Politics of the Thatcher Revolution: An Interpretation of British Politics 1975 - 1990

The Politics of the Thatcher Revolution An Interpretation of British Politics, 1979–1990 Geoffrey K. Fry The Politics...

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The Politics of the Thatcher Revolution An Interpretation of British Politics, 1979–1990

Geoffrey K. Fry

The Politics of the Thatcher Revolution

Also by Geoffrey K. Fry STATESMEN IN DISGUISE THE GROWTH OF GOVERNMENT THE ADMINISTRATIVE ‘REVOLUTION’ IN WHITEHALL THE CHANGING CIVIL SERVICE REFORMING THE CIVIL SERVICE POLICY AND MANAGEMENT IN THE BRITISH CIVIL SERVICE THE POLITICS OF CRISIS THE POLITICS OF DECLINE

The Politics of the Thatcher Revolution An Interpretation of British Politics, 1979–1990 Geoffrey K. Fry Emeritus Professor of British Government and Administration University of Leeds, UK

© Geoffrey K. Fry 2008 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2008 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan®is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN-13: 978 0 333 75196 1 ISBN-10: 0 333 75196 5 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. 10 9 8 7 6 5 4 3 2 1 17 16 15 14 13 12 11 10 09 08 Printed and bound in Great Britain by CPI Antony Rowe, Chippenham and Eastbourne

To Paddy and Marlene Thomas and Jim Riordan

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Contents Preface

ix

1

What Kind of Revolution? The IMF crisis of 1976: the centre cannot hold Apocalyse now: the challenge from the Left The challenge from the Right: Margaret Thatcher

1 1 6 12

2

The Conservative Ascendancy: The Pattern of British Politics, 1979–90 Three Tory General Election victories A one major party electoral model, 1979–90 Socialist nightmare: the Labour Opposition, 1979–90 ‘A better yesterday’: the Liberals and their allies, 1979–90

19 19 27 30 37

3

4

5

The Thatcher Cabinets and Governments, Her Court, and ‘an Old Whore’ of a Party ‘Where there is error may we bring truth’ Listening to ‘voices’: the Prime Minister’s court, her favourites, and her advisers ‘Where there is discord’: the early Thatcher Cabinets The Falklands War Cabinet and its immediate successors The Westland Affair of 1985–86 ‘Outstaying her welcome’: the decline and fall of Mrs Thatcher The Economic Liberal Crusades I: The Quest for an Economic Renaissance ‘A Holy War of the Just against the Unjust’ Grand strategy: the restoration of the market economy The privatization of public enterprise The attack on trade-union power The Economic Liberal Crusades II: The Recasting of the Welfare State Only one ‘social revolution’ Housing: the jewel in the crown ‘Saving’ the National Health Service ‘Tinkering’ with social security Confronting the educational establishment vii

43 43 44 49 53 58 63

71 71 76 94 99

105 105 110 115 122 127

viii

6

7

8

9

Contents

The Economic Liberal Crusades III: The Reconstruction of the Civil Service ‘Terrified’ of ‘the Lady’? The Higher Civil Service as an adversary Seeking a management revolution in the Civil Service ‘Radical reforms’ and the Next Steps programme

137 137 140 147 154

The Economic Liberal Crusades IV: The Confrontation with Local Government Less than ‘brutishly Napoleonic’ ‘The battle with local government’ The saga of the Community Charge

159 159 164 174

The Governments of the ‘Iron Lady’ and the Defence of the National Interest Farewell to the ‘Suez Syndrome’ Dealing with the Legacies of Empire Waging and winning the Cold War Thatcher and ‘Europe’

180 180 185 206 211

The Unfinished Revolution Thatcher: the ‘Outsider’ in 10 Downing Street? Thatcherism, Conservatism, and the real revolution

222 222 224

Notes and References Bibliography Political and constitutional history Diplomatic and military history Economic and social history

238 266 266 274 277

Index

285

Preface This book is called The Politics of the Thatcher Revolution, and it is the final volume of a trilogy that began with The Politics of Crisis: An Interpretation of British Politics 1931–1945, published in 2001, followed by The Politics of Decline: An Interpretation of British Politics from the 1940s to the 1970s, published in 2005. By the end of the 1960s, it seemed to me that the Keynesian order had broken down irreparably, and that, in the coming contest for the succession, economic liberalism rather than socialism would eventually become the ruling ideology in British politics. Almost everybody in university life and in higher journalism thought otherwise, even after Margaret Thatcher became the Leader of the Conservative Party in 1975, and, thus, according to those who thought like me, the next Prime Minister. The conventional wisdom was that there was not going to be a Thatcher era, and then when there was a Thatcher Government the argument ran that it was going to be doomed to suffer the same fate as the wretched Heath Government, with an explicit U-turn into supposed political and economic reality after about two years, and, of course, nobody was supposed to be able to break the unions and render Britain ‘governable’ once more, and capable of an economic renaissance. There seems no reason to set out the thesis of this book beyond stating that those who followed ‘respectable’ opinion in these matters got it wrong, and, for whatever reasons, which the present writer would concede included much in the way of luck, those who took the opposing line got it right, though inevitably not in detail. Many who argued against me were later more generous in defeat than I fear that I would have been in similar circumstances, especially as they tended to be political animals in the Aristotelian sense, whereas, aside from patriotism, my own interest was one of professionalism. I am not and never have been an economic liberal, and, unlike many who write about politics, I have never belonged to any of the political tribes. In relation to the Thatcher revolution itself, I would describe myself as an untrue believer. What did happen was that I thought would happen, though, inevitably, only in broad terms. As with my previous eight books, I am indebted to many people for their help with The Politics of the Thatcher Revolution, not least Lynne Thompson, Lindsay Scutchings, Susan Grayson, and Amanda Willis of the Brotherton Library at the University of Leeds, and all the Inter-Library Loan staff too. Many of my serving and former academic colleagues at the University of Leeds have encouraged me in the writing of this book, led by Heather Fry and family, Owen Hartley, James Macdonald, Richard Whiting, Edward Spiers, David Murdoch, David Bell, Alan Deacon, Kevin Theakston, David Seawright, ix

x

Preface

Patrick Bell, Christopher Lord, Neil Winn, Clive Jones, Rodney Lowe, Morris Szeftel, Michael Wilson and Glen Wilson. To put the matter mildly, these academics do not and did not necessarily agree with my interpretation of the Thatcher era, which makes their help all the more admirable. As I have written before, Edward Boyle, when Vice Chancellor at the University of Leeds, gave me considerable help and encouragement, despite disagreeing with me about almost everything, not least the future of socialism. I saw no reason to defer to socialism or to socialists myself, though I did take the precaution of reading The Collected Works of Marx and Engels, among many other socialist works. My antipathetic attitude was not influenced by having been taught by Michael Oakeshott, though he gave me excellent advice at one time, but followed from my own working-class family background, and my youth spent in the ranks of the Armed Forces, and my continuing contact with the mass opinion through my addiction to football. Of the many other people who have helped me so often in the past, I acknowledge that given by Richard Dickason, and the encouragement of George Jones, Peter Hennessy and Anthony Seldon. In relation specifically to this book, Andrew Riley of Churchill College, Cambridge proved, to be an excellent guide to the Thatcher Archive, and I am also very grateful to the other archivists and copyright holders for their help. I found the Thatcher CD-ROM invaluable too, not least in checking what Mrs Thatcher actually said as opposed to what was actually reported. I am grateful to Lord Powell of Bayswater for his help. I dedicate this book to my great friends from Portsmouth, Paddy and Marlene Thomas, and Jim Riordan. GEOFFREY K. FRY

1 What Kind of Revolution?

The IMF crisis of 1976: the centre cannot hold ‘The good news . . . was that the loan from the International Monetary Fund will be doled out in instalments up to some time in 1978, with audits to check whether Britain is fulfilling the loan’s terms’, The Economist observed in late 1976. ‘This period of rule by IMF Inspectorate General should give the country better government than successive teams of British politicians have done.’1 British experience had shown that the State could not, at one and the same time, perennially increase real incomes, attain price stability, sustain full employment, and continually expand the social services, as the Keynesian dispensation had led people to believe. Yet such a role for the State had become an integral part of Britain’s liberal democracy,2 and it was only obvious and regularly displayed excess on the part of the British trade unions together with a succession of external blows culminating in the Oil Crisis of 1973 and the IMF loan conditions of 1976 that eventually created the political climate in which the Governments of Margaret Thatcher could pursue their programmes of radical change. ‘British political life is not a record of steady, continuing, gradual progress on the Tennysonian plan’, or so one well-known essayist had concluded twenty years earlier, ‘The picture is rather of a certain broadly accepted form of society, a generation of petty bickering about small details and then, from time to time, a sudden jump forward to a new order’, as in 1945, and at such times it was as well that electoral arrangements were in place that enabled ‘the electorate. . . to turn out Tweedledum and put in Tweedledee.’3 What had happened, though, was that governments primarily composed of High Tories on the one hand and mainly drawn from the Right and Centre of the Labour Party on the other had alternated in office, and, this side of 1955, they all had obvious economic failure in common. When the Heath Conservative Government of 1970–74 tried to blast the British economy on to a higher growth path, not least to prove that membership of the European Community meant economic success, it only succeeded in demonstrating 1

2 The Politics of the Thatcher Revolution

that the Keynesian era was over. The prominence of the role that aggressive trade unionism had played in the Heath Government’s downfall seemed to some to call even the future of the political system into question. Had union power together with continuing economic failure and relative decline rendered Britain ungovernable? ‘Too much is impossible in Britain today’, The Economist was not alone in thinking in reviewing the state of British politics by the second half of 1976. The rise of Mrs Thatcher to be the Leader of the Conservative Party in 1975 meant that ‘for the first time in its post-war history the country lacks an Opposition which could govern in the Government’s place without provoking an extra-Parliamentary lurch against it which would threaten Parliamentary Government itself’. The Economist believed that ‘if all 635 Members of the House of Commons voted now the way they think, instead of for the Party Whips, Mr Callaghan would have the majority he needs to turn Britain round’. Though at the head of the Labour Government, James Callaghan was ‘the best conservative Prime Minister Britain could get’.4 There were those like Edmund Dell, one of Callaghan’s Cabinet colleagues, who believed that a Grand Coalition between the major parties would have been the best means of dealing with the political and economic crisis of the mid-1970s,5 and, given that another colleague, even one by now on the Left, Tony Benn, saw Callaghan as ‘so avuncular and agreeable’,6 it was not surprising that the Labour Foreign Secretary and then Prime Minister was thought of by the superficially minded as the ideal leader of a National Government. After Heath had led his Tory Government to defeat in the February 1974 General Election on a ‘who governs?’ platform, there had been much talk in politics about the need for a Coalition Government, some of it emanating from Heath himself, who campaigned in favour of a Government of National Unity in the next Election held eight months later, without success. Then, following the June 1975 Referendum on continued membership of the European Community, there was some speculation that the victorious ‘Europeans’ such as Heath, Roy Jenkins, and other ‘moderates’ might in some way get together to form a Coalition Government. In the event, Harold Wilson’s Labour Government soldiered on with its tiny majority, and when that majority was eroded the Lib–Lab Pact of 1977–78 was eventually devised to keep what had become the Callaghan Labour Government in office and to keep out Mrs Thatcher and the Conservatives. The Labour Movement and the trade unions in particular had good cause to fear Mrs Thatcher, though Benn had even been afraid that the formation of a National Government of ‘moderates’ would mean that ‘we will be absolutely clobbered’, presumably meaning the wider Labour Movement.7 It had to be difficult to know who among the ‘moderates’ would do this ‘clobbering’, given that, for example, few of them had shown much, if any, political courage in previous confrontations with the trade unions. Indeed, when, in 1969, the Wilson Government had brought forward the In Place of Strife legislation to regulate the activities

What Kind of Revolution?

3

of the trade unions, from within the Cabinet Callaghan had led the way in undermining the Bill.8 When the Heath Government’s Industrial Relations Act had failed to do the job too, it was never very likely that a subsequent Coalition Government largely led by those who had failed before and who were still tied to the existing and now discredited economic and social order would do any better. One reason for pessimism about such a political venture was that there was nobody to play the necessary role in the political context of the time of the union man that J.H. Thomas, founder of the National Union of Railwaymen, had done in the National Government of the 1930s. The Inland Revenue Staff Federation was the best that Callaghan could come up with as trade union experience, but he was the only candidate and he was never likely to wish to follow in the footsteps of ‘Traitor Thomas’. Dell had blamed the ideological incompatibility of the two major parties as the main reason why a Grand Coalition had never been practical politics even at a time of national crisis in the 1970s,9 but Callaghan – the crucial figure – could not be seriously described as having an ideological commitment. What Callaghan had was a tribal loyalty to the Labour Party added to knowledge of what had happened the last time that a National Government had been formed during the political crisis of 1931. Then, Ramsay MacDonald, the Labour Prime Minister, had been persuaded to become the head of a National Government, which also included Thomas among others from Labour’s leadership group, thus dividing the Labour Party, which spent the 1930s in embittered and inept Opposition.10 In the decisive Cabinet meeting, Callaghan refused to agree with Benn that the IMF Crisis of 1976 was comparable with that of 1931,11 which in terms of the remedies deemed necessary by financial opinion for its resolution was unconvincing. What Callaghan was determined upon was to ensure that if and when the IMF’s economic liberal medicine worked, the Labour Party would still be in office to take the credit, drawing support not least from those groups and their unions in the public sector as well as elsewhere whose interests seemed threatened by the prospective radicalism of Mrs Thatcher. As a strategy for winning the next General Election that had to be held at the latest by the autumn of 1979, Callaghan’s brand of conservatism had some promise, or so experts undeterred by failing to correctly predict the previous three Elections came to believe. As a means of arresting, let alone reversing, national decline, Callaghan’s conservatism had no merit at all, since his form of tribal loyalty dictated that the Fifth Estate had to retain its privileges when their removal was a condition of economic advance, and few, including presumably Callaghan himself, failed to recognize how ironic it was when eventually the trade unions added the Callaghan Government to its list of political scalps. The year 1976 not only invited comparisons with 1931: it was also the fiftieth anniversary of the defeat of the General Strike, which Beatrice Webb famously dismissed as ‘little more than a nine days’ world wonder’.12 When Stanley Baldwin, the then Conservative Prime Minister, bought off the


Miners Federation of Great Britain by temporarily subsidizing the coal industry to give the Labour Movement the triumph of Red Friday – 31 July 1925 – the Home Secretary, Sir William Joynson-Hicks had protested: ‘Is England to be governed by Parliament and the Cabinet or by a handful of trade union leaders?’13 Much the same question was asked from the late 1960s onwards when aggressive trade unionism, with what was now called the National Union of Mineworkers leading the way, had reduced both Labour and Conservative governments to the role of supplicant, and there was much talk, especially among upper and middle-class intellectuals, about the ‘inevitability’ of socialism, enforced if necessary, and, thus, of revolution. If there had been many more governments led by inept ‘moderates’, then those whom Neville Chamberlain once described as having ‘unsteady brains’14 might have got their wish, but what actually happened was the Thatcher CounterRevolution. Half a century before, if the First World War had been lost, then there might have been the British Socialist Revolution of 1919–21, but as that conflict was won the most that the established order had to face was the continuance of the strike wave that had disfigured the British polity and economy since 1911. Far from having to confront ‘moderates’, the Triple Alliance of miners, railwaymen and transport workers had to contend with the Coalition Government that had won the war. This had a Liberal Prime Minister, David Lloyd George, whose talents for unprincipled opportunism were much needed in what was a government dominated by the Right, which was led by Andrew Bonar Law, a Conservative who could match even the Prime Minister for ruthlessness. When once asked by a society hostess what people like the Triple Alliance really wanted, Bonar Law pointed to evidence of her wealth and observed that ‘perhaps they want just a little of all this’. Nevertheless, Bonar Law believed that the State must win in any confrontation with the Triple Alliance, and he was willing to envisage legislation empowering the government to seize strike funds and arrest the leaders.15 While not ruling out firm action, Lloyd George preferred specious promises of nationalization and personal diplomacy in dealing with the unions.16 When the Triple Alliance finally confronted the government, one sympathetic commentator wrote that ‘the military preparations to combat the strike were plain for all to see. A State of Emergency was declared, reservists were called to the colours, machine guns were posted at pitheads, and troops in full battle order were sent out to many working class areas. Compared with this display of militancy, the Government’s attitude in [the actual General Strike of] 1926 was positively pacific.’17 Black Friday – 15 April 1921 – marked the defeat of the Triple Alliance, though the MFGB (Miners’ Federation of Great Britain) itself was only defeated later. Red Friday proved to be a short lived revenge, and the General Strike of May 1926 was swiftly defeated by Stanley Baldwin’s Conservative Government, though the MFGB fought on until December. ‘The greatest enemy of the working classes that this last generation has produced is the present Prime Minister’, a Labour MP declared,18 as Baldwin


5

faced down the MFGB over several months rather than permanently subsidize the coal-mining industry. As voting behaviour persistently demonstrated, the working classes and the Labour Movement were not synonymous, and Baldwin was better described as an adversary rather than an enemy of the Labour Party and Movement. That Party and Movement had been brought within the British political nation in 1916 when Arthur Henderson had joined Lloyd George’s War Cabinet, and for all the determination that he displayed in defeating the General Strike and its sequel, Baldwin wanted to keep them there. Baldwin was not antagonistic to the trade unions as such, being a believer in voluntary collective bargaining because he considered that, as far as possible, the State should abstain from intervening in industrial relations. A Prime Minister like Bonar Law might have followed up the defeat of the General Strike by legislation to remove the legal immunities granted to the trade unions and their funds by the 1906 Act, but Baldwin preferred to inflict lesser blows and to promote conciliation in the spirit of the Mond–Turner talks.19 The Baldwin Model of the Man of Moderation became the dominant one for prime ministers thereafter, even surviving the immediate damage done to Baldwin’s reputation by his association with the defence and foreign policies of the National Governments of the 1930s. Harold Macmillan spotted Clement Attlee’s ‘imitation of Baldwin which he does so well,’20 and Macmillan himself was a prime minister of much the same type, and so was Churchill in his peacetime government of 1951–55, despite his warring relationship with Baldwin in the past. Though not remotely in Attlee’s league, later twentieth-century Labour Prime Ministers – Wilson, Callaghan and Tony Blair – played the Man of Moderation game, and possibly had to go in for this form of reassurance given that the Labour Party was supposed to be the more radical than its main rival. Others might argue that, since few prime ministers would be averse to more than twenty years in office, Sir Robert Walpole was the model, or that the folk memory of the English Civil War of the 1640s promoted thereafter a political culture that especially valued peace at any price and leaders who could provide it. ‘The great qualities, the imperious will, the rapid energy, the eager nature fit for a great crisis are not required – are impediments – in common times’, Walter Bagehot observed, ‘A Lord Liverpool is better in everyday politics than a Chatham.’ Bagehot recognized that there had been ‘few catastrophes since our Constitution attained maturity’, but one of its merits was that when crises came, it was flexible enough ‘to change the helmsman – to replace the pilot of the calm by the pilot of the storm’.21 Some would say that ‘the pilot of the calm’ – Baldwin – had done well enough in putting down the General Strike, and that in the 1930s there was much to be said for his argument that the Labour Movement should be well treated because ‘one day we may need them’,22 and that time came in 1940, when, of course, Ernest Bevin was brought into Churchill’s War Cabinet. From then onwards, the broad acceptance by the Fifth Estate


of public policy deemed by it to affect its interests had been treated as a requirement for the successful functioning of the Keynesian Welfare State. It was one thing, though, for governments to negotiate with trade-union leaders largely drawn from the Right and Centre of the Labour Movement, and another to deal with those of the Left. By the 1970s, the Left was in the ascendant, and the order of their dominance was such that it would take more than the politics of accommodation to defeat them.

Apocalyse now: the challenge from the Left ‘Until our own day, we have been governed in all fundamental matters by a single party in the State’, Harold Laski wrote in 1938, ‘ For though that party has given the appearance, by its technique of division into two main wings, of bifurcation, the fact always has been until now that both wings did define in common the ends of Parliamentary Government. These ends, broadly speaking [were] always within the framework of the private ownership of the means of production.’23 Now, Laski argued, ‘the striking thing about the foundations upon which the principles of each party rest is the abyss by which they are separated. Liberal Government could succeed Conservative Government before 1924 with the assurance to businessmen that the basic economic structure of our society would be undisturbed. Anyone who examines the Short Programme of the Labour Party. . . of 1937 will see that there is no longer any such assurance. There are promised to the electorate in the event of a Socialist victory not only wide measures of nationalization, to be completed within a five year period, but also immense social reforms.’24 Laski implied that the forces of reaction would frustrate the implementation of this Programme and that Britain faced a prospective revolutionary situation. Unwisely, in 1945, Laski sued for libel when he was accused of being a revolutionary, and inevitably lost. Though the manner in which the court case was conducted was a disgrace to the English legal system, thereafter those like Ralph Miliband, his disciple,25 who argued that Parliamentary socialism in Britain was unattainable, never said how a socialist system was going to be established, or for that matter how it would work. The implication was that such a system was either going to be imposed from outside by the Soviet Union, whom the Left had to hope would win the Cold War and in whose interest it was to work for such a victory; or, internally, socialism was going to be imposed by the wider Labour Movement once the Left controlled it. Whether or not the Churchill War Coalition Government of 1940–45 was the most socialist government Britain ever experienced or the Attlee Labour Governments of 1945–51 better merited that description could be debated, but the Keynesian Welfare State was anticipated and planned for by the Coalition Government, and the Attlee Governments implemented what had been agreed, together with the establishment of a large nationalized sector of the economy. The Second World War and the years immediately


7

afterwards had witnessed a social revolution of a kind, but, as both Keynes of The General Theory and Beveridge of the Report were Liberals, not much more than a semi-socialist system had been constructed, and by 1948 the Left wanted the structure to be completed and the Right and Centre of the Labour Party were for running the established arrangements in competition with the Conservatives. The latter strategy was the one that was followed, with the malfunctioning of the Keynesian Welfare State attributed to mismanagement of the economy by successive Tory Governments between 1951 and 1964, a form of argument that did not survive Labour’s return to office. More durable was the belief widely subscribed to outside the Labour Movement that the negative power of the trade unions was the main obstacle that stood in the way of Britain developing a successful modern economy. Such negative union power was certainly important, but it would not have made the difference if union co-operation had been the common experience. This was because in most circumstances the unions could not deliver much in any deals made, even memberships prepared to honour agreements, as the number of unofficial strikes and strikers testified. Men from the Left such as Jack Jones, the General Secretary of the Transport and General Workers Union and Hugh Scanlon, President of the Amalgamated Union of Engineering Workers – the ‘terrible twins’ – and some of the leaders of the NUM (National Union of Mineworkers) knew what they were against, which was an economy in which there was private ownership on the existing scale, and which, despite the scale of State intervention and the high levels of public expenditure, they persisted in calling capitalism. What remained unclear, deliberately so of course, in some cases, was what they were for. If it was not going to be the Swedish Middle Way that had captivated Anthony Crosland, was it to be a Soviet system that worked, and, if that was not the model, where was it to be found? From what had come to amount to be a form of negative veto to imposed socialism of a fully developed kind was a long, revolutionary step, but at times in the 1970s the socialists had reason to hope that the use of union power would overturn the system. The forces of law and order certainly had been humiliated at Saltley in 1972 during the then miners’ strike. The Heath Government had been determined to keep the coke depot there open, but, when the picketing miners were massively supported by other strikers from other industries, the Chief Constable of Birmingham had to order the gates to be shut, and to ask Arthur Scargill, the leader of the Yorkshire miners, to disperse the crowd. This Scargill did, standing on top of a public lavatory, according to him using public address equipment thoughtfully provided by the Chief Constable, having first taken the opportunity of congratulating the strikers present on having achieved ‘the greatest victory of the working class, certainly in my lifetime’.26 What this success of what Scargill called ‘a military operation’27 demonstrated, he was not alone in believing, was that ‘the working class had only to flex its muscles and it could bring governments, employers, society to a total standstill’.28 As his present approach was to use


wage pressure to break the political system, in that sense Scargill was neutral between Conservative and Labour Governments, being prepared to confront either of them.29 That said though, he believed that changing the Labour Party was ‘the ideal way [to] achieve working class power’ by means of establishing ‘a broad alliance of the whole Left inside the Party’. The Party had to be compelled to accept Conference decisions, and ‘those who do not accept this have got to be thrown out’. Scargill had in mind ‘[Reg] Prentice, [Shirley] Williams, [Roy] Jenkins, all the Tories that are in the Labour Party’, and, though he was the Leader of the Party and the Prime Minister at the time, Harold Wilson too. ‘The unions are the foundation of the Party and should control it’, Scargill said, ‘I’ve always supported the bloc vote and [it] would become ours if we won the leadership in the unions. Once you win those votes in the Party Conference you can then win the positions which are necessary to change society.’30 Scargill believed that ‘we could take over all the means of production, distribution and exchange more or less immediately’, though quite why sufficient of the electorate would vote for a Labour Party that would ‘take into common ownership everything in Britain’31 for a Government with the requisite majority to be formed was not explained. ‘A big strike reminds everyone of the realities of the situation’, Scargill stated,32 and when asked, after the triumph of socialism in Vietnam, whether conditions now made possible a socialist revolution in an advanced country, Scargill replied that ‘the capitalist system is in big trouble’, and following crises of the kind that Britain had experienced in 1972 and 1974 ‘a socialist revolution may be that much nearer . . . than many people think’.33 Since the wider Labour Movement had brought the Wilson Labour Government to its knees in defeating the In Place of Strife trade-union reforms in 1969, the Left had been making the running in the Labour Party anyway.34 Few pretended that Labour Governments of the 1960s had been anything but failures, and for many in the Labour Party’s ranks that had been true of the Government of 1966–70 in particular.35 The Right and Centre got the blame for this, though they had the consolation that when another Labour Government was formed they would once more take most of the leading positions on the basis of having the greater number of talented and experienced politicians in their Parliamentary ranks compared with the Left. In the meantime, though, they were on the defensive during the period of Opposition that began in 1970. Scanlon set the tone when he told the Conference of that year that ‘we will talk about a socialist income[s] policy when we own the means of production, distribution and exchange’,36 and, through the mechanism of the Labour–TUC Liaison Committee formed two years later, a document called Economic Policy and the Standard of Living was devised by 1973 that Harold Wilson chose to portray as an economic strategy, including food subsidies, price controls, housing and rents, transport and a redistribution of income and wealth, combined with a policy for increasing


9

investment in industry. Together with the repeal of the Conservatives’ Industrial Relations Act [of 1971], this would ‘engender the strong feeling of mutual confidence [between the unions and the next Labour Government] which alone will make it possible to reach the wide ranging agreement which is necessary to control inflation and achieve sustained growth in the standard of living.’ This was widely interpreted as a voluntary agreement to accept restraint in pay demands as part of a wider social agreement.37 For Wilson, what became popularly called the Social Contract was a means of securing the return of a Labour Government, and even its most articulate critic from within that Government – Joel Barnett, the Chief Secretary to the Treasury – conceded that it may well have helped the Party to obtain office in 1974.38 ‘The only give and take in the Contract was that the government gave and the unions took’, Barnett observed,39 adding that, ‘After the first disastrous year of the Social Contract in 1974/75, when pay rose by nearly 30 per cent, the TUC were extremely helpful in ensuring moderation in pay settlements, though we paid a high price in levels of public expenditure far in excess of what we could afford.’40 In the summer of 1975, Jack Jones delivered a flat-rate wages policy on behalf of the unions that bought some time before the inevitable reckoning with the IMF. To the extent that the Social Contract could be considered a serious document, it looked like an attempt to return to the world of 1948, recreating the Attlee years with no ‘bonfire of controls’ this time and no Tory ‘affluence’ to come. For, this time, the Left believed that they would win. With the Left rampant, the maintenance of a list of proscribed organizations membership of which was incompatible with that of the Labour Party had been discontinued in 1973, subject of course to the separate identity of that Party being respected as under Clause II of its Constitution.41 How this came about was a complex matter,42 but an important reason for the change would seem to have been an unwillingness in the leadership group to police the list. In their day, people like Herbert Morrison, George Brown or Morgan Phillips had done this task with relish, but it may not have been lost on others that being the hammer of the Left seemed not to have done the political careers of Morrison and Brown much good when it came to obtaining the leadership. The eventual successor to Phillips as General Secretary, Ron Hayward, who was to hold the post between 1972 and 1982, had been given the remit that his role was to seek the implementation of Party policy as laid down by the Conference and the National Executive Committee rather than the Parliamentary leadership, and, being a man of the Left, Hayward acted accordingly. The stage was not set for a rerun of the 1930s when the Conference was king because this time, unlike after 1931, the Parliamentary leadership remained largely intact, even if, as one observer put it, the politicians concerned had to keep a nervous eye on the groundswell of Party


opinion.43 In particular, though Scargill had dismissed the notion that Tony Benn could ever be ‘the Messiah of the Left’,44 the politicians of the Right and Centre had good cause to think that their former social democratic colleague had that ambition, as Crosland recognized.45 At one time, Crosland, his former Oxford tutor and then Cabinet colleague, had been given to saying of Benn that there was ‘nothing the matter with him except he’s a bit cracked’, even when he suspected Benn of telephoning him pretending to be a mad farmer,46 instead of affecting to be Jimmy the telephone engineer.47 When Benn defected to the Left, Crosland’s tolerance departed too. Benn seemed to see himself as the left-wing answer to Enoch Powell, believing that ‘Enoch has had more effect on the country than either Party.’48 This ambition ignored two realities. Firstly, for all Powell’s articulation of overwhelming popular antipathy to New Commonwealth immigration, not only had public policy on the matter failed to respond in the manner that most electors wanted, but also Powell’s estrangement from the mainstream of the Conservative Party had damaged his career.49 Secondly, Benn had no rallying cry of similar popular appeal, though, conceivably, campaigning for the restoration of capital punishment for murder would have done, and admirably so in the sense that nobody could doubt the scale of public support for hanging murderers, and Benn had come to urge more public ‘participation’ in governmental policy-making in the name of democracy. However, abolitionist sentiment had come to conquer the Labour Party, calling into question once more who exactly it was supposed to represent. Benn was not only an abolitionist: in 1965 he had specifically congratulated Sidney Silverman on getting the relevant legislation through.50 When the Home Secretary, Sir Frank Soskice had earlier said that ‘I shall have to start hanging again’, Benn described him as ‘an impossibly reactionary man’.51 If so, this description fitted an obvious majority of the electorate, and, unsurprisingly as a Parliamentarian when it suited him, Benn’s enthusiasm for ‘participation’ was limited to those issues on which he thought that he could get the desired responses. Benn’s idea of a popular cause that would win over the electorate, and one which he pursued with the zeal of the convert, was to take the Labour Party’s formal commitment to Parliamentary socialism literally, and to campaign to bring its policy and organization into line with this ambition. In this way, the Left would become the Party’s mainstream. Union power was one reason for believing that this would happen, and another was that the Labour Governments of the 1960s had demonstrated the intellectual and moral bankruptcy of the Right and Centre of the Party. It did not, though, follow that, even if they recognized this redundancy, the politicians concerned would see the light as Benn had done, or conveniently get out of the way by giving up their careers. Changes in the distribution of power within the Labour Party were proposed that would force such people to one side or, indeed, out altogether. From 1973 onwards, a Hard Left group called the Campaign for Labour Party Democracy sought mandatory reselection of MPs by their local Party


11

activists; a new method of selecting the Party Leader that would involve establishing an electoral college in which MPs would only be one element instead of having a monopoly; and control of the Party’s election manifesto by the National Executive Committee. In the long run, such a programme had a good chance of being adopted and of forcing the Labour Party further to the Left, but, more immediately, that Party remained a remarkably disparate coalition even by the standards of its divisions in the past. ‘At the Home Policy Committee of the N.E.C. there was a discussion about the next Labour Government’, Benn recorded in his diary for 8 March 1973 referring to what became known as Labour’s Programme 1973: They all felt that the programme was so complicated and full that it would take three Parliaments to implement. So I chipped in and said I was uneasy about this; we really couldn’t wait for twenty-five years. What we wanted was a substantial and irreversible shift in the balance of power and wealth in the next Labour Government and it wouldn’t necessarily cost money if we were prepared to act swiftly. . . I would need an Industrial Powers Act if I was going to carry through the sort of industrial policy a Labour Government would need. Benn praised himself for his toughness in taking this line,52 and later professed himself to be honoured when compared with Sir Stafford Cripps of the 1930s, a comparison that was made, despite the chasm between them in natural ability, because Benn advocated the use of an all-embracing Enabling Act to be implemented at the outset of the next Labour Government.53 When Shirley Williams questioned whether there was sufficient electoral support for more public ownership of the kind that Benn was advocating, Benn replied that ‘the public doesn’t necessarily accept your attitude on race, but you go on saying it, and quite rightly’.54 At the heart of the Alternative Economic Strategy that Benn promoted were proposals for a National Enterprise Board to take over 25 of the leading 100 companies, and subject other private-sector companies to planning agreements. Edmund Dell, one of Benn’s Cabinet colleagues, believed that ‘planning agreements were a farce. We hadn’t the faintest idea what they meant.’55 Undeterred, Benn pressed ahead with advocating ‘the real Labour policy of saving jobs, a vigorous micro-investment programme, import control, control of the banks and insurance companies, control of export, of capital, higher taxation of the rich, and Britain leaving the Common Market’.56 Logically enough, given the autarkic nature of the Alternative Economic Strategy essential for the establishment of British socialism, Benn had to find a means to get Britain out of the European Community, and he had led the way in committing the next Labour Government to holding a national referendum about membership with the implication that the electorate would come up with the result that the Left wanted. Benn had identified an issue that was crucial – sovereignty – but, as he himself


persisted in referring to the Community as the Common Market, he could hardly expect the electorate not to see it that way too. The defeat sustained by the Left along with the other advocates of withdrawal in the 1975 Referendum only strengthened the position of the Right and Centre of the Labour Party temporarily because they still did not have a domestic economic strategy of their own that would work. The IMF eventually insisted on them having such a strategy, and Benn walked away from the Cabinet table on 2 December 1976 and told Judith Hart that the social democratic wing of the Party had crumbled.57 ‘The trouble with fanatics – why one should never underestimate them – is they’re so assiduous’, Crosland had already observed of Benn, and when asked about the prospects of Benn becoming the Labour Leader, Crosland’s reply was ‘over my dead body’.58 In a matter of weeks after his defeat in the Cabinet over the IMF loan conditions, it was not just Croslandism that was dead, but Crosland too. ‘There never was the slightest prospect of socialist revolution in Britain between 1968 and 1979’, the most distinguished of the contemporary political commentators – Peter Jenkins – observed many years later,59 while recognizing that ‘the quadrupling of the price of oil in 1973’ had ‘produced a crisis of capitalism of a sort’, and that ‘working class action by the miners had brought the Heath Government down’. Jenkins recalled too that if in 1975 he had been asked to choose which politician had the better prospects, he would have chosen Benn rather than Mrs Thatcher.60 In part, this choice reflected the tendency of political analysts to see British politics in terms of the Labour Party and Movement, which if won over to, say, Bennite socialism would carry the day, not least because of the need to find the most effective appeasers of union power. The Right and Centre of the Labour Party had such appeasing aspirations, and with the Callaghan Government having been given an economic liberal strategy by the IMF that just might grant it an electoral reprieve, there was the possibility of the Labour Government muddling through, though, of course, only until the next crisis. Armed with extra-Parliamentary power, and the revelation of the future given to them by Marx, those on the Left believed that they would defeat the ‘moderates’ in whatever form or combination they presented themselves. Such was their confidence, the Left even welcomed the advent of Mrs Thatcher, a definite opponent for a change, and the war of ideas with economic liberalism that would surely follow, and one which they would surely win. They were wrong.

The challenge from the Right: Margaret Thatcher ‘I don’t believe a word of this’, Churchill was supposed to have said when he first heard of the contents of the Industrial Charter that R.A. Butler had devised as part of the New Conservatism in the aftermath of the Tory Party’s


13

heavy defeat in the 1945 Election. Nonetheless, when he faced the relevant Party Conference in 1947, Churchill read out the approving draft set before him.61 Much was made, not least by his official biographer, of Butler ‘[cutting] the [Conservative] Party afloat from its 1930s unemployment moorings’, getting it ‘to accept the concept of the Welfare State’, and making sure that ‘if the voice of the Tory turtles was still heard in the land, they were henceforth regarded as mere historical curiosities’.62 Given what the wartime Coalition had committed itself to anyway, Butler’s rethinking of policy did not amount to much more than the politics of reassurance. What the leadership group at least in the Tory Party had been swift to realize was the political reality of the Keynesian era, which was that the electoral market for the economics of ‘sound money’ was too small to sustain a governing party. This was the case for thirty years after 1945, but, in terms of the politics of the Conservative Party, the Election defeat of 1964 caused many Tories to question what had become of Conservatism, and, as the Butler formula had ceased to work in terms of retention of office, to think that it was time to turn once more to economic liberalism. Forty years before, under the guidance of Baldwin, the Conservatives were supposed to have established themselves as the Party of Resistance with the Labour Party as the Party of Change,63 descriptions that flattered both parties. If allegiance to ‘Europe’ was to be a test, then by the latter 1960s, many on the Right and Centre of the Labour Party formed an informal Party of Change with many High Tories: but, as far as the Keynesian dispensation was concerned the same elements constituted an informal Party of Resistance against the threats from the Right and the Left, who wanted a different economic and social order, and in the case of the Left armed with union power a means of using force to get it. In 1970, there was no hard evidence that enough of the electorate had lost their belief in the Keynesian dispensation built in the 1940s, even if many on the Right of the Conservative Party thought that by now they should have done. The Conservative Government of 1970–74 did secure the Treaty commitment to ‘Europe’, but, otherwise, the contradictions inherent in the Quiet Revolution that Heath promised soon made themselves apparent, and when he proceeded to act like the conviction Keynesian that Powell and the economic liberals had always suspected him to be and failed in that role too, there was nothing left beyond electoral defeats to add to those suffered at the hands of the unions.64 One disquieting experience that almost every Conservative candidate in the country shared during their personal canvassing during the October 1974 Election, according to the High Tory, Nigel Fisher, was that ‘on nearly every doorstep, if a conversation developed, one’s constituent – whether man or woman, Conservative, Liberal, or Labour – would say, “I’d vote for you except for Heath’, or “You’ll never win with Heath’, or, quite simply, “I don’t like Heath.”’65 Since even the admiring James Prior described Heath as ‘a very private, rather shy and unapproachable man who can be given to rudeness and show boredom quickly if he finds people uninteresting’,66 it was not


surprising that there were many in the Conservative Parliamentary Party who had come to despise their Leader. Heath himself recognized that as I had been Leader for nearly ten years. . . it was only natural that. . . there would be a number of malcontents on the backbenches. Many felt bitter at their lack of progress under my leadership – it is impossible to include everybody in a Shadow Cabinet or Government. In addition, some MPs would genuinely think that it was time for a change.67 It may well be that, given the lamentable domestic policy record of the Heath Government and its humiliating dismissal from office earlier in the year, the Conservatives did well to keep the Labour Government’s majority in the October 1974 Election down to single figures. The Tory Party machine in the country certainly did its job in retaining many more marginal seats than the pundits had predicted. The Tories had fought ‘a good rearguard action’, according to William Whitelaw, the Party Chairman, who congratulated himself on his own contribution, while confessing that, on his return to the House of Commons, he underrated the depth of the antipathy towards Heath in the Parliamentary Party, believing that the Executive of the 1922 Committee and its Chairman, Edward du Cann, in particular, were unrepresentative in their hostility.68 As it was, when Parliament met again after the Election, Fisher thought uniquely, the Chairman, officers and Executive, including himself, were all re-elected, in du Cann’s case unopposed, which was evidence that the views of the Parliamentary Party had been fairly represented. The point was made in debating the matter that the Party Leadership was a leasehold, not a freehold,69 but Heath was as determined to hang on as his enemies were to bring him down. Memories of Heath supplanting the then Sir Alec Douglas-Home as Tory Leader in 1965 were revived when Heath asked Lord Home to chair a committee to examine the Party’s rules for electing its Leader. The new rules stored up trouble for a future Leader, who was made subject to annual re-election without sufficient safeguards being put in place to ensure that challengers had wide support, but they served their purpose in 1975, which was to make it very difficult for the existing Leader to survive. This was because the 1965 rules were changed to require that a successful candidate had to have a winning margin on the first ballot not just of at least 15 per cent of the votes cast, but of those entitled to vote. Although Home himself deprecated the use of the phrase, the revised 15 per cent rule came to be known as ‘Alec’s revenge’.70 That Home and then Heath had become Conservative Prime Ministers at all might well be explained by what could be called ‘Harold’s stupidity’, given the damage done to his wing of the Party by Macmillan in ensuring that Butler did not become his successor in 1963. With Macleod dead and Maudling discredited, that by 1975 Whitelaw seemed to be the best available successor to Heath from that wing demonstrated its decline. Heath did not make way


15

for Whitelaw, believing, it seemed, that three defeats in four Elections as Leader did not disqualify him from continuing. Heath seemed to think that he had done well in the second 1974 Election to avoid repeating the earlier defeat of 1966, and he may well have judged that, with Powell lost to the Party, the Right would have problems finding a candidate who would be a worthy adversary, possibly sharing Edward Boyle’s belief that Powell’s third place and just 15 votes in the 1965 contest was no accident. Sure enough, the Right had problems in finding a convincing candidate. Sir Keith Joseph, believing himself to be a convert, attracted some support and a remark from a Shadow Cabinet colleague that ‘if you chose Keith instead of Heath, it would be like going straight from the fridge to the freezer’.71 Joseph made a speech in Birmingham in October 1974 that an ally described as ‘a carefully planned disaster’, which caused prospective supporters to question his political judgment,72 and Joseph eventually withdrew from the fray, to take up the role of economic liberal campaigner at the Centre of Policy Studies, while du Cann’s controversial business connections ruled him out too.73 So, by serendipity, the candidate for the Right turned out to be Margaret Thatcher. ‘You must be out of your mind’, her husband said of her candidacy, adding that, ‘You haven’t got a hope.’74 That Mrs Thatcher was mad proved to be a popular interpretation of her political behaviour for years to come, and not surprisingly so, given that for a woman of her generation, having married a rich man, far from putting her feet up as most in those days seemed to do once they had won that prize, she then embarked on a career in politics. Even the finest army the world has known, man for man – the Wehrmacht – was defeated when it had to fight on two fronts, and, in the days before measures were taken to try to adjust the labour market in their favour, career women had to contend not only with overt male prejudice but also with what only those who defer to feminism would deny to be as at least as deadly at times, namely, antagonism on the part of other women. Thus, there were few female Conservative MPs, though women were numerous in the Tory Party with over a million of them forming the largest female organization in Britain in the 1980s, for example, representing three-quarters of the then total Party membership.75 Mrs Thatcher herself also remarked on the snobbery of the Conservative Party of the 1970s in its attitude towards a grocer’s daughter.76 In the 1950s, attitudes would be unlikely to be different, and, what with distrust of a mother of young twins trying to pursue a political career, Mrs Thatcher was fortunate to secure the then safe seat of Finchley in time for the 1959 Election.77 Mrs Thatcher had been no more than the statutory woman in Heath’s Cabinet, being Secretary of State for Education and Science. Prior recalled: ‘She had always been cold shouldered by Ted: she sat in the Cabinet on his right side, carefully hidden by the Secretary of the Cabinet, who was always leaning forward to take notes. It was the most difficult place for anyone to catch the Prime Minister’s eye, and I am sure that she was placed there quite deliberately.’78 Nonetheless, she impressed


Lord Home so much by her contribution to Cabinet discussions that he concluded that ‘she’s got the brains of all of us put together, and so we’d better look out’.79 Her Permanent Secretary remembered Mrs Thatcher saying that her ultimate ambition was to be Chancellor of the Exchequer, but she did not believe that the Tory Party would allow a woman to progress that far.80 In 1974, Mrs Thatcher had said, ‘It will be years before a woman either leads the Party or becomes Prime Minister. I don’t see it happening in my lifetime.’81 If Mrs Thatcher was known at all to the general public, it was because, when Education Secretary, she had abolished free school milk for children above six, earning her the soubriquet ‘Margaret Thatcher, milk snatcher’, and the description from the Sun as ‘The Most Unpopular Woman in Britain.’82 Heath plainly did not think her to be a danger to his position; otherwise, he would not have granted her prominent Shadow Cabinet responsibilities. Between the two 1974 defeats, Mrs Thatcher shadowed the Department of the Environment, cautiously taking up the idea that council tenants should have ‘the right to buy’ their homes at the lowest possible prices. Heath required Mrs Thatcher to make a pledge to undertake a fundamental reform of the rating system together with interim rate relief, and he intervened again to ensure that the Conservatives promised a maximum house mortgage interest rate set at 9.5 per cent. Mrs Thatcher herself remarked on the publicity that she attracted,83 this time of a more favourable kind. After the October 1974 defeat, Heath appointed Mrs Thatcher to help Robert Carr in opposing the Finance Bill, a role in which he had enhanced his leadership prospects in 1965. Mrs Thatcher took her opportunity, and among those impressed by her performance in this role was Airey Neave,84 one of the Tory backbenchers determined to bring Heath down. With Joseph and du Cann out of the running, Mrs Thatcher became the standard bearer of the Right, and Neave led her campaign team. When informed that she would stand against him in the leadership contest, according to Mrs Thatcher, Heath said, ‘If you must’,85 or, according to another version, ‘You’ll lose.’86 Since most Tory MPs wished Heath to lose, but not necessarily, it seemed, Mrs Thatcher to win, and for there to be a second ballot, Neave’s reply to enquirers about how well her campaign was going was ‘Margaret is doing very well, but not quite well enough’87 proved nicely judged. On 4 February 1975, the result of the first ballot was that Mrs Thatcher obtained 130 votes, Heath 119, and the little-known Hugh Fraser 16. Prior, who had failed to vote himself, witnessed Alan Clark, whom he gently called a maverick right-winger, rushing out of Westminster Hall shouting, ‘She’s won, she’s won.’88 In fact, though even Heath had felt the need to resign, there was still the second ballot to be faced on 11 February 1975. Mrs Thatcher, who had risked her political career to challenge Heath, proceeded to secure 146 votes in that ballot, trouncing other candidates who had come late into the field like Whitelaw who got 79, with Prior and Sir Geoffrey Howe obtaining 19 each, and John Peyton a mere 11.89


17

‘I think it was much more a peasants uprising than a religious war’, Christopher Patten, Heath’s appointee as head of the Conservative Research Department, later said of the 1975 leadership contest, ‘It was seen much more as the overthrow of the tyrant king rather than as a great ideological shift. There were ideological arguments about what happened from 1970–74, but I think it was primarily a reaction of the Parliamentary Party against the fact that they thought they had been taken for granted and that they’d lost too many Elections.’90 Powell’s assessment was that Mrs Thatcher ‘didn’t rise to power. She was opposite the spot on the roulette wheel at the right time, and didn’t funk it.’91 That said though, before the contest Mrs Thatcher had made her political position very clear: To deny that we failed the people is futile, as well as arrogant. Successful Governments win Elections. So do parties with broadly acceptable policies. We lost. . . Indeed one of the reasons for our electoral failure is that people believe that too many Conservatives have become socialists already. . . My kind of Tory Party would make no secret of its belief in individual freedom and individual prosperity, in the maintenance of law and order, in the wide distribution of private property, in rewards for energy, skill and thrift, in diversity of choice, in the preservation of local rights in local communities.92 What was for her and her followers happy accident certainly played its part in Mrs Thatcher’s victory in the 1975 Tory leadership contest, not least in the fact that so many in the Conservative Parliamentary Party wanted Heath out at any price. That said, though, the contest was well-described as both peasants’ uprising and religious war,93 because Mrs Thatcher was clear that ‘I am standing against the present establishment because I think that it has not been successful and has forgotten some of the principles on which the Conservative Party is based.’94 It could only be the principles of the Right that had been ‘forgotten’. The discredited Heath Government had tried everything else, including socialism, as Benn had gleefully noted.95 ‘The fundamental concern of Toryism is the preservation of the nation’s unity, of the national institutions, of political and civil liberty, and not some ideological victory’, Sir Ian Gilmour wrote, spelling out the High Tory creed, ‘Hence the Tory objective is limited, and, like wars in the eighteenth century, relatively civilized.’96 The hard facts were, though, that Baldwin had defeated the General Strike of 1926 in a matter of days, and then crushed the miners over seven months. In 1972, the miners had broken the Heath Government in just seven weeks, and humiliated the same Government and its High Tories again two winters later. Norman St John Stevas only spelt out the conventional wisdom when he wrote in the mid-1970s that ‘no Government in Britain can hope to succeed today without the goodwill of the unions’,97 but this was the same as saying that no government could succeed and that there could


be no sustained British economic recovery. Further, what Gilmour and many who thought like him chose not to face was that Scargill and the Left did not aim to fight a limited war. What they threatened was a civil war with all that implied. So, to sustain the British political system and to promote the country’s economic renaissance, the power of the unions and especially that of their shock troops had to be broken. What Margaret Thatcher’s rise to the Conservative leadership threatened was also a form of revolution, one from the Right.

2 The Conservative Ascendancy: The Pattern of British Politics, 1979–90

Three Tory General Election victories After the excitements of the Winter of Discontent and the Labour Government’s dramatic fall and Airey Neave’s murder by Irish terrorists at the outset of the campaign, the General Election of 3 May 1979 proved to be an anti climax, not least because some form of Conservative victory was always overwhelmingly the most likely outcome. With the Tories having no particular need to win the voters over, and, of course, no wish to alarm the electorate, what was simply called The Conservative Manifesto 1979 was a cautious document, which, indeed, stated that ‘those who look in these pages for lavish promises or detailed commitments on every subject will look in vain’.1 Only 76 per cent of those entitled to vote in the 1979 Election did so. The Conservatives secured 43.9 per cent (13,697,923) of the votes cast, and 339 seats, which meant that they had a majority of 43 in the House of Commons. The Labour Party obtained 37 per cent (11,532,218) of the votes cast, and 269 seats. The Liberals attracted 13.8 per cent (4,313,204) of the votes cast, and 11 seats. The Scottish and Welsh Nationalists both won 2 seats, and 12 MPs were also elected for other parties in Northern Ireland.2 ‘By any of the measures of swing, the Conservatives secured the biggest net movement between the two largest parties at any Election since 1945,’ the relevant Nuffield Study observed, ‘This substantial swing produced the decisive outcome of the Election; it gave the Conservatives as large a plurality of votes (7 per cent) over the next largest party as any party has enjoyed since Labour’s 1945 landslide – larger, in fact, than the 1955 and 1959 Conservative victories which produced bigger Parliamentary majorities.’3 In terms of postwar politics, then, the Conservative victory in 1979 was a remarkable achievement. ‘A dramatic day in British politics’, Benn wrote, ‘The most right wing Conservative Government and Leader for fifty years; the first woman Prime Minister. I cannot absorb it all.’4 Benn was to be given plenty of time to do so. ‘The choice before the people was to take further strides in the direction of the corporatist all powerful State or to restore the balance in favour of 19


the individual’, Mrs Thatcher declared in the Debate on the Address on 15 May 1979, ‘The Labour Party stood for the former. We offered the latter. The difference is clear-cut, and we steadily put it across during the campaign. It was indeed a watershed Election. The result was decisive, with a difference of about 2 million votes between the two major parties, which was the largest difference since 1945.’5 On the basis that ‘when the Conservatives returned to office in 1951 and 1970 there was similar speculation about a Conservative counter revolution’, the authors of the Nuffield Study doubted that ‘the 1979 Election [would] prove to be a watershed’. Indeed, ‘the resurrection of the theme in 1979 testifies to the continuities of post war British politics’.6 The 1951 analogy was irrelevant because then the Tories secured a Commons majority despite gaining a lower number of votes than Labour, and they were only too glad to run an economic and social order that they had been pledged in large part to establish themselves if they had not lost in 1945. That the Keynesian order was malfunctioning by 1970 was obvious and Heath had promised a ‘quiet revolution’ to put things right, and failed. James Prior recalled that ‘between 1970 and 1972’ the Heath Government had been ‘stupidly right wing and doctrinaire about economic policy’. Though he hoped that the Thatcher Government elected in 1979 would avoid these ‘follies’, and, as it turned out like most commentators, Prior seemed to be thinking of two years before – as in 1972 – ‘the facts of life’ were accepted.7 There was a tendency among political analysts to underrate the performance of the Conservatives in the 1979 Election, and to attribute even the fact of victory solely to the ‘special circumstances’ of the Winter of Discontent. Even if this was the case, these ‘circumstances’ had occurred, and a comfortable Conservative working majority had been obtained, which was likely to be supplemented in the near future by the findings of the Boundary Commissioners. The Thatcher Government also had the benefit of the proceeds of North Sea oil, which were not a secret. Trapped in their Keynesian ‘realism’, most commentators regarded the Thatcher Government with its overt economic liberalism, then called Monetarism, as facing certain future electoral defeat, unless, as Prior anticipated, a re-run of events after 1970 occurred and the 1979 Government executed an explicit ‘U-turn’ in economic policy, commonly predicted for 1981. When this did not happen, thus supposedly ruling out an economic recovery, because, after all, almost every university economist of Keynesian persuasion had said so in a famous letter to The Times,8 most observers, consistently enough, wrote off the Tories. This was despite the current state of the Labour Party, which was in the grip of the Left, and which had been weakened by the formation of the Social Democratic Party by defectors from its Right and Centre. The Social Democratic Party (SDP) soon combined with the Liberals to form the Alliance. Though the Alliance did not have an institutional base, many commentators convinced themselves that it would carry all before it. The autumn of 1981 was not

The Conservative Ascendancy

21

only ‘the halfway stage of the natural span of the Parliament elected in May 1979’, but ‘it also turned out to [be] the low water mark in the Government’s fortunes’, the Thatcherite, Jock Bruce-Gardyne, later wrote, though he conceded that ‘brave hearts were needed to see it that way at the time’. This was because an Administration which had set out to release the national spirit of enterprise by cutting public spending and taxation had so far achieved a substantial rise in both. Inflation had been pulled back to where it started, but was now forecast to rise again. The private sector appeared to be flat on its back. The flow of funds to the public corporations continued on a massive scale. Monetary policy, presented as the cornerstone of the Government’s counter inflation strategy, was threatening to escape control yet again. Interest rates across the world were rising steeply, promising to set off a secondary recession on top of the one of unprecedented postwar severity which had already occurred. Unemployment had passed the three million mark, and showed little sign of abating. According to the opinion polls, popular support for the Government, and the Prime Minister in particular, was lower than hitherto recorded since the statistics had been first compiled.9 At the time of the Conservatives’ Blackpool Conference in 1981, BruceGardyne gleefully recalled, ‘majority opinion among the commentators was that the Party was heading for a defeat of 1945 proportions, or worse’.10 As the performance of the Labour Party in by-elections had been unimpressive since the Southend East by-election of 26 June 1980, which, even then, it failed to win,11 the Alliance was supposed to be the author of the downfall of the Thatcher Government. ‘Everything is dreadfully depressing’, the Tory backbencher, Alan Clark, recorded in his diary for 26 November 1981, ‘Clearly the SDP is going to win [the] Crosby [by-election]. How fickle and spastic the electorate are. How gullible, to be duped by somebody as scatty and shallow as Shirley Williams.’12 One extrapolation of the result of the Crosby by-election suggested that the Conservatives could expect to win a single seat if that voting pattern was repeated at the next General Election.13 The ‘impossible’ economic recovery, though, was soon difficult to deny, and by the early spring of 1982, with evidence that the Alliance threat was fading and Labour was continuing to make no progress,14 and with two years left before a General Election needed to be called, the Conservatives were reasonably placed for victory. Then, Argentina attacked a British colony, the Falkland Islands. ‘We’ve lost the Falklands’, Clark informed his wife on 2 April 1982, ‘It’s all over. We’re a Third World country, no good for anything.’15 Britain was still good at winning wars, and led by Mrs Thatcher did so again. What became known as the Falklands factor served not to rescue the Tories,16 but the numerous commentators who had dismissed the


Conservative Government as electorally doomed. They now had a means of not only explaining away why things had turned out otherwise, but also for continuing to produce much the same sort of analysis as before on the grounds that, once the effects of the factor had worn off, things would return to ‘normal’ and the reckoning would come. The Falklands factor may well have explained the scale of the Conservatives’ General Election victory on 9 June 1983, but not necessarily the fact of it. ‘In the last four years, Britain has recovered her confidence and self respect’, Mrs Thatcher declared in the foreword to The Conservative Manifesto 1983,17 which document stated that When we came to office . . . our country was suffering both from an economic crisis and a crisis of morale. British industry was uncompetitive, over-taxed, over-regulated and over-manned. The British economy was plagued by inflation. . . The country was drifting further and further behind its neighbours. Defeatism was in the air. We did not disguise the fact that putting Britain right would be an extremely difficult task. The second sharp oil price increase and the deepest world recession since the 1930s have made these difficulties worse. At the same time, the Western world is passing through another transformation from the age of the smokestack to the era of the microchip. Traditional industries are being transformed by the new technologies. These changes have led to a rapid rise in unemployment in almost every Western country.18 Mrs Thatcher made clear her belief that ‘the answer is not bogus Social Contracts and government overspending. Both, in the end, destroy jobs. The only way to a lasting reduction in unemployment is to make the right products at the right prices, supported by good services. The Government’s role is to keep inflation down and offer real incentives for enterprise. As we win back customers, so we win back jobs.’19 As in 1979,20 trade union reforms were promised,21 and this time there was greater emphasis on ‘reform of the nationalized industries’ than before, notably the pledge to ‘transfer more state owned businesses to independent ownership’.22 What was called ‘a property owning democracy’ in the 1979 manifesto23 was called ‘a home owning democracy’ in that of 198324 but the Tories had no need to take risks. ‘It looks as if we are heading for a substantial victory’ and ‘a new Conservative Government’, Alan Clark wrote in his diary before the event, adding: ‘The House [of Commons] won’t be much fun with nigh on 400 estate agents, merchant bankers and brief less barristers.’25 Only 72.7 per cent of these entitled to vote in the 1983 Election did so, a decline of 3.3 per cent compared with 1979. The Conservatives secured 42.4 per cent (13,012,315) of the votes cast and won 397 seats. Thus, the Tories obtained 58 more seats than in 1979, but their share of the vote declined by 1.5 per cent, and 685,608 fewer voted for them compared with four years before. Nonetheless, the Conservatives now


23

had a majority of 144 in the House of Commons. The Labour Party obtained 27.6 per cent (8,456,934) of the votes cast, and 209 seats. The Alliance secured 25.4 per cent (7,780,949) of the votes cast, and 23 seats. The Welsh and Scottish Nationalists obtained 2 seats each, and 17 MPs were also elected for other parties in Northern Ireland.26 If the Conservative candidate concerned had not been found to have a National Front background, the Tories would have almost certainly avoided their narrow defeat at Stockton South,27 and thus matched Labour’s majority in 1945, though, of course, in a larger House of Commons. As for the electorate, the Conservatives won 60.6 per cent of the votes cast for the two major parties. Only in 1931 had the winning party been so far ahead of its principal rival.28 The Nuffield Study found that there had been a long term movement towards Labour in the North, in Scotland and in the most urban areas and towards the Tories in the rest of England and in rural areas, and that this pattern persisted in 1983, sharpening even further the socio-geographical cleavage between the two major parties.29 Out of the 186 seats in the southernmost regions outside Greater London, Labour won only Bristol South, Ipswich and Thurrock. So, there was a Tory Britain and a Labour Britain,30 and, though the national net swing from Labour to the Conservatives was about 6 per cent, what had once been the traditional pattern of a largely uniform swing with variations evenly spread about the average did not apply in 1983.31 That said, though, the Study observed that since mass suffrage came in, the Conservative lead of 14.8 per cent over the second party obtained in 1983 had been matched only in 1924, 1931 and 1935.32 While recognizing the contribution made to the success of the Conservatives in the 1983 Election by the demoralized and divided Opposition that the Tories faced,33 Bruce-Gardyne, recalling that ‘the mixture of distrust, dismay and even contempt with which [Mrs Thatcher] was regarded in the salons had hardly been diminished by four years’ experience’, gloried in the ‘victory of the backwoods over the bien pensants’.34 The one thing that could not be said about British politics during the 1983–87 Parliament was that it was uneventful. The IRA came close to murdering Mrs Thatcher at the time of the Party Conference in 1984. ‘Jane told me that there had been a huge bomb at Brighton, the hotel had been all but demolished’, Clark wrote in his diary for 12 October 1984, They had ‘got’ [Norman] Tebbit, [John] Wakeham, Tony Berry, various dignitaries. Amazing TV coverage. The whole façade of the hotel blown away. Keith Joseph (indestructible), wandering around in a burgundy coloured dressing gown, bleating. The whole scene was one of total confusion, people scurrying hither and thither, barely a police ‘officer’ to be seen. Mrs T had been saved by good fortune (von Stauffenburg’s suitcase!). Had she been in the bedroom she would be dead. But what a coup for the Paddys. The whole thing has a smell of the Tet Offensive. If they had just had the wit to press their advantage, a couple of chaps with guns in


the crowd, they could have got the whole Government as they blearily emerged – and the assassins could in all probability have made their getaway unpunished.35 So, Mrs Thatcher lived on to defeat the year-long strike in the coal-mining industry that the National Union of Mineworkers had launched in March 1984. ‘Undoubtedly it was her leadership which saw to it that in the confrontation with the miners during 1984–85 it was not the Government which fell, as it had done ten years before’, James Prior wrote, while feeling the need to add that ‘I only wish that she had brought the same resolution and management skills to reduce the worst unemployment of the century.’36 Though Prior had departed by then, divisions within the Cabinet persisted, and what came to be called the Westland Affair caused Mrs Thatcher difficulties, this time mainly emanating from Michael Heseltine, who eventually resigned. ‘Michael has always had this slightly scatty side’, Clark wrote, ‘It is the only half endearing trait that he possesses. He is the man who pushed further out the definition of folie de grandeur than it has ever been hitherto.’37 The Westland Affair excited the political class and one prominent observer convinced himself that it was nothing less than ‘an unexploded bomb’ which continued to lie in wait to destroy the Conservative Government.38 Quite why anybody should believe that, in a General Election to be held many months later, a ‘scandal’ with no sex, spies or financial corruption should undermine the Tories remained an unsolved mystery. The outcome of the 1983 Election had meant that the Labour Party needed a 12 per cent net swing in its favour to obtain an independent majority at the next Election, which meant that it had to emulate its feat of 1945, but without two Parliaments’ worth of swing and a World War to help it. Most commentators, though, carried on much as before, treating the Conservative Ascendancy as if it was solely the consequence of a succession of ‘accidents’. The Tory majority was supposed to be ‘fool’s gold’, especially as Mrs Thatcher, once said to be ‘unelectable’, was now defined as not being ‘re-electable’, except, of course, without, as might be guessed, the explicit ‘U-turn’ in economic policy, and change in personal demeanour, which would be the necessary ‘confession’ of the political error of her ways. The Alliance was widely believed to be the means of bringing the Conservative Government down, despite the grave handicaps it faced under the existing electoral system. It most certainly could be said of a period as late before the 1987 Election as the summer of 1986 that ‘anybody who wrote then that the Conservatives still had a credible chance of winning the Election tended to be seen as eccentric. It was the conventional view that the Government was all but finished.’ So wrote the prominent political commentator, Hugo Young. Plainly bemused by what seemed to be happening, not least to several years of mistaken political analysis on his part, Young writing this weeks later, added that ‘the collective wisdom now says the opposite and it


25

is just as unreliable. One should take seriously Ministers’ belief that they will win but more seriously their admission that they cannot understand why.’39 Ministers, though, could not be expected to do the political analysts’ work for them. Few academics fared better than the political journalists. As late as March 1987, one of them wrote that the Conservatives were ‘boxed into a rather uncomfortable corner’. To gamble on Mrs Thatcher winning three Elections in a row for the Tories was ‘betting against hundreds of years of history’, not least because of ‘an iron law of British politics that the Liberals/Alliance always gain ground when running against a Tory Government’ which meant that ‘it would be fairly remarkable if the Alliance does not make a further advance this time – and it is difficult to see how this could happen without it either overtaking Labour. . . or stealing enough votes from the Tories to make Labour the biggest party.’40 That amounted to two forecasts instead of one, and, unfortunately, both of them were wrong. Even closer to the 1987 Election, a distinguished political biographer predicted a June 1970 upset as being on the cards. All that was needed was for the Labour Party to display ‘a Heath like obstinacy’ in presenting ‘its overwhelmingly good case on jobs and unemployment’, thus exploiting ‘the most important domestic issue of all, and the Conservatives Achilles’ heel’.41 When it came, the 1987 Election proved to have much the same outcome as those who had studied the 1983 results dispassionately would have expected, always provided that the NUM was crushed in the long anticipated coal strike: a reduction in the Tory majority in the House of Commons from the original 144 to about 100, which estimate allowed for a minor Labour revival and for the Alliance to stay much the same. ‘Although our analysis pointed to a majority of 98 I told the others that my central forecast was for one of 50 to 60’, Norman Tebbit, the Party Chairman recalled, ‘The overall arithmetic had always been pretty clear. If we could achieve 40 per cent or more of the votes and lead Labour by 3 per cent then we would achieve another victory. If our share fell below 38 per cent then at best it would be a hung Parliament’.42 The Conservative manifesto had a title this time: The Next Moves Forward. ‘Together we are building One Nation of free, prosperous and responsible families and people’, Mrs Thatcher declared,43 possibly, for once, with a touch of humour. ‘Our goal is a capital owning democracy of people’ in which ‘ownership and independence cease to be the privileges of a few and become the birthright of all’, the manifesto stated, ‘In this way One Nation is finally reached not by a single people being conscripted into an organized socialist programme but by millions of people building their own lives in their own way.’ Of course, home ownership was ‘the foundation stone of a capital owning democracy’.44 The manifesto asserted that ‘no previous Government with eight years of office to its credit has ever presented the electorate with such a full programme of radical reform’,45 but The Next Moves Forward also warned about going back to the disorder of the last Labour Government and the Winter of Discontent which the benefits


of Conservative rule were supposed to have made seem like ‘the history of another country’.46 Though the man had never fought a contested election, Tebbit appointed Lord Young as Director of Communications to deal with the newspapers and to supervise the Prime Minister’s itinerary. Political friends told Tebbit that he was mad to give any colleague positions of such influence, but Tebbit intended to leave the Cabinet anyway. As it happened, the press corps got the impression of a campaign going badly wrong, but the information reaching Conservative Central Office said otherwise.47 With one week to go, on 4 June 1987, what Young had learnt from Alistair McAlpine was always going to be ‘Wobbly Thursday’ arrived: ‘You see, they’ll be above us on that day – they were in ’79, they moved to half a point above us, and in ’83 that was the day when the campaign was going wrong and we met and thrashed it out and changed this and changed that – it will all work out all right, just you wait and see.’48 According to his own account, Young panicked: ‘I got [Tebbit] by the shoulders and said “Norman, listen to me, we’re about to lose this . . . Election! You’re going to go, I’m going to go, the whole thing is going to go. The entire Election depends on [Mrs Thatcher] doing fine performances for the next five days”.’ Later that day, Young was handed opinion poll findings which showed ‘44 Conservative, 34 Labour, 20 Alliance! Obviously, yesterday’s poll had been a rogue. Immediately, I knew we had the Election won and everything was going to be all right.’49 The Election was held on 11 June 1987, and of those registered to vote only 75.3 per cent did so, though this was typical of British turnouts over the previous quarter of a century, and an improvement of 2.6 per cent on the 1983 figure,50 while still 0.7 per cent down on that of 1979. The Conservatives obtained 42.3 per cent (13,763,066) of the votes cast and won 376 seats. The Labour Party secured 30.8 per cent (10,029,778) of the votes cast and won 229 seats. The Alliance attracted 22.6 per cent (7,341,290) of the votes cast and won 22 seats.51 The Welsh and Scottish Nationalists obtained 3 seats each,52 and 17 MPs were elected for other parties in Northern Ireland.53 ‘As I drove back to Central Office, it was clear to me that we had won a great victory’, Tebbit later wrote, The BBC was still deluding itself into believing what it wanted to believe, that we were sliding to defeat, only conceding our victory as its best political journalists telephoned their editors, telling them the unwelcome truth and imploring the Corporation to stop making a fool of itself. . . Friday passed in something of a haze, but at least it was clear that we had won a third victory on a magnificent scale. . . we had held our overall share of votes to within a fraction of one per cent of the 1983 result.54 The Nuffield Study pointed out that ‘although the Conservatives had lost a net 20 seats compared to 1983, their final majority of 102 over all other parties was the second largest since 1945’.55 During the campaign, Mrs Thatcher


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overheard a remark, almost inevitably from a BBC source and on the basis of an opinion poll, ‘that’s it: she’s downhill all the way now’.56 As a prediction of the 1987 Election result, which was what was intended, this was nonsense, and Mrs Thatcher naturally rejected suggestions that her conduct of what was ‘not. . . a happy campaign’ merited ‘being carried off to one of new NHS hospitals by the men in white coats’.57 That said, though, the Conservatives were in the position that they could only throw away victory and all that was in doubt was the scale of it, and there was nothing to be gained from worrying about opinion polls which had shown only too often their failings as predictive devices, and not surprisingly so, given that they were at best imperfect messages from a largely uninterested electorate to the politically obsessed with neither side of the equation having much in common. Even the loyal Tebbit wrote of ‘reports on public opinion [that] did not tally with ours [that] undermined the Prime Minister’s confidence’, and about her needless ‘unease’ and ‘anxiety’ about such findings.58 Mrs Thatcher made much of her understanding of what people wanted, especially her people, but her conduct at the time of the 1987 betrayed an excessive nervousness about the behaviour of the electorate. With Mrs Thatcher acting like this in the face of what she should have known was a certain victory, Whitelaw could be forgiven for concluding, ‘That is a woman who will never fight another Election.’59 She was not to be given the choice.

