Margaret Thatcher: The Autobiography (85 page)

I had not always seen eye to eye with Norman Tebbit over BL. I felt that the company was continuing to perform badly and wanted to take a tougher line with it. There had certainly been improvements, but the management was still poor.

There must, I felt, be a new management and new Chairman at BL, tighter financial discipline and, above all, a renewed drive for privatization. From October 1985 Leon Brittan concentrated closely on all these aspects but it was privatization which increasingly took centre stage. Jaguar had already been successfully sold off. Unipart, which handled BL’s spare parts, should have been privatized too, though BL seemed to be reluctant to move ahead with this. But, most important, we had secretly been in contact with General Motors (GM) which was interested in acquiring Land Rover, including Range Rover, Freight Rover (vans) and Leyland Trucks (heavy vehicles). These negotiations too seemed to drag on and on; so I was pleased when Leon sent me on 25 November his proposals for moving ahead with the deal.

Apart from (though having a bearing upon) the price, there were three tricky questions which required attention.

Suddenly, however, we were facing an
embarras de richesses.
Before we had fully come to grips with the GM offer, code-named ‘Salton’, the still more intriguingly code-named ‘Maverick’ put in an appearance. At the end of November the Chairman of Ford in Europe came to see Leon Brittan to say that Ford were considering making an offer for Austin Rover and Unipart. The company fully recognized the political sensitivity of this and so wanted the green light from the Government first. Leon Brittan, Nigel Lawson and I discussed what should be done at a meeting on the afternoon of Wednesday 4 December. There was no doubt in our minds of the political difficulties involved. Although Ford said that they intended to keep the main BL and Ford plants open there would be opposition from MPs fearful of job losses in the areas affected. Ford’s productivity was worse than BL’s, their newest models were not selling well and they were worried about Japanese penetration of their European markets. There might be problems about collaboration with Honda on which BL had come to depend. But for all that the Ford offer was certainly worth pursuing.

To Paul Channon’s horror – and mine – at the start of February the weekend press was full of details of what was planned. BL had almost certainly leaked it. All hope of confidential commercial discussion had been destroyed. Irrationality swept through the debate.

I chaired an extremely difficult meeting of the Cabinet on Thursday 6 February in the course of which it became clear to me that there was no way in which the Ford deal could be put through. Paul Channon told the House that afternoon that in order to end the uncertainty we would not pursue the possibility of the sale of Austin Rover to Ford. It was humiliating and did less than justice to Ford, which had provided so many jobs in Britain. But in politics you have to know when to cut your losses.

The question now was whether we could still strike a satisfactory deal with GM. And now the news was out, we were faced with a rash of alternative bids. Few of them were serious and all of them were an embarrassment rather than a help. Most politically sensitive was the proposal for a management buy-out of Land Rover. GM remained – in our and BL’s view – by far the best option because that company was interested in all, not just some, divisions; because of its financial strength; and because of the access to its distribution network.

GM in the end were not willing to proceed with a deal for Leyland Trucks and Freight Rover which excluded Land Rover and so the talks ended. When this was announced by Paul to the House of Commons on
Tuesday 25 March, one after another of our backbenchers stood up to say that a great opportunity had been lost and that the GM deal should have gone through. I told several later that they should have spoken up when the going was rough.

This whole sorry episode had harmed not just the Government but Britain. Time and again I had drawn attention to the benefits Britain received as a result of American investment. The idea that Ford was foreign and therefore bad was plainly absurd. Their European headquarters was located in Britain, as was their largest European Research and Development Centre. All of the trucks and most of the tractors that Ford sold in Europe were made in Britain. Ford’s exports from the UK were 40 per cent more by value than those of BL. But it was not just a matter of Ford. Over half the investment coming into Britain from abroad was from the United States. Both Ford and GM were offended and annoyed by the campaign waged against them. Britain just could not afford to indulge in self-destructive anti-Americanism of this sort. Yet it would continue and was shortly to be raised to fever pitch – not just in the area of industrial policy but that of defence and foreign affairs, where passions ignite more easily.

I was at Chequers on Friday 27 December 1985 when I learned that terrorists had opened fire on passengers waiting on the concourses at the Rome and Vienna airports, killing seventeen people. The gunmen were Palestinian terrorists from the Abu Nidal group. They had apparently been trained in the Lebanon, but evidence soon emerged of a Libyan connection.

On Tuesday 7 January the United States unilaterally imposed sanctions on Libya with little or no consultation and expected the rest of us to follow. I was not prepared to go along with this. I made it clear in public that I did not believe that economic sanctions against Libya would work.

In late January, February and March tension between the United States and Libya rose as US naval forces started manoeuvres in an area of the Gulf of Sirte which Libya, in violation of international law, claimed as its own territorial waters. On Monday 24 March US aircraft were attacked by Libyan missiles fired from the shore. US forces struck back at the Libyan missile sites and sank a Libyan fast patrol boat.

I had to consider what our reaction would be. I was conscious that we had 5,000 British subjects in Libya. I was also aware of the possibility of Libyan action against our base in Cyprus. But I told Cabinet that in spite
of this we must endorse the right of the United States to maintain freedom of movement in international waters and air space and its right to self-defence under the UN Charter.

