It was the most dramatic episode in British history since those tense five days in early May 1940, which ended with Churchill ascending to the Premiership, and to his destiny. In late November 1990, it took even less time – a mere forty hours – to bring Margaret Thatcher’s Premiership to an end and, as she saw it, sever her from her destiny.
Those final hours began in splendour, irony and pathos. Mrs Thatcher had been in Paris, at a summit. President Mitterrand had decided that there should be a glorious finale. When it comes to celebrations with a military component, the British can lay on the finest display. In other manifestations of la gloire, the French are hard to rival. Thus it was on Tuesday 20 November 1990, in Versailles. There was to be a ballet, followed by a banquet in the Galerie des Glaces. It may well be that no dining room in the world had ever looked more resplendent. It may also be that in her eleven and a half years as Prime Minister, Mrs Thatcher had never attended a more glittering event.
Yet that evening, the finery was wasted on her. Just after six o’clock, she had received very bad news from London. In the first ballot for the Conservative leadership, she had fallen a tantalising four votes short of the figure needed for victory. She and her closest associates knew that her hold on power was under a mortal threat.
In the mid-1960s, the Conservative Party had devised a new system for choosing its leaders, and for dealing with challenges to incumbents. To win on the first ballot, a sitting leader would require 50 percent of Tory MPs, plus a further 15 percent. In subsequent rounds, 50 percent plus one would deliver victory. In effect, the first vote became a referendum on the existing leader, which seemed reasonable. But when Mrs Thatcher headed the poll by 52 votes and yet fell four short of winning, this seemed to be a cruel and unusual punishment.
Her fellow guests at Versailles could not believe it. Until she arrived, her misfortunes had dominated the conversation. Even critics such as German Chancellor Helmut Kohl were full of sympathy, and bewilderment. A couple of days later, when her fate was sealed, Henry Kissinger, never noted for lachrymose sentimentality, phoned 10 Downing Street in a state of high emotion. His reaction was widely shared in the offices of the powerful across the globe, not least in Moscow, where Gorbachev was incredulous. She was the most respected statesman in the world, truly a world-historical figure, who had won three elections for her party. How could that party treat her so shabbily? This dismay was echoed in many less exalted circles, though in some cases crucial ones. A British army was massing in Saudi Arabia, preparing for war with Saddam Hussein. She was a proven war leader. Unlike American Presidents, British Prime Ministers are not Commanders-in-Chief. But many of the fighting men will have been happy to regard her as such. Few of them knew much about John Major, her successor. There was a widespread feeling that by changing leaders at this vital moment, the Conservatives had let them down.
The belief that the Tory party had betrayed one of its greatest leaders was far from restricted to the military. It would endure, not least in Conservative circles in Britain. This was encouraged by the Lady herself post-resignation. She was an unquiet political ghost. For years, she became the once and future Queen. Whenever the Conservative party was in distress (which was most of the time) there was always the same lament: why did they get rid of Maggie, and when shall we look upon her like again?
Indeed, her fall was not just a drama. It was a psycho-drama, as if the party had committed matricide, like Orestes. As with him, it was then pursued by the Furies. Unlike him, it could not draw the process to a close by a trial at the Areopagus, with Apollo as defence council in front of Athena, a friendly judge. The Tory party had to endure the Furies for two decades.
Given all that, how could this have happened? Surely such an extraordinary event must have equally great causes? ‘The heavens themselves blaze forth the death of princes.’ At the time, and subsequently, there were dark rumours of a deep-laid plot by Europhiles to assassinate a leader who was obstructing Britain’s journey towards an ever-closer European Union. There was no such plot. As with most political bouleversements, the outcome depended on a mix of policies and personalities as well as on luck, an underrated quality in politics.
Europe, that constant threat to British Prime Ministers and governments, was becoming even more intractable. In two other important policy areas, the government had lost control of events. There had also been failures in man management and some poor appointments, one of which made her seem especially insensitive to her backbenchers’ electoral anxieties. Finally, Margaret Thatcher was a victim of her own success.
