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EU veterans explain their hopes for PM's landmark speech on Europe

Lord Heseltine, Lord Mandelson and others who have helped define Britain's relationship with the EU evaluate the task ahead

A bumpy journey in which Britain initially spurned moves towards European integration finally ended in, of all places, Los Angeles.

Lord Heseltine recalls with great pride how he became the first minister to hail the UK's landmark decision to join the European Economic Community on 1 January 1973 – 40 years ago on Tuesday – in a speech on the US west coast.

The man who would later bring down Margaret Thatcher, in part over Europe, set out the creed that all pro-Europeans have since followed. Britain must be "a leading European influencer as opposed to being at the margin", the former deputy prime minister tells the Guardian.

Heseltine is one of a series of grandees who have spoken to the Guardian for the final day of a three-part series marking the 40th anniversary of Britain's accession. The five peers all agree that Britain has immeasurably improved its standing in the world by taking a seat at the top table of the world's largest trading bloc.

But they also acknowledge that a rising tide of Euroscepticism – with a slim majority of voters in this week's Guardian/ICM pollImage may be NSFW.
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favouring withdrawal – means that Britain is now reaching a crossroads in its membership. They look forward, some in hope and others with dread, to David Cameron's long-awaited speech on the EU in the new year in which the prime minister will set out his plans to reconfigure Britain's relationship within the EU.

Lord Powell of Bayswater, Thatcher's long-serving principal foreign policy adviser, believes Britain should be able to excuse itself from some of the social obligations it originally spurned in the Maastricht treaty. Cameron is widely expected to call for the repatriation of social and employment laws as the price of British support for a major revision of the Lisbon treaty to underpin new governance arrangements for the eurozone. This would then be put to a referendum as part of a strategy dismissed in the Guardian by the European council's president, Herman Van RompuyImage may be NSFW.
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Powell says: "It's always seemed to me that we should be able to avoid that in-or-out choice, that we should rightly be looking for an adjusted relationship with Europe in which we don't have to do a lot of things but should be broadly satisfied with what we've agreed to up to date. I think we should be able to turn back some of the social regulation and that side of things."

Powell, who wrote Thatcher's famous Bruges speech in 1988 in which she warned of the dangers of concentrating "power at the centre of a European conglomerate", believes Cameron would do well to follow her example. But he should examine the speech as delivered, in which Thatcher declared Britain "does not dream of some cosy, isolated existence on the fringes of the European community", rather than the version spun over the decades.

Powell says: "The Bruges speech did set out a rather credible alternative vision for Europe which involved us being good members that wanted to push back on excessive interference in the affairs of nation states, wanted to emphasise things like enlargement in Europe, the importance of the transatlantic relationship, the importance of deregulation in the market." The crossbencher calls on critics to acknowledge the political pressures on Cameron. "There is now this sort of tidal wave in the Tory party in parliament [on Europe] which is a new phenomenon and obviously makes it much more difficult in management terms for David Cameron to handle the debate and the issues," he says.

Lord Brittan of Spennithorne, Thatcher's former home secretary, who served as European commissioner for trade in the 1990s, has some sympathy for Cameron. "He does have a difficult task. There is no doubt about that."

But Brittan, who agreed with John Major's decision to secure an opt-out from the social chapter in the 1991 Maastricht treaty, believes Cameron would be wrong to overplay his hand in treaty negotiations by demanding repatriation of powers in exchange for supporting new eurozone structures. "That is only an offer if, without the offer, they wouldn't be able to," he says, recalling how France and Germany forced through the eurozone's fiscal compact last year without UK support by bypassing the EU.

Brittan notched up a record as Britain's longest-serving European commissioner between 1989 and 1999, while Lord Kerr of Kinlochard became one of Britain's legendary permanent representatives to the EU. The chain-smoking Scot, who served in Brussels from 1990 to 1995, earned a place in EU folklore when he crouched under the table during the Maastricht treaty negotiations to advise John Major on the finer details.

Kerr may have spent 36 years as a diplomat but he is utterly dismissive of the prime minister's strategy, which could, he fears, see Britain tumbling out of the EU by accident. He believes a host of EU countries will be wary of repatriating powers to Britain because they do not want to give Britain a competitive advantage in the single market. "That is where it starts getting really nasty," he says. "If you're in the eurozone you are persuaded that you need to change the treaty. Then the Brits say: 'Hang on, we are only prepared to agree provided you agree that we are going to make our motor cars much cheaper.'

