British conservatism is hard to ignore in relation to the processes of globalization, at least since the long ‘Thatcher decade’ which helped to make British conservatism of considerable importance in the era of the neo-liberal economic consensus and related processes of globalization. [King & Wood, 1999]

The issue of the British Conservative party and Europe since the end of that decade is intimately bound-up with these processes and as such provides and excellent case study to explore the relationship between modern conservative politics and the changing nature of capitalism and global order. The conservative party has always been a ‘broad church’ containing an amalgamation of a variety of conservative political groups and attitudes ranging from the centre right interventionists, through die-hard authoritarian populists, to neo-liberal idealists. As implied above it has been the victory of the neoliberal idealists which has most coloured British Conservative politics in recent times. Thus, while many conservative (and some social democratic) movements and parties have adopted neo-liberal economic policies, none of the other mainstream European conservative parties has embraced the wider implications of an unfettered global economy as warmly as have the British Conservatives.

European Parties of the right have played an important role in developing both elite and popular support for European integration, and the British Conservative party has also played its part in the past as the self-proclaimed and united British ‘party of Europe’. In part this was motivated by a wish to strengthen European defences against communism, and also to cement Germany into a liberal democratic tradition of governance and partnership, rather than leadership. As a result the disappearance of Soviet Communism after 1989 was of great significance with regard to attitudes towards EU, since anti-communism had provided British Conservatism’s main external enemy in the post-war era. Its demise therefore had the effect of disorienting rather than strengthening British Conservative attitudes towards EU. At the same time the potential rise of the now reunited German state to political as well as economic European pre-eminence brought images of the nazi nightmare into the forefront of the minds of some British Conservatives, an attitude reflected in dark mutterings of a dangerous Franco-German ‘axis’ pushing forward a self-interested European agenda at the expense of British national interests.

Two other key structural developments have further undermined the past stability and unity of British Conservatism on the question of Europe. Firstly, the plethora of economic, cultural, and social trends commonly associated with ‘globalisation’, which in various ways bring the nation-state and national identity into question; and secondly the much commented-on ascendancy of liberal lifestyles and the associated spread of multiculturalism. [Giddens, 1994]. It is the former and, in the context of Britain and Europe, the more significant development, which forms the core of this paper.

Finally, since the ratification of the Single European Act (SEA) in 1988/9 the accelerated pace of European economic and political integration has also proved a particular problem for British Conservatives, as many of the forms of political identity which they have traditionally promoted have often been closely linked to an appeal to the sovereign British nation-state, which is increasingly threatened by routinised legal and administrative encroachments emanating from Brussels and Strasbourg.

Conservative accounts of the nation stressed the common values of national culture – common institutions, a shared history and common values – constructing an idealised ‘imagined community’. Reverence for Parliamentary sovereignty was the lynchpin of this vision, depicted as developing not from the abstractions of first principles, but rather evolving organically over past centuries, self-selecting the very best of national traditions and moral fiber. This was, as ever, contrasted highly favourably with French nationalism based upon Roman law, Catholicism and intolerant feudalism. This view was famously endorsed and promoted in Edmund Burke’s conception of the ‘conservative nation’ as an ordered and integrative community. As Philip Lynch sees it:

Lynch asserts that the enduring hold of this ideology within modern British Conservatism has been largely due to its intuitive philosophy and because it has not been static, but has developed over time, adapting or reacting to change, and even proving capable of gradually absorbing some of the themes espoused by its rivals, including ideological nationalism, racism and democratic populism.

As a consequence of this Sovereignty is of both real and symbolic importance in Conservative politics of nationhood, since at the heart of Conservative statecraft is the defence of executive autonomy – expressed as parliamentary sovereignty – representing the ability to govern in the sphere of ‘high politics’ relatively insulated from both domestic and external pressures. British Conservatives tend, therefore, to locate both democracy and legitimacy in the nation state, for them the basic unit of all legitimate politics. In concrete policy terms this means either reverting to a more intergovernmentalist and decentralised EU or, as some, but still a minority, of Conservative Eurosceptics argue, seeking a wholesale reestablishment of Parliamentary sovereignty and British political independence through complete withdrawal from the EU.

The paper concentrates on the British Conservatives’ recent divisions over European integration, against the background of the party’s new-found marginal status in British power politics and draws on material from two of our past ESRC surveys of the attitudes of British parliamentarians to European integration. It will explore how these divisions are related in part to particular understandings of the discourses on globalisation and regionalisation and attempt to show how a powerful strand of post-Thatcher ‘hyperglobalist’ ideology has unexpectedly re-emphasised and bolstered the traditional hypernationalism of the Tory party and caused an increasingly hostile attitude amongst many British Conservatives at both elite and grass roots levels, towards the European project as it is presently constituted.

