Margaret Thatcher: The Authorized Biography (86 page)

Inside Downing Street, the issue was hotly debated. Ever since the early 1950s, there had been strong official suspicions against Blunt, and he was interrogated on eleven occasions. In 1964, because of new evidence from the American traitor Michael Straight, the suspicions became certainties. The British authorities concluded, however, that Straight’s evidence was not the sort which could be used in court. They believed, although this turned out to be mistaken, that there was a Fifth Man in the ring, and so they had not yet succeeded in identifying the ‘Ring of Five’ British traitors,
and did not want to prejudice their hunt for the Fifth Man by going public.
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They therefore decided to offer Blunt a deal – immunity from prosecution in return for a confession, and the information which that confession would supply. Blunt confessed. The embarrassment consisted in his royal connection. It would be damaging if it ever became known that the government and the Palace had agreed to cover up Blunt’s treachery, and yet, successive governments felt, once the cover-up had happened, it must be preserved. Because of the secrecy involved, there was also a good deal of confusion about who had ever been told. Alec Douglas-Home, the Prime Minister at the time, had not known, though the Queen’s then private secretary, Sir Michael Adeane, had.

Mrs Thatcher asked Sir Robert Armstrong, by now the Cabinet Secretary, to investigate. He found little on paper, and several politicians with apparently faulty memories. He concluded that the Queen had been informed, though this was never officially confirmed to him.
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Within Whitehall, there were differing views about how to proceed. The head of MI5, Michael Hanley, advised against any prime ministerial intervention, but the Attorney-General, Sir Michael Havers,
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advised that if Blunt were not named by the government he would be free to sue for libel if others named him. This would create an intolerable position. Mrs Thatcher, who was new to all this, listened carefully to both sides, but was inclined to name him. Her straightforward instinct was that ‘he had betrayed his country’,
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and there was no reason to protect him unless exposure would cause intolerable embarrassment to Crown or government. She was also worried that ‘the finger was pointing at several innocent people’,
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and only the government had the power to tell the truth. Blunt’s right to immunity from prosecution did not automatically guarantee him anonymity. It was decided to take advantage of a written security question put down by the Labour MP Ted Leadbitter and ask him to raise the issue of Blunt. Armstrong gave Blunt’s lawyer twenty-four hours’ notice.

Mrs Thatcher duly gave Leadbitter a written parliamentary answer naming Blunt, and later, on 21 November, a full statement to the Commons.
There was tremendous excitement about the story. Acting as the establishment person which, in one half of his mind, he was, Blunt gave his version of events exclusively to
The Times
, and was served white wine and smoked trout in the paper’s offices by the deputy editor, Louis Heren, to the rage of the other newspapers. Meanwhile, in another dining room in the building, the editor, William Rees-Mogg, was giving lunch to Ted Heath, who was surprised and, until he realized what had happened, pleased to emerge from the building to a barrage of cameras.
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The optics of the moment were very good for Mrs Thatcher. It looked as if she would have nothing to do with the corrupt and weak old ways of doing things. She had told the Commons that Blunt’s behaviour had been ‘contemptible and repugnant’.
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In the lobby of the Commons, she saw Leadbitter and told him, ‘And it damn well serves him [Blunt] right.’
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Shortly after Mrs Thatcher’s statement to the House, Buckingham Palace announced that Blunt would be stripped of his knighthood. Because she had insisted on openness in this case, many jumped to the conclusion that Mrs Thatcher would inaugurate a new era of transparency in the security services, but this was not her intention at all. As she also told the House, ‘Our task now is to guard against their [the Communist traitors’] counterparts of today.’
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She wanted the Blunt embarrassment out of the way, but she had no desire to shed light on secrecy which she thought was vital in the defence of the nation.

