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Interview with

Arthur Cockfield

Interview by A. Crozier
London 24/08/1998

Voices on Europe collection

Francis Arthur Cockfield

Interview with Lord Cockfield (AC) conducted on 24 August 1998

Interviewer Dr Andrew Crozier (AJC)

'This is the European Commission Oral Programme carried out by Jean Monnet
Chairs of History.
It is taking place at 10.00 am on Monday 24 August at Lord Cockfield's home,
Connaught House, Mount Row, London.

AJC Do you agree to allow the transcript ofthis interview to be usedfor scholastic
and research purposes under terms and conditions which you may wish to set
and with a date for access set by you.

AC Broadly speaking, yes, but if one is to be perfectly frank about some of the

things that one would wish to say it is, I feel, important that I should see the
transcript when it is available, and if there are passages in it which I think
ought to be put under embargo for a period of time, I will so indicate.

AJC Thank you Lord Cockfield. You have had a very long and varied career,
particularly you were responsible with others for a number of reforms at the
Inland Revenue where you functioned as a Commissioner, 1 think I'm correct
in saying.

AC That is right

AJC And you thereafter went into business, 1 think with Boots for which you were

the Chairman, is that correct?

AC In those days there was a division between an independent Chairman and a


Chief Executive. I was the Chief Executive, and I was the Chairman of what
was called the Executive Management Committee, which was a Committee
which effectively ran the business. There was, in fact, a majority on the Board

of members of that Executive Committee. The company had been organised


on the American model. It was, in fact, American owned between the early

1920s and the early 1930s and it's not surprising that they adopted the system
of an independent non-executive Chairman, the company effectively being run
by a Chief Executive and I was the Chief Executive.

AJC Thank you Lord Cockfield. In these years in business the European Union, as
it now is, was clearly taking shape. Did you have any direct interest in the
process of European integration in the 1950s into the 1960s and if so what
were your views then on the subject?

AC I was involved in this in two quite separate capacities. First of all in the very
early days in the 1950s, and in the early 1960s, industry was consulted

1 This text excludes comments by Lord Cockfield on which he has placed a thirty year embargo for

citation or publication.

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AC I was involved in this in two quite separate capacities. First of all in the very
early days in the 1950s, and in the early 1960s, industry was consulted
principally through bodies such as the FBI as it then was and which was the
forerunner of the CBI; I was in fact a member of the Grand Committee of the
FBI for what that is worth. I had therefore a general interest in the United
Kingdom coming into the European Economic Community as it then was, and
particularly so because the company had interests outside the United Kingdom
and we felt as a company it was very important that we should be in Europe,
particularly as if you manufactured in the United Kingdom you needed free
access to the European market. The European Economic Community was
from the onset based upon a Customs Union where there were no fiscal
barriers inside the Union. It was therefore essential from the point of view of
the company's own future that the country should join the European
Community. Later on I did a very great deal of work with lain Macleod and
Ted Heath; this of course was on a voluntary basis. This was particularly so

after the 1964 election, although I did work for them, before the 1964 election.
I had a long long-standing connection with the Conservative Party in the sense
that I had worked for Rab Butler when I was a Commissioner of Inland

Revenue at Somerset House. Indeed Rab was my senior supporter when I
went into the House of Lords and the connection had been maintained right
through this period. Rab was also Chairman of the Research Department of
the Conservative Party. In the early 1960s I started doing some work
associated with the Research Department and this greatly expanded before the
1964 and the 1966 elections, I had already met Ted Heath: I was a member of

the original National Economic Development Council known as NEDDY and

after the night of the long knives when Harold Macmillan sacked five of his
cabinet ministers, a feat not excelled until the days of Mr Yeltsin, Ted Heath

took the place of the previous Minister responsible for the Department of
Trade and Industry. That was when I first met him. After the election defeat
in 1964 I started doing a great deal more work for Ted Heath including the

major design of the tax reform programme which was introduced by the Heath
Government in 1970. lain Macleod, who had become Chancellor of the
Exchequer, died just after the election. A great deal of the preparatory work

on tax was in fact done in this flat. lain Macleod had access to an apartment in
the Hyde Park Hotel but it was much more convenient for him to come and

talk here because we are only about 200 yards away. I spent an enormous

amount of time on this. After I left Boots it was my main interest in life,
working out what was a major tax reform programme extending over the
whole field of taxation, indirect as well as direct. So that when the Heath
government came into office in 1970 it was probably much better prepared to
introduce a tax reform programme that any government has been before or
since and certainly much better prepared than the present Labour Party has

AJC You were obviously very close, am 1 right in saying, with Ted Heath? ..

AC This is another story. Before the 1964 election when Ted Heath was put in
charge of forming policy he set up a large number of very, very big groups
studying a great range of different policies. I was a member of the group
which was dealing with economic and financial policy. It was an enormous

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body. After the second defeat in 1964 the committee was purged and it ended
up with about five people of which I was one. There was Ted himself, lain
Macleod, Reggie Maudling, myself, and David Montague (later Lord
Swaithling) who died recently. And that was about all. This was the body
which in fact drew up the whole of the tax reform programme. The point of
this story really is this: I had to know whether we were going into the
European Community or not because this was absolutely critical - if we went
in we would have to have a Value Added Tax because the Value Added Tax
was presented by the First and Second VAT directives, both dated 11 th April
1967, as the one and only turnover tax which would be permitted in the
Community. At that time we had two minor taxes, we had the original
Purchase Tax - incidentally I was the Secretary of the Committee which
invented the Purchase Tax and the Purchase Tax was, and in my opinion
remains, a much superior tax to the VAT - I mean, I speak with authority as
one the principal authors of it -it was a much better tax. It was ruined by the

activities of the House of Commons and particularly by the activities of Mr
Nabarro, the owner of a series of motor cars known as NAB 1, 2, 3 and so on.
He was the spearhead of every conceivable lobby which wanted to introduce

an exemption or a lower rate of tax and the Purchase Tax in the end became an
unwieldy instrument but it was a great tragedy because in principle the
Purchase Tax was a better tax than the VAT. It was supplemented by the
Labour Party in the 1964-1970 government by the Selective Employment Tax.
When therefore we were sitting down to consider the future of British taxation
we had two turnover taxes, neither of which conformed to the VAT. And

therefore I had to know if we were going to join the Community, because if

we went in we would have to abolish the existing taxes and introduce a VAT.
Ted said we were to proceed on the basis that we were going into the

Community. That story does now appear in some detail in the short book on
the Single Market that I wrote a few years ago. There are various facets of
this story which are of some interest. Thus Harold Wilson who was then

Prime Minister welched on the long standing tradition under which six months
before an Election the opposition party is given access to officials; Harold
Wilson refused to let the Customs see me, presumably on the grounds that I

knew too much about the subject and therefore it would have been of grave
embarrassment both to the Wilson Government and possibly even to the

Customs. So we had to bring in Professor Wheatcroft as an intermediary, and


very valuable he was. So we decided we had to introduce a VAT.

Unfortunately, Mrs Thatcher was one of the people who didn't quite
understand this because there's another story which does not appear in my

Embargoed text

One of the great problems that Margaret Thatcher faced was that nobody was
prepared to tell her the truth and this is the great problem faced by all people
of great ability and a dictatorial temperament. If somebody had only got up
and said "You can't do that" - (a) they would have got sacked but (b) she
would at least have thought again. I retell a similar incident in my book in
which I was involved with her when she was contesting the right of the
Community to harmonise the Excises and I told her that it was in the Treaty of

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Rome and she said it wasn't. I said it was, she said it wasn't. So the then
Secretary of the Cabinet was sent to get a copy. I opened it up at Article 99
and read it, which says that the Commission shall present proposals for the
harmonisation of indirect taxes; "shall" not "may". There was a dead silence.
I said "Well, you ought to have read it before you signed it". "I didn't sign it"
she said. "I know you didn't sign it" I said, "but you were a member of the
Government which did and there is a doctrine called Cabinet collective
responsibility". The Secretary of the Cabinet sat there poker faced and
absolutely silent after this exchange of pleasantries.