In May 1997 the British Conservative party suffered its worst electoral defeat since 1832, emerging as more than ever before a party of the South (with three quarters of their seats located there) small to medium sized towns and rural regions. Their parliamentary representation was wiped out in Scotland and Wales, as well as in most of urban England, and they ran second to the Liberal Democrats in Devon and Cornwall [Norris & Gavin, 1997; Dunleavy, 1997; Butler & Kavanagh 1997].

In several important respects they are much weaker now than at any time in this century. [Gamble, 1998] Yet the party had recently enjoyed its longest continuous spell in government this century. In fact, the prior achievements of Thatcherism in forging a new kind of free market consensus politics, real though they were, can now be seen to have exacted a heavy political price on the present Conservative Party. Indeed, the very success of the Conservatives in carrying through a programme of market orientated economic modernisation can plausibly be viewed as accelerating a much longer term erosion of the four pillars which had formed the basis of Conservative political hegemony throughout the twentieth century and the era of mass democracy - the Union, the Constitution, Property and Empire [Gamble, 1995, Lynch, 1998]. Ironically, this party which had made itself pre-eminently the democratic representative of the nation-state and its traditional institutions had, in its quest for economic modernisation, managed to undermine much of the rationale for many of its past attachments.

By the 1990s the party still proclaimed itself the party of the centralised unitary state, expressed as the ‘Union’, but during the Thatcher years it had failed to properly restore its historic links with the Unionists in Northern Ireland, and its dwindling support in Scotland and Wales had crumbled further. [Seawright, 1999] The party which had 50 per cent of the Scottish vote and half the Scottish seats in 1955 found itself in 1997 with no seats and less than 20 per cent of the Scottish vote. The decision by the party leadership to fight for a No/No vote in the Scottish parliament referendum in September 1997 further isolated it from core Scottish opinion, and underlined how much the party had become an English party, centred on the South and East of England and English countryside.

A second great cause, the British Empire, was also gone beyond recall and repeated calls to foster more trade with the Commonwealth could not disguise the inadequacy of any comparison. Even the Falklands episode could not revive past glories. [Ludlam, 1996; Sanders, 1990]. The handover of Hong Kong in 1997, fittingly negotiated by the Thatcher Government, appeared the final chapter. This demise of empire helped further underline the importance of the European Union and Britain's relationship to it. But encouraged by the open hostility of a key section of the Conservative leadership, including Thatcher herself, towards the wider European project as espoused by France and Germany, the party swung increasingly against any further European integration, an opinion which exploded into action during the passage of the Maastricht legislation through the Commons. [Baker et al, 1993] The once proud ‘party of Europe’ became increasing perceived as the party of anti-Europe. The resulting divisions in the party over the question of Europe have meant that the party in recent years has edged steadily closer to its first major split since the struggle over Tariff Reform in the first decade of the last century [Baker et al, 1993; Ludlam, 1996]. The rise of William Hague to the leadership of the party in the wake of the election of 1997 appears to have decisively tilted the balance towards the Eurosceptic wing of the party. But this still left many elder statesmen and powerful figures in the party including Michael Heseltine, Geoffrey Howe, Chris Pattern and Kenneth Clarke still favouring deepening both the economic and political union with Britain’s European partners.

With regard to the third pillar, the old constitutional state and its old ‘Establishment’, this is an institution that most Conservatives still declare undying loyalty to, but in practice during the Thatcher period they waged unrelenting war on many of the professions, institutions, and organisation which composed it, bypassing the civil service and the Lords, and confronting the medical, legal and educational establishments. In this sense the state was indeed ‘hollowed out’ and many of the unwritten understandings and easy compromises of ‘the usual channels’ upon which it had rested were weakened or destroyed. Perhaps the most graphic image of this process the 1980s was the unprecedented refusal by Oxford Dons (on a free vote) to countenance the traditional award of an honorary doctorate to its former student and PM, Margaret Thatcher. Under her leadership the Conservatives themselves became the gravediggers of the old constitution, and helped create the conditions in which radical reform of the constitution have become possible under Tony Blair’s New Labour. [Moran, 1999]

A similar story can be told in relation to the fourth pillar, property. Throughout the twentieth century the Conservatives were the party of property, the umbrella for the defence of all property interests against the threat posed by the spread of socialist ideas across the growing British Labour Movement. They successfully portrayed Labour (and before them their fellow bourgeois party rivals the Liberals) as the anti-business party, lacking economic competence. But the end of the cold war and the weakening of organised labour, partly through the actions of the Thatcher Government and party through market mechanisms, have changed the terms of the domestic political debate. Labour’s links to brute trade unionism have been considerably weakened, and the business coalition behind the Conservatives has fractured, and the automatic identification of business with the Conservatives has ended, at least temporarily. Of great significance in the context of this paper, on certain issues such as the European single currency, significant sections of business have deserted the Conservatives. [Greenwood and Stancich, 1996]