Nothing did more than the long row over the EEC budget to bring out the qualities which made Mrs Thatcher so impressive to her admirers and so irritating to her detractors. When Bryan Cartledge left his job as her foreign affairs private secretary in September 1979, she wrote him a thank-you letter which was remarkably frank about affairs of state. ‘Rhodesia’, she wrote, ‘goes desperately slowly. Peter [Carrington] and Ian [Gilmour] are doing a superb job and are much more reconciled to a long stint than I am. I think it is time we forced the pace a bit …’ Then she continued: ‘I get more and more disillusioned with the EEC. We are going to have a real fight over the budget and by one means or another we have to get our way. We need the money.’
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These few words summarize fully her approach to the question at the time. She wanted a fight; she wanted the money; and she found the whole EEC set-up uncongenial. She had not, as she was later to do, sat down and considered the constitutional implications of the whole European project. Since the disputes of the early 1970s and the ‘yes’ vote in 1975, European controversies had, to the relief of party managers, died down. There was a strong ‘atmospheric pressure’ to be pro-Europe and leave it at that. Mrs Thatcher half succumbed to this, but only half. She was not, in any general sense, anti-European, but she was frustrated and
displeased, and jealous of encroachments upon British sovereignty. The attitudes of her main European counterparts brought out her combative instincts. And although she agreed with the general proposition advanced to her by officials when she came into office that the new government must show itself more friendly to Europe than Britain had been in the fraught Wilson–Callaghan years, she did not like most of the suggested ways of doing so.

One of these was joining, or promising soon to join, the Exchange Rate Mechanism (ERM). On the very day she reached No. 10, John Hunt had sent her a memo advocating ‘an open-minded approach to the concept of a zone of monetary stability in Europe consistent with the mainstream of Community development’. She wrote beside this: ‘I doubt whether this can be achieved by a currency system. Indeed it can’t – unless all of the underlying policies of each country are right.’ (And for good measure, she added: ‘Fish should
never
have been made a common resource.’)
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Lord Carrington argued in a similar strain to Hunt’s, and the Foreign Office’s generally conciliatory attitude provoked her to write on one of their reports: ‘I despair of FO memos … This is jabberwocky to me. What is it supposed to mean.’
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Records of her discussion with Roy Jenkins, the Commission President, over the summer and autumn, show him pushing her to join the ERM, and her dragging her feet: ‘she recognised the political advantages but was not prepared … to take the risk with the money supply that full membership would involve.’
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In October the government privately decided that it was the wrong time for Britain to join the ERM.

Although her European attitudes gave ministers and officials in the Foreign Office the vapours, they were popular in the country. They also caused her little political difficulty in her own party. Bernard Ingham told the usual off-the-record lobby briefing, ‘I personally voted to go in, admittedly more for political than economic reasons. But, I am sure like millions of others, I didn’t vote to go in to be fleeced.’ He was annoyed to find these words quoted in the papers and attributed to Mrs Thatcher herself,
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but they probably reflected the prevailing mood among Tory supporters and did his boss no harm. Nor was Mrs Thatcher arraigned by the Opposition. The feeling in the rank and file of the Labour Party, though not of most of the leadership, remained anti-EEC. At Prime Minister’s Questions, she was often pressed on the subject by Labour MPs, almost always from the point of view of those who wanted her to insist on an even larger rebate than that for which – the quantum varied as negotiation progressed – she was arguing. On her own side, a newly elected MP by the name of John Major
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put down an early day motion in the Commons congratulating her on her tough negotiating stance.