AJC If J could ... ....

AC The other disaster was the Corporation Tax. And really this is one incident in
my life where I feel such tragic regret. I'd advised Ted Heath very very
clearly he should go in for what is now called a split rate system. That

effectively is the original system introduced by Addington who reintroduced
the Income Tax a couple of years after Pitt had introduced the original income
tax in 1799. By the way have you read Pitt's speech in 1799 when he

introduced the Income Tax?

AJC As an undergraduate, so it s very

AC I mean the actual Hansard Report?

AJC J've read extracts from it in books.

AC You want to look at the original because it's terribly interesting, it starts with

the words "Mr Pitt was understood to say ..." This goes back to the fact that in
those days Hansard was unofficial as there were not supposed to be reporters
present and therefore it was started with the words "Mr Pitt was understood to

say "My comment is that in these days ministers are very often
misunderstood to say. But the Income Tax as introduced by Pitt and
reintroduced by Addington, was a very sound one. You tax the company on

the whole of the profit, when it paid a dividend you followed the deduction at

source principle, and you said "well, so much of the tax relates to that
dividend", you deduct it from the dividend so that the company is left paying

the tax on its share of the profit, the shareholder paying tax on his share. It got
into certain troubles, I don't want to go into that in detail, but over 160 years
most things get into trouble. The Millennium Dome hasn't taken quite as long
as that but generally speaking that's the timescale for getting into trouble. All
we needed to do was to separate the two and say "Right", a tax on the
dividend, by deduction at source; a tax on the company's profit after deducting
the dividend. This was adopted as party policy, it appeared in the manifesto
and a green paper was issued. (Embargoed text) He came back hot foot with
intelligence from Brussels where he had just been, saying that there was now
agreement in Brussels that they would harmonise on the basis of the French
imputation system.. I said "This is a disaster." But nevertheless the decision
had been taken and we would have to go in on the French system. I've always
taken the view, I took it then, I take it now, that the imputation system was
unintelligible and a mistake but nevertheless in the European context there

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seemed no alternative. In the event the Germans didn't adopt it. The trouble
was that most people in those days and most people today do not understand
how things work in Brussels. I didn't in those days either. This was in the
early days, the first few months of 1970. This sort of nonsense happens all the
time and we ought to have stuck to our guns. Unfortunately we didn't and we
adopted the imputation system. Much later in the 1980's when Geoffrey Howe
had become Chancellor of the Exchequer, we took it up again and we went out
to consultation. lain Macleod always regarded consultation as a great mistake;
he said the effect of consultation is that the "nos" always have it, in other
words the "yeses", the people who might benefit, keep their mouths shut in
case they lose the benefit; the people who have a grievance all yell to the
skies. So the result of any consultation is seriously biased. So when we came
in the 1980's on consulting whether we should stick to the imputation system
the almost unanimous view of industry, at least of those who made a great
fuss, was that although they didn't like the imputation system, they'd gone

through the agony of putting it in and they didn't want it changing. So we
were left with it. Now the present Labour government, and I've explained this
in the House in detail, have gradually gone back to the Harold Wilson system

under which you tax dividends twice - you tax the whole profit once and you
tax the dividend again a second time. And this is how they've succeeded in
taxing all the Pension Funds. Pension Funds used to have a total exemption on
their dividend income. Now they get an exemption on one bit of it only, in
other words the second half. Nobody has seemed to have understood this.
Sadly Lamont was the first man to go down the line of reintroducing the

double taxation of dividends by restricting the tax credit. How any

Conservative Government in possession of its full faculties could ever have
allowed this, is something which is beyond all human understanding and

certainly beyond mine. And it opened the road for the Labour Party to come
along, to follow in the steps of Good KingWenceslaus.. (Embargoed Text)
This shows you how people react to what they regard as unfair. This

illustrates that I had some considerable background knowledge of the

European Community. Much more importantly of course, when I was in the
Treasury I was directly involved in the financial negotiations, particularly as I

was one of the few people at that stage thought to understand the Community.
When I became Secretary of State for Trade I was responsible for most of the

issues which subsequently went into the Single Market programme (or the

Internal Market Programme as we originally called it). I was the member of

Cabinet in charge when the Internal Market Council was set up in 1983, and
you'll find the details of that set out in the book that I wrote.

AJC Could 1, Lord Coclifield, just ask you before you go on, these are very very
interesting comments that I'm hearing, but I'm just wondering, in the J970s,
just before we get to the J980s, ifyou could say something ofwhat you thought
about Britain s relationship with Europe in the J970s. Did you feel, for
example, that perhaps Ted Heath was rather - obviously you had no direct
involvement - but did you feel that perhaps the Ted Heath government was
rather too keen actually as it were to get into the Community rather than
worry too much about the terms. What did you feel about Labour s position
on renegotiation and a referendum and do you feel that had Mrs Thatcher not
won the election in J979 that the British budgetary question would still have

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created substantial friction between Britain and her fellow Community


AC The answer's this: if you look at the history when we refused to join - we'd
refused to join the original Coal and Steel Community - that was Ernie Bevin,
that was a Foreign Office decision, this is right back in 1951 - we'd refused to
go in on the grounds that we were strong enough to stand on our own; i.e.
we'd nationalised our industries, we weren't prepared to get involved with
these Continentals. Then when it came to the Treaty of Rome, the
negotiations leading up to that, we were strongly against it. It's difficult to say
exactly why: first of all, we thought it ought to be a Free Trade Area and the
idea of this "Community" seemed to us at the time to be going far too wide. I
don't think we ever fully understood the difference between a Free Trade Area
and a Customs Union. And today people don't, because you hear Ministers of
the Crown talking of Europe as a Free Trade Area. It's nothing of the sort; a

Customs Union is something very much more important and very much wider.
But nevertheless immediately after having decided not to go in and much to

our surprise we found the Continentals sink their differences and sign up to the
Treaty of Rome. There's a story behind the Treaty of Rome which again I set
out in that book which is little understood. What I say is based upon what
Emile Noel told me. It was not the first option. The first option was the
Euratom Treaty, nuclear energy being a natural "follow on" of Coal and Steel.
The Defence Community had failed, had been rejected by the National
Assembly in France; the Euratom Treaty which was the next one in line was

bogged down in difficulty. Then the idea of the European Community was
revived and it went through remarkably quickly. The Euratom Treaty was
then signed on the coat-tails of the Treaty of Rome. But we in the UK felt the

whole thing was wrong, it ought to have been a Free Trade Area. We objected
to all this other stuff associated with it and Macmillan then set up EFTA. But
EFTA had not been going for very long, about 18 months, when Macmillan

realised that he'd got this wrong and decided that we ought to join the
European Community. Have you read the Cabinet Minutes of this period,
which have recently been revealed? They show that Harold Macmillan

realised there would be grave public opposition and, putting it politely, he


embarked upon the pathway of not telling the children more than they needed
to know. When he applied for membership, it was indignantly rejected by the

Community in 1963. When the Labour Party came into power they applied
again and that was also rejected. Have you read de Gaulle's speech that he
made to the press in 1967 following this second rejection? Again I cited that
in my book, because it's the most trenchant analysis of the British economic
situation and the British outlook? He described Britain as the "monumental
exception". It's absolutely amazing this. After this dual rejection the
Conservative Party nevertheless decided that they would go on trying to join.
The Labour Party was going more and more to the left and they decided it
would be a very good thing to be anti-European. You see the same today with
the Conservative Party, having got into Opposition after one of the biggest
defeats in history, deciding they had better go anti-European. And this is
exactly what happened with the Labour Party going further and further to the
Left. They were led of course by Michael Foot. I repeat in my book the
exchanges which occurred in the House of Commons when the Solemn