The party therefore faces a very difficult task in rebuilding itself in the new millennium. Even as the confidence of the Blair Government wains in mid term, it lacks clear ways of differentiating itself from New Labour electorally without resorting to populist issues such as asylum seekers and law and order. Its membership is declining and ageing [Whiteley et al 1994]. Its leader, William Hague, is an able parliamentarian, who has restored the core Conservative vote in England by populist appeals to tougher law and order policies and anti-asylum seeker rhetoric, and his attacks on Labour’s ‘spin’ rather than substance have also struck a cord, but he and his cabinet colleagues have little popular appeal and he know full well that elections tend to be won or lost on the ‘big issues’ of the economy, health and education. Alternative strategies for identifying the party as a distinctive entity in contemporary British domestic politics appear limited as there is now a broad consensus on macroeconomic management, taxation and public spending, and industrial policy [Kelly, 1997].

However, it is of great significance for our argument that this domestic policy consensus in no way extends to the future of the European Union, and Britain’s part within (or without) this process, and so a more or less united Conservative party can still hope to gain much from a adopting a populist policy critical of the EU. In this ideological arena there are some distinct advantages of adopting a hostile attitude towards Europe. The popular press and in particular those broadsheets under Rupert Murdoch’s ownership, have continued to hound the Blair government over the issue of keeping the Pound, and have relentlessly attacked Europe as a bureaucratic, high tax and irredeemably undemocratic and centralising entity, with an anti-German subtext in some cases.

A number of significant ant-European ginger groups and even single issue political parties have also emerge recently. Admittedly they have different agendas. Some are pro-European, but anti-euro, including Business for Sterling, headed by ex-Labour, now cross-bench, peer and businessman Richard Marsh; backed with City expertise and money; and New Europe, chaired by Lord Owen, former Labour foreign secretary and SDP leader, a group supported by former Labour chancellor Lord Healey, and Lord Prior, a prominent ‘wet’ Thatcher cabinet member. Others, are anti-euro, and against any further loss of sovereignty to the EU – these include the Institute of Directors, the European Research Group (chaired by Sir Michael Spicer); the European Foundation (run by Tory Bill Cash) and the Bruges Group, the main academic group behind Lady Thatcher's famous Bruges speech, condemning federalism – of which former Chancellor Lord Lamont is a high profile supporter. Finally, there are the vociferous anti-European and pro-withdrawal groups such as Global Britain, run by the rightwing peer Lord Pearson of Rannoch; the Democracy Movement run by the Yorkshire IT millionaire Paul Sykes; and the UK Independence Party, an anti-EU party which won three seats in the last Euro-elections. Add to this the anti-Euro press and take a look at recent opinion polls which show two thirds of those polled are for keeping the pound and around a third favour actual withdrawal, and there now appears to be a considerable populist potential available for the Conservative party to tap into and exploit.

However, amongst the biggest difficulties which the British Conservative party faced in rebuilding its national electoral base and political standing after 1997 was in resolving the damaging split over its policy towards European integration amongst its MPs and MEPs. Until this issue was settled it would be difficult for the party to unite and offer a credible alternative to new Labour which could wrest back the political initiative.

The problem here is that there are still many prominent Tories and members of the business elite who either sympathise with, or are active supporters of, pro-euro and pro-European groups. The creation of a pro-European Conservative Party for the 1999 European elections underlined the continuing fault lines on the centre right of the political spectrum over EU. The most important umbrella group is undoubtedly Britain in Europe, whose founding Chairman, Lord Marshall, was also chairman of British Airways. The Board and Council include most of the top establishment and the great and good, including Lord Jenkins of Hillhead, Lord Howe, Michael Heseltine, and Peter Mandelson. Groups affiliated to Britain in Europe include: the European Movement; the Centre for European Reform (a centre-left think tank); the Action Centre for Europe (a centre right think-tank chaired by Lord Howe); the Labour Movement for Europe; the Conservative Group for Europe (chairman John Gummer); and the Tory Reform Group (president Kenneth Clarke). Not affiliated, but sympathetic groups, include the Confederation of British Industry and the British Chamber of Commerce. To this list should be included global manufacturing actors such as Toyota and Ford, which view the artificially high pound outside the Euro-zone as highly damaging to their local profits.

The divisive issue of ‘Britain in Europe and Europe in Britain’ has a long and complex history [Baker & Seawright, 1998] and the way in which it has been debated has been shaped in the past by particular contexts. Arguably the most important long term change in attitudes was brought about by the collapse of the Bretton Woods international financial regime in the early 1970s. Since then the context in which national economic policy-making and European integration has been discussed has been dominated by the growing issues of globalisation and regionalisation, vis-à-vis whether these trends actually exist, and what the policy implications of them should be.

In relation to the domestic debate in the UK three perspectives are of particular importance, both in understanding the divisions inside the Conservative party and also the attitudes of the broader British political and business elites concerning the process of EU and Britain’s future role within it. From the outset it should be recognised that these are heuristic categories and therefore not necessarily entirely distinct in the real world of day to day political discourse. Indeed, there can be considerable overlap, and even deviations from these notional norms in practice. The three positions are: hyper-globalisation, national political economy, and open regionalism. The first two positions allocate priority to national sovereignty and the importance of the nation-state; the third emphasises instead Britain’s growing interdependence in the world.