In her first setpiece interview of the autumn, Mrs Thatcher took the budget row as the touchstone for whether people would regard Britain as being fairly treated in the EEC – ‘it is about free people living together.’
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And in her speech to the party conference at Blackpool she spoke of the ‘appalling prospect’ of paying out £1 billion net per annum to Brussels (the net contribution five years before had been £16 million). Even when asked to lift her sight to the far horizon for the Winston Churchill Memorial Lecture in Luxembourg later that October, Mrs Thatcher was frank and fierce about the ‘manifest inequity’ of the budget problem. ‘Our friends may despair – I sometimes do myself –’, she said, ‘at the daily bickering over small matters,’ and she warned: ‘I cannot play Sister Bountiful to the Community while my own electorate are being asked to forgo improvements in the fields of health, education, welfare and the rest.’
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The Thatcher vision of the EEC, even at this early stage in her premiership, was one that no other European leader would have advanced. It was to link the EEC and NATO so that ‘The principle at the heart of our European institutions is the principle of liberty.’ This principle needed to be advanced in the face of the fact that the West had nothing better than ‘prolonged armed truce’ with the Soviet Union. Away with ‘grey uniformity’, away with the ‘unnecessary standardisation’ which ‘sits ill with liberty’ – the point of the whole thing, she believed, was to advance in ‘the struggle between liberty and tyranny’.
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In an interview in Luxembourg the next day, she was asked about a United States of Europe. ‘That has never, I believe, been the practical intention,’ she said.
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In fact, for most of those at the heart of the project, that was indeed the intention. According to Sir Michael Jenkins, who at that time worked with Roy Jenkins, the President of the Commission, ‘The Commission
was
trying to create a United States of Europe – with a common currency and a constitution,’
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and most of the relevant people in the British Foreign Office were of a like mind. Michael Butler,
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who was the United Kingdom’s ambassador to the EEC (a position always known as UKREP) from 1979, and David Hannay,
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who ran European Community affairs for the Cabinet
Office at the same time, were lifelong, committed European integrationists. So was Sir Michael Palliser,
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the Permanent Secretary at the Foreign Office. As Michael Jenkins put it, ‘We were Ted’s children.’
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Many British ministers, though perhaps less Euro-visionary than the Commission, saw ‘Europe’ as an unquestionably ‘good thing’. When they met at the councils of European foreign ministers, Roy Jenkins and Ian Gilmour, who were anyway great friends, would ‘wring their hands’ about Mrs Thatcher.
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Even before she entered into the battle of the budget, Mrs Thatcher lacked the instinctive sympathy with the European Continent and Community institutions which, for much of the British educated elite, was seen as a mark of being civilized. Michael Palliser first met her in 1975, when she had just become leader of the Opposition and he was the United Kingdom’s ambassador to the Community. At dinner with him in Luxembourg, she told him what an unsatisfactory lot the European Commissioners were: ‘She found them rather tiresomely foreign.’
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He found her ‘exceptionally ignorant, but with some deep-rooted prejudices’ which did not alter over the years. One of these was that the French were preternaturally cunning, and therefore almost always had to be resisted in negotiation. ‘They are cleverer than us,’ she told him. ‘They will run rings round us.’
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From the start, the mindset of those of all nations who were involved with the running of Europe was quite different from that of Mrs Thatcher. This difference probably only increased her determination. It was a very strong part of her character that she felt the need to fight if everyone else seemed to disagree with her: ‘My father taught me to “dare to be a Daniel”,’ she told Bernard Ingham.
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She felt isolated in Europe, and among her own officials and ministers. A few days before the Dublin summit at the end of November, she told Geoffrey Howe that ‘she could not understand why Mr Ridley [Nicholas Ridley, the free-marketeer whom she had made a junior minister at the Foreign Office] was not working on economic issues. He was the only FCO minister who understood economics. She intended to take this up with Lord Carrington.’
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For the European leaders con
fronted by Mrs Thatcher, her request for a rebate was more than a bruising battle about particular sums. It had a quasi-theological significance. Mrs Thatcher insisted on referring to the British payments involved as ‘our money’, sometimes as ‘my money’. This offended against the European doctrine that ‘own resources’ – the percentage of VAT receipts voted to the Community by the member states – belonged absolutely to the EEC and so could not be broken down nationally or talked of in terms of a ‘net contribution’.
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Mrs Thatcher took refuge in the promise, made by the other member states during Britain’s accession negotiations in the early 1970s, that, should an ‘unacceptable situation’ arise, ‘the very survival of the Community would demand that the institutions find equitable solutions’.
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At a joint press conference with Mrs Thatcher in Bonn at the end of October, in which she once more complained that Britain’s payment was ‘very unfair and inequitable’, the German Chancellor, Helmut Schmidt, sharply questioned the principle on which she took her stand. If Germany were to take her view that there had to be a ‘broad balance’ between what a country put in and what it got out, he said, ‘it would mean the end of the Community in a few weeks.’
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European leaders feared that she was trying to revive the concept, beloved of General de Gaulle, of the ‘juste retour’, which, according to Euro-enthusiasts, had been destructively nationalistic. At a similar occasion in London three weeks later, President Giscard d’Estaing of France also attacked the ‘broad balance’ idea. Mrs Thatcher, determined not to be bamboozled by clever Frenchmen, was tart. The battle over the budget was not a matter of technicalities, she said, but of will: ‘I trust I make myself clear.’
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