Europe: Six decades of strife and controversy for UK

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It's groundhog day in Britain, where the European Union is concerned. The context changes, but the basic issues do not.

When the six founder members of the European Community came together in the 1950s in a new political and economic organisation, the British were deeply suspicious of its supra-national institutions and sceptical as to whether it would work.

But, from its foundation in 1957, it did work and its members started to outstrip the UK economically.

In 1961, Prime Minister Harold Macmillan persuaded his reluctant cabinet that Britain could not, on its own, compete politically or economically with the two super powers - the US and the Soviet Union.

The only viable alternative was to apply to join the European Community (EEC).

It was a choice made out of necessity, not enthusiasm.

In 1963, President de Gaulle of France, vetoed Britain's application.

It was a national humiliation. Macmillan resigned as prime minister a few months later.

The Labour Party too was a reluctant convert to the cause of European membership.

Its leader, Hugh Gaitskell, had decried Macmillan's bid to join as "the end of 1,000 years of history".

But his successor, Harold Wilson, who became prime minister in 1964, soon came to the same conclusion as Macmillan.

The Labour government followed its Conservative predecessor in applying to join.

In 1967, De Gaulle once again said: "No."

Membership finally

When De Gaulle fell from power in 1969, it was once more a decision of the head, and not the heart, that led Wilson to persevere with his application.

De Gaulle's successor, President Pompidou, decided to open the door to Britain - but only after the six existing EEC members had first settled the long-term financing system for the organisation.

This they duly did, devoting 90% of the EEC budget to agriculture, from which France was the main beneficiary, and ensuring that the British would pay into the budget far more than they got back.

Indeed, there would be only two countries that would not benefit from the EEC budget in net financial terms - Britain and Germany.

But whereas Germany was the wealthiest EEC member, the UK was one of the poorest.

Wilson unexpectedly lost the general election he called in the summer of 1970, and it was left to his successor, Edward Heath, to negotiate the terms of entry that, otherwise, almost certainly would have been agreed by Wilson.

The Labour Party, in opposition, denounced the terms negotiated by Heath.

Inside Heath's own Conservative Party too there were MPs who, contrary to official policy, had stood for election in 1970 on platforms opposing membership.

So, the issue was controversial within both parties, so much so that Wilson had, to avoid a split in the Labour Party, to promise that, if he was returned to power, he would renegotiate the terms of Britain's EEC membership and hold a referendum on whether Britain would stay in or leave.

That renegotiation, more smoke and mirrors than hard gain, gave Wilson enough to get its terms through his cabinet.

But he had to allow his rebel ministers to break cabinet ranks to campaign against membership, and his party conference voted against the terms negotiated by their own Labour government.

But with the three main party leaders, including Margaret Thatcher, newly chosen as leader of the opposition Conservative Party, campaigning for a "Yes", two-thirds of the country voted and two-thirds of voters chose to stay in.

Budget negotiations

When Margaret Thatcher won the 1979 general election, she was immediately faced with the need to renegotiate the hugely adverse EEC budget deal Heath had reluctantly accepted.

She fought a battle with the eight other EEC members that ended only in 1984 with the negotiation of the British budget rebate, which survives to this day and which, it seems, will reduce by about half the extra budget bill presented to the present government a few weeks ago.

But distrust of her partners, and they of her, soured the British relationship with the rest of the EEC.

The sense that Britain was battling against its partners, rather than cooperating with them, had entered the British bloodstream.

When Margaret Thatcher lost office in 1990, she set herself up, in the House of Lords, in public opposition to the EU's Maastricht Treaty negotiated by her successor, John Major, even though Mr Major had negotiated an opt-out from the single European currency, which the treaty introduced.

For many Conservatives, loyalty to the fallen leader became synonymous with hostility to Europe.

Many people, in many other EU countries, are critical of the European Union.

But only in Britain is the question of continued membership an ever-present issue.

Parliamentary sovereignty

There has never been a time when we have been at ease with our membership.

Our island story, our 20th Century history, our emphasis on parliamentary sovereignty - all play a part.

We did not join, as some believe, a trading body that has somehow transformed itself into a political entity.

"Ever closer union" is at the very start of the Treaty of Rome.

The essence of the project is that, when laws are agreed at European level, they replace national laws and cannot be amended by national parliaments.

There is therefore a loss of parliamentary sovereignty inherent in the project, and it is continuous to the extent that new laws are agreed by the member states at European level.

The question for us is whether the cost of being out - in terms of economic prosperity and political influence - is greater than the perceived cost to parliamentary sovereignty of staying in.

Does theoretical sovereignty trump effective influence?

Like Wilson before him, but with the added challenge of UKIP, David Cameron has to convince his party that he can square the circle by being seen to bring some powers back to the UK.

The result, as it was for Wilson, will be critical to the prime minister's political future and that of his party.

To be in a position to renegotiate the terms of Britain's EU membership - ie to win the general election - he may be pushed into promising more than he can deliver.

A re-elected David Cameron, with five years of government ahead of him, would have more negotiating leverage than he does now with less than a year to go.

But 27 other member states have to satisfy their public opinion too. For many of them, the principle of freedom of movement will be non-negotiable.

And none of them will want treaty change, which would oblige them to face their own parliaments or electorates. In 1984, the EEC was going bust and could only raise more money if all its governments agreed.

That gave Margaret Thatcher the leverage she needed to secure the rebate, but it had taken her five years to get there.

Mr Cameron can threaten to take the UK out of the EU. Standing on the cliff edge and threatening to jump will have some people running to his aid, but not at their own peril.

Calculating the strength of his own hand and what other people's bottom line will be, will be a task for David Cameron if re-elected.

The issue for the rest of us will be to make a once-in-a-lifetime judgement about the future prosperity and influence of our country and about whether we wish to continue to play a leading role in Europe and in the part Europe plays in making the world a more peaceful and stable place.

Sir Stephen was British ambassador to Portugal from 1993 to 1995, permanent representative to the European Union from 1995 to 2000 and head of the European Secretariat in the Cabinet Office from 2000 to 2004.