Margaret Thatcher: Power and Personality (44 page)

The British negotiators, Lord Carrington and his House of Commons spokesman Ian Gilmour, did better than expected. They improved the rebate terms by £50 million, and extended them into a third year. So they returned from their all-night negotiations in Brussels with some satisfaction, only to be greeted at Chequers by an extremely dissatisfied Margaret Thatcher, who did not even offer them a cup of coffee. ‘Had we been bailiffs arriving to take possession of the furniture,’ recalled Ian Gilmour, ‘we would probably have been more cordially received. The Prime Minister was like a firework whose fuse had already been lit; we could almost hear the sizzling.’
³²

The fireworks chastened Carrington. His Assistant Private Secretary, Stephen Wall, remembered ‘his mixture of exasperation tinged with reluctant admiration, that after he and Gilmour had negotiated for days and nights, and secured a deal … Margaret Thatcher should treat them as if they were schoolboys who had failed to produce their homework to the standard required.’
³³

In the end, the schoolboys outwitted their schoolmistress. Gilmour ignored the Prime Minister’s fulminations and briefed the press that a diplomatic triumph had been achieved. Carrington put his foot down in cabinet and insisted that the deal he had signed in Brussels must be honoured. Faced with such a rebellion, well supported by other senior figures in the government, Margaret Thatcher had to back down. It was almost the only occasion in her first year of power when the collective will of her colleagues forced her into a course of action to which she was strongly opposed.

These early experiences of EEC summitry did not teach Margaret Thatcher the lessons she might have learned from them. She should have realised that progress in European diplomacy is not always achievable by advancing like a battle-tank with all guns firing. She would not have liked the French phrase
réculer pour mieux sauter
, but she needed to know that more subtle methods of negotiating could achieve the desired results.

Subtlety did not come easily to her personality. It was one of the reasons why the politics of Europe eventually became her downfall. But whatever annoyance she caused by her trenchant style of negotiating in 1979–1980, she did deliver a budget rebate for Britain that was far larger than anyone had expected. So in
the short term, her undiplomatic diplomacy paid off. It was a substantial and enduring achievement.

A SLOW START TO THE SPECIAL RELATIONSHIP

The highest priority for Margaret Thatcher in foreign policy was strengthening the Anglo-American alliance – a cause in which she had believed passionately ever since her wartime childhood in Grantham when US servicemen had been a memorable presence in the town. But by 1979 the special nature of this alliance was now fading. According to a CIA report written for President Carter in October 1979, ‘The “Special Relationship” between the United States and the United Kingdom, finally, has lost much of its meaning. The United States is no longer significantly closer to Britain than to its other major allies.’
³⁴
President Jimmy Carter annotated this observation with the comment, ‘Partly accurate, partly fallacious’.
³⁵

The same ambivalence characterised his attitude to the new British Prime Minister. A week after her election, the US National Security Adviser, Zbigniew Brzezinski, sent the President a memorandum advising him, ‘It will take patience to deal with Mrs Thatcher’s hard-driving nature and her tendency to hector’.
³⁶

Carter seems to have found this warning accurate. ‘A tough lady! Highly opinionated, strong willed, cannot admit that she doesn’t know something’, was his private comment after seeing her at the G7 summit in Tokyo.
³⁷

Their next encounter came on her visit to Washington in early December. America was in the throes of the Iranian hostage crisis created by the seizure of the US Embassy and fifty-two American diplomats in Tehran. Margaret Thatcher mistakenly took the view that this was a domestic problem for America, on which a visiting foreign leader should not publicly comment. Lord Carrington had to work hard to change her mind. But he succeeded.

At the arrival ceremonies on the White House lawn, the Prime Minister came out with a ringing statement of solidarity. ‘At times like this you are entitled to look to your friends for support. We are your friends, we do support you. And we shall support you. Let there be no doubt about that.’
³⁸

After these words, which resonated profoundly with Washington’s need for reassurance from close allies, the rest of the Prime Minister’s visit was a
triumphal progress. She was serenaded at a White House banquet in her honour by a choir that included Kirk Douglas and Secretary of State Cyrus Vance. She was acclaimed for her address to Congress and for her speech to the Foreign Policy Association of New York. There was a section in both audiences that virtually fell in love with Margaret Thatcher’s personality. Her forthright style of answering questions and her robust views on issues ranging from free-market economics to Soviet expansionism created a fan club of American conservatives which grew for many years.