Meanwhile, the Americans may have started to see who their true friends were. I learned that the French were expressing reservations about any policy of confrontation with Colonel Gaddafi, arguing that any US military action would win Libya Arab support and urging the need to avoid ‘provocation’.

Then in the early hours of Saturday 5 April a bomb exploded in a discotheque frequented by US servicemen in West Berlin. Two people – one a US soldier – were killed and some 200 others – including 60 Americans – were injured. US intelligence, confirmed by ours, pointed to a Libyan involvement. For the Americans this was the final straw.

Just before 11 p.m. on the night of Tuesday 8 April I received a message from President Reagan. He requested our support for the use of the American F1–11s and support aircraft based in Britain in strikes against Libya, and he asked for an answer by noon the following day. I immediately called in Geoffrey Howe and George Younger to discuss what should be done. At 1 a.m. I sent an interim reply to the President. Its main purpose was to support the United States but I also expressed very considerable anxiety. I wanted more information on the targets in Libya. I was worried that US action might begin a cycle of revenge. I was concerned that there must be the right public justification for the action which was taken, otherwise we might just strengthen Gaddafi’s standing. I was also worried about the implications for British hostages in the Lebanon – and, as events were to turn out, rightly so.

Looking back, I think that this initial response was probably too negative. But it had the practical benefit of making the Americans think through precisely what their objectives were and how they were to justify them. Two other considerations influenced me. First, I felt that there was an inclination to precipitate action in the United States, which was doubtless mirrored there by a perception of lethargy in Europe. Second, I knew that the political cost to me of giving permission for the use of US bases by the United States in their strikes against Libya would be high. I could not take this decision lightly.

Some time after midnight President Reagan’s response came through on the hotline. It was a powerful and not uncritical answer to the points I had raised. He stressed that the action he planned would not set off a new cycle of revenge: for the cycle of violence began a long time ago, as the
story of Gaddafi’s terrorist actions demonstrated. He drew attention to what we knew from intelligence about Libyan direction of terrorist violence. He argued that it was the lack of a firm western response which had encouraged this. He felt that the legal justification for such action was clear. The US action would be aimed at Gaddafi’s primary headquarters and immediate security forces, rather than the Libyan people. The strikes would be at limited targets. I was particularly impressed by the President’s sober assessment of the likely effect of what was planned. He wrote:

The more I considered the matter, the clearer the justification for America’s approach to Libya seemed.

That afternoon I sent a further message to President Reagan. I pledged ‘our unqualified support for action directed against specific Libyan targets demonstrably involved in the conduct and support of terrorist activities’. I pledged support for the use of US aircraft from their bases in the UK, as long as that criterion was met. But I questioned some of the proposed targets and warned that if there ensued more wide-ranging action the Americans should recognize that even those most keen to give them all possible support would then find themselves in a difficult position.

Now that America was actually asking the Europeans for assistance which involved a political price they showed themselves in a less than glorious light. Chancellor Kohl apparently told the Americans that the US should not expect the wholehearted support of its European allies and said that everything would turn on whether the action succeeded. The French refused to allow the F1–11s to cross French air space. The Spanish said that the American aircraft could fly over Spain, but only if it was done in a way which would not be noticed. Since this condition could not be met, they had to fly through the Straits of Gibraltar.

Speculation was now rife. We could not confirm or deny our exchanges with the Americans. The Labour and Liberal Parties insisted that we
should rule out the use of American bases in the UK for the action which everyone now seemed to expect. It was important to ensure that senior members of the Cabinet had my decision. At midday on Monday (14 April) I told the Cabinet’s Overseas and Defence Committee what had been happening in recent days. I said that it was clear that the US was justified in acting in self-defence under Article 51 of the UN Treaty. Finally, I stressed that we had to stand by the Americans as they had stood by us over the Falklands.

That afternoon it was confirmed from Washington that American aircraft would soon take off from their British bases.

Late that night I received a message from President Reagan saying that the US aircraft would shortly strike at five named terrorist-associated targets in Libya. The President confirmed that the text of his televised statement to the American people took into account our advice to stress the element of self-defence to get the legal position right. My own statement to the House of Commons on the raid for the following day was already being drafted.

The American attack was carried out principally by sixteen F1–11s based in the UK, though a number of other aircraft were also used. The attack lasted forty minutes. Libyan missiles and guns were fired but their air defence radars were successfully jammed. The raid was undoubtedly a success, though sadly there were civilian casualties and one aircraft was lost. Television reports, however, concentrated all but exclusively not on the strategic importance of the targets but on weeping mothers and children.

The initial impact on public opinion in Britain was even worse than I had feared. Public sympathy for Libyan civilians was mixed with fear of terrorist retaliation by Libya.

I was to speak in the emergency debate on the Libyan raid in the House on Wednesday afternoon. It was intellectually and technically the most difficult speech to prepare because it depended heavily on describing the intelligence on Libya’s terrorist activities and we had to marshal the arguments for self-defence in such circumstances. Every word of the speech had to be checked by the relevant intelligence services to see that it was accurate and that it did not place sources at risk.