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2019 | OriginalPaper | Chapter

8. Prime Ministerial Management of the Actors in the European Monetary Policy Core Executive

Author : Birgit Bujard

Published in: The British Prime Minister in the Core Executive

Publisher: Springer International Publishing

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Abstract

This chapter focuses on the actors in the European monetary policy core executive. In addition to the prime minister, these are particularly foreign secretary and chancellor and at times trade and industry minister(s). Sometimes actors responsible for a policy area not related to European monetary policy also affect the decision-making process. The question is addressed as to how far these actors impact on the prime minister’s political leadership. It also considers whether any of the prime ministers attempted to expand their leeway by using their right of appointment and dismissal and of cabinet management. Lastly, the four prime minister’s options for two-level politics are examined to analyse whether they managed due to their own position in the European Council to force their cabinet to accept decisions.

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previous chapter Prime Minister’s Office and Cabinet Office as Institutional Resources of the Prime Minister in the European (Monetary) Policy Core Executive

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In 1972 Jenkins had opposed the official party line and voted with the Conservative government for Britain to join the EC.

The decision not to promote Jenkins to the Foreign Office raised criticism e.g. from Callaghan’s advisers Tom McNally and Bernard Donoughue (Donoughue 2009: 16, 17).

As the EMS discussion began in 1978 Crosland’s tenure as foreign secretary is not further considered.

Interview with B. Donoughue, 24 March 2010.

Interview with T. McNally, 22 March 2010.

Pym’s role is not further analysed here as the ERM only became an issue of significant interest in the government from the mid 1980s.

As Edward Heath’s former Political Secretary Hurd had supported him in the 1975 leadership competition not Thatcher (Hurd 2009: 266).

Moore (2015: 66) suggests Thatcher might not have chosen Lawson, if her majority at the 1983 general election had been smaller, as it was considered a daring choice.

For Lamont’s view on Europe, see Lamont (1999: 10–11).

It had been an argument in the cabinet particularly between Thatcher and Heseltine (Defence Secretary) over the sale of the British helicopter company Westland; for more see Dunleavy (1995).

Interview with S. Wall, 8 January 2010.

On the divisions between Brown and Cook, see Anderson and Mann (1997: 117).

Cook’s extramarital affair was exposed by the press in summer 1997 (Mandelson 2010: 230).

She is not further taken into account here, as in 2006 the government no longer actively considered the euro issue.

For details on their relationship until 2004, see Seldon (2005: chapter 14).

Interview with S. Wall, 8 January 2010.

Before the election he had received a loan from Labour colleague Geoffrey Robinson, whose business activities the DTI was investigating. Mandelson had kept the loan secret. When it became public, Blair insisted for him to leave the cabinet, not to damage the government (Rawnsley 2001: 219–230).

His second resignation concerned accusations he had used his previous position at the DTI to influence passport applications. There was an inquiry which found no wrongdoing on his part, but by then he had already resigned due to pressure from Blair (Seldon 2005: 169–173).

An example was the first London mayoral election in 2000, when the New Labour leadership tried to prevent the candidacy of Ken Livingstone, who was seen to represent Old Labour. For more see Shaw (2004: 63–65).

For the details of the discussion in the first three meetings, see Dell (1994: 38–43).

It was shortly addressed on 12 October when the PM informed the cabinet about the final GEN 136 meeting, promising extensive discussions in the full cabinet soon (TNA, CAB 128/64, CM (78) 34th Conclusions, 12 October 1978, 1). On 26 October Healey brought the cabinet up to date on the developments on EMS/ERM. The PM explained the cabinet would in the following week discuss the issue in detail on the basis of a paper by Healey setting out the implications of membership and non-membership (TNA, CAB 128/64, CM (78) 36th Conclusions, 26 October 1978, 3–4).

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Yet Thompson (1996: 28) cites an unnamed source, who placed Carrington’s rejection of his officials’ pro-entry ERM brief above-mentioned at this meeting.

Lawson did, however, discuss the issue with the foreign secretary (Lawson 1992: 486–487).

It was a local tax, which “was to be a flat-rate one and payable by all to some degree, even students and the unemployed… Thatcher’s personal support, defiant style and the pusillanimous nature of many MPs and ministers… let a clearly flawed law on to the statue book. In March 1990 polls showed a huge majority opposed it and on 7 April a riot erupted in London. When John Major succeeded Thatcher he quickly replaced the measure with one more closely resembling the old-property-based rates.” (Jones 2001: 537).

It was also referred to at least twice in connection with other issues, e.g. the negotiations about the British contribution to the EC budget (e.g. TNA, CAB 128/67, CC (80) 12th Conclusions, 20 March 1980, 5; TNA, CAB 128/73, CC (82) 6th Conclusions, 18 February 1982, 3).

Background information for this chapter was taken from an interview with N. Wicks, 1 November 2010.

The other two, Kenneth Baker (Home Office) and Michael Howard (Employment), were less relevant on EMU.

Stephens, P. (1997), Politics and the Pound, The Tories, the Economy and Europe, 2nd edition, London/Basingstoke: Papermac. © Philip Stephens 1996, 1997. Reproduced with permission of The Licensor through PLSclear.

A statement by the president of the Bundesbank contributed to the slide (Stephens 1997: 244–245).

Clarke (2016: 308) claimed he already knew then that re-entry was unlikely but thought it important keep up the impression that the government had a policy, which was re-entry to the ERM.

E.g. in February 1995 Clarke denied in a speech that joining the single currency would have critical constitutional ramifications. Michael Portillo criticised his senior colleague publicly which showed the degree of division over EMU in the Major cabinet at the time (Stephens 1997: 314–315).

For the reasons why the issue did not return to the government’s agenda after 2003 until Blair’s resignation in 2007, see Wall (2008: 171).

Rawnsley (2010: 196) cites Jonathan Powell referring to Blair’s lack of coalition building in cabinet.

E.g. Roy Jenkins (1989: 530), then European Commission President, suggested, that Thatcher at the Dublin summit in November 1979 did not bring the discussion about the UK’s budget contribution forward by insisting on ‘her money’, but antagonised her European counterparts.

At the Rome European Council in 1990 she insisted that Britain’s dissent from the other EC members’ plans on EMU was included in the summit conclusions (Dyson and Featherstone 1999: 632).

During Britain’s 1992 EC presidency Major chaired the Edinburgh European Council and achieved a compromise on the European budget, which had to be recalculated with implications for the UK rebate. Chancellor Lamont opposed taking a decision on the budget during the presidency. He argued that the government, due to its obligation to chair the negotiations, would be too constrained to receive the best possible result. But Major thought that particularly during the presidency a decision in the country’s interest was achievable because Britain controlled the agenda (Wall 2008: 151).

During the UK’s 2005 presidency Blair used a two-level policy to pressure Brown to acquiesce to a course Brown did not want on the EU budget negotiations. Blair thought the best chances for agreement were as long as the negotiations were conducted under British chairmanship – particularly as Britain was the only EU member wishing to keep the UK rebate. Yet the Treasury argued a better deal could be struck, if the UK did not hold the presidency. Blair prevailed over Brown and secured a budget agreement under his chairmanship of the European Council (Wall 2008: 150–151; Blair 2010: 535, 542–543).

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Title: Prime Ministerial Management of the Actors in the European Monetary Policy Core Executive
Author: Birgit Bujard
Publisher: Springer International Publishing
Book: The British Prime Minister in the Core Executive
Print ISBN: 978-3-319-89952-7

Electronic ISBN: 978-3-319-89953-4

Copyright Year: 2019
DOI: https://doi.org/10.1007/978-3-319-89953-4_8