Margaret Thatcher: The Authorized Biography (87 page)

At the European Council in Dublin on 29 November 1979, Mrs Thatcher made herself clearer still. In preparing for the summit, she had continued to come under pressure from her own officials who believed that only by signing up to grand European beliefs could she gain specific, detailed negotiating advantages. At the end of October, for example, when Sir Donald Maitland retired as UKREP, he sent the customary farewell despatch to the Foreign Secretary. It concluded with the idea that a common market and a customs union provided ‘an inadequate basis on which to face the challenges of today’, and he hailed the aspiration for an ‘eventual political community’. Michael Alexander,
^†
who had succeeded Bryan Cartledge as
Mrs Thatcher’s foreign affairs private secretary, sent her Maitland’s memo. He commended the conclusion and wrote on top: ‘Selfish, wilful and short sighted though our partners are, they are so far as I can see, the only partners we have. I … believe that you personally could play a major role in pointing the Community in the right direction.’
³¹
Against Maitland’s notion of a ‘political community’, however, Mrs Thatcher inscribed her customary wiggly line of disapproval.

But, contrary to some of the myths that grew up later, there was no great disagreement within the government about what to demand at Dublin. Although Mrs Thatcher and even, despite his lifelong Euro-enthusiasm, Geoffrey Howe, were more hawkish than Carrington and the Foreign Office, it became increasingly obvious to all that Britain was being set up by its partners. In the words of Maitland’s successor, Sir Michael Butler, ‘They certainly thought they’d score off her.’
³²
Giscard gave no ground, and even Schmidt, the friendliest of the main players, warned her of isolation and that, if it came to a matter of take it or leave it in reference to budget reform, ‘The other members might well say leave it.’
³³
The government prepared its position. It would not hold out for a complete rebate – a reduction in Britain’s net contribution of between three-quarters and two-thirds was privately agreed as the acceptable minimum so long as, in the favoured phrase, ‘the solution was as long as the problem’ rather than one-off – nor would it plan to break EEC law if it did not get its way. But it would accept isolation at Dublin and warn, in the words of a note from Howe to Mrs Thatcher, that, unless she got satisfaction, ‘you would not thereafter be able to facilitate the operation of the Community’.
³⁴
On 28 November the Cabinet agreed this approach. Even the Europhile Lord Soames, who could not attend the meeting, wrote to her before it: ‘… I hope that you will make the punishment fit the crime and you may ultimately need to withhold payments.’
³⁵
Two days earlier, a rather agonized Roy Jenkins had called on Mrs Thatcher to try to calm matters down. He failed. Mrs Thatcher reiterated her positions, even regretting that she had not gone so far as to demand that Britain become a net beneficiary of the EEC budget. She bridled at criticisms by member states: ‘The Prime Minister expressed impatience with the wish of other members of the Community to have more evidence that the Government was Community-minded.’ In response to Jenkins’s prediction that she would not get what she wanted at Dublin, she warned that there would be ‘no movement in
the Community’ unless she prevailed. Jenkins said she should avoid building up a ‘head of steam’ about the budget question. Mrs Thatcher ‘said that there was already an uncontrollable head of steam’. The record of the meeting ended thus: ‘Mr Jenkins commented that the Dublin Council promised to be an interesting one.’
³⁶

It
was
interesting. From the beginning, Mrs Thatcher went to war. She refused all prepared texts for her opening statement in Dublin Castle, preferring to extemporize and thus speak more vigorously. At the dinner of the heads of government, she kept them all at table for four hours, talking, as Roy Jenkins put it, ‘without pause, but not without repetition’.
³⁷
‘I want my money back,’ she said again and again. Schmidt pretended to fall asleep and Giscard was alleged, though he denied this to the author, to have read a newspaper. ‘I am not a night bird,’ Giscard remembered. ‘I hate discussions after dinner. It bores me.’
³⁸
Mrs Thatcher’s performance was, according to Carrington, ‘a rant’.
³⁹
Giscard agreed: ‘It was unpleasant, because it wasn’t a conversation. It was a repetition.’
⁴⁰
Britain was offered £350 million in rebate. Mrs Thatcher, who was arguing in public that the full £1 billion contribution should be rebated, scornfully dismissed it as ‘a third of a loaf’ at the press conference afterwards. She felt she was being ganged up against, and resented it. Her own notes scribbled during the summit say, ‘We thought we had joined an
equitable system
.’
⁴¹
She considered the Continental approach unBritish: ‘What I would not accept was the attitude that fairness did not seem to enter into the equation at all.’
⁴²
‘Equity, of course, is historically a British concept,’ she said in reply to Alan Clark when she reported on the summit to the House of Commons:
⁴³
the EEC, in her view, had not displayed it. There was no basis for agreement, except, as Britain had planned, agreement to have another meeting. Mrs Thatcher amplified her anger at the press conference. The negotiations had been ‘totally unsatisfactory’: ‘all we are doing is asking for our own money back.’
⁴⁴