It is important to remember just how bad things were in Britain when she became Conservative Leader in 1975. The previous four Prime Ministers’ terms of office had ended in failure. Harold Wilson, one of the failures, had been given a second chance, which he was using to justify all the doubts that had ever been expressed about him. Back in 1964, he had talked about ‘the white heat of the technological revolution.’ That was a load of meretricious waffle, but it took in a lot of people at the time. He had also spoken about controlling ‘the commanding heights of the economy.’ By 1975, it seemed that there would soon be no heights left to command.
Britain was a strike-ridden country in the grip of high inflation, confiscatory levels of income tax – which reached 98 percent – lawless trade unions, and nationalised industries that appeared to have an unlimited right to raid the public purse, thus diverting resources from potentially productive areas of the economy to irredeemably profitless ones. Government expenditure was approaching 50 percent of GDP. There was also an intellectual crisis. It seemed that the principal post-war economic assumption, which had been shared by all governments from both parties, was now inoperative.
William Beveridge, the grand panjandrum of British economic and social theory for some time after 1945, had written a book which helped to create a post-war consensus. It was called Full Employment in a Free Society. That became an aspiration for every government of all parties, each of them equally determined to avoid a return to the 1930s. In this, the key weapon was Keynesian demand management. When in doubt, increase government borrowing. To prevent large increases in the money-supply turning into wages, prices – and inflation – governments came to rely on prices and incomes policy. That, in turn, depended on cooperation from the trade unions. By 1975, all this had broken down. A couple of years earlier, I heard J. K. Galbraith sneering at Nixon and Heath. He said that he had been examining PhD theses for thirty years. In all that time, if any candidate had ever claimed that it was possible to have seven percent inflation and seven percent unemployment, he would have flunked him as too stupid even to teach in West Virginia. Now President Nixon and Premier Heath had proved him wrong.
Galbraith was being sarcastic. It had never entered his head that he really might be wrong. But he was. He thought that if there were a Labour government in Britain and a Democratic administration in the US all would be well, with a resumption of normal Keynesian service. That was not going to happen. At least in Britain, for full employment in a free society, read high and rising levels of unemployment, stagflation – stagnation plus inflation – plus fears that the country was becoming ungovernable. In the UK, freedom under the rule of law had been taken for granted. No longer. The phrase was never far from Margaret Thatcher’s lips, as if she feared that it was now in jeopardy.
The country’s discontents were not just macro-economic. Throughout the UK, the public mood was sour. The regulations associated with prices and incomes policy were a problem for anyone trying to run a business. No-one was allowed to take more than £50 out of the country, thanks to exchange controls. If anyone wanted a telephone – in those days the Post Office was in charge of allocating phones – they had to ask some post-office bureaucrat, and woe betide them if they did not ask nicely. Many older people, who had either fought in the War or endured the hardships of the home front, wondered whether their sacrifices had gone for nothing. The young had another option. In those days, the term ‘brain drain’ was in constant use. Bright youngsters were leaving the country. Abroad, Britain was pitied, regarded as the sick man of Europe: a once-great country with a brilliant future behind it.
As a result of all this, a covert pessimism was widespread, both among senior officials and a lot of sophisticated Conservative politicians. Their mood can be summarised as ‘After such knowledge, what forgiveness?’ They had seen the Macmillan government stumble into decline. Admirable man though he was, his successor Alec Douglas Home was just an interlude. Ted Heath started with high hopes, but then he too ended in failure. A phrase which rarely reached the public was widespread when these seniores met in private: ‘the orderly management of decline.’ The alternative seemed to be a disorderly rout into chaos, in which the country would actually become ungovernable.
So Margaret Thatcher became leader of her party at the lowest point in her country’s peacetime fortunes since the reign of Charles II. She did so in controversial circumstances. Standing as the exponent of a new economic approach, she not only defeated Ted Heath. In a second ballot, she beat Willie Whitelaw, who had become the Conservative establishment’s choice. He had the support of a majority of Tory MPs who had served in government: she, of the backbenches. In 1922, after most Tories abandoned the Lloyd George coalition, F. E. Smith said that the cabin boys had taken over the ship. Her victory in 1975 was not as extreme as that, but Thatcher’s shadow cabinet was full of powerful figures who had not voted for her and were sceptical about her policies.