A one major party electoral model, 1979–90 ‘Until recently it was a commonplace of political commentary that Britain had a two-party political system’, a political analyst wrote in 1979, adding that ‘this belief can no longer be maintained. Britain no longer has a simple two-party political system. The old concept must be replaced.’ Of course, this was ‘tilting at a straw man’,60 that familiar tactic of the revisionist writer, because models of British political party activity were bound to differ in validity at different times. There were two major political parties in Victorian Britain in the form of the Liberals and the Conservatives, though they were subject to divisions in their ranks, and the Irish Nationalists and then the Labour Party eventually intruded upon this arrangement. Though, according to George Dangerfield’s famous thesis expounded in The Strange Death of Liberal England, the years 1910–14 witnessed the demise of the Liberals as a governing party, it was the Conservative Party that was not only excluded from office at that time, but which seemed blocked off from it for the foreseeable future by an informal alliance between the Liberals, Labour and the Irish Nationalists. ‘The [First World] War hastened everything – in politics, in economics, in behaviour – but it started nothing’, wrote Dangerfield,61 before taking out intellectual life assurance by subscribing to ‘the forward march of Labour’ interpretation of British politics. Thus, among other factors, the bitter split between Lloyd George and the Asquithians from 1916 onwards


was supposed to matter less than the advent of the Labour Party because its rise meant that the Liberals were ‘no longer the Left’.62 Three-party politics characterized the 1920s, with the Liberals condemned to third place and, at best, to holding the balance in the House of Commons, in which Chamber only the Tories could expect to have an independent majority. The events of 1931 ensured that British politics in the 1930s had the character of a one major party system, with that party being the Conservatives, who, of course, attracted allies. That dominance did not survive the Second World War, which was followed between 1945 and 1974 by Britain having a two major party system – Labour and the Conservatives being well matched – though this arrangement was subject to increasing incursions by the Liberals, the Scottish and Welsh Nationalists, and then the Ulster Unionists and their Irish adversaries. The notion of multi-party Britain was a creature of the 1974 political crisis, as well as of the reality that several parties now had MPs on a regular basis, and of the electoral plight of the contemporary Labour Party and its Government. The conventional wisdom was that no single party was supposed to be able to command sufficient electoral support to override the minor parties’ block of seats and govern effectively. That what was designed to be a majoritarian electoral system was deemed unlikely to yield a House of Commons majority led to a lot of talk about the need for proportional representation. Once rid of Heath, however, the Conservative Party was soon back in serious contention for office, and from the 1979 Election onwards they were the dominant element in a one major party political system. The Tories in the 1980s did not have the authority to command the system as they had done in the 1930s, though they still had too much strength for their opponents as late as 1992. That said, though, the Conservatives could no longer boast that they were the only party with Parliamentary representation in all four countries of the United Kingdom, which made them the only national party. That boast tended anyway to have a hollow ring to it in relation to Wales, in which country the Tories failed to win more seats than Labour even in 1931, and what was well-described as the English Nationalist Party had traditionally obtained its votes under the Unionist label in Scotland and Northern Ireland. Heath’s suspension of the Stormont Parliament severed the link with the Ulster Unionists, and alienated the Protestant vote in Scotland too. The Conservatives had been the only party since the Second World War to obtain a majority of votes and seats in Scotland, which feat they achieved in 1955, after which a decline had set in which meant that the Tories secured only 31.4 per cent of the Scottish vote in 1979, 28.4 per cent in 1983, and 24 per cent in 1987.63 There were many and various explanations of this decline, with Mrs Thatcher herself finding that ‘the old Glaswegian Orange foundations of Unionist support which had in earlier decades been so important had irreparably crumbled’.64 Commonly thought to be important too was that the end of the British Empire had undermined one of the more telling


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advantages of the Union between England and the other countries of the United Kingdom, namely economic self interest and the economic advantages of world status.65 Then again, the discovery of North Sea oil opened up the possibility of independent Scottish prosperity, given that, even though under international law it was mainly ‘England’s oil’ following the line of the border through the oilfield, the oil was landed in Scotland. Scottish nationalism flourished as never before, though the Scottish National Party emphasized its character when it combined its commitment to independence with one to ‘Europe’, not being willing, of course, to turn away from a source of prospective subsidies. Scotland had come to be largely administered by the Scottish Office and its fellow departments in Edinburgh anyway, and Mrs Thatcher complained about the scale of public expenditure this caused, though the Governments she led did not get rid of the Barnett formula inherited from Labour that was designed to ensure higher levels of such spending on Scotland. This did not save the Prime Minister from having to endure Scottish Office Ministers portraying themselves as ‘standing up for Scotland against me and the parsimony of Whitehall’, when there should have been ‘the same drive to implement [her] programme north as south of the border’.66 The reality was, though, that, in her own words, Mrs Thatcher was seen in Scotland as ‘a quintessential English figure’ and that this was a source of unpopularity as was the perceived Englishness of the Conservative Party. She protested that ‘the Tory Party [was] not, of course, an English party, but a Unionist one’,67 but she took no steps to give the Scottish Conservatives back their old Unionist name, which had been dropped without advantage in 1965.68 So, despite having been ‘the home of the very same Scottish Enlightenment which produced Adam Smith’, Mrs Thatcher recognized that ‘there was no Tartan Thatcherite revolution’ in Scotland’, despite the fact that ‘private enterprise had developed a prosperous and thriving oil industry’ there, and that also in the 1980s ‘foreign – often high technology – companies [were attracted] to Scotland and Edinburgh became a prosperous financial centre. . . Even then, jobs in uncompetitive industry continued to be shed and unemployment remained higher than in England.’69 Though it could be argued that a social democratic culture was not dominant in Scotland before the mid-1970s,70 Mrs Thatcher saw herself as being confronted by a ‘Scottish Left Wing Establishment’ which, naturally enough, did not share her belief that ‘more public spending in a dependency culture’ had exacerbated Scotland’s problems. The Conservatives were not helped by the fact that ‘about half Scotland’s population were living in highly subsidized local authority housing compared with about a quarter in England’.71 So, there really was a Tory Britain and a Labour Britain, and, though the thesis of books like The Break Up of Britain in the wake of the break up of the British Empire had yet to be translated into political fact, even in 1979 the Conservative position in the major Northern cities was poor. The Tories had just two seats out of eight in Liverpool, one seat out of eight in Manchester,


two seats out of six in Leeds, one seat out of six in Sheffield, and one seat out of four in Newcastle.72 Following the 1987 Election, of those cities, only Leeds and Sheffield still had Tory representation.73 ‘If a small State, low taxes, less intervention, and more choice were right then we should argue for them and do so without apology’, Mrs Thatcher declared,74 but this was an appeal to the winners and those who expected to join their ranks, and there were plenty of actual or prospective losers who wanted something different.

Socialist nightmare: the Labour Opposition, 1979–90 ‘The Forward March of Labour Halted?’ proved to be an arresting title for a tract for the times published by a Marxist historian, Eric Hobsbawm, in 1978. This ‘forward march’ had begun to falter in 1948. Since then, he argued, there had been a decline in ‘manual workers in the literal sense of the word’ as a proportion of the working population, in trade-union membership and in active membership of socialist societies, and in the Labour vote which he stated had risen in number and percentage without interruption, aside from 1931, between 1900 and 1951. This ‘halting’ of the ‘forward march’ was ‘ironic’ because the ‘crisis’ even ‘breakdown’ of ‘British capitalist society’ was at hand.75 If there had been a ‘crisis’ of British capitalism then 1931 had surely been it, and that a substantial majority of the electorate had voted for a National Government formed to sustain the private ownership system was more than an aberration. The Labour vote was actually lower in 1935 than it had been in 1929. The political experience of the Second World War transformed the Labour Party into a formidable electoral force, which it had shown little sign of becoming earlier, and the more that its 1945 triumph receded into the distance, Labour faded, though by no means uniformly and far from swiftly, and at Elections between the 1945 and 1979 the Party always polled well over eleven million votes.76 A ‘Forward March’ that did not really get under way until 1941 and then supposedly ended in 1948 was more of a historical stroll, and the Parliamentary socialism of the type associated with Bevan had long since given way to a taste for a more direct route. Marxism never was much more than powerful criticism of mid-Victorian capitalism. It was obvious that when it came to prediction, ‘[Alfred] Marshall was right and [Karl] Marx wrong about the progressive evolution of capitalism.’77 Keynes, though, had put Marshall’s economic theories to death. Now Keynesianism was dead. That Marxism was still alive was remarkable. As long before as 1909, from within the Marxist ranks, a personal friend of Engels,78 Edward Bernstein, a German socialist, had shown that a range of State activity was ameliorating the lot of the working classes.79 There was no need for ‘a sudden catastrophe’, meaning revolution.80 Amelioration took the form of the conservative Bismarck’s social security reforms, and their British imitations and development into Welfare State legislation. The Marxists were dismissive about State social provision, much as they were about working-class self-help


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activity within moderate trade unions and co-operative societies, the supposed sin of Labourism. For them, it remained essential to seize power by revolutionary means. Seizing control of the Labour Party was the first step, which was not by 1979 a difficult one, because the Right and Centre had been discredited by the record of the Wilson and Callaghan Governments. The collapse of Keynesianism, though, undermined the Labour Movement more generally. For, union power did not just depend on legal immunities, although these were important and about to be attacked. Union power had become a creature of the Keynesian order. The unions needed full employment and, especially in relation to the public sector, they needed the public expenditure taps turned full on. The politicians of the Keynesian era acted as if they had little choice, whether from necessity or conviction. Mrs Thatcher could afford to take a different line. This was not thought to matter early on. The Conservative victory in 1979 was underrated. Mrs Thatcher was seen either as a temporary Prime Minister soon to be replaced by ‘the men in grey suits’ or one forced to change her economic policy, or both. Even if she persisted with her chosen course, Thatcherism was supposed to be so demonstrably evil that the voters would have no choice but to turn to the Labour Party, which could thus go to the Left without paying an electoral price, with the Left believing, of course, that the majority of the electors were prospective socialists anyway but had been prevented from recognizing this by socialization, a pervasive process that only those on the Left had risen above because they had the true faith. Those without this supposed advantage, though, might well see Thatcherism as being a lesser evil than socialism, which had the Russian example to live down and one that Mrs Thatcher and her allies did not hesitate to cite. Further, that the Wilson and Callaghan Governments had failed to meet socialist criteria was always unlikely to have been the main reason for electoral rejection in 1979. It did not follow that imposing a programme from the Left was likely to pay electoral dividends, not least because this would exacerbate divisions within the Labour Party. These divisions were already of an order of seriousness that it was reasonable to assume that a major factor in keeping some on the Right and the Centre within the Labour Party was knowledge of the fate that of those who broke with the Party in 1931 to become National Labour. So, the Labour Party in Opposition was bitterly divided from the outset. ‘The New Left went straight for the jugular’, Austin Mitchell, one of those on the receiving end, wrote: Power was to be transformed by transferring it down to the activists. Policy would be formulated through the wishes of the activists coming up in resolutions passed by Conference, then wielded into a manifesto, not by the Parliamentary Party which had abused its independence, but by a National Executive dependent on the Party activists. That manifesto would then become a binding mandate as the Party was carried to power on it. It would


be forced through by the votes of MPs, disciplined by reselection making them dependent on the constituency activists rather than on the patronage of leaders. With such a discipline there would be no more betrayals, no more cuts, no more refusal to implement a manifesto. . . To stop [the] Ramsay Macdonald syndrome assumed to be latent in all leaders. . . the leader was to be elected not by the Parliamentary Party, which had always chosen him in the past, but by the outside Party.81 There was little scope for the Baldwinian political style of Callaghan in this political atmosphere, especially as Leader of the Opposition, but he seemed to think that only he had the authority with which to deal with the Hard Left and Militant. Callaghan told Healey that he would stay on ‘to take the shine off the ball for me’. By the time that the promised eighteen months had elapsed, Healey found that ‘the leather’ on ‘the ball’ had been ‘ripped away’ as well.82 Callaghan had long since got to a stage where he could not do a thing right, and when, in October 1979, the National Executive Committee (NEC) set up a Committee of Inquiry into inner Party democracy, he was helpless to prevent a situation in which, as Benn recorded, ‘the Left–Right balance [was] potentially 10–4 in our favour – a great victory’.83 At a meeting held at Bishop’s Stortford in June 1980, Callaghan agreed to the compulsory reselection of MPs, and to a compromise that eventually meant that the Party Leader would in future be selected by an electoral college comprising 40 per cent for the unions, 30 per cent for the constituencies, and merely 30 per cent for the Parliamentary Labour Party (PLP).84 ‘Jim was not entitled on behalf of the Shadow Cabinet to make the deal that he did at Bishop’s Stortford’, David Owen commented, ‘He felt guilty about it and it was a great mistake’. Like others, Owen recognized that once the electoral college was in place ‘you would close down any possibility of the PLP asserting its sovereignty over the rest of the Party on some crucial issues of policy. So effectively you will be saddled with. . . coming out of the European Community. . . unilateral disarmament, and all the rag tag and bobtail of nonsense’.85 Such ‘nonsense’ was what the activists at least of the Left called socialism, and, for the present, the issue of the distribution of power in the Labour Party had been settled in the Left’s favour. The 1980 Party Conference witnessed Benn at the height of his personal influence as the leading light of the Left. Benn promised the Conference that there would be ‘three major pieces of legislation within the first month of another Labour Government’. First, there would be ‘an Industry Bill which would give us powers to extend common ownership. . . to control capital movements. . . to provide for industrial democracy.’ This was to done ‘within a matter of days’. Secondly, a further Bill ‘must transfer all the powers back from the Common Market Commission to the House of Commons, also within a matter of weeks’. Then, Benn added, ‘our third immediate Bill is to do what the Movement has wanted to do for a hundred years, to get rid of the House of Lords and. . . we shall have to do it by


33

creating a thousand peers and then abolishing the peerage as well’.86 Benn recorded: By 5 million to 2 million, we voted to withdraw from the Common Market. That is sensational, a fantastic victory. In the afternoon we had three great debates on the constitutional changes [in the Labour Party]. . . it was the best speech I have ever made in my life. . . there was absolute uproar when the Conference voted. . . to support the principle of an electoral college. . . It was a most thrilling day.87 Later, Benn ‘talked to a couple of ASLEF drivers who were full of anti-working class stories about scroungers on the Welfare State, Pakistanis queuing up for supplementary benefit, etc. The Press do a brilliant job.’ It did not seem to occur to Benn that these ‘two old trade unionists’88 were expressing their own opinions. Callaghan resigned as Leader in October 1980 to ensure that the contest for his successor took place under the old rules, and before those on the Right and Centre who could no longer tolerate what was happening to the Labour Party took the opportunity to defect, as several were soon to do when forming the SDP. Once Benn stepped aside to give Michael Foot a clear run on the Left, it was always likely that Healey would be defeated. Callaghan’s biographer, and possibly Callaghan himself, found this outcome to be surprising,89 though the biographer himself remarked on Healey’s rudeness even to likely allies.90 Healey admitted ‘my own insensitivity towards my own supporters’, adding that ‘though I believe most of the MPs who ultimately joined the SDP voted for me in the Leadership election, I am certain that several voted for Michael Foot in order to be able to justify their later defection; their few votes alone were sufficient to explain my defeat’, and Healey did not hesitate to accuse some of those who voted against him of cowardice. It was the Wembley Special Conference in February 1981 that finally decided the composition of the electoral college in relation to future leadership elections, undermining the position of the PLP. Healey described the Conference as a shambles, and the formation of the breakaway SDP followed soon after.91 Healey and Roy Hattersley and most others on the Right and Centre of the Party resolved to stay and fight their corner. Though Benn had become ‘absolutely persuaded that [the Labour Party] was not a Party I would ever be invited to lead, and nor could I lead it’,92 this did not stop him from engaging in a bitter contest with Healey for the Deputy Leadership of the Labour Party, which was not settled until late September 1981. Healey won, obtaining 50.426 per cent of the votes cast, whereas Benn secured 49.574 per cent.93 That was ‘an absolute whisker’s difference’, as Benn wrote, attributing the narrowness of the outcome to the fact that ‘the T and G had decided to vote for me on the second ballot’.94 Though he made much of the need for greater democracy in the Labour Party,


Benn did not add that the union delegation concerned had no authority to vote for him.95 ‘Never underestimate the passion for unity in the Labour Party’, Foot had said when becoming its Leader,96 quoting Bevan, but the veteran Bevanite’s brand of Parliamentary socialism was outflanked on the Left on which there were supposed to be very few enemies. Those who had always wanted the activists who turned up to Party Conferences to actually make its policy got as near to that state of affairs as they could have dreamed, with economists from Cambridge providing them with an economic strategy of a kind. ‘Unemployment will lose the next Election for the Tories, but to win it for Labour. . . it has to be with the Alternative Economic Strategy, which is the bricks and mortar of our policy’, Moss Evans of the Transport and General Workers Union (TGWU) told the 1982 Conference, and this meant a commitment to the achievement of full employment. . . a sustained reflation of the economy with increased public spending and job creation. . . the reconstruction of British industry, led by the public sector and supported by controls on capital and planning agreements. . . overseas investment control. . . union and government action to shorten the working week and the working year. . . control of rents, prices and public transport fares. . . increase in wage levels, pensions and social security and elimination of low pay. . . a redistribution of wealth and power to working people. Not surprisingly, there were to be ‘selective import controls’97 and, in fact, what was being proposed was an autarkic solution to Britain’s economic problems, and by that time a familiar one. Labour’s 1983 Election manifesto followed suit, promising that a ‘British withdrawal from the [European] Community [would] be completed well within the lifetime of the Parliament.’98 Labour promised ‘to act on imports directly’, not least ‘to safeguard key industries. . . and to prevent excessive import penetration’, so as not to disrupt ‘our plan for expansion’.99 There was to be a national economic assessment and a five-year National Plan, involving consultation with both sides of industry,100 who would be represented on ‘a new tripartite National Planning Council’, and there was also to be ‘a powerful new Department of Economic and Industrial Planning’.101 There would be a Price Commission designed to control inflation,102 though there would ‘not [be a] return to the old policies of. . . wage restraint’.103 Conservative legislation relating to industrial relations was to be repealed,104 and there would be ‘a return to public ownership [of] the public assets and rights hived off by the Tories’ together with public investment in selected industries’.105 Labour’s central aim was ‘to reduce unemployment to below a million within five years of taking office’.106 Labour made a plethora of pledges for increased expenditure on State social provision, and, among those relating to housing, there was a


35

promise to end tenants having the right to buy council houses, and to give councils the power to repurchase them.107 It was recognized that ‘our proposals add up to a considerable increase in public spending’,108 but the cost was not going to be met by increased taxation in the first instance.109 The House of Lords was to be abolished, and in the sphere of defence policy the promise was to ‘cancel the Trident programme, refuse to deploy Cruise missiles and begin discussions for the removal on nuclear bases from Britain, which is to be completed within the lifetime of the Labour Government.’110 Gerald Kaufman described the manifesto as ‘the longest suicide note in history’,111 and the Labour Party was badly beaten in the 1983 Election, having to be grateful to keep second place. ‘The full scale of the losses is enormous’, Benn wrote,112 and he was defeated himself, having had the courage to stay and contest Bristol South East instead of finding a safer seat. Benn, at least, did not ‘overlook the fact that the inward looking nature of the Party had done us down’.113 The then rank and file of the Labour Party had got the programme that they wanted to fight the Election on, and the predictable humiliation that resulted left the successor to Foot with an unenviable task in restoring the Party’s fortunes. This proved to be Neil Kinnock, who defeated Hattersley easily in the Leadership contest,114 with the latter becoming Deputy Leader.115 If Foot had been the worst Labour Leader since Lansbury, Kinnock, also of the Soft Left, proved to be the second worst, never able to shed the image of a student politician, and, of course, an ageing one. As for Hattersley, that he was there to represent the Right and Centre served as a reminder of the losses that side of the Party had suffered. As Benn wryly noted, the Kinnock–Hattersley combination was presented as Labour’s ‘dream ticket’,116 and accepted as such by many commentators, but the electorate was less impressed. Kinnock was later to say that ‘I presumed when I was elected in 1983 that I had to play what I called a “two innings match” to have a hope of gaining victory for the Labour Party. Frankly, I had hoped our first innings score would be better.’117 After the 1987 Election, the Tory majority was one of three figures again, even if, as Kinnock noted, it also witnessed ‘a small rise in Labour’s vote [3 per cent], a 20 seat gain, and the achievement of second place above the. . . Alliance’.118 This was a poor return for a lot of hard work by Kinnock and his allies. In terms of strategy, Kinnock thought that the policies that clearly had to be altered in order to broaden and deepen the appeal of the Labour Party fell into three categories. Firstly, ‘those that could, with decent organization, be changed without great resistance – for example, the policy on council house sales and the policy of hostility towards the European Community.’ Secondly, ‘there were policies that could be changed with greater effort and with the right timing – for example, the antagonism towards trade union ballots and the general policy on nationalization.’ Thirdly, ‘and most challenging, there were policies with particularly deep roots that were, in themselves, benchmarks of political disposition within the Labour Party. Chief among those policies


was, of course, the whole issue of defence and nuclear weapons.’ Kinnock acknowledged that on nuclear arms ‘my alignment was. . . plain, public and, in general political terms, damaging too’.119 Kinnock characterized the policies and attitudes that the Labour Party had come to be associated with down to 1983 as ‘impossiblism’.120 Similar sentiments were evident afterwards in the activities of the Militant organization, and the Hard Left more generally, in what Tory newspapers predictably called the ‘loony Left’ Labour controlled local councils. Worst of all, there was the NUM strike of 1984–85, ‘the lost year’ as Kinnock called it.121 Kinnock could do little for a long time, and much was made of it when he turned on the Hard Left at the 1985 Conference. First, he denounced Derek Hatton and the Militant leadership on Liverpool City Council: I’ll tell you what happens with impossible promises. You start with far fetched resolutions. They are then pickled into a rigid dogma, a code, and you go through the years sticking to that, out-dated, misplaced, irrelevant to the real needs, and you end up with the grotesque chaos of a Labour council hiring taxis to scuttle round a city handing out redundancy notices to its own workers. [Applause]. I am telling you, no matter how entertaining, how fulfilling to short term egos – [continuing Applause] – you can’t play politics with people’s jobs and people’s services or with their homes. [Applause with some boos]122 Kinnock later turned on Scargill, the NUM leader, in similar style.123 ‘The bravest and most important speech by a Labour Leader in over a generation’, enthused The Guardian over Kinnock’s attack on Hatton,124 but it was Mrs Thatcher who really knocked out Hatton and Scargill and the Hard Left, even if the temptation to compare their fate with that of, say, Marciano’s opponents would have to be resisted because to do so would suggest that Kinnock was a heavyweight by any definition. For all Kinnock’s tactical bobbing and weaving, more than any other factor it was Mrs Thatcher’s swingeing Election victories that drove a reluctant and resentful Labour Party to reform itself. ‘In certain areas [of policy] – defence, economic policy and the European Community – Labour has completely reversed its position since 1983’, one sympathetic commentator observed in 1992: For instance, economic policy is now based on fundamentally different principles. . . the policy in the 1982–3 period was intended to initiate the transition to socialism. With the Policy Review, the Labour leadership. . . made a clean break. . . Labour’s goal [was] no longer a publicly owned and controlled economy. Rather its aim [was] to use the market economy, with State assistance and intervention where necessary, to provide economic growth, increasing wealth for all and a just society.125


37

The continuities were more evident in policies relating to the Welfare State.126 Labour’s volte-face on ‘Europe’ owed something to the belated recognition that the European Commission could well exercise a form of socialist veto on a British Conservative Government. It was only after the Commission’s President, Jacques Delors spelt this out at the TUC Conference in 1988127 that this was widely grasped in Labour ranks. Labour’s new ‘Europeanism’ may well have mattered less than Tory protest voting and abstention in the European Parliamentary Election of 1989, but Labour had at last won a national election of a kind, and the pundits seemed to think that the next British General Election would see the Party returned to office, but they were defeated once more.

‘A better yesterday’: the Liberals and their allies, 1979–90 ‘In his company it was possible to feel that the melancholy decline of British political life had been momentarily reversed, that Asquith and Balfour were in the next room, that the world had suddenly again become one of civilized conversation, remembered history and good food and wine.’ So wrote an admiring official about Roy Jenkins in the late 1970s,128 and six months into what ‘liberals’ were not alone in perceiving as the Thatcher Terror, and while he was still President of the European Commission, Jenkins was given the opportunity by the BBC to deliver a televised lecture called ‘Home Thoughts From Abroad’. In this lecture, Jenkins contended that an ‘ossified’ political system was largely to blame for Britain’s economic ills. The lecture was ‘an unashamed plea for the strengthening of the political Centre’. Jenkins believed that ‘the case for proportional representation was overwhelming’. He was unconcerned that this would lead to Coalition Governments: ‘Do we really believe that the last Labour Government was not a coalition, in fact if not in name, and a pretty incompatible one at that? I served in it for half its life, and you could not convince me of anything else.’129 Jenkins’s new-found enthusiasm for electoral ‘reform’ and, before or after its introduction, for the realignment of the political parties, followed from his wish not merely to have written about Asquith and Balfour but to emulate them and become the British Prime Minister. This ambition was a legitimate one, but Jenkins’s analysis that Britain’s relative economic decline was largely institutional in origin and related to the party system was unconvincing. Further, that governments of ‘the political Centre’, including at various times Jenkins himself, had presided over this continued decline since 1945 was not much of an argument for ‘strengthening that ‘Centre’. For the present, Jenkins could do no more than wait upon events, meaning a split in the Labour Party, and what was to happen in relation to the Liberal Party. The Strange Death of Liberal England may well have been the most arresting title of a book about British politics or its history, but the hard fact was that, though by the end of the First World War for various reasons the Liberals had


been killed off as a party of government for the rest of the twentieth century, the Liberal Party itself survived. When a book called The English Ideology was published in the 1970s, few readers could have been surprised to learn that the ideology was none other than Liberalism. That the Liberal Party did not prosper as a result had many explanations, but one of them was that there were too many Liberals in other parties. Some had defected to the Tories or to Labour, or not joined in the first place like Jenkins, being well-aware of the Liberal Party’s electoral prospects. The allegiance of academics proved more durable, and it was probably not until 1945 that most universities became the domain of the Labour Party. Keynes and Beveridge were Liberals, and the Liberals could plausibly present themselves as a Party of ideas down to 1956, for instance taking some interest in ‘Europe’, and because Clement Davies, the Leader since 1945, retained a commitment to both sides of Liberalism, meaning not only individual liberty but also economic liberalism. Davies’s successor was Jo Grimond, who was Leader between 1956 and 1967. Grimond gained a reputation as a man of ideas, and the Mont Pelerin Society took him seriously. The evidence present in his writings bore out Nigel Birch’s remark to Lord Boyle that Grimond was ‘a silly, lazy Tory’, but Grimond devised a political strategy for the Liberals, and though he got the timing wrong and as a result became weary of waiting for it to come off, it was one which had a future of a kind. Grimond believed the Conservatives to be the dominant party within the system. So, the Liberal ambition became to replace the Labour Party as the main opponents of the Tories, with disillusioned Social Democrats coming to see the logic of making common cause with the Liberals. Individual liberty was still in favour as a Liberal theme, but economic liberalism was effectively abandoned, not least because it was antipathetic to the subsidy game, leaving the ideological field clear for Powell and later Mrs Thatcher. To individual liberty was added ‘Europe’ as well as instrumentalism, which boiled down to whatever was in ‘liberal’ fashion at the time, and parochialism, which was the exploitation of local grievances and also, of course, Celtic ones with subsidies the common cure. In this way, the Liberal Party was translated into a particular form of party of protest, given especially to protesting about the electoral system and advocating proportional representation in its place, ideally to guarantee it in office as a pivotal party. The existing electoral system was a formidable barrier for the Liberals to surmount, but so was the Party’s lack of an institutional base which mattered greatly even when the long-awaited allies arrived to complement it. An important reason why the Conservatives survived the trauma of 1940 as a prospective peacetime party of government when their Prime Minister was supplanted by another Cabinet Minister and the Liberals did not after the events of 1916 was that the Tories had an institutional base to sustain them, having by 1940 long since displaced the Liberals as the party of the private ownership system. It was in terms of political principle that Keynes famously described Lloyd George as ‘rooted in nothing’130 but his neglect


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of the institutional dimension of politics invited that description too, and it was not surprising that his proposed Centre Party came to nothing. ‘There has been a lot of talk about the formation of a new Centre Party [and] some have even been kind enough to suggest I might lead it’, Jenkins had stated in 1973, ‘I find this idea profoundly unattractive. I do not believe that such a group would have any coherent philosophical base.’131 This was true of the Labour Party too, of course, as it had both a socialist tradition and a social democratic one. ‘The trouble with the social democratic idea is that it does not stock and does not sell any of the exciting ideological commodities which various totalitarian movements – Communists, Fascists, or Leftists – offer dream hungry youth’, Leszek Kolakowski had observed: It is no ultimate solution for all human misery and misfortunes. It has no prescription for the total salvation of mankind. It cannot promise the firework of the last revolution to settle definitely all conflicts and struggles. It invented no miraculous devices to bring about the perfect unity of man and universal brotherhood. It believes in no final victory over evil. It requires, in addition to commitment to a number of basic values, hard knowledge and rational calculation, since we need to be aware of and to investigate as exactly as possible, the historical and economic conditions in which these values are to be implemented. It is an obstinate will to erode by inches the conditions which produce avoidable suffering, oppression, hunger, wars, racial and national hatred, insatiable greed and vindictive envy. According to David Owen, this was ‘the best working definition of social democracy’,132 and Healey had cited it too,133 and one could see that it was not necessarily ‘a soft, middle of the road, flabby’ creed,134 or even, as was so often claimed in its defence and advocacy, a moderate one, as Crosland, no less, demonstrated both in his behaviour as a Minister, and in the resounding titles selected for books, notably, The Conservative Enemy and Socialism Now. Though Crosland had no taste for it, the strategy of ‘gradualness’ had the advantage that the electorate might be fooled over the destination, and, along with some others, Crosland had fooled himself in the 1950s into believing that he had thought through the social democratic position in The Future of Socialism. Twenty years later, with few now believing that the Swedish Middle Way was the model to follow, and with the Keynesianism on which Crosland had staked everything discredited, the stage was set for the intellectual aridity that social democrats were to display in the 1980s. When the social democrats allied with the Liberals, Shirley Williams plaintively asked: ‘Does this mean I’ll have to support proportional representation?’135 As such support was what was most distinctive about the Liberals, it did, and the social democrats were too closely associated with the failures in office in the Keynesian era to make any serious contribution to public policy themselves.


All the social democrats could offer – as Ralf Dahrendorf ruthlessly pointed out – was ‘a better yesterday’.136 The idea of a Social Democratic Party per se had its origins in discussions between Jenkins and David Steel, the Liberal Leader, in 1979. Steel later recorded: ‘Roy and I agreed that some new organization founded mainly from the Labour Party but linking up in alliance with us would stand the best chance of “breaking the mould” of British politics. The adhesion of two or three figures to the Liberal Party, while welcome, would have nothing like the same cataclysmic effect.’137 The chapter headings of Owen’s memoirs provided a shorthand version of the various stages in the development of the SDP – ‘The Gang of Three’, ‘The Limehouse Declaration’, ‘The Launch of the SDP’, ‘The Alliance’. The Gang of Three had been Owen, Shirley Williams and William Rodgers and the issue that had brought them together in the first instance was ‘Europe’. The Gang of Four comprised the same people plus Jenkins. That these people seemed almost to welcome being tagged as the Gang of Four was strange, given that the Right and Centre was traditionally mainstream Labour, and it was the Left that was tearing the Labour Party apart. This, though, pointed to staying with the Labour Party, and combating the Left, but, of course, it was one thing to dish out party discipline when the Right and Centre were running the Party, using at times ‘undemocratic’ union block votes to do this, and another to have to take it. As it was, there was hesitation about leaving the Party on the part of Mrs Williams and Rodgers, who had a lot to lose, unlike Jenkins, who had everything to gain. Owen was unenthusiastic about Jenkins being on board at all, and initially talked a great deal about the SDP needing to be ‘socialist’. As Jenkins wryly observed, Owen published two editions of his book Face The Future in 1981, the second of which excised all mentions of ‘socialism’. Jenkins’s attitude all along was that the SDP ‘should be radical’, and that there was no need to ‘cling to the imprecise and misty “socialist” label’.138 The term ‘radical’ lacked precision too. ‘Roy used the SDP’, Owen later wrote, ‘It would have been more honourable [for him] to have joined the Liberals in 1981.’139 In return, it seems that Jenkins once remarked that Owen was like the fabulous Upas tree, which destroyed all life for miles around it.140 For all the contempt and distrust that Jenkins attracted, it was he who braved certain defeat at the hands of Labour in the Warrington by-election in July 1981, coming a good second as an SDP candidate with Liberal support Five months later, Mrs Williams won the safe Tory seat of Crosby, a feat that Jenkins emulated in March 1982 when he won at Glasgow Hillhead. Meanwhile, the SDP, and the Liberals too, basked in the approval measured by the opinion polls. ‘Go back to your constituencies and prepare for government’, Steel had told the Liberal Party Conference in 1981,141 and Owen commented that ‘the Llandudno air was so intoxicating that not even the hardened pressmen at the Conference laughed’.142 The SDP had four former Cabinet Ministers in its ranks, which helped it to seem serious, but only one Tory, Christopher


41

Brocklebank-Fowler joined its ranks in the House of Commons, sent on his way with the observation that he was ‘not merely Wet, he [was] dripping, you could shoot snipe off him’.143 At first, only 14 from the Right and Centre of the Labour Party defected, a figure that later rose to 26. There were those who thought that the Falklands factor killed off the SDP–Liberal Alliance’s chances of at least holding the balance of power in the House of Commons in 1983 or 1984, but Healey’s narrow victory in the Labour Party’s Deputy Leadership contest probably prevented further defections from its Right and Centre, and the character of the British electoral system also worked against the Alliance. Of the outcome of the 1983 Election, in which the Alliance secured 186 fewer seats than the Labour Party while obtaining only 2.2 per cent fewer votes, Steel commented that ‘this revealed the injustice – fraud would be a better word – of our electoral system more than ever before’.144 The Alliance knew all along that the 1983 Election would be fought under the existing arrangements and not under some form of Proportional Representation followed by political fraud practised in ‘smoke filled rooms’, and its boast had been that it would succeed under those arrangements. So, there were disappointed expectations, and such were the tensions in the Alliance during that Election, Jenkins, the supposed ‘Prime Ministerin-waiting’, had to try to assert his authority at the Ettrick Bridge Summit. Jenkins resigned from the SDP leadership after the Tory victory.145 The Alliance’s task had never been anything more than finishing at least second in terms of votes cast, and, crucially, it had just failed to do this in 1983. Its overriding task at the next Election of 1987 or 1988 was to do better than the Labour Party in relation to the popular vote. The leadership of the SDP passed to Owen, and Jenkins observed that he became more privately divisive. . . he did not find it easy to work on a basis of equality or semi-equality. It was not only the obvious strains with David Steel and with me. Relations with Rodgers, perhaps never close, were sundered in 1986 [over defence policy], and the saga of Shirley Williams’s reluctant alienation from Owen, both personally and politically, was a running feature of the 1983–7 Parliament and the middle years of the SDP.146 Jenkins also wrote that ‘by the General Election of 1987 there was a widespread fear that his leadership was taking the SDP and the Alliance not into the Centre but to the Right of British politics’,147 and he even tried halfheartedly to blame Owen’s supposed Thatcherism for his loss of the Hillhead seat at the 1987 Election before conceding the scale of the swing to the Labour Party in central Scotland and his own failings.148 The critical body blow that sank the Alliance was not delivered by Owen, but by the Liberal Party Conference in September 1986, when it voted by a margin of just 27 votes in favour of a non-nuclear defence policy, thus


publicly humiliating Steel.149 At the 1987 Election, the Alliance lost the battle for second place to the Labour Party, finishing 8.2 per cent behind it in terms of the popular vote. After this outcome, Steel moved swiftly to obtain a merger between the SDP and the Liberals. Etterick Bridge was once more the scene of activity.150 The memberships of the two parties later voted for a merger, in the Liberal Conference’s case by six to one.151 So it was that in 1988 the old Liberal Party died, and in its place the following year there emerged the Liberal Democrats. Owen ploughed on alone with a separate SDP. At the Bootle by-election in May 1990, the SDP candidate polled fewer votes than the Monster Raving Loony Party candidate.152 The SDP was finished; the commentators who had hailed it were nowhere to be seen. More remarkably, it seemed that Healey got things at least partly right for once, when, remembering the political effects of earlier splits in the Italian and French Socialist Parties, he had tried to persuade the Gang of Four to stay in the Labour Party, later writing of the SDP: ‘I was not surprised by the consequences of that unhappy experiment; right-wing breakaways from left-wing parties have never come to anything. Their only important effect is to weaken the influence of common sense in the party they have deserted, and to keep Conservative Governments in power.’153

3 The Thatcher Cabinets and Governments, Her Court, and ‘an Old Whore’ of a Party

‘Where there is error may we bring truth’ When Mrs Thatcher entered 10 Downing Street for the first time on the afternoon of 4 May 1979, she chose to make a declaration of intent, using words that she had been led to believe were those of St Francis of Assisi,1 but which had in fact been the anonymous composition of someone in the twentieth century:2 Where there is discord may we bring harmony; Where there is error may we bring truth; Where there is doubt may we bring faith; Where there is despair may we bring hope.3 Prior was aghast: ‘Margaret’s choice of words on her arrival in Downing Street. . . could hardly have been less apt and from her lips were the most awful humbug: it was so totally at odds with Margaret’s belief in conviction politics and the need to abandon the consensus style of government, which she blamed for Britain’s relative economic decline over the past two decades.’4 Mrs Thatcher herself noted that her declaration attracted sarcasm, but attributed this to the critics only reading the first line of what she said, arguing that ‘the forces of error, doubt and despair were so firmly entrenched in British society, as the Winter of Discontent had just powerfully illustrated, that overcoming them would not be possible without some measure of discord’.5 The unifying theme would have been better expressed in terms of economic liberalism, given that Mrs Thatcher and her allies had ‘faith’ that the greater application of market forces to the British economy would reverse its decline, and the belief that, once this ‘truth’ had been revealed, there would be ‘hope’ in place of ‘despair’ about the country’s future. ‘Discord’ had been present in the Winter of Discontent anyway, and evident for years before that as the Keynesian economic order had been discredited, not least by the behaviour of elements within the wider Labour Movement who were determined to ensure a socialist succession. The ‘harmony’ brought 43


about by market forces would no doubt come at a considerable social cost and ‘despair’ for many and for them not necessarily just in the short run, but the Keynesian consensus such as it was had been broken and those who thought like Prior that it could be pieced together again were deluding themselves.

Listening to ‘voices’: the Prime Minister’s court, her favourites, and her advisers As she was without the institutional support that a Prime Minister’s Department or similar body would have provided, Mrs Thatcher could never have practised the Prime Ministerial Government that she was accused of, and, far from creating such an organization, she seemed to glory in the frugality of the administrative arrangements at 10 Downing Street with ‘its relatively slender resources and modest surroundings’ as contrasted with ‘the White House with its 400 staff, or the German Chancellery with 500’.6 Sir Robert Armstrong served as Secretary to the Cabinet from 1979 to 1988, later taking on the position of Head of the Home Civil Service, with his successor in both roles being Sir Robin Butler. Armstrong and Butler were both career civil servants, as was Mrs Thatcher’s Private Secretary from 1984 to 1990, Charles Powell, who was a member of the Diplomatic Service, as was Sir Anthony Parsons and then Sir Percy Cradock, who successively acted as Special Adviser to the Prime Minister on foreign policy. Cradock, who also became Chairman of the Joint Intelligence Committee from 1985, wrote that what his appointment as Foreign Policy Adviser ensured was that there was ‘a second opinion, and a check for the Prime Minister that the official advice she was receiving was the best calculated to promote our interests’. Cradock, like Parsons, a former insider, had no difficulties in dealing with the Foreign and Commonwealth Office (FCO), in some contrast with another insider, Roger Jacklin, whom Mrs Thatcher transferred from the Ministry of Defence to act as her Defence Adviser. Michael Heseltine, as Secretary of State for Defence, effectively prevented Jacklin from doing his job, and the arrangement soon ended, with Cradock adding defence issues to his brief.7 This episode emphasized the paucity of resources available to Mrs Thatcher as well as her remarkable level of tolerance of Heseltine’s behaviour, presumably explained by reasons of party management. David Wolfson was brought in from the private sector to act as the Prime Minister’s Chief of Staff between 1979 and 1985, drawing no salary, and his role was described by Norman Strauss of the Policy Unit as one of ‘strategic leadership’, concentrating on ‘the big issues. . . that matter’ and ensuring action resulted.8 Sir Derek Rayner was also recruited from the private sector to be the Prime Minister’s Adviser on Efficiency in Government between 1979 and 1983, with Sir Robin Ibbs being his successor. Alan Walters was brought in from academic life to be the Prime Minister’s Economic Policy Adviser from the beginning of 1981 until after the 1983 Election, returning

The Thatcher Cabinets and Governments

45

later. Mrs Thatcher emphasized how important she found Walters’s advice to be.9 Like several of the irregulars attracted to Mrs Thatcher’s banner, Walters was an unusual character, having working–class origins, a Communist father, and having himself been a Private in the Army.10 Of the other irregulars who stayed outside the machinery of government, Geoffrey Howe recalled that Margaret would quite often – more frequently as the years went by – cite advice she had received from ‘one of my people’ or ‘my people’. It sometimes seemed as though she was Joan of Arc invoking the authority of her ‘voices’. The Prime Minister was understandably reluctant to reveal the balance of her telephonic kitchen cabinet. Quite often, I suspect, the voice was that of Woodrow Wyatt – which she may have thought sufficient reason for cloaking it in anonymity.11 Wyatt was later described by Mrs Thatcher as ‘a former Labour MP turned entrepreneur, author, sympathizer, and friend’,12 and Wyatt admitted that he was ‘platonically’ a bit in love with her,13 writing that ‘the public has not the slightest idea of what a vulnerable, human woman she is, all motherly instincts and feminine instincts and charm as well. And wonderful looks and liveliness’.14 Wyatt recalled that he had ‘gone to Flood Street to talk to her just after she had become Leader of the Tory Party. I had told her I would support her because what she was going to do reminded me of Hugh Gaitskell’.15 This analogy was nonsense. That Wyatt resorted to it seemed to follow from his belief that the Labour Party was ‘like a Church in which faith and hope and an irrational belief in the willingness of human beings to be good are the ingredients of the Gospel’.16 So, for Wyatt, to go on as he did and urge people to vote Conservative17 and produce an ‘anti-Labour majority. . . of 1931 proportions’,18 because without at least two terms of Tory Government ‘our democracy will be unlikely to survive’,19 was a serious matter. As late as 1989, Wyatt was still protesting that ‘I am not a Tory’,20 sitting on the cross benches of the House of Lords, as if this fooled anybody into thinking that Wyatt was some sort of independent. Wyatt’s fellow peer and another recruit from the Labour Party, John Vaizey took the Conservative Whip, and placed on record what his defection cost in terms of personal friendships as he strove both publicly and privately to sustain Mrs Thatcher in office during the early years.21 Inevitably, Mrs Thatcher’s band of irregulars were a mixed bunch, and, for instance, that at one stage Professor Max Beloff, who had a legion of detractors in his chosen profession, ranked among a self-styled ‘First Eleven’ among her favoured supporters22 could only have pleased the Prime Minister’s political foes. Nonetheless, among others who rallied to her cause, in terms of intellect nobody with much sense would write off Hugh Thomas, Paul Johnson, Kingsley Amis23 or Robert Conquest. Mrs Thatcher had little admiration at the time for the Angry Young men of the 1950s,24 but,


a couple of decades later, for those whose hallmark was irreverence for established opinion, she offered a cause. Introduced to Mrs Thatcher by Conquest, and in the company of Julius Gould, apparently ‘the only right wing sociologist in captivity’, Amis seems to have fallen politically in love.25 That Amis had been a member of the Communist Party from 1941 to 195626 tended to be glossed over, not least by himself,27 and Mrs Thatcher recorded her gratitude for Amis’s ‘support in the culture wars of her Administration’.28 Of the defectors to the Tories, the departure of Hugh Thomas was the one that caused most dismay among those left behind. Thomas had become a member of the Conservative Philosophy Group, which had also included Anthony Quinton, John Casey and Roger Scruton, and, to the bemusement of one embittered biographer, Mrs Thatcher even attended meetings to plunder their ideas, leading him to conclude that as a user of intellectuals she was unequalled.29 Those who gave Mrs Thatcher advice especially in the defence and foreign policy field, besides Thomas and Conquest, included George Urban, Michael Howard, Leonard Schapiro, Hugh Seton-Watson, Brian Crozier, Gordon Craig, Fritz Stern, Norman Stone and Timothy Garton Ash.30 Urban observed that Margaret Thatcher’s requests for advice or speech writing assistance were striking by their informality. A broadly shared political platform and the right personal chemistry were enough to induce her to entrust her unceasing search for fresh thought to a small number of private sympathizers. The more detached these were from Whitehall, and the more unversed in the ways of the Conservative Party, the more she seemed to value their judgement.31 Urban admired ‘her willingness – indeed her compulsive desire – to be among intellectually sharp people, whether of agreeable or contrary opinions, in bad times as well as good ones. I don’t think Baldwin, or Macmillan, or Wilson, or Callaghan, or Douglas-Home or even Heath held seminars to broaden their minds and take advice from unorthodox quarters. They were too grand or too complacent and frequently both.’32 In office, and especially at first, Mrs Thatcher still got some intellectual support from the Centre for Policy Studies, primarily through its Chairman, Hugh Thomas, and, though Alfred Sherman was eased out in 1983, Mrs Thatcher had previously tolerated Sherman providing her with confidential memoranda as well as acting as a severe public critic of the Government’s performance. She was said to enjoy his scathing attacks on her colleagues and Party officials.33 Once the Tories were in office, Sir John Hoskyns and Norman Strauss had left the Centre and moved directly into Whitehall, with Hoskyns heading the Prime Minister’s Policy Unit between 1979 and 1982, eventually to be succeeded in that role by Ferdinand Mount, John Redwood, and Brian Griffiths.


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Hoskyns defined the role of the Policy Unit in his time as being ‘the unending task of clarifying, again and again, as precisely as possible and with small shifts of perception and insight, what it was that the Government was trying to accomplish in its critical first term, and then checking whether the necessary actions looked likely to work in practice’.34 In 1979, the Policy Unit ‘initially consisted of Norman Strauss and myself’, Hoskyns recalled, ‘We were extremely sharply focused and we did not really need six people to help the Prime Minister screw it up, if two people could prevent her doing so.’ That said, though, Hoskyns soon added Andrew Duguid, a high flyer from the Civil Service, to the Unit,35 and he turned out to be ‘as impatient with Whitehall’s defeatism’ as Hoskyns himself,36 and, as he was eventually to leave the Service, presumably other behaviour too, such as when on a visit to a major department he was asked: ‘This fellow Hoskyns, do we tell him what we tell everybody else, or do we tell him the truth?’37 Hoskyns and Strauss thought that ‘stabilization of the government finances (not of the real economy, that would come later) was all that we should be trying to achieve in the first four or five years’. This meant dealing with ‘the linked problems [of] inflation; inflationary expectations; nationalized industries, which were . . . putting prices up all the time and at the same time turning to the Government for massive subventions; trade union expectations in the face of inflation, which gave them a completely new role, a completely destabilizing role; public sector pay generally; funny money budgeting.’38 The presence of Hoskyns and Strauss in the Policy Unit ensured no more than what they deemed to be the best of business thinking as well as that of the Centre for Policy Studies was brought to the attention of Mrs Thatcher and her allies in the early, much troubled years of the Government. Both were gone by 1982. ‘I left . . . because I really felt that we had done everything we could in the first term’, Hoskyns wrote, ‘The second term would require a bigger Policy Unit and a complete rethink. I thought that it would really be about two things: privatisation. . . and the Welfare State.’ To judge from the tone of his memoirs, and despite his admiration for and good working relations with the Prime Minister herself, Hoskyns may simply have tired in his dealings with the other Ministers of being regularly reminded that ‘words are deeds for politicians’.39 There was some talk of Hoskyns being made head of the Central Policy Review Staff (CPRS), a body that reported to the Cabinet, but this came to nothing,40 and Mrs Thatcher got rid of that body after the 1983 Election. Some months before, a document drawn up by that Staff proposing what Nicholas Ridley called ‘extravagantly savage cuts in public spending for the future, based on imperfectly worked up plans to transfer burdens from public to private spending in health, education and the social services’ had been leaked by a Cabinet Minister.41 ‘We were to be plagued by talk of secret proposals and hidden manifestos up to polling day’, Mrs Thatcher recalled, and, as she thought that the CPRS had become no more than a freelance ‘Ministry of Bright Ideas’, she abolished it, believing that ‘a Government


with a clear sense of direction does not need advice from first principles’.42 Mrs Thatcher then doubled the number of staff in her Policy Unit, and its then Head, Ferdinand Mount, later wrote that ‘her fellow Ministers shed few tears’ about the demise of the CPRS, with the relevant point being that ‘the Cabinet did not feel itself equipped to discuss difficult, long-term policy options; the fear of political embarrassment was too overwhelming to run the risk of being seen to examine such bleeding raw material. Implicitly, while continuing jealously to think of itself as the supreme executive body, Cabinet recognizes that it is equipped only to approve dishes that are at least three quarters cooked; it is not itself the cook, and the Cabinet Room is not the kitchen.’43 Believing that politics was about more than presentation except in the very short term, Ridley was one who thought Mrs Thatcher placed too high a value on presentational skills when making promotions to the Cabinet, observing that ‘those who got a consistently good Press, or who excelled on television, found their futures assured, no matter that sometimes the Press praised them for apparently having different views from her’s’.44 According to Bernard Ingham, a civil servant who acted as her Chief Press Secretary for eleven years and one month from October 1979 onwards, wrote that ‘what mattered to Mrs Thatcher was policy. If she could get the policy right she believed that presentation would more or less take care of itself’.45 Nonetheless, Mrs Thatcher felt that she needed ‘this tough, blunt, humorous Yorkshireman’ who ‘never let me down’,46 and Ingham – ‘Yorkshire Rasputin’47 – did well to choose the title Kill The Messenger for his memoirs, there being no shortage of would be assassins, mostly among those journalists who worked for the BBC and the ‘quality’ newspapers. Conservatives at this time routinely referred to the B.B.C. as the Bolshevik Broadcasting Corporation, and it would be naïve to believe that an organization of that importance and size would be free of Soviet agents and fellow travellers. That said though, the dominant tone of the BBC’s political coverage would be best described as liberal and radical but not socialist, which was thought by his biographer to be the outlook of Hugh Carleton Greene,48 whose behaviour as Director General in the 1960s undermined what remained of the BBC’s reputation for impartiality. As one of its better journalists later wrote, ‘the BBC’s assumptions are more progressive, or trendier, or mildly more radical, than. . . [the] more conservative country. . . it serves’, though it must have been with tongue in cheek that he maintained that ‘the bias is mostly unconscious’.49 Ingham’s own line was that the BBC was simply anti-Government, whoever was in office. Ingham found that the makers of supposedly serious television programmes ‘went on a lot about their responsibilities to society, the nation, the viewers, the truth’, but it was really about fat salaries and ratings, and producing material ‘which challenged authority because agreeing with it makes for boring television’. Then again, Ingham agreed with the view that current affairs television and, to some extent, the ‘quality’ newspapers had attracted a generation of


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journalists who had ‘Watergate on the brain, and think they could be the next Carl Bernstein, if only they were encouraged to betray every confidence, violate everybody’s privacy and read every top secret document’.50 Socialist journalists working for Conservative newspaper owners had been one explanation of the bitter tone of British journalism in the past, but Ingham had only praise for the tabloid journalists he had to deal with because they had no wish to change the world, only to get a good story. As Ingham himself recognized, only The Daily Mirror of the tabloids could be counted as an opponent of Mrs Thatcher.51

‘Where there is discord’: the early Thatcher Cabinets ‘When the time comes to form a real Cabinet, I do think I’ve got to have a Cabinet with equal unity of purpose and a sense of dedication to it’, Mrs Thatcher had stated shortly before becoming Prime Minister, ‘It must be a Cabinet that works on something much more than pragmatism or consensus. It must be a “conviction” Government . . . We’ve got to go in an agreed and clear direction. As Prime Minister, I couldn’t waste time having any internal arguments.’52 Mrs Thatcher also stated at the beginning of the first Government she led, ‘give me six strong men and true, and I will get through’, and she added: ‘Very rarely did I have as many as six.’53 To some extent, this was her own fault, since when it came to choosing Cabinet colleagues she made some strange selections, not least Lord Young, whom, she believed, ‘understood how to make things happen’,54 and of whom she was reported to have said that ‘others bring me problems, David brings me solutions’.55 Nicholas Ridley, a loyalist, correctly thought that Mrs Thatcher showed ‘an uncertain touch in selecting, promoting and dispensing with people at the highest level. This was her chief weakness. She hated sacking people, and seemed to take too little care in selecting them’.56 Thus, ‘she failed to promote early enough many of the bright young Members who would have supported her; she instead promoted many who were antipathetic to her views’.57 Of course, Mrs Thatcher could not just promote economic liberals because she had to sustain the Conservative coalition, and, early on, in particular, there were only too many prominent High Tories that she had to find places for in the Government. That said, though, the composition of the Cabinets she led bore out Ridley’s analysis rather than the application of a ‘one of us’ test, and the number of leaks of confidential information from the Cabinet was evidence of disloyalty on the part of several Ministers. ‘Every Prime Minister needs a Willie’, Mrs Thatcher memorably said of Whitelaw,58 who was Deputy Prime Minister to her all the way down to early 1988 when illness forced his resignation. The general opinion was that Mrs Thatcher then lost a valued counsellor,59 and she remarked herself on his loyalty.60 Ridley thought that ‘Whitelaw’s support for Margaret Thatcher in the early period of her Premiership was vital


to her survival. Later his influence was crucial in some of the most difficult moments, such as the Westland crisis and the Libyan bombing decision.’61 Nigel Lawson said of Whitelaw that ‘certainly the fact that there was somebody of his stature who discussed things with her did help matters; I think that the process of government definitely deteriorated in the third Thatcher Government after Willie Whitelaw had departed’. Lawson came to believe that ‘an institutionalised Willie’ was what was needed,62 which was why he advocated ‘the creation of a genuine Inner Cabinet’.63 Much of this praise for Whitelaw was no more than confirmation that, to be successful, every Prime Minister needs an able number two in his or her Cabinet. ‘In many respects, it was Willie Whitelaw’s Cabinet that [Mrs Thatcher] first appointed’ in May 1979, according to Ridley,64 who observed: ‘To me, and to my friends, it was always inexplicable why she appointed to her first Cabinet so many people who didn’t share her ambitions or believe in her analysis of the nature of the cancer eating into the heart of Britain. . . the Cabinet was packed with supporters of the old consensus, Heathite policies.’65 Heath himself was said to have had hopes of being made Foreign Secretary, but the most he got was the offer of being Ambassador in Washington, which, remembering Churchill’s treatment of Halifax in 1940, Heath took to be ‘a clear indication that [Mrs Thatcher] wanted me out of the way’, and refused the post.66 Even without Heath’s presence, Prior certainly thought that ‘the balance of the Cabinet looked better for our wing of the Party than I had dreamt possible’. Prior noted that the composition of the economic team at the Treasury and the other economic departments obviously showed that she was going to have her own way as far as she possibly could. Margaret’s main supporters at the outset in Cabinet [included] Geoffrey Howe, her Chancellor, Keith Joseph at Industry, John Nott at Trade. . . and John Biffen as Chief Secretary to the Treasury – not a very impressive bunch. . . The dissenters in the Cabinet included [Lord] Carrington at the Foreign Office, [Prior himself] at Employment, Peter Walker at Agriculture. . . Michael Heseltine at Environment, Norman St John Stevas as Leader of the House [of Commons], and [Sir Ian] Gilmour as Lord Privy Seal.67 This was ‘a Cabinet of Conflict’ as one of her supporters called it,68 though Mrs Thatcher’s willingness to have a Cabinet that was ‘a broader church’ than Heath had tolerated,69 did not mean that she always consulted it. Peter Walker, who served for eleven years in Mrs Thatcher’s Cabinet, observed: She did develop a system of taking decisions by groups of Ministers rather than the full Cabinet. I do not think she did it to exclude those Ministers who had different views, though some believe this is precisely what she did on economic issues. This was a false accusation. She frequently


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put me in groups when she must have suspected that I would challenge the prevailing line. She did it to get the Ministers who were affected by an issue to come to a conclusion quickly. A failing in the system was that if you read of a decision in which you had taken no part, you had no sense of the Cabinet’s collective responsibility. . . Ted Heath’s method of having every Cabinet committee report to Cabinet meant that everything came to Cabinet. . . Under Margaret, that process had gone. There were some occasions when issues went to Cabinet committee and then to Cabinet, but not the majority. It was an important constitutional change. Walker recalled that Heseltine and himself had only learnt from journalists about the Government’s abandonment of exchange controls in November 1979.70 When Secretary of State for Trade, Nott’s recollection was that he spent more time on the Economic and Overseas and Defence Committees of the Cabinet than he did in his department, or, for that matter, the full Cabinet, where ‘virtually no decisions’ were taken about economic policy, only ‘perfunctory exchanges of view’. Instead, ‘much of [the Cabinet’s] time was. . . taken up with hearing from the Foreign Secretary about various irrelevant happenings around the world and in deciding the following week’s Parliamentary business’.71 ‘Margaret Thatcher couldn’t trust her Cabinet to keep matters to themselves’, Ridley wrote in defence of her manner of proceeding, No wonder things could not be discussed there: too often what was discussed appeared accurately in the newspapers next day. It was the members of her own Cabinet who reduced their influence and importance by simply not being sufficiently trustworthy for her to have confidence in them. Can it be any wonder she preferred small groups from which the leakers could be successfully excluded? This continual problem was one of the reasons for her style of government. Towards the end, she was reduced to announcing all important decisions on Thursdays. She would clear the decisions through Cabinet at the weekly morning meetings, and have them announced that afternoon in the House. That way the leaks preempted little or nothing becoming less worthwhile and therefore less frequent. The irony [was] that some of those who complained about her style of government were almost certainly among the leakers.72 Another Thatcher loyalist, Nott saw things rather differently. ‘It seemed as if we lived in a world in which collective responsibility lay with us, but not with her’, Nott wrote: Throughout the first Thatcher Government the internal atmosphere was poor. This was caused not only by genuine disagreement over


philosophy and policy, mainly in the economic domain, but also by indiscretion and background press briefing. Both sides were responsible for [this] but the principal responsibility for the bad blood created by leaks and gossip undoubtedly lay with No.10 Downing Street. Politics being the life blood of Margaret Thatcher, she had an insatiable urge to gossip among her immediate circle about her Ministers – their attitudes, their failings, and what she could do about them. It was extraordinary how so many disagreements about policy were personalized and found themselves into the pages of the press. . . This practice was a major stain on the first Thatcher Administration. . . If one compares the unending flow of press tittle tattle and malice flowing from inside the Thatcher Government with the Heath and Major Administrations, it is clear where the responsibility lies.73 Of Mrs Thatcher’s first Cabinet, Walker wrote that ‘we were particularly divided over the 1981 Budget’, he was describing a situation in which ‘an important proportion’ of its members ‘felt the Budget was too deflationary with a recession setting in’. Walker, Prior and Gilmour contemplated resignation, but thought better of it.74 The balance of opinion within the Cabinet had been slightly changed in January 1981 when St John Stevas was dismissed, and Leon Brittan, an economic liberal, was brought in as Chief Secretary to the Treasury, his firstover- promotion. September 1981 witnessed a critical recasting of the Cabinet. In came ‘the formidable Norman Tebbit’, as Mrs Thatcher called him, in place of Prior at Employment, who was despatched to run Northern Ireland. The Prime Minister promoted ‘the immensely talented Nigel Lawson’ to become ‘a highly successful Secretary of State for Energy’. This promotion gave Mrs Thatcher ‘great pleasure’, although probably less than the opportunity to dismiss Ministers like Gilmour, who displayed resentment at the decision. Of another Ministerial casualty, Mrs Thatcher wrote: ‘Christopher Soames was equally angry – but in a grander way. I got the distinct impression that he felt that the natural order of things was being violated and that he was, in effect, being dismissed by his housemaid.’ Sir Keith Joseph was moved to Education. After the new Cabinet’s first meeting, Mrs Thatcher remarked to her aides, ‘what a difference it made to have most of the people in it on my side’.75 Francis Pym, who remained in the Cabinet, later complained of Mrs Thatcher asking the question, ‘Are you one of us?’, by which he said she meant ‘Are you completely free of doubt as to the utter rightness of everything we are doing?’ Pym needlessly added that ‘I am not one of us.’76 The composition of Mrs Thatcher’s various Cabinets did not reflect the application of a ‘one of us’ test of this kind, not least because, as Ridley observed, ‘there [was] a feeling in the Tory Party that each strand of opinion. . . should be represented in the Cabinet’, with these representatives, as ‘leaders of some important group or faction’, seeing themselves as having ‘a political position of their own’. Ridley thought that such people greatly overestimated their


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power, but that Mrs Thatcher was always concerned about their influence in the Party,77 and during her time as Prime Minister more of them attained and retained Cabinet rank than their abilities justified, and Pym was one of them.