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Declaration was signed at Stuttgart in 1983. This was one of the most
important documents in the history of the Community, and the reaction of the
Labour Party of Michael Foot is most interesting. "They've got us into this
mess", he said "they've now got to get us out." So they never understood a
word of it. But you need to read the actual exchanges which took place. I've
set them out in detail in my book. They cast no great credit on Mrs Thatcher
either, I may say. But there it is, this is now a matter of history and the history
needs to be written down. There are far too many people, and incidentally this
is why I wrote my book, there are far too many people trying to rewrite
history, and among them (I regret to say) was Jacques Delors himself. This
was because he got into serious trouble over Monetary Union. There was a
terrible swing against the Commission when the recession came in the early
1990s. Originally Delors regarded the Single Market as a subsidiary project
that would support his great ambition of Economic and Monetary Union and
the Citizen's Europe; but with the difficulties which became associated with

Monetary Union particularly with the onset of the recession he realised that he
had better have his name attached to something which was a success instead of

having his name attached to something, namely Economic and Monetary
Union which everybody thought at the time was going to be a failure. Jacques
like Tony Blair, and Tony Blair's awfully similar to Jacques Delors, had his
own spin doctor, his own "Mandelson", who set about busily rewriting history.
And I decided they were certainly not going to rewrite it so far as I was
concerned. You will recall Orwell's "1984" when Goldstein was removed
from all the pictures and records. For years the Conservative Party removed

me from everything that was said or went out relating to the Single Market.
Did you not realise this?


AC I was deleted by the Conservative Party. They would never reply to a speech I

made in the House. They would never associate the Single Market with
myself; later they began to refer to it as a "Conservative Party" achievement
not acknowledging the fact that the achievement was by one of their bete

noirs. So that having been, as it were, removed from the group photograph by

my own party and my own government, I was damned if I was going to be

removed from it by Jacques Delors with whom I'd cooperated loyally,

effectively and very amicably over a long period of time. When, later,
Monetary Union began to take off, Jacques Delors began then to move a bit
back again. And in his own book, he has written in his own handwriting "To
Arthur Cockfield, the great architect of the Single Market". And that's in my
book too. It's in my study, and that's written in his own handwriting. But I'll
tell you a minor incident on this, and this is what I've always been up against.
Delors decided that in December 1992 there would a great "Celebration" of
the completion of the internal market - admittedly it had not been 100%
complete, but it was well on the way - but gradually as he got into further and
further difficulties it got further and further demoted and it was only with a
great deal of pressure on my part that the meeting was held at all, but it was no
longer a "Celebration" of 1992, it was a "Colloquium" as they call it in
Europe. And you actually had the President of the European Parliament,
claiming that the internal market programme was launched by the European

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Parliament in 1987. Absolute nonsense. But as all of these chaps were busy
rewriting history 1 thought "1 'm not having that one" so 1 sat down and wrote
this book of my own. Its publication was delayed because of the death of my
wife, that's the background to it. 1 thought at least 1'm going to set down my
story whether or not anybody reads it. And there it is. There are two
documents in the Appendix of the book; one is the lecture 1 delivered at
Florence just after 1 had left the Commission which very accurately forecast
what in fact has now happened, including the naming of the members of the
awkward squad, namely the United Kingdom and Denmark. 1 didn't name the
third member and 1 won't now but it's got remarkably close to the truth. The
lecture was then printed and circulated in a number of languages by the
European Commission. That is one and the other is the Address 1 gave to the
"Colloquium" which should have been a "Celebration".

AJC I wonder if I could ask you a question of interpretation here. I've put this

question to ....

AC (Embargoed text). Margaret Thatcher did what needed to be done. The way
she did it you can object to, you know, but some of these Continentals are
impossible people. And unless you know how to deal with them you don't get
anywhere. You had to face them on their own ground, tell them what you
thought. It upset them, because they weren't used to being talked to straight.
But it was an absolute outrage what was going on, an absolute outrage that de
Gaulle had rigged the finances of the Community to ensure - and he said it

publicly - that if ever we joined the Community we would pay dearly for so
doing. And Margaret was absolutely 100% right. The original deal proved to
be a very effective one, and the figures are in Hansard and 1 repeat them - we

got our contribution down from a bit under 1,000,000,000 to less than
200,000,000. You must remember that money was worth a lot more in those
days than it's worth now. A pound is now worth fourpence compared to what

it was worth at the end of the War. This is what is called "sovereignty" in the
monetary field, and this is, as 1 say in the House of Lords, is what they're
proud of - a fourpenny pound. But still, let me not follow my own particular

bent on these matters. So she was absolutely right. She may have been a bit

rough in the way she talked to them, but the British tend to be rather more
straightforward in what they say than people on the Continent. So there it was

and really it was a great tragedy of life that in her latter days she got too
dictatorial - she got rid of everybody who disagreed with her and there was
nobody left who would stand up to her; and even Geoffrey Howe with his
infinite patience until finally he turned, or Elspeth turned.

AJC Do youfeel that Elspeth Howe was probably more important?

AC She had the reputation of being a much tougher individual than him. 1 would
have thought so. Well in some ways my wife was too. 1 was by far and away
the oldest member of the Cabinet. 1 knew 1 would never be there beyond the
next Election. This was in the 80s. We decided therefore that we would be
retiring but 1 was then offered the job in Brussels and my wife took the view
that it was much better that 1 kept active, living here in London is a congenial
place in which to live and also being a member of Cabinet has its advantages.

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When politicians plead poverty don't pay much attention, what matters isn't
the pay, it's what goes with the pay, it's the status. It's the facilities that are
available to you. It's what happens to you when you travel abroad. All of
these things are beyond price. The influence of one's wife can be critical in
these matters. But to return to Margaret Thatcher - there was nobody in the
end who would really stand up to her. Nigel got to within a hair's breadth of
it, Nigel is a quarrelsome man anyway, or was, and she promptly sacked him
or -made him resign or whatever you like, so she got rid of him. Mind you he
was wrong - his monetary policy was a disaster for the country. He was single
handedly responsible for the great depression we had in the 1990s. It was
simply an error of judgement. As simple as that. Nobody's ever got up and
said so.

AJC You mean taking the brakes offafter the 1987 election?

AC No, it wasn't that, it was a bit later. The Stock Exchange crash came in 1987.
Nigel was an academic economist plus a newspaper writer, and the great point
about newspaper writers is that they're admirable at telling everybody else

what they ought to do, the trouble comes when they try and do it themselves.
He decided, just as the great crash of 1929 on Wall Street was followed by the
great recession of 1931, we were now in for the same scenario. And he was
going to be the one Finance Minister in the Western world who had foreseen
this and had taken the right steps to deal with it and he would go down in
history in the same way as Roosevelt and Keynes had as the men who had got

America out of the recession; he was going to be the one man in the Western
world who'd saved the United Kingdom from a recession. So he expanded the
economy just at the time when really one ought to have gone slow and it led

directly to the subsequent boom and bust. That is my explanation, other

people will give you a totally different explanation. Margaret Thatcher would
not tolerate dissent or disagreement and in the end it led to her own downfall.

She began to make serious errors of judgement. She made them over the
European Community, she always maintained that she'd signed the Single
European Act without realising what it meant. Really to go around and excuse

your change of policy on the ground that you've made a frightful blunder a
few years earlier doesn't seem to be the right credentials for people to put their

faith in you in the future, but still, that's a rather different view from that taken

by a lot of people.

AJC In conversation with Sir Michael Butler, he said to me that after 1985 Mrs
Thatcher became rather cross with, the Foreign and Commonwealth Office
which she felt had misled her. In your book you yourself refer to Mrs
Thatcher 50 reaction to the ultimate realisation of the Single European Act as
one of having been conned. When you said that she felt that she had been
conned, were you thinking of the Foreign Office or were you thinking of a
wider dimension? Is it possible that Mrs Thatcher felt that she had been
conned by the continentals too?