Their pessimism was reinforced by anxiety. In those days, the left was steadily gaining control of the Labour party under the leadership of the former Anthony Wedgwood Benn, Viscount Stansgate, a one-time moderate who had swung left while dropping most of his name on the way. By then, he was Tony Benn. Some of Mrs Thatcher’s colleagues feared that if she was too reckless in breaking with the post-war consensus, she would open the door for the Bennite Left. Bennery, Marxism: that was a distinction without a difference, she thought. Around this time, Auberon Waugh, a witty commentator, wrote that she had only one idea in her pretty little head: to reach 10 Downing Street. She did not seem to realise that if she made a mess of things, Tony Benn would be waiting to take over.
But in her party, she had one advantage. Although the Heath supporters may have been sceptical about her, several of them were intellectually honest enough to recognise that they had failed. At the time, one or two of them actually said that as they no longer knew what to do, and Margaret thought that she did, she may as well be given a go. But that was a long way from a ringing endorsement. In those early days, Rab Butler, the most important Tory politician from the 1950s who did not become Prime Minister, once said to Chris Patten: ‘This…ah…Thatcher woman: we don’t have to take her seriously, do we?’ That was not only his view. Per contra, back in those early days, no-one, absolutely no-one, was saying that ‘this Thatcher woman’ would transform her country, tame the trade unions, bring down tax rates, bring inflation under control (though see below) and liberate the animal spirits of the middle classes – while also helping Ronald Reagan to win the Cold War, earning the right to be regarded as Britain’s greatest peace-time Prime Minister: a domestic Churchill.
In an Engelsberg Ideas essay, Graham Stewart was right to point out that behind the rhetoric, Mrs Thatcher was far more cautious than she wanted others – or herself – to believe. She could be Quintus Fabius Cunctator as well as George S Patton. But whatever the private hesitancies, she transformed the country that she had inherited.
How could she be sacked with as little ceremony as a cleaner caught helping herself to the gin? What went wrong to cause such an almighty convulsion? There is a simple answer. Everything went wrong.
For a start, Margaret Thatcher ran out of luck. In her early days, she had a lot of luck at crucial moments, which she always exploited ruthlessly. In the autumn of 1978, almost everyone expected Labour leader Jim Callaghan to call a general election. If he had done so, it could have been a damned near-run thing, as the Duke of Wellington almost said. By then, the country had taken a pace or two back from the abyss which had seemed to confront it in 1975. A prices and incomes policy appeared to be working. Callaghan was a calming figure, who offered more of the same: a version of safety first. Thatcher was emphatically not offering safety first. But would the voters opt for a voyage into to unknown?
Labour had prepared an election poster for that autumn. As beautiful an image as ever appeared on any election propaganda, it was a single candle, with the words: ‘Remember the last time the Tories said they had all the answers?’ Thatcher clearly intended to tame the Trade Unions. But she had not explained how. Callaghan would run a government which would seek the Unions’ cooperation. So would the voters opt for radicalism, or a quiet life? It would have been an interesting contest.
Fortunately for the Tory party, by the time it took place, the terms of trade had changed. In the winter of 1978/79, the government’s incomes policy collapsed. The trade unions ran amok.
The phrase ‘winter of discontent’ sprang into use, and stuck. As a result, Jim Callaghan was bereft. The candle poster was never seen outside the Labour Party’s HQ in Transport House. Thatcher won, comfortably.
As regards her opponents, her luck held. James Callaghan was replaced by Michael Foot, a litterateur. He could make a good speech, in a rhodomontade manner. But he never sounded Prime Ministerial, and ended with a lower percentage of the popular vote than Jeremy Corbyn managed. This was partly the Bennites’ doing. As the Left tightened its grip on Labour, there was a split. Several of the party’s most impressive – and electable – figures broke away to form the Social Democratic Party. After the 1983 Election, Foot was replaced by Neil Kinnock. He had qualities, including stump oratory. He did manage to keep the SDP at bay so that Labour remained the principal party of opposition. But ultimately, and indeed proximately, he was insubstantial. When it came to the Premiership, to paraphrase Eliot, ‘Between the idea and the reality… fell the shadow:’ in Neil Kinnock’s case, the shadow of unelectability. He could not convince enough voters that he deserved to be taken seriously.