The first perspective in the globalisation debate has been termed hyper-globalisation [Perraton et al, 1997; Held, 1999]. The proponents of hyper-globalisation argue that the changes introduced by globalisation are so profound that they have altered irrevocably the political economy context of national policy-making. The powers of the nation-state are depicted as being ‘hollowed out’ by a huge increase in capital mobility due to the computerised financial and commercial flows which have created for the first time a global (as distinct from international) economy whose major ebbs and flows national governments are simply powerless to control.

The policy implications for this are considerable since there is little if any room left for discretionary policies aimed at protecting, subsidising, or fine-tuning the national economy. The programmes and policy stances of national governments in the preceding era of social democracy - including Keynesian economic management aimed at giving priority to growth and employment - simply no longer work. Instead priority must be allocated to maintaining macroeconomic stability - defined narrowly as the control of inflation and fiscal balance. It is suggested that Governments which attempt to pursue traditional interventionist or social democratic objectives quickly lose the confidence of the financial markets, as the British Government did in the IMF crisis in 1976, the French Government in 1981/2, or the Swedish Government in 1994. In each case, so the argument goes, the massive and sustained outflows of capital, the refusal to extend credits, and the actual or threatened collapse of the currency, forced a swift change of policy. To remain a member of the open and global trading network governments have learnt that they must implement polices which command confidence in the financial markets [Gill, 1998].

National governments therefore become ciphers for policies which they do not themselves determine. As Margaret Thatcher put it in a memorable phrase ‘You cannot buck the market’.

Much of the more esoteric discourse on hyper-globalisation is both anti-political and fatalistic, and in some of its variants supremely optimistic about the benign opportunities and long-term effects of largely, if not entirely, unregulated global markets [Ohmae, 1995]. Nations and states can wither away with little noticeable long-term ill-effects for popular democracy or general human well-being. Their only task is to facilitate the adjustment of the national economy and national institutions to the requirements of global competition, removing all forms of regulation - for example friction in labour markets, which hinder market flexibility - and are properly concerned with reducing all extraneous burdens on industry, especially taxation and social costs, to the absolute minimum.

The standpoint of hyper-globalisation is, therefore, a difficult one for any political party to embrace, since most political parties are rooted in the institutions of the nation-state, for which hyper-globalisation theory, in its more extreme formulations, sees no future. This would appear particularly true for the British conservatives, wedded as they are to the nation state as the supreme political base for ordered, legal and democratic government. [Lynch, 1998]

But there is a way of attempting to reconcile an attachment to the concept of the nation as a key agency in governance, with a belief in the economistic and deterministic hyper-globalisation perspective. Indeed, this position has come to represent a dominant strand of thinking within the British Conservative party over recent decades. In this approach a programme of low taxation, low government spending, deregulation, and privatisation is combined with strong attachment to national sovereignty and the nation-state as the guarantor of national identity and national independence. The national policy making constraints of globalisation are welcomed because they rule out the kind of social democratic and socialist measures which are viewed as incompatible with British national identity – forcing the government to set the people free whatever its ideological predilections. [Holmes 1996; Portillo 1998].

This approach informs the attitude of many British conservative Eurosceptics on the European Union and European integration. The European Union is viewed as a long-term project designed (largely by a Franco-German axis) ultimately to create a federal super-state which would impose unacceptably high levels of taxation, spending, and regulation on its UK component part, making the UK economy uncompetitive in global markets. In so doing it is undoing the hard-won market disciplines created during the Thatcher era in the 1980s as an expression of the democratic preferences of the majority of British people.

In its most highly developed form the correct policy for Britain flowing from this analysis is regain parliamentary sovereignty in order to seek to become a de-regulated, privatised, low tax, low union, low state spending, offshore island, which would take full advantage of its links with markets in North America and East Asia, a policy programme once known in Britain as the ‘Hong Kong’ solution, until Hong Kong was reunited with China. [Holmes 1996; Spicer 1992]. But what remains central to this perspective is the vision of national political and economic independence – seen as crucial for protecting the economic policy which can help the economy adjust best to globalisation, while leaving the nation state intact to represent national traditions and proper democratic accountability.

The implications of this approach is to deem the EU with its federalist and protectionist practices and intentions to be a dangerous obstacle to such natural developments in the global marketplace. At its most extreme it leads to the advocacy of complete withdrawal; at the very least it seeks to reverse the federalist tide to the position pre-Maastricht. Leading advocates of this position in the Conservative party have included Michael Portillo, Margaret Thatcher, Norman Tebbit, John Redwood, Peter Lilley, Michael Spicer, Lord Lamont and Bill Cash. It is also a stance which has also recently found some favour with William Hague.