AC You're asking a question that I can't answer. I took a very simple view of this
- I was simply saying that this was the explanation she gave. To what extent -
there is a phenomen known as ex-post rationalisation - and to what extent her

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reaction when she said she'd been conned was ex-post rationalisation I just do
not know, but the point that I've made repeatedly is that the Single European
Act was a direct child of the Solemn Declaration. I've said, and I explajned
this in my own book, that the Single Act had a dual provenance. It was first of ...
all that in 1985 the Heads of Government had put their money on the Single
Market. You cannot understand, unless you were there, the enormous
enthusiasm that that programme created when it was produced. The
Community had lived through the dark days of the Thorn Presidency and I tell
the story of what Thorn said to me when he asked me to come and see him -
his apologia pro vita sua - when he said that he knew that his Presidency had
been a disaster but he said that it was all due to the British budget contribution.
And he said "But of course you were right" - but it's no good being right if all
the others are against you". There's a great truth in that. But to come back to
the Single Market. Suddenly finding put in front of them in a matter of weeks
a major programme which would take the Community forward in the direction

which had been signposted by the Treaty of Rome but never fulfilled, the
Heads of Government reacted with enthusiasm. We did, in fact, play what
was almost a trick on the Heads of Government in that we didn't send the

programme to them until ten days before the actual meeting of the Heads of
Government. It gave them time to get enthusiastic about the grand vision; it
didn't give their officials time to get down to the hard task of nit-picking at
which all officials are greatly skilled. And the one thing I'd learned as a result
of fifteen years in the Civil Service was to recognise nit-picking when I saw it.
But there it was, and it completely altered the atmosphere inside the

Commission's services. For once they had a clear positive remit as to what
they were to do, and once that programme had been approved by the Heads of
Government I would never argue with anyone whether it was the Council of

Ministers or their officials, I would say "that is the programme the Heads of
Government have agreed; they had the programme, it was in the White Paper;
it's no good you arguing with me, if you don't like it, go back and argue with

Helmut Kohl or with Mrs Thatcher or with whoever else it is, it's nothing to
do with me; this was a decision by the Heads of Government and that was
that." It totally altered the whole atmosphere and the sort of things that

happened, looking back, were unbelievable before 1985 and equally probably
unbelievable today. The Luxembourg Presidency introduced the idea of the

rolling programme to get away from this nonsense of every Presidency having

its own pet ideas, things that had been started by other Presidencies being put
on one side. In future you had a troika, so you were carrying on automatically
from one Presidency to another. And the Belgian Presidency, deciding that we
were to go ahead with majority voting despite the fact that the Treaty had not
been ratified. Absolutely unbelievable and they stuck to it too, this was the
point, it had totally changed the whole of the atmosphere and it was a story of
success. You have to remember also that Delors was avery, very able leader
or President of the Commission, he really was. Like all Continentals he took a
long time to do things, his meetings went right on late into the night very often
while Cabinet over here meets at eleven and goes away for lunch by one
o 'clock, but he was very, very good indeed as a Committee Chairman. He had
a very clear vision, his vision was one of Economic and Monetary Union
essentially leading to European Union. He was perfectly content to leave me
to run the Internal Market Programme, well knowing that I would never do

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anything that I knew he objected to without having it out with him first. The
result was that I had nearly always absolute support from him and this was
critical. I wasn't faced with the risk of having votes called against me with the
Chairman on the wrong side, and in many ways it's this partnership that grew
up between us which underpinned the success of that programme. What went
wrong with it in the end was his eye shifted. By the time of the Summit at
Hanover in June 1988 his mind was turning from the Single Market which had
then only been running effectively for less than two and a half year into what
was an eight year programme. His attention turned to Economic and
Monetary Union and he got the Heads of Government to declare that the
Single Market was a success and therefore the time had come to tum to
Monetary Union and they set up a grand committee to propose what were
called "Concrete Steps" to Monetary Union. But so far as the Single Market
was concerned it took the eye off the ball a year or two years early. And of
course it was then compounded by the fact that Margaret decided not to

reappoint me. I've always refused to get involved in public debate on this, but
I never expected, when I took the job on, that I would ever be there for more
than one term. It is perfectly true that by the time I got this programme rolling

I would have liked to have seen it through to a successful conclusion but
nevertheless this is the position. Clinton Davis bitterly resented being what he
described as 'being sacked'. I never did. In a way I thought it was a tragedy,
a tragedy for Margaret in a way more than for me because I could have carried
that programme through to complete success and she could then have claimed
credit for it. It never seemed to occur to her that the greatest victories are won

by your subordinates. It is Eisenhower who claims to have won the War; in

fact it was the generals in the field, the Pattons and the Montgomerys and the
people like that who actually won it. But she never learned that lesson. And

instead of as it were, saying what wonderful chaps they were, she felt they
were challenging her supremacy, a terrible error of judgement. But still, I
never expected to stay on. I thought it was a tragedy, a tragedy for her but not

a tragedy for me because after all I'd worked then for well over fifty years, if
not approaching sixty years so why should I worry. But there it was. I'm
sorry, I've now lost the thread of what we were saying. It's only now that

they're right up against the deadline for Monetary Union the Heads of
Government suddenly realise that they'd not got the Single Market properly

finished and what is more it had regressed in some respects. So they then have

had to have a great drive to do what they ought to have been doing in 1988
and 1989. It would only have been a year, or at the most two years, before the
whole project would have been in the bag and successfully completed.

AJC What I wanted to ask you about Jacques Delors is this. Quite clearly he was
keen on the completion of the internal market, but was his main priority from
the beginning Economic and Monetary Union and did he select as it were
after his Cook s Tour ofEurope to opt for the Single Market programme as a
means ofgetting a regeneration ofthe Community going?

AC It wasn't like that at all. I took the Single Market portfolio on the ground that
I'd agreed with Margaret Thatcher that that's what I would do and we had
Delors to dinner at Number 10 Downing Street - just a few of us sitting round
in a little room, sitting round the table, and she just told him, and he more or

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less touched his forelock. She just said to him "And Mr Delors, Lord
Cockfield will be taking the Single Market" or the internal market as we then
called it". End of discussion. And it's not surprising; in those days she was
the most formidable Head of State in Europe. Kohl was a relative newcomer,
Mitterand everybody thought was now beginning to move towards the end, so
there was Margaret, the most formidable statesman in Europe, and what was
Oe1ors? He'd been a Finance Minister in France, he was essentially a
fonctionnaire, on the fringes, and this is what she said, and it suited him. His
view, and you've only got to read his early speeches, and I detail this, both in
my book and in the lecture I gave, his priority was always Economic and
Monetary Union, the Citizen's Europe and European Union. It was this broad
political project. The internal market was simple underpinning it because he
realised that if you were going to have Economic and Monetary Union then of
course you'd got to complete the original agenda of the Treaty of Rome but at
the same time he felt that if the Brits were prepared to take this one on board,

something which suited them, then at least they were not going to be a
nuisance in the Community, there was not going to be a repeat of the British

budget row. I had refused point blank to take the Budget, although Nigel had
agreed with Willie de Clercq that Lord Cockfield would have the budget and
Willie de Clercq would have Economic and Monetary Union. I went to
Margaret, I used to get copies of all these dispatches, a thing probably Nigel
didn't know, I saw this, I went to Margaret, I said "I'm not having this" and
she said she wasn't having it either. So when we sat down to have dinner and
she made this announcement, poor Nigel just sat there dumbstruck. I hadn't

said anything to him quite deliberately.

AJC What J also wanted to ask you about .


