The year Guinness wanted to reclassify beer as a foodstuff

Analysis: a 1964 trade dispute between Ireland and Britain has striking parallels to today's post-Brexit landscape

By Michael Kennedy, Royal Irish Academy

Is beer a food or a drink? This problem, reminiscent of Myles na gCopaleen, which vexed a senior Irish diplomat on the last Friday of October 1964, appears in the soon to be published latest volume (1961-5) of the Royal Irish Academy's Documents on Irish Foreign Policy series. Although it took place nearly 60 years ago, this sudden crisis in British-Irish relations has striking parallels to today's post-Brexit landscape.

It was all to do with British-Irish trade, and it was the fault of a new Labour government in London. Britain was importing more than it was exporting and prime minister Harold Wilson suddenly imposed a 15% duty on all imports, including those from Ireland, to balance Britain's trade. The new duties were a surprise to Dublin so Taoiseach Seán Lemass summoned the British ambassador, Sir Geofroy Tory, to Government Buildings to explain.

Britain was Ireland's major export market. Now Irish exports to Britain, apart from foodstuffs, manufactured tobacco and raw materials, were going to cost the British consumer more. This would hit Irish exporters hard. Ireland would retaliate, placing duties on British goods coming into Ireland, hitting the very producers Wilson was trying to help.

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From RTÉ Archives, Sixty Four's John O’Donoghue gets reaction on the streets of Belfast to the election of Harold Wilson's Labour government in Britain

The economies of Britain and Ireland were then, as now, intricately connected. Irish goods already had considerable duty-free access to Britain via agreements painstakingly negotiated before the Second World War. Lemass was alarmed at how the Wilson government had simply ignored these long-standing international agreements when imposing the new levy.

The Taoiseach diplomatically told the ambassador that, perhaps in the rush of events ,the Wilson government had simply overlooked existing Anglo-Irish trade agreements. He added somewhat sorrowfully that, if only London had consulted Dublin in advance, they could have worked it all out. He would meet Wilson for urgent talks.

With Lemass was Hugh McCann, the Secretary of the Department of External Affairs (as today's Department of Foreign Affairs and Trade was then called). As news of the new duties spread, McCann received a letter from the Managing Director of Arthur Guinness and Son. Guinness wanted the Irish government to help it get around the new British duty by reclassifying beer as a foodstuff and over £6m of Irish exports to Britain were at stake.

From RTÉ Archives, RTÉ News report on the arrival of Guinness ship the Lady Patricia in Dublin for its first fill of beer in 1962. The ship's hold was capable of carrying the equivalent of 1.15m pints.

As in so much of British-Irish relations, there was also a Northern Ireland dimension. Guinness had a dominant share in the Northern Ireland market and McCann wondered if this would offset the financial impact of the surcharge on Guinness exports to Britain. He knew the proposed exemption on beer could be negotiated, but one concession here reduced the chances of others on more important manufactured goods. There would be no promises to Guinness.

This was very different to what McCann had expected nearly two years earlier in January 1963 when he took the top job in Iveagh House. He was an experienced trade negotiator and he had confidently expected to soon be negotiating alongside Britain with the European Commission as Ireland entered the EEC with her nearest neighbour.

But less than a fortnight after McCann became Secretary, French president Charles de Gaulle vetoed Britain's entry into the Common Market. The close economic links between Britain and Ireland, as well as a host of political considerations, meant that Ireland’s EEC application now was also on hold. The roadmap for 1960s Irish foreign and economic policy had fundamentally changed.

From RTÉ Archives, RTÉ News report on the opening of a new Guinness research laboratory by Taoiseach Sean Lemass at St James's Gate in Dublin in 1964

Lemass had hoped Ireland would join the EEC by 1965. He believed that free trade with Europe would build Ireland's economy and lead to an improved standard of living for all Irish citizens. Dublin had to revise its plans after de Gaulle’s veto. Lemass planned an interim deal with the EEC and also redoubled efforts to remove barriers to trade with Northern Ireland, a move which had the covert blessing of the Stormont government, and sought to further improve trade relations with Britain.

British-Irish relations had improved hugely since Lemass replaced Éamon de Valera in 1959. Partition notwithstanding, relations between Dublin and London moved from politics to economics, trade and, after 1961, both states’ entry into the EEC. Britain and Ireland had their differences, but they had some common ground over EEC membership. Now, all of this was on hold.

In spring 1963, Lemass responded to de Gaulle's veto by proposing to London no less than a full-scale British-Irish free trade area. A British general election was looming and the Conservative government of Sir Alec Douglas-Home showed little interest. Through the year, the Irish embassy in London built relations with Wilson, the new leader of the Labour Party. Wilson had a strong Irish vote in his Lancashire constituency and was noticeably more attuned to Irish affairs than most of the British political class. When Wilson replaced Douglas-Home in Downing Street, this was one reason why the October 1964 15% duty came as such a shock to Dublin.

From RTÉ Archives, RTÉ News report on British prime minister Harold Wilson hosting a formal Irish Club Banquet in London on St Patrick's Day 1965

It was in this context that Lemass' proposed talks with Wilson in London in November 1964 were significant. They kick-started his British-Irish free trade area plan and began a new chapter in British-Irish relations. By December 1965, Irish and British negotiators finalized a free trade area between Britain and Ireland that came into being in July 1966. EEC membership remained for the longer term as Jack Lynch, who succeeded Lemass in 1966, made clear.

Trade brought prosperity, and not only Dublin and London wanted prosperity, Belfast did too. In the context of recent cross-border trade relations post-Brexit, few have noticed that the 1965 Anglo-Irish Free Trade Area Agreement included an important side document. This protocol allowed Dublin and Belfast to develop separate trading regulations on the island of Ireland without affecting the integrity of the United Kingdom. North and South could move at a faster speed to free up cross border trade as Ireland and the United Kingdom moved towards a comprehensive free trade area. History provides such lessons, but do we want to learn?

Documents on Irish Foreign Policy Vol. XII, 1961-1965, will be published by the Royal Irish Academy in November

Dr Michael Kennedy is Executive Editor of the Royal Irish Academy's Documents on Irish Foreign Policy series

The views expressed here are those of the author and do not represent or reflect the views of RTÉ

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