Few aspects of British economic policy have generated such impassioned and persistent debate as Britain’s membership of the European Communities. The longevity of the argument over whether membership has benefited or hindered Britain’s economic prospects is partly due to the impossibility of separating the impact of EEC membership from the other international economic events that plagued the troubled decade of the 1970s. The enlargement of the EEC to include the UK coincided with the oil crisis and followed shortly after the introduction of floating exchange rates. In addition, the changes in Britain’s relationship with Europe were the product of longer term trends such as the general reduction in tariff barriers under the auspices of the GATT and the adjustment of companies to membership during the decade between Britain’s first application and final acceptance. A further obstacle in the way of establishing the impact of EEC membership on the UK is the need to judge actual performance against some alternative scenario. The choice of alternative policy obviously profoundly influences the outcome of any cost-benefit analysis.