During the twenty months while they were in office together, President Jimmy Carter and Margaret Thatcher got on better than either of them expected. She admired his Christian faith, scientific knowledge and personal sincerity. But she thought he was inadequate in his understanding of economics and of the Soviet threat.

After the Soviet invasion of Afghanistan he felt she was the weaker partner, sheltering behind legalities and technicalities in order to avoid imposing the toughest possible sanctions. ‘I would hope that you would not be so, excuse me using the word, adamant’, he said to her during a 28 December call to Chequers when the British seemed to be having too many reservations about a US draft of a Security Council Resolution.
³⁹
Evidently, the President had not learned in his dealings with the British Prime Minister that it was in her nature to be ‘adamant’ about most things.

Despite their differences of political and diplomatic outlook, the two leaders did much useful business together. Among their strategic agreements was the replacement of Britain’s ageing Polaris nuclear missile system with the purchase of Trident, and a deal which allowed a large US expansion of its military facilities on the British island of Diego Garcia. But Jimmy Carter and Margaret Thatcher were never kindred spirits. That personal rapport and the revival of the ‘special relationship’ that went with it had to await the election of Ronald Reagan.

REFLECTION

The Carrington–Thatcher partnership was a fruitful one for British foreign policy. For all her inexperience, she did jolt him and the diplomatic establishment into more robust stances. For all his amusing cynicism, he was strong
enough to stand up to her when she was being impossible. As a result, they jointly had some considerable successes on Rhodesia, on the British budgetary rebate in Europe and in strengthening the ‘special relationship’ with the United States. Yet sometimes their co-operation resembled that of a patrician trainer working with a headstrong racehorse. Carrington could cajole or turn her away from what he regarded as a disastrous course. But he never managed to restrain her from her rudeness, particularly to the Germans.

‘My dear Peter, please explain me something about Mrs Thatcher’, enquired the new German Chancellor, Helmut Kohl, after a couple of bruising European summits with her. ‘Could you tell me why she treats me as though I was the most junior and least important member of her cabinet?’

‘My dear Helmut,’ replied Carrington, ‘she treats all of us like that – and you are lucky, for she would be far worse if you really were in her cabinet.’
⁴⁰

The reasons why Margaret Thatcher never established good relations with the four Franco-German leaders she had to deal with – Giscard, Mitterrand, Schmidt and Kohl – were a combination of the visceral, the political and the personal. As a child of the Second World War, she could not forget the shadows of Nazi Germany and Vichy France. She had moved on, but not nearly as far as most British people who had been teenagers in the dark days of the 1940s when England stood alone.

What might have convinced her to change her attitudes would have been a willingness on the part of the key European leaders to engage with her in forensic arguments about issues on the agenda of the EEC. But these leaders were broad-brush declarers of intent, while she was a master of detail. This was a gulf that could not be bridged. She became as contemptuous towards them as she could be towards her own ministers when she realised they had not done their homework. There could be no dialogue and no meeting of minds between Margaret Thatcher and those who had not studied their briefs, however eminent they might be.

The only one of the big four in Europe for whom she developed a soft spot was President Mitterrand. Initially, this was a personal feeling, strengthened later by his helpfulness during the Falklands War. When he made his first visit to Chequers soon after his election in May 1981, the President and the Prime Minister struck up a warm
entente cordiale
. As Mitterrand was driving away, her Cabinet Secretary, Robert Armstrong, congratulated her on how well the
discussions had gone. ‘Yes’, replied Margaret Thatcher, and then, after a short pause, ‘He likes women, you know.’
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The unexpected comment reflected a strange dimension to Margaret Thatcher’s foreign policy. The statesmen she could best do business with were the men she found attractive – Reagan, Gorbachev and Mitterrand. Those she found unattractive, notably the corpulent Kohl, the reptilian Giscard and the anaemic Carter, were consigned to the outer regions of her likes and dislikes. Looks counted with her. This may have had something to do with the differences between the ways she treated her Foreign Secretaries. The lugubrious Francis Pym and the podgy, discursive Geoffrey Howe were not her type. The trim, amusing Lord Carrington had much more appeal to her. Their arguments were vigorous, but they enjoyed each other’s company without the slightest traces of rancour.