A second broad position in the globalisation debate argues strongly against the accuracy of the globalisation thesis as a model of the real world in which we now live and defends the continuing viability of social democracy and other competing nationally-based economic policy regimes. This view recognises that there have been significant changes in the way in which the international economy has been organised in the last thirty years, but it insists that it has not mutated into a global economy, and that nation-states, on the whole, have not declined in power. The Globalisation thesis is depicted therefore as seriously misleading on the extent and scope of the changes in the international economy and how they have affected politics In this model the world economy is still international rather than global. A global economy is defined as driven by supranational forces and co-ordinated by transnational institutions such as transnational corporations, while an international economy is one which is managed through bi-lateral and multi-lateral negotiations between nation-states and in which therefore the sovereign nation-state remains the key administrative and political institution. [Hirst & Thompson 1996].

Seen from this perspective the contemporary ‘international’ economy is based on large annual trade and investment flows between three dominant centres - North America, Europe, and Japan. But these flows, though sizeable, are seen as relatively small in relation to domestic GDP and do not amount to the all-embracing supranational global economy pictured by many theorists of globalisation. If certain market-orientated policies are being imposed through the world economy on all states, even the most powerful like the US, the explanation is to be sought in the policies pursued by the dominant states in the international economy, and not in impersonal, structural economic forces operating purely at the global level.

This position argues that different nation-states have different capacities and face different constraints, so in any period some are advancing while others are declining, but that there is no universal pattern yet discernible. Consequently opportunities for states to exercise autonomy in economic policy making remain considerable, and are shown to be so by the diversity of response and experience which is evident around the world. Proponents argue that if the globalisation thesis were true, a much more uniform pattern of policy and performance and economic development would have been established.

In political terms this argument means that still existing sovereign national states are not simply obliged to accept a regime of unfettered economic liberalism. The aim of policy regimes inspired by social or christian democratic ideologies are understood to be to stabilise and regulate capitalism, containing the scope of market forces [Hirst 1999]. The alternatives, including interventionist social democracy and paternalistic and corporatist christian democracy, remain at least potentially viable. National governments are still able to pursue these aims by promoting growth and full employment and tackling inequalities of power and wealth, without necessarily abandoning participation in the world economy, indeed this may strengthen their competitive edge through better education provision and improved transport infrastructures. This process, it is further argued, also requires the creation of new mechanisms of governance at the international level, to deal with problems cause by unregulated financial markets and unstable currencies, and to protect the ability of national governments to pursue distinct welfare and industrial policies. It also means accepting that important aspects of economic governance, such as industrial policy, will increasingly be supplied at the sub-national level.

The key assumption of this position is that if the world economy remains an international economy rather than a global economy, and therefore that what happens in it still depends to a significant extent on ‘real politics’ – that is, on the political will democratic choice and political programmes of its constituent states. Thus, while the architecture of this international economy was changed in the 1970s and 1980s by a particular constellation of political forces, which was unfavourable to social democracy and welfare conservatism, it can be changed again. [Cerny, 1990] Globalisation has not created a race to the bottom, a process of competitive deregulation, in which all the gains of social and Christian democracy have to be sacrificed, nor has it created a general crisis of the welfare state [Vandenbroucke 1998].

At one time this perspective would have embraced protectionism as a central focus for policy, as in the Social Imperialism of the Chamberlainite wing of the Conservative party which dominated its thinking on economic policy in the first half of the twentieth century. This tradition has all but disappeared, and in fact support for protectionism is now very limited in the UK. Support within the Conservative party for the notion that the nation state is still capable of playing its traditional post World War II role in economic management and regulation is still strong. For some, Conservatives it is simply a case of national government pursuing traditional economic objectives, but doing so in a more light-footed manner, where possible in concert with our closest trading allies in Europe which can be presented in a way which does not invite the wrath of the international markets.

Within the British Conservative party the national political economy (or ‘intergovernmentalist’) perspective has been most associated with John Major and to a lessor extent, William Hague. Both support Britain’s continued membership of the EU, but have opposed measures of integration that require ceding further powers to supranational agencies in the European Union – especially the creation of the Single European Currency. The safeguarding of national independence remains the key priority in this perspective as in the hyper-globalisation perspective, but whereas many of the conservative hyper-globalists have come to the conclusion that the European Union represents an obstacle to healthy globalisation, because it is irredeemably federalist and interventionist in conception, the national political economy perspective accepts the pragmatic arguments for European cooperation as securing markets and a greater say in world affairs, and is strongly against withdrawal from the European Union.

Its position was well expressed in the already mentioned cross party group New Europe, formed in March 1999 to oppose Britain’s participation in the euro, and headed by David James Prior the former senior Conservative Cabinet Minister under Margaret Thatcher and leading internal critic of Thatcherite economic policies, and Denis Healey the former Labour Chancellor of the Exchequer and Deputy Party Leader.

