13th November 2020
Once upon a time there was a controversial government adviser in Downing Street.
The controversy was not just about clashes of personalities, though that was certainly also present.
The controversy was in respect of competing visions of the UK and its place within the (then) European Economic Community.
On one hand the adviser, and the prime minister whom he was directly advising, believed that both economics and common sense meant that the United Kingdom should not participate in the exchange rate mechanism (ERM).
Sterling should float freely so as to find its own level, as one could not ‘buck the market’.
On the other hand the Treasury, headed by a chancellor who later (and ironically) was to become a Brexiter, wanted the United Kingdom to be part of the ERM – even though it was plain that the ERM was (and was intended to be) a prelude to monetary union.
(If memory serves, the proposed name of the new currency was still then ecu – the European Currency unit – rather than euro.)
And so what was on one level a clash of personalities – which was lapped up like milk by the newspapers of the time – was supercharged by it also being about a fundamental disagreement about UK and its place in the EEC (now European Union) project.
It was this split and row that, more than the then prime minster’s famous Bruges speech (which was actually quite mild in content) that perhaps marked the start of the divisions in the Conservative party that continued for another thirty years, up to and beyond Brexit.
The adviser was, of course, Sir Alan Walters, and the prime minister and chancellor were Margaret Thatcher and Nigel Lawson respectively; and the date was 1989.
Walters was forced to resign, as did Lawson, and – in a sequence of events which flowed from those two resignations, Thatcher herself resigned the following year.
At about this time United Kingdom also entered the ERM, despite the misgivings of Thatcher and her supporters.
And when, with Black Wednesday in 1992, those sceptical of the ERM believed themselves vindicated when the United Kingdom abruptly had to leave the mechanism.
That sense of vindication then fortified and informed what was then called ‘Euro-scepticism’ at each stage of the development of the EEC into the EU and beyond.
Here it was significant that the Maastricht treaty was negotiated, signed and ratified around the same time.
And so those who sought to ‘push’ UK into the ERM were seen by Euro-sceptics as the same as those who promoted the integration of EU more generally, and so Black Wednesday was seen as discrediting the wider European project.
Thatcher and Walters were seen by ‘Euro-sceptics’ as having been ‘proved right about Europe’.
(I recall all this, as I was a Euro-sceptic at the time too.)
Now, as I type this, there is another row in Downing Street about an adviser, which is in part about a clash of personalities and in part also about the basis of the United Kingdom’s relationship with the EEC/EU.
It may well be that the current drama will be inconsequential, but such dramas – as in 1989 – can also be momentous in their consequences and implications.
And this especially may be the case as the United Kingdom is only days away from ending the Brexit transition period with or without a deal and in the midst of a pandemic emergency.
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