"That is when it gets really horrible as they are all already completely pissed off with the Brits for our tone of voice, for all the shouting we have done at the eurozone: 'For Christ's sake get a big bazooka. And you need to do all these things now. And why are you so pathetic?" So it seems to me the idea that we can block their doing what they think is necessary to prop up the euro, given that we have been shouting at them for three years until they agree to give us something, is a bit implausible. It sounds more like bust-up time."

Lord Mandelson, the former business secretary and European commissioner, shares some of Kerr's concerns. He believes Britain's national interest lies in stabilising the eurozone and ensuring its new governance arrangements do not jeopardise Britain's position within the single market. This, he argues, is more important than repatriating powers, which he dismissed as "pointing a gun at everyone else's heads".

"The reason why the current trajectory of Conservative party thinking is so damaging to our national interest is because it is designed to present weak arguments, unconvincingly, to people who do not see the sense of those arguments and certainly wouldn't align themselves with Britain in pursuing them … A so-called repatriation of powers is about staying in Europe but coming out of the EU simultaneously. It doesn't work, it doesn't add up and nobody's going to buy it on the continent.

"The risk is that [the prime minister] will simply impale himself on an impossible negotiating position that will not achieve the results that he wants and will inevitably disappoint his party and trigger even more opposition to himself in his own ranks."

Mandelson believes Cameron is underestimating the patience of Angela Merkel, the German chancellor, who is keen for Britain to remain one of the key members of the EU.

Mats Persson, the Swedish director of the pro-reform EU thinktank Open Europe, believes Britain can win concessions, though he says it needs to be careful with Germany. "Berlin has two demands. The first is don't park your truck in front of the fire exit – don't block further eurozone integration. The second one is don't mess with the single market."

Mandelson says every political party has struggled with European integration. He cites his grandfather, Herbert Morrison, deputy prime minister in Clement Attlee's postwar Labour government, who vetoed British membership of the European Coal and Steel Community, the forerunner of the EU. "It's a great idea but I don't think the Durham miners would wear it," Mandelson quotes his grandfather as saying when he was summoned from the Ivy restaurant in 1951 to decide whether Britain should join.

It took a further 10 years for Harold Macmillan, in the wake of his "wind of change" speech, to apply to join the EEC. Mandelson says the prevailing view was that Britain was joining a "United Markets of Europe" rather than a "United States of Europe".

Heseltine describes Macmillan as the "great architect of Britain's position in Europe" who sought to return Britain to its rightful place as a European power. But he disagrees with Mandelson's contention that Britain thought it was just joining a trading bloc.

"The Schuman plan [by the French foreign minister in 1950] which preceded the treaty of Rome was all about harnessing the war-making industries into a common accord so that the Europeans couldn't do the thing they were always doing otherwise, which is slaughtering each other. So bringing the iron, coal and steel industries under one collective arrangement was a massive step towards preventing war; it wasn't a kind of an economic decision."

Heseltine's argument is important because it answers one of the main criticisms of those who favour withdrawal. This is that voters endorsed a common market, not a political European Union, in the 1975 referendum.

Lord Liddle, Tony Blair's former EU adviser, who is writing a book on Britain's "Europe dilemma", believes the Conservatives were initially the most pro-European party. But he says of the party now: "They feel Europe is holding Britain back and they have a vision of Britain as an offshore deregulated tax haven which would be a pole for free enterprise in this global race."

Heseltine acknowledges the British have had a "totally different psychological experience" to those on the continent. But he said that even Thatcher, the "most Eurosceptic of modern politicians", discovered a truth when she drove through the Single European Act, establishing the single market.

"Margaret realised that Europe is about dealing. It's about relationships. It's about fighting your corner and forming partnerships and alliances. It is a very obvious piece of political sharing in which you have to give a little to take a little."

Heseltine has a warning for the likes of Dan Hannan, the Conservative MEP who would like Britain to withdraw from the EU and follow the example of Switzerland, which negotiates access to the single market. Thatcher, once again, should be the guide.

"Faced with the prospect of a Europe harmonising and rationalising hundreds of industrial standards, it was quite apparent to her that Britain had got to be actively, positively engaged at the conference table," he says. "Otherwise the Europeans would do in industrial terms what they had done in agricultural terms, which is to fix the rules their way."

Heseltine, a successful businessman who had minted his fortune before entering the Commons in 1966, paused. He then added: "I would have done that if I'd been them." Reported by guardian.co.uk 16 hours ago.

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