The Falklands War Cabinet and its immediate successors When the news came through on Friday, 2 April 1982 that Argentina had invaded the British colony of the Falkland Islands, it was obvious that the Thatcher Government had been caught unprepared. ‘I am so depressed by what I have heard today – the shuffling and fudging, the overpowering impression of timidity and incompetence’, Alan Clark wrote in his diary: Can it have felt like this in the Thirties, from time to time, on those fine weekends when the dictators, Hitler and Musso, decided to help themselves to something – Durazzo, Memel, Prague – and all we could do was wring our hands and talk about ‘bad faith’? I have a terrible feeling that this is a step change, down, for England. Humiliation, for sure, and, not impossible, military defeat.78 Indeed, as the Secretary for Defence, John Nott, recalled, ‘there was an attempt on the Wednesday, and even on the Thursday, to respond to [the crisis] diplomatically’, though, ‘by the Wednesday evening. . . we were also in the process of preparing for war’. Nott stressed the importance of the role of Sir Henry Leach, the First Sea Lord, who, ‘rightly fearing that some feeble compromise would be sought’, went in uniform to see Mrs Thatcher. According to Nott, the Admiral impressed her by his appearance,79 and, it seemed, by his argument, which essentially was ‘what the hell is the point in having a Navy if you don’t use it for this sort of thing in these sort of circumstances’.80 Nott remembered ‘Friday 2 April [as] a day of some confusion. The Cabinet met in the morning [and] it parted in some gloom’,81 and ‘at 7.30 on Friday evening the Cabinet met again and gave its backing for the despatch of the Task Force. Only John Biffen expressed some doubts, but without in any way opposing the move outright.’82 Cecil Parkinson wrote that Biffen ‘bravely argued we should try to negotiate our way round this difficulty’,83 and Nott described the line that Biffen took as ‘courageous’.84 Courage and bravery were what was demanded from the members of the Armed Forces sent to the Falklands. Biffen’s behaviour was unimpressive. It still remained for the Government, which Parkinson thought, looked ‘incompetent and ill-informed’,85 to face the House of Commons, and, as Nott wrote, the Saturday emergency debate [on 3 April 1982] (the first since the Suez Crisis) has gone down as a famous event in Parliamentary history. The House was full, worried and concerned; but there was an underlying ugly


mood – a developing desire to find scapegoats for the national humiliation that had occurred. . . The most unpleasant contributions came from a predictable direction, namely from the Tory benches. Edward du Cann and Patrick Cormack both made contemptible speeches, dressing up naked self advertisement in patriotic clothes.86 As for Nott himself, Clark gleefully recorded: Poor old Notters was a disaster. He stammered and stuttered and gabbled. He faltered and flustered and fumbled. He refused to give way; he gave way; he changed his mind; he stood up again; he sat down again. All this against a constant roaring of disapproval and contempt. I have seen the House do this so often in the past. Like the pack that they are they always smell the blood of the a wounded animal and turn on it.87 Afterwards, there was a meeting of the Conservative 1922 Committee, attended by as many as 200 backbenchers, that lasted for two and a half hours, at which Lord Carrington became the main target, taking the blame for policy in Northern Ireland and at the MOD in the past, and for that in Rhodesia as well as in the Falklands, and ‘the whole fury against the Foreign Office came out. . . against him’.88 Clark recorded that thirty-three Members asked questions and, with the exception of three heavyweight duds ([Christopher] Patten, [Anthony] Kershaw and [William] van Straubenzee), every single person was critical. I asked a long sneering question about the failure of our intelligence. I made a point of addressing it to Peter Carrington whom, with my very long memory, I had not forgiven for snubbing me at a meeting on Afghanistan in December 1980 in the Grand Committee Room. As my irony developed, people in the Committee Room started sniggering, but poor Notters was still so rattled and blubbery that he leant across and answered it, while Carrington sat staring at me in haughty silence.89 Carrington recalled that ‘with John Nott, I had attended a fairly disagreeable meeting of the 1922 Committee and although nobody shouted for my resignation I knew that within the Conservative Party itself my remaining in office was not going to help the Prime Minister with her own supporters’. Correctly as it turned out, Carrington assumed that ‘my departure would put a stop to the search for scapegoats. . . serve the cause of unity and help turn the eyes of all from the past to the immediate future’.90 That Mrs Thatcher saw the force of Carrington’s argument did not stop her from unsuccessfully trying to persuade him to stay. Nott tried to resign too, and this was made public, but ‘I told him straight that when the Fleet had put to sea he had a bounden duty to stay and see the whole thing through’.91


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To prosecute the Falklands War of 1982, Mrs Thatcher decided that a War Cabinet was essential. Besides herself, it consisted of Pym, who had replaced Carrington as Foreign Secretary, Nott as Secretary of State for Defence, Whitelaw who was Deputy Prime Minister as well as Home Secretary, and Cecil Parkinson, who became Chancellor of the Duchy of Lancaster, as well as being the Conservative Party Chairman. Sir Terence Lewin, Chief of Defence Staff, always attended. So did Michael Havers, the Attorney General, as the Government’s legal adviser. The War Cabinet met every day, sometimes twice a day. Mrs Thatcher took advice from Harold Macmillan about the composition of the War Cabinet, and, though this displeased Howe, she followed the former Prime Minister’s ‘main recommendation. . . to keep the Treasury. . . off the main committee in charge of the campaign, the diplomacy and the aftermath’. Thus, ‘everything we did was governed by military necessity’, and ‘we were never tempted to compromise the security of our forces for financial reasons’.92 Nott considered that ‘the key person on the War Cabinet, apart from obviously the Prime Minister, was the Chief of Defence Staff’, believing that the ‘extremely determined’ Lewin was ‘an exceptional man and did an exceptional job’. Nott thought that Lewin ‘handled the Prime Minister absolutely brilliantly’. The War Cabinet or OD(SA) was formally called the South Atlantic Sub-Committee of the Overseas and Defence Committee of the Cabinet, and it first met on 7 April 1982. It had been Nott who had suggested to the Prime Minister that Parkinson should be included in the War Cabinet, having feared that with just four politicians the arrangement would not work. Mrs Thatcher wanted Parkinson there because he could handle the media work, much of it done, as Parkinson said, ‘when my more important colleagues were trying to get some sleep prior to another big decision making day’. Nott was glad to have someone of his own generation like Parkinson in the War Cabinet because he expected that Pym and Whitelaw would be natural allies, being of the same generation and similar political outlook, with service in the Second World War, and both having been Chief Whips. ‘In retrospect, I need not have worried about the political balance because Whitelaw – who always supported Margaret Thatcher anyhow, whatever the merits of the issue – became with Margaret herself the most hawkish political voice in the War Cabinet’, Nott recalled, ‘And Michael Havers. . . proved to be more of a pragmatic former Fleet Air Arm officer than a typical pernickety, nitpicking wordsmith of a lawyer.’ With Havers proving to be a hawk, Nott observed, ‘poor old Francis Pym was a bit isolated’.93 ‘One of the features of the [Falklands] Campaign was that the Prime Minister at all times set out to make sure the Cabinet was fully informed and totally behind the Forces, and also Parliament and the Opposition’, Parkinson later wrote, adding that ‘we were very lucky that we had Michael Foot leading the Labour Party [who] hated fascists and hated [the leader of the Argentine Junta] as a result and was amazingly staunch’.94 There were three weeks to negotiate before the Task Force reached the Falklands, and though


Clark found the overall mood of the House of Commons to be ‘very determined’, even as early as the first Monday he detected ‘the first odours of appeasement [beginning] to waft round the Chamber’ with ‘Members on both sides. . . muttering and shuffling’. Though ‘feeling in the Party is still very strong’, Clark witnessed ‘that sanctimonious creep, van Straubenzee’ actually wringing his hands as he regretted ‘a certain jingoistic tendency’, and, by the Wednesday, Clark found that ‘people who should know better are striding up and down the Smoking Room Corridor telling anyone whom they can apprehend that the Invincible is sailing without her radar operative; that many of her weapons systems have been removed; that the Sea Harrier cannot land on deck in a rough sea; that many of the ships in the Task Force have defective power trains, etc. etc.’ Clark thought that it was ‘monstrous that senior Tories should be behaving in this way’, adding: It is only on occasions such as this that the implacable hatred in which certain established figures hold the Prime Minister can be detected. They oppose Government policy whatever it is. . . They are within an ace, they think, of bringing her Government down. If by some miracle the expedition succeeds they know, and dread, that she will be established for ever as a national hero. So, regardless of the country’s interest they are determined that the expedition will not succeed. The greater the humiliation of its failure, the more certain will be the downfall of The Lady’s Government, the greater the likelihood of a lash-up coalition, without a General Election, to fudge things through for the last eighteen months of this Parliament. Clark had seemed to think that the departure of the ‘grossly appeasing’ Carrington had meant that ‘the collusive element in the Foreign Office [had] been decapitated’,95 but soon the behaviour of Pym was worrying hawks like Clark, who recorded that ‘the whole Party is very prickly and unsure of itself. I dread a sell out. I am sure that we are being slowly set up for one.’96 ‘Francis [Pym] is in many ways the quintessential old style Tory: a country gentleman and a soldier, a good tactician, but no strategist’, Mrs Thatcher later wrote, ‘He is a proud pragmatist and an enemy of ideology; the sort of man of whom people used to say that he would be “just right in a crisis”. I was to have reason to question that judgement.’97 Mrs Thatcher had ‘made up her mind from the outset that the only way we could regain our national honour and prestige was by inflicting a military defeat on Argentina’, Nott recalled, unconvincingly adding in view of his later account of her behaviour that ‘she was sufficiently pragmatic to understand that if the negotiations could bring about a total withdrawal of the Argentines and the restoration of some kind of British administration, then the Cabinet would accept it’. Pym seemed to be among those who doubted that the Task Force was capable of


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recapturing the Falkland Islands anyway, and so, Nott believed, he ‘wanted to do a deal and was flexible in his approach to achieving this objective’, adding the observation that Pym, who had combat experience, wanted ‘to avoid an ugly and dangerous battle at all costs; I think he was genuinely upset at putting all these young soldiers and sailors – at very great risk – into an opposed amphibious landing without air superiority’.98 Parkinson thought that ‘privately [the Prime Minister and Pym] found each other a trial, and were mutually suspicious of each other’, and Pym going to the FCO ‘meant they would inevitably be working closely together’,99 and so it was not surprising that ‘there was a frequent clash of wills’.100 Parkinson later wrote that the meetings of OD(SA) divided neatly into two distinct phases. The first, the diplomatic offensive and the search for a negotiated settlement, often gave rise to heated discussion. For, although we were all committed to achieving a diplomatic solution, the Prime Minister was determined to avoid what she called a sell out. The second part passed off more smoothly, as we discussed the arrangements for the military campaign and received reports on the progress of the Fleet and the activities of the Argentine Command. As the Task Force neared the Falklands and the diplomatic initiatives faltered, the agenda for OD(SA) was switched so that we discussed the military campaign before we turned to discuss the fading diplomatic offensive.101 Towards the end of April, as the then British Ambassador to Washington, Sir Nicholas Henderson, recalled, the American Secretary of State, Alexander Haig produced what he regarded as reasonable terms for a settlement. . . It was from the British point of view. . . a very reasonable proposal, which safeguarded our immediate sovereignty, but left open the possibility of negotiating at some stage. This came to the British Cabinet and it produced a terrific problem for them. Were they to say no to this? The Secretary of [State for] Defence said “I have got an idea. Let’s keep quiet and wait and see what the Argentines do” and the Argentines. . . rejected it. We then never had to reply to this proposal, but Haig took it as a rejection by the Argentines and that led immediately to [the Americans] coming down on our side. If the Argentines had accepted the Haig proposal, Nott thought that ‘we would have been in a terrible jam, because. . . the majority of the Cabinet would have felt like accepting and Margaret Thatcher would have been determined that it shouldn’t be accepted. But in my view the House of Commons would have accepted it. So it was a problem, but in the end we decided not


to have a view and fortunately the Argentines then said they didn’t like it, so that solved it.’ Parkinson confirmed that ‘it was a relief that we didn’t have to take a decision, because I think that it would have split the Cabinet, actually I don’t think Margaret would have been alone in finding it difficult to accept these terms’.102 With the Argentines ruling out the settlement that Mrs Thatcher plainly did not want, the Falklands War resulted, and, following Britain’s military victory, it was the Argentine Junta that fell, and not her. ‘That’s a hell of a tough lady’ was Haig’s verdict on Mrs Thatcher,103 and there was no doubt that after the Falklands victory her authority was enhanced. Nonetheless, Nott, while observing that ‘she was not good at conciliation with her colleagues’, and that ‘she preferred the bludgeon to the rapier’,104 still refused to subscribe to the ‘myth’ about Mrs Thatcher that ‘in some way her word was law. It was never the case in my day; she was very well aware that she had to keep her Cabinet, her Parliamentary supporters, and the Party in the country with her’.105 Nott had always intended to leave politics at the end of what proved to be the 1979–83 Parliament, and, indeed, chose to leave the Cabinet at the end of 1982 on his own initiative, and taking the opportunity in his resignation letter to protest about the ‘utterly divisive and destructive behaviour’ of those advisers who worked most closely with Mrs Thatcher, received no reply.106 Mrs Thatcher was well aware that she might not have survived as Prime Minister even if the Falklands War had ended in some form of draw, as Pym seemed to want. The defeat of Argentina played a part in the Thatcher Government’s victory in the 1983 Election. In remarks beforehand about the undesirability of large Parliamentary majorities, Pym seemed to be seeking a draw once more. Not surprisingly, afterwards Mrs Thatcher told Pym: ‘Francis, I want a new Foreign Secretary.’107 Pym’s replacement at the Foreign Office was Geoffrey Howe, who, Mrs Thatcher felt, soon fell under the spell of that institution. Nigel Lawson became Chancellor of the Exchequer. ‘Nigel was well aware of his own virtues’, Mrs Thatcher observed. Whitelaw became Leader of the House of Lords. Leon Brittan became Home Secretary, with Mrs Thatcher recognizing, again too late, that this was ‘too rapid promotion’. Mrs Thatcher’s wish to have Cecil Parkinson in a major Cabinet role was soon frustrated when events in his personal life forced him to resign. This ‘cloud’ had ‘a silver lining’, in the Prime Minister’s opinion, with the arrival in the Cabinet of Nicholas Ridley as Secretary of State for Transport.108

The Westland Affair of 1985–86 One Cabinet Minister whom Mrs Thatcher could always count as an opponent was Michael Heseltine, who led the way in making trouble for her in the Westland Affair. After simmering for several weeks, the Affair came to a


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head in January 1986, amounting to a crisis that excited the political class as well as what Ingham called ‘the Watergate generation of journalists’,109 and it was one that just might have brought the Prime Minister down. The Affair arose from a dispute between Heseltine, who was by this time Secretary of State for Defence, and Leon Brittan, who, having failed at the Home Office, had become Secretary of State for Trade and Industry. Mrs Thatcher did not disguise her later opinion that Brittan would have had his difficulties in this role too. As far as the Westland Affair was concerned, ‘demoralized’ by his demotion, Brittan was poorly placed to deal with ‘a ruthless opponent’ like Heseltine.110 The Affair was formally about the future of a small helicopter company in the West of England. Heseltine wanted a European consortium to take it over; Brittan wanted an American company to become the new owners. The leaking and counter-leaking of confidential material by both Cabinet Ministers and their advisers eventually dragged in the Law Officers and the Prime Minister. The Head of Information at the Department of Trade and Industry (DTI) had been given permission by Brittan to leak a letter from the Solicitor General to Heseltine expressing the view that there were ‘material inaccuracies’ in material that he had presented. Ingham recalled: Colette Bowe made it clear to me that the DTI hoped that Number 10 – namely myself – would do the leaking. I refused to do so point blank. I had no authority to disclose the Solicitor General’s letter. I told [her] that I had to keep the Prime Minister above that sort of thing. At no time was I asked to approve of the disclosure. I could not have done so without seeking Mrs Thatcher’s specific permission, and I would not have been prepared to put such an idea to her.111 The Attorney General, Michael Havers, was to melodramatically threaten Downing Street with a police inquiry, and Ingham would have welcomed one, believing that his reputation had been damaged by the Affair and that the facts were on his side.112 It was, of course, Mrs Thatcher’s reputation that her foes wished to undermine, though Ingham’s scalp would have been welcome too. At the Cabinet meeting on 9 January 1986, Heseltine resigned. He tried to go with a flourish, stating ‘Then I must leave this Cabinet’, but admitted that ‘not everybody left behind was sure that I had resigned’,113 including the Prime Minister, who was said to have thought that he had gone to the lavatory.114 ‘Michael appears to have done it semi-spastically, not the grand geste’, Clark learnt from David Young, ‘When he slammed his brief shut and walked out a lot of people just thought that he’d been a bit rude, and then gone out to the loo. But the photographers were all waiting in Downing Street, so he must have tipped them off.’115 Heseltine later wrote that ‘there was no calculation of advancement’ in his resignation,116 but, if he stayed at the Ministry of Defence, he had already exhausted the


opportunities for administrative reorganization that so appealed to him, and what remained of the 1983 Parliament looked unpromising from the point of view of defence expenditure. There was also the consideration that the Ministry of Defence was probably as far as he could go in a Thatcher Government. As a corporatist, he was going to be denied the DTI. The Treasury and the Home Office and the FCO were also likely to be placed out of his reach. Since the source of the story was Critchley, we can believe Heseltine when he wrote that he had ‘absolutely no memory’ of having ‘mapped out my future career on the back of an envelope’ when at Oxford ‘with the date “1990s” and the words “10 Downing Street” alongside it’.117 That said, though, it proved a struggle for Heseltine to dress up his resignation as a matter of principle, and, however much connoisseurs of his behaviour over his career appreciated the effort involved, few doubted that Heseltine had left office because he believed that this action would further his Prime Ministerial ambitions in the event of a Tory defeat at the next Election, or, at best, a narrow victory, which conventional wisdom currently anticipated. The Westland Affair was ‘a crisis created from a small issue by a giant ego’, Mrs Thatcher later observed,118 but, even if it was such, and not more the result of her own failure to be ruthless enough with Heseltine at the outset, she still had to negotiate the Parliamentary hurdles that remained. Of her statement on 23 January 1986, Clark wrote: How can she say these things without faltering? But she did. Kept her nerve beautifully. I was sitting close by, and I could see her riffling her notes, and turning the pages of the speech. Her hand did not shake at all. It was almost as if the House, half horrified, half dumb with admiration, was cowed. . . at its end she swept from the Chamber, and a little later came to a meeting of the ’22. The mood was wholly supportive of her, and the Scapegoat was duly tarred. This morning came the news. Leon Brittan has resigned.119 Nonetheless, Clark believed, ‘The Lady is still terribly beleaguered. There is to be an emergency debate on Monday. Is this the end of an era? Uneasily, I feel it may be. Perhaps they’re actually going to get her, the same way the weevils got de Gaulle’.120 Ingham recalled Mrs Thatcher jokingly saying, while she was writing her speech for the debate on 27 January 1986, that she might be out of office by 6 p.m. that evening.121 That afternoon, Clark found ‘every seat in the House had been booked with a prayer card, and they were all up the gangways. For a few seconds [Neil] Kinnock [the Leader of the Opposition] had her cornered, and you could see fear in those blue eyes. But then he had an attack of wind, gave her time to recover. A brilliant performance, shameless and brave. We are out of the wood.’122 Mrs Thatcher later wrote that she did not observe ‘the traditional formal way of chairing meetings’ – her


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practice was to ‘chair from the front’,123 but the behaviour made public by the Westland Affair did not fit in with this preferred image. This was lost on The Economist, which still managed to write of Mrs Thatcher in terms of ‘the style has been uncompromising: those who disagreed with her could take it or leave it’, and of ‘the noise of breaking glass and splintering glass in Downing Street’, and ‘the regular Ministerial ejections from the front door’.124 Naturally, Heseltine geared his parting statement to the image of a domineering Mrs Thatcher riding roughshod over the opinions of her colleagues, and so engaging in behaviour that amounted to ‘the complete breakdown of Cabinet Government’.125 If this meant, as Heseltine was supposed to have also said, ‘a breakdown of collective responsibility’,126 that constitutional convention did indeed justify his resignation as a matter of principle, but solely in the sense that he was the only Minister in the Cabinet who was not prepared to accept the agreed policy of his colleagues and, as a consequence, there was no honourable course but to resign. That was not how Heseltine presented his conduct, and few should have been under any illusions that, if roles had been reversed, Heseltine, politically nicknamed Tarzan, would have denied Mrs Thatcher and doubtless others even the privileges of Jane. An explanation of Mrs Thatcher’s behaviour in relation to Heseltine was advanced by Mount, now returned to the world of political commentary, who observed that ex-Prime Ministers like to say ‘of course, I’d have had him out of my Cabinet in five minutes’ – but in practice they did not do it like that. . . Propriety these days demands a period of reflection and a show of reluctance from the Prime Minister before disposing of a Minister who has sinned or blundered. Thus, she would not have found it easy either to sack Mr Heseltine as soon as he began to breach collective responsibility or to sack Mr Brittan until the Press and Tory MPs had demanded it.127 Mrs Thatcher had not shown much sign of ‘reluctance’ in the case of the September 1981 cull of the Cabinet, but only lesser Ministers had been dismissed, and losing Brittan over Westland would not have mattered if he had been the sole departure from the Cabinet. Losing two Cabinet Ministers in the same month did matter, and The Economist thought that the departure of Heseltine mattered a lot. ‘Mr Heseltine now sits precisely where Mrs Thatcher did not want him, on back benches crowded with those whom she has worsted or ignored’, that journal commented, ‘She may continue to dominate her Government, but the party in Parliament is her electoral college. . . She won its support in 1975 as a result of a backbench coup against the aloof and frigid style of her predecessor, Mr Edward Heath. She is risking


many of his faults, while supplying her critics with a succession of embittered spokesmen.’128 Since there were bound to be plenty of disaffected MPs on the back benches by the time of Mrs Thatcher’s seventh year as Prime Minister, obviously she had to cultivate support from sufficient of her fellow Tories to keep the numbers of the alienated down, and Mrs Thatcher recorded her later efforts to do this.129 Her Parliamentary Private Secretary between 1979 and 1983, Ian Gow had ‘enormous influence’ with the Prime Minister at that time, and, according to Parkinson, ‘they continued to meet regularly and he continued to influence her thinking’ afterwards.130 It did seem, though, that Mrs Thatcher’s links with her own backbenchers were never as effective once Gow resigned from the Government in 1985 in protest at the Anglo-Irish Agreement. Gow was later to be murdered by IRA terrorists in 1990, and Clark wrote: I thought particularly of the Lady. She wept at the first casualties in the Falklands. I wonder if she did today? Because Ian loved her, actually loved, I mean, in every sense but the physical. And in the end, as lovers do (particularly that kind), he got on her nerves, and she was off hand with him. He played his last beseeching card: ‘I will have to resign’. ‘Go ahead, then.’ (I foreshorten the exchange, of course) – and that was it. Gow’s dislike of what then happened to ‘the Court’ and that ‘Charles Powell had got the whole thing in his grip’,131 may well have owed something to jealousy, but Powell was an official not a Conservative politician, and Gow was never properly replaced. One piece of advice Gow among others among her allies should have given Mrs Thatcher immediately after her 1979 Election victory and certainly after that of 1983 at the latest was that, given the unreliable character of the electoral college, she needed to safeguard her position by changing the Conservative leadership rules to make a challenge to her far more difficult. As for the Westland Affair itself, Ridley was right when he wrote that Mrs Thatcher ‘mishandled’ it, and that ‘if she had asserted her authority on the issue of collective ministerial responsibility and dismissed Michael Heseltine when his behaviour had become insupportable, the whole Affair would have been avoided’.132 Instead, Mrs Thatcher preferred the course of ‘reacting to events’, later unconvincingly maintaining that ‘Michael. . . did himself great damage by storming out as he did: if he had not gone voluntarily he might have been still more troublesome on the back benches.’133 In the immediate aftermath of the Westland Affair, Mrs Thatcher sensed that her Government was vulnerable, and, in a slighting reference to the Secretary of State for Health and Social Security, she observed that ‘when the Norman Fowlers of this world believe that they can afford to rebel, you know that things are bad’.134 Things, and Fowler, soon returned to normal.


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‘Outstaying her welcome’: the decline and fall of Mrs Thatcher Mrs Thatcher’s domineering ways continued to be a familiar feature of political commentary, though Douglas Hurd, in her Government from the outset and in her Cabinet from 1984 onwards wrote of her behaviour more subtly. ‘When dealing privately with an individual, particularly someone in difficulty, Margaret Thatcher could be exceptionally perceptive and helpful’, Hurd observed: But in official meetings of all kinds with her colleagues she was usually authoritative to the point of abruptness. When crossed in argument she would dart off into a thick smokescreen of irrelevancies or even resort to personal rudeness, including to subordinates who had no means of defending themselves. There was no deliberate desire to hurt, simply a determination by hook or by crook to get her own way. Hurd recorded colleagues exploding with exasperation against her performance at Cabinet meetings, and ‘gossip writers who heard indirectly of such explosions suspected, then and later, rebellion and treachery. That is to misunderstand the political process. The use of the safety valve does not prevent Ministers working loyally and effectively under leadership which they sometimes find maddening.’135 Nigel Lawson, in the Government from 1979 and in the Cabinet from 1981 for eight years, later speculated on why colleagues allowed her to govern in the way that she did. ‘While spinelessness or careerism may be adequate explanation in the case of some, it will not do for all’, Lawson wrote: And belief in her infallibility was even more narrowly shared. Of course. . . she was a particularly formidable Prime Minister. . . But beyond this, her method of Cabinet Government was accepted because in many ways it was highly convenient to her colleagues. Most Cabinet Ministers, particularly after a longish period in government, tend to be preoccupied with fighting their own battles and pursuing the issues that matter within their own bailiwick, and lose interest in the wider picture. Most of the time it is comforting for them to feel that all they need to do is strike a deal with the Prime Minister, and not have to bother overmuch about persuading their other colleagues. . . It was noticeable that, towards the end, those colleagues who most bemoaned the lack of collective discussion of issues outside their own departmental field were busy making private bilateral deals with Margaret over issues within their own departmental responsibility. Finally, if less important, was the fact that she was in practice at her best in bilaterals and other small gatherings. The larger the numbers, the greater her tendency to play to the gallery, either showing off her own


knowledge on the subject or rounding, in a profoundly embarrassing way, on some hapless colleague whom she felt either bullyable by nature or objectively in a weak position at a particular time. Geoffrey Howe was a favourite victim.136 Howe himself wrote that ‘Margaret’s most important weakness – the flipside of her strength – was the extent to which her partners were driven in the end to choose between submission or defection. Perhaps inevitably, the closer the original bonding, the longer the life of the partnership, the more dramatic the final rupture. “I must prevail” was the phrase that finally broke Nigel Lawson’s bond of loyalty and affection.’137 Of his own relationship with the Prime Minister, Howe wrote that ‘during my four years at the Treasury the Thatcher–Howe partnership had something of [a] sibling quality’, and, though there was ‘some friction. . . on most big issues (the 1981 Budget) or tactical questions (the timing of interest rate changes) differences were generally ironed out either by fuller debate or by the passage of time’. Howe found, however, that ‘it became very different during my six years at the Foreign Office, not, I think – at least initially – for personal reasons, but largely because of Margaret’s profound antipathy towards the Office’.138 Mrs Thatcher came to have a ‘profound antipathy’ towards Howe as well, being on one account, given to bullying the man, eventually moving him from the FCO to become Lord President of the Council, Leader of the House of Commons, and Deputy Prime Minister in July 1989. According to one Minister present, at the last Cabinet meeting Howe attended before he resigned in November 1990, the Prime Minister ‘treated him with scorn and derision. . . She treated him so badly that that was finally it’.139 In fact, according to his own account, Howe had already decided to resign, and that ‘this final tantrum’ only served to confirm his decision.140 ‘In retrospect, it may be said that she made the traditional mistake of outstaying her welcome’, Ridley, her ally, was to write of Mrs Thatcher, adding that, ‘I am convinced she intended to win a fourth General Election victory and then retire gracefully from the scene.’141 Mrs Thatcher’s herself thought that ‘two years into the next Parliament would be the right time to leave’. She recorded that Lord Carrington argued to her in April 1990 that ‘the Party wanted me to leave office both with dignity and at a time of my own choosing. I took this to be a coded message: dignity might suggest a rather earlier departure than I would otherwise choose. Peter was. . . speaking on behalf of at least a section of the Tory Establishment.’ Mrs Thatcher was not much interested in ‘dignity’, and, with good cause to believe that what she called ‘the Great and Good of the Tory Party’ would have stopped her from becoming Leader and then Prime Minister if they could have done, she resolved to continue because of ‘the scale of the challenges’ that the Government faced and her ‘uncertainty over the succession’. So, though Mrs Thatcher denied that she ever intended to go ‘on and on’,142 that was not how it must have


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seemed to the patient Howe, ruled out of the succession on the grounds that ‘something had happened to Geoffrey. His enormous capacity for work remained, but his clarity of purpose and analysis had dimmed’.143 There was no convincing evidence of fading powers on Howe’s part, and no shortage of ‘clarity of purpose’ in relation to policy on ‘Europe’. That, after much provocation, Howe eventually turned against her would not have made the difference if Mrs Thatcher’s position had not been seriously weakened before this. Mrs Thatcher had not only led the Conservatives to victory in British General Elections in 1979, 1983 and 1987. She had also led them to victory in direct elections to the European Parliament in 1979 and 1984. In the direct elections to the European Parliament held in June 1989, the Tories were defeated by the Labour Party in terms of votes and seats, thus failing for the first time to win a nationally based election under Mrs Thatcher’s leadership. The turnout was a pitiful 36.8 per cent of the electorate, but the aura of electoral invincibility had been dented for those looking for signs of a weakening of the Prime Minister’s position. Later in 1989, an obscure backbencher and enthusiastic ‘European’, Sir Anthony Meyer, took advantage of the failure of Mrs Thatcher and her allies to change the rules by which a challenge to her position as Leader from within the Parliamentary Party could be only too easily made. ‘The [December] 1989 leadership contest was a serious challenge by a frivolous candidate standing as a representative of those who had been dismissed, disappointed or disenchanted by Thatcher’, Kenneth Baker wrote of a contest of which the outcome was Thatcher 314, Meyer 33, abstentions 24, and 3 non-voting. Baker recorded that George Younger, who had run her campaign team, told the Prime Minister that ‘the figure of discontent was greater than 57 and closer to 100. Loyalty had secured the lower figure. George also told her that she should move Bernard Ingham and Charles Powell out of Number 10, as their combined influence was resented by many Tory MPs.’144 The loyal Ridley thought that Mrs Thatcher was ‘a little more disconcerted by [this] result than was generally realized. She always wanted to feel that she had a really strong and solid base of support in the Parliamentary Party’.145 ‘The first three months of 1990 were an almost unmitigated disaster for the Government’, when ‘just about anything that could go wrong did go wrong’, Baker, the then Party Chairman recalled,146 with ‘the issue which dominated the whole of the political debate’ being ‘the new Community Charge’.147 Ironically, though it was widely believed that the Poll Tax or Community Charge was an example of Mrs Thatcher driving through a preferred policy against the wishes of her Cabinet colleagues, Lawson, one of those opposed to the Poll Tax, observed that [the Community Charge] went rigorously through all the procedures the textbook said it should do and, indeed, more. . . there was all manner of public consultation, Green Papers, White Papers, the lot, quite apart


from a Cabinet Committee which sat for a year: nothing could have been done with greater punctiliousness. Yet at the end of the day, we got this appalling decision. The explanation of why this happened [was] the Prime Minister getting out of touch with her own Ministers, and Ministers themselves acting as merely departmental heads, and, even though they were members of the Committee, concentrating on the issues that directly concerned them departmentally. Lawson believed that ‘the introduction of the Poll Tax . . . was the most disastrous single decision which the Thatcher Government took’.148 Joining the European Exchange Rate Mechanism (ERM) proved to have worse longterm consequences for the Conservative Party, and, as Chancellor of the Exchequer, Lawson had been ‘very anxious’ that Britain should join. He recalled that the Prime Minister ‘tried every means she could to avoid’ this happening. ‘Because the Prime Minister controls the Cabinet agenda’, it took an enormous amount of work. . . to get any collective process instituted at all. After going through various hoops, I did secure a meeting of senior Ministers, but it was not a meeting of a Cabinet Committee. It was not therefore a meeting that had any clear constitutional significance. So, even though an overwhelming majority came out in favour of joining the ERM at that time in November 1985, no decision to do so was taken. It was a case of using Prime Ministerial power to bypass or to avoid the normal procedure of Cabinet Government.149 Clark was told in the summer of 1988 that ‘confrontation’ in the Cabinet was inevitable, in which ‘the Prime Minister will find herself isolated by her three “heavies” – Howe, Hurd and Lawson’. Clark thought that ‘Europe’ was a ‘great bore’, but recognized that for both Europhiles and their opponents ‘the subject becomes obsessive and towers above all others’.150 The so-called Madrid ‘ambush’ actually took place in June 1989 when Howe and Lawson together tried to force the Prime Minister into setting a date for Britain joining the ERM, threatening to resign if this was not done. ‘Whether I could have withstood the loss of both my Foreign Secretary and my Chancellor at the same time I am not sure’, Mrs Thatcher later wrote, ‘but I was not prepared to be blackmailed’.151 Howe was moved from the FCO the following month, but Mrs Thatcher once more less ruthless than she was commonly portrayed as being, because, as we have noted, she retained Howe in the Cabinet instead of dismissing him. Lawson resigned as Chancellor of the Exchequer in October 1989 after public wrangling with Alan Walters over the ERM and economic policy generally.152 Though he had only served for a matter of weeks as Foreign Secretary as the replacement for Howe, John Major then became Lawson’s replacement as Chancellor of the Exchequer, and he managed to persuade Mrs Thatcher that Britain should join the ERM


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in October 1990. The Prime Minister only did so because she had ‘too few allies to continue to resist and win the day’, recognizing that ‘there are limits to the ability of even the most determined democratic leader to stand out’.153 In the following month, Mrs Thatcher was to find that her base of support in the Conservative Parliamentary Party and within the Cabinet itself was insufficient for her to continue as Prime Minister. ‘As far as I can make out practically every member of the Cabinet is quietly and unattributably briefing editors or members of the Lobby about how awful [Mrs Thatcher] is’, Alan Clark wrote gloomily in his diary on 28 March 1990: There is even talk of a coup in July. Heseltine is quite openly spoken about as the heir-presumptive, and preens himself in public. How has all this been allowed to come about? The Community Charge has got on everyone’s nerves of course, and generated the most oppressive volume of correspondence. Persistent deficits in the polls of a nearly insuperable order rattle people. But I am inclined to think that the Party in the House has just got sick of her. She hasn’t promoted her ‘own’ people much. Her ‘constituency’ in this place depends solely on her proven ability to win General Elections. But now this is in jeopardy she has no Praetorian Guard to fall back on. There’s been a lot of talk about ‘one of us’ . . . but most of them are still left to moulder at the ’92 dinner table. When’s the Revolution? In the meantime, all the Wets and Blue Chips and general Heathite wankers, who seem ineradicable in this bloody Party, stew around and pine for her to drop dead.154 Things did not come to a head until 1 November 1990 with the resignation of Howe, the last survivor of Mrs Thatcher’s original Cabinet. Howe’s resignation letter was largely about ‘Europe’,155 and, on 13 November 1990, Clark noted in his diary that ‘Geoffrey will make his resignation speech this afternoon . . . received wisdom is that this will finally tear the whole thing wide open.’156 According to Clark, ‘the House was very full indeed, with much chattering and giggling from recusants. The loyalists are glum, and apprehensive. From the moment he rose to his feet Geoffrey got into it. He was personally wounding – to a far greater extent than mere policy differences would justify. Elspeth’s hand in every line.’157 Charles Irving, whom Baker described as a waspish and witty Tory MP, observed that ‘it took Elspeth [Lady Howe] ten minutes to write that speech and Geoffrey ten years to make it’.158 Baker himself recalled the contrast with the speech that Howe had made at a dinner in 10 Downing Street to mark Mrs Thatcher’s tenth year of office in 1989, which had been ‘a paean of praise and seen as a preliminary to sanctification. On this occasion his speech was coolly dismissive and seen as a preliminary to assassination.’159 When Mrs Thatcher said that ‘I didn’t think he would do something like that’,160 she demonstrated that she had


misjudged him on two counts. As late as 30 October 1990, in a Commons interchange, Mrs Thatcher had described Howe as ‘too big a man’ to need a helping hand from ‘a little man like [the Leader of the Opposition]’,161 which was a compliment of a kind. Some time before, though Mrs Thatcher had decided that Howe was not a big enough man to succeed her as Prime Minister, but there was no compulsion upon Howe to share this assessment of his talents, and if his hopes of the succession, probably still alive in 1989, had died eighteen months later, one consolation was to bring down that politician who had stood in his way until it was too late for him. Mrs Thatcher should surely have recognized frustrated ambition on the grand scale in a senior politician, especially one who had been an advocate of economic liberalism long before her. Unaccountably too, since there had been no shortage of devoted ‘Europeans’ in her generation, her Cabinets, her Governments, and, at that time, in the Tory Party, Mrs Thatcher misjudged the depth of commitment of true believers like Howe. ‘Europe’ first was always difficult to portray as patriotism, though Howe had a try, along with arguing that his behaviour served the best interests of the Conservative Party, before concluding that ‘the time has come for others to consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long’.162 Baker observed that it was a pity that Geoffrey’s invective had never been used so sharply upon the Opposition. Quite apart from its effect upon the Prime Minister, Geoffrey’s speech was reckless and irresponsible because it sought to impale the Party on the single issue of Europe. He had become so preoccupied with this that he overlooked the fact that there were deep divisions within the Party on that subject. He was being just as divisive as Margaret in the line he was taking. The Conservative Party has to be kept together on Europe by a judicious balance.163 ‘No one seems to have given a thought to the constitutional implications, let alone the international’, Clark wrote in his diary, ‘How can a narrow caucus in a singular political party unseat a Prime Minister just because it calculates that it may improve its election prospects thereby?’164 Using the same Tory Party leadership election procedure as had been devised to unseat Heath was the answer, with Mrs Thatcher needing a majority of at least 15 per cent of those entitled to vote. After the 1989 leadership contest, Gow had told Clark that ‘he had a hard time persuading many colleagues to vote for the PM’, even having to resort to telling them that ‘you will have another chance next year’,165 and, by the time that the next contest took place, Gow was dead. Wyatt was worried enough by Lord Home’s observation that he did not think that Mrs Thatcher would last as Prime Minister until the next Election166 to sound out Whitelaw in May 1990 about Mrs Thatcher’s prospects, and received the reply that ‘when people went mad it was very difficult to do anything


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about them’, which Wyatt preferred to treat as a reference to the state of the Conservative Parliamentary Party and not that of the Prime Minister.167 Later, one of her Cabinet Ministers, Christopher Patten, said of his support for Heseltine, ‘Well, he’s not mad, is he?’168 After what Wyatt called Howe’s ‘vile, disloyal speech’,169 Heseltine took the opportunity to mount a formal leadership challenge. Nothing went right for the Thatcher campaign from the beginning, not least the Prime Minister’s choice of 20 November 1990 for the contest, with the Chairman of the 1922 Committee pointing out to her in vain that she was going to be abroad for much of the campaign, not least for two days in Paris to sign the treaties marking the end of the Cold War. ‘Peter Morrison soon had my own leadership team up and running’, Mrs Thatcher wrote, wryly adding that ‘some people subsequently suggested that this was too energetic a metaphor’.170 To the extent that Mrs Thatcher herself directly intervened in the campaign, she did her best to portray the contest with Heseltine to MPs as being between two philosophies of government, though it became clear to her that Tory MPs ‘did not want to think anything was at stake apart from their seats,’ thus emphasizing ‘the funk and frivolity of the whole exercise’.171 A former Minister for Higher Education, George Walden may have captured the mood of the 1990 leadership contest best: Somehow the fact that she had ‘lost it’ communicated itself to the Party at large. The exact way that she went – the Heseltine challenge and the subsequent vote – was of limited importance. . . The idea that she was toppled by a Parliamentary cabal against the general sentiment in the Party is a fantasy of the Right. MPs voted against her not just because she was endangering their chances of re-election, though that was an understandable motive. They threw her out because the constituency parties were losing faith in her too. On the surface all the talk was of loyalty to the Leader, yet I was not the only MP who knew the reality was different.’172 In the event, Mrs Thatcher obtained 204 votes, Heseltine secured 154, and 16 abstained. ‘Four votes, that was all there was in it’, Clark bemoaned the narrow margin by which the Prime Minister had failed to prevent a second ballot, ‘I get so cross when I remember Peter Morrison asleep in his office. For want of a nail a kingdom was lost.’173 At first, from Paris, Mrs Thatcher breathed defiance, but, when she returned to Downing Street, she chose to consult her Cabinet Ministers one by one about whether or not to proceed to a second ballot. Mrs Thatcher had good cause to later write that she had ‘never kept talented people out of my Cabinets just because they were not of my way of thinking’,174 but she had taken this policy to excess. So, the outcome of any canvass of the Cabinet was bound to be unfavourable, even though what Mrs Thatcher found hardest to bear was ‘the desertion of those I had always considered friends and allies and the weasel words whereby they had transmuted their betrayal into frank advice and concern for my fate’.175 There was


much ignoble behaviour, but, if Mrs Thatcher proceeded to the second ballot, there was a danger that Heseltine would win a second ballot outright, and she herself had said that ‘it’d be so terrible if Michael won’ because ‘he would undo everything I have fought for’.176 So, having ‘lost the Cabinet’s support’ and unable to ‘even muster a credible campaign team’, Mrs Thatcher concluded: ‘It was the end.’177 Mrs Thatcher’s prospective resignation as Prime Minister opened up the contest for the Tory leadership to other candidates than Heseltine, and Douglas Hurd and John Major joined the contest. Major’s ‘tendency to accept the conventional wisdom’ had previously been one of Mrs Thatcher’s reservations about him as a potential Leader,178 and, given his background and such natural ability as he had, identifying and deferring to such wisdom, a talent for being or seeming likeable, together with luck, largely explained how Major had progressed so far and so fast in his political career. ‘He was the best of a very poor bunch’ was how Mrs Thatcher later and tactlessly justified her support for Major to Hurd a dozen years later,179 but at the time her support for Major was made on the basis that ‘I wanted – perhaps I needed – to believe that [Major] was the man to safeguard my legacy and to take our policies forward.’180 Quite how Mrs Thatcher came to think this mystified Hurd, but he thought that ‘out of a mixture of guilt and affection among MPs her advice in favour of Major had an effect on the outcome of the contest’,181 which was that Major came so close to outright victory in the first ballot that both Heseltine and Hurd felt unable to continue. In successfully persuading his predecessor as Prime Minister in favour of British entry into the ERM, Major had already made the crucial mistake that was eventually to sentence his Government to a living death, and severely damage the Conservative Party’s reputation for economic competence. One right wing economist misread the politics of the matter and Major too when he observed shortly after entry that ‘no one but a madman would have gone into the ERM’.182 It had been the supposedly sane in the Establishment who had been of one mind on the policy. In the short run, though, the Tory Party, which Clark described as ‘an old whore that has been around for 400 years’,183 seemed to have taken out insurance against electoral defeat in the form of Major the Unknown and his form of lower order Baldwinism. One of Mrs Thatcher’s journalist allies, Bernard Levin, lamented: ‘The pygmies have got Gulliver, and I hope it chokes them.’184 It did. ‘I detect a distinct touch of Elba’, Clark observed when he visited the exiled Mrs Thatcher, ‘Her sense of betrayal is absolute, overrides everything.’185 Wyatt remained among the loyalists, proud that ‘she created a revolution which can never be reversed’.186 It is to that revolution, and, thus, to the record of the Thatcher Governments, that we now turn.

4 The Economic Liberal Crusades I: The Quest for an Economic Renaissance

‘A Holy War of the Just against the Unjust’ My Government will give priority in economic policy making to controlling inflation through the pursuit of firm monetary and fiscal policies. By reducing the burden of direct taxation and restricting the claims of the public sector on the nation’s resources they will start to restore incentives, encourage efficiency and create a climate in which commerce and industry can flourish. In this way they will lay a secure basis for investment, productivity and increased employment in all parts of the United Kingdom. Thus, in these sentences of the Queen’s Speech delivered on 15 May 1979, the Thatcher Government set out its statement of intent about the future management of the economy,1 and there were those who noted that similar sentiments had been present in the Queen’s Speech of 2 July 1970 delivered shortly after the Heath Government had taken office.2 Of course, there were only so many things that Conservatives could say, and the conventional wisdom was that the Heath Government’s experience would be replicated, meaning that anything resembling an economic liberal strategy could not survive more than about two years. Though the Heathites got more than their fair share of Cabinet appointments overall in 1979, Mrs Thatcher made sure that ‘true believers in our economic strategy’ controlled the Treasury and most of the main economic departments. Thus, Geoffrey Howe became Chancellor of the Exchequer, in which post ‘some of the toughest decisions were to fall to him’ and ‘he never flinched’. Another economic liberal, John Biffen was made Chief Secretary of the Treasury, where ‘he proved rather less effective’ than Mrs Thatcher hoped ‘in the gruelling task of trying to control public expenditure’. Sir Keith Joseph ‘took over at Industry, where he did the vital job that no one else could have done of altering the whole philosophy which had previously dominated the department’.3 Sir Keith issued his leading officials with a reading list that included, of course, Adam Smith’s Wealth of Nations as well as his Theory of Moral Sentiments and standard works by Joseph Schumpeter, 71


Frank Knight and Alexis de Tocqueville, together with more ephemeral material in the form of Institute of Economic Affairs (IEA) and Centre for Policy Studies (CPS) publications. If one added in Hayek and Friedman, both interestingly absent, the list would more or less embrace what had come to be called New Right philosophy.4 Another ally, John Nott became Secretary of State for Trade,5 though, more surprisingly, a critic of Mrs Thatcher’s preferred economic strategy, Peter Walker, became Minister of Agriculture since ‘he was both tough and persuasive, priceless assets in dealing with the plain absurdities of the. . . Common Agricultural Policy’. Another critic, James Prior was made Secretary of State for Employment despite the differences between him and Mrs Thatcher over economic strategy and, more specifically, trade-union reform. She thought that ‘Jim was the badge of our reasonableness’.6 Such ‘reasonableness’ on the part of the Prime Minister was to be well-hidden. For her, as Nott observed, ‘everything had to be either a victory or a defeat’ in what was to become ‘a Holy War of the just against the unjust’.7 The Prime Minister and her economic liberal allies in the Conservative Government were more than willing to continue to practise the Monetarist policies that the IMF had imposed on the preceding Labour Government in 1976. Monetarism had become the economic fashion of the day, even if those who had actually faced reading A Monetary History of the United States 1867–1960 and the other major works written by Milton Friedman could be forgiven if they thought that monetarism was little more than the quantity theory of money dressed up in modern clothes. ‘Monetarism is a comprehensive theory which you can go around applying [because] you can insert it as a key into a succession of locks’, Powell observed, who had not felt the need for Hayek and Friedman to show him the way. Powell added, though, that ‘comprehensive theories are antipathetic to the Conservative mentality which doesn’t regard – and rightly so – human society as theoretical. It is suspicious of theory’.8 So, scepticism about Monetarism was rife in the Tory Government and Party that Mrs Thatcher led, although it was one thing to say that it would not work, and another to come up with an alternative now that easy answers in the tradition of Galbraith were discredited. Of course, there was much more to economic liberal ideology than Monetarism, but, for the present, what was on offer from Friedman and those who chose to follow him was policy analysis and prescriptions that could be presented as a coherent programme for remedying some of the worst of the current ills of the British economy. ‘Inflation over any substantial period of time is always and everywhere a monetary phenomenon, arising from a more rapid growth in the quantity of money than in output’, Friedman was to tell a House of Commons committee: Few economic propositions are more firmly grounded in experience – extending over thousands of years and the face of the globe. But the proposition is the beginning of an understanding of the cause and cure

The Quest for an Economic Renaissance

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of inflation, not the end. The hard questions are why the quantity of money expands more rapidly than output and how the difference can be eliminated. For Friedman, why was explained by Big Government with higher State spending provoking taxpayer resistance which encouraged governments to finance spending by monetary creation, thereby increasing monetary growth and hence inflation, which, as a by-product welcome to legislators, raised effective tax rates without legislation. According to Friedman, government spending together with State intervention reduced output growth, thereby further raising inflation for any given rate of monetary growth. Slower growth also increased the burden on the community of any given level of government spending, exacerbating the resistance to explicit taxation. Inflation, especially highly variable inflation, interfered with growth by (a) introducing static into the messages introduced by the price system, increasing uncertainty facing individuals and business enterprises, which encouraged them to divert attention from productive to protective activities, and (b) inducing governments to adopt counterproductive and false cures as price controls and incomes policies. A monetary strategy was how to deal with the situation, with monetary growth as the major intermediate target, stating in advance targets for a number of years ahead, setting targets that required a steady and gradual reduction in monetary growth, and emphasizing the government’s intention of strictly adhering to those targets. Friedman wrote that ‘restraint in the rate of monetary growth’ was ‘both a necessary and a sufficient condition for controlling inflation’, which ‘in turn was a necessary but not sufficient condition for improving Britain’s productivity, which was the fundamental requirement for a healthy economy, and that required ‘measures on a broader scale to restore and improve incentives, promote productive investment, and give a greater scope for private enterprise and initiative’. Friedman recognized the effects of the contemporary energy crisis on inflation, while pointing out that for Britain, thanks to North Sea oil, that crisis had been a boon as well as a burden,9 but the behaviour of the trade unions did not rate a mention because he believed, as his intellectual ally Powell put it succinctly, ‘inflation, with all its attendant consequences, comes about for one reason only. The Government causes it.’10 Why did ‘the Government cause it’ was the question that was begged, and an answer was appeasement of a modern electorate previously led to believe that there was always a comfortable way out of economic difficulties, and appeasement too of the trade union movement specifically organized to protect the selfinterest of groups and deemed too powerful to confront. Though the unions were not solely to blame for Britain’s lamentable productivity record, any theory that absolved them from any responsibility was flawed. When published in 1977, the Tory Party document called The Right Approach to the Economy did not contain an economic strategy, being no


more than ‘a common ground statement’ according to Howe11 and, as John Hoskyns observed, ‘its real purpose seemed to be to unite opposing factions in the Shadow Cabinet’.12 Naturally enough, Hoskyns preferred the Stepping Stones strategy document that he and Norman Strauss had prepared for the Conservative Opposition. Nott thought that Hoskyns and Strauss and Alfred Sherman had ‘considerable political influence on Mrs Thatcher’, but ‘less influence on the overall direction of policy in the first Thatcher Government than is often suggested – a fact partly attributable to their expressed contempt for politicians, the Civil Service, and the political process’.13 Such contempt was understandable given the time wasted by the Tory Opposition in a doomed attempt to marry the Stepping Stones approach with that of Patten and the Conservative Research Department. Howe’s Economic Reconstruction Group was also active, and Howe thought that in relation to Stepping Stones Mrs Thatcher ‘as on other occasions had proved reluctant to commit herself and her team to a measured strategy. But events [in the form of the Winter of Discontent] had happily conspired to enable heart and head to come together.’14 The disunity present among the Conservatives in Opposition was bound to have affected their performance in the field of policy preparation, but Alan Walters was one irregular who thought that the Tories had still managed to construct in broad terms an economic reform programme that would take eight to ten years to complete. ‘The most urgent business of the early years was to secure financial stability, particularly the reduction of inflation to low and stable levels’, Walters wrote, because ‘without financial stability, little could be achieved’ and with its attainment ‘many other reforms were at least feasible’. Then, ‘the second area of urgent reform was the deregulation or freeing of the economy from the complex and confusing network of controls. The objective was to get a market economy functioning efficiently without suffocating government intervention’ so that ‘the market and not the bureaucracy determines the price and allocation of resources’. Further, ‘the third field of reform was the privatisation of state owned industries’ because the nationalized industries were ‘over mighty and. . . used by powerful unions and other special interests for extortion and political purposes.’ Further still, the fourth package of reforms applied to the trade unions. The basic thrust was to try and reduce the overweening powers of the unions, as exercised through their leaders and shop stewards, by abolishing or modifying the legal immunities conferred on them eighty years ago. In addition, the policy envisaged that unions would evolve from their feudal form and would become increasingly democratic and responsive to the wishes of their members. As for external economic relations, the Government was committed to the membership of the European Community and ‘free trade remained the


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central aim of policy’. What the Government aimed for was an economic renaissance, with the belief being that inflation and over regulation and the lethargy and waste of the nationalized industries and the restrictive practices of the trade unions had retarded Britain’s economic growth. Walters conceded that even allowing for its time horizon the reform programme was ambitious, and noted that at the outset ‘many cognoscenti opined that the Government’s will would wilt or that the people would protest the pain of such a metamorphosis and throw the Government out’.15 That such people subscribed to this form of analysis was mainly explained by the high level of unemployment that characterized the Thatcher era, and became associated with the economic policies favoured by the Prime Minister and her allies. ‘We must now harden our hearts to the consequent misery and distress [and] we must ruefully recognize how much of it is humanly inevitable’, the economic liberal, Colin Welch wrote as the unemployment figures stayed obstinately high: In normal times unemployment is part of the ineluctable and salutary process of economic adaptation. Each unemployed person is normally on a journey, which may be long, painful and even unsuccessful, from a job or service which is no longer needed to a new and tenable one. The present pathological level of unemployment differs from the norm in degree but not in kind. It is the bitter fruit of innumerable adaptations postponed or avoided for as long as possible, and which now burst upon us all together. What should have been a slow and tolerable process of continual adjustment comes upon us like a tidal wave.16 Besides inheriting various special employment measures from the previous Government, the Thatcher Government itself engaged in job-creation activities to try to keep the numbers of unemployed down, and, believing that as its Chairman he had revolutionized the working of the Manpower Services Commission, Mrs Thatcher brought David Young into her Cabinet in the Department of Employment in 1985 with a brief to get the unemployed back to work, in which role he demonstrated energy and some success.17 For the United Kingdom in each May of the Thatcher era, the seasonally adjusted figure for unemployment in the United Kingdom was 1,087,000 (4.1 per cent) in 1979, 1,223,000 (4.6 per cent) in 1980; 2,129,000 (8 per cent) in 1981; 2,490,900 (9.3 per cent) in 1982; 2,783,000 (10.5 per cent) in 1983; 2,891,900 (10.5 per cent) in 1984; 3,032,000 (10.9 per cent) in 1985; 3,116,600 (11.2 per cent) in 1986; 2,874,000 (10.3 per cent) in 1987; 2,343,300 (8.3 per cent) in 1988; 1,819,000 (6.4 per cent) in 1989; and 1,610,900 (5.7 per cent) in 1990. With Mrs Thatcher about to leave office, the unemployed figure for October 1990 was 1,702,000 or 6 per cent of the workforce. From early 1980 to the autumn of 1986 the official statistics for unemployment showed no sign of a sustained decline, and that decline was from nothing less than 3,120,000 or


11.2 per cent of the workforce, which were the figures for August 1986.18 In 1986 too, Nigel Lawson was able to state in his Budget the following year the rate of inflation at 3.5 per cent represented the lowest figure for almost twenty years,19 and later to add that ‘the six years to 1987 had been the longest period of steady [economic] growth, at a rate averaging 3 per cent a year, for half a century’.20 Lawson was also able to rightly state in his 1989 Budget Speech that ‘in Britain today we have more people in work than ever before in our history’.21 Most commentators and rival politicians had believed that the headline rate of unemployment would bring the Thatcher Government down long before its economic liberalism paid off, if it ever would or could, and that headline rate was easy to portray as a damning indictment of the supposed Thatcher experiment. Why this did not make the political difference that commentators expected was a complex matter, but Lawson thought that enough of the electorate ‘at least half believed the official Conservative line. . . that the UK recession was essentially part of a world recession’,22 and as The Economist remarked with the 1983 Election just over the horizon, ‘six-sevenths of Britons are better off than they have ever been before, while the other one-seventh are unemployed or fear they or their teenage children might become so’.23

Grand strategy: the restoration of the market economy ‘The 1979 Government contained quite a number of people who had a clear commitment to the concept of controlled public spending, reform in taxation, a greater role for the private sector, and borrowing restrained in such a way as to minimize the likelihood of inflation’, Biffen recalled, ‘ [That gave] a cohesion which quite often Governments don’t possess, being drawn from large political parties that are themselves a coalition of interests’.24 Early on especially, there was a Thursday Breakfast Group on the day of the weekly Cabinet meeting that was held at 10 Downing Street, and, besides the Prime Minister, the Cabinet Ministers attending always included Joseph, Nott, Biffen and Howe. The Chancellor thought that ‘the breakfasts had some value in maintaining the collective morale of those who participated [and] they fortified the Prime Minister’s self confidence and helped. . . to overcome her recurrent sense of isolation in her own Cabinet. By the same token, they fostered the sense of conspiratorial disunity within the Government.’25 St John Stevas ‘realized very soon. . . that although the people supporting the traditionalist view [on economic policy] were in fact the majority, the weight of the Cabinet was not with them’.26 As if after years of economic mismanagement, the Government’s inheritance was not daunting enough in the wake of the Winter of Discontent in terms of wage inflation, there was a massive increase in world oil prices following the fall of the Shah of Iran. The Energy Secretary, David Howell, found it ‘difficult to get through to other people, in Parliament and in the Government, the enormity of what