AC But it's very important this, this is in fact what happened and having got this
agreement that I should take the Single Market, when later Delors came to

draw up the allocation of portfolios among the Commissioners and I saw him
in this hotel in Brussels, he not only offered me everything I'd asked for but
also threw in virtually the whole of DO III, i.e. Industry, as well. What was in

the back of his mind was that "Industry" as commonly understood included

most of the dying industries, coal and steel, textiles and so on, while he
wanted the emphasis to be on new technology, on research on the new

industries. He was absolutely right. And he wanted the Industry

Commissioner not to be an Industry Commissioner in the old sense any longer
but to be the man in charge of the brave new world. The trouble was the
Germans didn't see it that way. I had in fact no intention whatever of being
lumbered with coal and steel, none whatever, but I took it because I knew
what was going to happen when we got to the so-called "night of the long
knives" which was held at Royanmont. There are some stories about that one
too. I introduced the French to the habit of eating butter with your bread. We
sat down at the scrubbed table in the Monastery and we were all given a roll or
a piece of bread and I looked round and there was no butter. I said "This is
absurd, you've got a butter mountain, you're complaining about the cost of
maintaining butter mountains and you don't eat the stuff yourself'. After that
butter was always served at the Commission functions and as a matter of
principle I always used to eat it too. But at the "night of the long knives", I

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knew I'd got coal and steel to give away, and in the end, because I surrendered
these specific areas after long hard fought battles, I ended up with most of
industry. I retained the pharmaceutical industry, the chemical industry, the
food industry, the construction industry, the textile industry, that is virtually all
the industries which were critical to the internal market and I kept command
also over all the horizontal subjects like standards, including standards in the
rump of industry that Karl Heinz Narjes, the Industry Commissioner, had
inherited. What I left him with was everything that I didn't want to have
anything to do with. In fact Karl Heinz and myself worked very well together.
Two other people wouldn't have done so; there would have been turf wars and
quarrelling all the time, but I had been given too much work to do and if he
was happy to do some of it and I wasn't interested, the best thing was
graciously to let him get on with it. Karl Heinz was very good. You know,
we worked well together as a Commission and this was critically important.

AJC You had obviously a very long association with the Conservative Party and the
question I .

AC My mother was a member of the Primrose League in the 1920s. Our local MP
was Major J J Astor, who had two jewels in his crown; he owned the Times
newspaper and also Hever Castle where the ladies of the Primrose League
were always taken for an annual outing. He was the Chairman of Governors
of my school, for what it was worth.

AJC Going back to the 1950s, the Messina Conference took place and it became
known that the Six were moving towards a Customs Union. This, as one can
see from the documents which are now publicly available, this created a great

deal ofconsternation within the Government; there was an anxiety lest British
industry be shut out of Europe, there was anxiety that Germany might well
become the most powerful member within that Customs Union. The question

that I want to ask is in a sense one of interpretation: were these anxieties a

constant threat in the Conservative attitude towards Europe from the 1950s
down to the 1980s? Was there, within the Conservative Party a feeling - I'm

not talking about Ted here now, but other members, rank and file and so on -
was there afeeling within the Conservative Party that association with Europe

would be OK on the basis it was, as you put it in your book, a super free trade

area, that they viscerally opposed any kind ofdeepening structures in Europe,
anything really approximating to a Customs Union? Was there this continuity
of thought or feeling and did it resurface with renewed vigour with Mrs

AC We have never really in this country come to terms with our reduced status in
the world. As I've said repeatedly in the nineteenth century we had the
biggest navy in the world, the most powerful army in the world and the most
efficient and productive industry in the world. Today we have none of those
things and it's taken us a very, very long time and very hesitatingly to come to
terms with it. It was really only when Healey became Defence Minister, in the
1960s that we made the retreat from East of Aden, or East of Suez. But we've
always been dominated by our Imperial past and our enormous industrial
power and we've only very hesitatingly come to terms with the modem world.

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You must also remember that a great deal of our power rested upon the theory
of the Balance of Power, namely that we sided with the French when the
Germans were getting too powerful; we sided with the Germans when the
French were getting too powerful. If you study our history over several
hundred years, really since the time of Queen Elizabeth I, we were gradually
developing this policy of setting one off against the other. In the post-War
world we were I think genuinely afraid of developments in Europe. We had
just lived through the most terrible war in history where a coalition of France
Russia, Poland and the United Kingdom proved impossible to contain
Germany. When Russia came in against Germany the outcome still hung in
the balance and it was only when the full American might became evident - it
was the Americans who rearmed the Russian armies, it was the Americans
who built the great armaments plants beyond the Urals - it was that which
finally won the war. The 1914-18 war was much the same; it was stalemate
by 1917, it was only when the Americans came in the balance changed. All

the time this was in the back of our minds, namely that we were perpetually
afraid that Europe might unite against us. But at the same time there was the
fear that trade links with the Empire, now the Commonwealth, were ebbing

away. It started with the breakdown of the free trade system after the Great
Depression. The Commonwealth countries began to build up their own
industry, they began to be protectionist against the United Kingdom, though
not as protectionist as they were against others - and we could see our trade
ebbing away. I remember very well Peter Walker at a seminar at which I was
speaking telling the story of his own conversion to the European ideal. This

essentially rested on seeing trade with America gradually falling away, trade
with the Commonwealth falling away, and Europe gradually becoming the
market of the future. So he could see no alternative if we were going to

survive. I saw this development very much when I was Chief Executive of
Boots. Boots was a company which had very large manufacturing facilities
and the Company manufactured on behalf of American companies. As time

has gone on, all these American companies have set up their own plants, but
they've set them up in the United Kingdom and the feeling was that unless we
were in Europe, these companies would leave the UK and would migrate into

Europe. For so many people it was really a question of the head overcoming
the heart and the realisation that leaders were supposed to lead. The Prime

Minister was supposed to give a lead. He wasn't there to have consultation


and polls and then make up his mind what he ought to do. I learned the folly
of that approach when I was member ofNEDDY with Frank Cousins who was
then the leader of one of the great trade unions. And we had a strike because
the members of his union went on strike. And he called me aside one day and
said "You know Arthur, if this goes on much longer, you and I will have to be
involved in this", and he said "You know, I'm in a very difficult position. I
know when I'm right when I'm going in the direction that my members want
me to go." Well, there's a story about Robespierre. You know the story?

AJC No, no

AC Oh, he was sitting in his apartment talking to someone and a great mob goes
roaring by going up to the Place Vend6me for the daily executions by
guillotine and he said "Stop, stop, I must now go and follow them, I am their

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leader. I am their leader, I must follow them". This was the Frank Cousins
approach. Quite simply. you saw which way your members wanted to go and
you followed them. This is the approach of the New Labour Govemment- to
be fair to the Government Blair has made an enormous change in that party
and a change for the better, but what he is now doing, of course, is dithering.
Their failure is the failure to have used the eighteen years in which they were
the Opposition to flesh out their policies and work out the details of them.
How you do it? You can see, on this tax reform programme we drew up for
Ted Heath and lain Macleod - lain died and it was taken over by Tony
Barbour. When the programme was presented to the Inland Revenue, they
came back with a document this thick, detailing what I call the 57 varieties, all
the objections. This was the beginning of the month of August, my wife was
in the Isle of Man. I sat down, and in those days I used to write everything,
wrote out the answers to every single one of these objections. No problem
whatever, because I'd thought of all of them myself. I'd been in the game

long before they were born, let alone having been in it, so I wrote out all the
answers to these objections and the answers went back. Six weeks I think it
was passed without a sound. Then a memorandum this long came from the

Chairman of the Board of Inland Revenue, "Chancellor. It wasn't that we
couldn't have thought of the answers ourselves, but we felt that you ought to
know what the problems were". Now they had sold that pup to Roy Jenkins
because I was horrified when I opened Hansard and read his Budget speech
the year before when he was talking about amalgamating the Income Tax and
Surtax that was one of the things that was a key to this programme. After

detailing all the advantages, he ended up by saying "But alas, it is impossible".

They simply didn't want to do it and they produced all these objections, and
Roy Jenkins simply hadn't got anybody to write the answers. Before the

election Ted called me in and said "Will this programme run?" I said "Yes".
And that was all.