She liked and learned much from Carrington. Yet it is intriguing that she never invited him to rejoin her government after his later honourable resignation over the Falklands,
^‡
which was only a transient blot on his escutcheon. His restoration to her cabinet would have been easy before or after he became Secretary General of NATO. Perhaps the real problem was that she wanted to be her own Foreign Secretary. She would not have welcomed a foreign-affairs heavyweight in the senior ranks of her government, particularly one who would have managed to restrain her approach to Europe from being so confrontational. This was a pity, because Carrington was a statesman whose partnership with her contributed much to her early successes.

18

Storm clouds on the economy and in the cabinet

THE GATHERING STORM

Margaret Thatcher’s determination to cure Britain’s deep-rooted economic sickness came to be symbolised by her words to the Conservative Conference of October 1980: ‘You turn if you want to – the lady’s not for turning.’
¹
Although greeted with thunderous applause by the rank and file of the party, there were many in her cabinet who thought them foolhardy. For by this time unemployment was over 2 million, inflation had risen to 13 per cent and the recession was worsening. The government’s main weapons in the battle to restore prudence to the nation’s finances were controlling the money supply and reducing public expenditure. Neither was working.

There was a widespread expectation that the realities of the recession, especially the rise in unemployment, would force a change of strategy in the management of the economy. But the Prime Minister had staked her reputation on not initiating the kind of U-turn that had brought about the political demise of Ted Heath. Moreover, she was far more resolute than he had been in her certainty that she must stick to the course she had set. The big question, not resolved until the autumn of 1981, was: would her cabinet stick with her?

Although the cabinet was portrayed as being divided into the wets and the drys this was largely a caricature of Margaret Thatcher’s own making. She enjoyed the mystique of being an embattled crusader against her adversaries. But the reality was that her praetorian guard of Treasury ministers and like-minded colleagues on the ‘E’ or Economic Committee of the cabinet backed her strategy. So did two other bulwarks of support in the shape of William Whitelaw and Lord Carrington. ‘As every other nostrum for reversing our economic decline had failed, we thought we had better let her get on with what she wanted to do’,
was how Carrington described their position.
²
So, with the connivance of her Home and Foreign Secretaries, the cabinet itself rarely discussed economic policy for the first two years of the Thatcher government’s existence. The Wets (Jim Prior, Francis Pym, Lord Soames, Norman St John-Stevas, Ian Gilmour, Peter Walker and later allies) huffed, puffed and leaked, but they never came close to bringing the house down. In the meantime, the Chancellor and the Prime Minister went ahead with implementing their master plan.

But what exactly was their strategy? In the beginning it was said to be all about monetarism. But measuring, let alone controlling, the money supply proved an elusive failure. The principal yardstick was called £M3, which meant all money in circulation including notes, coins and bank deposits. In 1980, £M3 soared to 18 per cent, three times the government’s target of 6 per cent. Ian Gilmour had a point when he commented that monetarism was ‘the uncontrollable in pursuit of the indefinable’.
³
Margaret Thatcher was stung by his criticism, tartly noting that the Wets were finding ‘the wayward behaviour of £M3 a suitable subject for mockery at dinner parties’.
⁴
She insisted that the monetary squeeze was bringing down inflation and working more effectively than the £M3 figures suggested.

The second cornerstone of the strategy was reducing public expenditure. Sir Geoffrey Howe did make cuts of over £3 billion in his 1979 and 1980 budgets, but these were overwhelmed by overspending in Defence and Health; by the high cost of subsidising nationalised industries; and by burgeoning wage claims in the public sector, particularly those granted by the Clegg Commission,
^*
whose awards Margaret Thatcher had promised to honour in the heat of the election campaign. The net result was that public spending kept on rising.

Some order in all this chaos looked as though it might be imposed by the Medium Term Financial Strategy (MTFS). It was the brainchild of the intellectually assertive Nigel Lawson, still only a junior minister in the Treasury. Margaret Thatcher, who was in awe of first-class minds in general and Nigel Lawson’s in particular, bought the idea of MTFS. It was supposed to be a set of iron-clad rules setting fixed targets for monetary growth and public expenditure
reductions for several years ahead, replacing the usual one-year forecast. But who would deliver performance in line with the MTFS rules? The Prime Minister took the challenge personally. ‘The MTFS would only influence expectations in so far as people believed in our determination to stick to it’, she declared. ‘Its credibility depended … on the quality of my own commitment, about which I would leave no-one in doubt. I would not bow to demands to reflate.’
⁵

It was the recognition of Margaret Thatcher’s commitment not to make a U-turn that proved the game changer. Although she was vilified for her inflexibility, stubbornness, heartlessness and even for practising ‘sado-monetarism’,
⁶
somewhere deep down in the political subconscious of the British people there was a recognition that her determination should be given its chance.