There is no doubt that Mrs Thatcher’s behaviour did annoy the other European leaders. In the days after the summit, Foreign Office telegrams keened with reports of upset from their Continental counterparts. But even Euro-enthusiasts like Michael Butler, who thought that it ‘didn’t do her any good’ to talk about ‘having my money back’, believed that her stance was essentially correct. She set out the case with ‘great aplomb’, he considered, and the other heads of government ‘were always pretending to be outraged by what she said’.
⁴⁵
The budget mechanism
was
inequitable, and the nations – the majority – which benefited from this tried very hard to avoid the issue. France, in particular, worried that a Common Agricultural Policy constructed from the start essentially for its benefit was threatened by Mrs Thatcher’s approach, and so resisted fiercely. More than 70 per
cent of the Community budget went on the CAP, strikingly little of it benefiting Britain. Given the state of public opinion at home, Mrs Thatcher had little choice but to fight, and her style of doing so did her more political good than harm. ‘It was an uncomfortable manner of doing it,’ recalled Carrington, but an uncomfortable manner was what was required, and Mrs Thatcher ‘did her homework and the other heads of government didn’t’.
⁴⁶

Returning home, she felt pleased with her stance, and redoubled her energy for combat. One compromise suggestion floating around was that Britain should make some concessions to the EEC about privileged access to North Sea oil, the resource which was doing so much to secure Britain’s balance of payments at a time of wider economic difficulty. She hated the idea of ‘linkage’ between her budget position and other issues, and scrawled on a memo from Robert Armstrong: ‘Energy – I am not prepared to bargain away our few resources. To suggest that we might be allowed to keep our own money in return for giving up some of our oil is ridiculous.’
⁴⁷
In the New Year, the Foreign Office had another go, producing a draft statement on North Sea oil. Mrs Thatcher wrote on it: ‘The idea that we should have to sacrifice our main asset to secure some of our own money back is one that may appeal to the Foreign Office but it doesn’t to me. Wouldn’t it have been courteous to have come to me first?’
⁴⁸
Her blood was up.

As winter turned into spring, it gradually became clear to all sides that a settlement would have to be reached fairly soon. In Giscard’s view, Mrs Thatcher ‘with good judgment saw that she would get better from the Germans than from the French’.
⁴⁹
Helmut Schmidt helped move things on by setting up an informal meeting between the personal representatives of all the heads of government. Giscard also observed that Mrs Thatcher ‘thought that the male was weaker than she’.
⁵⁰
This was true.
*
On the other hand, France had not only the high ground of European doctrine but also the low ground of doing very well out of the existing budget and the CAP, and so wanted to fight hard. Giscard told his close associate Prince Poniatowski that ‘we must keep on bashing the British steak to make it tender.’
⁵¹
As the special summit in Luxembourg at the end of April 1980 approached, the whole thing turned into a blame game. Intensive British diplomacy round Europe revealed that the other partners were getting restive with France for its insistence on linkage between agreeing the budget and putting up agricultural prices. On 24 April, just days before the summit, Giscard telephoned Mrs Thatcher in some anxiety, in order to
accuse her of ‘perpetual postponement’. She replied that she was not qualified to negotiate agricultural prices at the summit. Echoing the language she had used publicly during Giscard’s visit to London in November, she reminded him that the problem at issue was not a technical problem, but ‘a question of the will’.
⁵²
Without resorting to active illegality, Mrs Thatcher told the Cabinet on the same day, Britain stood ready to block progress on sheepmeat, agricultural prices and the entire Community budget for 1980.
⁵³
At the Luxembourg summit, though improved offers for British rebates were made, the issues were not resolved, and there was no agreed communiqué.