AJC I wonder, going back to the early 1980s, I'd like to ask you another question.
Clearly, I understand that you had a very unique role in the realisation of the
internal market. What was your input into the memorandum "Europe - The

Future" at the Fontainebleau summit? Did you have any input?


AC You're talking about which Summit? The Solemn Declaration was in 1983,

the Fontainebleau Summit in 1984 both before I went to the Commission.

AJC But at the Fontainebleau summit

AC Which was before. The point about the Fontainebleau summit is that the
Single Market isn't mentioned at all.

AJC But in the ....

AC You're thinking of a Fontainebleau summit, a much later one. The story of

Stuttgart, Fontainebleau and my coming to the Commission I set out in detail
in my own book.

AJC I'm just, this is the Fontainebleau Summit of1984

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AC Yes, this is the one, well, this is before I'd gone to the Commission

AJC Yes, yes indeed, but I'm just wondering did you have any involvement with the
memorandum that put forward "Europe The Future" in which the
Government proposed the completion ofa market and also talked about

AC This would have gone through the official channels, and I don't know exactly
what did that memorandum, say when it was talking about the Internal (or
Single) Market. The briefing that I got about the single market both for the
meetings with Delors in October 1984 and when I went to Brussels was
hopelessly inadequate. Indeed they were talking of the single market almost
entirely in terms of services such as transport and the financial services and
very little else.

AJC I'm just looking in the index for the precise location, 'Margaret was ready to
undertake one more initiative ahead of the June Milan Summit as part of our
campaign to convince people of our seriousness. She agreed to circulate a

discussion paper outlining all the positive features of our approach entitled
"Europe the Future". I developed the same themes and was able to make
some real headway, most notably at the Italian informal meeting at Stresa.
But all this was badly blighted by the fate ofMargaret s attempts to woo Kohl
for not only was there no response from him ".

AC Well it depends exactly, who is this, this is Butler is it?

AJC No, no this is Geoffrey Howe. it says here under the .....

AC Oh, Geoffrey Howe. Well all I can say is this. That memorandum would have
gone into the machine. I would almost certainly have seen it and just accepted

it without too much argument. You have to remember that at that stage in
June I had not been approached, I had no idea that I would be going to

AJC What I also wanted to ask in connection with that i, your very wide contacts

with business. In the early 1980s. For example, Wisse Dekker, President and

Chairman of Phillips, had written "The Play for Europe" in 1990. Fiat had
also produced a document on the completion of the internal market, and Ford

AC Wisse Dekker was the President and Chairman of Phillips, Agnelli, the
Chairman of Fiat.

AJC And Ford also had produced something. To what extent .... What I'm trying
to come to here is this. I obviously do understand and appreciate your very
great contribution to this but to what extent was there a general move in
Europe towards the completion ofthe internal market?

AC You will find that point is dealt with specifically in my own book. What
happened was that in the early 1980s a great revival took place. The 1970s

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had been blighted by three factors - there was the enlargement of the
Community to include Britain, Denmark and Ireland with both Britain and
Denmark proving difficult new members. Secondly you had the two big
increases in oil prices. Thirdly you had the recession which was sparked off
by the oil price increases, and the failure of monetary policy to react correctly
to what had happened with serious inflation resulting. Progress in the
Community stopped effectively after 1973; the great VAT Directive, the Sixth
Directive, which was not adopted unti11976 was really a clean-up operation of
trying to incorporate what achievements had been made before the paralysis
set in. But as you moved into the 80s people began more and more to talk of
the resurgence of the Community, of the unfinished business of the Treaty of
Rome. You began to get a more forward looking attitude. You had the
foundation at the beginning of 1983 of the Internal Market Council because
people were beginning to say that we should start to move forward again. By
the time I took over in January 1985, there were already a hundred draft

directives relating to internal member matters on the table, most of them
dating before 1976. An enormous amolmt of background work had been done,
everyone knew those directives were there and they were begirming to say

"Shouldn't we get on with some of this?" My own reaction, after the event,
was that we'd have been far better off had all those draft directives been
scrapped and had we started with a clean sheet. But that is by the way. So
there was this undercurrent of pressure for progress. You had the creation of
the Internal Market Council when I was the Secretary of State and responsible
for this area of policy. You had a number of people, Wisse Dekker of Phillips,

Agnelli of Fiat, and Jacques Solvay, Chairman of Solvay the great Belgian
chemical company all exerting great pressure that progress could be made.

AJC I thought you were referring to a person ...

AC Oh, I am - Jacques Solvay was the Chairman of the Company founded by his

family in the nineteenth century. There were also the two big industrial
bodies, there was the one that Jacques Solvay was running and there was the
one that Agnelli was the Chairman. They both represented the top echelon of

business. All of these people were agitating on this issue at this time, Wisse
Dekker was right in the front, Agnelli was there with his group, and Solvay

with his group. A lot of other people talking about this. Then of course in

1983 there was the Solemn Declaration on European Union, the broad canvas,
but with the internal market coming in in very much of a supporting capacity
and which did not appear until Page 14 of the English edition. At the time
industry had more interest in this issue than the politicians. In a sense my
interest in it was driven by the fact that I had been an industrialist. I was the
Secretary of State for Trade and in those days the remit of the Trade
Department was much wider than that of Trade and Industry is today. I took
the financial services, including the City of London and Lloyds. I took
aviation and I took shipping. When after the 1983 Election an empire was
made for Cecil Parkinson, a lot of the responsibilities of the Department of
Trade were taken away leaving it more as an overseas sales promotion
department which was then joined up with the rump of the old Department of
Industry. So I had that specific interest in parallel with these leading people in
European industry. I was absolutely horrified at one of the very, very early

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conferences I attended with Wi sse Dekker in 1985, because he was then

advocating the completion of an internal market by 1990 which was clearly
impossible. I always maintained very close and friendly relations with Wisse
Dekker but I was on the inside and could see what was practicable. Eight
years taking us to 1992 was the time span that I decided was right. I went
back to the Treaty of Rome which had specified three Commissions of four
years each to establish the Customs Union which in fact was completed a bit
ahead of time in ten and a half years. I said what they could do in ten a half
years we ought to be able to do in eight - the lifetime then of two
Commissions. But I had another factor in my mind and that was that, if you
have three Commissions, which is what was taken in 1957 - if number one
falls behind he will say "Oh well, it doesn't matter, there are two to come".
Number two will then say "They put up a poor performance, we inherited this
from Number one and we could only do our best" and Number three would
say "It wasn't our fault, Numbers 1 and 2 fell behind". I said "we are going to

have no excuses: Number one has got to hand over to Number two a job
which is running and running properly; and Number two will have no excuse
whatever, because he's inherited a good performance". I drew up a report

before I left saying exactly what had been done, and what had got to be done
before we handed over to the next Commission - this was before I knew I
would not be re-appointed.
Delors had reached "1992" through some other route that I've never fully
understood. Just after we were appointed in 1985 there was an argument
between Lamy, Delors' Chef de Cabinet, and myself over what was meant by

"1992" with Lamy trying to maintain it was the first of January 1992 and I
saying, "on no account: it's the thirty-first of December". And I won that
argument. Whether De10rs was thinking of the traditional seven years as the

measuring rod, the seven years of the good harvest etc, or whether there was
something else in the back of his mind, I've never quite understood. But so
far as I was concerned I'd got to "1992" before I came to the Commission as

an exercise in business management. In many ways success in management

lies in the ability to plan ahead, to know what was going to happen next year
before it happens. My argument was it's no use waiting until the disasters

occur, you start the year by seeing what it's going to look like and if you don't
like what the year's going to look like you change your plans. Given the

requirement that you were to compete the Internal Market as we originally


called it or the Single Market, how did you achieve it? The answer was you
selected what you thought was an attainable date on the basis of certain very
broad general principles and you then validated it by working it out in detail.
If you then found the date couldn't be met, you had to alter the date and
revalidate it or if you felt the path was too easy you could bring the date
forward. I started by arguing that if the Customs Union could be completed in
less than the lifetime of three Commissions we ought to be able to do the
Single Market in two Commissions and that took you to eight years because
the life of a Commission was then four years. This in tum took you from the 1
January 1985 until 31 December 1992. I then sat down and validated that
programme by having it drawn up in detail, having a time schedule attached to
every single item in the programme. The White Paper only divides the
proposals into two batches, but every single item had its own timetable, so you
can validate your programme by reference to the published overall programme

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and also to the detailed internal programme. You then of course have to do a
critical path analysis to tidy the whole thing up. From my point of view this
was not only where 1992 came from, this was what demonstrated that 1992
was a practicable, achievable goal.