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was happening’. Howell remembered what he called ‘the Government’s economic theoreticians’ arguing that ‘well, if the price of oil goes up, the price of something else will come down and we must just hang on to our targets’. Howell thought that ‘this was for an ideal world; in the real world it was hopelessly unrealistic because the price of oil was very important to the price of a vast range of goods and rapidly began to push up the RPI’.27 Worse, in the 1979 Election campaign, under pressure, the Tories had agreed to accept whatever comparability awards the Clegg Commission set up by the Callaghan Government might give to public-sector workers in terms of pay increases.28 Ministers seem to have been divided about whether to honour the pledge, given that, in Parkinson’s words, ‘that commitment. . . turned out to be a very, very expensive one’, but the view that prevailed was that of Biffen, which was that it would have been ‘unthinkable. . . to cast aside. . . that which you had underwritten for the purpose of winning votes’.29 Howe and his economic liberal allies in the Cabinet decided to press ahead regardless of the grave economic situation in which the Conservative Government found itself placed, though, as will be seen, and as Mrs Thatcher saw it, Nott and Biffen did not prove to be beyond questioning Howe’s grand strategy in economic policy. That said, though, despite the harsh political reality that – in Nott’s words – ‘all the economic indicators moved in the wrong direction between 1979 and 1981’, the economic liberal agenda that he and others had long believed in had won through in the end. In observations that paid too little attention to the contribution made to the development of public policy represented by Howe’s Budgetary strategy, Nott wrote that measures such as ‘the abolition of statutory price, dividend and wage controls’ though they caused ‘considerable pain’ at the time ‘laid the foundations for the prosperity for the prosperity and economic freedom of the later Thatcher years’, with the ‘bold and controversial step’ of ‘the abolition of exchange controls’ ensuring that Britain became ‘an open world economy’.30 In his first Budget Speech on 12 June 1979, Howe remarked that ‘in five years of office [Healey as Labour’s Chancellor] introduced no fewer than 15 Budgets and economic packages’, and the results encouraged the conclusion that ‘the notions of demand management, expanding public spending and “fine tuning” the economy have now been tested almost to destruction’. Howe maintained that his predecessor’s behaviour indicated that he had recognized this, and he rightly began the practice of setting money supply targets, and he claimed to make his public spending plans accordingly. This means that I am able to approach my task. . . on one crucially important piece of common ground: that the poor performance of the British economy in recent years has been due to a shortage of demand. We are suffering from a growing series of failures on the supply side of the economy. It is our belief that many of these failures are themselves the result of actions and


interventions by the Government themselves – laws that stand in the way of change and stifle enterprise: and, as important as anything, a structure of taxation that might have been designed to discourage innovation and punish success. Of course, there are many other causes of our decline. That is not in dispute. But we believe that it is more sensible for the Government to make those beneficent changes that are undoubtedly within their power than to preach the need for changes that lie well beyond their authority. . . Our strategy to check Britain’s long term economic decline, which has gathered pace in the last five years, is based on four principles. Firstly, ‘we need to strengthen incentives, by allowing people to keep more of what they earn, so that hard work, talent and ability are properly rewarded’. Secondly, ‘we need to enlarge freedom of choice for the individual by reducing the role of the State’. Thirdly, ‘we need to reduce the burden of the public sector, so as to leave room for commerce and industry to prosper’. Fourthly, ‘we need to ensure. . . that those who take part in collective bargaining understand the consequences of their actions’. Howe emphasized that ‘these changes will not be enough unless we also squeeze inflation out of the system. It is crucially important to re-establish sound money. We intend to achieve this through firm monetary discipline and fiscal policies consistent with that, including strict control over public expenditure.’31 So, Howe tightened up on the targets for the money supply that he had inherited from Healey, raised the Minimum Lending Rate from 12 to 14 per cent, and made cuts in proposed public spending that were supposed to mean that the Public Sector Borrowing Requirement would fall from 4.5 per cent to 3.75 per cent of GDP.32 Howe then acted to implement the manifesto pledge ‘to switch some of the tax burden from taxes on earnings to taxes on spending’.33 In relation to income tax, Howe believed that ‘the present top rate of 83 per cent is an absurdity’ and ‘the rate of 98 per cent on investment income is even worse’, not least because ‘such rates bring in very little revenue’ and ‘they kill incentive and are patently unjust’. So, ‘the top rate on earned income’ was to be ‘cut from 83 per cent to 60 per cent’, which was the Western European average, and it applied to taxable income over £25,000, which was a lower income level than was common elsewhere’, and this was ‘a matter to which we may need to return on a future occasion’. Between £10,000 and £25,000 of taxable income, Howe introduced ‘a new scale of rates less steeply progressive than the old scale’. As for the basic rate of income tax, Howe cut it from 33 per cent to 30 per cent and made a reduction to 25 per cent the eventual aim.34 To offset these changes, Howe proposed that Value Added Tax (VAT) should be charged at a new unified rate of 15 per cent.35 Howe later recorded that how difficult it had been to persuade the Prime Minister of the need for this VAT increase despite her having long accepted and, indeed, proclaimed ‘our central tax theme: the switch from income to expenditure taxes’. What worried Mrs Thatcher, of course, was the immediate effect on the Retail Price


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Index, and Howe thought that her behaviour illustrated ‘the ambivalence which Margaret often showed when the time came to move from the level of high principle and evangelism to practical politics’. Biffen helped Howe to persuade her that it was now or never for raising VAT in this way, and a compromise followed in which ‘we refrained from any increase in excise duties on tobacco and alcohol’. Howe wrote that critics have subsequently argued that we were reckless to contemplate any of these changes at a time when inflation was already accelerating as a result of earlier Labour policies. . . I have never been remotely persuaded that our ultimate success in the battle against inflation was severely affected by the scale of our VAT switch. In July the following year, 1980, when the VAT increase dropped out of the index, the annual inflation rate fell to 16.9 per cent. By April 1983 it was down to 4 per cent, the lowest figure since 1968. And we secured a hugely important and lasting change in the tax structure.36 More immediately, The Economist credited the Prime Minister and Howe with having established the base camp from which they mean to assault their Mount Everest: to alter the course of British economic policy. . . Sir Geoffrey’s route is simple and ambitious. And horribly hard. It involves the abandonment of the public sector as the prime engine of Britain’s economic growth and its replacement by private initiative, achieved through a progressive reduction in personal (and ultimately capital) taxation. Sir Geoffrey’s Budget is a brave attempt, at the foot of Everest’s North Face, to spit into an economic blizzard.37 There was to be more ‘spitting’ in the autumn of 1979 when Howe followed up the relaxing of exchange controls in the Budget38 by announcing their abolition on 23 October 1979.39 ‘The Government has made a noble bonfire of all the fencing that has surrounded Britain’s external capital account since 1939’, The Economist declared, under the dramatic headline ‘Sterling Unchained’.40 For Healey, ‘to change in a moment an environment in which industry and finance have lived for 40 years’ was a ‘reckless, precipitate and doctrinaire action’ on Howe’s part, which would lead to further deindustrialization at home as rich men and financial institutions sought better returns abroad.41 The Economist was nearer the mark when it stated that the abolition of exchange controls offered one of the few remaining hopes of preventing North Sea oil from pricing the rest of British industry out of existence. Treasury Ministers argue that, while North Sea oil production is at its height, British capital should be able


to roam the world for the most profitable opportunities to earn dividends which will flow back when the oil is drying up. Absolutely right. . . but less than half the picture. . . because that neglected ‘the uncomfortable truth that what industry was asking for was not an actual fall in the exchange rate but something less than the headlong rise generated by oil’. The Government had been inhibited from explaining this by the old fear of ‘knocking the exchange rate’.42 Howe had to be concerned about the current state of the British economy, scarred as it was by growing unemployment, and short term considerations did influence the decision to abolish exchange controls, but ideology played its part, and it was no surprise that Lawson and Nott were Howe’s main allies in pursuing this policy or that Mrs Thatcher needed a great deal of persuading of its merits. ‘On your own head be it, Geoffrey, if anything goes wrong’, the Prime Minister said, with Howe believing her to be joking. The Cabinet was told of the decision only a few hours before the announcement was made, with only Heseltine objecting both on the merits and because the Cabinet had not been consulted. Howe and the Prime Minister explained that ‘such an acutely market sensitive decision simply had to be taken that way’, and the Chancellor recalled that the abolition of exchange controls was ‘the only economic decision of my life that caused me to lose a night’s sleep. But it was right’.43 Howe believed that by abolishing exchange controls he and his colleagues had ‘sent out a message to the world about our commitment to liberal economics as the means of reviving Britain’,44 Nott’s recollection was that ‘the sudden revelation. . . that we were about to abolish all exchange controls was taken by a sullen majority of the Cabinet as another sign that the Government was in the hands of a crazy cabal’.45 ‘Dog Days Budget’ was how The Economist chose to describe the Budget Statement that Howe delivered on 25 March 1980, which implicitly accepted that there will be a 2.5 per cent decline in real national income this year, high and rising unemployment, rapidly falling investment, inflation topping out at over 20 per cent in mid-1980, and another £2.5 billion overseas deficit on current account. This lays it open to some criticism. But the main criticisms being heard are that it is hard hearted, Monetarist, an axeman’s assault on public expenditure, and a giveaway to Tory businessmen, which are unfortunately what they are not.46 Howe was placed in an unenviable position in many respects, not least that despite ‘the strength of sterling. . . the price of oil and other inputs to manufacturing industry [had] risen by 41 per cent since the beginning of 1979’.47 Since, the Government regarded ‘the fight against inflation as the first priority’, and monetary policy had an essential role in the defeat of inflation,


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Howe set out what became known as the Medium Term Financial Strategy (MTFS) which set out ‘a four year path for monetary growth, public spending and tax policies. . . By 1983–84, the last year covered by our spending plans, the target rate of growth of money supply will be reduced to around 6 per cent – just half the rate of growth over the past year.’48 Lawson was the chief draughtsman of the MTFS,49 the purpose of which, according to its author, was ‘to confirm and consolidate the complete change of direction on which we had embarked’, signalling ‘a shift from a real to a nominal framework for macro economic policy’, and being ‘confined to charting a course for those variables – notably the quantity of money – which are within the power of Governments to control’.50 Lawson was later to concede that the MTFS was not fulfilled in any literal sense, at least not on the monetary side. The liberalization of financial markets which we had ourselves launched changed the meaning of the monetary aggregates and made them much more difficult to predict and control. The original 1980–81 monetary target was heavily overshot. So, less heavily, was that for 1981– 82; and the objectives for the subsequent two years were met only after the targets had been raised, and then by. . . artificial means. The target definitions of money were also changed in subsequent years. Lawson thought that ‘the fiscal side of the MFTS wore better than the monetary side. Until the late 1980s, the Government came as close to fulfilling its forward objectives for the PSBR [Public sector Borrowing Requirement] as can be expected in an uncertain world. After that, the departures from target were initially in the favourable direction of Budget surplus and debt repayment.’ So, Lawson believed that, in terms of its fundamental aims, the MTFS succeeded, and recalled, shortly before the 1980 Budget, at a time when inflation was about 20 per cent, informing senior Treasury officials, who seemed to think that he had gone mad, that inflation would be 5 per cent in 1983–84, and it was slightly below this.51 Aside from setting up the MTFS, the most interesting feature of the 1980 Budget was one of Howe’s own ideas that he well-described as ‘an imaginative experiment’, which was to establish, in the first instance, about half a dozen enterprise zones in the older urban areas ‘with the intention that each of them should be developed with as much freedom as possible for those who work there to make profits and to create jobs’, and he indicated a range of tax concessions and incentives to encourage the development of such zones.52 ‘The Government’s swashbuckling capitalist intentions’ as displayed in this initiative impressed The Economist, and that journal looked forward to ‘the whole country’ becoming ‘an enterprise zone’.53 The more immediate prospect was the collapse of British manufacturing industry. ‘There is much talk about industry rising like a phoenix from the ashes’, one West Midlands industrialist observed, ‘But what if we are just left with the ashes?’54


In the short run, it was bound to be the private sector that bore the brunt of the harsh readjustment that Britain’s economic plight made essential if a sustained recovery was to be brought about. Security of tenure was a characteristic of much of the employment in the public sector, and the most that could be done at first about public expenditure was to try to call a halt to its rate of growth. So, for the true believer in economic liberalism, the first couple of years of the Thatcher Government were bound to be traumatic, and Sir Keith Joseph was or had become such a believer. Mrs Thatcher thought that Joseph’s ‘combination of personal qualities’ made him unsuitable for ‘the cruel hurly burly of political life which Chancellors above all must endure’, and so she appointed him as Secretary of State for Industry, where he did ‘the vital job that no one else could have done of altering the whole philosophy which had previously dominated the department’. It may well have been the case that Joseph ‘cared about those who were affected’ by the bankruptcies and unemployment ‘far more than did our professionally compassionate critics’,55 but his personality disqualified him from running any of the main economic departments. Whether or not Joseph soon became ‘totally bonkers and a liability’, in the words of one Tory,56 his torment was made worse by the situation and problems that he inherited at Industry largely denying him the opportunity to practise the economic liberalism that he had so eloquently preached, thus making him an easy political target. The Economist dubbed him ‘the Minister for Misery’, and the journal reported that with ‘his alpha mind’ soon bored by businessmen who had come to see him complaining about the effects of Government policy, Joseph had disconcerted such visitors by picking up his private letters and once even his own income tax form.57 One Confederation of British Industry official remarked about Joseph that ‘he didn’t believe that anything the Government would do would help. Handing out government money was anathema to him. At our first meeting he asked why we even needed a Department of Industry.’58 In important respects, British Leyland (BL) encapsulated Joseph’s predicament. When the head of the National Enterprise Board asked the Chief Executive at BL which types of car made profits and which did not, he received the reply that ‘the accounting system is such as not to produce an answer’.59 The Labour Government had installed Sir Michael Edwardes as Chairman to sort out the management of BL. According to the tenets of economic liberalism, much of BL should have been closed down, but the suppliers would have died too, and the Conservatives had emphasized in their manifesto their commitment to small businesses.60 Such was the state of BL that, towards the end of 1980, Edwardes was forced to approach the Government for a huge subvention to keep the company going, and such was the sum the Prime Minister became involved, holding what became known as ‘the BL dinner’, which experience she resolved never to repeat.61 Joseph had produced a bizarre Cabinet paper arguing for the closure of BL while setting out the dire consequences of doing so, thus inviting its rejection.62 Joseph was in obvious difficulties


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when he had to inform the House of Commons that BL was to continue on its highly subsidized way,63 drawing mock sympathy from the Labour benches for ‘the agony’ he was suffering,64 and from the ubiquitous Alan Clark criticism that Joseph ‘of all people [should] talk of such enormous sums with such insouciance’.65 According to one Ministerial colleague, ‘There’s a job waiting for Joseph in Oxford Street. He’s been practising the role of Father Christmas for the past twenty months.’ The Economist reported that ‘the former (very free) Trade Secretary’, John Nott, ‘wanted to start breaking up BL there and then’,66 and, plainly, the preferred long-term goal was privatization of such of its operations that seemed likely to be commercially viable.67 What Joseph was condemned to was a very uncomfortable short term holding role. During the brief time he was at the Department of Trade, Nott was able to take several economic liberal initiatives, notably the abolition of the Price Commission, and the announcement to privatize British Airways, though an anti-trust suit in the USA delayed the implementation of this measure, and he played a part in persuading Mrs Thatcher to appoint John King as the Chairman. Since Nott knew from personal experience that the City of London was rife with restrictive practices, he refused the request of the Stock Exchange to exempt it from being subject to the Restrictive Practices Court on the basis that he could not see how the Government could apply one law to capital and another to labour, given that it was about to launch an attack on the restrictive practices of the trade unions.68 Nott’s eventual Ministerial successor, Parkinson saw things differently, and wanted the Stock Exchange to be granted exemption in exchange for reforms,69 which approach, as Chancellor, Nigel Lawson took up, leading eventually to the ‘Big Bang’ of October 1986, and the regulatory framework for the savings and investment industry in the form of the Financial Services Act of that year.70 The Thatcher Government’s early relationship with the private sector proved to be less than harmonious, though the Institute of Directors provided consistent support. This was not the case with the Confederation of British Industry (CBI), at whose conference in November 1980, for instance, Michael Edwardes declared that ‘the pound was overvalued, interest rates were penurious, and the whole issue was being aggravated by North Sea oil’, adding that ‘if the Cabinet does not have the wit and imagination to reconcile our industrial needs with the fact of North Sea oil, they would do better to leave the stuff in the ground’.71 The Director General of the CBI, Sir Terence Beckett, chose to follow this by saying ‘we have got to get the gloves off and have a bare knuckle fight’ with the Government,72 though divisions in the ranks and defections from them soon forced him to climb down and describe Mrs Thatcher as nothing less than ‘magnificent’.73 Nott recalled that, when he was at the Department of Trade, we were besieged by demands to restrict imports of cars, textiles, and electronics. . . the situation was most acute in the textile industry. As the money squeeze tightened, and sterling rose, textile imports flooded into


the country. Delegation after delegation came to see me as unemployment in the North and Midlands rose dramatically. In 1979 the textile industry employed nearly 1.5 million workers, by 1982 the numbers had virtually halved – at least another half a million were added to the dole queues. I felt devastated for these people. Eventually, I surrendered to the pressure and persuaded the European Commission to impose anti-dumping duties against cheap textile imports. It was a foolish mistake. I had imagined that meeting the urgent request of the textile lobby would bring them some relief, but the opposite was the case. An equally large section of the textile industry was dependent on these cheap imports, which were then recycled into exports of finished goods. I learned a solid lesson: Governments tamper with free trade at their peril.74 ‘With the gap between rhetoric and practice becoming apparent by early 1981, a major shift was taking place in our economic policy’, Prior later wrote, ‘The folly of high interest and exchange rates was now obvious. We began to hear very much less from the Treasury about their money supply target [and more about] the need to reduce the PSBR [meaning] the Government’s own overall borrowing in order to keep interest rates down.’75 So, the stage was supposedly set for what the pundits and the unbelievers and the cynics and the massed ranks of Mrs Thatcher’s enemies both within the Tory Party and Government and on the Opposition benches had predicted would come after about two years in office. This was, of course, an explicit U-Turn in economic policy, the public confession that the Government had got it wrong all along. Still, it seems, in a state of shock years later, Prior recalled that ‘at a time of rapidly rising unemployment, the Government. . . sought to pursue a deflationary policy in the 1981 Budget. There were no apologies for this: quite the reverse.’76 Lawson’s recollection was that ‘the Government did not set out with the deliberate intent of making a dramatic doctrinal challenge to economic orthodoxy or to the political faint-hearts in our own ranks. The 1981 Budget was essentially a response to the fiscal difficulties which had emerged in the financial year 1980–81.’77 This situation was brought about by several factors but a prominent one was the Cabinet’s unwillingness to make the cuts in public expenditure that the Chancellor wanted, and it was not surprising that when presenting his Budget on 10 March 1981 Howe emphasized that ‘the overriding need is for more effective restraint of public spending’ from which ‘further progress towards lower inflation and lower interest rates’ would follow. Howe announced a cut in ‘the minimum lending rate by two percentage points’,78 and that he had ‘decided to make a major shift in the planning and control of [public] spending from volume to cash,’ which meant getting rid both of the Plowden ‘funny money’ arrangements that had been employed since 1961 and ‘the automatic assumption that what was once planned can always be afforded’.79 Despite the context of a recession and high and rising unemployment, Howe then proceeded to plan


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a reduced PSBR to bring it into line with the Medium-Term Financial Strategy (MTFS), and observed that tax increases had been made necessary by the high level of public spending.80 Though rates of income tax were not increased, personal allowances were frozen, and among the measures taken to raise extra revenue indirect taxes were double indexed.81 ‘That ass [Nicholas] Winterton shouted “you must be joking” when the Chancellor announced an extra 20p on petrol’, Alan Clark recorded, who, though no admirer of Howe, thought the Chancellor and his Budget to be ‘quite uncompromisingly “firm”. His figures were pretty horrific where they related to the old targets which, of course, had been wildly overshot, but as soon as he said that tax allowances were not being raised I realized that it was all hard line.’82 So, as Walters recalled, ‘in spite of rapidly increasing unemployment and falling output’, the Thatcher Government had introduced what he called ‘the toughest peacetime Budget in living memory’.83 Most university economists were horrified, and it was then that 364 of them together placed on record their opinion that the Budget had made an economic recovery impossible. ‘Their timing was exquisite’, Lawson gloated: The economy embarked on a prolonged phase of vigorous growth almost from the moment the letter was published. So far from launching the economy on a self-perpetuating downward spiral, the Budget was a prelude to eight years of uninterrupted growth and left our economic critics bewildered and discredited. . . In the course of time the 1981 Budget came to be seen almost as a political equivalent of the Battle of Britain: the Thatcher Government’s finest hour; its most widely acknowledged success and a turning point in its political fortunes. Hence the myth making and attempts to take the credit.84 Howe dismissed the ‘myth’ that the 1981 Budget had been ‘made in Number 10’ because the key judgements were made by himself and his fellow Treasury Ministers and their advisers,85 and Lawson endorsed that version of events.86 A definitive account seems unlikely to ever emerge, but, as the Prime Minister recalled, Hoskyns and Walters and also the monetarist economist Jurg Niehans were among those who advised her87 and Hoskyns kept a diary. Hoskyns did not share the interpretation later advanced in The Times that the Prime Minister was the real author of the Budget, and that Howe was only obeying orders, but he did not agree with the Howe version either, and pointed out that Lawson was not present at two of the most important preparatory meetings anyway, meaning those held on 10 February and 13 February 1981. Mrs Thatcher’s memoirs made no mention of another important meeting, which was that held at Chequers on 17 January 1981, but in other respects her version of events was closer to that of Hoskyns than the Howe–Lawson account. Hoskyns observed that ‘the common thread’ of that account was that ‘the Treasury got the Budget right. Perhaps they did, and we


were unaware of other discussions that were going on behind the scenes. But my strong impression remains, from my own records, that the top Treasury officials were totally opposed to what [Hoskyns and his fellow irregulars] were suggesting, and that the younger officials feared a disaster in consequence.’ Hoskyns suspected that ‘over the next ten years’ Howe ‘unconsciously internalised the Treasury’s subsequent account’, which was to rewrite history in its favour once it seemed that the Budget was working.88 Hoskyns thought that the Budget was the product of outside views that had influenced the Downing Street irregulars. . . It was Gordon Pepper and Christopher Hawkins in the summer of 1979 who warned that the monetary contraction was too severe. It was Terry Price – as early as February 1980 – who wrote to me with his penetrating analysis of the ‘positive feedback’ consequences of that error. Like Terry, David Wolfson and I became increasingly certain that the chosen monetary measure, sterling M3, because it included interest bearing deposits, would, therefore – perversely – grow as a result of the very measures (high interest rates) which were designed to make it shrink. . . It was Alfred Sherman who, in late 1980, asked the question ‘Why is sterling so high?’ and Jurg Niehans who gave us the answer in a study conducted outside Whitehall and financed with private sector money. It was Alan Walters who had warned Mrs Thatcher and Keith Joseph in August 1980 that he saw all the signs of an excessive monetary squeeze. Geoffrey made no Budget proposals at the Chequers meeting. The shape of the Budget first emerged at an advisers’ meeting in my office on 21 January. It was fiercely resisted on 13 February by both the Prime Minister and the Chancellor – and who could blame them? Douglas Wass, the head of the Treasury, supported their position, not ours. But in the end, Margaret and Geoffrey took the outsiders’ advice rather than Whitehall’s. Or so it appeared to me at the time.89 ‘A Budget With Few Friends’ was the verdict of The Economist,90 but one of them was the irrepressible Ferdinand Mount in The Spectator, inspired it seemed by Mrs Thatcher having praised Hayek in the Commons that very day,91 leading him to speculate: ‘Has the woman no sense of self preservation?’ Mount went on: If this Government goes down – as half the Tory Backbenchers seemed to think it would when the shocks first hit them – then it will go down firmly stuck to guns and with colours nailed to masts. It will, in short, be unlike other British Governments. Professor J.K. Galbraith can rest easy. This is as fair a test of Monetarism as we are likely to find in an imperfect world. Mrs Thatcher may fumble. She may acquiesce in the odd medium sized surrender. But in any large ample sense of the verb, she does not turn.92


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There then occurred what Mrs Thatcher in her memoirs called The Urban Riots of 1981, referring to those which took place in the Brixton district of London, at Moss Side in Manchester, and in the Toxteth area of Liverpool. Though she took the racial overtones in these outbursts as meriting serious response, Mrs Thatcher did not concede that ‘our economic policy was causing social breakdown and violence’ because ‘riots, football hooliganism and crime generally had been on the increase since the 1960s, most of that time under the very economic policies that our critics were urging us to adopt’.93 On his way to what he called ‘the historic Cabinet meeting of 23 July 1981’, Nott recalled that ‘I may have been influenced – it would have been hard not to have been – by the fact that riots were breaking out in several cities. Indeed, the night before had seen renewed violence in the Toxteth district of Liverpool. I therefore arrived at the meeting in a state of some uncertainty.’ What he was certain about was that the Treasury paper proposing to cut £5 billion more out of public spending than had been previously planned was so poorly argued that the Treasury must have simply assumed that ‘because it would have the support of the Prime Minister and her economic cabal, its advice would go through anyway’.94 At this meeting, there then ensued what Mrs Thatcher called one of the bitterest arguments on the economy, or any subject, that I can ever recall taking place at Cabinet during my Premiership. . . Even those like John Nott, who had been known for their views on sound finance, attacked Geoffrey Howe’s proposals as unnecessarily harsh. All at once the whole strategy was at issue. It was as if tempers suddenly broke. I too became extremely angry. I thought that we could rely on these people when the crunch came. I just was not interested in this kind of creative accounting that enabled fair weather Monetarists to justify an about turn. Others, though, were as loyal as ever, notably Willie, Keith and, of course, Geoffrey himself, who was a tower of strength at this time. And indeed it was their loyalty that saw us through. Mrs Thatcher concluded that ‘it would be difficult for this group of Ministers to act as a team again’, and with even the previously reliable Party Chairman, Thorneycroft, confessing to ‘rising damp’ when it came to advocacy of an economic policy that would combat increasing unemployment, the Prime Minister decided to replace him and to recast her Cabinet in September 1981.95 The dismissed Gilmour commented that ‘it does no harm to throw the occasional man overboard, but it does not do much good if you are steering full speed for the rocks. And that is what the Government is now doing.’96 In fact, the Government was heading for re-election, and on what could be presented as being on Mrs Thatcher’s terms, and in at least one important respect the 1981 Budget and the strategy that followed from it was largely presentational. For, as the then Cabinet Minister,


David Howell, later wrote, the 1981 Budget was ‘not some sort of Stalingrad, the moment when the dark forces of ever rising public expenditure were finally and heroically turned’,97 not least because such spending carried on rising. What was important about that Budget was the political symbolism of the primacy that the Conservative Government gave to conquering high levels of inflation. It was to serve as a major test of competence in much the same way as the target of building 300,000 houses had been after 1951. After the 1981 Budget, it was by no means plain sailing for the Thatcher Government, but the Conservatives could not be seriously believed to be heading for the political rocks once an economic recovery of a sort could be detected. The Guardian and those who thought like it became very excited about something called the Mitterrand experiment in France that was going to show that the Thatcher experiment was not necessary. Since France was less reliant on foreign trade, in principle an experiment there could be persisted with for longer than in Britain, but what those who trusted in Mitterrand forgot was that the French President was much more an opportunist than any kind of socialist, and so in practice he soon abandoned the experiment and those foolish enough to believe in it as an economic cure. ‘To hearken to the voices that urge us only to “borrow, borrow, borrow” would perform no service to British industry or to the unemployed’, Howe declared in his 1982 Budget Speech, ‘On the contrary, it would lead only to the dead end of a plummeting exchange rate or a rocketing rate of interest – more probably to both’.98 So, if we believed one economist, ‘Howe’s latest Budget continues his prescription for [Britain’s] economic ills by a diet of thin gruel and the intermittent application of leeches. This year there is a little more gruel and fewer leeches but the strategy remains the same.’99 According to The Economist, this was ‘a Budget which was a little Wet round the edges’,100 and the observant Mount noted that The Chancellor was forty minutes into the Speech before we heard that first full throated roar from the Tory backbenches – last heard three years ago – which always mark the announcement of an appropriately handsome bribe to the electors, in this case, the raising of old age pensions by two per cent more than the rate of inflation. . . Sir Geoffrey was able to reduce taxation a little only because he raised taxation last year and reduced the Government’s spending plans (even if government expenditure actually went on rising merrily) – thus steadying interest rates and bringing inflation more or less under control. To the true believer, last year’s Budget was the one that mattered, the test of nerve; and if there are any rewards in this year’s, they are Sir Geoffrey’s reward for having refused to use a horrible slump as an excuse for further inflating an already appalling rate of inflation.101


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Howe’s Budget also included what he called ‘a major reform of the capital tax system’, notably the adjustment of capital gains tax for inflation,102 and at the other end of the scale added to ‘the ragbag of schemes to provide work for the unemployed, mainly on useful community projects, such as helping the sick and elderly as well as useless ones, like counting lamp posts in Manchester’.103 Howe’s message was blunt enough: the truth is that ‘reflation’ does not create jobs that last. In the longer run it helps to destroy them. If more public spending was the proper engine for growth and jobs, Britain should now lead the world in both. Yet in fact unemployment today is almost eight times higher than it was twenty years ago. . . [There were] two figures that virtually tell it all. Since 1960 the real purchasing power of the average citizen in Britain has risen by almost two-thirds, but the real rate of return on the capital employed in British industry has fallen by five-sixths. In other words, our present living standards have for years been plundered from the store of investment for the future.104 After Howe delivered his fifth and last Budget on 15 March 1983, The Economist granted him one main hurrah for the last three of his four years’ stewardship of Britain’s Exchequer. He has brought inflation down to 5 per cent from the 1980 peak of 22 per cent which he half inherited from Denis Healey and the Ayatollah Khomeini, but also self-created by the Clegg and tax-switching mistakes of his own first year in power. If inflation had continued to accelerate, it would have ended in a crash. Sir Geoffrey has averted the crash by being a stern fiscal taskmaster but rather a loose Monetarist one: a 7–11 per cent annual increase in money supply to be permitted even now, but a Budget deficit doggedly halved right through the recession, from 5.5 per cent of Britain’s GDP in 1979–80 to an intended 2.75 per cent in the next fiscal year.105 Howe himself chose to emphasize that ‘it was the firmness of the 1981 Budget which paved the way towards the lower inflation and lower interest rates which today offer the prospect of lasting economic recovery’.106 Howe ‘reckons constancy is not only the best policy; it is also the best politics’, The Spectator believed, arguing that ‘he and Mrs Thatcher are at one on this’, before using a naval analogy sadly worthy of Callaghan that ‘the order from the bridge is steady as she goes. The message to the faithful is steady and she stays’.107 If Howe had ‘a lawyerly scepticism of economic theorists’108 while remaining firmly in their intellectual grip, his successor as Chancellor in 1983, Nigel Lawson made much of being the first professional economist to hold that


office since Gaitskell. ‘So [Lawson] knows what his officials are telling him – and vice versa, which is sometimes more important’, The Economist enthused in 1988: He dominates Cabinet discussions on economic issues not simply because of his position but because of his grasp: one reason that the Tory Party is as united on economic policy as it is ever likely to be. And Lawson can hold his own with Mrs Thatcher. . . Lawson can also boast of an economy that his predecessors merely dreamed of. In his almost-five years as Chancellor, real GDP growth has averaged 3.5 per cent a year, the fastest in Europe’s big economies. Unemployment is falling faster than at any time since records began. Inflation, already much shrunken at 3.7 per cent when he took over, is 3.3 per cent now. All this has been achieved with a fiscal prudence that has owed nothing to orders from the IMF. The journal believed that ‘if Mr Lawson wants to be remembered as Britain’s greatest Chancellor, he still has two things to do. One is to restructure the tax system. . . The other is to put in place a durable, coherent framework for macro policy instead of his trust-me discretion: rule by laws, not by Lawson.’109 The Medium Term Financial Strategy (MTFS) had served this purpose at one time, and Lawson referred to it in the 1984 Budget110 and that of 1985,111 and that of 1986,112 as well as that of 1987,113 1988114 and 1989115 In the 1987 Budget Speech, though Lawson set a target for narrow money, he stated that ‘for broad money. . . as the Governor of the Bank of England cogently argued in his Loughborough lecture last October, it is probably wiser in current circumstances to eschew an explicit target altogether’.116 With the 1984 Budget, Lawson had started off with nothing less than ‘A Star is Born’ treatment from one ally in The Spectator,117 and The Economist reported that following his Speech ‘Mr Lawson sat down amid a sea of waving order papers’ from his fellow Tories. That journal shrewdly analysed the situation that the Chancellor had faced as follows: One alternative before Mr Lawson. . . was to continue with Sir Geoffrey’s policy of pushing Budget deficits steadily lower, and to hope against experience that a second term Conservative Government would be regarded as maintaining a political dynamic if it kept on annually squeezing harder so as to attempt to get inflation down to virtually nil. The other alternative was to stop reducing Budget deficits after a slightly sleight-ofhand showpiece this year, to accept an annual 3–5 per cent as the target inflation rate for the rest of this Parliament, and to use the small resultant leeway to introduce a Budget aimed at securing the maximum possible reduction in unemployment. Mr Lawson opted for the second alternative, although many. . . of his backbenchers. . . want to believe that he did not.118


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Lawson maintained that the 1984 Budget was ‘broadly revenue neutral’ with ‘business taking the lion’s share’ of such tax reductions as were made.119 The unforgiving Sherman recalled that during the 1984 Party Conference at Brighton. . . Lawson was given a rough time from the floor for his consistent refusal to undertake monetary relaxation. This was not the first call for a loosening of monetary restraint. But the weight of criticism fell on Lawson rather than on [Mrs Thatcher], as it had done in 1979-81. The incident was overlooked at the time because of the bomb in Brighton’s Grand Hotel, which almost killed the Prime Minister on the following morning. But Lawson drew his own conclusions and began to relax monetary controls. . . and these ‘loose monetary policies. . . sowed the seeds of inflation and a new cycle of “stop-go” ’.120 When it came to 1985, The Spectator reported that the Chancellor introduced a short Budget, without any of the radical measures which had been feared by his own Party. The scope of VAT was not extended, tax privileges associated with pensions were not attacked. The payroll tax known as National Insurance contributions were reformed; the upper limit was abolished and lower rates were introduced for small incomes. Great comfort was given to the self-employed, their NI contributions were lowered, while the price of whisky went up by only ten pence. The pound rose smartly to almost $1.17.121 ‘Penned in now, penned in later’ was how The Economist perceived how Lawson was placed in 1985,122 but the Chancellor’s Budgets of 1985123 and of 1986124 were essentially holding operations, with Lawson maintaining that he was still adhering to the strategy set out in 1979. ‘Economic arguments are seldom concluded, one way or another’, Lawson observed in his 1987 Budget Speech, adding: This is chiefly because it is unusual for economic policies to be held in place long enough to provide sufficient evidence. But the 1980s have been different; and, as a result, one critically important economic argument has now been concluded, finally and decisively. Throughout our period of office, our critics have consistently maintained not only that a fiscal stimulus would produce real economic growth but that without an expansionary fiscal policy sustained economic growth was impossible. They were wrong, and have been proved wrong. The British economy is now embarking on its seventh successive year of steady growth, at an average rate of getting on for 3 per cent a year. And during that time the PSBR, even if privatisation proceeds are added back, has been deliberately and steadily reduced from a shade under 6 per cent of GDP to a little over 2 per cent. Indeed,


had I or my predecessor at any time heeded the advice of our so-called expansionist critics, the British economy would never have been in the. . . favourable position it is today.125 In his 1986 Budget, Lawson had reduced the basic rate of income tax from 30 per cent to 29 per cent,126 and in that of 1987 he reduced that basic rate to 27 per cent.127 ‘With a pre-Election Budget that gave away only half of what it conceivably could, Mr Lawson has interrupted a pantomime that has run [since 1955]’, The Economist observed admiringly after the 1987 Budget, betting that there would be no need to go in for the familiar and early remedial measures that so many of his predecessors had been forced to take subsequently.128 Forgotten was the same journal’s analysis of the Government’s public expenditure plans published earlier that correctly deduced that ‘virtue can wait until after the Election’.129 Using the analogy of Tenniel’s cartoon of Dropping the Pilot, Mount in The Spectator had pictured Lawson ridding himself of two Professors called Monetarism and Expenditure Control, and believed that Lawson’s Autumn Statement will. . . be seen as one of the turning points in this Administration. At its worst, it might mark a resumption of national decline. . . just suppose Mr Lawson had not added £4.5 billion on to the £144 billion he plans to spend next year and had also eschewed the £3 billion tax cuts which he seems to have in mind. What an intoxicating prospect would have opened up, assuming that the revenue continued to flow in as strongly as it has of late. Not £7 billion Government borrowing, but nil borrowing. The Government would have balanced its books. . . Interest rates could have been cut to German-Swiss levels. Inflation ditto, with growth humming along nicely at three per cent or thereabouts. Unemployment coming down too as the demographic curve flattened out. The path of virtue would have brought its own reward.130 The Economist saw things differently: A main purpose of electing a Conservative Government in 1979 was that Whitehall and town hall would no longer spend so near to half of the British people’s money for them. Less public spending would mean lower taxes, so more of Britain’s decisions about how much gets spent by whom and on what would be taken in markets instead of by bureaucrats. Economic growth would benefit thereby. Throughout, Mrs Thatcher’s achievement has fallen far short of her rhetoric: this year, barring overshoots, public spending will be 16.9 per cent higher in real terms than it was in the year before she came to power. . . The Thatcher Government can hardly be accused of a pre-Election U-turn. It is, alas, still doing most of the things it has done throughout its seven years of office: spend too


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much, give too little heed to markets, and, one way or another, pretend to stick to the macroeconomic guidelines. The reward for such consistency may be a third wasted term.131 The Wall Street Crash that took place on Black Monday 19 October 1987 led the same journal to fear ‘the slump of 1988’ and to declare that ‘the immediate task is a Keynesian one: to support demand at a time when the Stock Market Crash threatens to shrink it’.132 Lawson was not short of foolish advice of this kind as the London Stock Exchange was affected, and the talk was of another 1929, which did not come to pass. When it came to the next Budget and the first of the third term, Lawson remembered the lesson of the previous Parliament and went for the radical change of establishing ‘one of the simplest systems of income tax in the world, consisting of a basic rate of 25 per cent and a single higher rate of 40 per cent’, and stated that ‘our aim should now be to get it down to. . . a rate of 20 pence in the pound – as soon as we prudently and sensibly can’.133 By the time of the 1989 Budget, which proved to be the last one that Lawson presented, the economic situation was looking grim once more, which, of course, did not surprise those who had Monetarist opinions in the slightest. ‘Taking the seven major industrial nations as a whole, inflation is now at its highest level for three and a half years’. Lawson said: In the United Kingdom, as in a number of other countries, it became clear that it was necessary to tighten monetary policy sharply. That meant raising short term interest rates, which I duly did, starting last June. . . The outlook for 1989 is for inflation to rise a little further over the next few months, from 7.5 per cent including mortgage interest payments to about 8 per cent, before falling back in the second half of the year to 5.5 per cent. . . Some slowdown in real growth is inevitable is inevitable as we get inflation back on to a downward path. Lawson was ‘keenly conscious of the difficulties many borrowers, particularly home owners are now facing’ as the result of high interest rates, and with ‘the housing boom that played such a large part in the events of last year [having] subsided’.134 So, the Lawson Boom was over. ‘With inflation at 7.5 per cent and set to go higher, the pound in a Briton’s pocket is now halving in value every ten years’, The Economist observed, ‘For any Government, that is a warning; for a Thatcher Government, it is an indictment. Hammering inflation was what this Budget had to do. Mr Lawson rightly said that “interest rates will stay as high as is needed for as long as is needed” to do the job. He stressed that sterling would not be allowed to fall, which was also right (and gives global investors a one-way bet on a sterling bank deposit).’135 Policy differences between the Prime Minister and her Chancellor had affected economic policy, with Howe intervening as these differences had a ‘European’


dimension to them. ‘The only effective way to control inflation is by using interest rates to control the money supply’, Mrs Thatcher believed, ‘If, on the contrary, you set interest rates in order to stick at a particular exchange rate you are steering by a different and potentially more wayward star. As we have seen twice – once when, during my time, Nigel shadowed the Deutschmark outside the ERM and interest rates stayed too low; once when, under John Major, we tried to hold to an unrealistic parity inside the ERM and interest rates stayed too high – the result of plotting a course by this particular star is that you steer straight on to the reefs.’136 Mrs Thatcher believed that Lawson ‘undermined confidence in my Government’ by ‘his pursuit of a policy that allowed British inflation to rise, which itself almost certainly flowed from his passionate wish to take sterling into the ERM’.137 Citing too much interference from Mrs Thatcher’s adviser, Walters, Lawson resigned in October 1989, to be succeeded at the Treasury by what one pundit called ‘the curiously anonymous John Major’ on the basis that ‘take away the trapeze artist father and what’s left?’ The pundit also observed that Chancellors rarely go on to become Prime Minister.138 Major was to do so, but not before persuading Mrs Thatcher as one of her last acts as Prime Minister to take Britain into the ERM at what was bound to be too high a rate for sterling in the longer run. That being so, membership of the ERM could be no more than a short run, pragmatic means of getting domestic inflation down, in which role it made a contribution. So, aside from those weighed down by belief, the problem always was to know when the national interest was best served by jumping ship, and the Major Government was to get the timing wrong. The wreckage did not mean the undoing of the Thatcher Governments’ reconstruction of the economy, which was extensive as the following examination of their trade union reforms and their privatization programme demonstrates.

The privatization of public enterprise ‘Privatization means almost the same thing as denationalisation’, Nigel Lawson, one of the architects of the privatization programme later wrote, but only almost because industries such as the telephone service, which had never been in the State sector, and thus had never been through a process of nationalization in the first place, were transferred to the private sector. Partly for this reason and partly because most of us felt denationalisation did not sound positive enough, the process came to be officially described as ‘privatization’. The word was, to the best of my recollection, David Howell’s invention. It is an ugly word – and Margaret disliked it so much that for some time she refused to use it. But none of us could come up with anything better.139


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Lawson added that the limited and low key reference to denationalisation in the 1979 manifesto has led many commentators. . . to suppose that privatization was not part of our original programme and emerged as an unexpected development into which we stumbled by happy accident. They could not have been more mistaken. The exiguous references in the 1979 Conservative manifesto reflected partly the fact that little detailed work had been done in Opposition; partly that the enthusiasts for privatization were Keith Joseph, Geoffrey Howe, John Nott, David Howell and me, rather than Margaret herself; and, perhaps chiefly, Margaret’s understandable fear of the floating voter. But privatization was a central plank of our policy right from the start.140 Even within the Conservative Party itself in 1979, though, Ridley later wrote, when it came to privatization of public enterprise, ‘most people believed, like me, that the Government wouldn’t actually do it, just as Ted Heath had not done it earlier’. Like Heath before her, Mrs Thatcher had asked Ridley to chair a policy group to make proposals about denationalization, and he recalled that much of my report was concerned with tighter disciplines for running the nationalized industries – which would be needed for a while before privatization took place – and for the utilities, which I put bottom of the list as candidates for privatizing. I also suggested breaking up many of the industries into smaller units before selling them. In the event, all the candidates I identified were in fact privatized, and so were gas, electricity and the water authorities, which I believed then were too difficult. In addition, of course, numerous minor concerns, which had seemed too small to identify at the time, left the public sector during the 1980s.141 Ridley’s report was scarcely a blueprint, and its main interest at the time was that it anticipated a long term strategy for dealing with ‘the full force of Communist disrupters’ in the public-sector unions, while arguing that in the short run in nationalized industries that had ‘the nation by the jugular vein the only feasible option is to pay up’.142 Denying those unions privileged access to the public purse was an obvious attraction of privatization, but another proved to be largely accidental. For the Tories learnt the lesson of Healey’s behaviour as Chancellor in the Labour Government in June 1977 when, under pressure from the IMF, he sold off part of the State’s holding in British Petroleum to raise revenue, and thus did so without increasing taxation or resorting to borrowing.143 That said, though, all that the Conservatives committed themselves to in their 1979 manifesto was ‘to sell back to private ownership the recently nationalized aerospace and shipbuilding concerns,


giving their employees the opportunity to purchase shares’, and also ‘to sell shares in the National Freight Corporation to the general public’.144 Howe described the sale of public assets as ‘an essential part of the long term programme for promoting the widest possible participation by the people in the ownership of British industry’, and, more immediately, as a short term means of helping to reduce the PSBR. He set a target of £1 billion for the year 1979–80. In June 1979, a sub committee of the Cabinet’s main Economic Committee was set up under Howe’s Chairmanship. It was called the E(DL) Committee. DL was short for disposal. It was Lawson’s job to identify and bring forward assets for disposal.145 Noting that Biffen as Chief Secretary as well as himself as Financial Secretary were on the E(DL) Committee together with Howe, Lawson observed that ‘it was unique for a Cabinet Committee to have no fewer than three Treasury Ministers [serving on] it, and [this] no doubt reflected Margaret’s lack of confidence in most of the rest of her first Cabinet’.146 Howe recalled that we started (in 1979) with a £290M tranche of BP shares (Margaret was initially nervous of this, in an oil sensitive world). The process gathered speed with a list of enterprises whose commercial role made them most obviously inappropriate for public ownership. Those that were privatized in 1981 included British Aerospace, Ferranti, Cable and Wireless, British Transport Docks, and British Rail Hotels. By 1982 we were ready to legislate for the introduction of private capital into [the] B[ritish] N[ational] O[il] C[orporation]’s oil producing business. Widespread employee share ownership in British Aerospace and an imaginative and highly successful staff buy out at [the] National Freight [Consortium] added to the popularity of the process.147 Lawson had no such sense of the popularity of privatization. ‘In advance of every significant privatization, public opinion was invariably hostile to the idea, and there was no way it could be won round except by the Government going ahead and doing it’, Lawson wrote, ‘Then, when the scare stories which had been so luridly peddled by the Opposition about the consequences of a particular privatization in prospect were proved to be unfounded, the private sector status of the industry concerned became accepted as a fact of life.’148 Though a Treasury Minister, Lawson was ‘always on the side of introducing competition and a tough regulatory regime where no competition was practicable, despite the fact that either would reduce proceeds’, and he was also a believer in ‘selling the shares rather than in literally giving them away. . . In fact no-one was keener than I to achieve the widest possible distribution of shares in the privatized businesses both to small shareholders in general and to their employees in particular, who in most cases were able to acquire shares on favourable terms.’ Employee shares were a major feature of privatizations with on average 90 per cent of the eligible workforce taking up the shares,


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with the figure being 96 per cent in the case of British Telecom. Lawson pointed out that the proportion of the adult population owning shares rose from 7 per cent in 1979 to 25 per cent ten years later, though he conceded that ‘this was not enough to reverse the long term decline in the proportion of shares held by private individuals rather than institutions – a worldwide trend’. Lawson emphasized that ‘there was also a clear political motive behind promoting the wider share ownership of the privatized companies. For the more widely the shares were spread, the more people who had a personal stake in privatization, and were thus unlikely to support a Labour Party committed to renationalization, so much the better. For our objective was. . . to make the transfer of these businesses to the private sector irreversible.’149 As, successively, Financial Secretary to the Treasury, Secretary of State for Energy, and then Chancellor of the Exchequer, Lawson was at the centre of the Thatcher Governments’ privatization programme. As Energy Secretary, Lawson pushed through the privatization of Britoil – the former British National Oil Corporation (BNOC) – ‘at the time (1982) the largest privatization the world had ever known’.150 Lawson ‘became increasingly convinced of the merits of taking privatizations beyond the competitive sector into the realm of the giant monopoly public utilities. . . this meant the privatization of British Gas and the entire electricity supply industry’.151 The big breakthrough, though, had been the privatization of British Telecom. In 1979, Sir Keith Joseph, as Secretary of State for Industry, had begun the erosion of the BT monopoly by encouraging the setting up of a partial competitor, Mercury Communications, owned principally by the newly privatized Cable and Wireless. In 1982, Joseph’s successor, Patrick Jenkin, announced that BT was to be privatized, and, though this was to be delayed by the 1983 Election, the following year witnessed its achievement. The ubiquitous Lawson recognized that ‘the sale of even 51 per cent of BT as a single entity meant a flotation far larger than any that had previously been contemplated’, and there were those who said that ‘the capital market simply was not large enough to absorb it’. The likes of Lawson and Jenkin’s successor, Norman Tebbit, took no notice, of course, and BT was privatized by means of a fixed price offer for sale in November 1984. ‘BT was the first more or less monopoly public utility to be privatized, and such animals cannot be permitted to exploit that position’, Lawson wrote, recognizing the need for a novel form of regulatory regime: An independent State owned agency, the Office of Telecommunications (Oftel) was set up to oversee the industry; and the key element in the regime was the rule that the company could increase its charges each year by no more than RPI−x, representing the rate of inflation for the previous year less a percentage designed to reflect the industry’s scope for increasing efficiency. This formula, which had been devised by Professor Stephen Littlechild, was originally envisaged as a rough and ready short term solution to the problem; but, in practice, it has endured and [it was]


used as the basis of the regulatory regimes for all the privatized public utilities. Lawson gloated: ‘Altogether some two million people, or 5 per cent of the adult population of the UK, bought shares in BT.’ thus ‘almost doubling the number of Britons who owned shares overnight’.152 Lawson’s successor as Energy Secretary, Peter Walker was given the task of privatizing British Gas, which was achieved in 1986. Lawson recorded: ‘My strong preference was to break up the corporation both regionally and into separate gas and appliance businesses before privatizing it. [This] would have reduced the proceeds of the sale, but I judged competition [to be] a more important consideration than maximizing government revenue. Peter was opposed to anything of the kind.’153 Walker recalled: The central figures running British Gas realized that I had decided [that] the breaking up of the corporation was lunacy and that I wanted a powerful British company which could compete round the world. Here was the biggest gas utility in the world, and it was not allowed to operate outside the UK. With that size and those skills it should be able to compete abroad. Nor could the corporation pay proper salaries. The Government [had] imposed salary levels. . . Sir Denis Rooke [the Chairman] realized that. . . privatization would mean an end to interference [from the Treasury in particular] and the long meetings in Whitehall. He was going to be able to make his own decisions and fix his own capital investment programme. Walker thought that ‘Rooke was the best nationalized industry Chairman I met. . . When he went into the private sector, it was easy for him to adapt. He could devote all his time to running the business.’154 Against the wishes of Lawson and, as it turned out, the Prime Minister,155 Rooke had been handed a private monopoly, if one subject to a regulatory regime, run by Ofgas in this instance. Walker recorded that the sale of British Gas ‘produced the biggest application for shares in the history of mankind’.156 The eventual roll call of privatizations by share offer under the Thatcher Governments illustrated the scale of activity: British Aerospace (1981), Cable and Wireless (1981), Amersham International (1982), Associated British Ports (1983), Enterprise Oil (1984), Jaguar (1984), British Telecom (1984), British Gas (1986), British Airways (1987), Rolls-Royce (1987), the British Airports Authority (1987), British Steel (1988), and the regional water companies (1989). The share issues relating to the privatization of the electricity supply industry took place under the Major Government,157 though the plans had been made and the legislation passed during Mrs Thatcher’s period of office. She thought that particular privatization was ‘the most technically and politically difficult’,158 though water privatization proved controversial too. With the relevant Secretary of State, Nicholas Ridley, under fire


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in 1989 the relentless Lawson favoured him with a statement of his philosophy on the matter. First, ‘all experience shows that businesses are more efficient and successful in the private than in the public sector’. Second, ‘the water and sewerage industry is a business like any other’. Third, ‘a quarter of the industry is already in the private sector’. Fourth, ‘of course, it will need regulation. . . but it is far better for the State’s responsibility to be clearly confined to that of regulator rather than to have the existing conflict of interest when it is both regulator and producer’. Fifth, ‘even though water is a natural monopoly, the privatized water industry will still face (a) competition for capital in the private sector and (b) a published share price – a comment on performance and a powerful spur to management’. Sixth, ‘privatization not only widens share ownership (desirable in itself) but increases employee share ownership, which previous privatizations show tends to lead to further improved performance’.159 This note from one true believer to another need not convince anybody else of the superiority of private ownership, and it did not mention one important advantage of the privatization programme. It denied the direct access to public expenditure that the unions had previously enjoyed under nationalization in the industries and services concerned, and it was a desire to bring to an end State subvented syndicalism that was an important motive behind the Thatcher Governments’ determination to break the power of the union movement.

The attack on trade-union power ‘The Acts of 1871, 1875 and 1906’ put the trade unions ‘in a position that in many ways placed them beyond the rule of law’, a prominent group of Conservative lawyers had stated in 1958, declaring that the time had come for the unions to be brought within the law.160 Their pamphlet was called A Giant’s Strength, and in the twenty years following its publication the strength of the trade unions had been demonstrated again and again. Since, as Douglas Hurd wrote, ‘the brutal exercise of trade union power’ had undermined the Heath Government,161 this raised the obvious question of how the next Conservative Government could avoid being destroyed too. So, Mrs Thatcher gave a group led by Nicholas Ridley the task of working out a strategy to deal with the public sector unions in particular. The Ridley Group warned Mrs Thatcher that there would be a major challenge to the next Tory Government in its first or second year from the union movement, and the Group feared that it would occur in a ‘vulnerable industry’ such as coal, electricity, or the docks with the support of ‘the full force of Communist disrupters’. The Group argued that ‘the eventual battle should be on ground chosen by the Tories in a field they think could be won (railways, British Leyland, Civil Service, or steel)’. The Report wanted every precaution to be taken against a challenge in electricity or gas, but the Group believed that ‘the most likely battleground


will be the coal industry’. So, they wanted a Thatcher Government to ‘build up maximum coal stocks particularly at power stations: make contingency plans for the import of coal; encourage the recruitment of non-union lorry drivers by haulage companies to help move coal where necessary; and to introduce dual coal/oil firing at all power stations as soon as possible’. The Group believed that ‘the greatest deterrent to any strike would be to cut off the money supply to the strikers, and make the unions finance them, though strikers in the nationalized industries should not be treated differently from strikers in other industries’. The Group recommended that ‘there should be a large, mobile squad of police equipped and prepared to uphold the law against violent picketing’.162 ‘The task of the next Tory Government – national recovery – will be of a different order from that facing any other post war Government’ because ‘recovery requires a sea change in Britain’s political economy’. So stated the opening words of the Stepping Stones report, adding: ‘There is one major obstacle – the negative role of the trade unions. Unless a satisfying and creative [union] role can be developed, national recovery will be virtually impossible’.163 Support for the thesis of John Hoskyns and Norman Strauss came from Whitelaw, who believed that ‘there was no option but to tackle the union issue head on’. Whitelaw thought that the Tories might well win the next Election, even without facing the union issue, but he agreed that failure in office would follow and defeat at the subsequent Election would then be inevitable. Whitelaw warned Hoskyns that big business would be totally opposed because ‘they prefer the quiet life and will take the short view’.164 Hoskyns and Strauss seemed to think the same of several of the leading Conservatives, but the unions’ role in bringing down the Callaghan Government undermined those opposed to the Stepping Stones approach, though the manifesto commitments made were limited to moderate sounding measures to deal with picketing, the closed shop, and to encourage wider participation by members in union affairs.165 James Prior had been surprised to be made Secretary of State for Employment in May 1979,166 and so the only member of Mrs Thatcher’s economic team ‘who was not of the Monetarist Right’.167 However, Prior recognized that there were ‘advantages in me being seen to hold back the baying hordes of the Party’s right wing. It was an uncomfortable stance, but it made me look the reasonable man and therefore difficult for the TUC to attack.’168 Prior was determined to avoid the ‘wholesale approach’ of the Industrial Relations Act of 1971,169 and adopted a ‘step by step’ approach.170 Prior’s Employment Act of 1980 had five main provisions. Firstly, the Act restricted lawful picketing to the pickets’ place of work and outlawed secondary picketing. Secondly, the Act restricted immunity for secondary action only to those with a direct interest in the original dispute. Thirdly, the Act made the closed shop conditional upon approval by 80 per cent of the workers covered by it. Fourthly, the Act banned the dismissal of a worker who conscientiously objected to union membership or


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a closed shop, and provided for compensation. Fifthly, the Act made public funds available for the conduct of union ballots.171 The Prime Minister found Prior’s approach frustrating as she showed in February 1980 when she announced, on her own initiative, that in future strikers claiming social security benefits would be deemed to be receiving strike pay with the level of benefits being reduced accordingly, and the change was made in the 1980 Budget.172 When Prior was removed from the Department of Employment in September 1981, the Prime Minister replaced him by Norman Tebbit. It was Tebbit’s opinion that ‘too few reformers had faced the fact that the power of the trade unions is based on the privilege of immunity from liability in tort. Broadly that means unions have licence to commit unlawful acts without those who suffer loss as a result being able to sue for damages or seek an injunction requiring the mischief to be ended’.173 Tebbit drew up a package of reforms that was ‘carefully designed and did not of itself compel the unions to do anything. . . nor did it create a complex new legal structure – it simply tilted the balance of power away from the unions by chipping away the privileges and immunities which gave them their ability to ride roughshod over the legitimate rights of the general public.’174 The Employment Act of 1982 had five main provisions. Firstly, it made the trade unions liable to injunctions and damages if its officials called for an unlawful industrial action. Secondly, it permitted employers to dismiss strikers even if the dispute was a legal one. Thirdly, it made occupations and ‘sit-ins’ illegal. Fourthly, it outlawed ‘union labour only’ contracts. Fifthly, it increased compensation for those dismissed for not being a union member, and tightened the procedures for approving a closed shop.175 Tebbit’s successor at the Department of Employment, Tom King, was responsible for the Trade Union Act 1984, which had five main provisions. Firstly, it broadened the categories of those entitled to sue a union for damages. Secondly, it ensured that legal industrial action should be preceded by a ballot. Thirdly, it required that all members of a union executive should be elected by secret ballot, at least every five years. Fourthly, it provided that all union political funds should be confirmed by ballot, the process being repeated at intervals of not more than ten years. Fifthly, it tightened the regulations covering the use of union political funds in pressure group and electoral activity.176 While it was changing the legal framework that regulated industrial relations, the Thatcher Governments had to confront a series of strikes, mostly in the public sector, where the unions and their members felt less intimidated by rising unemployment. In January 1980, the workers in the public sector of the steel industry went on strike for the first time since 1926, and, when what was then the longest national strike since 1945 ended three months later, the Iron and Steel Trades Federation had been defeated by the Government.177 The strike in the Civil Service lasted from January to July 1981, with Prior incredulous about the lengths to which the Prime Minister was prepared to go


in order to win.178 The Government defeated the railway unions as well as a National Health Service strike that lasted for eight months in 1982,179 though The Economist was less than impressed by the settlement that brought to an end a dispute in the water industry in 1983, and under the heading ‘Burst Main’ called for ‘job shedding’ among the water workers of the kind that British Steel had come to engage in.180 To the extent that she had a choice, Mrs Thatcher actually selected her opponents well, and she knew when to buy off the National Union of Mineworkers (NUM) when there was a threatened strike over coal mine closures in February 1981.181 When meeting the Prime Minister after taking over as Chairman of the National Coal Board in 1983, Sir Ian MacGregor asked her if there were substantial coal stocks in reserve compared with two years before, and almost six months’ supply had been accumulated. ‘It was the only prudent thing to do – especially since Arthur Scargill took over as the miners’ leader,’ Mrs Thatcher replied, ‘The threat of confrontation is now far greater. But it would be tragic for this country, just as it is beginning to see some progress towards economic recovery, to be brought to a standstill by a man like Scargill, who is, after all, a Marxist revolutionary – going under the guise of a normal trade union official.’ MacGregor knew about Scargill’s declared ambition to use extra-Parliamentary means against the Conservative Government, and to oppose the further rationalization of the coal mining industry, and that, therefore, the NUM President was waiting for his opportunity to call a strike.182 What astonished MacGregor was the timing of the strike for March 1984 with coal stocks still high at the pits and at the power stations,183 and then, unsure that the rank and file would support an all out strike, Scargill did not call a national strike ballot as stipulated in the union’s rule book. The strategy was to force the less militant areas out on strike by the use of flying mass pickets and appeals to solidarity. The Nottinghamshire miners decided to hold a ballot of their own, and, as 70 per cent voted against the strike, they carried on working with police protection from picketing.184 The police were better organized than in the NUM strikes in the 1970s, with a National Reporting Centre at Scotland Yard to co-ordinate action, and with a system of Police Support Units.185 When, at the Orgreave coking plant near Rotherham in June 1984, Scargill tried to emulate the symbolic victory by mass picketing at Saltley in 1972, he chose a location that the police described as ‘almost ideal for us’, and defeat ensued.186 When the ineptly led NUM finally capitulated after twelve months, Benn wrote in March 1985 that ‘the strike has been a monumental and titanic struggle. . . [the] use by the Government of the apparatus of the State to crush the miners has been on an unprecedented scale’.187 The NUM was soon in financial difficulties and forced to seek a merger with the Tronsport and General Workers’ Union (TGWU).188 There were other important industrial disputes such as that between the printing unions and News International at Wapping, which ended in the unions’ defeat in February 1987; but the crushing of the NUM – ‘the Praetorian Guard of the Labour


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Movement’189 – was the critical victory for the Government. Further legislation such as the Employment Acts of 1988, 1989 and 1990 only confirmed this victory. The Thatcher Governments had needed to crush union power not just for party political reasons and to safeguard the political system, but because the Prime Minister and those who shared her economic philosophy believed that solving the union problem was the key to the recovery of the British economy. There was soon a heated debate among economists and writers on industrial relations about whether or not a productivity miracle had taken place, or even an economic miracle, or a supply-side revolution, or all of them, and there was also a debate about whether or not management prerogatives had been restored or needed to be, and about whether or not means of pay determination and workplace relations had changed.190 Workplace relations were the subject of officially commissioned studies, with surveys conducted in 1980,191 1984,192 1990 and 1998. Not all the findings were what the Conservative Government wanted to hear, given that a companion volume to the 1984 survey about technical change ‘found no evidence that the rate or form of change was inhibited by trade union organization’, though ‘it did appear that systems of management or the nature of management structures were associated with the propensity of workplaces to innovate’.193 Nevertheless, the general trend in workplace industrial relations was in the direction that the Thatcher Government wanted. ‘The fact that fewer workplaces had recognized unions in 1990 than in 1980 was our strongest evidence of the decline in collective bargaining as an institution’, the third survey reported, ‘The fall was stark, substantial and incontrovertible’.194 Those who conducted the 1998 survey recalled that the Conservative Government that came to office in 1979 confronted a system of collective employment relations that was dominant though not universal. It pervaded the whole of the public sector, including the then extensive nationalized industries, and it covered large parts of the private sector, especially manufacturing industry and large employers generally. That system of collective relations, based on shared values of the legitimacy of representation by independent trade unions and of joint regulation, crumbled in the intervening eighteen years to such an extent that it no longer represents the dominant model. True, the substantially reduced public sector still operates that model to a large degree. But in the far larger private sector of the economy, joint regulation is very much a minority activity. The change was almost wholly in the direction that the Conservatives had wanted public policy to go, which was to ‘curb the power of the unions’, and the 1998 survey found that in comparison with 1980 union influence had diminished. On such matters as the closed shop and industrial


action, the direct impact of legislation was evident; but the Government had only indirect influence compared with economic pressures in the case of the decentralization of bargaining structures in the private sector, and the increasing recognition of workplace and organizational performance in determining levels of pay. The structures and conduct of British industrial relations had been transformed since 1979, mainly as a result of legislation, with union power diminished in the workplace,195 and as a force to be reckoned with in the wider conduct of British politics.