Before 1990 she was also fortunate in her opponents within her own party. Her Keynesian critics, alarmed by the rise in unemployment which seemed to leave her unmoved, were nicknamed the Wets. But they were not natural conspirators. They preferred grumbling over a good dinner to plotting her overthrow. There was also the divisive figure of Ted Heath. Some Wets would have been happy to bring about a Heathite restoration. Others would have viewed that with as much enthusiasm as the animals in Animal Farm had for the return of Farmer Jones. For one reason or another, the Wets would not hang together. So she hanged them separately.
Thatcher also enjoyed luck in two great events which initially brought adversity. The Falklands War was another damned near-run thing. It ended in triumph, both only after diplomatic and military difficulties. Although the Tories were actually ahead in the polls before the Falklands, the success confirmed the PM’s standing, and not only in Britain. Throughout the world, staff colleges studied that temerarious venture, and admired the country which brought it to a successful conclusion. Francois Mitterrand spoke for many when he said that once again, the world had been taught a lesson which the French had learned long ago. ‘On ne peut pas plaisanter avec les Anglais.’
Then there was the inevitable clash, which would make or break Margaret Thatcher’s premiership – as well as the country’s economic and political future. The miners went on strike in 1984. But they made a succession of mistakes. They started the strike in the summer, when demands on energy were low. They had not noticed that under the direction of the previous Energy Secretary Nigel Lawson, there had been a huge build-up of coal stocks. From the outset, it was clear that the striking miners’ leader, Arthur Scargill, had ambitions that went well beyond the coal mines. He wanted to cripple the government and the capitalist system. This alienated moderate trade unionists, as did Scargill’s reluctance to hold ballots. He was keener on flying pickets. So Thatcher won her second war.
As a result, she seemed invincible. ‘Ten more years’ the ecstatic Tory supporters – or, rather, worshippers – would chant after one of her party conference speeches. There seemed no reason why not; no reason, indeed, why the ten years should not become a rolling programme. But there were three related problems which would become more and more disruptive.
Margaret Thatcher had never been a Europhile. During the 1975 referendum campaign, she argued for continuing British membership without ever giving the impression that it was a cause which stirred her to the depth of her political being. In those days, she had been persuaded – and had persuaded herself – that Europe meant a Common Market which would increase trade and create opportunities for Britain. Over time, her views evolved, and not in a pro-European direction.
There were three reasons for this. First, the bruising battles she fought to restrain Britain’s contribution to the EU’s budget hardly encouraged her enthusiasm for matters European. Second, she became increasingly suspicious of other European leaders’ motives, concluding that a number of them were less interested in free trade than in federalism. Third, as Thatcherism gained momentum and with it, British national recovery, she came to believe that if the government adopted sensible economic policies, enabling industry and commerce to produce goods and services that people wanted at a price they were prepared to pay, the country would not need a European prop. If Britain failed in those areas, Europe would not save it. There was a further source of difficulty over Europe, within her own party. Brussels had devised an Exchange-Rate Mechanism (ERM). This created bands within which the currencies of its members could fluctuate. On the continent, and in Tory Europhile circles, this was seen as an interim measure along the road to a single currency. Thatcher was absolutely not interested in travelling along that road. But she created a problem which became increasingly troublesome. There was an intellectual case against the ERM, which she could have made. If a country ran sound policies, its exchange rate would benefit without external validation. Instead, she said that Britain would join ‘when the time is right.’ This exposed her to regular pressure from those in favour of the ERM.
That contributed to a growing estrangement from one of her most senior colleagues. Geoffrey Howe, Chancellor then Foreign Secretary, had always been a federalist, and it pained him to see his Prime Minister reject all that. Their personal relations deteriorated. Then again, personal relations with senior colleagues had never been her forte. From the beginning, there were difficulties. There is a paradoxical contrast. When she was dealing with messengers, drivers, typists, telephonists, she was politeness herself. Over nearly sixteen years as leader of her party and then PM she was under a certain amount of strain. But she never in any way took that out on the people who could not answer back. It was often a different story with senior figures, at home or abroad.
At the end of an early European summit, which she had reduced to rubble, the then Foreign Office minister, Ian Gilmour, commented: ‘She will insist on talking to heads of government as if they were members of her Cabinet.’ During another fraught European event, Roy Jenkins, the President of the Commission and as such a very grand fromage, sidled up to her to try to make peace. She swung round: ‘Oh, go away, Roy.’
