Margaret Thatcher: The Autobiography (50 page)

Just after the conference concluded, all three rival leaders – Bishop Muzorewa, Robert Mugabe and Joshua Nkomo – came to see me together at No. 10. They were in contemplative mood, pondering the future. I had the clear impression that each of them expected to win. Perhaps that was just as well.

Probably the most sensitive aspect of our approach related to the transitional arrangements: it was clear to me that, both for constitutional and practical reasons, Britain must resume direct authority in Rhodesia until the elections were over. On 15 November a Bill was introduced to provide for the appointment of a Governor and for sanctions to be removed as soon as he arrived in Rhodesia. Christopher Soames accepted the post. The decision to send him, as Governor, to Salisbury on 12 December, even before the Patriotic Front had accepted the cease-fire proposals, certainly involved some risk and was much criticized at the time. But we were clear that the momentum had to be maintained. Moreover, not only did Christopher have the authority of a Cabinet minister and wide diplomatic experience, he and his wife, Mary, had precisely the right style to carry off this most delicate and demanding job. Heavy pressure from the US and the ‘front line’ states finally led the Patriotic Front to accept the proposals for the cease-fire on 17 December, and the agreement was finally initialled on 21 December.

The outcome of the elections is well known. Mr Mugabe’s party, to most people’s surprise, won an overwhelming victory. On 18 April Rhodesia, as the Republic of Zimbabwe, finally received its independence.

It was sad that Rhodesia/Zimbabwe finished up with a Marxist government in a continent where there were too many Marxists mal-administering their countries’ resources. But political and military realities were all too evidently on the side of the guerrilla leaders. With the Rhodesian question finally solved, Britain again played an effective role in dealing with other Commonwealth – and especially African – issues, including the pressing problem of the future of Namibia and the longer-term challenge of bringing peaceful change to South Africa. Britain had demonstrated her ability, by a combination of honest dealing and forceful diplomacy, to settle one of the most intractable disputes arising from her colonial past.

With the Lancaster House Conference still in progress, I had to turn my mind to the vexed question of how to negotiate a substantial reduction in Britain’s net contribution to the European Community budget. Figures had at long last been put on the size of that contribution and henceforth it was difficult for anyone to deny the scale of the problem.

At the next Council – in Dublin at the end of November, the Irish having now assumed the European Community presidency – the issue of our budget contribution dominated the business. The security risk from the IRA required that I be lodged overnight in splendid isolation in Dublin Castle and the Irish press enjoyed the idea that I slept in the bed used by Queen Victoria in 1897 – though I had the advantage over her of a portable shower in my room. Indeed, I was very well looked after. The hospitality was perhaps the best feature of the visit, and contrasted strongly with the atmosphere at the meetings which was extremely and increasingly hostile.

The Council opened amicably enough in Phoenix Park at the Irish President’s official residence where he hosted lunch. Back in the Council at Dublin Castle we got down to business. My opening speech set out the facts of our case in somewhat greater detail than at Strasbourg and I elaborated on them in the vigorous debate which followed. There was a good deal of argument about the figures, at the root of which was an obscure and complex issue – how to calculate the losses and gains resulting to individual states from the operation of the CAP. But whichever way one did the sums, there was no doubt that the UK was making a huge net contribution, and unless it was mitigated it was about to become the biggest.

We had put forward our own proposals on the budget. But the Commission had come up with some of its own and I was prepared to accept their basic approach as a starting point. First, they proposed that action be taken to shift the weight of Community expenditure programmes. The trouble was this would take too long – if it happened at all. Second, they proposed, in addition, specific spending on UK projects to boost our receipts. But there simply were not enough suitable projects. Finally, on the contribution side, the 1975 Correction Mechanism had so far failed to cut our payments. If it were reformed on the lines the Commission was proposing, it could help reduce our net contributions – but still not enough: we would still be contributing about the same as Germany and much more than France.

I made one other point which was to prove of some significance. I said that, ‘The arrangement [must] last as long as the problem.’ It seemed to
me then, and even more so by the end of the Council, that we simply could not have these battles every year, all to establish what common sense and equity ought to have made self-evident from the beginning.

It quickly became clear that I was not going to make the other heads of government see matters like this. Some, for example the Dutch Prime Minister, Mr Andries Van Agt, were reasonable, but most were not. I had the strong feeling that they had decided to test whether I was able and willing to stand up to them. They were determined to keep as much of our money as they could. By the time the Council broke up Britain had been offered a refund of only £350 million, implying a net contribution of some £650 million. That refund was just not big enough and I was not going to accept it. I had agreed that there should be another Council to discuss the matter further, but I was not overoptimistic after what I had seen and heard in Dublin, and what I would not accept was the attitude that fairness as such did not seem to enter into the equation at all.

At the press conference after the Council, I gave a vigorous defence of our position. I said that the other states should not have ‘expected me to settle for a third of a loaf’. I also refused to accept the
communautaire
language about ‘own resources’. I continued to state without apology that we were talking about Britain’s money, not Europe’s. I said:

Most of the other heads of government were furious.

We used the period between the end of the Dublin meeting and the next European Council to press our case. On 25 February Helmut Schmidt came to London again. Our talks centred on the question of our budget contribution and on the German Chancellor’s repeated wish to see sterling within the ERM, and – contrary to the usual misleading press reports – they were useful and quite jolly. On 27 and 28 March there was a full-scale Anglo-German summit in London. I sought once more to stress how seriously we felt about the British contribution. Subsequently, I learned that Helmut Schmidt had been telling other Community governments that if there were no solution there was a danger that we would withhold British contributions to the Community. I had created the desired impression. The European Council due for 31 March and 1 April had to be postponed because of a political crisis in Italy (not an unusual event), but we pressed
for a new Council before the end of April and it was finally called for Sunday and Monday 27 and 28, to meet in Luxemburg.