5 The Economic Liberal Crusades II: The Recasting of the Welfare State

Only one ‘social revolution’ ‘It is a familiar truism to say that the Conservative Party has been in existence much longer than the Labour Party [but] it is a less familiar proposition that Conservative concern for and involvement in what we nowadays call welfare politics has been much more marked, and much more effective, than that of any rival party’, Mrs Thatcher wrote in 1977, adding: ‘Practically every measure of social amelioration passed through Parliament in the nineteenth century was passed by Conservatives. . . The greatest social reformer of the period was the Tory, Lord Shaftesbury. . . it was the Tories who. . . sought to mitigate the rigours and the consequences of the Industrial Revolution.’ Mrs Thatcher denounced ‘the uncaring dogmas of socialism’ and declared: ‘Once everything is provided and controlled by the State, the voice of the individual is silenced, the ability to choose eliminated. . . I believe that only the Conservative principles of thrift and industry will provide that stability of provision which alone can provide shelter for the vulnerable. And I believe that only a free society can hope to be a truly compassionate one.’1 Nobody with much sense doubted that the Conservative tradition involved a commitment to State social provision, or that the Tories had displayed this in opposing the nineteenth-century Liberals as well as by promoting various pieces of legislation of their own. The point was, though, that, in embracing economic liberalism, Mrs Thatcher often sounded like a nineteenth-century Liberal. Further, the very notion of the word ‘thrift’ was a reminder that the Keynesian era was over. There could be few illusions about the relationship between ‘sound money’ and, say, social security provision. After all, in the 1920s, Neville Chamberlain had drawn up plans for what was called ‘All-in Insurance’ that were never full implemented. There was the Widows, Orphans and Old Age Contributory Pensions Act of 1925,2 of course, commonly described as the halfway house between the Liberal reforms after 1906 and the Beveridge Report. Why, though, stop halfway? The answer 105


was ‘sound money’, in other words the cost, which was not to be such a consideration under the Keynesian dispensation with its relatively indulgent attitude towards public expenditure. With Keynesianism dead, if not its spirit, the Welfare State seemed vulnerable by 1979, with full employment gone, and, importantly, the conventional family structure in difficulties. Mrs Thatcher knew where the blame lay: ‘welfare benefits, distributed with little or no consideration of their effects on behaviour, encouraged illegitimacy, facilitated the breakdown of families, and replaced incentives favouring work and self reliance with perverse encouragement for idleness and cheating.’ Not surprisingly, Mrs Thatcher believed that ‘to cure the British disease with socialism was like trying to cure leukaemia with leeches’,3 but, as she showed herself to be aware, State social provision was part of the Conservative tradition too. She herself referred to the Balfour Education Act of 1902,4 which had benefited her own educational advancement, and acknowledged too the Butler Act of 1944,5 which benefited others. The Family Allowances Act of 1945 had been close to Tory sentiment at that time, but the Thatcher Governments allowed child benefit to ‘wither on the vine’, as well as Budgetary policies of fiscal neutrality which treated marriage as not mattering, whereas the costs of the undermining of the institution were among the obvious reasons why social security spending was to outstrip even the growth of expenditure on the National Health Service. One poverty trap that the Thatcher Governments did manage to avoid was that of defining poverty in relative terms,6 but this did not mean that there was anything resembling a relentless attack on social security in the Thatcher years. Indeed, fatalism characterized much of the Government’s behaviour. ‘What I wanted to do was to ensure that the social security budget was being spent to best effect’, recalled Norman Fowler, the Secretary of State responsible for a supposedly radical review, ‘It was easy to become mesmerized by the size of the budget, but when you looked at it in detail you found that almost half of it went on pensions and other payments to the elderly; that 20 per cent went to families with children; 17 per cent went to the unemployed; and that 13 per cent went to the sick and disabled. The spending may have been great but it was not being devoted to thousand upon thousands of undeserving and feckless claimants.’7 There was no sign here of what Titmuss had called the Residual Welfare (or Public Assistance) Model, ‘based on the premise that there are two ‘natural’ (or socially given) channels through which an individual’s needs are properly met; the private market and the family. Only when these break down should social welfare institutions come into play and then only temporarily [since for economic liberals] ‘the true object of the Welfare State is to teach people how to do without it’. The theoretical basis of this model can be traced back to the. . . English Poor Law, and finds support [from] sociologists like [Herbert] Spencer. . . and economists like Friedman, Hayek and the founders and followers of the IEA.’8

The Recasting of the Welfare State 107

In the autumn of 1987, in an interview, Mrs Thatcher made her most famous statement about society, declaring: I think we have gone through a period when too many. . . people have been given to understand ‘I have a problem, it is the Government’s job to cope with it!’. . . So they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no Government can do anything except through people and people look to themselves first. It is our duty to look after ourselves and then also to look after our neighbour. Then again: There is no such thing as society. There is [a] living tapestry of men and women and people and the beauty of that tapestry and the quality of our lives will depend upon how much each of us is prepared to take responsibility for ourselves and each of us is prepared to turn around and help by our own efforts those who are unfortunate.9 Mrs Thatcher’s critics thought nothing of leaving out such material in this instance which did not suit their case against her, and not surprisingly so since her remarks considered more fully displayed idealism. A believer herself, Mrs Thatcher was not averse to confronting her Christian critics, as in the Sermon on the Mound, the nickname given to her address to the Church of Scotland on 31 May 1988. Earlier, the Church of England had not been able to hide its antipathy towards the Government, though it was his views on theology that ensured that when the chief troublemaker Professor David Jenkins was consecrated as Bishop of Durham in July 1984 the ceremony was disrupted by protests. The Spectator recorded that ‘four days later the roof of the south transept of York Minster was consumed by a fire apparently started by lightning’.10 Like some others, the journal seemed to want to connect the events, not least because the Bishop was said to have ‘[theological] views the Church would until recently have condemned as heretical’.11 The Bishop’s political views proved to be of the ‘print money’ to ‘cure’ unemployment type combined with a vision of the future comprising ‘a labour intensive caring society’.12 A Church of England document, Faith in the City, published in late 1985, advanced the familiar thesis that ‘the State should be throwing more money’ at ‘poor inner city areas’, in response to which the Government was well described by The Economist as seeming ‘torn between thinking (a) that it should be doing no such thing and (b) that it [was] doing exactly that already’.13 It was as early as January 1980 that Mrs Thatcher had argued that ‘no-one would remember the Good Samaritan if he’d only had good intentions; he had money as well’.14 Those who passed by may well have


had money too, but the Good Samaritan gave his time and made an effort, which entailed risk to himself, as well as providing money. The behaviour of the Anglicans was such that they effectively thought that the message of the parable in Luke Chapter 10 verses 26–37 had too few takers in the modern world for private philanthropy to compensate more than marginally for ‘cuts’ in public expenditure, and so they looked to the State.15 Mrs Thatcher was predicating that there would be sufficient Good Samaritans to go around whereas her opponents had admitted defeat. ‘By the time I left office my advisers and I were assembling a package of measures to strengthen the traditional family whose disintegration was the common source of so much suffering’, Mrs Thatcher wrote, and while she recognized that ‘we had not the slightest illusion that the effects of what could be done would be more than marginal’,16 the aim was to reduce crime and curb welfare dependency.17 If the boundaries of State activity in terms of social provision were to be rolled back, then it was obvious that the interests of the traditional family as an institution had to be promoted, and the time to devise such a policy was in Opposition, and not almost as an afterthought, and including at the outset – as Mrs Thatcher herself would have preferred – returning to a system including child tax allowances. It seemed that ‘fiscal purists in the Treasury’ obstructed her in that instance,18 though opposition was overridden in the case of what became the Child Support Act of 1991. ‘I was. . . appalled by the way in which men fathered a child and then absconded, leaving the single mother – and the taxpayer – to foot the bill for their irresponsibility and condemning the child to a lower standard of living’, Mrs Thatcher recalled, ‘I thought it scandalous that only one in three children entitled to receive maintenance actually benefited from regular payments. So – against considerable opposition from Tony Newton, the Social Security Secretary, and from the Lord Chancellor’s Department – I insisted that a new Child Support Agency would be set up, and maintenance be based not just on the cost of bringing up a child but on that child’s right to share in its parents’ rising living standards.’19 What Mrs Thatcher’s behaviour showed was that, despite all the fuss about her supposedly humble origins, she knew less than she thought about male behaviour at the lower end of society. The Child Support Agency might well catch up with responsible males and do all sorts of things to them like renegotiate divorce settlements, but the irresponsible would be on their way and out of reach. Similarly, when it came to the broader issue of means testing, one Tory MP pointed out in relation to Fowler’s review of social security that it was ‘entirely opposed to. . . Conservative philosophy that those people who manage to save a little day by day are worse off when it comes to a whole range of benefits than those who have been unable or have not cared to do so.’ Fowler responded by saying that ‘these are principles. . . which we want to strengthen’,20 but such initiatives as were engaged in did not radically


change the balance of advantage against those shrewd enough to work the system. The then Prime Minister may well have deserved high marks for refusing to indulge in the cosmetic changes in the machinery of central government that had disfigured the Wilson and Heath years, but the bureaucratic empire that was well worth breaking up long before it was done in 1988 was the Department of Health and Social Security. ‘I was now in charge of the biggest spender and largest employer in Whitehall’, Norman Fowler reflected on his appointment as Secretary of State for Social Services in 1981, ‘Created in 1968 to give Dick Crossman a new and senior job, the DHSS was responsible for over 40 per cent of all public spending. It employed almost 100,000 people directly, mainly in our social security offices, and was responsible for the National Health Service – which, with almost a million staff was the largest employer in Europe.’21 Plainly, far from relentlessly pursuing a New Right agenda, in relation to the NHS, and, as it turned out, social security too, Mrs Thatcher and her Governments were too aware of electoral realities to act in a radical manner. In the sphere of education, the same caution was in evidence, since in relation to schooling, for example, it was no secret what many Tories believed needed to be done, even if Mrs Thatcher herself had other ideas. ‘Some years earlier the Labour Party’s strategists had correctly identified the grammar schools as the most important escape route from the socio-economic prison in which able children of working class parents are held’, Norman Tebbit wrote, ‘Then with the connivance of upper-class socialists within the Conservative Party, most notably Edward Boyle. . . they set about their destruction.’22 The Thatcher Governments did not restore the grammar schools, and neither did they introduce arrangements that linked schooling with paying for it, without which, some on the Radical Right would say, it would not be valued. That said, though, the Thatcher Governments were very active in relation to education, with much of that activity causing considerable resentment, notably in the case of the universities. Housing was to be the area of social policy in which the Thatcher Governments made what their supporters at least defined as the greatest advances. The sale of council houses came to be popularly seen as a trademark Thatcher policy, but there were other authors. The Housing Act of 1980 laid ‘the basis for perhaps as profound a social revolution as any in our history’, Michael Heseltine claimed, ‘Certainly, no single piece of legislation has enabled the transfer of so much capital wealth from the State to the people.’23 What the Conservative Government was doing was ‘designed to turn Britain into two housing nations’, Roy Hattersley argued from the Opposition benches,24 but, in terms of house ownership and rental it was at least that already. The winners in most cases were the owner occupiers, and the Thatcher Governments pursued the classic Tory aim of a ‘property owning democracy’ with relish.


Housing: the jewel in the crown ‘I cannot in this matter claim to be introducing any new principle’, Harold Macmillan said to the House of Commons in relation to provisions in what became the Housing Act of 1952 relating to the disposal of council houses, ‘For the local authorities have always had, under the existing law, the power to dispose of their houses with the consent of the Minister. . . [and] if there was any new principle [it was that] introduced by [the Attlee Governments] when they announced that as a matter of policy that they would not give consent to any such houses being sold or leased. . . we disagree with this view.’25 What Macmillan was doing was to ‘withdraw the general prohibition’,26 and selling off council houses was only to be a small part of what became his famous housing drive, which was often characterized by the creation of huge council estates that proved to be Labour citadels. By the 1960s, though, the Tory council in Birmingham led by Sir Frank Griffin was promoting the sale of council houses, and the Conservative Party Conference took up the issue and Labour obstruction of the policy was denounced, and there was evidence that the policy was popular.27 Among Harold Wilson’s advisers in the 1970s, there was work done on a scheme to promote council house sales, but it did not attract the support of Crosland, the relevant Labour Minister at the relevant time. The Left was hostile, leading one of the scheme’s authors to comment that ‘although they themselves personally often enjoyed the pleasures and benefits of living in their own Hampstead homes, they were dogmatically committed to denying these pleasures and benefits to council tenants’.28 So, the field was left to the Conservatives and, more specifically, Peter Walker. Promises had been made in the February and October 1974 Tory manifestos to press ahead with these sales,29 but the main credit for the programme designed to bring about what he once called ‘the Liberation of the Permanent Tenantry’30 belonged to Walker. He recalled that in office [in the Heath Government] I had decided we would give council house tenants a 20 per cent discount if they wanted to buy the homes in which some had been living for fifty years or more. . . but we. . . sold only a small proportion of all council homes in Britain. The best council houses had gone to the wealthiest tenants. Administration and repair of council houses cost a fortune, [indeed] the cost was greater than the rents. My proposal was that we should tell council tenants they could become owners of their council houses straight away. If they had been tenants for a long period they would get the house for nothing. That was a small proportion, however. Everyone in the Press described it as a give away. It never was that. If tenants had been in council housing less than thirty years, their rent would be treated as a mortgage repayment for the balance of the thirty years. The scheme took into account how long a family had been tenants and made sure their payment would never be more than the old rent, but


tenants did have to do the repairs. I thought most council house owners would be able to organize repairs with the help of relatives and neighbours. It might be part of the black economy but it would happen. You would have dismantled this costly bureaucracy and an inefficient repair service. Everybody, from day one, would become an owner-occupier. The whole scene would be transformed. That said, though, when in Opposition, Walker was cross-examined about his plans by a committee chaired by Hugh Rossi, it was clear that Margaret was against it because she felt it would upset ‘our people’ who had struggled to pay their mortgages. Suddenly, these other people would be getting their homes much cheaper. But all you had to say to ‘our’ people was that ‘these’ people would have the responsibility for repairing and maintaining their houses and that this would save hundreds of millions of pounds in public expenditure. ‘Our’ people would be delighted. Margaret’s political judgement on this point was wrong. I knew I was right and eventually I persuaded her to adopt a very similar scheme.31 ‘Many families who live on council estates and in new towns would like to buy their own homes but either cannot afford to or are prevented by the local authority or the Labour Government. The time has come to end these restrictions’, the Conservatives declared in their manifesto in 1979: In the first session of the next Parliament we shall therefore give council and new town tenants the legal right to buy their homes, while recognizing the special circumstances of rural areas and sheltered housing for the elderly. Subject to safeguards over resale, the terms we propose would allow a discount on market values reflecting the fact that council tenants effectively have security of tenure. Our discounts will range from 33 per cent after three years, rising with length of tenancy to a maximum of 50 per cent after twenty years. We shall also ensure that 100 per cent mortgages are available for the purchase of council and new town houses. We shall introduce a right for these tenants to obtain limited term options on their homes so that they know in advance the price at which they can buy, while they save the money to do so. As far as possible, we will extend these rights to housing association tenants. At the very least, we shall give these associations the power to sell to their tenants. Those council house tenants who do not wish to buy their homes will be given new rights and responsibilities under our Tenants’ Charter.32 Since ‘the Right to Buy was by far the most radical pledge and, as one of the core promises of the Election campaign, the legislation to allow the sale of


council houses. . . would inevitably command centre stage’, Michael Heseltine, the then Secretary of State for the Environment, was later to write, ‘But John Stanley [the Minister of Housing] and I had a wider agenda. We set out to address the problems of the nation’s housing across both public and private sectors.’33 The Tory Government was soon accused of ‘promising something for everyone’ when it came to housing, according to The Economist, ‘Landlords will be able to recover their property from tenants quicker; owner occupiers will find it easier to get grants for roof and brickwork. Council tenants will be given the right to buy their homes and even if they do not, the right to paint their front doors purple.’34 Heseltine was well-aware that ‘the political spotlight was sharply focused on Right to Buy’, and as a belt-and-braces approach, I asked officials to find the sharpest barrister they could and brief him as though he had been retained by an extreme left-wing council with infinite resources and with an absolute determination to break our proposed legislation. His job was to tell us if and how he would do it. These rather over-dramatized instructions would in all substance be precisely how Labour councils would so instruct their legal advisers. We got there before them. Before long, we received word that our in extremis lawyer had, indeed, bust our proposed legislation. But, for the same fee, he had also shown us how to close the loophole. As expected, local councils did try to obstruct the relevant provisions of the Housing Act of 1980, and, when it came to the use of default powers, Heseltine and Stanley waited ‘until Michael Havers [the Attorney General] advised us that he thought the evidence against one particular authority, Norwich, gave us an overwhelming chance of success. We had been right to wait. When we finally went to court, we won hands down, although we had to fight the matter through to the High Court.’ Heseltine believed that the political consequences that flowed from the success of this policy were epoch making. Giving tenants the right to buy their houses and flats was an exercise in mass compulsory conveyancing that had never been attempted anywhere else in the world before. For the vast majority of tenants who purchased, it was the deal of a lifetime [and what had been achieved] was a quiet revolution within the ranks of Britain’s property owning classes. . . We had begun to break up the monolithic local authority estates and to create a less polarized society.35 The sale of council houses and flats proved to be the most successful privatization of the period of the Thatcher Governments, with receipts amounting to more than the sale of British Telecom and the gas and the electricity industries combined. By 1990, almost 1.5 million council houses and flats had been sold off.36


Before 1914, the private rented sector accounted for about 90 per cent of the housing stock in Britain, and even in 1950 it was still the most common form of housing tenure, but by the end of the Thatcher era the proportion was down to about 10 per cent of the housing stock in England and 6 per cent in Scotland.37 Rent control was first introduced by the Increase of Rent and Mortgage Interest (War Restrictions) Act of 1915 following an outcry against rising rents in Glasgow,38 One explanation of the subsequent fate of the private rented sector was that it became a victim of the transition from local capitalism to a more national and international phase of capitalism,39 and other important factors were that rising incomes eventually encouraged people to think in terms of owner-occupation, not least because of fiscal incentives, together with the development of council housing, while important too was slum clearance because most slum housing was privately rented.40 Most important of all, though, was the political reality that landlords were far less numerous than tenants, and the latter had other uses for their money than paying anything resembling an economic rent for somebody else’s property. In such circumstances, the Rent Act of 1957 had been an isolated economic liberal venture, and the situation that the Conservatives inherited in 1979 was one in which ‘there are now hundreds of thousands of empty properties. . . which are not let because the owners are deterred by legislation. We intend to introduce a new system of shorthold tenure which will allow short fixed term lettings of these properties free of the most discouraging conditions of the present law. This provision will not, of course, affect the position of existing tenants.’41 According to Heseltine, behind the rather dry rhetoric, what we were promising was the most ambitious reversal of the private rented sector since the introduction of rent control. . . Our first change was to introduce ‘controlled’ rents, whereby the minuscule rents dating back to the First World War rent controls which had done so much to create the urban slums were replaced by more realistic rents under the guidance of the local authority. Next we brought in our promised shortholds. . . We wanted landlords to be able to let their properties at market rents for a fixed term under a shorthold lease. At the expiry of that term and with appropriate notice, the landlord would become entitled to vacant possession. The Tory Government made various concessions to the Labour Party, but it only dropped its opposition after its defeat in the 1983 Election. ‘The market that emerged heralded the beginnings of a new, healthy, private rented sector [in Britain] for the first time since the First World War’, Heseltine believed, especially when added to it arrangements, derived in part from how own experience as a landlord, for what was called an ‘assured tenancy’ which offered tenants ‘fixed term leases. . . in newly built property at market rates’.42


Further, and with Heseltine having moved on, the Housing and Planning Act of 1986 gave local authorities powers to get rid of blocks or whole estates to private developers. The Act made provision for authorities to remove tenants against their will if necessary in order to sell off these blocks and estates with vacant possession, although such tenants had to be given suitable alternative accommodation.43 Entire blocks of high-rise flats were sold off, with, for example, the Moravian Tower in Kensington and Chelsea being refurbished to provide exclusive housing for the expanding professional classes, with one feature in that development being hanging gardens planted on every third floor set behind a glazed atrium.44 Similarly, in Wandsworth, blocks were renovated and provided with gyms, six-foot fences around the buildings, lifts and video security, and it seemed that ‘no one quite seemed to know where those who had lived there before had gone’.45 Of Birmingham, it could be said that ‘in certain areas, and particularly in the outer wards with attractive wards with gardens, council estates have changed significantly and have become mixed tenure estates. . . But in other areas, and particularly inner city estates with high numbers of flats and maisonettes, the picture is very different. They remain largely one tenure estates. Those on the social and economic margins such as the homeless and unemployed have been increasingly funnelled into these estates.’46 Of course, homelessness was not a new issue, given that Cathy Come Home the famous television programme on the subject was first shown in 1966, and the classic study of Homelessness in London was published five years later.47 Overall, by the late 1980s, the statistics suggested that it was less difficult for people to get housed than in the early 1970s, and yet also by the late 1980s the number of households accepted by local authorities in England for rehousing because they were homeless doubled compared with ten years before, with the major rise being after 1982. The statistics reflected a change in the means by which people gained access to council housing as much as representing an index of the failure of supply in relation to demand. There were no reliable statistics for the literally roofless, and in 1989 a Salvation Army study estimated that on one night in London there were 75,000 ‘overtly homeless’ people in London.48 ‘There was a persistent tendency in polite circles to consider all the “roofless” as victims of middle class society’, Mrs Thatcher noted, while declaring that ‘crowds of drunken, dirty, often abusive and sometimes violent men must not be allowed to turn central areas of the capital into no-go zones for ordinary citizens’.49 Commentators tended to portray the problem of homelessness, however defined, as a recent invention, with the sale of council housing and the decline in house building for the public sector tending to be blamed,50 rather than obvious factors such as high levels of unemployment and the effects of the policies of family breakdown pioneered in the 1960s. In the immediate aftermath of the Thatcher era, it was evident that the percentage of home owners had risen from 57 per cent to 68 per cent in terms of housing tenure, with the rest of the market being accounted for by


local authorities, down from 30 per cent to 22 per cent, housing associations, up from 2 per cent to 3 per cent, and the private rented sector down from 11 per cent to 7 per cent, which meant that in the short run at least the attempt to revive it had failed badly. The rapid growth of home ownership in the 1980s was largely accounted for by provision for the Right to Buy. ‘Many councils in the south of England lost close to half their stock’, one commentator reported, ‘The average net reduction in council stock in the south east excluding London was 28 per cent, compared to only 18 per cent in Scotland. The second greatest reduction of 25 per cent was in Wales, while the contraction in London was only slightly greater than for Scotland.’51 The most important policy differences between the period before and after 1979 were well-described in terms of the shift from general subsidies for public housing towards higher rents and more spending on housing benefit and the Right to Buy, with not only the local authorities’ share of the housing stock but also net public expenditure on housing also declining markedly after that date. Even though the cash limit on mortgages eligible for tax relief threatened the future arrangements, the Thatcher era was characterized by tax concessions to owner-occupiers, which in real terms more than doubled in value compared with the days of Heath.52 Though this meant only too often that to those who already had a great deal even more would be given, and high interest rates were to emphasize that there was a price to pay, for a fortunate minority the Thatcher Governments did live up to Heseltine’s boast made in mockery of the authors of the 1974 Labour manifesto that council house sales would mean ‘an irreversible shift of wealth in favour of working people and away from the State’.53

‘Saving’ the National Health Service The Merrison Royal Commission on the NHS, set up by the Labour Government, and reporting in July1979, observed that such were the demands for more spending on the NHS made in evidence to it that ‘we had no difficulty in believing the proposition put to us by one medical witness that “we can easily spend the whole of the Gross National Product”’.54 When, in Opposition, a group led by Lawson drew up proposals for the reform of the NHS. As he recorded: understandably, Margaret would not touch them with a bargepole. The provision of health care is an issue where the intractability of the problems is matched only by the acute political sensitivity of the issue. The intractability stems chiefly from the fact that the demand for health care, particularly if it is to embrace caring as well as curing, is infinite. . . There is no limit to the demand for health care; and as medical science progresses, and new treatments are discovered, the demand grows still more and the cost of meeting it rises even faster.


Lawson recalled how often, despite the actual facts of extra expenditure on the NHS in real terms and how many more doctors and nurses there were compared with when the Tories had taken office, ‘at Prime Minister’s Questions every Tuesday and Thursday afternoon, Margaret had thrown at her case after case of ward closures, interminably postponed operations, and allegedly avoidable infant deaths, all of them attributed to Government parsimony.’ Then, there was the sheer size of the NHS, with Lawson believing it to be the third biggest employer and bureaucracy in the world, after the Indian railway system and the former Red Army. . . [Further] the NHS is the closest thing the English have to a religion, with those who practice in it regarding themselves as a priesthood. This made it quite extraordinarily difficult to reform. For a bunch of laymen, who called themselves the Government, to presume to tell the priesthood that they must change their ways in any respect whatever was clearly intolerable. And faced with a dispute between their priests and Ministers, the public would have no hesitation in taking the part of the priesthood.55 Those employed in the NHS were heavily unionized, and much of the debate about it was really concerned with self-interest, and this was the case with not just ancillary workers and the numerous officials, but also the doctors, nurses and the other professionals. It was a familiar pretence that ‘cuts’ had been made in the NHS, whereas, as Fowler observed, in reality the argument was about whether the Government had increased the budget enough. The NHS strike of 1982 was about employees seeking more pay for themselves, and about 70 per cent of the costs of the NHS were staff costs. It was not possible to run the NHS on the basis that ‘it costs what it costs’ but the unions thought otherwise. ‘Arrayed against me I had both the TUC-affiliated unions and the Royal College of Nursing, the professional organization representing the nurses’, Fowler recalled. At his side, as a fellow Minister, he had Kenneth Clarke. Fowler believed that they worked well together: ‘An aggressive visiting delegation would be dusted down by Ken in his best James Cagney style, leaving me looking untypically reasonable and friendly in bringing the meeting to a conclusion.’56 There were demonstrations and strikes in a dispute that lasted for several months, and there seemed to be no limit to the bitterness. ‘An editorial [in The Lancet] alleged that the Government would welcome headlines saying that a patient had died because it would swing public opinion against the unions’, Fowler observed, ‘It is a curiosity of medical politics that any charge, however gross, can be made against you. Unfortunately, not all health professionals take the objective standards of their medical training into their public and political comment.’57 Eventually, victory went to the Conservative Government, but not until December 1982. In November, the Royal College of Nursing had recommended their members to accept a proposed pay deal designed to drive a wedge between the nurses and the


other health unions, the Confederation of Health Service Employees and the National Union of Public Employees,58 and this strategy worked, despite the national executive of the former union recommending an all-out strike to their members without accident or hospital emergency cover, meaning that patients should be allowed to die. The delegates overwhelmingly rejected this, and the strike collapsed. ‘This surrender, after eight months of inflicting misery on hospital patients without getting much extra for their members [was] a crushing defeat for the trade unions’, The Economist declared, believing that ‘this could prove a historic British victory against wage inflation’,59 though the NUM strike was still to come. That still left the problem of what to do about the NHS, if anything. Fowler’s predecessor as Secretary of State, Patrick Jenkin, had asked the DHSS to examine the different ways in which Western European countries financed their health care. Fowler found that the results were predictable in that they showed that every country was facing an explosion in demand for health care and that each one was also spending substantial resources on health, and the review’s conclusion was that Britain’s centrally run, centrally financed system was the most effective in controlling costs.60 So, Fowler declared in July 1982 that ‘the Government have no plans to change the present system of financing the NHS largely from taxation, and will continue to review the scope for introducing more cost consciousness and consumer choice and for increasing private provision which is already expanding.’61 Nonetheless, on 7 September 1982, together with the other Cabinet papers a paper prepared by the CPRS was circulated, and made available to a wider public than the Ministers concerned by being leaked to The Economist, which then reported that the paper suggests replacing the NHS with private health insurance: this could save £3 billion–£4 billion a year from a 1982–3 health budget of £10 billion. The problem is that the less well off would underinsure, so the paper suggests that there might have to be a compulsory minimum of private insurance for everyone. In the meantime savings could be made by charging for visits to the doctor and more for drugs.62 Mrs Thatcher later wrote that ‘I was horrified by this paper’, though The Economist, whom she credited with publishing ‘a blow by blow account of discussions at Cabinet’,63 believed that in reality the Prime Minister had ‘shelved [the] report because she had met a Cabinet brick wall’. If that journal’s ‘insider’ account was to be believed there were plotters everywhere in the Cabinet.64 Howe thought that he as Chancellor and Brittan as Chief Secretary had to take a large share of the blame for how the exercise was handled, while believing that the ‘sacred cow’ status of the NHS had prevented serious discussion of its funding in relation to a prospectively slow-growing economy, with this assumption being ‘simplistically’ dismissed by Cabinet


colleagues as ‘typically negative Treasury thinking’.65 This assumption surely also implied that the overall economic strategy that Howe and the Government were pursuing would not work. Though what took place, according to Lawson, was ‘the nearest thing to a Cabinet riot in the history of the Thatcher Administration’,66 Fowler was to write that there was Cabinet unanimity in rejecting the CPRS’s proposals, and cited Mrs Thatcher’s subsequent assurance that ‘the NHS is safe with us’, with the issue never being raised again during his remaining five years at the DHSS.67 ‘Little John Moore is in trouble’, Alan Clark noted in January 1988, of the Cabinet Minister who had replaced Fowler a mere seven months before, ‘It’s the NHS debate today and the whole House will turn out, hoping for blood. The poor fellow has been. . . “on the sick list”, i.e. not around. . . Why is everybody so beastly? John was literally golden. Although in his forties he has kiss curls like a baby food ad.’ It seemed that ‘people were gloating, his own colleagues particularly’,68 at the prospect of Moore being ‘totally destroyed, finished.’69 Moore was ‘mildly of the Right’ and had ‘attached himself to Her’,70 and during the high months of his status as her chosen successor he framed the Health Service reforms exactly on the basis of what he thought she wanted. But she kept changing her mind. One minute she wanted to go further, the next she got an attack of the doubts, wanted to trim a bit. Each time the unfortunate John agreed, made the adjustments, came back for approval. The result was a total hotchpotch, and she ended up thinking he was a wanker, and got rid of him.71 Not surprisingly, Mrs Thatcher phrased things differently, praising Moore for ‘characteristic gallantry’ in returning to work ‘too soon’ after his illness,72 and recording that ‘the idea of money following the patient, the distinction between buyers and providers and the concept of self governing hospitals all emerged during his time as Secretary of State’.73 That said, though, Moore had failed as far as ‘the roughest game, at the biggest table’,74 was concerned, and there was no need to be a purist to wonder quite how public policy worthy of the name was going to made in that sort of political environment. The thinking in this case emanated from the USA, and specifically from Alain Enthoven, and shorn of the usual references in such studies of how they do things in Multnomia County, Oregon,75 what was proposed with enviable clarity was an internal market model for the NHS. ‘Such a scheme would still meet all the social objectives of the NHS, in particular free comprehensive care for all UK residents’, Enthoven wrote, and it would have five main characteristics. Firstly, Each District would receive a. . . per capita revenue and capital allowance. Each District would continue to provide and pay for comprehensive care


for its own resident population, but not for other people without compensation. It would be paid for emergency services to outsiders at a standard cost. It would be paid for non-emergency services to outsiders at negotiated prices. It would control referrals to providers outside the District and it would pay for them at negotiated prices. Secondly, ideally, ‘wages and working conditions would be negotiated locally’. Thirdly, consultants would contract with Districts, and Districts would be free to enter into all sorts of contractual arrangements including short-term contracts and contracts with incentive payments for increased productivity. Family practitioners would also contract with Districts. Districts could require them to contract out sources of care. And Districts could experiment with such ideas as contracts with incentives to improve the economy of prescribing practices. Fourthly, ‘Each District would have a balance sheet and an income statement. It would be free to borrow at government long term interest rates up to some prudent limit on debt. A District owning valuable property could sell it, keep the proceeds and add the interest receipts to its revenues.’ Fifthly, ‘Each District could buy and/or sell services and assets from other Districts or the private sector.’ Enthoven thought that from an economic point of view, the main defect of this model is that it lacks powerful incentives for District Managers to make their decisions in the best interests of patients in the face of political pressures to do otherwise [meaning] pressures to favour inside suppliers in the interest of keeping peace in the family, pressures for the District to use its own personnel rather than declare them redundant and spend the money elsewhere, pressures from consultants to develop a full range of services in the District for the sake of autonomy, control and prestige, etc. This is perhaps the central problem of the NHS today.76 The NHS had a host of problems which seemed to defy solution, not least to judge from their behaviour the belief of the majority of the electorate together with most of the Service’s employees, and especially its unions, that the money to fund it should simply ‘arrive’, in some way not having to be paid for. Then again, the original idea that those who were in greatest need should come first was never easy to put into practice, but harder to do so when consumerism in other spheres had come to dominate. Bevan’s ambition had been ‘to achieve as nearly as possible a uniform standard of service for all’,77 and the formula worked out by the Resource Allocation Working Party in the 1970s, and retained by the Conservatives until 1989, was successful in


redistributing resources between regions, though there remained inequalities within regions, and there was also no improvement in regional inequalities in access to care, as measured by access to general practitioners.78 That the distribution of resources thus made did not benefit the London regions79 with their leading teaching hospitals and a metropolitan elite seemingly given to self-pity in matters of health made for political agitation. Enthoven believed that the problems of the NHS were largely those one would get with ‘any monopoly of services’, and that ‘there is nothing like a competitive market to motivate quality and economy of service’,80 but, in line with contemporary political realities, his model had modest ambitions. A tier of NHS administration had been removed in 1982, and the Griffiths Report of 1983 had increased the role of professional management. Further developments included the raising of prescription, dental and ophthalmic charges, and there was contracting-out of catering and cleaning services, and some measures to encourage the private medical sector, involving more American companies which led to the Chief Executive of BUPA to observe that ‘private medicine is threatened by commercialism’.81 In July 1988, the DHSS was at last broken up, and Kenneth Clarke became Secretary of State at what was now the Department of Health. ‘As he was to demonstrate during the short period in which he was my Secretary of Education (when he publicly discounted my advocacy of education vouchers), Ken Clarke was a firm believer in State provision’, Mrs Thatcher wrote, ‘But whatever the philosophical difference between us, Ken’s appointment was a useful one. . . He was an extremely effective Health Minister – tough in dealing with vested interests and trade unions, direct and persuasive in his exposition of government policy.’82 As early as 31 January 1989, the NHS reform programme was complete, and Clarke sailed up from Westminster to the Limehouse Studios in London’s Docklands to launch the White Paper, Working for Patients. This was ‘a hunk of Hollywood’, according to the Health Service Journal, who, surely, could not have had Clarke in mind, but what was described as the first attempt at a controlled mass-communications exercise throughout the NHS.83 There were seven key changes that were proposed. Firstly, ‘to make [the NHS] more responsive to the needs of patients, as much power and responsibility as possible will be delegated to local level’. Secondly, ‘to stimulate a better service to the patient, hospitals will be able to apply for a new self governing status as NHS Hospital Trusts’, which would enable them to ‘earn revenue from the services they provide’, giving them ‘an incentive to attract patients’, and they would be able ‘to set the rates of pay of their own staff and, within annual financial limits, to borrow money to help them respond to patient demand’. Thirdly, ‘to enable hospitals which best meet the needs and wishes of patients to get the money to do so, the money required to treat patients will be able to cross administrative boundaries’. Fourthly, ‘to reduce waiting times [and] to help give individual patients appointment times they can rely on. . . 100 new consultant posts will be created over the


next three years’. Fifthly, ‘to help the family doctor improve his service to patients, large GP practices will be able to apply for their own budgets to obtain a defined range of services direct from hospitals’. Sixthly, ‘to improve the effectiveness of NHS management, regional, district and family practitioner management bodies will be reduced in size and reformed on business lines, with executive and non-executive directors. . . The confusion of roles will be replaced by a clear remit and accountability.’ Seventhly, ‘to ensure that all concerned with delivering services to the patient make the best use of the resources available to them, quality of service and value for money will be more rigorously audited. . . The Audit Commission will assume responsibility for auditing the accounts of health authorities and other NHS bodies, and will undertake wide ranging value for money studies.’84 There was the assurance that ‘the NHS will continue to be funded by the Government mainly from tax revenues’.85 The aim of the Government was ‘to transform the NHS into a consumer rather than a professionally driven organization, and move from an “administered” to a managed service’, a leading manager wrote, ‘It had to break the professional hold on the NHS and indeed the shift in the balance of power was a natural progression of the direction in which the NHS had been moving in the 1980s. What is more the Government possessed the political, the managerial, and the monetary clout to drive through its programme.’86 That said, though, the British Medical Association (BMA) had some initial success with a characteristic campaign of the ‘what do you call a man who ignores medical advice? Answer: Mr Clarke’ type, and there were polls reporting that 70 per cent of the public thought that the NHS was unsafe in Tory hands, and there was a long strike by ambulance workers. By the autumn of 1989, though, that strike had collapsed, and the doctors were in retreat, and the way was clear for what became the NHS and Community Care Act of 1990 to bring in the new arrangements.87 Enthoven‘s ‘overall assessment [was] that the reforms starting with Working for Patients made a useful and lasting contribution to the evolution of the NHS’. That said, though, he considered that the Conservative Government did not come close to creating and unleashing market forces to the extent that might have been possible in the NHS. If one were to rank the degree of achievement of free market forces on a scale of zero to ten, with zero representing complete central planning and top down control and ten representing the regulated but relatively free American commercial economy, I would say that the internal market in the NHS got to somewhere in the range of 2 to 3 for a year or two, that is very limited market forces, and then fell back to more central control. All the forces of politics and culture were arrayed against it. The desired long run benefit to patients was too remote and diffused to be an effective force for change.88


Enthoven thought that the manner in which the internal market had been introduced had been ‘government by blitzkrieg’,89 but the main author of the reforms was thinking in terms of the wrong World War. The entrenched interests were too well dug to permit more than a war of attrition, with the NHS reforms representing the ‘big push’ that tried to bring about a ‘breakthrough’, but the scale and nature of the opposition ruled that out. The NHS reforms were more than ‘muddling through’, and whatever direction the internal market was pointing in terms of eventual outcome nobody believed it was ‘back to 1948’ even if the time had not yet come for the slaughter of a sacred cow most still thought well-worth worshipping, given the likely alternatives. In the meantime, though much was made of the fact that the growth in resources assigned to the NHS did not match that of needs and demand, following the restoration of a form of financial order brought about by the IMF crisis of 1976, the scale of resources assigned to the NHS by the Governments of Mrs Thatcher and their Labour predecessor were similar.90 Over the whole period 1979–80 to 1989–90, total current spending on hospital and community health services grew by 7.5 per cent in real terms, measured against changes in NHS pay and price inflation, representing an average annual increase of 0.7 per cent.91

‘Tinkering’ with social security ‘Taken together, the various reviews and studies I have set in hand constitute the most substantial examination of the social security system since the Beveridge Report forty years ago’, Norman Fowler told the House of Commons on 2 April 1984,92 leading The Economist to conclude that after two years of false starts by the Think Tank, highly politicised leaks, and Downing Street hysteria, the show is finally on the road. It might not have happened: bruised by the row over Health Service finances, the Cabinet was wary of laying hands on further sacred cows. But Mr Fowler and the Treasury won their way. . . Will Mr Fowler’s clutch of reviews mean thorough and effective reform or just another round of tinkering?93 The smart money was on ‘tinkering’. As Fowler himself observed, ‘there had been a great deal of tinkering’ in the past, and it was the case that ‘since the War, Governments had by and large ducked the issue’. Further, the Beveridge proposals had not been implemented. Beveridge wanted a system based on insurance, with the public making insurance contributions to finance benefits like the State pension. But Beveridge was not a member of the post-War Labour Government. No one was content to wait for insurance. Instead, the new system was introduced on the payas-you-go basis which has bedevilled social security finance ever since


[because] there [was] no invested fund, only promises of how much future contributors [would] be prepared to pay. Fowler believed that ‘I had one advantage that was denied to Beveridge. I was not only able to review social security, I had the opportunity as a politician of implementing the changes.’ Fowler, though, had to operate ‘in a cold public spending climate’,94 whereas Beveridge, though relatively conservative in his social security proposals, worked in a political climate in which it was believed that the money would always be there, and, indeed, consumed with personal ambition, he went on to further promote this form of climate change.95 So, not surprisingly, Fowler found that ‘right from the start, there were tensions with Nigel Lawson’s Treasury team’.96 ‘To be blunt, the British social security system has lost its way’, the Green Paper of 1985 declared: There is no question that it has helped to raise the living standards of the poorest people; that it has provided a safety net against urgent need; and that it has improved the position of some of the most vulnerable groups in society like the retired, poor families with children, and sick and disabled people. Yet those achievements have to be weighed against a number of other facts. The cost of social security will this year be over $40 billion. Since the Second World War, it has grown five times faster than prices, twice as fast as the economy as a whole; and it is set to rise steeply for the next forty years. Despite mounting costs, resources have not always been directed to those most in need and under present plans will not do so in the future. The piecemeal development of the system has resulted in a multitude of benefits with overlapping purposes and differing entitlement conditions. The complexity in benefit rules has meant that social security is difficult to administer and at times impossible for the public to understand. While the overlap between social security and income tax means that significant numbers of people are paying income tax and receiving means tested benefits at the same time. The Government believed that three main objects should underlie the reform programme. First, ‘the social security system must be capable of meeting genuine need’. Second, that system ‘must be consistent with the Government’s overall objectives for the economy’, which followed from the reality that social security was ‘by far the largest government programme – more than twice defence spending and larger than health, social services, education and housing put together. It is responsible for a major share of the current tax burden on individuals.’ The Green Paper optimistically assumed that people understood that ‘in the longer term, the scope for sustaining and improving social security provision depends on the performance of the economy’, while noting that ‘while it is one of the functions of the social security


system to help those who are unemployed, it is self defeating if it creates barriers to the creation of jobs, to job mobility, or to people returning to the labour force. Clearly, such obstacles exist if people believe themselves better off out of work than in work. . . Equally, restrictions in areas like pensions can discourage people from changing jobs.’ Thirdly, ‘the social security system must be simpler to understand and easier to administer’. The rules of entitlement to supplementary benefit were ‘so complex that the manual for guidance to staff [ran] to two volumes and 16,000 paragraphs’. Nor was it only the rules which caused confusion, since ‘all the main income related benefits – supplementary benefit, housing benefit, and family income supplement – use different measures of income and capital’. The Green Paper’s suggestion that the situation would be even partially remedied in the near future by the wider application of ‘modern computer science’ as opposed to ‘the staff hunt for files in a Dickensian paper chase’97 was, surely, meant to amuse, given the appalling record of government departments in the computer field, and there was more of the same in an accompanying document.98 ‘The need is not for trimming but for proper reform’, a White Paper this time declared later in 1985,99 with Fowler believing that ‘we should assess the future cost of the whole social security system, and make any necessary changes now’, though his ‘immediate aim. . . was a cost neutral reform – and that was going to be difficult enough. For, if priorities are reordered without extra resources then inevitably there are losers as well as gainers [and] the conventional political wisdom [was] that you hear from the losers, not the gainers.’ Then again, ‘the Treasury was going to take some convincing that major savings in public spending were impossible’.100 Lawson as Chancellor recalled that there was one fundamental issue where, to his chagrin, I felt obliged to baulk Norman right from the start. He announced that he wished to look not only into the social security system, but into the tax system as well, in so far as it affected the clients of the DHSS. I refused, holding fast to the hallowed Treasury doctrine that taxation is a matter for the Chancellor and must not be put into commission. Towards the end of April 1985, he came back to me again, and suggested that we announced the setting up of a joint Treasury–DHSS study group on the links between the tax and the social security systems. Again, I refused. There was thus no discussion of either a tax credit scheme of the kind advocated by the Heath Government. . . or of any of the so called ‘basic income’ schemes that had more recently advocated. In taking this attitude, Lawson maintained that he was motivated by more than defending ‘my own turf’, as he was to demonstrate in a later Green Paper, The Reform of Personal Taxation. ‘The key point is that the tax and social security systems are not simply mirror images of each other, with social


security payments a form of negative taxation’, Lawson observed, ‘Whereas liability for tax is measured over a period of twelve months, which makes life simpler for the taxpayer and Inland Revenue alike, income related benefits have to be assessed on a weekly basis to ensure that poor families can always meet their basic needs.’101 Lawson revealed that both Margaret and I were also interested in developing a fully fledged ‘workfare’ scheme in which the unemployed would be required to work rather than do nothing, by the simple device of making the payment of benefit conditional on participation in a ‘workfare’ scheme. . . A number of meetings were held, under Margaret’s Chairmanship, but unfortunately an alliance on the issue between Norman Fowler, as Social Security Secretary, and David Young, as Employment Secretary, produced so many alleged practical difficulties that the idea was dropped.102 Young plainly preferred the scheme eventually called Restart,103 which Lawson conceded had a ‘marked effect on the unemployment figures’ because it ‘not only helped those who were genuinely seeking work but weeded out those who were not – either because they had decided to take early retirement, or because they were already hard at work in the black economy’. Lawson emphasized that Geoffrey Howe early on made unemployment benefit taxable – a brave step politically, but essential if the ‘why work?’ problem was to be solved – while the National Insurance reforms in my Budgets of 1985 and 1989 made it more worthwhile both for people with a low earnings capacity to take a job and for employers to employ them. . . Norman Fowler’s social security reforms shifted the basis of means tested benefits from pre-tax to post-tax incomes. This meant that, although the combined marginal rate of tax, National Insurance and benefit withdrawal could be very high (a necessary evil if benefits are to be concentrated on those whose need is greatest), at least it could not reach (and, indeed, exceed) 100 per cent as it could before. Another way in which the Social Security Act of 1985 helped was that early leavers from occupational pension schemes were entitled to take their pension rights with them. This eliminated a major discouragement to job mobility.104 Fowler was never going to be a radical New Right reformer of social security, though his reputation might well have been different if his Cabinet colleagues had agreed to the replacement of the State Earnings Related Pension Scheme (SERPS) as a second pension by individual pension provision with a minimum compulsory requirement. ‘This took the issue a giant step forward’, Fowler believed, ‘During the review I had been to Switzerland where I had seen a compulsory occupational scheme successfully in operation.’105 Fowler


had the zeal of the convert, and the Swiss example impressed Mrs Thatcher too, which drew from Lawson the response that ‘Prime Minister, it is well known that in Switzerland everything that is not forbidden is compulsory’, a ‘pardonable exaggeration’ that ensured that Lawson ‘never had Switzerland thrown at me again’, even though Mrs Thatcher had not changed her mind. ‘She had got the politics all wrong’, Lawson believed, ‘The burdens imposed by a compulsory private sector scheme would make far more political difficulty than the simple abolition of SERPS.’ This was because the real costs of pay-as-you-go SERPS were in the distant future, and those of compulsory private pensions were immediate in the form of tax relief. ‘It would be more than a banana skin: it would be evidence of an electoral death wish’, Lawson told his Cabinet colleagues, eventually coming up with the idea that ‘it would be better not to abolish SERPS at all, but to modify it to make it affordable’, which turned out to mean ‘a reduction in the level of pension from 25 per cent of the best twenty years’ earnings to 20 per cent of a person’s lifetime earnings, with half the pension and not the whole pension passing to the widow or widower’.106 Fowler was angered by Lawson’s behaviour, but recognizing that, together with opposition from employers’ organizations, ‘the pensions industry. . . regarded compulsory occupational pensions as several bridges too far’, he chose to pursue what ‘I could guarantee to deliver’.107 The White Paper duly announced the phasing in of the changes that Lawson had effectively insisted on,108 together with a minor concession in the rate of national insurance contributions to encourage occupational and personal pensions.109 Fowler believed that this initiative regarding pensions was a ‘spectacular success’ because in a short time ‘over four million people [had] taken out personal pensions’, and ‘over 800,000 people [came to be] covered by new occupational pension schemes’.110 There were existing tax incentives to encourage such provision, but cynicism was bound to be justified about the likely behaviour of some of the companies involved and their methods, and only a fool could have been surprised by the mis-selling scandal that followed. ‘Social security expenditure increased in absolute terms, real terms, and for most of the [period of the Thatcher Governments] as a proportion of GNP’, according to one socialist commentator,111 and the best that the critic could come up with was that arguably social security expenditure would have been very much higher than it was without Thatcherite policies. The principal saving came from the decision, made early in office, to break the link between the uprating of benefits and earnings [which meant that] by 1985 over £6 billion [had been saved]. Other smaller savings [came] from the failure to uprate benefits fully in line with prices, the abolition of earning related unemployment and sickness benefit, continuous increases in the tapers and other cuts in housing benefit, the freezing of child benefit and the


abolition of the maternity and death grants. Other notable changes that led to savings in public expenditure were the replacement of single payments in supplementary benefit [by] the Social Fund which succeeded in putting a cap on discretionary payments at the margin of income support. This is the first time that cash limits have been introduced into social security.112 Fowler stressed how smoothly the Social Fund had been introduced, confounding the critics,113 but that in the last financial year of the Thatcher Governments the Social Fund only accounted for just 0.36 per cent of the social security budget114 illustrated how little the established arrangements were changed.

Confronting the educational establishment ‘You have an awful department.’ So said Mrs Thatcher to Sir Keith Joseph about the Department of Education and Science where he had replaced the ineffectual Mark Carlisle as Secretary of State in 1981, recalling her own unhappy time there in that role in the Heath Government.115 ‘While a few able officials no doubt lurked there, in general the calibre of its key personnel was poor’, Nigel Lawson asserted, adding that ‘its ethos was wholly opposed to that of the Government: collectivist and steeped in the once trendy nostrums of progressive education that have so much to answer for. Keith was aware of this up to a point, but he was far too nice a man to realize fully what he was up against, or to do anything about it.’116 Joseph’s successor, Kenneth Baker did seem to recognize what he was up against, and he made a contribution of a kind. ‘The authors of the Black Papers on education had, to their credit, started to spell out a radically different approach, based on discipline, choice and standards (including the retention of existing grammar schools with high standards)’, Mrs Thatcher wrote, ‘Their case was strongly founded in well informed criticisms of the present system.’ As Secretary of State, Mrs Thatcher was ‘very conscious that in any struggle with the Civil Service I might not be able to count on the support of all my Cabinet colleagues’.117 The Secretaries of State for Education in the Thatcher Governments at least had the consolation that the Prime Minister was an enemy of progressive thinking, and in confronting the interests ranged against them those Ministers very much needed that support, given the dominance of the belief in and around political life that education was ‘a good thing’ in the 1066 And All That sense, despite there not being a scrap of evidence that increased educational provision promoted greater economic growth, on which basis Governments had justified its expansion.118 The fate that awaited the universities under the Thatcher Governments should not have been that unexpected. As Max Beloff had pointed out for years, the universities had placed themselves in a position of such financial


dependence on the State, that sooner or later the Government would want to call the tune and academic freedom would suffer. Consistent with his beliefs, Beloff eventually left Oxford to run the privately funded University of Buckingham, but this venture impressed few people because it was unclear how a university system on the Robbins scale could be financially sustained in this way. Like the Ministry of Education before it, the Department of Education and Science (DES) had largely left the University Grants Committee to take the responsibility for the universities, and, as was said so often, its role was to act as a buffer between the Government and the universities. The universities resembled publicly funded private clubs even after the Robbins expansion of the 1960s increased expenditure dramatically. The number of university students had been greatly expanded, despite there being no means of ensuring that the gifted among the less socially privileged would take up the extra places. It was not the case as some maintained that just about every young person of middle-class origins who could read and write then became a university student, but it was not too difficult to believe that this was so, and as the expansion was justified in terms of economic necessity inevitably there were students who took the line that you need us so listen to what we have to say. In comparison with the young people of even the recent past who had left school for the world of work in their early teens or who had done time in the Services or both, these students, subsidized by grants paid for by the taxes of others, had very little of any value to say. This did not stop a vocal minority of them, of course, from being very boring and saying it, and, following Orwell’s analysis, given their middle class origins what they advocated was a socialist Britain or often a socialist world, magically to be run without the Gulag and the rest of the apparatus that characterized ‘the Russian experiment’ and that also with people then being conducted in Mao’s China. Mrs Thatcher remembered the treatment dealt out to her when Education Secretary by such students,119 as did others too who seemed to forget that those students in the medical schools and the faculties of law and of pure and applied science as well as the majority of those reading for degrees in arts subjects and the social sciences were not involved. As for the academics, the campus novels from Lucky Jim onwards had done them no favours in portraying them in terms of a lazy man’s profession who treated university life as the last refuge of the gentleman, and as being, at best, eccentrics. The spirit of Cardinal Newman’s The Idea of a University did survive the Robbins expansion at least in the sense that, though degree classification was bound to be a matter of rough justice, it was still the case that good degrees tended not to be simply given away. Indeed, one reason why the graduates of the time did not later rally round the universities against the Thatcher Government was that the mediocre especially seemed to feel that they had deserved a better label in the honours finals. Worse, though many academics tended to see themselves in terms of the lovable, eccentric, liberal image of the novel, Changing Places, the less flattering, indeed morally corrupt, view of university life portrayed


in The History Man only too often seemed closer to the reality. Those who thought like Lawson came to be against academics having security of tenure, which he described as ‘the system under which a university post was a job for life, irrespective of the quality of the incumbent’s performance’.120 For the 1960s and 1970s and for some universities, The History Man was more like a documentary than a novel, but one warning it had was of the conformity of academic life, which meant that ‘the quality of the incumbent’s performance’ made no difference if he or she did not say the right things. Modern McCarthyism in the form of political correctness soon to be imposed more widely in society came early to the universities, and in the subjects that came most easily to the notice of Mrs Thatcher and Lawson, tenure was essential to protect what few political friends they had in that world, though they chose not to see this. The pledge originally made by Mark Carlisle that there would be level funding for the universities was always unlikely to survive even the early attempts of the Thatcher Government to bring order to the public finances, and in July 1981 it fell to Carlisle to announce economies. These were drawn up by the University Grant Committee (UGC), and they meant ‘the overall loss of recurrent resources between 1979–80 and 1983–84 [would] probably lie in the range 11 per cent. . . and 15 per cent. . . the reduction in student numbers by 1983–84 is expected to be in the range 3 to 5 per cent’.121 Carlisle was able to point out in a debate made easier for him by the ineptitude of the Opposition that ‘over the period covering the years 1960, 1970 and 1980, the university student population has risen from 96,000 to 203,000 to 265,000. The full population in higher education has gone up from 179,000 to 466,000’. Since ‘from the middle of the 1980s to the middle of the 1990s the number of 18 year olds will fall by 30 per cent. . . even without the problem of financial restraint. . . this sort of expansion cannot continue. Some reduction and rationalization is essential to meet the substantial drop in those of that age group who apply.’122 That said, though, the number of 18-year-olds was going to continue to rise until the end of 1982, and the obvious question was what was going to happen to the 20,000 teenagers denied university places. ‘The answer is that many of them will go to polytechnics and colleges outside the university system and run by local authorities’, The Economist observed, ‘There are some 200,000 places at these institutions, pale imitations of universities in everything except cost. Indirectly, they are largely financed by [central] government through grants to local authorities. Yet, the Government at present effectively exercises no control over them.’ In this way, ‘the absurdity of trying to reform one part of higher education in isolation’ was illustrated, and the journal argued that ‘it may be right to cut Keele to save Cambridge but there is no justification for cutting Keele while preserving North Staffordshire Polytechnic’. Warming to its theme, and noting that ‘technological universities such as Aston [and] Salford topped the UGC’s hit list’, The Economist pointed out that those universities did best at producing


graduates who got jobs in industry and commerce, and that in this respect somewhere like Salford was ‘better than almost any polytechnic’.123 Quite what useful purpose the polytechnics served was an obvious question that Carlisle’s successor, Sir Keith Joseph did not address, only in part because he had more than enough problems to deal with in other areas of education policy. Joseph made work for himself in trying to get rid of the Social Science Research Council. That body had made itself the object of derision in the past by awarding grants for such subjects as lesbianism in Lesotho, and its elaborate evaluation procedures seemed to many to serve only a presentational purpose because the lion’s share of the awards would go to academics working in the golden triangle formed by Oxbridge and London anyway. There were several courses of action available to Joseph, but he chose the self-defeating one of a review by Lord Rothschild, and there were no prizes for guessing that the institution would survive, in this case with a new name – the Economic and Social Research Council. Then again, when it came to the 3,000 academics to be made redundant, the coward’s way out of doing it by age was taken, and, for all the moaning about the universities being singled out for harsh treatment, the conditions were so generous that, over time, it was hard to see what economies were actually made in terms of public expenditure, and the individuals concerned would have had to been as mad as they were widely perceived as being if they turned the deal down. Joseph took care to ensure that some ‘new blood’ appointments of younger people were made at the same time. As for the main body of the academics who had survived the cull, a shock was in store, not least for those over-promoted, sometimes grotesquely, in the boom. Research was the distinctive role of academics, and what they actually did in this respect increasingly became the subject of review, eventually in the form of the Research Assessment Exercise. The days of the publicly funded private clubs were over, and appointments procedures and promotion arrangements tended to be made less arbitrary because of the need to get what were deemed to be results. The ‘characters’ were driven to the sidelines and sometimes out, protesting to the last as if Casaubon in Middlemarch that long promised great work would be forthcoming on their favourite subject if only they were given still more time. Those who benefited most of all from the change were the people who treated academic life as a professional job, though they were still reminded on a monthly basis that the salary levels seemed to assume a private income. The Oxford dons tried to take revenge on the Prime Minister by denying her an honorary degree, but it proved impossible to portray this action as other than petty. When Joseph at last got around properly to the matter of student grants in late 1984, he ran into a political storm when, in order to offer the Treasury a financial concession partly to safeguard funds for scientific research, he came up with the idea that the minimum student grant awarded to those from the families with higher incomes should be abolished, meaning a higher parental contribution. By behaving like this Joseph was ‘the Hammer of the Middle


Class’ and a madman, according to Auberon Waugh,124 and if Joseph felt that he could win over such people, the Tory backbenchers did not agree, and gave Joseph the most torrid time any Cabinet Minister had experienced since the fall of Carrington. Joseph was forced to climb down,125 and his biographers could not resist citing the comments of The Observer: ‘Watching him at the despatch box. . . withdrawing the proposal to charge parents for university tuition fees, it was hard not to feel sorry for him. His head was bowed, and his hoarse voice held a familiar note of plangent regret, like a toff down on his luck asking the Bench for one last chance.’126 This did not stop critics from asking quite why students, above the age of majority anyway, should not be treated as adults in financial terms, given that they were keen to assert their independence in other respects.127 Bizarrely, some students also had rights to social security payments, though this arrangement was soon to cease. When, with the support of Lawson, Joseph subsequently raised the matter of student loans in the Cabinet, he was opposed by Mrs Thatcher and Cecil Parkinson, who argued that he would not have gone to university if there had been a loan scheme. ‘We were the only developed country in the world that did not have some form of student loans, but it had been a taboo subject for too long’, Kenneth Baker, who succeeded Joseph as Secretary of State in 1986, wrote, ‘We had developed a system of funding higher education to suit a small and exclusive minority. I wanted to expand the numbers without reducing standards.’128 Of course, though few felt free to say so, only ‘a small and exclusive minority’ were suited to the world of scholarship anyway or interested in it. Already, satirists of the Peter Simple kind were finding it hard work to make fun of a university system in which only too many ViceChancellors had taken to communicating in barely understood management jargon. Baker wanted a target of one in three going into higher education by the end of the century, and, of course, this was to be led by student demand,129 which Baker could not or chose not to see would be for the easier degrees and for lower standards in awarding them. At last, the Amis prediction of ‘more will mean worse’130 was going to come true. If there had to be an expansion in higher education, and Baker produced no hard evidence of any need for it, then, as had happened recently, in principle, the polytechnics on the other side of the binary divide were the best place for it. The polytechnics, though, had tended to prefer the role of ‘pale imitations of universities’ to the ‘real world’ one that Crosland had sketched out for them, which meant, of course, that the ambition was to get rid of the divide and for ‘levelling down the pyramid’.131 If university expansion was insisted upon, then the Open University would have been the best mechanism as it was based on part time study paid for those studying, and it had pioneered programmed teaching which seemed the most practical way of dealing with large numbers, but the route of the universities as an extension of social life was preferred. Meanwhile, Baker pressed on with the introduction of student loans, arguing in 1988 that they represented ‘an important step away from the dependency


culture’,132 though, of course, only into debt culture for those whose families could not or would not pay for the loans. Baker’s Education Reform Act of 1988 got rid of tenure for university academics, and Baker made much of getting rid of standardized salaries too and going American by doing so,133 while not emphasizing that American universities still had arrangements for tenure as well as higher salaries. ‘It made me concerned that many distinguished academics thought that Thatcherism in [higher] education meant a philistine subordination to the immediate requirements of vocational training’, Mrs Thatcher later wrote, denying this and recording that ‘before I left office Brian Griffiths, with my encouragement, had started working on a scheme to give the leading universities much more independence. The idea was to allow them to opt out of Treasury financial rules and raise and keep capital, owning their assets as a trust. It would have represented a radical decentralization of the whole system.’134 It would have represented privatization, of course, and, once those institutions were supposedly set free, they would have had the opportunity to find out, possibly the hard way in many cases, whether or not it was true, as one slogan asserted, that ‘Britain needs its universities’, or, at least, so many of them. Sir Keith Joseph once confided that he was haunted by ‘a terrible vision of the teachers marching round and round’ Elizabeth House, in which the DES was housed,135 but even the sheer awfulness of that classic 1960s building and the inevitable conflicts with the teachers’ unions were dwarfed by the desperate situation that had enveloped the schools system, certainly in England, long before he took office. There were many reasons for this, but, to the extent that politicians were to blame, Crosland merited most of it even though Shirley Williams came to be the favourite target for the failure of the comprehensive experiment. Crosland had led the way in abolishing the 11-plus examination and getting rid of the grammar schools in the name of egalitarianism, while at the same time effectively leaving the private sector, including the most prestigious Public Schools, alone. Thus, a ladder for the gifted but financially disadvantaged was destroyed in most parts of the country, while leaving those with money not only unaffected but granted in most areas an effective monopoly of education beyond secondary modern level. This outcome was predictable, but Crosland, educated at Winchester himself, asserted otherwise, though he was not responsible for the later collapse of the disciplinary system which was both bound to be undermining of the learning process as well as making the work of teachers needlessly arduous. That the teaching profession included some of the most talented people in the community, and that G.B. Shaw had been made a fool of by Stalin, did not prevent Shaw’s gibe that those who can do and that those who can’t teach continuing to be damaging to teachers, and the union activists in particular often had about them the air of bitterness that follows from being widely portrayed as supposedly worthless. So, Joseph inherited an appalling situation that Mrs Thatcher had been able to do little to change when she was at


the DES. ‘Many of our own local councils are running with the comprehensive tide,’ she had reported to Heath, ‘The question is what sort of balance should be struck between defending existing grammar schools and leaving local education authorities free to make their own decisions.’136 Mrs Thatcher was well-aware that the 11-plus was widely unpopular,137 as, indeed, was to be expected, given that most people failed the examination, with the parents of the middle class failures seeming to be the most aggrieved. For those who had always viewed intelligence testing with scepticism, there was the good news that Cyril Burt the psychologist had fabricated some of his evidence, though, of course, it did not necessarily follow that intelligence was other than largely inherited as he had maintained. Those who wanted education to be organized on the basis that everybody would have prizes badly needed intelligence to be environmentally determined and came up with an unconvincing theory of their own called genetic equalitarianism.138 Mrs Thatcher never lived down failing to stop the comprehensive bandwagon in its tracks, but her position on the matter of secondary education turned out to be complex. ‘In defending grammar schools, Conservatives were rightly defending an existing institution that provided a fine education for children of all backgrounds’, she wrote: But we were also defending a principle – namely, that the State should select children by the single criterion of ability and direct them to one of only two sorts of school – that is far more consistent with socialism and collectivism than with the spontaneous social order associated with liberalism and conservatism. State selection by ability is, after all, a form of manpower planning. And variety and excellence in education are far more securely founded, and far more politically defensible, when parental choice rather than State selection of children by ability is their justification. In other words, ‘the argument for education vouchers becomes stronger every day’.139 ‘When I went to the Department of Education as Secretary of State I continued my modest practice of giving a short reading list to the officials’, Lord Joseph later recalled, ‘I gave only one book, called Lessons From Europe [by Max Wilkinson] from the Centre for Policy Studies [which] argued, with detailed analysis that in our neighbours of North West Europe, the standards of education, particularly for the non-academic child, are a great deal better than in this country. I gave it to the senior officials in my department and they [said] that it was rather more interesting than they had thought. However. . . they never produced any ideas for action.’ Joseph added that delegations of Her Majesty’s Inspectors ‘came back with their eyes wide open and stated that it was true that non-academic children do better in Germany and France’ and Joseph did not doubt that this was the case with the other countries too.140