The third broad position which has structured the British debate on globalisation is ‘open regionalism’. The theoretical position underpinning does accept the globalization thesis, in that the economic trends which make up the new world economy of the last thirty years are in certain respects qualitatively new, but it does not accept the more extreme formulations of the hyper-globalisation thesis [Perraton et al 1997].

On the one hand proponents insist that nation-states remain important political actors on the global stage, but on the other they reject the claims of the national political economy school that there has been no substantial erosion of the capacity of nation-states, and in particular, the view that globalisation, in policy terms, represents a set of choices which can be reversed. From this perspective, the changes represented by globalisation, particularly in relation to global financial markets, are real and enduring changes in the very architecture of world politics and have also vitally altered the context for national economic policy making. Certain policy stances and policy choices are simply no longer viable, but this is seen as far from meaning that national governments are left without any real choice as the hyperglobalists argue.

This is, at root, a regionalist perspective of global and national politics. Central to open regionalism is the relationship of the UK to the process of European integration. In this perspective the development of new forms of regionalism in several parts of the world does not run counter to globalisation, but is rather an important step which helps promotes it. It therefore rejects the interpretation of the ‘new regionalism’ school, which sees this as prefiguring a return to a world of rival closed economic and military blocs [Gamble & Payne 1996].

The very term open regionalism signals that these regional blocs such as the EU are not mere protectionist fortresses, but part of a wider system of new and essentially healthy forms of governance and regulation of the global economy. They remain open to world trade and subject to its rules. Yet at the same time they facilitate the creation of a new political space, a process which has gone furthest in Europe, which allows the discussion of common concerns, and the elaboration of new forms of governance, of which the most recent and most important examples have been the project of economic and monetary union and the associated launch of a single currency, the euro, at the beginning of 1999.

From the perspective of open regionalism traditional goals of national economic management are now best pursued at the collective level of the European Union, rather than left to the nation-state alone. The trade unions in Britain and the majority of Labour parliamentarians have become firm supporters of Britain’s membership of the EU and early participation in the euro for exactly this reason. Memories of the macro-economic policy failures of successive post-war Labour governments and the failure of the AES are bitter. The benefits of co-operation at the EU level to achieve and support macroeconomic stability and competitiveness, combined with high domestic levels of spending on welfare, health and education, and the extension of citizenship rights, are regarded as outweighing any deregulatory market-driven disadvantages.

Adherents of this approach differ on the kind of economic and monetary union which they seek, on how many powers should be exercised at the European level, and about how desirable (or necessary) further democratisation of EU institutions actually is. What unites them however is the belief that a regional framework of governance is an indispensable tier in the search for new and better ways to regulate the economy and deal with the new and insuperable challenges posed by globalisation to the old stand-alone sovereign nation states.

The open regionalism perspective therefore makes two key criticisms of the other two perspectives. First at an empirical level, it takes a different, and more nuanced interpretation of the evidence on the extent of the globalization of economic activity. But the second, theoretically based criticism, should also be noted. This rejects the way in which the ‘globalisation debate’ has been constructed by proponents of both the national political economy and hyper-globalisation perspectives. Both start from the assumption that in a globalised world trade and investment flows will increasingly result in convergence around an idealised model of a perfectly functioning market system. Hence, they base their argument on evidence about the extent to which actual trade and financial flows depart from what would be expected given a fully integrated and freely functioning global economy.

In contrast open regionalists stress that globalisation should be thought of as a historical process rather than an outcome. The historical process involves the shift towards the increased spatial reach of networks and systems of social relations; to transnational, and transcontinental, patterns of social and economic organisation [Held et al 1999]. Globalisation does not necessarily imply the incremental erosion of institutional diversity in the global economy; nor does it reflect a linear progression towards a world economy dominated by frictionless markets. Indeed increased regionalisation of economic activity and continued and even enhanced democratic governance is understood as an integral part of the move towards the greater intensification of interconnected world economic activity.

The open regionalism perspective is associated in the UK with many in New Labour, the bulk of the Liberal Democrats, and the most pro-European wing of the Conservative party. The latter includes many prominent Conservatives including Kenneth Clarke, Michael Heseltine, Edward Heath, Geoffrey Howe, Leon Brittan, and Chris Patten. It has strong support from the Party’s existing MEPs (although future reselection processes may change that) as well as the majority of the business community. [Baker and Seawright, 1998].

The sharp divisions in the Conservative party over Europe are revealed in the following tables derived from our surveys of British MPs and MEPs conducted in 1994 [ESRC R000231298] and 1998 [ESRC R000222397]; we maintained 24 attitude statements common to both surveys and thus directly comparable on the various aspects of European integration. These statements elicited Likert type responses of Strongly agree, Agree, Neither, Disagree and Strongly disagree. A sample of the wide range of issues covered by these statements are set out in Table 1 and Table 2 below where we have ‘collapsed’ the responses into agree and disagree categories.