The ‘winter of discontent’ remained such a bad memory that a majority of the electorate, rather like Whitelaw and Carrington, were willing to try Margaret Thatcher’s prescriptions for reforming the economy. But to a sizeable minority, including many within her party, her remedies seemed divisive.

Around this time the acronym ‘TINA’ entered the political vocabulary. It was derived from briefings Margaret Thatcher gave to Conservative MPs and others, vehemently repeating the phrase, ‘There is no alternative’. It rang true because the Wets had not come up with any coherent plan B for the economy that did not involve paying for the extra expenditure they wanted by printing more money. But TINA also became an irreverent nickname for the Prime Minister. I remember using it myself on the Terrace of the House of Commons one spring evening in 1981, only to be rebuked by Donald Thompson, the MP for Sowerby. He was a hands-on Yorkshire butcher who still chopped up carcasses and delivered cuts of meat to his customers on Saturdays. ‘Aye, Jonathan, but TINA is bloody well right – isn’t she?’
⁷

Belatedly and perhaps too grudgingly I was beginning to agree. So were many other Tory MPs who were not paid up members of the ‘one of us’ Thatcherite fan club. But thanks to Ian Gow’s assiduous efforts among back-benchers, the Prime Minister was much better supported by her parliamentary party than she was by her cabinet. What was starting to make an impact was the very ingredient Margaret Thatcher had mocked her critics for lacking – courage in backing the economic strategy. While the Wets fretted and fumed, often in a hand-wringing style that was unattractive, she was ploughing her own lonely
furrow with such personalised determination that she warmed hearts even if she did not change minds.

There were, however, many unanswered questions about the strategy. The biggest one was: what was the government going to do to curb the excessive wage demands and the excessive powers of the trade unions?

OUTFLANKING JIM PRIOR

Jim Prior was Margaret Thatcher’s most formidable opponent within her cabinet during her early years as Prime Minister. How she outflanked him, sidelined him and emasculated his influence is a story that provides revealing insights into her personality.

The unanswered political question of the 1970s was: who governs Britain? The circumstances in which the governments of both Ted Heath and James Callaghan lost power suggested that union leaders rather than elected politicians were calling the shots on economic and industrial policy. Margaret Thatcher was determined to reverse this, and believed she had a mandate to do so. But so long as Jim Prior was her Secretary of State for Employment, she was thwarted in her reforming zeal to sort out the unions. Another problem in their relationship was that he was effectively the leader of the Wets, and their only voice on the ‘E’ committee.

Jim Prior liked to play up to his image of a Suffolk farmer. He was authentic in this role, but he was a far cleverer operator than might be imagined from his rubicund countenance and genial manner. As a middle-way Conservative in the Harold Macmillan mould, he had an abhorrence of high unemployment. Prior was by temperament a seeker after consensualist solutions to the political problems of the day. He had invested much time and energy in building bridges with the leading trade unionists. Sincere in his determination to avoid a return to the scenarios of the three-day week or the ‘winter of discontent’, he thought he could gently nudge the unions towards greater moderation by personal diplomacy. So he followed a ‘softly, softly’ approach on the issue of trade-union law reform. As he took up this position in the cabinet with what might be called a ‘stubbornly, stubbornly’ attitude, this put him on a collision course with Margaret Thatcher.

Their first collision came over the Employment Bill of 1980, which did not go nearly as far as the Prime Minister wanted in curbing the excesses of
trade-union power. She and most Tory back-benchers hoped to see secondary strike action outlawed, the closed shop banned and the legal immunities of trade unions from civil damages removed. Prior had a more modest agenda. His bill gave increased rights of appeal to workers against the operation of closed shops, but did not outlaw the closed shop itself. Secondary picketing was made illegal, but secondary strike action remained lawful. Trade-union immunities were untouched.