At his first meeting with his senior officials, Joseph had made the observation that the nation compelled its children to spend eleven years of their life in school, and yet fifty per cent of them left school as soon as the law allowed them to leave with virtually no benefit to them in terms of character, or in preparation for work, adult life, or citizenship. ‘Oh, don’t say fifty per cent, Secretary of State’, said one official, ‘say forty per cent’. In this way, ‘the bottom forty per cent’ became a slogan of the DES in Joseph’s time, though Joseph himself still privately stuck to his guess that the system failed fifty per cent of pupils.141 Joseph would venture forth to visit local schools, not, it seemed, to escape from the absurd Elizabeth House, but to find out for himself what State schooling was like on the ground, and few on the receiving end appeared to doubt his sincerity,142 and, since 94 per cent of children went to State schools,143 the time this took seemed well-spent. ‘Whether I should be proud or sorry to have introduced the General Certificate of Secondary Education, only the historians will be able to judge’, Joseph said,144 but getting rid of GCE Ordinary Level examinations from 1988 onwards,145 however neatly it got rid of a legacy of the grammar schools, could only have deleterious effects on standards. With school rolls falling, expenditure per child was still increasing in real terms, but the teachers’ unions still wanted more, and his biographer recorded that Joseph was outraged that the unions had found methods of disruption short of complete strikes that meant that the teachers still drew their salaries. The same writer thought that Joseph’s problems in large part followed from his unwillingness to ‘play the Whitehall game’ when it came to money, and recorded that several times when Joseph was at the DES Treasury officials were astonished when he accepted a rejection of financial proposals which other Ministers would have regarded only as a first stage in a negotiating process.146 For all Joseph’s earnest efforts, it was not surprising that the first minute that Kenneth Baker, on succeeding him, sent to the Prime Minister started with the sentence, ‘I find that large parts of the education system are demoralized’, adding that ‘the main reason for this was that teachers were taking industrial action because of low pay and children were being sent home as their teachers walked out of the classrooms’.147 By doing this, ‘teachers were setting an appalling example to the very children who should be looking up to them’, Baker wrote, believing it to be behaviour unworthy of ‘people who consider themselves professionals’.148 Lawson said of Baker that ‘his instinctive answer to any problem is to throw glossy PR and large quantities of money at it, and his favoured brand of politics is the instant response to the cry of the moment’. That said though, Baker was a much more difficult opponent than Joseph for the teachers’ unions to deal with, and the Burnham Committee system for determining teachers’ pay was soon got rid of, being replaced by an Interim Advisory Committee, with Lawson denying Baker his wish far ‘a full blooded pay review body’. According to Lawson, ‘the whole point was to reverse the Burnhamite egalitarianism that had wreaked such havoc, and to ensure that those teachers


carrying special responsibilities, or of special merit, or in subjects where there was a serious shortage of teachers, were adequately rewarded’.149 Though the Chancellor did not say so, Baker’s task was made easier by a report on the pay of Scottish teachers produced by one of Lawson’s friends, Alan Main, which recommended increases that dwarfed those that Joseph had in mind for their English counterparts. It seems that at a MISC meeting in October 1986, it was agreed that it would be impossible to settle for anything less than the Main recommendations. While still having to face down opposition from the unions, Baker ended up ‘imposing a 25 per cent salary increase on teachers over an eighteen-month period, and a contract which included ‘Baker days’ for further training.150 Since ‘it was hard to imagine that we would get from [Baker] the fundamental thinking about education reform that [Lawson] was sure was needed’, the Chancellor resolved to do it himself. ‘The wresting of the schools from the so-called local education authorities would provide the essential basis for educational reform’, Lawson believed: The State would be able to lay down, and enforce, both a core curriculum and the standards of attainment required. . . The practice in France was highly relevant here. . . spending per pupil [was] the same in France as in the UK, yet the average standard of education was considerably higher. Then, with nationally determined standards, the actual running of the schools could and should be devolved to the schools themselves – which would still be subject. . . to an improved National Schools Inspectorate – a devolution which. . . would never occur on any significant scale so long as long as responsibility for schools lay with local government. Within that context, each school would be given its own budget to use as it thought best; each school would have the right to hire and fire teachers; and with each school’s income based largely on the number of pupils it attracted, a system of open enrolment could be introduced, enabling State schools to accept pupils in much the same way as the private sector does. Lawson sent the relevant paper to the Prime Minister in July 1986, but she thought its proposals to be too radical, though she did decide to set up a Cabinet Sub-Committee on Education Reform, which involved Lawson among others including the Number 10 Policy Unit, and, of course, Baker. ‘Margaret would sum up and give Kenneth his marching orders. He would then return to the next meeting with a worked out proposal which bore little resemblance to what everyone else recalled as having been agreed at the previous meeting, and owed rather more to his officials at the DES’, Lawson remembered: After receiving a metaphorical handbagging for his pains, [Baker] would come back with something that corresponded more closely to her ideas, but as often as not without any attempt by his Department to work them


out properly. . . This procedure was repeated on most of the aspects of the reform. . . The substitute Margaret came up with for my proposal to remove all schools from local authority control was the ‘opt out’ system, under which individual schools could escape from local authority control provided a majority of parents voted to do so.151 Not surprisingly, Baker was the hero of his own account of the genesis of the Gerbil as the Great Education Reform Bill became known as it was translated into the Education Reform Act of 1988.152 ‘The Government have introduced local management of schools, parental participation, changes in the curriculum, the GCSE, and the City Technical Colleges, which are intended to radiate higher standards by competition in neighbouring schools’, Joseph observed, ‘All of those are stimulating efforts to raise standards.’153 This was not the case, and, as he had himself remarked, Joseph had ‘led a division of the House [of Lords] against the national curriculum, while supporting the core curriculum’.154 As a perpetually smiling political operator, Baker achieved more than most expected at the DES, and Joseph did not disappoint those who anticipated that he would achieve less than he promised there. What one critic called The Riddle of the Voucher illustrated this. ‘One is always as a Minister looking for a single lever that would transform attitudes’, Joseph recalled: But problems in education are nearly all intangibles – motivation by the pupil, support from the parents, and that magic ingredient of infectious teaching skill from the teacher. There was no single lever. . . I was obviously a believer in the philosophy of vouchers. But believing in the philosophy is not the same as judging the consequences of the philosophy. I came to realize in connection with vouchers that there was at the heart of the voucher option a dilemma whether to go for vouchers on a pilot scheme basis, or whether to seek to impose freedom by imposing vouchers. As a preliminary to either, there would have been hugely controversial and complex legislation, splitting the Conservative Party, as well as creating a tumultuous split between parties, alienating most teacher unions, most local authorities, perhaps the Churches, and leading if we went for a pilot scheme possibly to a mouse at the end. And if we went for an imposed scheme, it would have called for more moral courage than I had.155

6 The Economic Liberal Crusades III: The Reconstruction of the Civil Service

‘Terrified’ of ‘the Lady’? ‘The sheer professionalism of the British Civil Service, which allows Governments to come and go with a minimum of dislocation and a maximum of efficiency, is something other countries with different systems have every cause to envy.’ At least in writing those words, Mrs Thatcher1 spared her readers, and for that matter the officials themselves, the platitude that Britain had the best Civil Service in the world. In terms of career Civil Services, Britain had one of the two most impressive such Services in the world, the other being that of France, and, since the governance of ‘Europe’ tended to be conducted in accord with French administrative culture as well as that country’s interests, the British Higher Civil Service had an unenviable task in conducting the relevant negotiations. When it came to running Britain itself, as one of their number, Sir Roy Denman, recorded with regret, the days when, at least he believed, higher civil servants were ‘the real, albeit shadowy, rulers of the land’ did not survive Mrs Thatcher becoming Prime Minister. She undermined ‘the bowler hated barons of Whitehall who had discreetly run the country’s affairs’, with it supposedly being the case that though she was on good terms with a few civil servants, mostly those who became her acolytes. . . for the most part she despised them. Her heroes were those who earned huge salaries in the City; those who worked for the State were by definition second-raters. . . The Civil Service found itself openly and publicly despised by its political masters and told that the role of the most senior was that of courtier. . . The quality of their advice suffered. So did the quality of the Service. Denman described Mrs Thatcher as a dictator,2 but, if his portrayal of the relationship between Ministers and higher civil servants was at all accurate what Mrs Thatcher was doing was to reassert the supremacy of the elected Government over the bureaucracy, which meant that she was actually respecting, indeed restoring, the traditional British constitutional arrangements. 137


The then Head of the Home Civil Service, Sir Ian Bancroft, maintained that the Service had at first welcomed the Thatcher Government ‘with a mandate, firm policies, and with a defined profile to it’, but relations between Ministers and higher civil servants did become ‘rather cooler, rather more formal’ than had previously been customary.3 That recent Governments had seemed to have a different attitude towards the Higher Civil Service owed something to Prime Ministers like Wilson, Heath and Callaghan having been civil servants, an experience that tends to engender respect for it as an institution, and not least for the rationality of its arrangements. Mrs Thatcher had no such experience, and she had not enjoyed working with the Higher Civil Service when a Cabinet Minister. That said though, the reality was that the self-interest of the career Civil Service had become bound up with the Keynesian order and with shoring it up, and Mrs Thatcher and her allies had radically different ambitions. Under the Keynesian dispensation, according to Mrs Thatcher, the ruling ethos was that set out by Douglas Jay – ‘the Gentleman in Whitehall really does know better what is good for the people than the people themselves’ – from which outlook it followed that ‘a disinterested Civil Service, with access to the best and latest information, was better able to foresee economic eventualities and to propose responses to them than were the blind forces of the so-called “free market” ’. The scale of State intervention was such that, ‘as Arthur Shenfield put it, the difference between the public and private sectors was that the private sector was controlled by the government, and the public sector wasn’t controlled by anyone’.4 The Civil Service per se only accounted for about 10 per cent of the numbers employed in the public sector at the time of the first Thatcher Government, which inherited a situation in which the overall number of civil servants was marginally less than it had been in 1955, when the Priestley Royal Commission had reported on the Service. Further investigation revealed other characteristics of and facts about the Civil Service. Firstly, the numbers employed in ordnance factories, dockyards, and workshops had declined by 44 per cent in the intervening period, and the numbers of non-industrial civil servants had increased by 38 per cent since then. This meant that in April 1979, there were about 732,000 civil servants overall, with 566,000 of them classified as non-industrial. Secondly, though the majority of non-industrial staff were employed in administrative and clerical posts, additionally in its ranks there were members of a wide range of professional and highly specialized occupations, including scientists drawn from nearly 40 distinct disciplines. Thirdly, the middle-aged, male, Whitehall image that the Service as a whole still had was misleading, given that about one-third of the non-industrial Home Civil Service was under 30, and about 45 per cent of those employed were women. Fourthly, the 566,000 non-industrial civil servants employed in 1979 were dispersed among about 60 government departments, almost all departments employing small numbers of them, not least the Treasury, commonly considered to be the most important

The Reconstruction of the Civil Service 139

of them. About 80 per cent of non-industrial civil servants were concentrated in seven departments or closely related groups of departments – the Ministry of Defence, the Department of Health and Social Security, the Board of Inland Revenue, the Department of Employment group, the Department of the Environment, the Home Office, and the Board of Customs and Excise. Fifthly, far from being located in and around Whitehall, such civil servants were employed all over Britain, working in over 7,000 buildings and sites. Some of these accommodated only half a dozen staff or fewer. At the other extreme, the central office of the DHSS employed 10,000 staff at Longbenton, near Newcastle-on-Tyne, on a 60-acre site that might well have been the largest single office complex outside the USA, and which housed the largest computer installation in Europe. No less than four out of every nine nonindustrial civil servants worked in local offices that had some direct contact with the public, being engaged in local casework – computing income tax, placing people in employment, or administering social security benefits. The character of the Service had been considerably changed by the expansion of local and regional office schemes resulting not least from the expansion of State social provision together with the effects of past policies of office dispersal away from London. So, the Civil Service had become increasingly a regional and local service, and many of the staff in the lower grades never moved away from the area where they were recruited, and they did not naturally associate themselves with the business of government in London. For them, a Civil Service job was just like any other job, which made it only a short step from behaving like other employees when it came to the conduct of industrial relations, an attitude likely to be promoted by the dispersal of the Service into areas of traditional union militancy.5 The Civil Service staff associations had once worked comfortably within the Whitley system of joint consultation, but when W.L. Kendall, the then General Secretary of the largest such association, chose to mark the fiftieth anniversary of Whitleyism in 1969 with a root-and-branch condemnation of its operations6 this proved to be a signal that Staff Relations in the Civil Service – to follow the title of the relevant official handbook – were going to be translated into industrial relations of a more conflictual kind. The first Civil Service strike followed in 1973, and there was another in 1979. ‘Ten years ago direct action by civil servants was virtually unheard of – now it is a common feature, and not merely on pay issues’, the Whitley Bulletin observed, ‘Civil servants have readily embraced a militancy in their attitudes towards employment issues that was unthinkable ten years ago.’7 When, however, Kendall declared in 1980 that ‘I am in the middle of a war with the Government’8 over pay and conditions and proposed cuts in Civil Service numbers, he had plainly been talking too much to his activists in the Civil and Public Services Association. The Economist detected several Communists on that Association’s Executive, and noted too that Leslie and Campbell Christie, who were leading lights in the Society of Civil and Public Servants, had ‘extreme left


wing sympathies’. For that journal, the increasingly militant Civil Service unions were nothing less than prospective Trojan horses poised to undermine the elected Government,9 and there were those in the movement who had such ambitions, but the unions had no shortage of moderates either among their officials or their memberships whose inclination would be to pull their punches, not least, to their credit, in the name of public service. Of course, pay was a concern to all of them, and under threat from the Thatcher Government was the Priestley formula under which, in principle, Civil Service salary levels were decided on the basis of ‘fair comparisons’ with outside pay. In practice, incomes policies had intervened to prevent the formula being implemented, but, in any case, the sheer scale of the sums involved in anything resembling regular implementation was daunting. The Thatcher Government decided to get rid of the Priestley formula. Thus, expectations were wrecked, and the stage was set for conflict between the Government and the Civil Service unions. Alan Clark believed that the higher civil servants were ‘completely terrified’ of ‘the Lady’ and ‘with good reason’,10 but not all of them showed fear or had cause to, and there were those in the unions who were spoiling for a fight from the outset. So, it seemed, was Mrs Thatcher.

The Higher Civil Service as an adversary ‘I was not among friends’ was how Mrs Thatcher remembered her time as Secretary of State for Education and Science in the Heath Government.11 One of the favourite tales of her biographers was about her attempt to get rid of Sir William Pile, her Permanent Secretary at the DES, on the grounds that he was a prospective Soviet agent. As would be expected, Heath accepted the advice of the Head of the Civil Service, and Pile stayed on.12 Mildly in the circumstances, Pile detected a dislike of higher civil servants on Mrs Thatcher’s part,13 though one of their number, Sir Frank Cooper, thought that this was not more than a dislike of ‘anybody who is not helping in the wealth creating process’.14 In an attempt to improve relations, Sir Ian Bancroft persuaded Mrs Thatcher to attend a dinner with all 23 of her Permanent Secretaries, including Cooper, on 6 May 1980. ‘This was one of the most dismal evenings of my entire time in government’, she recalled. What she got from many of those present was ‘a menu of complaints and negative attitudes’, and what lay behind this, she believed was ‘a desire for no change. But the idea that the Civil Service could be insulated from a reforming zeal that would transform Britain’s public and private institutions over the next decade was a pipe dream.’15 A quarter of a century before, when the then Head of the Civil Service, Sir Edward Bridges, had praised leading officials for being slightly detached and withdrawn in conducting their work, rather like Professors in disguise,16 such sentiments had reflected the contemporary Keynesian complacency. In the years since then, Sir John Hoskyns believed, ‘senior civil


servants [had] been engaged in a twenty five year campaign with scarcely one significant victory to punctuate steady retreat. For many of them, it must have been rather like joining Napoleon’s Army just in time for the retreat from Moscow.’17 So, when in 1979 a senior Treasury official suggested that the politically neutral role of the higher civil servant required him or her ‘to withhold. . . the last ounce of commitment’ to the policies of the current Government of whatever complexion, not least for the sake of the continuity of the Civil Service as an institution,18 he struck the wrong note. The situation that the Thatcher Government had inherited was sufficiently desperate that, as Hoskyns remarked, only total commitment was good enough.19 If this form of almost aristocratic detachment was deemed redundant, so was what passed for the pragmatic political position of the Higher Civil Service. ‘The Civil Service always hopes that it’s influencing Ministers towards the common ground’, Sir Anthony Part observed in 1980, ‘Now that’s not to say influencing them towards some piece of ground which the Civil Service has itself constructed; it is the Civil Service trying to have a sense of what can succeed for Britain, and trying to exercise its influence on Ministers to try to see that they do capture the common ground with their ideas, from whatever origin they start.’ This ‘common ground’ was not ‘the centre’ because that was ‘literally half way between the two poles, while the common ground on which or to which the majority of people can be persuaded to move. You have to remember that in recent times neither of the main political parties has been elected by a majority of the electorate.’20 Unlike the Higher Civil Service, though, these political parties had presented themselves to the electorate, and, under the electoral system, the party which won the most seats could expect to have the authority to form the Government, and to have the opportunity to implement its programme. That the Higher Civil Service had the right to guide Governments towards ‘the common ground’ was questionable, especially as that Service’s affection for the Keynesian order – ‘the common ground’ in disguise – was not necessarily disinterested. The scale of machinery needed to sustain that order provided higher civil servants with generous opportunities for advancement and for interesting work, ‘fine tuning’ the economy and so forth, and cutting back on the role of the State threatened those arrangements. Hoskyns argued that the Higher Civil Service did not have a legitimate part to play as constitutional ballast, and that as polarization was a fact of contemporary political life then seeking ‘the common ground’ was not an a politically neutral position.21 In any case, for those with a taste for it, there was some survey evidence that, in general, Conservative policy attitudes commanded wide support outside the ranks of Tory voters in 1979,22 which meant that, if there was a ‘common ground,’ the Conservative Government elected then seemed to be occupying most of it. Hoskyns’s reaction was to advocate the employment of many more politically appointed outsiders into Whitehall from the private sector, and at one stage he envisaged the mass pensioning off of the


much of the Higher Civil Service to change its defeatist culture.23 Hoskyns poured scorn on those who questioned where exactly the gifted outsiders were to come from,24 and some Ministers in the Conservative Government had told higher civil servants that there were those in the private sector ‘who could do the job in a morning with one hand tied behind their back’.25 Since the record of British private sector management in international competition had been unimpressive for several decades, the notion that there was talent to spare from that source was unconvincing. Aside from bringing in a small number of political advisers, the Thatcher Governments tended not to recruit outsiders to what were regarded as Higher Civil Service posts. One exception to this behaviour occurred in 1984 when the then Secretary of State, Michael Heseltine, appointed an industrialist, Peter Levene, to be Chief of Defence Procurement in the Ministry of Defence. That Levene was to be paid more than twice the Permanent Secretary salary that a career civil servant would receive in the same post was not lost on the union concerned, the First Division Association, as was the fact that Levene had not been subject to open competition, given that the post had not been advertised. The Government was accused of taking ‘a cavalier attitude towards appointments to the Civil Service’, not least because the Civil Service Commissioners were given less than 24 hours notice of Levene’s appointment. The Council of Civil Service Unions protested to the Head of the Home Civil Service, and the Prime Minister eventually admitted that the original terms of the appointment were illegal in the sense that they did not strictly comply with the Civil Service Order in Council 1982.26 In their next annual report, the Civil Service Commissioners asserted the importance of their role in ensuring open competitive recruitment free of the taint of patronage.27 The Levene appointment illustrated an obvious difficulty in recruiting gifted outsiders, which was not just that of observing particular procedures, but of salary expectations. As for patronage, outsider political advisers were more of a problem for the career Service, with Denman observing that such advisers not only ‘want to make sure that the old fossils of Whitehall do not dilute programmes [but] they want to have the fun of dealing with Ministers on major issues of policy without the tiresome necessity of passing a stiff competitive examination and serving a long apprenticeship’, and Ministers might well prefer such ‘uncritical support’ for their ideas rather than ‘face a sober appraisal of their workability by an experienced official’. Since Denman had doubted whether the Higher Civil Service really needed the galaxy of talent that it recruited any more,28 or that it had ever had needed it,29 his defence of the traditional arrangements was a curious one, but the reality was that, as far as the Higher Civil Service was concerned, the Thatcher Governments largely worked with those arrangements. Even at the wretched Bancroft dinner, Mrs Thatcher had believed that some Permanent Secretaries had agreed with her, and she was optimistic about the ablest of the younger generation of officials too.30 ‘I was enormously


impressed by the ability and energy of the members of my Private Office at No. 10’, she wrote, I usually held personal interviews with the candidates for Private Secretary for my own Office. Those who came were some of the very brightest young men and women in the Civil Service, ambitious and excited to be at the heart of decision making in government. I wanted to see people of the same calibre, with lively minds and a commitment to good administration, promoted to hold the senior posts in the departments. Indeed, during my time in government, many of my former Private Secretaries went on to head departments. In all these decisions, however, ability, drive and enthusiasm were what mattered, political allegiance was not something I took into account.31 Nevertheless, the promotion of Sir Clive Whitmore, the Prime Minister’s Principal Private Secretary, to become Permanent Secretary at the Ministry of Defence in 1982 proved controversial, even though Whitmore had spent almost the whole of his previous career in that Ministry. Controversial too was the promotion of Sir Peter Middleton to Permanent Secretary of the Treasury in 1983 over the heads of older men. ‘Anecdotal evidence suggests it is style rather than belief which tends to be considered important’ in making the most senior appointments, the FDA (Association of First Division Civil Servants), representing higher civil servants, observed, ‘The style which appeals to the Prime Minister is the “can do” approach, best characterized by decisiveness and an ability to get things done, rather than the more traditional approach which lays greater emphasis on analysis of options with recommendations for action based on that analysis.’ There was no evidence of politicization. Moreover, the powers that the Prime Minister used dated from 1920.32 ‘Advisers advise and Ministers decide’, Mrs Thatcher declared in 198933 , and one of her Ministers, Norman Fowler, later wrote of the phrase that ‘it is not a bad commentary on the Thatcher years. It was Ministers, not advisers, who drove through the distinctive policies like privatisation and industrial relations reform’.34 Mrs Thatcher certainly relied on the advice of her Court, but if Fowler was able to write in retrospect as if higher civil servants knew their place in the case of some of them this seemed to be because they had been put back into it. The economic liberals applauded this. As one wrote: ‘From the inception of the first Thatcher Administration in 1979, the Civil Service was “taken on”; a body of men and women which had grown ever larger since the War was cut back to the point where it became the smallest Civil Service since the War. The number of peerages and knighthoods given to senior civil servants markedly declined; relations between Ministers and their officials were – to quote one senior official off the record – “absolutely awful”.’35 One incident that mattered took place


during one of Mrs Thatcher’s early visits to departments. At Employment, she got involved in an argument over the legal position on secondary industrial action with an official called Donald Derx, who responded by saying: ‘Prime Minister, do you really want to know the facts?’ Prior, who believed Derx to be ‘one of the best and most dedicated civil servants I have ever met’, thought that after this meeting ‘Donald had a black mark against his name and appeared to be passed over for promotion. It was a pity that she was not able to accept that by standing up to her, he was displaying qualities which a civil servant must have if he is to serve his Minister properly, and which she of all people used generally to accept.’36 Since even the hostile Denman could only find two examples of senior civil servants of undoubted ability whose careers were ruined by arguing with her,37 it would seem that Mrs Thatcher ‘used generally to accept’ such behaviour. If she acted differently in the case of ‘the wretched Donald Derx’ as Clark called him,38 this may have reflected the importance that she gave to the Government’s industrial relations legislative programme and it was in that context that she had her doubts, well-founded or not, about Derx’s suitability as Permanent Secretary at Employment. On the other hand, she may have acted as she did on the principle of pour encourager les autres. The Government was asking two things of the Higher Civil Service. The first was that it should be leaner and more ‘efficient’ and that it should shed some of its ‘privileges’. The second was that it should play or, rather, revert to playing that role in governing the country that constitutional theory had assigned it. The realization of both aspirations required higher civil servants to give up what to many must have seemed a lot in terms of rewards, promotion prospects, and. in the case of some of them, influence, without compensating benefits from being offered. It was in this atmosphere that the Wardale inquiry was conducted into whether or not the Under Secretary grade should be abolished. That the then Chairman of the Board of Inland Revenue had told the Fulton Committee in the 1960s that the grade was ‘superfluous’39 meant that there was a case to be examined. The Under Secretary grade survived the review in 1981,40 but, of course, in the meantime the prospect of serious damage to the career ladder kept the Service on the defensive. Later in 1981, the Thatcher Government took the unprecedented step of requiring Sir Ian Bancroft, the Head of the Home Civil Service to take early retirement.41 Resentment about the manner that the Higher Civil Service, and indeed the career Civil Service as a whole, was being treated seemed to be a motive in the succession of ‘leaks’ of confidential material from government departments which characterized the Thatcher years, and which would seem to have been aimed at making life difficult for the Conservative Government. Clive Ponting, an Assistant Secretary in the MOD, who leaked confidential material about the sinking of the General Belgrano in the Falklands War, was to write that he objected to the ‘politicization’ of the Service under the Thatcher Government.42 Since Bancroft was replaced as Head of the Home Civil Service


in the first instance by two career civil servants in Sir Douglas Wass and Sir Robert Armstrong jointly taking that role, and then by Armstrong alone, the Government’s behaviour in that case did not qualify, and no evidence was produced that the relatively few Conservatives of economic liberal outlook in the Higher Civil Service were the subject of favouritism. In fact, though his own allegiance to the SDP was known, Ponting’s own career had prospered through his involvement in exercises designed to promote greater efficiency in the Service. ‘Ponting’s notion of his own duty can appear extremely high because he has no qualms about making it up as he goes along’, The Spectator savagely commented: So, for instance, Mr Ponting first sent the documents under plain cover, and, when inquiries were made, scarcely owned up with the readiness which schoolboy, let alone adult, honour demands. He had entered the exciting world of leaks, but he did not believe that this should disqualify him from personal advancement. He did not announce his intention to Mr Heseltine [the Secretary of State], then calmly walk up Whitehall and present the documents to the Chairman of the Select Committee. He ran them off on the departmental photocopier. . . and slipped them off to Mr Tam Dalyell [a Labour MP and opponent of the Falklands War]. If Ponting had not displayed ‘a classic case of Civil Service meanness’ and ‘he had paid for an outside photocopier, he would not have been detected. . . Only when he is caught does Mr Ponting start to have inflexible conscience and an unswerving moral duty. . . Mr Ponting is not a bona fide conscientious objector.’43 Whether Ponting was a ‘liberal’ hero or not, what was evident was that he had broken a trust, it seemed in the hope of getting away with it, and, unlike most others, he got caught. So, the question was should Ponting simply be allowed to resign, or, as happened, should he be prosecuted under Section 2 of the Official Secrets Act? When the latter course was pursued, to the surprise of most observers, on 11 February 1985, Ponting was acquitted, with the jury unanimously ignoring the arguments of Mr Justice McCowan. It then seemed to be widely believed that the British Constitution and the positions of the Thatcher Government and of Heseltine, who was said to have pressed for Ponting’s prosecution, would never be the same again. Exactly a week later, though, Heseltine did not hesitate to ruthlessly strike again at Ponting in the relevant House of Commons debate, sinking Ponting and with him the supposed Belgrano Affair as effectively as the cruiser herself had been sunk three years before.44 ‘I am content, as I have always have been, to leave the conduct of political matters to duly elected politicians’, Ponting stated after Heseltine had attacked him,45 but this was exactly what the former civil servant had not been prepared to do. Shortly afterwards, Sir Robert Armstrong issued a code of conduct for civil servants under the title of The Duties and Responsibilities of


Civil Servants in Relation to Ministers. Note by the Head of the Home Civil Service. ‘Civil servants are servants of the Crown’, Armstrong wrote: For all practical purposes the Crown in this context means and is represented by the Government of the day. . . in general the executive powers of the Crown are exercised by and on the advice of Her Majesty’s Ministers, who are in turn answerable to Parliament. The Civil Service as such has no constitutional personality or responsibility separate from the duly elected Government of the day.46 The Armstrong Memorandum set out the duties of civil servants in relation to the constitutional conventions of ministerial responsibility and collective responsibility, and it was difficult to see how formally those duties could be set down differently in terms of principle. It could be objected that what was being advanced was more like constitutional theory than practice, though Sir Douglas Wass at least thought that ‘the theorist who argues that the official is the creature and servant of the Minister [was] by far the closer to the truth’ than ‘the cynic who argues that Whitehall manoeuvres the politicians’, though, again, the reality was complex.47 What was clear was that officials did not have an independent role, and, as Wass added: ‘The Civil Service cannot be thought of as an in-built safeguard against what some people might well call the excesses of a radical or reforming Government. The only effective safeguards, if it is safeguards we are seeking, have to be found in the political and judicial processes, or in the force of circumstances.’48 That the Higher Civil Service could not expect a quiet life in the near future was emphasized once more when in 1986, and then into 1987, the Government chose to pursue a former British spy called Peter Wright in the New South Wales Supreme Court for breaking the Official Secrets Act even though and obviously its writ did not run in Australia. Wright had written a book called Spycatcher to make money, with his motivation being that he did not think that his Civil Service pension was good enough. Wright had to be the main source for the material in Chapman Pincher’s book Their Trade is Treachery, published in 1981, about the revelations in which the Government either felt it could do nothing or chose not to do. Though at one time there seemed to have been no shortage of Soviet agents to hunt, it was the case that Wright had not caught any of them, and Spycatcher added little to what was known from the earlier book. However, once more on the principle of pour encourager les autres, the Thatcher Government decided that Wright was not going to directly profit from having been Assistant Director of MI5, and Sir Robert Armstrong was sent to Australia to argue the case against Wright. Outside of the British political and administrative culture he knew so well, Armstrong fared badly in court, stating in response to one question that he had not lied but that he had been ‘economical with the truth’.49 The British Government lost the case, and Spycatcher was a best-seller.50 Heath condemned the Prime


Minister’s humiliating and ‘improper’ use of Armstrong in despatching him to Australia,51 and Mrs Thatcher had shown once more that she did not share his deferential attitude towards the Higher Civil Service and its interests, and the pattern of her behaviour suggested that she shared the opinion of her adviser, Lord Rayner, that such officials were ‘a mixture of superb talent on the one hand and of an able coterie of cynics on the other’.52

Seeking a management revolution in the Civil Service Since it was obvious that the self-interest of the career Civil Service was best served either by conservative Governments which, by and large left it to its own devices, or by those governments set on its expansion which profited it as a pay and promotion system, the advent of the Thatcher Governments, and especially the economic liberalism they professed and, on occasion, practised, was bound to induce dread in its ranks. The career Civil Service could run the gauntlet of Fabian criticism with equanimity. The Fabians wanted a better Civil Service, and their criticisms of the current Service tended to have the familiarity of an old song, and so did the programme of reforms, in both cases largely because the Service tended to do as little as possible in response. This did not necessarily mean that the criticisms lacked substance. The Administrative–Executive–Clerical structure of what most people thought of as being the Civil Service sufficiently reflected the social class system to irritate the Fabians, calmly neglecting their own social elitism in that respect, and also the extent of promotion from below. Of course, those promoted in the case of the Service and the Fabians would be only too likely to be conformists, otherwise they would be discarded. That said though, a Fabian exercise like the Fulton Committee of the 1960s would be bound to regard the main body of the Service favourably, and those with specialist qualifications could expect the same treatment too, because their fire was directed against the Administrative Class with its Oxbridge direct entrants and its generalist ethos. That such criticism was intemperate in tone did not disguise the reality that the Fulton Report left the Service largely unscathed, and, indeed, the resulting establishment of a Civil Service Department instead of the Treasury as the central body responsible for the Service was a recognition of it as an organization in its own right. Little followed from the recommendations of the management consultancy group that the Committee employed, which intelligently tried to reconcile the organization and methods of the career Service with the best of private management practice.53 At first sight, the group’s report bridged the gap between the Fabian reformers and the economic liberals, and the Fulton programme continued to surface later, and confusingly so in proposals for unified grading. The career Civil Service could live with the gentle reformism of, say, a Fabian pamphlet called The Administrators, but when one of its own members published a book called Your Disobedient Servant starting off with six chapters under the heading of ‘The Wasting Sickness’


about waste and extravagance in government departments54 ammunition had been presented to those with real radical intent. ‘In 1961 the numbers in the Civil Service had reached a post war low of 640,000; by 1979 they had grown to 732,000’, Mrs Thatcher wrote: This trend had to be reversed. Within days of taking office. . . we imposed a freeze in recruitment to help reduce the Government pay bill by some 3 per cent. Departments came up with a range of ingenious reasons why this principle should not apply to them. But one by one they were overruled. By 12 May 1980 I was able to lay before the House our long-term targets for reducing Civil Service numbers. The total had already fallen to 705,000. We should seek to reduce it to around 630,000 over the next four years. Since some 80,000 left the Civil Service by retirement or resignation every year, it seemed likely that our target could be achieved without compulsory redundancies. We were, in fact, able to do it.55 The Thatcher Government had inherited a heavily unionized Civil Service, which had the Civil Service Department as its central personnel department presiding over arrangements whereby civil servants, while normally enjoying security of tenure, in principle had their salary scales primarily based on ‘fair comparisons’ with outside pay, together with index-linked pensions. With inflation rampant, and with unemployment rising too, and in a political context in which ‘where will the money come from?’ was once again a pertinent question to ask, what were seen as the Service’s cosy pay and promotion system and privileges were bound to be targets for an ‘economizing’ Government. The Scott Inquiry into the value of pensions failed to supply the Conservative Government with the condemnation of index-linked pensions that it must have hoped for, and, indeed, comically suggested that everybody should have such pensions without bothering to suggest how they would be paid for.56 This was, though, one of the few setbacks that the Thatcher Government experienced in a campaign which witnessed the end of the ‘fair comparisons’ salary system, the effective defeat of the Civil Service Strike, the demise of the Civil Service Department, and all to the accompaniment of cuts in Civil Service numbers. Following the Priestley Report of 1955, special pay machinery was set up for the Higher Civil Service, which from 1971 became part of the Review Body on Top Salaries, and the Civil Service Pay Research Unit was established for the main body of the Service. This Unit assembled the data and excluded Ministers from what eventually became an annual pay cycle until near the end when they were presented with the prospective salary bill. Eventually, as the economy deteriorated, incomes policies postponed the payments, a practice that according to the Civil Service union leader, W.L. Kendall, constituted the ‘brutal robbery’ of his members.57 Incomes policies did not affect the entitlement to ‘fair’ salaries. The Thatcher Government was more concerned with the plight


of taxpayers and of its own need to find the money; and in October 1980, by declining to implement some expensive pay research findings, and thus unilaterally tore up the Civil Service pay agreement, the Government actually dispensed with the Priestley pay system. This behaviour led directly to the Civil Service strike, which began with a 24-hour stoppage on 9 March 1981, and lasted for 21 weeks until 30 July, when the unions were forced to concede defeat. Aside from a further one-day stoppage on 1 April, and a half-day stoppage on 14 April – both less well observed than that of 9 March – the strike was pursued by selective action. The unions seemed to have been anticipating a fight with the Thatcher Government from the outset. The establishment of the Council of Civil Service Unions in May 1980 in place of the National Staff Side appeared to be at least partly motivated by a recognition of the need for a stronger central organization should a confrontation occur. When the strike came, the CCSU strategy was to emphasize interference with revenue collection and the gathering of statistics and the disruption of defence establishments. When asked about the danger to Britain’s nuclear deterrent, Kendall replied: ‘I’ll be on the end of a phone if anybody wants to ring me up about some great invasion.’ This was widely said to be a sophisticated strategy, and it certainly seemed well-planned. Nevertheless, there were also obvious reasons why, despite the Kendall-style rhetoric, it was the only one available to the CCSU: namely, the lack of support for more sustained, extensive, incisive action from the public, the TUC, and, it was feared, most union members. At a time of rising unemployment, outside sympathy for civil servants, who had job security, and who many might well have regarded as striking for still better pay deals was bound to be minimal. The CCSU strikes did interfere with the issue of passports and, for a time, they disrupted airports. Generally, though, the CCSU’s approach was aimed at not antagonizing the public, which would certainly have occurred if the unions had gone beyond halting computer operations and had stopped social security payments. Moreover, the TUC ruled out action that would hurt the old, the sick and the unemployed and, where appropriate, emergency procedures ensured that the payments were made. In return for this restraint, all that the TUC leadership did was to express general support, and make gestures such as declining to cross a picket line to go to a NEDC (National Economic Development Council) meeting, and referring the dispute to the International Labour Organization. So, when Kendall said that the CCSU was going to ‘put the boot in’ that was exactly what the unions did not dare to do. In late May 1981, the CCSU dropped its 15 per cent claim, with one union leader, B.A. Gillman, fearing that ‘we have a Government which believes that it can beat down the Civil Service and make us crawl back to work’.58 ‘The Government has the Civil Service unions in an arm-lock’, The Economist gloated in early 1981, believing that ‘even [Mrs Thatcher’s] Wetter Cabinet colleagues see that the political cost of even a small concession above


7 per cent to the unfortunate union leaders would now be too high’.59 Prior’s account was different: The strong advice of Christopher [Soames] and myself was to settle. But when the matter came to the full Cabinet, it was clear that Margaret had lobbied intensively. Willie Whitelaw said afterwards she had told him she would resign if she didn’t get her way – as if a Prime Minister would go on such an issue, though enough believed her. The debate was one of the most acrimonious I have ever experienced. The Cabinet was completely split down the middle. In the end, the Prime Minister got her way and the dispute dragged on. The Treasury became even more worried . . . Geoffrey Howe gradually changed his stance. Eventually, after nineteen weeks, the strike was settled at 7.5 per cent within the 5 per cent cash limit. We could have had the deal after six weeks. Instead we lost a further $250M in revenue and finance charges, which we would never recoup.60 Howe’s recollection was that the Treasury had been in the front line ‘since the organizers of the Civil Service strike made their principal onslaught on our Inland Revenue and Customs and Excise offices, in the hope that they could destroy our cash flow’. Of the final settlement and the setting up of the Megaw Committee to examine Civil Service pay, Howe wrote that ‘it could not be seen as a famous victory, though it fell well short of a disaster’.61 Hoskyns agreed with this verdict, arguing though that the Civil Service and its unions had come out of it less well than the Government, whose authority had not been affected by ‘the whole depressing business’.62 Of Soames, Hoskyns wrote, ‘after the Paris Embassy and Rhodesia it must have all seemed pretty footling stuff to him, and yet this was the sort of stuff we had to get right, again and again, if the whole country was not to footle its way to economic collapse’.63 As the CCSU’s declared intention was ‘to blow the Government’s economic strategy right off course’,64 Mrs Thatcher and her colleagues had little choice about resisting the strike, even if some of those colleagues wanted that strategy to fail, as Hoskyns believed Prior did.65 Despite the characteristic British attempt to pretend that the outcome of the strike was some sort of draw, the facts were, as Kendall commented, the CCSU had been forced to accept a ‘thoroughly unsatisfactory pay settlement,’ and when Peter Jones of the CCSU thought that ‘the Civil Service trade union movement [had] come of age’ through its ‘first foray into the field of direct action’,66 this invited the observation that in the Thatcher era it was also its last. In the manner of the legendary W.J.Brown, the union leadership had resorted describing the confrontation in military terms at one stage,67 and if such analogies must be used then the Battle of Jutland would seem the best one. The outcome was said to be inconclusive, and there may have been ‘something wrong’ with the Royal Navy’s ships, but the hard fact was that the German High Sea Fleet never ventured forth again. Similarly, the Civil


service unions never came back for more, though the Thatcher Government did when it removed the unions from the Government Communications Headquarters in 1984, despite an offer from them of a no strike agreement. Much was made of Mrs Thatcher relegating the Civil Service Strike to a footnote in her memoirs,68 as if she wished to forget the episode, and one of her advisers, Strauss maintained that she displayed spite in later dismissing Soames from the Cabinet for having been right all along about what form of pay deal would settle the strike.69 What mattered above all, though, was not the Civil Service strike but the prospective coal strike. The NUM had been bought off in 1981, but they would be back and in any confrontation they would have to be beaten. People like Soames and Prior with their perpetual quest for a socially acceptable deal were not going to be of much use in that sort of political battle. Getting rid of the Civil Service Department (CSD) and Bancroft along with it in November 1981 was similarly deemed unreasonable, but Mrs Thatcher was, for once, not being controversial when she wrote of the CSD that it had ‘always lacked credibility and power in Whitehall’,70 making it of limited use to her in promoting a more efficient Service, and so she transferred its functions to the Treasury and the Cabinet Office. Though the CSD had not been worth setting up in the first place,71 there was no similar straightforward answer to the problem of Civil Service pay, and there was always the fear that the Megaw Committee would prove to be as inept as that of Scott. The Megaw Report of 1982 came up with majority recommendations that resembled the Tomlin formula that had governed Civil Service pay in the inter-war years, a period when economic liberal values had ruled, and which meant a compromise with the market, which was the most that could be expected in relation to a career Service. From the Thatcher Government’s point of view, what the Megaw majority endorsed was the dismantling of the Priestley system under which, in effect the Pay Research Unit, a body independent of the elected Government, had decided the size of a substantial block of public expenditure.72 With the unions driven on to the defensive, and so less able to obstruct ‘new and more efficient working practices’, as Mrs Thatcher saw things,73 there was now scope for the Conservative Government to put into effect its grand strategy for the Civil Service. No such strategy existed, though one eventually evolved as the Government cast around for ways of changing the Service, which, given the outlook of the Prime Minister and her allies, had to mean trying to breaking it up as well as the introduction of ‘business methods’ into the work of departments. That said, though, in 1986, the Government introduced unified grading down to and including the rank of Principal and corresponding Professional and Scientific grades. The Open Structure at the top of the Service introduced in 1972 had only gone as far down as Under Secretary level, and its advantage was supposed to be that such a Structure was to give better opportunities to those in the specialist grades to get to the very top of the Service. One could see that taking that Structure down to Principal


level got rid of about 160 different grades, but this form of rationalizing salary scales added an element of uniformity that contrasted with the differentiation that the introduction of performance pay was supposed to promote.74 Mrs Thatcher later wrote that ‘the difficulties of introducing pay rates related to merit proved immense; we made progress, but it took several years and a great deal of pushing and shoving’.75 The Government proved to be in no hurry to negotiate long-term pay agreements with the Civil Service unions, whose objective, of course, was to obtain ‘a settled, orderly and fair national pay system for all non-industrial civil servants’,76 and from the mid-1980s it was evident that the unions intended to pursue separate deals rather than central settlements.77 The Government’s suspicions that, for all the protestations of devotion to public service, the career Civil Service was not much more than a self interested pay and promotion system seemed borne out when in 1985 by classifying the relevant documents in a way to ensure that the Prime Minister’s Policy Unit did not see them officials ensured that the Cabinet simply nodded through increases in Higher Civil Service salaries.78 The Thatcher Government should have earlier got rid of the Heathite apparatus that made the recommendations. Then again, to win the staff concerned over to the acceptance of changed working methods an old fashioned across the board deal was done at what would have been called in former times the Executive and Clerical level, including the shortening of salary scales. What gains in efficiency followed from renaming the Clerical Officer grade as that of Administrative Officer remained unclear.79 Of course, the much criticized Administrative Class had not survived the immediate post-Fulton era, with the higher grades disappearing into the Open Structure, and the remainder into an Administration Group. Nobody with much sense had been fooled by this formal change, and there was still the fast stream entry and a career pattern of the kind that the Treasury of Sir Warren Fisher had patented in the inter-war years. The Fabians of the Fulton Committee had disliked the generalists that tended to get to the top of the Service, and Mrs Thatcher criticized them for thinking themselves as policy advisers and for paying too little attention to management.80 Since the Fisher model sacrificed specialized knowledge for versatility, only formalized post-entry training of the kind that leading French administrators endure could make much difference in the long run, and then only if the career pattern changed too. The Thatcher Government evaded the issue by eventually opting for an organizational structure that separated out policy work from that of management. The attempts to foster accountable management in government departments in the aftermath of the Fulton Report had been dismissed as ‘a charade’ and ‘playing at shops’ by Bancroft,81 but Mrs Thatcher and her allies in the Tory Government believed in the superiority of business methods, and so, importantly, did Michael Heseltine. One of the first things that Mrs Thatcher did as Prime Minister was to appoint Sir Derek (later Lord) Rayner of Marks and Spencer, which seemed to be her favourite ‘shop’, to advise her on the


promotion of efficiency and the elimination of waste in government departments. Rayner distributed copies of Your Disobedient Servant to those involved in his team, and the efficiency reviews that Chapman had conducted in the former Ministry of Public Buildings and Works were an example that the Rayner scrutinies followed. What Rayner found out was that nobody in Whitehall knew what it cost to run government departments, despite the fact that considerable sums of public money were involved, for example amounting to 3.4 per cent of GDP in the financial year 1985–86. Given that, in broad terms, every £1billion extra on the Civil Service pay bill at that time added another penny to the basic rate of income tax, the Thatcher Government’s objective of a smaller Service and its attempts to limit salary increases were understandable, given its commitment to reducing direct taxation. The Rayner exercises directly brought about only minor changes, but they did provide information that supported the belief of the Prime Minister and her economic liberal allies that there was scope for economies in the running costs of departments. In other words, Chapman had been right. A less likely ally proved to be Michael Heseltine, when Secretary of State at the Department of the Environment (DOE). According to his many critics, Heseltine’s inability to make any serious contribution to matters of policy explained the emphasis that he placed on management issues, but there was no doubting his effectiveness in dealing with those issues. Heseltine had been placed in charge of the fourth largest government department, which had a structure that, for instance, included at one stage no less than 48 Under Secretaries, and he introduced there a Management Information System for Ministers, under the aegis of which the numbers employed in the DOE were cut by a quarter. A complementary Rayner scrutiny conducted by a official called Christopher Joubert resulted in the DOE being divided up into 120 cost centres, which, in addition to the personnel information already supplied by MINIS, provided data on the actual expenditure incurred by each unit and related it to the unit’s budget.82 ‘What came to obsess Michael was introducing new management systems into government’, Mrs Thatcher wrote of Heseltine, ‘This seemed to me a most commendable interest and I encouraged him, arranging [in February 1982] a seminar with other Ministers to discuss it.’83 Heseltine found that his fellow Ministers and their leading officials were uninterested in his management thinking,84 but this made no difference because the Prime Minister was interested. So, in May 1982, the Government launched the Financial Management Initiative (FMI), the aim of which was to promote in each department an organization and system in which managers at all levels have (a) a clear view of their objectives and means to assess and, whenever possible, measure outputs or performances in relation to those objectives; (b) well defined responsibility for making the best of their resources including a critical scrutiny of output and value for


money; and (c) the information (particularly about costs), the training and the access to expert advice that they need to exercise their responsibilities effectively.85 The FMI represented the universalization of the MINIS and Joubert systems, and there was some evidence that improvements in productivity that compared well with those made in the more relevant parts of the private sector. A policy of running costs controls introduced by the Treasury in 1986 cohered with the delegated responsibility for budgeting and for management that the FMI promoted. By the end of the 1980s, the Thatcher Governments had devised a coherent pay system for the Civil Service that had replaced the Priestley arrangements, though, of course, the differentiation between staff represented by the introduction of performance pay and more emphasis on regional variations in salary levels. That said though, to a substantial extent pay and conditions of service remained standardized in the Service as a whole, which set obvious limits on the effectiveness of the FMI. Using Private Enterprise in Government was not only the title of a Treasury multidepartmental review published in 1986, but also what many took to be a shorthand description of the approach that the first two Thatcher Governments took towards the Civil Service. The initiatives already cited largely had private sector examples in mind, and, obviously, so did the introduction of competitive tendering and contracting out of ancillary services, but the reality still was that the core activities of the Civil Service remained largely intact, and the Prime Minister then had to consider whether to go farther and radically change the familiar structure of government departments and the career Civil Service with it.86

‘Radical reforms’ and the Next Steps programme ‘It was only towards the end of my time in government that we embarked upon the radical reforms of the Civil Service which were contained in the Next Steps programme’, Mrs Thatcher wrote, ‘Under this programme much of the administrative – as opposed to policy making – work of government departments is being transferred to agencies, staffed by civil servants and headed by Chief Executives appointed by open competition. The agencies operate within frameworks set by the departments, but are free of detailed government control. The quality of management within the Public Service promises to be significantly improved.’87 In this manner, the Prime Minister hailed the Next Steps Report of 1988, as well as writing off the previous efforts of the Governments she led to reshape the Civil Service, which must have seemed radical enough to many in that Service, certainly by the standards of former Governments. Thus, in 1985, Anne Mueller, a Second Permanent Secretary in the Cabinet Office, had written that ‘a management revolution is already underway in the Civil Service which will greatly increase its effectiveness’.88 The ‘revolution’, though, had not gone far enough for the


Prime Minister, and in 1987 there was a Mueller Report produced by a team led by the same official called Working Patterns, which proposed a two-tier Civil Service, with a core Civil Service that would enjoy job security and career prospects, and a peripheral Civil Service that would be employed on a wide range of conditions of employment. Though the Report did not say so, the career Civil service with its implication of permanency effectively meant that staff costs were treated as if they were fixed costs, whereas the thinking behind the FMI was to treat them as running costs. The career Civil Service’s range of employment rights severely limited the scope for managerial initiative, and the logic of the Conservative Government’s position was to change the conditions of service so that the FMI really did prevail.89 Quite how arrangements of the kind advocated in Working Patterns could be implemented except over the long term was hard to see, with the commitments made on provision of pensions presenting just one obvious difficulty. Meanwhile, though, the proposals made in Working Patterns came to be overshadowed by those made in pursuit of the Next Steps programme. This programme followed from a report called Improving Management in Government: The Next Steps published in February 1988. This was the work of the man who had succeeded Rayner as the Prime Minister’s Adviser on Efficiency, Sir Robin Ibbs and the Unit he led. The proposed structure resembled those that characterized Swedish central government, which had interested reformers for 30 years in part because of Sweden’s political reputation at one time for having established a successful social democracy. That reputation had not survived, and anyway quite why a British Government of the kind led by Mrs Thatcher should look to Sweden seemed strange at first sight, and after further consideration too, given that the Swedish system did not have a convention of Ministerial responsibility. The Efficiency Unit and the Government seemed undeterred. ‘Although, at the most senior levels, civil servants are responsible for both policy and service delivery, they give a greater priority to policy, not only because it demands immediate attention but because that is the area in which they are on familiar ground and where their skills lie, and where Ministerial attention is focused’, the Unit observed, concluding that, ‘A proper balance between policy and delivery is hard to achieve within the present framework.’90 The Unit believed that the aim should be to establish a quite different way of conducting the business of government. The central Civil Service should consist of a relatively small core engaged in the function of servicing Ministers and managing departments, who will be the ‘sponsors’ of particular government policies and services. Responding to these departments will be a range of agencies employing their own staff, who may or may not have the status of Crown servants, and concentrating on the delivery of their particular service, with clearly defined responsibilities between the Secretary of State and the Permanent Secretary on the one hand, and the Chairmen or Chief


Executives of the agencies on the other. Both departments and agencies should have a more open and simplified structure.91 The policy was to be that ‘within two years at the most, departments should have completed identification of areas where agencies are the most effective way of managing and should have changed their own internal structures to implement this change’.92 Out of a total of approximately 600,000 civil servants, the immediate implementation of the Next Steps Report only involved about 70,000, many of them involved in marginal activities, though half were located in the Employment Services part of the Department of Employment that included job centres and unemployment benefit administration, and so could not be written off as unimportant.93 Within the Government itself, Lawson as Chancellor of the Exchequer proved to be a sceptic about the virtue of hiving off executive functions into separate agencies, pointing out that the head of the autonomous executive agency was effectively accountable to nobody. Further, the original proposals made no provision for securing effective control of the expenditure of the agencies. After a long battle, the Treasury and the Cabinet Office agreed a concordat whereby the agencies were to be set financial targets by the Treasury, which would then monitor performance. Lawson approved of Peter Kemp being promoted to Second Permanent Secretary in the Cabinet Office and placed in charge of the Next Steps programme as Project Manager. This was because Kemp had joined the Treasury from the private sector, and so was not a conventional civil servant, and Lawson credited Kemp with having played a major part in ensuring that by the late 1980s every Civil Service union was negotiating pay agreements that made reference to market considerations. Lawson’s own contribution to the Next Steps programme was to volunteer the Stationery Office, the Royal Mint, and the Central Office of Information, but he objected when Kemp proposed to convert the Boards of Inland Revenue and of Customs and Excise into agencies as this would turn them into tax collecting bodies only. The Treasury would be expected to take on their policy role, but without practical experience on the ground.94 This was a convincing argument, but, nonetheless, these two bodies were added to the list of future agencies, and, even before their translation into agencies, by the time Mrs Thatcher left office there were 34 Next Steps agencies, and by the following summer that total was planned to be 50 agencies, employing about 200,000 civil servants.95 Lawson recognized that Kemp had done a remarkable job in bringing one-third of the entire Civil Service within executive agencies in such a short time, and while he disapproved of arrangements under which the agencies remained free of the ultimate sanction of financial failure, and his preferred solution was to take privatization deep, instead of marginally, into the areas of activity conventionally assigned to government departments, and Lawson came to see that the establishment of the agencies made future privatization less


difficult.96 The status of the Next Steps agencies resembled that of the public corporations that had run the nationalized industries, and it was not surprising that Mrs Thatcher emphasized that ‘I cannot rule out. . . that after a period of years, agencies, like other government activities, may be suitable for privatization.’97 There were those in heavily unionized career Civil Service who seemed to think that the Thatcher Governments gave it a torrid time, and even that the Service had even been singled out for especially unfavourable treatment, which, given the high levels of unemployment in the private sector in the 1980s, failed to convince. Of course, and obviously, if a quiet life was what was wanted, proximity to the Prime Minister was not advisable, and the leading civil servants in particular were too close for comfort, but such officials could not complain as of so many recent Governments that those of Mrs Thatcher lacked direction. The note of certainty that the Prime Minister in particular struck did not always conform with the facts, and when she stated in 1985 that ‘our Civil Service is now smaller than at any time since the War’, The Economist commented that the cuts in numbers had mainly come in the industrial Civil Service, nearly all of whom worked in dockyards and Royal Ordnance Factories. ‘Turn to real civil servants and Mrs Thatcher’s claim is wide of the mark’, the journal observed, ‘There were 499,000 in 1945, with departments on a full war footing. Mrs Thatcher this year apparently needs more than Churchill did to win the War; she has 504,000.’98 More relevantly, the total of ‘real civil servants’ had been 566,000 in 1979 and that for 1990 was to be 495,000, and the overall total was by then 170,000 lower than it had been eleven years before.99 So, there was not a dramatic reduction in the numbers of civil servants during the period of the Thatcher Governments. Those Governments took unified grading farther down the Service than before, an act of standardization that cohered uneasily with the ambitions of the FMI. The notion that the Thatcher Governments undermined the unity of the Service as such neglected the reality that the Service it inherited was characterized by 90 per cent of direct entry recruitment being done by the employing departments, which also provided 76 per cent of post-entry training together with 20 per cent purchased externally and just 4 per cent provided centrally.100 The Thatcher Governments did not change these arrangements, and, indeed tended to work with the Higher Civil Service that they had inherited, though it was put firmly in its constitutional place. ‘The Service belongs neither to politicians nor to officials but to the Crown and to the nation’, Bancroft had declared,101 thus echoing Fisher’s sentiments of half a century before. That said though, the role of leading civil servants as permanent politicians supposedly able as Fisher decreed to move between unrelated posts as Ministers did and for similar career reasons worked best when the conventional wisdom was much the same on both sides of the constitutional divide, but where the outlooks were radically different as was obvious the arrangements did not work, as, ironically, Fisher found out


himself when he had ideas on defence and foreign policy that the National Government did not share. The National Government tolerated Fisher, but, as we have seen, Mrs Thatcher chose to get rid of Bancroft and the Civil Service Department along with him. She wanted a different sort of Civil Service, but there was certainly no master plan at the outset, and nothing that could be said to be comprehensive until the Next Steps Report of 1988, and even then the outlines of Fisher’s Administrative Class could still be detected in the policy Ministries, and certainly nothing too technocratic seemed in prospect. As for the broad mass of civil servants they were destined for employment in a range of agencies, and the door had been opened to greater private sector involvement in the provision of public services in the name of efficiency. ‘We tried before but without the clout’ was one official’s verdict on past efforts to bring about radical change in the modern Civil Service,102 and Mrs Thatcher provided this, and, though World Wars and Warren Fisher shaped that Service more than any politician, it may well be that one contemporary historian got it right when he wrote that Mrs Thatcher had more impact on the Civil Service than any peacetime Prime Minister since Gladstone.103

7 The Economic Liberal Crusades IV: The Confrontation with Local Government

Less than ‘brutishly Napoleonic’ In a country like England, where business is in the air, where we can organize a vigilance committee on every abuse and an executive committee for every remedy. . . we need not care how much power is delegated to outlying bodies, and how much is kept for the central body. We have been. . . through all that. Now we are quite grown up, and can put away childish things. So wrote Bagehot in The English Constitution, stressing the contrast with ‘France, where there is scarcely any power of self- organization in the people, where the prefet must be asked upon every subject, and take the initiative in every movement’.1 It was Napoleon who ‘settled the administration of France upon an effective, consistent and enduring system’, Bagehot observed, and ‘the succeeding governments have but worked the mechanism they inherited from him’.2 In the case of Britain, Ferdinand Mount thought that ‘administrative centralization of a sort which, when encountered elsewhere, we disdain as brutishly Napoleonic’ was unlikely to be deemed tolerable for long ‘in the absence of an external foe’,3 though recent history had witnessed ‘the destruction of the stability and authority of local government’ in Britain, and Mrs Thatcher’s former adviser noted that it was fashionable to blame her Governments and the Prime Minister for this.4 Thus, according to two academic authorities, the cumulative impact of the actions of the Thatcher Administration in relation to local government. . . has been to transform the relationship between the two levels of democratically elected government in Great Britain. The ‘unwritten constitution’ which has governed the relationship between central and local government over the last century has been ignored and in effect radically (and unilaterally) changed. . . The world of local government has become destabilized by the sheer volume of 159


legislation directed at it, the perceived irrationality of much of its content, the fundamental challenge to many of its taken-for-granted assumptions and domains of responsibility, and the intensifying uncertainty about the scope of its responsibilities and indeed its future role. To deplore ‘the attack on local government’5 became a familiar feature of a certain kind of contemporary political writing, with its most gifted exponent arguing that Margaret Thatcher detested local government as much as she detested the trade unions and the Labour Party. There is no reference in her memoirs that is not pejorative. Her colleagues were frequently shocked by her vehemence on the subject. She saw local councils as irresponsible, left wing and profligate. Government departments and nationalized industries she thought she could control. ‘Local government as usual is overspending’ is the comment that litters her memoirs, whether or not it was true. Local councils were holes not just in the public spending bucket but in the whole Thatcherite political economy. Worse, they imposed a tax that was to Thatcher a fixation, a tax on property known as a rate.6 Since the Attlee Governments’ nationalization programme of the 1940s ‘represented the most important reduction in local government functions in history and an unparalleled centralization of governmental power’, the same commentator recognized that the Thatcher Governments only came second when it came to attacking ‘local democracy’.7 That in post-1945 British politics the only Labour and Tory Governments that anybody would be seriously tempted to regard as distinguished both displayed little faith in the capacity of local authorities to run essential services efficiently seems worth noting, especially as in the case of the Governments led by Attlee the last great political figure who made a reputation worth having in local government was one of their supposed Big Five. This was Herbert Morrison, of course, who had been Leader of the London County Council between 1934 and 1940, and who had led that Council in its defiance of the National Government in pressing ahead with a new Waterloo Bridge, with the Council initially finding the relevant money itself. That he wanted the new structure to be called Morrison Bridge.8 was a reminder that Morrison was not without his problems, but in so far as these related to politics the most important of these was that he was an advocate of both local government and of nationalization. Indeed, Morrison was what passed for Labour’s leading thinker about public ownership before guiding much of the nationalization programme through the 1945 Parliament. This programme took away from the local authorities their gas and electricity undertakings. In the relevant Cabinet meeting on 20 December 1945, Morrison objected to the proposed structure of the NHS, arguing that local authorities should be made responsible for both voluntary and municipal

The Confrontation with Local Government 161

hospitals, but he was unsuccessful in opposing this form of nationalization,9 and not surprisingly so given his advocacy of other acts of nationalization which removed local government functions. Further, Morrison never seemed to understand the trade unions, though in his beloved local government the contribution of NALGO (National and Local Government Officers’ Association) to the establishment of a general pattern of employment applicable to the greater part of the local public services10 must have been known to him. Of course, the unions tended to be led by right-wingers in Morrison’s day, and his biographers described him as being unlike many socialists in recognizing that the public purse was not bottomless.11 Notions of financial responsibility of this kind were to some extent a hangover from the economic liberal past, and as late as 1958 the Local Government Act of that year had in important respects the character of a gentleman’s agreement. That said, though, local government finance remained a political problem, not least because of the increasing dependence that local authorities came to have on the Treasury for money, and, not surprisingly, though it came to be widely believed in public discourse that ‘something must be done’ about local government, politicians found it safer to do ‘something’ about its structure. Morrison had never actually said or written that ‘we’ll build the Tories out of London’,12 but the Conservatives had not obtained a majority on the London County Council (LCC) since 1934, and it was not surprising that by the early 1960s they came to favour a structure which, in Morrison’s words, would give them ‘a reasonable chance of electing and preserving a Tory majority’. Morrison described this as ‘gerrymandering’,13 but arguments that were not partisan could be advanced for replacing the LCC by a Greater London Council more or less covering the London area outside the City of London and within the green belt, though ‘planning, traffic and main roads’ seemed a thin list of functions. The original intention had been to divide responsibilities for education between the GLC and 32 new, enlarged Greater London Boroughs, but education came to be ‘wholly in the hands of the Borough Councils’ with the exception of ‘a central area’ where there would be ‘one education authority’.14 This latter arrangement seemed designed to preserve at least in part the former LCC education service, which had a good reputation. Morrison chose to describe the changed structure as ‘insane’,15 which, ironically, eventually came to be a widely held opinion about the policies pursued by what became the Inner London Education Authority. ‘Only once in each century will there be a politician fool enough to embark upon the reform of local government. I have decided to volunteer myself for that sacrifice this century.’ So said Peter Walker in 1970 as the relevant Minister in the Heath Government.16 Like the London Government Act of 1963, a two-tier structure was used for the wider reform of local government in England and Wales. Under the Local Government Act of 1972, county boroughs were abolished in those countries and the number of counties was


reduced to 47 incorporating 333 non-metropolitan districts. In the English conurbations apart from London, 6 metropolitan counties were established, together with 36 metropolitan districts. In Scotland, separate legislation reduced the number of local authorities from over 400 to 65.17 ‘Local government reform has been hung around my neck like a millstone’, Walker was to complain, though, in retrospect, he would make only a few changes. It was a mistake to give responsibility for planning to both counties and districts. . . The job should have gone to the counties. . . One fundamental mistake that I made was in setting up the metropolitan county councils. I specified what they could do, but not what they could not do. I did not, for example, say that they should not go in for economic development. What happened was that the councils took on a whole range of new spending functions. It would have been wiser to have excluded these other activities.18 The Heath–Walker reforms avoided the tank-trap of local government finance, but the October 1974 Manifesto made the commitment that ‘within the normal lifetime of a Parliament we shall abolish the domestic rating system and replace it by taxes more broadly based and related to people’s ability to pay. Local authorities must continue to have some independent source of finance.’19 There were no such commitments in 1979 and 1983, but by 1987 such reform was back on the agenda. The local government world of Morrison had been gone for some time by that stage, and Mount observed: What in most places had been the a relatively peaceful business of drains and libraries took a sourer turn in the 1960s and 1970s when [the local] Labour caucuses lost the mass support that they had enjoyed in the late 1940s (the peak of party allegiance and membership in both the Labour and Conservative Parties) and became an easy target for the ‘bedsit militants’, the ‘loony Left’ or the ‘incomers’. . . In the boroughs which they captured, the level of domestic rates soared to unprecedented and often unaffordable levels. . . The Government felt compelled to take action,20 or, at least, the Prime Minister eventually did. In broad terms, national political trends had seemed to largely determine the outcome of local government elections, sharing with by elections the opportunity to express discontent, especially with turnouts reflecting widespread apathy and with the outcomes often seeming to bear little relation to the manner in which the individual councils or councillors had performed their duties. In particular areas, though, the position of the Left was far from ‘loony’ in the sense that the logic of their position was to break the system, with excessive public expenditure being one means of doing so, and there were various interests notably local government employees who had every reason to appreciate extra


spending on public services, as indeed did much of the local government electorate since they did not have to pay the rates in full. That somebody else had to pay for the excesses of, say, the Socialist or People’s Republic of South Yorkshire may well not have concerned enough electors of the area concerned to make the difference, but Mrs Thatcher seemed determined not to tolerate such socialist experimentation, especially as must be the case others had to pay for it, though what she could not seem to see was that there was a much wider unwillingness to pay for local government at all, which interpretation included the optimistic assumption that many, perhaps most, electors could distinguish between what were local government functions and what were those of central government. That the Thatcher Governments were behaving unconstitutionally in its treatment of local government was a familiar theme in contemporary journalism and academic discourse, but few of these observers grasped the nature of what the constitutional arrangements actually were with the clarity expressed by Nigel Lawson in evidence to a House of Commons committee in 1985. ‘We suffer from an unfortunate constitutional set up in this country as a result of our consistent pursuit. . . of the middle way’, Lawson said: There are countries like West Germany and the United States which have a genuine federal constitution and where local authorities, whether they are states, as in the case of the United States, or Länder, as in the case of Germany, are genuinely held to account. They are independent authorities and the electorate understands the responsibilities that these authorities have for managing their own affairs. That does not work too badly. You also have the opposite. The French, very logically, have a unitary constitution and carry it to the extreme where nearly every decision is dictated from the centre – Paris – and the head of the Departement, the prefet, is appointed from the centre. That works out not too badly. We have a curious mixture because our constitution is mid-way between the two we have a unitary constitution but nevertheless the local authorities have considerable autonomy.21 Lawson was antagonized by how ‘the Militant Tendency group which for some years controlled Liverpool’ and others ‘whose ambition was to establish a high spending socialist republic’ in other local authorities used such autonomy,22 and so were Mrs Thatcher’s other allies. Burke had deemed it wise ‘to love the little platoon we belong to in society’,23 and under an economic liberal order if there had to be State activity it was best done at local level. The financial disciplines of the rate paying democracy of J.S. Mill were no longer there, of course, and what Mrs Thatcher eventually set out to do was to restore the disciplines without the rates and with a universal Community Charge in their place, and her determined attempt to reform local government finance was to help to bring her down.