The responses to the statements clearly reveal the now even greater level of euroscepticism in the present Parliamentary Conservative Party [PCP], an increase of scepticism from an already extant high that we found in the previous PCP survey of 1994. But the data also provide an extremely useful insight into our three particular positions in the globalisation – regionalisation debate; that of hyper-globalisation, national political economy, and open regionalism, vis-à-vis the Parliamentary Conservative Party. To reiterate these categories are not mutually exclusive and we should expect a degree of overlap in practice, particularly in our first two positions which give priority to national sovereignty and indeed that is what we do find in Tables 1 and 2.

With our crucial ideological dimension in mind, i.e. the split between interdependence and sovereignty in the Conservative elite, we see from the data in both the tables that the advocates of national sovereignty within the Party are winning out in the European debate, while the position of the adherents to the open regionalist approach have been further marginalised. We see this marginalisation, of the ‘integrationist Conservatives’, quite clearly by viewing statements [2.8 through 2.11] in our Table 2. Around two thirds of the Parliamentary Party are opposed to the most recent of the ‘common concerns’ of the EU, the single currency project. We should not be too surprised to find that Conservative MPs, once bitten by ERM, are twice shy about the possibility of rejoining it [2.10]. Moreover, two thirds of these MPs want no part in a project which they see as sounding the death knell on national sovereignty for the UK [2.11] and there is near unanimous antipathy to any ‘Euro-Keynesian’ implication of budget enlargement [2.8]. This antipathy to the elaboration of new forms of governance is starkly portrayed in table 1.

Whereas the advocates of an open regional approach would not balk at the supranational strengthening of EU institutions, to resemble the normal ‘executive – legislature’ relations of a liberal democracy, the vast majority of Conservative MPs’ views are still firmly rooted in the institutions of the nation state. Indeed, we find a 19 per cent rise, to 69 per cent in this Parliament, in the number of MPs who believe that a Supremacy Act should be passed which would in reality challenge the Treaty of Rome [1.1]. And 83 per cent now believe that a single European Army would undermine the UK’s security [1.6], and an astonishing 90 per cent would like to see QMV blocked for foreign and defence policy [1.5]. Nearly two thirds of the MPs would like to see the Commission lose its capacity to initiate EU policy [1.2], thus aborting the idea of the Commission as an embryonic executive. This opposition to the irredeemable federalist conception of the EU is illustrated by the extent of the change in the views of MPs on the concept of subsidiarity. Rather than accept the ‘German Catholic’ original meaning of subsidiarity, that decisions should be taken at the appropriate level of government, the greater number of Conservative MPs [45 per cent] now believe that subsidiarity merely facilitates the federalist tendency [1.4]; up from the level of just 28 per cent in the previous Parliament who held such a view.

Furthermore, when integrationists of the open regional school of thought talk of the ‘democratic deficit’ in the European Union, the usual inference is one of strengthening the EU Parliament, in the belief that his would make the EU more accountable to the people of Europe. But, in stark contrast, an overwhelming majority of Conservative MPs view the ‘democratic deficit’ as being due largely to a lack of scrutiny by national parliaments [1.3].

Returning in more detail to the statements in table 2, cognisant of the MPs’ views on the constitutional issues from Table 1, we see that the future debate within the Conservative Party may well be one of ‘national political economy’ versus ‘hyper-globalisation’; between those who believe in pragmatic arguments within the present European structures in order to obtain their goals and between those who believe that this can only be achieved by a fundamental re-negotiation of the UK’s position vis-à-vis those structures. The problem for William Hague, similar to his predecessor’s position, is that most of his MPs do not believe that such desirable goals of ‘reducing employers’ social costs’ [2.6] and ‘flexibility in labour markets’ [2.7] can be procured through a principle of a European strategy on deregulation [2.1] or indeed through one on privatisation either [2.2]. In fact, there is no better illustration of this antipathy to European structures and European solutions to such issues than when we turn our attention to their views on the thorny question of taxation. Only one per cent of the MPs could accept the harmonisation of income tax [2.4], while the numbers advocating the harmonisation of ‘Company Tax [2.5] and VAT [2.3] have all but halved since our first survey in 1994.

Unfortunately, we did not ask MPs in 1994 if they were prepared to countenance UK withdrawal from Europe [since at the time this appeared to remain off the agenda], but in 1998 we found that over a quarter of Conservative MPs, at 26 per cent, were prepared to accept this ‘nuclear option’ and 11 per cent were undecided on the question. It is clear then that Mr Hague still has fundamental problems on the issue of Europe, not only from the small number of prominent Conservatives from the pro-European wing of the party who oppose the Party’s inexorable sceptic path but there may also be future problems in balancing the ‘national political economy’ wing with those of a ‘hyper-globalisation’ persuasion.