Carrington, however, got wind of the general desire for a settlement, brokered by Italy, which held the incoming presidency, and started working on Mrs Thatcher with the idea that a three-year deal, pending a longer-term solution, could at last be achieved by the foreign ministers meeting together at the end of May. His first memo on this displeased her. She wrote on it: ‘I am so horrified with this approach that I think it would be better if we didn’t have the meeting [planned with Carrington to discuss the situation]. I feel as if the FCO is going to cancel out all my own efforts.’
⁵⁴
Yet the meeting between Carrington and Mrs Thatcher took place, and Carrington pushed ahead, though not without much storming from Mrs Thatcher. Clive Whitmore recalled a meeting in the Cabinet Room shortly before the EEC Foreign Affairs Council, when Carrington, needing to leave, got up, still arguing, and walked to the door without looking where he was going. He knocked into one of the Doric pillars. ‘My God,’ he exclaimed, ‘I’ve hit another immoveable obstacle.’
⁵⁵

On 30 May, in Brussels, Carrington and Ian Gilmour reached a provisional deal with their opposite numbers. Carrington immediately telegraphed Mrs Thatcher to give her the details, which included agreed amounts of refund for 1980 and 1981— a two-thirds reduction of the net contribution – and a repetition of the formula upon which the 1980 and 1981 refunds were based for 1982, so they had at last got a three-year deal. He had fought off, he said, any link between the 1981 refund and agreement on agricultural prices for that year. By 1981, a longer-term settlement would be agreed, within the 1 per cent VAT ‘own-resources ceiling’. Carrington said: ‘I am convinced that this is the limit of what we can negotiate.’
⁵⁶
Luckily for Carrington’s cause, the Continental press interpreted the deal as a victory for Mrs Thatcher (‘British Europe’ said the headline in
Le Monde
), and a great improvement on what had been offered at Luxembourg. Clive Whitmore improved the shining hour, writing on the telegram from the British Embassy in Paris, ‘Michael Alexander has just telephoned me from Paris to say that all the French media are presenting the Brussels
proposals as a great victory for you and a defeat for France.’
⁵⁷
Mrs Thatcher was highly suspicious, however. When Carrington and Ian Gilmour flew straight to Chequers to see her, she gave them a hard time for which they were unprepared. She did not like the figures; possibly she did not like the feeling that the wind had been taken out of her sails. ‘She didn’t even offer us a drink,’ remembered Carrington, who had been negotiating for eighteen hours continuously before flying back, and had not slept. ‘ “I’ll resign,” she said. “No,” I said, “I’ll resign.” ’
⁵⁸

No one resigned. The Chequers meeting was uncomfortable but inconclusive. Gilmour returned to London and briefed the press that the deal was Mrs Thatcher’s triumph. This was faithfully reflected in the next day’s headlines. On Monday the Cabinet endorsed the deal, without demur, though also without enthusiasm, from the Prime Minister. It recorded, however, that the deal gave the United Kingdom ‘less than would be ideally desirable’.
⁵⁹
Lord Hailsham summed up the reasons for acceptance: ‘We have no alternative but to accept. We shan’t get better. The press have treated it as a victory. The alternative would be a complete leap in the dark, with the Community’s future and our membership at stake.’
⁶⁰

In the ensuing weeks, everything went quiet. In early July, Robert Armstrong sent her a note headed ‘Cabinet: Community Affairs’ which read, in full: ‘There have been no developments in the Community during the last week calling for discussion by the Cabinet. This is perhaps the shortest brief I shall ever submit to you.’
⁶¹
There would, indeed, be few other weeks when the EEC did not intrude upon Mrs Thatcher and her Cabinet.

Despite the complaints about Mrs Thatcher’s stridency, her first big European battle, long though it was, was generally seen as successful. From the British point of view, the budget situation which she remedied was indeed unjust, and her determination to put it right won admirers at home and even, though they were more reluctant to say so, abroad. The Carrington–Gilmour deal held, and provided a good base for the negotiations on a longer-lasting settlement which were finally completed at Fontainebleau in 1984.