first duty of a Prime Minister is to remain in office.
“The object of a party leader must be to retain power and get power, and there is no way he would have won the election with an out and out majority if he hadn’t gone for the referendum.
“And worse than that, I think the Conservative Party was haemorrhaging support, people tend to diminish it, but the European elections spoke for themselves, the two MPs who defected, there would have been others, I don’t think it was a tenable position.
“So I think people who criticise Cameron for that are quite wrong. Where possibly they could have a point is that I think he could have been tougher with Mrs Merkel in the actual negotiation on freedom of movement of labour.”
ConHome: “What do you make of the period after the referendum, when Parliament tried not to do what it had said it would do?”
Lamont: “It’s something I’d rather forget. It was terrible, and it was a terrible advertisement for Britain as well. But fortunately, because of the spectacular election result, that’s all been dramatically stood on its head, and the dysfunctional Britain is now an island of stability.
“The referendum really went the way it did, unexpectedly to most commentators, because older people, by which I mean people of my age and more [Lamont is 77], voted very strongly for Leave.
“Why did they do that? I think it was above all about independence and sovereignty. My generation remembered, even if they were not very political, how Europe was sold to the British people as an economic venture, which would not lead to political union.
“As everybody knows, the 1975 White Paper said there’d be no question of monetary union. And they could see that basically the country had been lied to.
“When people talk about the lying on the referendum campaign and the lying allegedly about the amount of money we paid, it was nothing like the lie of not addressing the question of Europe being a political union.
“And I think the mistake that the Remain side made was thinking that people were going to be moved by silly claims that after 15 years we were going to be five per cent worse off than otherwise we would have been. I mean who the hell knows over 15 years?
“I think you had a combination of older voters and Labour, if I can use the phrase, working-class voters who had old-fashioned values about identity and sovereignty, and thank God for them, salt of the earth.”
ConHome: “What should Boris Johnson do now?”
Lamont: “On Europe, I’m happy to leave it to him. As far as I’m concerned, we’re out of political union and I’ll leave it to him to make the judgements on the precise type of trade agreement that we have.
“More generally, I read all this stuff that he’s more Reagan than Thatcher, more Heseltine than Thatcher.
“All I would say is that in this new world in which we’re going to live, Boris I’m sure is a liberal Conservative, but I hope he will also see that in a world where we are on our own, I think it’s very important that we remain very anchored in a free-market philosophy.
“I didn’t much like the helping hand that was extended to Flybe.
“Of course low interest rates mean you can have more infrastructure, although nobody can guarantee that interest rates will be low forever, and I would say just don’t go wild.
“I don’t want Boris the big spender to undo the good that George Osborne did, and I think George Osborne does deserve credit for the very, very difficult situation to get the deficit down in the way that he did.
“What worried me about Flybe is how you are perceived matters enormously in fostering confidence. If Britain’s going to attract inward investment, it must show it’s going to be hard-headed about the type of economic policy it follows. I think it’s very important.”