‘The battle with local government’ ‘The battle with local government was not an easy struggle. It was a battle of attrition. We had few weapons and a resourceful opponent’, Michael Heseltine, the Secretary of State for the Environment in the first Thatcher Government, recalled.24 In their 1979 manifesto, the Conservatives had stated that ‘cutting income tax must take priority for the time being over abolition of the domestic rating system’,25 which Heseltine translated as meaning that ‘we had no idea how to replace the rates’. That said, though, the tax cuts had to be paid for and, among other economies, the Cabinet wanted a 3 per cent reduction in local government expenditure [meaning in the] current 1979–80 budgets [of local authorities]. We wanted cuts in actual spending levels, something few councils had any experience of delivering. Effective management, private sector competition, delivering the same – even better – services with less expenditure all belonged to an unimaginable world. Their officials, every local and national pressure group, and much of the media, shouted ‘amen’ to their complaints. Heseltine recalled that ‘seeking cuts in local government was far from the concerted strategy it seemed’, even after ‘the Treasury had won the battle for global cuts’, because ‘the Department of Education, the Home Office, the Ministry of Transport and other spending departments used every wile to ensure that their local programmes remained intact’. Heseltine described the DOE as ‘the jam in the sandwich’. None the less we persevered. The battles were fought trench by trench. By 1983 we had exerted such pressure over local authorities that the numbers employed – which had been rising for decades – had fallen back to levels last seen in 1974. To this must be added Geoffrey Howe’s success in reducing inflation from a rising 10 per cent in 1979 to 3.7 per cent in May and June 1983, the lowest rate since 1968. The annual rates bills were no longer the centre of attention.26 ‘There were, and remain, many – including councillors – who believed in or exploited the myth that pre-1979 local government enjoyed an exhilarating freedom to do its own thing’, Heseltine also wrote: The more we explored the workings of Whitehall and its relations with local authorities, the more fanciful the notion became. Detailed control over local government was in practice widespread. I once instructed officials to pin up on my wall all the forms required by the department’s housing division before a local housing authority could lay a single brick. Houses not only had to conform to Parker Morris standards, eighty


questions had to be answered in meticulous detail before the Department would authorize any building. The size of the room, the pitch of the roof, the colour of the slate, the texture of the brick, all were under Whitehall control, underpinning the reality of centralization in a way quite unappreciated by councillors or Ministers. The same pattern existed across Whitehall. . . It was this culture that [Heseltine and his fellow DOE Ministers] set out to challenge and reverse. Much of the suffocating detail. . . was scrapped. The Parker Morris housing controls went. . . Our Urban Programme came increasingly to rely on local initiative and public–private partnerships. . . With increased freedom we demanded increased accountability. Authorities now had to publish much fuller information about the costs and quality of their services. Their Direct Labour Organizations were to keep proper accounts and to be opened up to competition from the private sector. Their land, classified as unused or derelict, had to be placed on a register so that the private sector and councillors were made aware of the hidden resources tucked away, unused and unexploited. We were accused of excessive centralism. We were simply ensuring that local people were properly informed about the councils they elected.27 The Thatcher Governments ‘passed roughly fifty Acts affecting local government. . . almost all of them designed to restrain council spending’, Lawson recalled, with ‘every measure [being] easily caricatured as an affront to local democracy’. What the Thatcher Governments eventually managed to achieve was ‘the gradual decline in the share of local government spending financed by central government grants from 57 per cent in 1979–80 to 48 per cent in 1989–90. Had the overspending been validated by the Government maintaining the share unchanged, public expenditure control would have disappeared out of the window altogether.’28 Unlike, say, Peter Walker or Kenneth Baker, Lawson considered that Heseltine had ‘never been an indiscriminate big spender’,29 and Heseltine was of the opinion that ‘by 1979 local government had become a barely controllable free wheeling employment machine which for year after year had been run largely for the benefit of the machine minders’,30 and this mattered not least because ‘the cost of wages and salaries [accounted for] two-thirds of all current expenditure’. Heseltine stated that there was no wish to interfere in the priority of expenditure decisions of particular councils, and no attempt at first was made; but as time passed we were forced to involve ourselves more and more. In my first year I made a mistake. The local authorities, both Tory and Labour controlled, all assured me that local government had always complied with the overall expenditure guidelines set by central government. ‘You won’t need controls’, they said, ‘We always stick to the guidelines’. They were telling me the truth, and I do not think that most of them realized any more


than I how comparatively easy it had been for them to contain expenditure within. . . guidelines that had risen every year. Now the guidelines were going to be lowered, and the change in 1979–80 from Labour’s proposed increase of 6 per cent to a decrease of 1.4 per cent – a reduction of 3 per cent after the financial year had begun – broke the habit of a lifetime in local government.31 What had been needed from the outset was a body like the eventually established Audit Commission for Local Authorities in England and Wales. Heseltine’s previous Ministerial experience at the DOE under the Heath Government had led him to believe that the relationship between the councils and the District Audit Service had ‘become too comfortable after years of friendly familiarity’, and that it would be advantageous to introduce ‘some of the rigours of private sector accountability into local government’ with the Commission concerned being given a remit ‘to actively promote efficiency and value for money’. Heseltine recalled that ‘the Treasury raised objections and delayed for two years the establishment of the Audit Commission. At the root of their arguments was their instinctive hostility to anything which they cannot control or at least interfere in. . . After a renewed campaign [the Commission] found a place in the Local Government Finance Act of 1982. The upshot was that it was April 1983 before the Audit Commission could start its vital work.’32 Heseltine believed that the establishment of the Audit Commission was an ‘ambitious innovation’ since ‘authority by authority, service by service, for the first time it was possible to compare individual councils and their performance’. Heseltine was able to appoint John Banham, a partner at McKinsey, to be the first Controller of Audit at the Commission,33 and Banham and the Commission soon demonstrated their independence when criticizing the block grant arrangements in the 1980 Act. ‘The block grant system. . . is being used to try to secure at least four different objectives which are not mutually compatible: to distribute grant in a way some of which reflects local needs and resources, to control aggregate local government expenditure, to ensure that individual authorities do not exceed their spending targets, and to limit rate increases from year to year for individual ratepayers.’34 The Commission concluded that major changes needed to be made in the arrangements for distributing the block grant, namely: ‘less system induced uncertainty, more financial stability, more delegation, stronger local accountability, less second guessing from the centre, more consistency, less complexity, more local flexibility. . . The existing shortcomings in information on needs and local property values need to be corrected – distributing £8.6 billion in part on the basis of poor information is a false economy.’35 The Commission noted that ‘a succession of targets and penalties was overlaid on to the block grant system which has generally made it more expensive from year to year for authorities to spend above the expenditure targets set


by the Government. Normally the effect has been to withdraw block grant progressively as an authority’s expenditure exceeds the target.’ The 1980 Act had also introduced ‘a new system of controlling local authorities’ capital expenditure. . . which replaced the old system of controlling the borrowing to finance capital schemes with a series of capital expenditure allocations for individual authorities’. In addition, the power of local authorities to levy a supplementary rate and precepts had been withdrawn by the Local Government Act of 1982.36 ‘We’ve got this problem’, Heseltine supposed to have said to the Prime Minister in 1979 about the question of the need for a rating revaluation for England and Wales, given that there had not been one since 1973. ‘There’s no problem’, Mrs Thatcher was reported to have replied, ‘We’re not doing it.’ Heseltine was ‘much relieved’, while noting that ‘my colleague in the Scottish Office, George Younger, took powers to delay the mandatory review in Scotland for two years’, and looked at the rating system and possible alternatives. ‘A local income tax – arguably the most coherent of options – would simply mean that, as we lowered income tax nationally, local Labour authorities would push up tax locally’, Heseltine observed, Local sales taxes made little sense in the tight geography of this country, where local boundaries are not readily identifiable and where, in any case, the worst effects would be felt by local businesses, already indignant about the burden of the business rates. A poll tax had attractions in that would ensure that voters identified much more clearly the consequences of voting for high spending – invariably Labour – authorities, and it would also reflect the number of occupants enjoying local services in a given property. But it would be difficult to collect and quite impossible to persuade a fair minded electorate that the richest and poorest alike should pay the same towards what was effectively a local tax system. Each alternative we examined had its merits and demerits. Every conceivable idea was explored, including the option of transferring the cost of a major service, education, to the national taxpayer, which would have seriously lowered the bills but would also have reduced the responsibilities of local authorities.37 Heseltine’s Green Paper concluded that ‘probably none of the possible new sources of local revenue. . . could be used as a replacement for domestic rates. A local sales tax or local income tax combined with either a poll tax or domestic rates retained at a lower level of yield could replace the present system, but would entail correspondingly higher administrative and compliance costs.’38 With Tom King, a fellow Minister, Heseltine saw almost every Tory MP and found there to be ‘a blocking minority against each option’.39


‘My personal instinct was. . . to grant local government considerable freedom to initiate policies and experiment between different ways of delivering services’, Heseltine wrote: I like the idea of enabling authorities. Their responsibility should be to make sure that services of quality are delivered, rather than providing them themselves. They will usually be well advised to buy in these services, their quality defined contractually, from outside providers after competitive tendering. It is a question of political philosophy. Is local government to be more an agent than an initiator, carrying out the wishes of an all powerful central government? Or should it be seen as relatively free to pursue a local agenda, devised by local councillors responsible to a local electorate? I believe we are an over centralized society with decision making too tightly controlled by Whitehall.40 Yet, the Local Government, Planning and Land Act of 1980 made provision for the establishment of Urban Development Corporations. ‘I wanted them to have the same powers as the New Towns Corporations which, though successes in their own right, had drained away so much of the life of the old cities’, Heseltine recalled: The London Docklands Development Corporation was to encompass 6,000 acres of land on both banks of the lower Thames; while [the] Merseyside Docklands Corporation took in nearly 900 acres of polluted wasteland in the heart of [Liverpool]. We also included two smaller sites in Birkenhead and Bootle. They were to have the powers, with the resources provided to central government, to own and acquire land, build factories, and invest in both infrastructure and environment so as to attract industry and commercial and residential development. They were to exercise planning powers. In all practical senses they were to be New Town Corporations in old cities. The wheel had turned full circle.41 What was envisaged, as Mrs Thatcher remarked about Howe’s plans for Enterprise Zones, was ‘regional policy by another name’, but much as Howe was eventually allowed to proceed,42 Heseltine got his way, choosing to argue that left wing councils, Communist it seemed, had to be swept aside.43 Of the local authorities, Heseltine said, ‘We took their powers away from them because they were making a mess of it. They are the people who have got it all wrong. They had advisory committees, inter-relating committees, and even discussion committees – but nothing happened! [Whereas] UDCs do things. More to the point they can be seen to do things and they are free from the inevitable delays of the democratic process.’44 Heseltine was to intervene as an unofficial ‘Minister for Merseyside’ following the uprising in the Toxteth area of Liverpool in the summer of 1981 that seemed more serious than the


other riots of that time, which were all in areas of urban deprivation with high unemployment. It Took A Riot was the dramatic title of the 21-page minute that Heseltine circulated to the Cabinet,45 but his own initiative relating to the Liverpool area had been taken earlier. Without doubting the remarkable level of energy that Heseltine subsequently put into trying to revive that area, he could not have been surprised either by the dismissive ‘give us jobs not trees’ reaction to his Garden Festival ideas,46 or that the political culture that had come to dominate Liverpool meant anything other than further trouble for the Government. What also became evident was that the refashioning of the structure of local government that the Conservatives had undertaken in London in that decade followed by the Heath–Walker reforms had not served the Tory interest in the manner intended. The GLC run by Horace Cutler was one thing, but when Ken Livingstone at the head of the Labour Left took charge of County Hall in 1981 the Thatcher Government found that while it merely faced an inept Labour Opposition in Parliament, across the river Thames it had an adversary with a gift for publicity. Though portrayed as a Marxist, Livingstone was, knowingly or not, a disciple of Marcuse, effectively writing off the old working class as a revolutionary instrument, and concentrating on ethnic minorities and their organizations and women’s groups,47 not seemingly minding that the latter were largely middle class in composition and interests. Indeed, Livingstone seemed to see London as having become like Paris, being ‘composed of skilled middle class people that basically administer society, the poor and the single parents, the immigrant families, and the unskilled working class labour force’. As Livingstone saw it, ‘the influx of people that have given the GLC this great reputation in the gutter press for being the end of civilization as we know it, is the fact that it is the post-1968 generation in politics’.48 Livingstone believed that the way that housing, transport or education are funded by local government does directly challenge capital. The rating mechanism is the best method of redistributing wealth that the Labour Movement has ever laid its hands on. It beats the hell out of any policy which government has for financing central programmes. To be able to spread the burden of financing services in such a way that the greater part is paid by industry and commerce is incredibly advantageous to the Labour Movement. That’s why the Tories have woken up to the importance of centralizing the State. If you have radical socialist administrations prepared actually to fund services, you are redistributing wealth in a big way, as, for example, with fares policies. If you look at it, a third of all we spend is financed by the City of London and Westminster, which means mainly the office blocks in those two areas. Out of a current rate product of £19M per penny rate, £3M comes from Westminster and £2.7M from the City of London. That’s fantastic redistribution of wealth, it makes the GLC the best redistributor


of wealth we’ve ever been able to get control of, much better than any other council in the country.49 In the case of Sheffield, which was a metropolitan district within the South Yorkshire County, there was no comparable wealth to redistribute. This did not stop the Council led by David Blunkett from trying to demonstrate that ‘local government can be a tool for achieving socialist change’,50 even though ‘at first our achievements can only be beacons’,51 providing ‘hope for people who are struggling and [indicating] to central government that if they want a fight they’ve got one’.52 Policies such as heavily subsidized bus fares and no redundancies among council staff, though, had to be paid for in some way, and for example, the rates went up by 40 per cent in 1980–81, and by 37 per cent in 1981–82.53 There were many reasons why Leeds rather than Sheffield was to become well-before the end of the century second only to London as the most fashionable city in England despite being farther away from the capital, but the Blunkett regime in Sheffield was one of them. No sensible privatesector organization would want to invest in Sheffield while it was run in that manner, though, of course, this did not trouble the advocates of local socialism since, for them, the State was to be the universal provider, and, indeed, consciously or not, they were gambling that the Thatcher Government would in the end have to bale out councils who did not play its game. ‘We have checked the relentless growth of local government spending, and manpower is now back to the level of 1974’, the Tories stated in their 1983 Election manifesto, ‘The achievement of many Conservative authorities in saving ratepayers’ money by putting services like refuse collection out to tender has played a major part in getting better value for money and significantly reducing the level of rate increases. We shall encourage every possible saving by this policy.’ However, ‘there are. . . a number of grossly extravagant Labour authorities whose exorbitant rate demands have caused great distress both to businesses and domestic ratepayers. We shall legislate to curb excessive and irresponsible rate increases by high spending councils, and to provide a general scheme for limitation of rate increases for all local authorities to be used as necessary.’ Further, the manifesto pledged to abolish the GLC and what it should have described as the metropolitan counties.54 A White Paper called Streamlining the Cities followed declaring the GLC and the Councils for Greater Manchester, Merseyside, South Yorkshire, Tyne and Wear, the West Midlands, and West Yorkshire to be redundant. The White Paper argued that these councils had ‘found it difficult to establish a role for themselves’, which generated ‘a natural search for a “strategic” role which may have little basis in real needs’, and described the GLC in particular as a heavy spending authority.55 ‘From its beginning, the GLC was flawed’, Livingstone himself argued retrospectively: It was caught between being a strategic authority without the powers to perform that function and a body which overlapped and conflicted with


the boroughs in the provision of personal services. It was a recipe for conflict. The personal [social] services should have been the responsibilities of the boroughs. It was nonsense to create such an authority that had such a vast housing stock. But the Government of the day did not want to create a proper strategic body, because it would have meant surrendering some of the powers of central government to people elected by Londoners, who might take a different view from that of the Administration of the day. . . Between 1981 and 1985. . . we did our best with a flawed structure.56 If that was the case, it was not surprising that, even before the arrival of the Livingstone regime at County Hall, the Thatcher Government established a body like the London Docklands Development Corporation, which largely bypassed the GLC and other local politicians. The Livingstone regime’s ‘Fares Fair’ scheme was one factor leading the Government to transfer control of the London Transport Executive from the GLC eventually to a holding company called London Regional Transport.57 Some of the functions of the GLC were transferred to the boroughs, notably its housing estates, but otherwise the responsibilities were granted to numerous joint boards, notably the London Fire and Civil Defence Authority and the London Waste Regulation Authority, with a body called the London Residuary Board taking up what was left over.58 That the Inner London Education Authority was not sentenced to death until 1988 served to emphasize that the Thatcher Government’s reconstruction of the government of London had resulted in a mess. The Economist, at least, thought that there were advantages in ‘London’s fragmentation’ which meant that since 1986 ‘London has been run by a babble of individual local authorities (32, plus the City Corporation). Even the Lord Mayor does Dick Whittington’s old job only in the square mile of London’s financial district.’ The journal recognized that ‘many Londoners feel uncomfortable with this lack of a single symbolic figure to speak for the whole city’, but ‘give London a single voice and it would become a powerful lobby for more national taxpayers’ cash’. Being without ‘a single City Hall’ was supposed to have promoted the ‘urban economy’ of London in which it was an advantage to be ‘small scale and nimble footed’.59 Whether or not Londoners were better informed than the journal about the plethora of unelected bodies that had taken on many of the GLC’s former duties, such attitudes as the electorate had about the abolition of that council and the similar fate of the metropolitan counties displayed remarkable ignorance of what the functions of local government actually were.60 ‘The Government have concluded that rates should remain for the foreseeable future the main source of local revenue for local government’, a White Paper declared in July 1983,61 while announcing at the same time that it would ‘seek powers to limit the rate levels of authorities whose high spending imposes an excessive burden on householders and business. The purpose will be to restrain both the expenditure and the rates of these authorities.’62 Commentators described this behaviour as being counter to the spirit and letter of


the Constitution,63 representing, as it did, an unprecedented centralization of political power.64 Mrs Thatcher was accused of taking ‘a sledgehammer to crush a few left wing nuts’ by The Economist, which suggested that she should have the courage of her convictions and either kill or cure. . . she could choose to follow the logic of her present centralism and go for outright financial annexation. This would involve treating local rates as part of central taxes, fixed overall by the Treasury and for each council by the [DOE]. It would turn local authorities into a cross between a parish council and an existing health authority with delegated powers from Whitehall. Members might continue to be elected if they wished, but their budgets would be cash limited by law. As such a course would be ‘a recipe for gigantism and bureaucracy’,65 Mrs Thatcher eventually chose to seek a ‘cure’, and what became the Rates Act of 1984 was no more than a holding measure. Several Labour councils contested the application of rate capping, with Liverpool leading the way. Though the Liverpool Council had not been Labour controlled before 1955,66 by the time of the May 1983 local elections Liverpool was in the grip not only of the Labour Party, but of the Militant Tendency within that Party. ‘Unlike the Labour Party in many other areas, in Liverpool the party was overwhelmingly working class’, the Militant leaders pointed out,67 believing that ‘the capitalists and those who support their system within the Labour Movement were mortally afraid that the example of Liverpool would prove contagious in the explosive social situation that had opened up in Britain in the 1980s’.68 Liverpool. A City That Dared To Fight was how the leaders of Militant were to portray the story of what then happened, notably ‘The Battle Against Ratecapping’,69 and ‘Moving Into Illegality’,70 and, following defeat, ‘Bring Me The Heads Of Hatton and Mulhearn’.71 If what might be called the High Tory tendency had been running the Conservative Government fear and appeasement might have been the response, and Derek Hatton and Tony Mulhearn might have tasted victory. ‘The posture of Mr Hatton and his supporters continues to be that of a beggar who threatens that if we do not give him large sums of money he will start to mutilate himself, and will go on mutilating himself until he has no limbs left and is probably dead’, wrote Auberon Waugh, and the court jester of Low Toryism concluded that ‘all that is required for the triumph of common sense is that good men should do nothing’.72 The Government did not ‘do nothing’ and it did insist on the law being upheld, and there was what The Economist called ‘a last minute expedient [that] saved the [Liverpool] City Council from going bust’, which still left the problem of what to do about local government finance and its financing, with the journal wondering if the Government was looking to the example of France, which was ‘largely still run from the centre’, and arguing that ‘one is a Jacobin or one is not. British Tories should not be.’73


‘There is little doubt in my mind that local government is at a turning point’, Howard Davies, the Controller of Audit at the Audit Commission, wrote in 1988: This has, of course, been said before. And it has not been true. In 1979 people talked darkly of the Thatcher threat to local authorities. Yet, to take but one indicator, local government manpower has stayed almost precisely constant over the last eight years. This time, however, I suspect it is ‘for real’. Indeed, to say that local government is under siege is the most neutral and least emotive phrase I can think of which would be appropriate to its predicament.74 ‘Local government under siege’ was also how leading academics retrospectively portrayed its then recent history,75 but, as Davies hinted, there had been many instances of crying wolf earlier on, and, from close quarters, Davies was able to identify at the time of the third Thatcher Government six major areas in which the traditional structures of local government were ‘under threat’ involving privatization and contracting-out; functions like education; housing; inner-city development; and social services, and the rating system. In the Queen’s Speech in 1987, the Government had listed six new areas in which councils will be required to put services out to tender: refuse collection, street cleaning, ground maintenance, building cleaning, vehicle repair and maintenance, and catering including school meals. Davies conceded that little had come out of the previous initiatives, with the total amount of business given to private contractors accounting for £120M of business out of expenditure of £34 billion. ‘The Government has. . . learnt from its earlier mistakes and councils will be obliged to put a far greater proportion of their business out to competitive tender’, Davies believed, observing that ‘no matter how efficient an individual department may be, it will find the greatest difficulty in winning the business if it must carry an undigested lump of central overhead costs into battle’. In the case of housing, ‘the Government had made no secret of its desire to operate around local authorities if necessary’ to bring about ‘the long awaited Thatcher revolution’, but Davies thought that it was in the sphere of education that the most dramatic changes were envisaged. The local authorities were going to lose their responsibilities for polytechnics and eventually for further-education colleges, but Davies anticipated that the most important changes related to schools, notably allowing schools to recruit to capacity, financial delegation to schools, and provision for opting out of local authority control. As for the Government’s proposals in relation to the supplanting of the rating system, Davies correctly predicted that ‘the managerial challenge will be immense’,76 but this was to be dwarfed by the political storm that engulfed the Government.


The saga of the Community Charge ‘We will reform local government finance to strengthen local democracy and accountability’, the Conservative manifesto for the 1987 Election declared: Local electors must be able to decide the level of service they want and how much they are prepared to pay for it. We will legislate in the first Session of the new Parliament to abolish the unfair domestic rating system and replace rates with a fairer Community Charge. This will be a fixed rate charge for local services paid by those over the age of 18, except the mentally ill and elderly people living in homes and hospitals. The less well off will not have to pay the full charge but everyone will be aware of the costs as well as the benefits of local services. This should encourage people to take a greater interest in the policies of their local council and in getting value for money. Business ratepayers will pay a Unified Business Rate at a standard rate pegged to inflation.77 That the Poll Tax of 1381 had been one cause of the Peasants’ Revolt and an object lesson in how not to tax was naturally cited by those with a knowledge of English history, and there were seventeenth-century examples too, notably the Poll Tax tried in 1641, and experience of them was that either such taxes were flat rate and led to riot and rebellion or else they were graduated and the yield was poor.78 Even if the advocates of the Poll Tax chose to be as dismissive of history repeating itself as Marx had been in relation to Hegel’s thinking, there was no excuse for ignoring Adam Smith’s famous and well known exposition of the principles of taxation. ‘The subjects of every State ought to contribute towards the support of the Government as nearly as possible in proportion to their respective abilities’, wrote Smith, whose first principle of taxation was, therefore equality, in the sense of the capacity to pay. The second principle was that ‘the tax which each individual is bound to pay ought to be certain and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought to be clear and plain to the contributor.’ The third principle was that ‘every tax should be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it’. The fourth principle was economy of collection.79 What Lawson called ‘the dreadful Poll Tax’80 failed the test of equality and, obviously, that of ease of collection, since, to put the matter mildly, property moved much less often than people. ‘The battle for control of local government spending. . . became one of the perennial themes of the Thatcher years’, Lawson recalled, with ‘the Poll Tax [becoming] the last, and most disastrous, attempt at a permanent solution’. If, though, as Lawson suggested, one way out was to ‘require councils to fund all of their local services from local taxation’,81 there had to be a practical means of bringing this about, and in the meantime what Lawson called the ‘muddled system


of local government finance’ persisted. Lawson remarked on Mrs Thatcher’s ambivalent behaviour: ‘Her low regard for local government, particularly that large part of it under Labour control, made her unsympathetic to the [DOE’s] case for generosity; while her fixation with the evil nature of the rates made her reluctant to endorse the Treasury’s case for parsimony. In the event, the Government did take a tough line over central government grants to local government, but probably not tough enough’, though the result still was that the relationship between the two ‘degenerated into something close to open warfare’.82 ‘Margaret had set up in October 1984 a separate Cabinet Committee, under her Chairmanship, called E(LF) – the Local Finance Sub Committee of the Economic Affairs Committee’, Kenneth Baker later wrote, ‘This Committee was to consider “future policy relating to local government finance” and most senior Cabinet Ministers were members. . . On 31 March 1985, Patrick Jenkin [the Secretary of State for the Environment], [and his junior Ministers] William Waldegrave and [Baker] presented [their] preliminary thoughts [on reforming local government finance] to a Sunday meeting of Ministers at Chequers.’ Lawson chose to be absent, though his opposition to the Community Charge was made known. Baker noted that ‘Nick Edwards on behalf of the Welsh Office supported our proposals’ as did the Secretary of State for Scotland, George Younger, who said, ‘All my political life I have been waiting for this.’ On 20 May 1985, Baker recalled, ‘William and I presented our proposals to the E(LF) Committee, consisting of ten Cabinet Ministers. The key proposal was for a flat rate residents charge which “would have to operate with a rebate” for the less well off. . . The reaction of colleagues to our proposals was overwhelmingly favourable.’ Younger argued that ‘we must do something because of the political pressure in Scotland and [he] was adamant that ‘we must abandon the present rating system’. The main opponent was Lawson, present this time, who submitted a paper recommending that the central government should take over complete responsibility for the financing and some aspects of the management of education. . . The Treasury maintained that if education came off the rates then councils could raise the revenue for all the rest of their services from a property tax. This would be kept up to date with an annual programme of rolling revaluation. The Treasury did recognize that better accountability requires a highly perceptible and therefore unpopular tax. So the choice was between a high and painful property tax and the Community Charge. The Treasury went on to condemn the idea of a flat rate charge as ‘unworkable and politically catastrophic’. This made no difference, and on 9 January 1986, Baker presented proposals for reforming local government finance to the Cabinet, which included the phasing in of the Community Charge, and


then presented them to the House of Commons on 31 January 1986, with Lawson saying to him of the Prime Minister that the Poll Tax would be ‘her King Charles’s head’.83 The relevant Green Paper was called Paying for Local Government and it set out ‘proposals for the most radical reform of local government finance in Great Britain this century’. The system of central government grants was to be ‘radically simplified’, and there were two other important proposed changes. Firstly, ‘non-domestic rates should in future be set by central government as a uniform rate in the £. The proceeds would be pooled and redistributed to all authorities as a common amount per adult. The introduction of such a scheme would be accompanied by a revaluation of non domestic properties.’ Secondly, ‘domestic rates should be phased out over a period up to ten years and replaced by a flat rate Community Charge, payable by all adults.’ The Green Paper stated that these proposals lie at the heart of the Government’s reforms. They would widen the tax base so that virtually all adults would have a financial stake in the affairs of their local authority; they would ensure that the full costs or benefits of any changes in a local authority’s expenditure would fall on its domestic taxpayers alone; and, while non-domestic ratepayers would still make a significant contribution to local government expenditure overall, authorities would no longer be able to finance extra expenditure by taxing them at their own discretion. Together these reforms would ensure that the accountability of local authorities to local electors would be greatly enhanced.84 ‘I supported the Government on the introduction of the Community Charge and I still support the principle’, Rhodes Boyson declared from the Tory backbenches in 1990, having previously been Waldegrave’s replacement as Minister of State at the DOE, ‘Past revolutions were based on the words “No taxation without representation.” The rates position is “representation without taxation:” only one in two, one in three or, as in Brent, one in four of those who vote pay rates. Some people vote to spend other people’s money. That is political immorality. I support the community charge principle on the basis of accountability.’ What Boyson described as ‘the beginning of my road to Damascus’ came when Northern MPs showed him ‘what the Community Charge on low rated properties would mean’ in areas like their own where in some cases 80 per cent of their constituents would be worse off. Not surprisingly, Boyson concluded that this was ‘politically disastrous’, and he also noted that ‘it was said that the Community Charge would come in over ten to twelve years, that inflation would ease it, that one-tenth or one-twelfth of rates would be taken up by the Community Charge each year so that it would be eased in gradually.’ That had changed, and safety-net arrangements had been made which ‘went against the basis of accountability’ and benefited ‘spendthrift Labour areas’. So, Boyson concluded, ‘the Government started


out with good intentions. Ministers have passed through and civil servants have passed through, so no one guides the legislation through from beginning to end. Eventually, as the saying goes, a camel is a horse invented by a committee.’85 One could understand why Douglas Mason and the Adam Smith Institute favoured the Community Charge, especially as that Institute’s policy preferences rarely seemed to reflect Smith’s thinking or sophistication, and, given that he was an economic liberal of a kind, Boyson’s initial interest was also easy to understand. Quite why Tories of the Baker and Waldegrave kind largely independently came up with the Poll Tax remained a mystery, and that the Community Charge came into being when all the constitutional conventions were observed and there were plenty of opportunities to stop a political disaster from happening has to be mysterious too. The depiction of Mrs Thatcher in The Madness of King George terms naturally found favour as an explanation with some observers, and not only with her detractors, and they could point to her behaviour in eventually taking up the Community Charge as if she had patented it. Some commentators thought that Lawson as Chancellor might have stopped the Community Charge in its tracks if he had made it a resigning issue, and they recorded that Lawson came up with a proposal for a banded property tax much like the later Council Tax in a memorandum opposing the Poll Tax.86 Whether at the DOE or as a member of the E(LF) Committee when at Education, Baker kept trying to find ways of modifying the impact of the Poll Tax once it was introduced, but the detailed implementation of the Community Charge had become the responsibility of Nicholas Ridley as Environment Secretary, and Malcolm Rifkind, Younger’s replacement at the Scottish Office.87 ‘The whole purpose of the operation. . . was to end an unpopular and unfair property tax – the rates’, Ridley later recalled: It is easy now to forget the antagonism was that the rates which grew throughout the 1960s and 1970s; and also to forget the experience of the Scottish revaluation [of 1984–85]. The need to have an English revaluation was the clinching argument. . . If revaluations are held only at long intervals, all hell breaks out when they do take place, as Scotland showed. Annual valuation of every property every year would be a mammoth task, which would turn us into a nation of valuers. . . So I came to the conclusion in 1986 that the Community Charge was the right way forward. But I believed that it would be right only if it were not at a level too high for anyone to pay. The principle that everyone should pay something was paramount at the time, after our experience of only 20 per cent of the electorate paying rates in some local authority areas. Equally, I was sure it should be properly rebated for those on low incomes, to make sure it was within their ability to pay at all levels of income.88 Baker thought that the crucial mistake that was made was the removal of the transitional period and of dual running, and Ridley was soon recommending


that the transitional period should come down from ten to four years, and, though Baker and the Chief Secretary, John Major, were opposed to this, the E(LF) Committee agreed to this change. ‘By now, both the Scottish and Welsh Secretaries wanted to do away with the transitional period’, Baker recalled: This was not surprising, as the level of rates was much lower in Wales and Scotland, cushioned by the high amount of grant they received. Some English MPs had also come to believe that dual running was a bad thing, for it meant two taxes instead of one. . . At the 1987 Party Conference, in the debate on the Community Charge, several speakers argued for its immediate introduction and the abandonment of dual running. In particular Gerry Malone, who had just lost his seat in Aberdeen South and knew little about the English rating system, said to loud cheers, ‘scrap dual running’ . . . [Ridley] strenuously denied that he had arranged this intervention. However, Nigel Lawson was in on doubt whatsoever, and he believes that the Conference debate was rigged. After the debate, Margaret. . . said to Nick, ‘We’ll have to look at this again’. It was a fatal mistake, because introducing the Community Charge in one swoop meant that chargepayers, many of whom had never paid any rates, would now have to bear the full weight of local authority excess spending in the first year.89 It had been Lawson who had urged that the Poll Tax should be introduced in Scotland a year earlier than in England and Wales, and Rifkind proved eager to press ahead. There had to be separate Scottish legislation anyway, and this was passed before the 1987 Election. ‘As I saw it, the Scottish tail had been wagging the English dog for far too long; and there was an outside chance that, if implementation of the Poll Tax in Scotland demonstrated its horrors, there might still be time for the Government to have second thoughts about its introduction in England and Wales’, Lawson later wrote, ‘In the event. . . despite all manner of trouble when the Poll Tax was introduced in Scotland in April 1989, Margaret was by that time far too committed to the Tax. . . to contemplate drawing back.’ Soon, ‘Chris Patten, who had succeeded Nick Ridley at Environment in July 1989, characteristically sought far larger injections of public money than Nick had ever done’, Lawson recalled, observing that ‘it was. . . a rich irony that [the Poll Tax] a measure designed to curb local government spending led directly to [its] biggest increase in. . . the entire Thatcher period’.90 The introduction of the Community Charge into England and Wales in April 1990 was anticipated by the Trafalgar Square Riot of 31 March 1990. ‘Violent confrontation is nothing new in Britain: during Margaret Thatcher’s three terms of office since 1979, riots scarred the inner cities and the conduct of the Miners’ Strike and the printers’ campaign against Rupert Murdoch’, The Economist observed, But there was a strong undercurrent of sympathy for Mrs Thatcher’s Government whenever it tackled an entrenched vested interest that was ready


to defend itself with violence. The public might have had little stomach for the fight, but knew deep down that the Government was right to fight it. This time the mood is different; the way that venom towards the British Prime Minister has brought disparate protesters together cannot be ignored. And this time the Government itself is scrambling for ways out of its Poll Tax crisis in ways which undermine the convictions on which the whole well intentioned but ill thought out exercise is based. How can a tax promote local political responsibility if its tough simplicity is blurred with tinkering and capping from Whitehall?91 Mrs Thatcher was to concede that ‘many of the bills for the Community Charge which people are now receiving are far too high. I share the outrage they feel. But let’s be clear: it’s not the way the money is raised, it’s the amount of money that local government is spending. That’s the real problem. No scheme, no matter how ingenious, could pay for high spending with low charges.’92 Mrs Thatcher believed that ‘the defects in our system of local government finance were largely remedied by the [Community] Charge’, though ‘it would have taken time before the disciplines of the new system began to affect the behaviour of the worst overspenders’.93 If, though, to borrow her words, those protesting against the Poll Tax included ‘the very same law abiding, decent people. . . on whom we depended to defeat the mob’,94 then what the saga of the Community Charge revealed was a deeper crisis in relation to local government than those determined to portray what happened in terms of a morality play seemed to grasp. Even if one made the heroic assumption that most people actually knew what functions local government performed, what the Poll Tax experience demonstrated was the popular unwillingness to pay for them. The failings of the Community Charge were obvious, but then so were those of the alternative forms of local taxation, and if in Mrs Thatcher’s long battle against the culture of ‘something for nothing’ she experienced predictable defeat when she tackled local government, one of her many mistakes may have been to believe that local democracy in Britain was capable of being rescued.

8 The Governments of the ‘Iron Lady’ and the Defence of the National Interest

Farewell to the ‘Suez Syndrome’ Though she was out of office by then, on 23 September 1991, in Washington, Lady Thatcher was the guest of honour at the Heritage Foundation’s Clare Booth Luce Award Dinner. A specially composed Thatcher Freedom March was played. ‘I was stunned. . . by the realization that America was conferring on MT the sort of honorary imperial Presidency she had vainly sought at home’, wrote George Urban: The glory was hers, even though the power was borrowed. Inward looking Britain in her shrunken state, one among several in a squabbling and for her psychologically alien Europe, is small beer for her. But here in Washington, seat of the only remaining superpower, with the symbols, and the reality, of the might of America so theatrically displayed, she could, for a brief hour or two, savour the rewards of history she felt were her due. Though ‘praised by her hosts to the point of embarrassment’, Urban noted that when, in her speech, Lady Thatcher denounced ‘the concept of a United Europe’ and she coupled it with ‘an initiative. . . for an Atlantic Economic Community’, this ‘seemed to make no impression on the Americans at my table’.1 It would have been surprising if it had done so, given that a continuing objective of American foreign policy since the Second World War had been to promote the unity of Western Europe, an objective pursued with a tenacity and intensity that had been matched by the American determination to hurry along the fall of the British Empire. In much the same manner as Americans at the time ignored Churchill’s vision in the Fulton Speech of 1946 of a political arrangement involving the USA and Britain and her Commonwealth, Margaret Thatcher’s call for merely an economic arrangement fell on deaf ears. That the two twentieth-century British political leaders most commonly associated with patriotism behaved in this way suggested that 180

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the ‘special relationship’ between Britain and the USA only too often had the character of a one-sided love affair with the lover who believed himself or herself to need the ‘relationship’ most being driven into the position of supplicant. Yet, as happens in many relationships, the dominant partner does not always get what he or she wants, and, though the Americans would have preferred otherwise, Britain not only retained her nuclear deterrent, but contrived to have the latest weaponry, whether Polaris or Trident, with the Americans bearing the development costs. Of course, the Americans were granted military bases in Britain, and the ability to deploy Cruise missiles in the country, but then it was Britain that they were defending and at their cost. The Americans looked to its allies in Western Europe to make more provision for their own defence, and, without good cause, they seemed to think that further political integration would promote this. As it was, the American contribution dominated NATO, and, in 1977, it was an achievement to get all the members of that alliance to agree that from 1979 to 1984 they would aim at an annual increase in defence expenditure in the region of 3 per cent.2 Of course, without the necessary political will, the scale of defence spending made little difference, and, for instance, in 1976, the then Labour Government had emphasized that it ‘support[ed] NATO as an instrument of détente, no less than of defence’.3 At that time, such attitudes reflected those of the Americans, who, Mrs Thatcher believed, were suffering from a ‘Vietnam syndrome’ following military defeat there, which had allowed the Soviet Union and its surrogates [to] expand their power and influence in Afghanistan, southern Africa, and Central America by subversion and outright military invasion. In Europe, an increasingly self confident Soviet Union was planting offensive missiles in its eastern satellites, building its conventional forces to levels far in excess of NATO equivalents. It was also constructing a navy that would give it global reach.4 The American President in the latter 1970s was Jimmy Carter, of whom it was well said that ‘his election [in 1976] was a product of the time; he happened to fit the circumstances rather than the office’.5 Mrs Thatcher thought that ‘in foreign affairs, [Carter] was over-influenced by the doctrines then gaining ground in the Democratic Party that the threat from Communism had been exaggerated and the US intervention in support of right-wing dictators was almost as culpable. Hence he found himself surprised and embarrassed by such events as the Soviet invasion of Afghanistan and Iran’s seizure of American diplomats as hostages.’6 So, Mrs Thatcher welcomed the Republican Presidential election victory of Ronald Reagan, which made ‘1981 the last year of the West’s retreat before the axis of convenience between the Soviet Union and the Third World’.7 As for Britain’s role in the world as she found it on coming to office, Mrs Thatcher believed that the country was still suffering from a ‘Suez syndrome’


dating back to 1956, when political and economic weakness had enabled the Americans to force Britain to abandon a war with Egypt. Mrs Thatcher thought that ‘having [before the Suez Affair] exaggerated our power, we now exaggerated our impotence’. As she saw things, ‘Britain was a middle ranking power, given unusual influence by virtue of its historical distinction, skilled diplomacy and versatile military forces, but greatly weakened by economic decline.’8 Though she was often later to be compared with Elizabeth I of England, Mrs Thatcher never had any need to insist, as that monarch had done at Tilbury in 1588, that ‘I know I have the body of a weak and feeble woman, but I have the heart and stomach of a king, and a King of England too, and think foul scorn that Parma or Spain, or any Prince of Europe should dare to invade the borders of my realm.’9 In her dealings with ‘Europe,’ Mrs Thatcher was to display similar levels of belligerence at times, not least in campaigning to reduce the high level of British financial contributions to the Community. Even before she became Prime Minister, though, she already had the best image that a woman of that time could aspire to for the conduct of international politics. For, in 1976, the Red Army newspaper had called Mrs Thatcher ‘the Iron Lady’ in the belief that she was the Soviet Union’s most formidable political opponent in Western Europe, and she was understandably grateful for the soubriquet.10 So, from the outset, Mrs Thatcher had the image of the Cold Warrior and no guilt even by association with the ‘weak and feeble’ policy of détente or, to give this its proper name, Appeasement of the Soviet Union. Of Churchill’s famous three interlocking circles of the Atlantic Alliance, ‘Europe’, and the Commonwealth within which Britain’s world role was supposed to be played out, only Atlanticism had much appeal for her. Nonetheless, though Sir Nicholas Henderson, the British Ambassador in Washington between 1979 and 1982, recorded President Carter and Mrs Thatcher ‘hitting it off well together’ when they eventually met,11 the Prime Minister’s early attitude was ‘what was there to discuss with Carter?’ According to the seemingly bemused Henderson, Mrs Thatcher declared that You could only tackle a limited number of things at a time. . . Rhodesia and Europe come first. . . She spoke of the terrible amount of money we were giving to Europe. ‘I have the money and they won’t get their hands on it’, she insisted with some animation. I interjected that the Europeans have difficulty in seeing us as a poor country when we had the oil. She rejoined that figures of GDP per head spoke for themselves.12 What Henderson called ‘the very downrightness of her views and her categorical way of expressing them’13 should not have disguised the pragmatism that Mrs Thatcher often displayed in her political conduct, or that she had to work with Cabinets and Foreign Secretaries who did not necessarily share her outlook. Mrs Thatcher was well-aware too that her attitudes as well as her priorities were not always those preferred by the Foreign and Commonwealth


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Office (FCO), which she believed to be an institution in which ‘compromise and negotiation were ends in themselves’, together with ‘a reluctance to subordinate diplomatic tactics to the national interest’.14 Henderson wrote that, ‘Mrs Thatcher’s attitude to the Foreign Office was the opposite of her attitude to the Church of England: with the latter she liked the institution but she was not particularly drawn to the people at the top; as regards the Foreign Office she distrusted the place but liked the people, as shown by her employment of Tony Parsons, Percy Cradock, and Charles Powell.’15 So, while less than admiring of the FCO, Mrs Thatcher did not share Enoch Powell’s view of that institution as being ‘that nursery of traitors and nest of vipers’.16 That said though, when one traitor from the related part of the intelligence community, Anthony Blunt, was shown to have worked for the Soviet Union in the past in a book called The Climate of Treason and libel proceedings were in prospect, unlike her immediate predecessors as Prime Minister, Mrs Thatcher declined to respect a deal done with Blunt fifteen years earlier protecting him in exchange for what seemed to be limited co-operation with the authorities. Blunt was unmasked in dramatic style in the House of Commons in November 1979.17 Mrs Thatcher also felt dissatisfied with the work of the present-day intelligence community in relation to the period before the Falklands War, and in 1983, following the related Franks Report, she removed the Chairmanship of the Joint Intelligence Committee from the FCO, giving the role in the first instance to Sir Anthony Duff, the Cabinet Office’s Co-ordinator of Security and Intelligence, who reported directly to her,18 as did Cradock as her Foreign Policy Adviser, when he became Chairman on the Joint Intelligence Committee from 1985.19 Changes were also made in what Mrs Thatcher thought of as the ‘traditional federal structure’ of the Ministry of Defence,20 though it only dated from 1964, when the separate Service Ministries and the original Ministry had been amalgamated. The Service Ministries had been the ones with tradition on their side, and, as far as Ministerial responsibility was concerned, an obvious solution was that employed by the Wilson Governments then of divorcing Ministers from the individual Services.21 This was done in 1981, following upon the dismissal of the Minister for the Navy, Keith Speed, for speaking out against cuts in the Royal Navy.22 The then Secretary of State for Defence, John Nott, recalled that ‘the First Sea Lord organized for the Naval Staff, some in uniform, to line the corridor as Keith departed the building, and they piped him down the steps of the Ministry of Defence in a public gesture of support for him and of defiance of me.’23 Nott’s successor as Secretary of State, Heseltine took integration further in the White Paper called The Central Organization of Defence, issued in July 1984. The crucial explicit change was to make the Chief of Defence Staff the dominant source of professional military advice to the Secretary of State, thus subtly diminishing the roles of the Chief of Naval Staff, the Chief of the General Staff, and the Chief of the Air Staff to that of advisers.24 In the relevant House of Lords debate, Max Beloff expressed diffidence about even commenting on


the matter in view of his own ‘inglorious military career’,25 but the similarly undistinguished Heseltine showed no such inhibitions, and, with the support of the Prime Minister, outdid the Chiefs of Staff and got what he wanted. Heseltine observed that ‘British forces have been on active service on several occasions since those reforms were introduced. The Gulf War [of 1990–91] was probably as close to “war conditions” as any and the reaction there to the new system was very positive.’26 However forcefully Britain was led, and however well-organized the country was to defend her national interests, such was the imbalance of power between Britain and the USA that success or failure was bound to largely depend on the quality of leadership forthcoming from the dominant partner in the Atlantic Alliance. ‘The election of Ronald Reagan as President of the United States in November 1980 was as much of a watershed in American affairs as my own election victory in May 1979 was in the United Kingdom, and, of course, a greater one in world politics’, Mrs Thatcher later wrote, adding that, ‘from the first I regarded it as my duty to do everything I could to reinforce and further President Reagan’s bold strategy to win the Cold War which the West had been slowly but surely losing’.27 As for Reagan himself, he observed: Throughout the eight years of my Presidency [1981–89], no alliance we had was stronger than the one between the United States and the United Kingdom. Not only did Margaret Thatcher and I become personal friends and share a similar philosophy about government; the alliance was strengthened by the long special relationship between our countries born of shared democratic values, common Anglo-Saxon roots, a common language, and a friendship deepened and mellowed by fighting two world wars side by side. The depth of this special relationship made it impossible for us to remain neutral during Britain’s war with Argentina over the Falkland Islands in 1982, though it was a conflict in which I had to walk a fine line.28 Few Presidents were more skilled at doing this. ‘Previous Administrations have tried to impose their political wills on the news media, dissembling and lying when necessary to protect foreign policy misadventures [but] the Reagan White House appears to be the first to have institutionalized the process’, two appalled commentators observed in relation to the Iran Contra Affair, ‘Employing the scientific methods of modern public relations and the war tested techniques of psychological operations, the Administration built up an unprecedented bureaucracy in the N[ational] S[ecurity] C[ouncil] and the State Department designed to keep the news media in line and to restrict conflicting information from reaching the American public.’ Though, it seems, approximately 60 per cent of that public were opposed to the policy concerned in so far as they knew much about it, such opposition was


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defined as ‘inside the Beltway’, and opponents within Congress were treated with remarkable ruthlessness.29 ‘When people say that the present US Administration is the most right wing of this century they mean that it is influenced by Reagan’s particular prejudices, the fruit, not, I think, of careful thought or discussion, but of his own experiences and whims’, the ubiquitous Henderson wrote in 1982: He is like Mrs T in having no sentimental or guilty feelings about underdogs. They came from more or less similar backgrounds which are very different from the aristocratic surroundings that inspired the philanthropic do-gooding of Wilberforce or Shaftesbury. . . theirs was an upbringing encouraging one later to think that others can look after themselves too, and that if they get into difficulties or remain underlings the fault lies in themselves, not in their stars, and that the more fortunate should not have any sense of guilt or responsibility to help others.30 Nobody with much sense would deny that ‘luck – merit, certainly, but a great deal of luck – plays a large part in determining who, in life, succeeds’, as Lord Carrington, the Foreign Secretary in Mrs Thatcher’s first Government, was to write, having in mind the talented people in the other ranks of the British Army with whom he had served as an officer during the Second World War.31 That said though, ‘Nicko’ Henderson went too far in implying that attitudes sympathetic to the fate of those farther down the social scale were widespread among the socially privileged in Britain. This was not to say that Conservative Paternalism was unimportant or unprincipled when practised, but, to take the examples of such Paternalism most relevant to Henderson’s observations, the Balfour and Butler Education Acts were bound to promote social mobility but, according to Henderson, and those who thought like him, those who advanced were supposed to model themselves on those already there, and behave accordingly. When the model was Churchill as a wartime leader, few would dissent, but mystification sets in when, say, Henderson’s valedictory despatch on leaving Paris as Ambassador was leaked to The Economist in June 1979,32 and attracted heavy praise, despite being no more than a familiar ‘European’ thesis about the reasons for Britain’s post-war decline. Even Mrs Thatcher chose to describe the despatch as ‘very, very interesting’.33 It was not in relation to ‘Europe’, though, that, at first, Mrs Thatcher made her mark as a Prime Minister, but in relation to the legacies of Empire, one of which was to involve Britain in the Falklands conflict.

Dealing with the Legacies of Empire The Rhodesian Settlement, 1979–80 Since it was ‘the job I had wanted all my life. . . I was. . . delighted when invited to be Foreign and Commonwealth Secretary’, Lord Carrington later


wrote about his appointment to that role in 1979.34 Opinions differed about Carrington’s abilities, but what was evident about him was that political accidents tended to take place when he was around as a Minister. Thus, the Crichel Down Affair took place during his time at the Ministry of Agriculture,35 and when the Portland and Vassall Spy Cases occurred it was his misfortune to be the First Lord of the Admiralty.36 Though Carrington survived those episodes, those who had studied his career had cause to expect political drama to follow him at the FCO. Carrington himself only expected to last ‘about six months’, about which he was wrong, as, indeed, he was about the cause of him leaving, which he expected would be ‘over Rhodesia [because] my views by no means coincided with those of an influential wing of the Conservative Party’. What was needed was ‘some sort of breakthrough’,37 and this was achieved. From what the ‘liberal’ Judith Todd called An Act of Treason: Rhodesia 1965 – the Unilateral Declaration of Independence – to what Ian Smith called The Great Betrayal – the legitimate granting of independence to Rhodesia – took a decade and a half. ‘For you and me to come to an agreement is no problem’, the then British Prime Minister, Harold Wilson had told Smith, the leader of what was called the white Rhodesian rebel regime, in the 1960s, ‘What we have to do is produce an agreement which I can sell to the rest of the world, and in particular to the Organization of African Unity.’ When Smith protested that the Organization of Africa Unity (OAU) was ‘a bunch of Communist dictators’, Wilson did not dissent but observed that ‘you cannot divorce yourself from the world we live in’.38 Of course, Smith continued to try to do this, but the Rhodesian regime that he led lost an important ally when the Portuguese colony of Mozambique became independent in 1974, leaving Rhodesia entirely dependent on support from the South African Government, whom Smith found to be increasingly unreliable in the face of international pressure, mostly exerted by Britain and the USA.39 Eventually, as Smith put it, the South African Government ‘blackmailed us’ into arranging an ‘internal settlement’ under which, in 1979, a black majority Government with Bishop Abel Muzorewa as Prime Minister was elected in Rhodesia with, as Smith recorded at the time, ‘a 63 per cent turnout of voters for the election, in spite of the fact that terrorists had attempted to intimidate people into abstaining’.40 Predictably, the ‘terrorists’ concerned, in the form of the Patriotic Front factions and their leaders – Robert Mugabe and Joshua Nkomo – refused to recognize the ‘internal settlement’, and, with the guerrilla war destined to continue, and with no prospect of international acceptance of Rhodesia in its existing form, the incoming Thatcher Government was faced with an unenviable inheritance. Carrington found that the Prime Minister had not given much thought to African matters, and that she was inclined to go along with the ‘internal settlement’, sharing the outlook of the Right of the Tory Party, and taking a ‘why not stick out our jaws and


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get on with it, damning much of the world for its ignorant prejudice and its double standards?’ line. Carrington recalled: I had some spirited discussions with her. In the end we came to see it in the same way. It was one of those occasions. . . when her heart and basic instincts (which I don’t think changed) were subordinated by her to what her intellect came to decide made political sense; and I much respected the process. When convinced of something like this she was, of course, a most able and indefatigable exponent of the line adopted. And it was no doubt reassuring to me, in a way, that we started our internal debate from opposite corners: it gave me a sense that the question had really been thrashed out, that some synthesis had been achieved. Meanwhile, we had to agree our practical policy and tackle the next and vital step: the Commonwealth Conference to be held very shortly at Lusaka.41 ‘At Lusaka [in August 1979] Britain was in a strong position they never had before, with the support of our own allies [the front line states], and that was the predicament we found ourselves in’, Mugabe later recalled. As host to Mugabe and his guerrillas in Mozambique, President Samora Machel was well-described as being in a special position to compel Mugabe to attend the forthcoming Conference at Lancaster House, and to stay there. In the opinion of a friendly observer, Machel and the other Presidents of the front-line states – Julius Nyerere of Tanzania, and Kenneth Kaunda of Zambia – had reached the point where they welcomed the prospect of a constitutional settlement, fearing that Mrs Thatcher would recognize the ‘internal settlement’ of Smith and Muzorewa, and, even more importantly, because their support of the guerrilla armies had become an unsustainable burden for them.42 It could be added that the Rhodesian regime was also in serious difficulties. So, the Commonwealth leaders present at Lusaka approved the British Government’s proposal to call a constitutional conference.43 The Lancaster House Conference lasted for weeks into December 1979, but, at last, an agreement was made under which a new election would be held in Rhodesia with the Patriotic Front taking part this time. Carrington recalled: I was dreading the moment when I would have to announce that the first step would have to be the return of a British Governor, for although it was an inevitable consequence of our proposals for return to legality I knew nobody expected it and nobody would like it. The whites thought that they’d declared for independence as irrevocably as the American colonists in 1776, and the blacks thought they’d been fighting for years for freedom ‘from colonial rule’. Now, I was telling them that the next thing they’d see was a British Governor. I made the announcement at a plenary session. There was a dead silence. It lasted a long time. It was broken by Joshua


Nkomo. He looked at me enquiringly. ‘Really? Will he have plumes and a horse?’ The whole Conference dissolved into laughter. The day was saved. The Lord President of the Council, Lord Soames, agreed to act as Governor.44 That the British Government was reputed to have an ‘Anyone But Mugabe’ policy was later confessed by Soames to Mugabe himself, and Carrington admitted that what was expected to emerge after the promised election was a Muzorewa–Smith Coalition Government possibly including Nkomo too, though the welcome from ‘enormous crowds’ accorded to the Patriotic Front leaders when they returned to Salisbury indicated another outcome.45 Though there were other candidates for the political leadership of the largest language group in Rhodesia, the Shona-speaking people or nation, Mugabe had the highest profile among them, and he also had the most effective armed forces at his disposal for the purposes of intimidation. So, a Mugabe victory was always the most likely outcome, even if its scale was unexpected,46 given that Mugabe and ZANU obtained 57 seats, compared with 20 for the followers of Nkomo, and 3 for Muzorewa’s party. When Carrington announced these figures in March 1980,47 Lord Home talked of ‘an exemplary exercise in democratic procedures’,48 despite Carrington having previously admitted that there had been ‘large scale intimidation of the rural population. In certain parts of the country it has been made impossible for even Mr Nkomo or Bishop Muzorewa to hold meetings. People have been told that if they do not vote for the wishes of a party, the war will continue or they will be killed.’49 Smith complained to Soames about this well documented behaviour to receive familiar worldly advice in return, as well as learning of Carrington’s refusal to do anything about it.50 As might be expected, ZANU was not alone in practising intimidation, though possibly better at it than those adversaries, who, for instance, failed in attempts to assassinate Mugabe.51 Mugabe could ‘easily lead Zimbabwe-Rhodesia into dereliction’ since ‘its economy could as readily collapse as prosper’, The Spectator observed with some prescience, pointing out that Mrs Thatcher’s diplomatic ‘triumph’ at Lusaka and Carrington’s own ‘triumph’ at Lancaster House could not surely have been intended to result in ‘the democratic election of a Marxist whose power hitherto was. . . based upon arms supplied by Moscow and by guerrilla troops trained and based in Mozambique’. In this way, ‘Mugabe’s triumph’ was ‘Carrington’s defeat’, but the journal recognized that from the British point of view ‘we look like getting ourselves off the Rhodesian hook at last, and pretty painlessly at that’.52 This proved to be the case. General Peter Walls could not have been alone among the Rhodesian whites in hoping to the last that The Lady would save them,53 but, outnumbered as they were by 24 to one,54 their prayers were not answered. The Conservative Right had paraded with ‘Hang Carrington’ banners at one stage,55 but Mrs Thatcher’s presence as Prime Minister acted as an assurance both to them and to the Rhodesian whites that there was no politically viable alternative to the policy undertaken, and


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her authority made possible a settlement of the Rhodesian problem for the then foreseeable future. That still left, of course, the political problems represented by the remainder of Southern Africa. There are good circumstantial grounds for believing that the Thatcher Governments played an active role there, for which they got little credit, in two respects: in promoting a solution to the Namibia question 1989–90, and helping to persuade the de Klerk Government to undertake a political reform process in South Africa leading to a political settlement and the end of a three hundred year old racial order.56

The Falklands War, 1982 ‘Is the Prime Minister aware that the Government’s decisions to withdraw and pay off HMS Endurance when she returns from the South Atlantic is an error that could have serious consequences? Is she further aware that this stale old proposition was put to me on more than one occasion when I was Prime Minister and after considering it I turned it down flat? Will she please do the same?’ In this manner, on 9 February 1982, James Callaghan addressed a Parliamentary question to Mrs Thatcher about the future defence of the Falkland Islands. In her reply, the Prime Minister of course supported the decision of the Defence Secretary, John Nott, in relation to the Endurance, observing that ‘the defence capability of that ship is extremely limited’.57 The ‘serious consequences’ that Callaghan had in mind was that Argentina would use force to assert her territorial claims to the Falklands. In 1977, when there was the threat of an invasion, the then Labour Government had ensured that what the official historian called a covert task force was in place, including a nuclear submarine, as a precaution. Callaghan as Prime Minister told Maurice Oldfield, the Head of the Secret Intelligence Service, of these developments expecting him to inform the Americans and that they would tell Argentina.58 With a political reputation to rescue, and seemingly unable to resist playing the old sea dog, Callaghan made much of facing down Argentina both in his memoirs and in the House of Commons, even arguing that the Falklands conflict of 1982 was ‘an unnecessary war’ because a Labour Government would have prevented it by acting as it did five years before.59 The official historian of that conflict, though, was less admiring, choosing the heading of ‘Undetected Deterrence’ for that part of his account because of a lack of evidence that Argentina knew about this British activity designed to deter her from invading the Falklands. He added that, while the covert task force itself was a unique deployment, it was fully in keeping with the pattern of crisis management of the Labour Government. As awkward moments approached, Foreign Office Ministers were given to seeking the comfort of some extra Royal Navy deployment, and he noted that after the 1977 deployment, the then Foreign and Commonwealth Secretary, David Owen, looked – unsuccessfully – for the despatch of another task force in February 1978 and a frigate the following October.60


The future of the Falkland Islands was even more complex matter than it came to be commonly portrayed. As the dispute deepened, the inhabitants or Kelpers tended to be accorded sturdy and independent qualities, though the suggestion that the Islands were economically self sufficient did not survive counting in defence costs,61 and the importance of economic links with Argentina tended to be played down, not least that of an air service. So did the determination of many young people to emigrate, with ‘a vision of romantic solitude’ contrasting with the reality of ‘an unending diet of mutton, beer and rum, with entertainment largely restricted to drunkenness and adultery, spiced with occasional incest’.62 A Colonel from Military Intelligence wrote of the Islanders as relying on the generous teat of British tax money and the almost feudal suzerainty of the Falkland Islands Company for their economic survival.63 The Company owned about half the Islands and produced about half the annual wool crop,64 and so many of the Kelpers were actually tenant farmers. The official historian found that in the past the issue of an outright Argentine purchase of the Islands or of the holding of the Falkland Islands Company was often raised, even at times by Islanders (who could see the advantages of being bought off), but it was never pursued. In narrow terms moving the community to, for example, a comparable island off the Scottish coast would have been relatively cheap, especially if Argentina picked up the bill. Perhaps the idea of selling sovereign territory was too awkward to broach. To the Islanders it appeared largely as a fallback option, to be pursued only in the event of a betrayal, and was raised largely to expose the logic of British indifference. The Falklands was their home and that is where they wanted to stay under the Union flag. . . Although Argentina presented the Falklands as an example of colonialism, the Islands remained British because of the principle that had animated the anti–colonial movement. . . self-determination.65 The official historian recorded that it was later the view of many of the Islanders that if Argentina had done nothing at all, the steady outflow of population would have eventually have caused the fragile economic and social structure to collapse, and he added that the fate of the Falklands might well have been eventually decided by what the Governor in 1976 had called ‘euthanasia by generous compensation’.66 For the Thatcher Government, the radical solution to the political problem of the Falklands would have been to sell off the Islands after buying out the Company and such Islanders as agreed the terms, leaving the others to their fate. The hostility with which even leaseback proposals attracted in Parliament suggested that a more radical approach would have fared even worse, but without such an approach and with the Islanders having been accorded the right to block any alternative, unless the Argentines desisted in pressing their claim to what they called Islas Malvinas, which was unlikely,