As he was leaving government, John Hoskyns, the first head of her Number 10 Policy Unit, wrote what came to be known as the block-buster memorandum, complaining about the ill-feeling and waste of nervous energy which resulted from her gratuitous rudeness. No Prime Minister has ever received a memo like that, she fumed. There was an obvious retort. No previous Prime Minister had deserved one.With the passing of years, this became more of a difficulty. Much can be forgiven of dragon-slayers. But what happens when the dragons have all been slain? In the mid-1980s, I wrote a piece comparing Margaret Thatcher to a cat. A family had acquired her because their house was over-run with mice. She had proved to be an excellent mouser. The rodents had been dealt with. But the family had now decided that they had never liked cats. A growing number of Tory MPs had come to realise that as long as she was the pilot, the ‘fasten seat-belts’ sign would never be turned off. They would not have minded a quieter life. Now that Mrs Thatcher had beaten the miners, and the ‘ism’ of socialism seemed to be turning into a ‘wasm’, some Tories began to wonder if she had done her work.
There was a further problem. As the years rolled on, she took less and less trouble with her own MPs. This was partly due to time pressure. As her prestige grew, every important – or self-important – visitor to London wanted to meet her. They could hardly be fobbed off with a photo-call. A half-hour meeting had to be rostered, and when she stated talking, half-hours burgeoned into whole ones. So the House of Commons tea-room saw less of her and her links with her parliamentary troops were gradually weakened.
None of this was apparent immediately after the 1987 election: more invincibility, in the form of a 100 majority. But trouble was growing. It took a strange form. This supposedly imperious figure put her premiership in peril because she permitted Nigel Lawson, the Chancellor of the Exchequer and her most senior colleague, to defy her to the extent of running three different policies in crucial areas. The first was high-level international finance. If all the advanced countries implemented sensible monetary and fiscal policies, Nigel Lawson could not see why there ought to be violent fluctuations in exchange rates. Exchange-rate stability would be in everyone’s interests. This was the reason why he wanted to join the ERM.
Lawson’s critics accused him of being seduced by the temptations of international grand-standing. In part, Thatcher may have agreed with them. She certainly disagreed with her Chancellor on another international issue. With some justice, he believed that in recent years, the Pound had fallen too far against the Deutschmark, which encouraged complacency as some firms concluded that devaluation would make it less necessary to be competitive. So he instructed the Bank of England to shadow the DM. Margaret Thatcher believed that exchange rates should be left to the markets while the Chancellor concentrated on bringing down inflation. This argument went on until Nigel Lawson’s resignation, and still continues.
The two of them also disagreed about local government finance. Thatcher had always hated the rates, a tax which fell on property, and hit elderly people who lived on their own and were dependent on a pension. She wanted to replace this with a tax on all adults, to be known as the community charge. Nigel Lawson strongly disagreed. He was convinced that the new tax, which quickly and permanently became known as the poll tax, would be a political disaster. He was right, but everything was exacerbated by his refusal to allow the Treasury to fund some of the reliefs which later mitigated the damage.
Thatcher had choices. She could have instructed the Chancellor to do what she wanted. If that provoked his resignation, so be it. Or she could have given way. As it is, she ended with the worst of all options. Policy drifted and Lawson did resign over a relatively trivial issue: the PM’s decision to employ an economic advisor of whom he disapproved. By then, the Government seemed to have lost control of inflation. Thatcher’s acolytes blamed Lawson, but a lot of Tory MPs were unhappy. If Margaret Thatcher stood for anything, it was the defeat of inflation. If her government could no longer deliver that, what was the point? Equally, the loss of Nigel Lawson seemed to vindicate critics who claimed that she had an increasing problem with able colleagues.
In that respect, another crisis was brewing. For years, Margaret Thatcher had found Geoffrey Howe increasingly irritating. She complained that he could not take decisions unless they related to enmeshing the UK in Europe, where his enthusiasm was unlimited. Matters reached such a pass that everything he said grated on her. She could hardly bear to be in the same room as him, and often tried to return from international gatherings on different planes.
Charles Powell, her Foreign affairs private secretary, said that Geoffrey never understood that with her, you had to make your point in the first half of the sentence. You were never sure whether there would be a second half.