AJC Towards the end of the 1980s a great deal ofpressure built up in the Cabinet
for Britain to join the Exchange Rate Mechanism. Now obviously you were a
Commissioner and not a member of the British government but clearly you
would have had some closeness to events and policy even as an observer. Did
you feel that Mrs Thatcher s resistance to the ERM was justified?

. AC The real story of the ERM is a fascinating one. It started by our saying that we
would join when the time was ripe. The rhetoric then got altered, we will join
when the time is right. I said at the time we in fact joined that the time was
over-ripe and what went wrong was essentially one of timing. People have

said that the trouble was we set the exchange rate too high: we didn't, we set
the exchange rate at the wrong time. When we went in the Exchange Rate was
absolutely right but we were at the beginning of a slip downhill in the

economy into recession. If you're sliding downhill your exchange rate
weakens anyway so we were finding ourselves in a position having just joined
at a rate which was right at that moment of time; but every day that went by
the rate was going to become wrong and then wronger because we were
locked in a rate when the economic situation - we ought not to have been in a
recession but leave that on one side - but we were locked in a situation where

the recession meant that the pound ought to be falling in value. This was what
went wrong - it was as simple as that. It is probably true that the ERM was
too much of a straightjacket and it hadn't been forseen that there might be

what proved to be quite a serious recession. The answer again is that what
went wrong is that we went at the wrong time, we went in when the time was
wrong not when the time was right. This was a mistake you can guarantee the

Blair Government will make because it's a mistake that has always been made
by this country in the past. We will probably end up by going into the Euro at
the wrong time. Not that it would be wrong to go into the Euro - on the

contrary - it would be that we will choose the wrong time to do it. The great

point about all these moves forward, and you can see it so clearly in the case
of the Single Market, is that they not only require convergence, they promote

convergence and you've got to look at both factors. We are too negative
because we say convergence first, move later. If you don't move you never
get the convergence anyway so you lock yourself into a negative position, but
you have to get sufficient convergence to make it possible to go in and the
system will then force the convergence. You've seen it with the Euro, that the
fact that a date was agreed when it was going to start has forced convergence
among the States intending to join. It's forced budget discipline on all of these
countries. The Single Market did the same, it forced change, it made people
plan on the basis of an open Europe. People are always coming along now
and saying to me "But you didn't do this, you didn't do the other". I've
always replied you could never do everything at once, the point was to have a
system in operation where goods and services could begin to flow freely; once
you'd breached the dykes the forces of trade would widen the entry points.
You'd have industry pressing for more to be done. The one thing that I've

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never regretted is being criticised for not really having got the Single Market
fully completed by 1992 because industry is now on the same side as I am, we
want the job done, we're trying to force the job being done. Instead of
industry holding back, industry is saying "Why don't those fellows go
forward". I used to argue this in Cabinet over privatisation. I used to say
"Well, look what happens at present if the railway is wrong or the coal is
wrong you have to get up and defend it in Parliament; you have to get up and
defend those people. If you privatise it what happens? You get up and you
say to the critics, "We agree with you, it's an absolute scandal, something's
got to be done. Now which position would you prefer to be in?" I never get
any reply to this sort of argument. But that's the real argument for
privatisation, it's that the Government and the citizen are now on the same
side - they both want better performance. Instead of the Government being in
the position of defending bad performance against the citizen. How absurd
can you get, if you want to get elected? But the Single Market's the same, we

want industry, we want people agitating that you've not completed it. You
never will complete it. There's been a single market in America since the
Second Constitution was signed in 1779. And they're still bringing forward

proposals to remove barriers to inter state trade - after two hundred years.
The first important step in consumer protection in the United Kingdom was
taken by the Sale of Goods Act in 1893. And I pointed out when we
celebrated the centenary of that Act we were still having new legislation
coming forward on the Statute Book to improve it. This doesn't mean to say it
wasn't worth while - having the American Constitution of 1779 abolishing

internal frontiers as far as trade was concerned, it wasn't wrong to have the
Sale of Goods Act of 1893 introducing the concept of consumer protection - it
was right. And this is why it was right to get the Internal Market Programme,

the Single Market launched even though people will come along and say it's
imperfect - of course it's imperfect, all we want to do is to ask you to help us
to put it right.

AJC Lord Beloff, in his recent book on Britain's relations with Europe which he
subtitled "Dialogue ofthe Deaf" makes great play ofthe notion that in a sense

the Continentals are in some way instinctive federalists, the British are not,
and that there is a federal agenda. Do you feel from your experiences at the

Commission and from your connections with Europe via business etc. that in

fact there is afederal agenda?

AC You're up against what I call the Humpty Dumpty syndrome. I had to make it
clear in the House when I quoted this that I was not referring to the Prime
Minister at the time. You remember that Humpty Dumpty said: When I used
the word" Humpty Dumpty said "it means just what I choose it to mean -
neither more nor less". When the British use the word "federal" they mean
something entirely different from what the Continentals mean; and once you
start perverting language in this way it does make rational debate difficult. So
that when you talk of "federalism" the trouble is that so many of the people
that I regard as anti-Europeans - although they would resent it - are using the
term "federal" in a very different sense from the sense in which many of us
would think of a federal structure. This country had a federal structure after
1923 right up until 1973 when Stormont was abolished. And we're now

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moving back to a federal structure. I del ivered a speech in the House of Lords
in response to a debate initiated by the retired Law Lord, Lord Simon of
Glaisdale, on the Swiss Confederacy as a pattern of constitutional progress.
This would be three or four years ago; you should read my speech in that
debate where I said that the only long term solution for the United Kingdom
would be to become the United Kingdoms; that in fact is where we're going
effectively to end up. This was well before the 1997 Election. We're going to
have a Parliament in Scotland, and before long you will have a Parliament in
Wales. The only possible solution to the Ulster problem is a Federal solution
under which Ulster is part of a Federal United Kingdom with the power for its
citizens to Federate with the United Kingdom or to federate with Southern
Ireland. Once you do that you've solved the Northern Ireland problem; if you
read the paper put out by the Conservative Government, it almost goes as far
as that except that it eschews the dreadful word "federal". But this is the only
real answer - you've then given both sides what they want. At the moment it

would be part of a federal United Kingdom because that's where it is, but
under a Federal Constitution if it wishes to defect by say a two-thirds majority
and go and join the Southern Irish, good luck to them. Well, what's wrong

with that? And this is still my view. I tend to approach these problems in a
somewhat different way from most people. I ask myself not what I want, but
what I think is likely to be the position in twenty or fifty years time and, given
that scenario, what should your policy be to ensure you meet the
circumstances of that time in the way most advantageous to you. And I start
with the view that the United Kingdom, constituted as it has been under the

Conservative Government, is not going to be in existence in fifty years time.

No way will it be in existence in fifty years time. In fact, privately I said no
way will it be existence in its present form much beyond the millennium, and

it won't be either. It'll already be part way down the path to a Federal
constitution. And that solves the so-called West Lothian question because you
would have an English Parliament as well as a Federal Parliament. There's no

reason why they should not both be sitting in Westminster in the same way as
Congress consists of the House of Representatives and the Senate both sitting
together in the same building. There it is, now you can define the centre as

narrowly or as widely as you want to, you will start by defining the centre as
keeping most of the existing powers- but as time goes on you'll probably want

to devolve them. That's the only way I see the future of the United Kingdom.