The atmosphere in Luxemburg turned out to be a good deal better than in Dublin. But we did not get around to talking about the budget at all at our first session. Indeed, only after dinner, and the usual foreign affairs
tour de table
, did I obtain agreement that the official group should resume effective negotiation that evening. The French were the main stumbling block: the proposals their officials presented were much less helpful to us than President Giscard’s had seemed to be. In the meantime, the Agriculture ministers of the other governments of the Community had agreed on a package of proposals which would have raised farm prices, increasing again the proportion of the Community budget devoted to agriculture (quite contrary to the proposals put forward in Dublin) and giving the French a sheep meat regime which was more or less all that they wanted. Against this – for us – distinctly unfavourable background, we received eventually the offer of a limit on our net contribution of about £325 million, applying only to the year 1980. Under a subsequent proposal our net contribution would have been limited to about £550 million for 1981 as well.

My reaction was that this was too little. But above all I was not prepared to have a settlement that only lasted for two years. Helmut Schmidt, Roy Jenkins (President of the Commission) and almost everyone else urged me to settle. But I was not willing to return the following year to face precisely the same problem and the attitude that went with it. So I rejected the offer.

In fact, we were a good deal closer to a settlement than was widely recognized. Great progress had already been made in winning agreement to substantial reductions in our contribution. What remained was to secure these reductions for the first two years with a reliable undertaking for the third. We had a number of powerful levers by which we could apply pressure to this end. The French were increasingly desperate to achieve their aims in the Agriculture Council. The Germans, too, were keen to see higher agricultural prices. Most important of all, the Community would, we thought, probably reach the limit of its financial resources in 1982. Its persistent overspending was catching up with it, and greater resources could only be made available with British agreement. Ultimately our negotiating position was a strong one.

It soon became clear that Luxemburg, following the clashes in Dublin, had had the desired effect. In spite of talk of the Luxemburg offer having
now been ‘withdrawn’, there was evidence of a general desire to solve the budget issue before the next full European Council at Venice in June. The easiest way to achieve this appeared to be a meeting of the Community Foreign ministers.

Peter Carrington, having received his mandate from me, flew to Brussels on Thursday 29 May with Ian Gilmour. After a marathon eighteen-hour session they came back with what they considered an acceptable agreement, arriving at lunchtime on Friday to brief me at Chequers.

My immediate reaction was far from favourable. The deal involved a net budget contribution in 1980 higher than envisaged at Luxemburg. It appeared from Peter’s figures that we would pay rather less under the new package in 1981, though to some extent this was sleight of hand, reflecting different assumptions about the size of that year’s total budget. But the Brussels proposal had one great advantage: it now offered us a three-year solution. We were promised a major review of the budget problem by mid-1981 and if this had not been achieved (as proved to be the case) the Commission would make proposals along the lines of the formula for 1980–81 and the Council would act accordingly. The other elements of the Brussels package relating to agriculture, lamb and fisheries, were more or less acceptable. We had to agree a 5 per cent rise in farm prices. Overall, the deal marked a refund of two-thirds of our net contribution and it marked huge progress from the position the Government had inherited. I therefore decided to accept the offer.

Wider international affairs had not stood still while we were engaged in bringing Rhodesia to legal independence and negotiating a reduction in our Community budget contribution. In November 1979, forty-nine American diplomatic personnel had been taken hostage in Iran, a source of deep and growing humiliation to the greatest western power. In December at the invitation of President Carter I made a short visit to the United States – the first of many as Prime Minister. In a short speech at my reception on the White House lawn I went out of my way to reaffirm my support for American leadership of the West.

At the end of 1979, the world reached one of those genuine watersheds which take almost everyone by surprise: the Soviet invasion of Afghanistan. In April 1978, the Government of Afghanistan had been overthrown in a communist-inspired coup; a pro-Soviet government was established, which was met by widespread opposition and eventual rebellion. In September 1979 the new President, Taraki, was himself overthrown
and killed by his deputy, Hafizullah Amin. On 27 December, Amin was overthrown and killed, to be replaced by Babrak Karmal, whose regime was supported by thousands of Soviet troops.

Perhaps I was less shocked than some by the invasion of Afghanistan. I had long understood that détente had been ruthlessly used by the Soviets to exploit western weakness and disarray. I knew the beast.

What had happened in Afghanistan was only part of a wider pattern. The Soviets had instigated Cubans and East Germans to advance their aims and ambitions in Africa. They had been working to further communist subversion throughout the Third World, and had built up armed forces far beyond their defensive needs. Whatever their precise motives now in Afghanistan, they must have known that they had threatened the stability of Pakistan and Iran and were within 300 miles of the Straits of Hormuz. Moreover, bad as the situation was in itself, it could be worse as a precedent. There were other areas of the world in which the Soviets might prefer aggression to diplomacy, if they now prevailed: for example, Marshal Tito was approaching the end of his life in Yugoslavia and there could be opportunities for Soviet intervention there. They clearly had to be punished for their aggression and taught that the West would not only talk about freedom, but was prepared to make sacrifices to defend it.