In July 1989, she removed Sir Geoffrey from the Foreign Office, but then made a disastrous misjudgment. There was an obvious move which might have worked. If she had made him Home Secretary, a great office of state which generated vast amounts of detail, he might have immersed himself into all of that like a submarine without a periscope. At the time, he told friends that he would not accept the Home Office. Under pressure, he might have changed his mind. If he had persisted in refusal, his resignation at that stage would have been less dangerous than it eventually was, in early November 1990.
Instead, however, she made him Leader of the House of Commons. This meant that he was in charge of orchestrating the government’s business in the Commons. This required close liaison with the Prime Minister. Given her attitude, that was impossible. His new lighter workload also gave him plenty of time to keep an eye on Europe. By then, Margaret Thatcher had come to the conclusion that Geoffrey would put up with anything. That was not quite true, as he eventually proved in a devastating resignation speech: the starting-pistol for the leadership challenge which brought her down.
His resignation was precipitated by Mrs Thatcher’s dismissive ‘no, no, no,’ rejecting the EU Commission President Jacques Delors’ proposals for moves towards federalism. This led some commentators to think that the Tory party was rejecting her Euro-scepticism. That seems odd. Within a few years, largely the same party was persecuting John Major for his willingness to cooperate with Europe.
There is another explanation. At an earlier stage, Tory MPs applauded Margaret Thatcher’s leadership of the awkward squad. By the end of the decade, a lot of them were less sure. Why did she have to fall out with everybody?
Even by 1989, there was a lot of dry tinder around in Downing Street, plus a fair few sticks of dynamite. But all might still have been well, if Thatcher had chosen the right Chief Whip. In November 1989, Sir Anthony Meyer had launched a leadership challenge. He was a self-confessed stalking horse – some said a stalking donkey – trying to incite a formidable challenger to enter the lists. That failed, but sixty Tory MPs either voted against their leader or abstained: far too many for comfort. This was a warning, which she ignored. At that stage, she had a hopeless Parliamentary Private Secretary (PPS). That is a very junior post, but also a very important one, for the holder is a conduit between the leader and the Parliamentary party. In 1979, her PPS had been Ian Gow, who did the job superbly well. He was rewarded by a ministerial position. Then, despite the fact that he adored Margaret Thatcher, he resigned over the Anglo-Irish Agreement, which he could not reconcile with his own intense and romantic Unionism. Some modern theologians believe that hell is exclusion from God. Excluded from his Goddess, Ian became an alcoholic. The same was true of his eventual successor, Peter Morrison. He was tall, pompous, supercilious and upper-class: a caricature of an out-of-touch toff, in an era when the knights of the shire were being replaced on the Tory benches by esquires of the suburbs, some of whom had social chips. Given all that, he had no rapport with the great majority of Tory MPs, especially those who were worried about their own seats. With resurgent inflation and the poll tax, the Government was losing by-elections and falling behind in the opinion polls. Peter Morrison reacted to that with impermeable insouciance. Many MPs concluded that his appointment proved that his boss was not interested in them.
At the same time, she needed a new Chief Whip, the manager of the parliamentary party. The outgoing one, David Waddington, recommended Richard Ryder, who had been her political secretary and would have done the business for her. Instead, she chose Tim Renton, a close friend of Geoffrey Howe’s and no ally of hers. Lord Ryder, as he now is, would have rescued her from herself and subtly realigned her with her own backbenchers.
If she had recalled Ian Gow in November 1989 and if he had been not been murdered by the IRA, he and Richard Ryder would have got her the four votes that she needed against Michael Heseltine on November 20 1990, and a few more for a safety margin. The removal of Peter Morrison would have done much of their work for them. But it was not to be.
She fell in forty hours because she had neglected her Party for 365 days, with the help of her PPS. ‘For want of a nail, the shoe was lost.’
Her demise was more of a shock than a surprise to a number of her ministers. In his memoirs, Douglas Hurd writes that: ‘Her very success was spoiling her judgment. She was less inclined to listen to anything except applause.’
To her, however, the shock was enduring. For years, she went on producing more adrenalin than she could consume. Charles Powell doubts whether she ever had a fully happy day after she left Downing Street. She deserved a contented old age. Then again, she was born to be a storm-crow and for greatness. A great destiny is never easy to reconcile with a happy ending.