Margaret Thatcher, who had long ago accepted the case for wholesale reform of trade-union privileges, as set out in John Hoskyns’ unpublished policy document
Stepping Stones
, did her utmost to persuade Prior and the cabinet to toughen the legislation. She lost the early battles, but found other routes for winning the war.

One fundamental problem was that the personalities of Margaret Thatcher and Jim Prior were chalk and cheese. When she appointed him to her cabinet they had an argument about who should become his junior ministers. ‘I’m determined to have
someone
with backbone in your department’,
⁸
she told him, insisting on the appointment of Patrick Mayhew as his Parliamentary Under-Secretary. In fact, Mayhew’s backbone leant more in the direction of Prior than Thatcher, but at the time her note of menace was clear. The difficulty was that from day one the Prime Minister thought her Secretary of State for Employment was an appeaser. She described him in pejorative terms. ‘Jim Prior was an example of a political type that had dominated and, in my view, damaged the post-war Tory Party. I call such figures “the false squire”. They have all the outward show of a John Bull – ruddy face, white hair, bluff manner – but inwardly they are political calculators who see the task of Conservatives as one of retreating gracefully before the Left’s inevitable advance.’
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For his part, Prior could not stand Margaret Thatcher’s shrill combativeness when challenging his proposals:

Margaret not only starts with a spirit of confrontation but continues with it right through the argument. It is not a style which endears and perhaps even less so when the challenger is a woman and the challenged is a man. I have to confess that I found it very difficult to stomach, and this form of male chauvinism was obviously one of my failings.
¹⁰

Prior’s ‘confession’ is almost the only recorded example of any male minister or official admitting to suppressed feelings of misogynism as a result of being
told off by Margaret Thatcher. There were probably numerous examples of such emotions. The Attorney General, Peter Rawlinson, acknowledged having them late in life with the wry comment that his hostile reactions to her cost him the Lord Chancellorship.
¹¹
Men of that generation sometimes did find it hard to accept an abrasive and upbraiding style from a woman – even a woman prime minister. The fault was theirs. At least Jim Prior had the grace to admit it.

The Prior–Thatcher quarrels may have been exacerbated by a clash of styles, but at the core of their disputes lay a clash of wills. In February 1980, when the Employment Bill was going through its committee stages, the Prime Minister put heavy pressure on Prior to introduce a new clause outlawing secondary strike action. She even, through Ian Gow, solicited votes in the lobbies for what he called ‘Margaret’s amendments’ to the government’s own bill. This subversive activity failed. But it was becoming a parliamentary ‘Alice in Wonderland’, where the PPS to the Prime Minister was seen to be fermenting opposition to the legislation proposed by the Secretary of State for Employment.

Meanwhile, a strike accompanied by secondary picketing at the British Steel Corporation was causing serious national difficulties. In response Margaret Thatcher tried to pre-empt the main Employment Bill with an emergency one-clause bill to ban secondary picketing immediately. Prior felt that this would be a panic response, and was prepared to resign over it. So, the day before the vital ‘E’ committee meeting on 13 February, he embarked on a major lobbying exercise of his colleagues, persuading Willie Whitelaw, Lord Carrington, Michael Heseltine, Peter Walker, Lord Hailsham, Ian Gilmour and Norman St John-Stevas to support it.

The result was that Prior got his way. His ‘softly, softly’ line held. It was one of the rare examples of a rebellion by the Wets gaining a victory. But their success was short-lived. Margaret Thatcher hated her defeat, and came up with a new initiative of her own to signal her willingness to take tougher action against the unions.

Twenty-four hours after she had lost the argument with her cabinet, she made a surprise announcement at Prime Minister’s Questions that the government would soon be cutting welfare benefits for strikers. Jim Prior was ‘amazed’ by this announcement, but grudgingly admired the cunning of her pre-emptive move. ‘She was determined to get it on the record in case, when it came to the
crunch, the wets prevailed’, he commented. ‘And that was quite often her way of doing things. Very effective.’
¹²

The label the Wets originated from Prior–Thatcher tensions. She got into the habit of scrawling the adjective ‘wet’ in the margins of memoranda and letters from him when she was Leader of the Opposition. Prior saw the accusation of wetness as a badge of honour. He boasted of it to journalists. As a result, the word came to be a generic term for those who harboured serious doubts about the economic policies of Margaret Thatcher in her first three years as Prime Minister.