The nature of this clear split in the ranks of the British Conservatives on Europe explains why the party has become so difficult to manage in recent years. The split is not just between the intergovernmentalists and open regionalists. The hyper-globalists are a strong faction as well, and have moved to a position which implies withdrawal from the EU altogether as preferable to being forced into further integration and the Tory leadership has to balance all three factions. The position in the Labour party is considerably simpler as far as party management is concerned. The bulk of the party has moved to the open regionalism perspective, although national political economy arguments remain strong on both the right and left of the party. Of great interest is the fact that while the Labour leadership sometimes employs hyper-globalisation language, but in reality its practical policy commitments derive firmly from the other two perspectives.

Significantly, in the rest of the present European Union the fundamental divide over Europe amongst conservatives and christian democrats is between the national political economy perspective and the open regionalism position.[Benoit, 1997] Mainland euroscepticism is predominantly a phenomenon of the national political economy perspective - a belief in maintaining the importance of the national level of regulation and intervention, and resisting the transfer of further powers to a European state. What makes Britain stand out is the presence of the hyper-globalist conservatives as a significant factor in the national debate, and in particular in the ranks of the Conservative party and media.

The appeal of the hyperglobalisation in the UK reflects in part the legacies of Britain’s past history which have shaped the exceptionalism of the British political elite. [Krieger, 1999, Ch 8] Britain exercised hegemony in the global economy of the nineteenth century through an open seas policy - one which emphasised free trade and free movement. At the same time the creation of a domestic free market involved minimal government and at first the removal of most of the restrictions on economic activity which had hitherto existed. The nineteenth century policy regime came to be viewed as an ideal, and reflected the particular organisation of industry, finance and commerce in the UK.

This open seas policy came under increasing pressure from the 1880s onwards and led to the growth of rival and powerful national political economy perspectives, notably social imperialism, which relied heavily on converting Britain’s formal empire into a trading, financial and industrial bloc within the world economy. But the attachment to the liberal open seas policy remained, and when there was an unexpected opportunity to revive it after 1945, under American leadership, the British political elite was not slow to grasp it. Since the 1940s this ‘Atlanticism’ has been a key part of British policy, and it is this which explains much of the exceptionalism of the British political elite to the process of European integration.

Significantly then other major liberal democracy where conservative hyperglobalists are a significant, some would say dominant element in the national debate is the United States and no other political elite or party in the European Union has the same kind of material links or the same kind of ideological attachment to the United States as do the British Conservatives. So strong is this ideology that all the major parties have this attachment to some degree, but it is complicated in the case of the Conservatives because of the particular politics of Thatcherism and its legacy within the Conservative party, which has meant an extreme emphasis both upon the importance and inviolability of the national state and identity (seen at its height during the Falkland’s campaign), as well as upon the supreme importance of markets as a guide to public policy.

Modern Euroscepticism is not a uniform phenomenon. In each country of the European Union where it is strong, it is associated with specific national features and traditions. But a common strand running through European Euroscepticism is the desire to protect the ability of the nation-state to determine its own policies however defined) and resist the creation of greater sovereign supranational authority. What is striking however is in no other EU country apart from the UK does there appear to be a Eurosceptic position which is closely linked with a hyperglobalisation stance.

On the contrary, in France for example, where Euroscepticism has at times been strong, European integration, the Maastricht treaty, and EMU are all seen by Eurosceptics as manifestations of a dangerous process of globalisation [Benoit, 1997]. What is also striking about France, however, is that Euroscepticism became a strong populist movement in the 1990s, but although it made some inroads particularly into the RPR [Alexandre & Jardin 1996], it did not manage to capture a major party as occurred in Britain. The other major centre-right party, the UDF, remained firmly committed to the pro-European consensus, as did the leadership of the RPR.

Euroscepticism also has a particularly strong populist element in the UK, particularly as expressed through the popular print media, [Wilkes and Wring, 1996] However, whereas in other EU countries with powerful Eurosceptic movements, such as Denmark, the opposition is centred on popular grass roots movements opposed to the pro-European policy of political elites, in Britain the political class itself has been badly divided over the merits of European integration.

If the case for Britain joining EMU eventually becomes economically overwhelming this could make the issue of Europe ‘in or out’ the single most dangerous policy issue for any future Conservative administration. Any future referendum on the issue would certainly see the party and its business backers badly divided. The split between the intergovernmentalists and open regionalists will also be further exposed, (and within Labour too) but for the Conservatives the extreme hyperglobalist third position of withdrawal from the EU altogether would also surface as a real possibility, with powerful constituency and electoral support. If and when this occurs, conservative and christian democratic forces on mainland Europe, located as they are almost entirely in an intergovernmentalist and open regionalist discourse over Europe, are likely to remain largely mystified by these hyperglobalist and national populist based attitudes amongst British conservatives. American conservatives, on the other hand, will recognize this position and may be only too willing to lend a helping hand if necessary. In that sense, at least, there is still a very ‘special relationship’ between these two continents-apart conservative political cultures.

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