It just has an's' on it - the "United Kingdoms" that's all.

AJC One final question, Lord Coclifield. In his memoirs Geoffrey Howe says that
he feels that Mrs Thatcher believed that Commissioners, in particular
Conservative Commissioners, should in a sense represent British interests as
conceivedfrom a Conservative point ofview. I think I'm correct in this.

AC I don't know exactly what he says because I've not read his book, I'll be

AJC But if couldjust ...

AC But the Treaty's absolutely clear about it.

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AJC Do you feel that Mrs Thatcher felt that a Commissioner should represent
British interests?

AC Do you know there's avery, very funny printer's error, perhaps not exactly a
printer's error, but it's a trouble that printers cause. There is a consolidated
edition of the Treaties - it is produced by the Commission but it is not a
consolidated edition in the strict legal sense - if you look at the consolidated
edition that was in use in my day and in Mrs Thatcher's day you'll find that
when you're looking at the duties of Commissioners, the Commissioners'
duties appear on one page, and it's only when you turn the page over you find
at the top of the next page the statement that the Member States must "not
seek to influence the members of the Commission in the performance of their
tasks". Most people had not turned the page over. I learned this when I was
the Chairman of the Price Commission because I was sent for by Mr Denis
Healey who was then the Chancellor of the Exchequer, who started upbraiding

me for what I had said in the Commission's Annual Report and I pointed out
that if he only went to the trouble of turning the page over he would find that
that started by saying that this argument is, of course, all nonsense. Just

because the printer had ended the page at that point he'd read only so far, and
had not taken on board the fact that I was saying that this argument had been
put forward, and he thought it was my argument. This has always taught me,
first - always turn the page over before you get involved in an argument - and
secondly, if you're responsible for setting the text in print, make quite certain
that other people can't fall into that particular trap. I don't want you to think

that my comment is intended in any way to be critical of anything Geoffrey

Howe may have said. I worked very happily with him. He was always a very
considerable supporter as far as I was concerned. But one of the basic

difficulties, and you'll need to bear this in mind throughout, the Foreign Office
has interests very much wider than the European Community or the European
Union as it now is. The result is that it never quite gets the whole hearted

attention it ought to get. I've protested quite deliberately on a number of

occasions in the House, because in the keynote debate of the year, the debate
on the Humble Address, the European Community is lumped together with

Foreign Affairs and Defence. I've started on two occasions by saying that this
is really very peculiar because it suggests that there's something foreign about

the European Union and it's something against which we require defence. It's

this attitude of mind I object to. Unfortunately this concept is deeply

entrenched in the Community (or the Union) itself, namely that the
representatives of the member states were always the Heads of Government,
(or in the case of France, the Head of State) and their Foreign Ministers.
You'll find this in the Solemn Declaration, you'll find it in the Single Act and
it's repeated ever since. And you see the fact also in the General Affairs
Council, which was set up originally as a kind of umbrella Council. There are
now about thirty corporate Councils, but there was also a General Affairs
Council. It wasn't long, because it was attended by the Foreign Ministers, that
it began to be called the "Foreign Affairs Council". In fact they used to spend
much of their time debating Foreign Affairs, over which, I may say at that
time the Community or the Union had no competence - so they described their
activities as "Co-operation in the field of Foreign Affairs". That's what they
spent their time on, the matters that they had no competence over, and the

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matters they were supposed to be dealing with they never dealt with at all.
And this is the trouble. Indeed in the days in which - and to be fair to him
Nigel was one of the leaders in this - we tried to get a sense of financial
responsibility dinned into the heads of the European Community and we could
get nowhere at all because we said the General Affairs Council ought to have
the final say over agricultural expenditure because at present the rule, set out
in the Financial Regulation, was that the beneficiaries, the Ministers of
Agriculture, decided what they were going to spend and then it was obligatory
expenditure. The poor chaps who had to put up the money were bound by law
to put it up. A crazier system you could not find, and Nigel, to do him credit,
was one of the leaders in saying "That decision has got to go to the top
Council", which is the General Affairs Council. "Not on your life" said the
Foreign Ministers, "nothing whatever to do with us". Nothing to do with us!
In the end, of course, we did, at Edinburgh, get the guideline laid down under
which the Community as a whole, or the Union now, was not to spend more

than the equivalent of 1.27 per cent of the total GOP and the Agriculture
Ministers were not to exceed a given percentage of the total budgetary figure.
This has meant that what they spend can still go up year by year despite the

fact that what they're spending is excessive and ought to be coming down year
by year. And that's financial control. Every time they reform the Common
Agricultural Policy in order to reduce the cost, the cost goes up. I used to say
this all the time and they'd say "Well, it's investment for the future". The
McSharry reforms - it was as clear as noonday they were going to push the
cost up; they have. The Fischler reforms are going to push the cost up too.

These fellows have never been in the position where it's their own money that
they're having to deal with - to them money doesn't matter, they're figures on
a sheet of paper, until the tax payer revolts, of course. Well, all right, this is a

side issue. You diverted me onto it.

AJC I only have to say, in conclusion, that Geoffrey Howe has nothing in his

memoirs but the highest praise for you.

AC I got on very well with him


AJC I'm sure you did and everybody wants ..


AC Against the background, and I really do want to say this very sincerely, he had
a bigger problem than I did. He was having to deal with Mrs Thatcher on a
day to day basis. I had the protection of the Treaty. I knew what my position
was and to be fair, my working life had extended long beyond most people's
working life. I was not in any financial position where it mattered to me
whether I had a paid job or whether I didn't and I could take an independent
line. It didn't matter to me if I was told to go. I'd cut my teeth in the Price
Commission where in effect the CBI or their members succeeded in getting
established in a Court of Law that the Price Code was a legal document and
had to be strictly adhered to. Now it was industry that made it a straight
jacket, it was not the Price Commission. The CBI will tell you a different
story, but the one I'm telling you is the true one. They made it a straight
jacket because it was their members who if they got somewhere they didn't
like went to a Court of Law. Didn't do most of them much good. I cut my

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teeth also on both the Excise and the Income Tax and I knew where I stood
when it came to Courts of Law but Geoffrey was in the position that he was a
politician occupying one of the most important Offices of State, and he
thought quite rightly, that what he was doing was right and correct and the last
thing he wanted was to be forced to give up that position and he never gave it
up until effectively he was put in the position where life was beginning to be
intolerable and he then did the honourable thing and said "All right this is the
end " I'm not a patient man, you probably will have gathered that
impression, but Geoffrey was, he had infinite patience, in dealing with the
most difficult and awkward people and that is the quality a Foreign Secretary
needs. He was in many ways an ideal Foreign Secretary. Within the limits
that were available to him he did the country very well indeed. He got what
was feasible within the confines he had to work. I don't think Margaret was
ever misled in the proper sense of the term, she was always very proud of the
fact. You read her evidence to the Swift Enquiry on arms to Iraq. Her defence

before the Enquiry was very simple - "I deal with policy, I had not authorised
a change in the policy, therefore there had been no change". And that's what
she said. I sat by her when she made her maiden speech. My relations with

her personally are very good, never had the slightest difficulty and it's simply
that we do not see eye to eye. EU
AJC Lord Coclifield, thank you very much indeed for speaking to me today and
commenting upon your long and varied career, particularly as it relates to
Britain and the European Union or the European Community as it was, and

all that remains for me to do is to thank you profusely on behalf of the

European Community. Thank you once again Lord Cockfield.

AC Well thank you, it has been a real pleasure talking to you.


22 The text of the taped interview was fLrst transcribed under my supervision, and then revised by Lord
Cockfield in correspondence with me. The [mal agreed text, contained in this paper, might not,
therefore, strictly adhere to the original interview text, although it broadly reproduces its contents. [note
by Dr. A Crozier November 1998]

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