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then the scene was set for war and provision had to be made for this. ‘There have been several occasions in the past when an invasion has been threatened’, Mrs Thatcher was to observe on 3 April 1982, ‘The only way of being certain to prevent an invasion would have been to keep a very large fleet very close to the Falklands, when we are some 8,000 miles from base. No Government have ever been able to do that, and the cost would be enormous.’67 The Foreign and Commonwealth Secretary, Carrington wrote that ‘it was alleged much later that [the Thatcher Government] took little notice of the Falklands situation until it was on a disaster course, and that earlier attention might have averted trouble had we not been, or supposed ourselves to be, too busy with other things. That is nonsense.’ Indeed, Carrington sent one of his Ministers of State, Nicholas Ridley, out to the Falklands to assess the situation within weeks of the Tory Government taking office. On the Falklands issue, as early as the autumn of 1979, Carrington found that not only did Mrs Thatcher suspect a defeatist Foreign Office of finding ways to appease Argentina, but also that his Cabinet colleagues could not be persuaded to support his preferred alternative policy or, for that matter, any other such policy. Carrington thought that ‘Fortress Falklands’ was ruled out on grounds of cost and diversion of resources from Britain’s overriding commitment to NATO. Then again, though it might be possible to negotiate further about, say, economic co-operation while declining to consider any concessions over sovereignty, since Argentina was unlikely to tolerate for ever the status quo, and she had the capacity to invade, and so there would be a confrontation sooner rather than later. Carrington’s preferred policy was ‘some sort of leaseback arrangement [by which] Argentina would obtain formal sovereignty over the Islands while simultaneously agreeing to lease them to Britain for a long period of time, perhaps a hundred years’, though, of course, as with all arrangements made, ‘the Islanders’ agreement to any change must be a paramount condition’. Eventually, in the summer of 1980 he persuaded the Cabinet that Ridley should be sent to the Falkland Islands once more to persuade the inhabitants to agree to this policy.68 Ridley secretly obtained the agreement to the leaseback in principle to such a policy from the Junta headed by General Viola then ruling Argentina.69 However, as Ridley later pointed out with his usual tact, the Falkland Islanders were very generously subsidized under the existing arrangements.70 So, they had little incentive to agree to the leaseback policy especially when it became clear that not all of the 1,900 inhabitants would have the right to leave for Britain if the changed arrangements were not to their liking, given the provisions of the forthcoming Nationality Act of 1981.71 At a meeting at Port Stanley during his visit, Ridley was asked: ‘If the Argentines invaded, what is Britain going to do about it?’ Ridley replied: ‘Kick them out!’ This was greeted with laughter.72 The Kelpers plainly thought that they were in no danger in exercising their veto against the leaseback proposal, and, when Ridley presented this policy to the House of Commons,


he was attacked not only from his own side but also by the Labour Left, who objected to what they deemed to be appeasement of an authoritarian right wing Argentine regime.73 So, the Falkland Islanders not only had their veto, but also good cause to believe that they retained support in political London. The official historian told the story of what happened to Carrington’s attempt to find a peaceful solution to the Falklands problem under the headings of ‘Towards Lease Back’, ‘The Rise of Lease Back’, ‘The Fall of Lease Back’, and, then, ‘Micawberism’. That the Argentine Armed Forces would turn up to annex the Falkland Islands was made even more likely by two developments. One was the proposed removal of the Endurance. The Chiefs of Staff had stated before that though they were aware of the limits of Endurance’s capability, even her ability to defend herself, she still represented an ‘intention to resist’.74 Since defence expenditure by the mid-1980s looked like being no less than 21 per cent higher in real terms than it had been when the Conservatives had returned to office in 1979,75 understandably the Defence Secretary, John Nott was looking for economies, but the political risk entailed in getting rid of the Endurance was not worth the minimal savings. Nott later remarked that he did not know where the Falklands were,76 and also that the Royal Navy had themselves listed Endurance near the top of their list for disposal at the outset of his Defence Review, and that Carrington had pleaded for a reprieve for the vessel. Nott also pointed out that the weakening of the British position went back as far as the Defence Review of 1966 when the decisions were taken to withdraw the Commander in Chief South Atlantic and the frigate on station in the area, and in 1974 to terminate the Simonstown Agreements and the British naval base in South Africa.77 By the early 1980s, the MOD itself took a pessimistic line about the defence of the Falklands, and an optimistic one about future behaviour of Argentina in the case of Defence Sales, which department was thinking in terms of selling that country an aircraft carrier plus Harrier jump-jets.78 The second development that made an invasion more likely was that, following a coup in December 1981, the Viola Junta that had previously ruled Argentina was replaced by another one headed by General Galtieri. The crucial support of the Navy had been pledged to Galtieri by Admiral Jorge Anaya in return for a commitment to invade the Malvinas, and plans were swiftly being made. With the Argentine economy in a desperate state and with domestic discontent rife, the distraction of an external adventure suited the interests of the Galtieri Junta, and the projected withdrawal of the Endurance, and the treatment of the Kelpers envisaged in what was then the Nationality Bill, and the pragmatism that the Thatcher Government had shown in the Rhodesian Settlement, as well as the willingness to give ground in the leaseback proposals, all combined to suggest that the British Government would not respond to an invasion with the use of force. As one critic wrote: A proper analysis of their adversary would have told the Junta that the odds were that the bellicose British in their pubs and bars would want


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to fight, even if the more delicate souls of their Foreign Office did not; and an elected leader who failed to reflect the popular mood and regain national honour would soon find herself out of a job and disgraced. . . Their intelligence services failed to brief them on either the British character or the implications for Britain’s other colonial territories around the world – Gibraltar and Belize among them – if an invasion of the Falklands went unchecked. . . There were. . . solid reasons why it was highly likely that Britain would meet force with force. . . Mrs Thatcher was not the only leader let down badly by her intelligence services.79 In fact, Galtieri simply had to heed the advice of President Reagan: ‘Mrs Thatcher, a friend of mine, is a very determined woman and she would have no other alternative but to make a military response.’80 The Franks Report of 1983 was ‘satisfied that the Government did not have warning of the decision to invade. The evidence of the timing of the decision taken by the Junta shows that the Government not only did not, but could not, have had earlier warning. The invasion of the Falkland Islands on 2 April [1982] could not have been foreseen.’81 The official historian broadly took the same line about the intelligence available about actual timing of the invasion,82 but one critic from within the intelligence community thought that the statement in the Franks Report was ‘disingenuous nonsense’ because ‘the Argentine order to sail may well have been given with only three days to go, but putting together the capability, making the plan, assembling the ships, guns, stores, aeroplanes, and men to invade the Falklands was the result of a decision made. . . nearly four months before.’83 The Director of Service Intelligence, Sir Michael Armitage commented that the British ‘had no indication at all of [Argentine] intentions, although, of course, we had some idea of their capabilities. . . In the Defence Intelligence Staff. . . we had one and a half desk officers looking after the whole of Central and South America. And although the South American Group of the JIC [met frequently] they were focussed on the Guatamalan threat to Belize.’ In Argentina itself, resources were ‘thin on the ground’, though he described the Military Attache as being ‘very much on the ball’.84 Indeed, Colonel Stephen Love had sent what proved to be an accurate report warning about Argentine planning and intentions, which the FCO and MOD seemed to treat as unimportant,85 thus supposedly displaying what one critic called cognitive dissonance in relation to the Falklands question,86 especially as it seems British intelligence had been able to read confidential Argentine material for years.87 The Argentines had made warlike noises before, of course, and if there was going to be an invasion the best bet may well have seemed to be January 1983, the one hundred and fiftieth anniversary of Britain annexing the Falklands. The FCO had tried to solve the Falklands problem, but it was now reduced to hoping that it would in some way solve itself, much as that relating to Belize was later to do. Those who had viewed the history of the Foreign Office with scepticism were not to be disappointed in their expectation that the bi-centenary of


that institution would be marked by a foreign policy calamity, especially with Carrington at its head. Sure enough, the celebrations coincided with the Argentine invasion of the Falklands, and shortly after Carrington had published a lecture entitled ‘My Job’88 he felt obliged to resign. When Mrs Thatcher and her Ministers faced the House of Commons on what Callaghan called ‘that famous Saturday’89 – 3 April 1982 – after the invasion had taken place, the Government was vulnerable to the indictment that Anthony Williams, the returning British Ambassador in Buenos Aires, set out in a telegram at that time. ‘Knowing full well that current British policy with regard to the Islands could not lead to any satisfaction of Argentine aspirations and that the Argentines were becoming increasingly restive, we refused to face the fact that our encouragement of total intransigence from the Islanders involved a physical risk to them, to counter which no adequate provision had been made or could have been made’, Williams wrote, adding: ‘Nor did we make adequately clear to the Islanders the stark choice they faced. They were never really brought face to face with the full realities of their position.’90 Nobody took this line in the Commons debate. At the emergency Cabinet that was called after news of the invasion reached London, William Whitelaw had spelt out the reality that the Government could not survive unless it took immediate steps to recapture the Falklands,91 and, in the Saturday debate, the Prime Minister announced that ‘a large Task Force will sail as soon as all preparations are complete’.92 With the British Armed Forces prospectively going into action, those who did not take a bellicose line were in difficulties, as one former diplomat found in the Saturday debate,93 and as those who were essentially pacifists like the Labour MP, Tam Dalyell, found throughout the conflict. As for the fate of the Task Force and, of course, Britain too, Alan Clark found that in the House of Commons there were those openly going round making the comparison with the Sicilian Expedition that led to the downfall of the Athenian State. Sometimes, I must admit, this analogy occurs to me also, although I keep my thoughts to myself. If we are going to go, I feel, let us go in a blaze – then we can all sit back and comfortably become a nation of pimps and ponces, a sort of Macao to the European continent.94 The pessimists were always wrong about the Falklands Crisis in the sense that if it turned into a war, given the country’s military record, the most likely outcome was that Britain would win, even if, given the distance from home involved, it was bound to be a close run thing. That said, though, the military outcome of the Suez Crisis had not been in doubt if battle was joined. Suez was a political defeat, not a military one, and one inflicted by the USA. One lesson that was learnt from Suez was the need to act with speed, with the Task Force being assembled in 48 hours, though Mrs Thatcher had to be told that it would take three weeks and not, as she seemed to think, three days for


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it to get to the Falklands.95 Washington must have been informed about the sending of the Task Force, but not, it seemed, consulted about the desirability of sending it, despite the implications for the Americans and for NATO of a war in the South Atlantic.96 An important difference from the Suez situation was that Eisenhower merely talked about rolling back the Soviet Empire, and bringing Britain into line was a consolation prize for the impotence he displayed in relation to the Russian subjugation of the Hungarian Uprising of 1956. Reagan was determined to destroy the Soviet Union, and, if a quarter of a century later that was a less daunting task than it had been for Eisenhower, it was still a formidable challenge, and one in which he believed that he needed the support of Mrs Thatcher, whom he wanted as an ally in his ideological crusade. So, he could not afford for the British Prime Minister to be brought down by the Falklands Crisis. Mrs Thatcher portrayed the Falklands War in terms of Argentina having committed aggression and offended against international law, and an unexpected diplomatic triumph was obtained by Sir Anthony Parsons, Britain’s Ambassador to the United Nations, who, as early as 3 April 1982, persuaded the Security Council to pass resolution 502, which put the onus on Argentina to withdraw from the Falklands, and wide support for Britain taking action under the provisions of Article 51 of the Charter followed.97 To the Americans, though, the Falklands Crisis could not be the straightforward matter that Mrs Thatcher believed it to be, which led her to observe that, though the Americans provided ‘invaluable help. . . their public pronouncements on occasion’ were ‘irritating and unpredictable’.98 The Americans were bound to play a double game in public, even after the public ‘tilt’ in favour of Britain following a bitterly divided National Security Council meeting on 30 April 1982.99 The American friendship with Britain had to compete with the reality that the USA saw Central and South America as its sphere of influence. So, a body like the Organization of American States and the politics connected with it was bound to be of importance to the USA not only because of her informal economic empire in the area, but also in a Cold War role against the spread of Communism, in which fight Argentina was perceived as a prospective ally. The American Ambassador to the UN, Jeane Kirkpatrick, worked to save the situation for Argentina throughout the crisis, acting as if there was something coherent enough to be called Latin American opinion that would be alienated if the Argentines were beaten, whereas the reality was that not just Chile of Argentina’s neighbours would not mind unduly if such a defeat occurred. As for Reagan, the fall of the Junta would serve his purpose in one respect, since it would be likely to bring to an end Argentina’s attempt to secure nuclear weapons, which it did.100 Publicly, though, until the end of April, Reagan portrayed American policy as being even-handed between Britain and Argentina, and, as for Mrs Kirkpatrick, Reagan merely noted that she ‘disagreed with our position’ and offered ‘some resistance’, but her behaviour did not deflect nor, it seemed, much concern Reagan.101 The working relationship between


Mrs Kirkpatrick and Alexander Haig, Reagan’s Secretary of State, was one of personal rivalry,102 and of marked differences of opinion when it came to the Falklands crisis.103 Haig had been made Secretary of State because, for reasons of sustaining the Republican Party as an electoral coalition, Reagan needed a representative from its Kissinger wing, and Reagan would not tolerate Henry Kissinger in the role, having publicly denounced him for his policy of détente with the Soviet Union.104 Haig’s ‘as of now, I am in control here’ behaviour at the time of the attempted assassination of Reagan in March 1981105 had suggested greater ambitions than being Secretary of State, but even in conducting that role Haig had already had to seek reassurance from Reagan, who contrived to say: ‘Damn it, Al, we have the same views, and I need you.’106 When it came to the Falklands conflict, Haig engaged in ‘mediation’ and ‘shuttle diplomacy’ that, on the face of it, impressed only those who wanted peace at any price. Haig recounted that ‘I told the [Argentines] that they are a second or third rate military power and they were contemplating a power which may be 8,000 miles away, but which is of the highest technological and fighting ability. You are committing suicide by doing it.’107 Henderson observed: Haig did this shuttle between London and Argentina and Washington and he really was always on our side. He kept saying to me. . . ‘We will never do another Suez on you. . . but we have to show the American people and the Congress that the Argentines are not prepared to have any negotiated settlement that is reasonable. You, the British, have to show that you are ready to have a settlement. If there is a settlement that is possible then we shall go for it, but I don’t think there is – but my negotiations must show that it is the Argentines who are making it impossible’. That was the point of [Haig’s diplomatic activity and] it was an essential element in securing American backing for us, politically and in materiel. And I don’t think it did us any harm because. . . it was going to take three weeks for the Task Force to get there.108 As for Haig, he had recognized that ‘the Falklands might be my Waterloo’, and soon afterwards he was told by a former ally: ‘You’ve won a lot of battles in this Administration, Al, but you’d better understand that from now on it’s going to be the President’s foreign policy.’109 As he prepared to make way for his successor as Secretary of State, George Shultz, Haig complained to Ambassador Henderson about the baseless rumours about him that emanated from the White House staff,110 and if Reagan found Haig to be ‘utterly paranoid about the people he must work with’,111 he had good reasons. ‘We let the Junta know privately that, while we would provide military help to neither adversary, our sympathies were on the British side’, Reagan chose to write in his memoirs,112 as if, like, it seemed, the State Department most of the time, he did not know about, or had not assented to, the remarkable scale of aid that, from the outset, his Anglophile Defence Secretary, Caspar Weinberger ensured that the Task Force received. Of Weinberger,


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the British official historian wrote that ‘he feared Soviet influence in South America, but. . . he saw Argentina as already in something of a Russian bear hug, because of the grain agreement [between those countries]. There was also some evidence that Moscow was providing intelligence on British fleet movements to Buenos Aires.’113 Weinberger himself wrote that nearly seven years later, at a dinner in 10 Downing Street, I described my role as being that of Assistant Supply Sergeant, or an Assistant Quartermaster. The major factor in our assistance was the speed with which we fulfilled all British requests. . . Speed was what they most needed. Most of their requests to me were approved and sent on their way in 24 hours. One request, for radio receivers to talk to intelligence gathering sources, took only six hours from their original request to delivery.114 For reasons, not least to do with the onset of winter, Admiral Woodward in charge of the Task Force was instructed that ‘you have got to land between 16 and 25 May, and you have got to complete the ground war by mid-June’.115 Time was against the British in recapturing the Falklands, and, to judge from what was done, and against much pessimistic military advice, Weinberger and his President acted as if they were not prepared to take any risk that their leading NATO ally would fail to win. ‘From the start, [Weinberger] realized Britain’s logistics problems, as did the American Navy’, The Economist later wrote: The key would lie in the USAF’s Wideawake airbase on Britain’s Ascension Island. The [British Government] had originally planned to send the Task Force non-stop south from Gibraltar, but realism soon pointed to an air bridge to Ascension. Although Britain reserved the right under lease to use Wideawake in an emergency, more than just ‘use’ would be needed. From day one of the Task Force, pleas for everything from missiles to aviation fuel flooded the Pentagon from the British Military Mission on Massachusetts Avenue. There were also many telephone calls from British Fleet Headquarters in Northwood direct to friends in the US Navy. . . To those intimately involved, it seemed at times as if the two navies were working as one. On Ascension Island itself, security was tight, and, along with the rest of the world, the State Department was ignorant not only about extensive improvements made in the supporting infrastructure, but also that ‘an astonishing 12.5M gallons of aviation fuel were diverted from American defence suppliers for British use’, with the British even feeling able to ask for an American tanker to be turned round in mid-Atlantic. The list of material supplied to Britain was extensive, with pride of place going to the new Sidewinder AIM-9L missile, the single most decisive weapon of the campaign. It claimed as many Argentine


‘kills’ as all other weapon systems together, and the threat of it forced Argentina’s aircraft to come in low and bomb low, thereby restricting their range and tactics. Britain’s existing heat-seeking Sidewinders were effective only from behind. For limited combat duration over the Falklands, the super sensitive AIM-9Ls, which could be fired sideways on, or even from ahead, were vital. These were made available from American front-line stocks immediately, as were the adaptor plates to fit them to the GR3 RAF Harriers. Among the other American missiles sent were Shrike radar-seekers, which came complete with intelligence on Argentine radar frequencies. In the later stages of the war, Britain persuaded the Americans to move a military satellite from its Soviet watching orbit over the northern hemisphere to cover the Falklands area. The Pentagon allocated to the Task Force some of its military satellite channels which ‘immensely eased confidential communication between Admiral [Sandy] Woodward, Commander of the Task Force, and. . . Northwood. . . The Cabinet decision to sink the Argentine cruiser Belgrano was probably communicated to the British nuclear submarine HMS Conqueror over an American military satellite link.’ Mrs Thatcher recalled that ‘Weinberger even proposed sending down the carrier USS Eisenhower to act as a mobile runway for us in the South Atlantic – an offer that we found more encouraging than practical.’ Another idea emanating from Weinberger was that should anything happen to the aircraft carriers, the Hermes and the Invincible, then the USS Guam would be handed over to the Royal Navy.116 The British carriers survived. When asked by Mrs Thatcher whether the Falklands could be recaptured, the Chief of the Naval Staff, Sir Henry Leach, said that this could be done, though it would be ‘a high risk venture’, adding ‘and we should’. When asked why, the First Sea Lord replied: ‘Because if we do not, if we muck around, if we pussyfoot, if we don’t move very fast and are not entirely successful, in a very few months’ time we shall be living in a different country whose word will count for little.’ Mrs Thatcher’s reaction convinced him that ‘it was exactly. . . what she wanted to hear’.117 The Falklands War was Out of Area as the terminology of the strategists went, but what was the point of the scale of provision made for waging the Cold War or, indeed, serious provision for defence at all, if Britain could not defeat a country as militarily unimportant as Argentina? Weinberger thought that ‘the decisive factor’ in Britain’s military success was ‘Mrs Thatcher’s firm and immediate decision to retake the Islands. . . Her decisions and subsequent resoluteness in carrying them out were the essence of leadership and demonstrated that. . . leadership can overcome not only heavy odds, but many obstacles.’118 By contrast, the leader of the Argentine Junta, Leopoldo Fortunato Galtieri was more impressively named than equipped to be a General, not least because he was drunk most of the time.119 If Galtieri and his colleagues had delayed their invasion for six months, Britain would


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have been unable to send a Task Force because the aircraft carriers would have been sold. Even in the face of the invasion that did take place, time was of the essence and that was why the speed as well as the scale of the American aid that was forthcoming was such an important contribution to the British victory. Of course, the British still had to do the fighting. ‘In the space of seven weeks a Task Force of 28,000 men and over 100 ships had been assembled, sailed 8,000 miles, effectively neutralized the Argentine Navy and fought off persistent and courageous attacks from combat aircraft which outnumbered its own by more than six to one’, an official review of the Falklands campaign later observed, ‘This in itself was no mean feat, but the Task Force put ashore 10,000 men on a hostile coast while under threat of heavy air attack; fought several pitched battles against an entrenched and well supplied enemy who at all times outnumbered our forces; and brought them to surrender within three and a half weeks.’120 The Argentine Armed Forces were by no means inept, though their ground forces were outclassed by their British opponents. Mrs Thatcher was warned by Admiral Sir John Fieldhouse that recapturing the Falklands might cost anything up to 3,000 British casualties, but, in fact, there were 253, together, of course, with the loss of naval vessels and aircraft and other equipment.121 When HMS Sheffield was lost, Cecil Parkinson recalled, Mrs Thatcher ‘didn’t waver at all’.122 This was just as well, given that there were those in Britain who had either predicted that the Task Force would fail, or needed it to do so. That Argentina’s only aircraft carrier, the Veinticinco de Mayo was allowed to escape being sunk was an obvious question to ask about the Royal Navy’s conduct of the Falklands War, but critics concentrated on the sinking of the cruiser, the Belgrano, on the grounds that this was done to frustrate peace proposals which the Junta would have agreed to. This interpretation of the event was later shown to be untrue.123 The Belgrano had constituted a threat to the Task Force, which, except to those who wanted Britain to fight the Falklands War with one hand tied behind its back or not at all, was the justification for sinking it. This action had the effect of confining the Argentine Navy to its ports, to the obvious advantage of the Task Force, thus playing an important part in the British victory. That Britain would go to such lengths to fight for what Reagan called a ‘little ice cold bunch of land down there’124 was testimony to the country’s resolve and that of its Prime Minister. ‘So ends the Falklands Affair – which began in such despair and humiliation’, Alan Clark wrote, having himself melodramatically rushed up to Mrs Thatcher and declared: ‘Prime Minister only you could have done this; you did it alone, and your place in history is assured.’125 That was, of course, what her enemies feared, as was illustrated in the manner in which Robert Runcie, the Archbishop of Canterbury, chose to mark the British victory in the sermon that he delivered at the Falklands Thanksgiving Service. ‘The service could have been worse’ was the most that Clark could muster for the modern Anglican Church, and as for ‘little Doctor Greer’ – the Moderator of the Free Church Federal Council – ‘his prayers were not as


awful as one might have expected’. Clark added: ‘Afterwards, the crocodile moved its way out very slowly down the aisle, starting from the top. I was on the civilian side, passing row after row of next of kin. Anxiously, I scanned their faces, but the only emotion I could see was anguish, sheer anguish.’126

The Grenada Interlude, 1983 When the Americans successfully invaded Grenada in October 1983, President Reagan later wrote that they ‘captured secret papers. . . that documented how the USSR and Cuba were acting in concert to make the Caribbean a Communist lake’.127 Mrs Thatcher was not alone in finding it hard to believe that the American invasion had no connection with that country’s humiliation in the Lebanon,128 and, indeed, as Weinberger remarked in his memoirs, ‘our rescue operations on Grenada took place’ two days after ‘the terrorist bombing of the Marine Barracks at Beirut Airport’.129 The US Marines had not observed their motto ‘take the high ground’, and 241 Servicemen had been killed.130 Though Reagan recognized that ‘post-Vietnam syndrome’ would ensure Congressional opposition to ‘the use of military force abroad for any reason’, he believed that ‘the United States couldn’t remain spooked for ever by this experience’.131 So, when ‘the Organization of Eastern Caribbean States (OECS) asked us to intervene militarily [in] Grenada’, Reagan recalled,132 ‘We didn’t ask anybody, we just did it’,133 and the military victory secured ‘helped all Americans to stand a little taller’.134 After the humiliations of Vietnam and of the Carter years, Reagan acted as if he needed his equivalent of the Falklands victory to satisfy the American public that the years of retreat were over, and Grenada was a signal that this was so. Secretary of State George Shultz wrote that ‘Grenada, like the Falklands, was a shot heard round the world by usurpers and despots of every ideology.’135 Shultz was well-aware of the ‘special relationship’ with Britain,136 and wary of Mrs Thatcher,137 but in behaviour relating to the Grenada invasion the Reagan Administration took scant regard of the fact that the island was a member of the Commonwealth and that the Queen was the Head of State, or about prospective British opposition to the venture, the knowledge of which indicated that the British had not been kept in the dark about the invasion, aside from its timing of the intervention which was only decided a matter of hours before the event.138 The Governor General, Sir Paul Scoon was said to have asked the Americans to intervene, and that he was ‘seeking assistance’ from them was stated in a letter from Scoon to the Prime Minister of Barbados,139 though one account suggested that Washington did not know of Scoon’s plea for help until told of it by Mrs Eugenia Charles of the Organization of Eastern Caribbean States (OECS) after the invasion.140 With Britain taking little interest in the Caribbean area after the collapse of the West Indies Federation, it would have been natural to turn to the USA.


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Whether or not one of her biographers was justified in reporting that the Queen was angered by American behaviour,141 one report suggested that ‘those present at Downing Street that night had seldom seen [Mrs Thatcher] more furious’.142 When she got through to the President on the hot line, the Prime Minister learnt that ‘we are already at zero’, and later wrote: At best, the British Government had been made to look impotent; at worst we looked deceitful. Only the previous afternoon Geoffrey [Howe] had told the House of Commons that he had no knowledge of any American intention to intervene in Grenada. Now he and I would have to explain how it had happened that a member of the Commonwealth had been invaded by our closest ally. Further, she now had to face the argument in debate that ‘if the Americans had not consulted us about Grenada, why should they do so as regards the use of Cruise missiles?’143 That said, though, it was difficult to differ from Shultz’s assessment: The British position remained a puzzle. Whatever the reasons for Prime Minister Thatcher’s opposition, she did not exhibit any particular concern for ‘the special relationship’ between Britain and America. President Reagan and I felt that she was just plain wrong. He had supported her in the Falklands. He felt he was absolutely right about Grenada. She didn’t share his judgement at all. He was deeply disappointed. Shultz wondered if Mrs Thatcher’s reaction was the result of having been ‘needled hard two days earlier in the rough and tumble of Question Time in the House of Commons about being Ronald Reagan’s poodle’.144 It seems more likely that, despite Mrs Thatcher’s gift for thinking up principled objections to the Grenada venture, it was her public exclusion from being involved that irritated her. Since Mrs Thatcher had gone ahead with war in the South Atlantic without first consulting Reagan, she could hardly object to being treated similarly over Grenada. The Economist concluded that American casualness in dealing with Britain’s position meant that ‘superpowers did not need allies, only cheerleaders’,145 and Howe as the British Foreign Secretary, straining to give events a ‘European’ dimension, had ‘no doubt that we should base our future strategic planning increasingly upon the premise that Grenada, rather than the Falklands, offered the best evidence of American instincts’.146 In some contrast with her recent conduct, Mrs Thatcher still believed that ‘Britain’s friendship with the United States must on no account be jeopardized’,147 and, though Shultz seemed to think that the President had tired of her ‘imperious’ behaviour,148 Reagan took the trouble to mend fences with the Prime Minister, and in their next conversation he disarmed her by saying that ‘if he was in London and dropped in to see me he would be careful to throw his hat through the door first’.149


The Hong Kong Agreement, 1984 ‘It was not until 28 July 1982, two days after the Falklands Thanksgiving Service at St Paul’s, that time could be found in Margaret’s programme for a proper discussion of Hong Kong’, Geoffrey Howe recalled, ‘ Pressure of time was not the only reason for delay. No one had been relishing the idea of telling the Prime Minister, who had just triumphantly reasserted sovereignty over the Falklands, that she must now consider relinquishing it over Hong Kong.’150 Moreover, it was to a Communist tyranny – the Chinese People’s Republic – that sovereignty would need to be ceded. It was later estimated that well over 70 million people had perished in peacetime as the result of the misrule of Mao Tse-Tung,151 and the main reason why he chose to leave Hong Kong as a British colony was because it was useful to his regime being China’s biggest source of hard currency.152 After his death in 1976, Mao’s successors had continued to leave Hong Kong as it was for the same pragmatic reasons, but the 99-year lease granted to Britain in relation to 92 per cent of the territory of Hong Kong ran out in 1997, and it seemed best to the Thatcher Government to find a settlement well before that date. The colony was dependent on the Chinese mainland for food and water, and, as Mao’s successor, Deng Xiaoping, pointed out to the visiting Mrs Thatcher in September 1982, the military reality was ‘that the Chinese could walk in and take Hong Kong later today if they wanted to’. She conceded that ‘I could not stop them’, but pointed out that if the Chinese did this then Hong Kong’s economic collapse would follow.153 Initially, as Howe put it, the Prime Minister thought in terms of ‘leading Hong Kong Island and Kowloon towards independence as a separate entity, but. . . her head recovered control of her heart’.154 Percy Cradock, who was involved in the negotiations, wrote that over Hong Kong, [Mrs Thatcher] was induced, after much effort, to abandon her initial embattled stance and accept that a solution could only be negotiated within the tight framework imposed by the expiry of the lease and Chinese determination to recover both sovereignty and administration. The result was a Treaty [in December 1984] ensuring the colony the most complete protection possible in the real world for at least fifty years after the hand over.155 There was little choice about accepting Deng’s formula of ‘one country, two systems’ for Hong Kong,156 and it was obviously in China’s economic interest, certainly in the short term, for Hong Kong to continue with its entrepreneurial ways. The numbers of Hong Kong people involved seemed to deter those who normally agitated in favour of mass immigration from suggesting that they should have the right to come to Britain should they wish. Though there was no practical alternative to the policy adopted over Hong Kong, it was hard to believe that a Prime Minister without Mrs Thatcher’s


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political credentials could have consigned five million people to Communist rule without more domestic controversy. The Anglo-Irish Agreement, 1985 ‘Any Conservative should in his bones be a Unionist too’, Mrs Thatcher was later to assert,157 but it had been the Heath Government that had suspended the Stormont Parliament in 1972, thus severing the traditional alliance of the Tories with the Ulster Unionists. Shortly before this, Douglas-Home had written to Heath about the Northern Ireland situation that ‘the real British interest would be served best by pushing them towards a United Ireland rather than tying them closer to the United Kingdom’,158 and, despite assertions on the part of successive British Governments to the contrary, the Protestant majority in Northern Ireland increasingly felt that they had cause to believe that they were going to be betrayed. As the Protestants saw things, they came a poor fourth in the London Government’s priorities behind, in no particular order, the appeasement of the Catholic minority in Northern Ireland, buying off the Catholic dominated Irish Republic that governed Southern Ireland, and trying to placate the numerous American politicians who believed that the predominantly Catholic Irish–American vote was worth cultivating. Thus, as long before as 1943, with that vote in mind, President Roosevelt had raised the matter of unifying Ireland with Churchill, and, to the alarm of his Cabinet colleagues, the then Prime Minister seemed resolved to settle the Irish problem. Leopold Amery stated the obvious when he observed that ‘Ulster will bitterly resent any idea of trying to persuade her to come in under de Valera’, and took Churchill’s willingness to raise the matter to mean that his fears that ‘Winston might lose his balance’ had come to pass. Cabinet opposition ensured that Churchill ‘with not too good a grace’ did not persist.159 Between the Treaty of 1921, which separated off Northern Ireland from the remainder of the country that became in the first instance the Irish Free State, and the resumption of the Troubles in 1968, British Governments tended to be only too pleased to leave matters relating to Ireland alone. Even when the Troubles were revived, primarily in the form of violence conducted by Sinn Fein/Provisional Irish Republican Army (PIRA), initially they mattered little in England, because, to borrow Churchill’s words from 1920, though ‘the Irish murders [were] getting very serious. . . they are concentrating their attention on one another. I should take a still graver view if they started serving us out with any of it.’160 Of course, this was bound to come, and, in the Thatcher era, the terrorists attempted to murder the Prime Minister and the rest of the Cabinet at Brighton, and actually assassinated Neave and later Gow. In the background, there was always the American factor. To the extent that Ireland figured in political debate in the USA, the British presence in Ireland tended to be portrayed in terms of imperialism and commonly without recognition that Ulster either existed or that it had a Protestant majority. So, Sinn Fein/PIRA attracted Irish-American financial


support, importantly through Noraid, and American Courts tended to protect terrorists, a number of whom secured American passports. Such behaviour did not stop President Reagan from urging Mrs Thatcher at their meeting in late 1984 to take action about the situation in Northern Ireland.161 Mrs Thatcher had ‘no great enthusiasm’ for that subject, Douglas Hurd, the Secretary of State for Northern Ireland at the time, observed: In general she wanted to preserve the Union but had no particular regard for Unionist politicians, with the exception of Enoch Powell. Her main concerns were the danger to British troops and the cost of the Province to the British taxpayer. She regarded the Irish in Dublin rather as she regarded the British Foreign Office: she could be charmed by individuals but looked on them collectively as too subtle and too soft. . . at the opening of each meeting on Northern Ireland she tended to begin from square one and to repeat ancient themes which had been discussed and dealt with long before. I do not know how many times she began a conversation with me by saying that the answer might be to redraw the border so as to be rid of areas which were substantially nationalist and retain a loyal and impregnable Unionist province. Repeatedly I had to tell her of the tribal map of Belfast hanging in my office at Stormont. The map looked as if an artist had flung pots of orange and green paint haphazardly at the canvas. There was no tidy dividing line. The intertwining of the communities was hopelessly complex. The same was broadly true of Londonderry, and four of the six counties of the Province. . . Moving on, the Prime Minister would then excoriate Irish Ministers and the Irish police (the Garda) for their feebleness in dealing with the IRA. Her main aim in negotiation was to shame and galvanise Dublin into effective anti-terrorist action, making as few concessions on points of interest as was compatible with that objective.162 For all the efforts of Hurd, and also Howe at the FCO, that an Anglo–Irish Agreement eventually emerged in November 1985 owed much to the good working relationship established between Mrs Thatcher and the Irish Prime Minister, Garret FitzGerald. ‘Extra sensitivity was needed. . . after eight hundred years of misunderstandings’, Mrs Thatcher was told by FitzGerald, and she observed, it seemed wearily, that ‘I felt at the end that I had gained an insight into every one of those eight hundred years.’163 Article 1 of the Agreement stated that ‘the two Governments affirm that any change in the status of Northern Ireland would only come about with the consent of a majority of the people of Northern Ireland’. Article 2 ‘established. . . an Intergovernmental Conference. . . concerned with Northern Ireland and with relations between the two parts of the island of Ireland to deal. . . on a regular basis with (i) political matters; (ii) security and related matters; (iii) legal matters, including the administration of justice; (iv) the promotion of cross-border co-operation.’164 Hurd believed that Article 1 represented ‘the admission for


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the first time by the Irish Government that consent was the key to the constitutional position of the North’, which was important because ‘at that time the case for Irish unity seemed so strong to the Irish political parties, to the Americans, and to the British Labour Party that all these players were reluctant to concede that the Unionist majority in the North had the right to block it.’165 In actual fact, under the Sunningdale Agreement of 1973, the statement was made that ‘the Irish Government fully accepted and solemnly declared that there could be no change in the status of Northern Ireland until a majority of the people of Northern Ireland desired a change in that status.’166 Hurd differed from Howe about the importance of persuading the Irish to repeal Articles 2 and 3 of their 1949 Constitution, arguing that ‘the Unionist suspicion of the Republic would not be transformed by the alteration’.167 Nothing was going to remove that suspicion, but the point was that Article 2 of that Constitution stated that ‘the national territory consists of the whole island of Ireland, its islands and the territorial seas’, and its Article 3 stated that ‘pending the re-integration of the national territory, and without prejudice to the right of the Parliament and Government to exercise jurisdiction over the whole of that territory, the laws enacted by that Parliament shall have the like area and extent of application as the laws of [the Irish Free State] and the like extraterritorial effect’.168 So, as the Irish Supreme Court made clear in response to legal challenges to the Sunningdale and Anglo–Irish Agreements, in signing them the Irish Government had not changed what it perceived as being the de jure status of Northern Ireland. All the Irish Government had done was to recognize the de facto situation there.169 While Articles 2 and 3 of the Irish Constitution existed, the PIRA could maintain that they were pursuing the legitimate aspirations of the Republic by direct means, and, though those who enjoyed violence might well continue with such behaviour anyway, the formal removal of the territorial claim would lay the motivation bare. Article 2 of the Anglo–Irish Agreement was the more important one because in return for what turned out to be repeating its acknowledgement of what Hurd called ‘the principle of consent’ in relation to the future of Northern Ireland, Hurd offered the Irish Government ‘not joint authority but a right to be consulted and to give advice on certain key aspects of the governance of the Province, including security. We would be giving them in theory what they already had in practice.’170 The security aspect was prospectively important because the Republic had been a safe haven for the terrorists. Gow was right when he pointed out that ‘a foreign power’ had become involved with governance in Northern Ireland, although Howe tried to maintain that, despite that country’s behaviour in leaving the Commonwealth in 1949, Ireland did not somehow count as a foreign country, and that, despite there not being territorial claims any more in their case, the relationship that was envisaged resembled that between the now reconciled France and Germany.171 The Spectator argued that ‘British. . . thinking on the matter [was] convoluted to the point of lunacy’,172 and it was inevitable that Enoch Powell would accuse


Mrs Thatcher of ‘treachery’ in concluding the Agreement.173 ‘Mrs Thatcher is not Bonar Law reborn’, a former adviser wrote in that sense correctly, ‘She is simply an Englishwoman, if a tough one; rock hard for the Union but just as impatient with the Unionists as the rest of her tribe.’174 Another former adviser, Percy Cradock from the FCO praised the Prime Minister’s ‘pragmatism’ in agreeing to ‘an implicit bargain, on the one hand a say for the Dublin Government in the affairs of Ulster, on the other greater security co-operation between the two Governments against the terrorists. . . it demonstrated a readiness to think afresh and, if need be, compromise on the most neuralgic of issues.’ That it ‘proved a disappointing bargain and the Irish tragedy pursued its course’175 should have surprised nobody in the short run, but, as The Spectator observed at the time, all the Agreement could be was the first part of a ‘process’. Suspicious of ‘Sir Robert Armstrong and the Foreign Office’, the journal thought that the Agreement was ‘intended as a first step to a united Ireland’,176 and, unlike the negotiations at Sunningdale, the Unionists had been excluded from those relating to the Agreement. Few outside their ranks thought in terms of the cause of the Unionists prevailing, and fewer still considered quite how they would fit into the political arrangements of the Republic if in some way they were induced to take part. For the present, though, the politics of Ulster continued to demonstrate that moderation did not pay, and the Protestant majority in the Province turned more and more to the Progressive Unionists to protect their position in a separate Northern Ireland. The Anglo–Irish Agreement was a modest measure in itself, with the Irish Government having been drawn into having formal responsibilities for security in Ulster, and so to experience failure to deal with terrorism, and with war weariness on all sides at that stage representing such hope as there was of an eventual form of settlement emerging.

Waging and winning the Cold War The Cold War had been ‘a boon for us, a second Great Game, with its grand strategies and nuclear weapons and spying dramas, all of which had kept us in the forefront of world affairs’, George Walden, formerly of the FCO, later wrote of Britain’s role in the world since 1945.177 The Soviet invasion of Afghanistan in 1979 reminded those with the requisite historical knowledge of the original Great Game, and Enoch Powell observed that ‘three times in the last century [Britain] did what the Russians have done now – with ultimate results which I suspect may be repeated on this occasion’. What Powell emphasized was that it was no longer Britain’s concern ‘if Russia breaks [the] Khyber bar’,178 leading him to be described by Sir Ian Gilmour as enunciating ‘the complete isolationist doctrine’,179 when what Powell was doing was questioning the wisdom of Britain following the American line so closely in reacting to the invasion of Afghanistan. Since Mrs Thatcher was commonly portrayed in relation to defence and foreign policy matters as a British or,


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at least, English Nationalist, her pursuit of the ‘second Great Game’ was especially open to assessment from Powell’s perspective, with it being his belief that this pursuit had turned Britain into ‘something horribly resembling a satellite of the United States’.180 Powell’s argument was that Britain’s defence interests were bound up with her own territory and with that ‘on her doorstep’181 and, since he did not consider that nuclear weapons would be used even in a situation comparable with 1940,182 Powell believed that Soviet forces could have swept across Western Europe to the Channel ports at any time in the preceding thirty years, and the real question was whether it had ever been their intention to do so.183 Powell argued that ‘if Russia is bent on world domination she has been remarkably slothful and remarkably unsuccessful’ since ‘no Russian soldier stands today an inch beyond where Russian soldiers stood in 1948’. According to Powell, the Soviet invasion of Afghanistan was supposed to be the exception that proved the rule,184 but it was undermining of any perception that the Soviet Union as a satiated power, much as did the size of its Armed Forces and scale and menace of that country’s espionage activity. That activity had caused trouble for the Americans all over the world, and not least ‘on her doorstep’, and, especially after Reagan became President, making trouble for the Russians in Afghanistan and elsewhere was a form of revenge. It cost Britain little to support the USA over Afghanistan, and it was in her self-interest to do so as a senior partner in the NATO Alliance, and as the Falklands episode was soon to demonstrate. The Americans were portrayed by Powell as having a Manichaean view of the world, dividing it ‘into two monoliths – the goodies and the baddies, the East and the West, even the free and the enslaved. It is a nightmarish distortion of reality.’185 There were all sorts of difficulties with the notion of the Free World, not least having to keep the company of ‘Cold War bastards’ among the ranks of the various ‘friendly’ dictatorships on the basis that they were ‘our bastards’. This did not mean that, aside from those running and exploiting the system, those entombed in the Soviet Empire were not ‘enslaved’. George Urban, one of Mrs Thatcher’s advisers, wrote that our ideological contest with the Soviet system and Soviet power was about moral values, or it was about nothing. Moral outrage was, as it had to be, the mainspring of our opposition to totalitarianism. . . I rejoiced in this primacy of moral concepts and did my best to reinforce Margaret Thatcher’s identification with them. ‘Right’ and ‘wrong’ became useable words again in public discourse – a welcome change after the grey and ineffectual relativism and utilitarianism of earlier British Governments and the psycho-babble of the chattering classes.186 When Reagan made a speech to British Parliamentarians in June 1982, he predicted the eventual downfall of the Soviet Union. ‘In an ironic sense Karl Marx was right’, Reagan declared,


We are witnessing today a great revolutionary crisis, a crisis where the demands of the economic order are competing directly with those of the political order. But the crisis is not happening in the free non-Marxist West, but in the home of Marxist-Leninism, the Soviet Union. It is the Soviet Union that runs against the tide of history by denying human freedom and human dignity to its citizens. It is also in deep economic difficulty.187 Of Reagan’s speech, which had lauded democracy as much as it had condemned Communism, that representative of the chattering classes, Roy Jenkins, observed that ‘he did not think it had been very appropriate’.188 What was supposed to be ‘appropriate’ was the Helsinki Accords approach to dealing with the Soviet Union, whereby the boundaries of the Russian Empire in Central and Eastern Europe were acknowledged by the West as legitimate, especially those relating to the division of Germany, and, in return, the Soviet authorities agreed a text on human rights. Walden and the other Western negotiators thought it to be a bonus that the text actually became important for dissidents in the Soviet Empire, with them running unofficial Helsinki monitoring groups.189 Reagan had no sympathy with the Helsinki approach to dealing with the Soviet Union, which was ‘putting our stamp of approval on Russia’s enslavement of the captive nations. We gave away the freedom of millions of people – freedom that was not ours to give.’ Reagan was also uninterested in a policy of parity and sufficiency in arms competition with the Soviet regime, believing in the restoration of American ‘military superiority’.190 Not surprisingly, when, early on in his Presidency, the situation in Poland made difficulties for the Soviet Government, not least because of the intervention of Pope John Paul II, himself a Pole, Reagan was for making more trouble and for working to overturn the Communist dictatorship in the country. This alarmed politicians like the West German Chancellor, Helmut Schmidt, who told Secretary of State Haig in early 1982 that it was ridiculous for Reagan to think that he could ‘overthrow the post-World War II division of Europe’, and that it was best to leave Poland, and its Solidarity Movement, now subject to martial law, to its fate. Reagan took no notice, and, besides imposing economic sanctions on the Russians in relation to Poland, he obstructed the building of a natural gas pipeline from the Soviet Union to Western Europe. ‘They can build their damn pipeline’, Reagan declared, ‘but not with our technology.’ The Soviet Empire desperately needed such Western technology and the hard currency cash flow that the pipeline represented, and, risking relations with his country’s closest allies, Reagan’s combativeness led to the project being halved in size and delayed by eighteen months.191 Though it was not until March 1983 that Reagan famously described the Soviet Union as an ‘evil Empire’,192 what the Reagan Doctrine amounted to seemed obvious, though Reagan’s deviousness made his individual actions difficult to interpret. Though portrayed by his critics as stupid, what Reagan looked for was simple solutions. Against much advice, he raised the stakes in


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the Cold War. Though it was Nixon and not him that was the poker player, Reagan played the political game in the spirit that when your opponent blinks you raise the bid. The Strategic Defense Initiative (SDI) of March 1983 was a spectacular means of raising the game. What was dubbed Star Wars envisaged the use of space-based weapons, lasers, as well as ground-based defences to render nuclear weapons ‘impotent and obsolete’. Star Wars was meant to be destabilizing and undermining of the concept of Mutual Assured Destruction, and to massively complicate the deterrent calculations of the Soviet leadership. As Edward Spiers observed, by taking the arms race into space, with an emphasis on computer-based, futuristic technology, at huge costs, and to insist that it was non-negotiable, Reagan posed a massive, potential challenge to the fabric of Soviet security, while at the same time threatening to impose horrendous costs upon the Soviet economy. The actual feasibility of Star Wars was never the main issue, but whether the Soviet leaders felt able to ignore it, and they did not.193 Secretary of State Shultz later wrote that ‘SDI proved to be of deep concern to the Soviets. General Secretary Andropov’s reaction had been immediate. The Soviets were genuinely alarmed by the prospect of American science “turned on” and venturing into the realm of space defences. The SDI. . . proved to be the ultimate bargaining chip. And we played it for all it was worth.’194 KGB General Nikolai Leonov, the former Chief of Intelligence for the Western Hemisphere, seemed representative of the views of the Soviet leadership group when he said of the SDI that ‘this idea played a very powerful psychological role. And of course it underlined still more our technological backwardness.’195 With the USA devoting only 6.4 per cent of its GNP to defence even in 1984 at the peak of the Reagan expenditure programme compared with the Soviet Union’s 20 per cent or more of GNP, and with the latter devoting some 70 per cent of its industrial productivity directly to its military effort, the Russian regime was being broken by its need to compete.196 Far from easing the way in negotiations, the Soviet Foreign Minister, Eduard Shevardnadze, recalled that Reagan began his dozen meetings with him with a ‘bill of indictment’ against the Soviet Union, and he saw his country’s predicament by the mid-1980s in terms of ‘no matter where we turned, we came up against the fact that we could achieve nothing without normalization of Soviet-American relations. We did some hard thinking, at times sinking into despair over the impasse.’197 Reagan was not interested in ‘normalization’ but in the overthrow of the Soviet system. ‘It had been the SDI that had brought the Soviet Union to Geneva [in November 1985] and Reykjavik [in October 1986],’ Reagan later wrote of his summit meetings with the Soviet General Secretary, Mikhail Gorbachev, but ‘I wasn’t going to renege on my promises to the American people not to surrender the SDI’.198 Reagan recognized that Gorbachev was ‘different from the Communists who had preceded him to the top of the Kremlin hierarchy. . . he was the first not to push Soviet expansionism, the first to agree to destroy nuclear weapons, the first to suggest a free market and to support open elections and freedom


of expression.’199 Shultz later wrote in terms of ‘What Really Happened at Reykjavik’, and at one stage Reagan recalled ‘we were getting some amazing agreements’ in terms of unprecedented cuts in provision for nuclear weapons among other concessions. The obvious condition was that Reagan would have to abandon Star Wars, and though Reagan later wrote that on hearing this ‘I was very disappointed and very angry’,200 it was difficult to believe that he was doing more than sounding the Russians out about how far they would go. As Shultz remarked, ‘even though the Soviets withdrew these concessions at the end, I knew that we could reel them in again subsequently’.201 The terms that the Soviet leadership chose to pay for the Intermediate Nuclear Forces (INF) Treaty of 1987 were similar to those that the Andropov regime had rejected with contempt only a few years before,202 and not least in this sense Shultz observed that ‘the INF Treaty. . . was a watershed agreement’, and that the Cold War was ‘all over bar the shouting’.203 ‘British influence in Washington throughout this time was disproportionate, exerted though a common view of the world, close intelligence and defence ties, and sympathy between the leaders’, Percy Cradock later wrote of the Thatcher era, especially during the Reagan Presidency: It was always a delicate relationship to manage, for example during the Contra scandal; American intentions were often uncertain and worrying; and there were open disagreements, as over Grenada and the Siberian pipeline, when the Prime Minister did not hesitate to take up an independent position. But these episodes were set against a background of natural understanding and collaboration; and as a whole the relationship was managed skilfully, to Britain’s great advantage.204 When it came to policy relating to the deployment of Cruise missiles and of Trident, Mrs Thatcher was not found wanting by the Americans, unlike several of that country’s NATO allies. Those opposed to this policy chose to ignore the classic text called Soviet Military Strategy, which stated that ‘from the point of view of armed combat, a Third World War will be first of all a nuclear rocket war’.205 The author, Marshal of the Soviet Union Sokolovskiy, had written as early as 1962 that ‘it should be emphasized that, with international relations existing under present day conditions and the present level of development of military equipment, any armed conflict inevitably will escalate into a general nuclear war if the nuclear powers are drawn into the conflict.’206 Sokolovskiy was clear that ‘mass nuclear strikes. . . will be the main, decisive method of waging war’.207 America’s allies tended to display weakness too when it came to supporting her retaliatory air strike against Libya in 1986. Weinberger recalled that President Mitterrand of France gave the Americans some gratuitous advice about the raid of the ‘don’t inflict a mere pinprick’ variety, while refusing permission for the F-111s to fly over his country’s airspace.208 Not surprisingly, Shultz found that ‘Margaret Thatcher


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had come through in staunch support of our effort by allowing American planes to take off from British bases’,209 and the American raid on Libya was a success, and without the terrorist reprisals opponents of the policy feared. Mrs Thatcher’s ‘special relationship’ with the Reagan Administration was important for the conduct of relations with the Soviet Union. Of Mrs Thatcher, Reagan recalled that ‘she told me that Gorbachev was different from any of the other Kremlin leaders. She believed that there was a chance for a great opening. Of course, she was proven exactly right.’210 As for Gorbachev himself, his official biographer shared his subject’s belief that Mrs Thatcher’s personal and public support for the changes that he brought about in Soviet domestic and foreign policy was especially important in relations with the Reagan Administration, with the biographer finding it remarkable that a politician of the Right should succeed in the role of honest broker when more politically moderate British Prime Ministers such as Macmillan and Wilson had failed before.211 It was, of course, the Right that had to be squared. ‘They look at us in the West and wait for us to drown’, Gorbachev told the Politburo after Reykjavik,212 and the West did not have to wait for long, though the Reagan Administration had been succeeded by that of George Bush before the collapse of the Soviet Empire finally took place. Of her relationship with the Bush Administration, Mrs Thatcher recognized that ‘Bush felt the need to distance himself from his predecessor: turning his back fairly publicly on the special position I had enjoyed in the Reagan Administration’s counsels and confidence was a way of doing that.’ Bush had ‘never had to think through his beliefs and fight for them when they were hopelessly unfashionable as Ronald Reagan and I had had to do’, Mrs Thatcher considered, though a better relationship between them eventually emerged when she took to ‘eating a little humble pie’.213 Whether Bush was aware of this differing approach seems not to be known, and there was much talk about Mrs Thatcher’s forthrightness at her meeting with Bush at Aspen, Colorado, the day after the Iraqi invasion of Kuwait in August 1990 caused a world crisis. ‘It has been said that Mrs Thatcher had to put backbone into the President’, Charles Powell observed, ‘That is just wrong. They both arrived there absolutely determined that this was something that could not be tolerated. The genuine sense of outrage on the part of both of them is the thing that I remember.’ It was three weeks later that Mrs Thatcher famously said ‘all right George, all right, but this is no time to go wobbly’, but this was about seeking United Nations authority for taking military action not about what to do,214 and Mrs Thatcher had left office before the Gulf War of 1990–91 resulted in a form of victory.

Thatcher and ‘Europe’ ‘Looking back, it is perhaps natural to assume that the Thatcher years were a period of uninterrupted hostilities with Europe, a kind of Napoleonic War,


broken only by the occasional Peace of Amiens’, though, ‘in fact it was not like that’, Sir Percy Cradock later wrote: There were perhaps three stages. The first was dominated by the continuing battles over the Community Budget, which had begun under her first Government in 1979 and were not concluded until Fontainebleau in June 1984. The second, from 1984 to say 1987 was a much more positive period, in which Britain pressed for the completion of the single market, and took a leading part in drawing up the Single European Act. The third, and darkest, phase covered Mrs Thatcher’s last two years in power. It was marked by disputes with Europe and divisions within the Government itself, and its characteristic expressions were the Delors Report on monetary union on the one side and the Bruges Speech of 1988 on the other.215 ‘There is one thing you British do not understand, an idea. There is one thing you do understand, a fact. We will form the Community without you and then when we have shown you that it can work, you will join us.’ So said Jean Monnet,216 who recognized that ‘Britain had not been conquered or invaded; she felt no need to exorcise the past’,217 which in large part explained that country’s reluctance to ‘join us’, since her history meant that the issue of sovereignty or constitutional self containment was of a different order of importance for her. Several factors explained why the British political class eventually did turn to ‘Europe’, with one being that the Commonwealth was at last recognized to be a burden and not an asset and most certainly not a political surrogate for Empire; and another factor was American pressure following from an unjustified belief that a more politically integrated Western Europe including Britain would contribute more to its own defence. That said, though, the hard evidence that the British Keynesian Welfare State was not an internationally competitive social and economic order was the main motive behind Britain’s eventual attempts to join the Community, and the terms secured by the Heath Conservative Government savoured of desperation. The next Labour Government attempted a ‘renegotiation’ that Roy Jenkins well described as producing ‘the minimum results with the maximum of ill will’,218 and which may even have marginally worsened the terms that Heath obtained.219 Since Britain had a form of representative government and was well-described as a Parliamentary democracy, Heath may well have been fortunate that neither the application made for membership nor the poor terms obtained needed an immediate and explicit popular mandate of the kind required in, say, Norway, where given the opportunity, the electorate of Britain’s fellow applicant voted against. The ‘fact’ of British membership having been obtained in 1973 made the reluctantly granted Referendum of 1975 a different form of contest, and the Establishment inevitably prevailed in a grand manner not really seen since the Munich Agreement of 1938. Then, too, only the mad and bad were supposed not to see the good sense


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of the Agreement, and Churchill spoke against it in icy silence, and probably at least two-thirds of the electorate and possibly more would have voted for Appeasement if a referendum had been held before the Agreement was shown to be worthless, and given that the alternative was total war with Nazi Germany this might well have seemed the sane thing to do. The Hitler regime provoked understandable terror, but the common later British reaction to ‘Europe’ was that it was numbingly boring. This did not make the difference because, much like the League of Nations in the inter-war years, in which organization nobody should have been surprised to learn Monnet was once employed, the Community had come to attract an unthinking adherence on the part of the British Establishment, characterized, as so often, by Carrington, who was to write that ‘when I became Foreign Secretary I had no great knowledge of the other European statesmen with whom I would be dealing, no detailed knowledge of Europe or Community affairs. I had, however, conviction.’ Carrington thought of those opposed to British membership of the Community as displaying ‘a sort of national death wish’.220 For those who actually understood the Monnet Dream, the opposite would be the case, since, in principle, Britain in a federal ‘Europe’ would have a status comparable with a Canadian province or a West German land. When a leading FCO official wrote in 1971 about the issue of sovereignty and the European Communities, he seemed to think that it would take as long as thirty years for the British electorate to fully recognize that ‘Europe’ had political ambitions, and that by then it would be too late to do very much about it.221 Heath chose to play down the political dimension anyway, leading to later allegations of deceitful behaviour, and enabling those opposed to ‘Europe’ to argue that the victory of the ‘Europeans’ in the Referendum had been rendered worthless because it had been obtained by a trick.222 At the time of Britain’s entry, though, and for some years afterwards, the Monnet project seemed to have stalled, and Gaullist obstruction in the form of the ‘empty chair’ and the Luxembourg Compromise were fresh in the memory, and some took Kenneth Clarke’s line that the British had no need to fear European integration because they had ‘a monopoly of common sense’ and so could always ‘bluff our way through’. This form of ‘cavalier optimism’223 was not a characteristic of most of the British political class in relation to ‘Europe’ since they chose to treat the Monnet project as unimportant. When Roy Jenkins moved from British domestic politics to head the European Commission between 1977 and 1981, the then Foreign Secretary, David Owen, soon sent a minute around the FCO instructing his officials to desist from the growing practice of referring to President Jenkins,224 but neither political ‘Europe’ nor the Commission nor those who thought like Jenkins could be wished away. ‘Margaret Thatcher’s long and bitter struggle for a budgetary rebate from the European Community was not about British overpayment at all’, Urban believed, ‘Rather was it her way of expressing her growing hostility to a supranational institution which Britain had failed to join at its inception


and was unable to influence in the way she would have liked. Foreigners had made the rules – Britain had to live by them. Could there be a greater indignity?’225 Cradock thought that Mrs Thatcher had a ‘private attitude to Europe’ that ranged from ‘suspicion to undisguised hostility’ which made ‘Europe. . . pre-eminently an area of struggle, an arena’. So, Cradock believed that Mrs Thatcher’s antagonism had deeper roots than ‘the patronage from Giscard d’Estaing and Helmut Schmidt that she had to endure when a new girl at the summits of the early 1980s.’ Further, ‘the arguments over money, British money, her money, which were the theme of her first five years, lent themselves easily to a confrontational approach and to her concept of foreign affairs as a series of battles from each of which she had to emerge as the victor’.226 Jenkins himself conceded that the disproportionate size of Britain’s net contribution to the Community budget was ‘a nettle that Mrs Thatcher had to grasp’, though he thought ‘she caused a justified but limited dispute. . . totally to dominate the Community for five years and run into the sand any hopes of, and ambitions for, a British leadership role within the Community’.227 If there was a time when Britain could have had such a role it was in the mid-1950s at the latest, and the least surprising feature of Jenkins’s inheritance when he became President was that ‘Europe’ was being run by ‘the Franco-German axis’.228 As for the balance within this, Jenkins himself had remarked on the deep-seated reluctance of post-1945 Germany to play a strong political hand. Much of the stage of modern Europe has been occupied with, on the one side, the British and the French, each in their different way, trying to exercise a power somewhat beyond their capacity, and, on the other, the Germans trying to push it away like a magnet trying to reject metal. There was also, Jenkins detected, on the part of the Germans ‘a certain distaste for the complicated dance of international hauts fonctionnaires’. Of course, this was ‘utterly unlike the French’,229 and the reality was that France was politically the dominant country within ‘Europe’ which those hostile to the Monnet project easily demonstrated was largely organized in her interest, and not only in the case of the Common Agricultural Policy.230 Quite why British ‘Europeans’ thought such arrangements would promote a domestic economic recovery or could be to their country’s political advantage remained a mystery, but then being communautaire most commonly translated into doing what the French and, to a much lesser extent, the West Germans wanted. So, there was a marriage between French political power and West German economic power and one which dominated the Community, and when in 1979 Jenkins suggested to Mrs Thatcher that ‘we should. . . endeavour to break up the endless exhibition waltz between [Chancellor] Schmidt and [President] Giscard [d’Estaing]’,231 it was difficult to see not only how this could be done but also why the politicians concerned would wish to cease calling the tune,


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and the same was bound to be true of their successors, Helmut Kohl and Françcois Mitterrand. Of Mrs Thatcher’s performance at the Dublin Summit in November 1979, Jenkins recorded that ‘her constantly reiterated cry of “I want my money back” strikes an insistently jarring note’, and that ‘she bored everybody endlessly by only understanding about four of the fourteen or so points on the British side and repeating each of them twenty seven times’.232 Jenkins, of course, thought that Mrs Thatcher should have been playing another kind of game, and so she should have done soon afterwards when the obsession with ‘my money’ came to cause her to take insufficient notice of revived supranationalist initiatives. ‘With British implacability by now well advertised’, as Carrington put it, ‘the matter of the British contribution was. . . sent to the Foreign Ministers to try to settle. We met in [May] 1980 [at Brussels] for an unbroken twenty four hours and finally reached a three year agreement. . . I doubt if Margaret was particularly pleased with this but half a loaf is better than no bread.’233 According to her own account, Mrs Thatcher’s ‘immediate reaction was far from favourable. . . but the Brussels proposal. . . offered us a three year solution’, and ‘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.’234 Gilmour, who had accompanied Carrington to Brussels, later wrote of their visit to Chequers on their return in a manner that demonstrated the gulf of social class between them and the Prime Minister. Mrs Thatcher treated Gilmour and Carrington as if they were people who had come back from the sales without a real bargain. ‘The Prime Minister was like a firework whose fuse had already been lit; we could almost hear sizzling’, Gilmour recalled, ‘It was difficult to discern the exact structure of her argument, but it was tolerably clear that she thought the agreement lousy.’ Gilmour thought that ‘her objection was to the fact of the agreement, not to its terms. . . the grievance was more valuable than its removal’. After their ordeal, during which they had been denied food and drink for a long time, the two Ministers agreed that the best way to present the agreement to the media was in terms of a triumph for the Prime Minister, which ploy worked. So, ‘by Monday [2 June 1980] the battle was virtually over’, Gilmour recalled, ‘At the meeting of the Cabinet that morning. . . Mrs Thatcher had not changed her mind, but only one Cabinet Minister followed her line. All the others who spoke were strongly in favour of what we had agreed, and the Prime Minister had to acquiesce.’235 Carrington believed that ‘we had taken an important step towards a durable resolution’ of the British contributions problem,236 but Mrs Thatcher’s attempts to find a permanent solution stalled in the face of much activity and some opposition from President Mitterand and threats of a ‘two-track’ Europe and a ‘special status’, and, of course, a lesser one, for Britain. Such threats surfaced once more at the Fontainebleau Summit in May 1984, an event that witnessed Britain receiving a permanent annual rebate totalling two-thirds of its annual


net contribution.237 On the budgetary question, Cradock was probably right when he observed that ‘there is little doubt that without intransigent and on occasion. . . outrageous behaviour on the Prime Minister’s part, we would not have succeeded’,238 but while Mrs Thatcher was conducting this campaign neither she nor her allies nor her advisers seemed to recognize that those who wanted a federal ‘Europe’ were advancing their plans. ‘With the Fontainebleau settlement behind it, the Government was able to adopt a much more positive attitude in the Community’, Cradock recalled, ‘In fact the years from 1984 to 1987 could be regarded as our communautaire period.’239 Charles Powell considered that ‘from 1984 to 1987 British diplomacy in Europe was very successful: we got the EC to focus on enlargement and the Single Market’, and the blame for bringing this constructive period to an end was accorded to Jacques Delors, the President of the EC Commission between 1985 and 1994.240 ‘We’re not here just to make a single market – that doesn’t interest me – but to make a political union’, Delors was later to say, and, while Mrs Thatcher saw the Single Market as an end in itself, the last paragraph of the relevant White Paper issued by the Commission stated that ‘just as the Customs Union had to precede economic integration, so economic integration had to precede European Union’.241 The White Paper was mainly the work of Lord Cockfield, whom Mrs Thatcher had sent to Brussels in 1985 to be Vice President of the European Commission, and she ‘paid tribute to the contribution he made to the Single Market programme’.242 Howe went farther and wrote that ‘Cockfield had almost single handedly imposed and carried well on the way to fulfilment the entire Single Market programme.’243 Close to the action at the time, Sir Roy Denman, one ‘European’ who could be fairly described as a fanatic, was clear that ‘the Single Market. . . would not have been achieved without the imagination, knowledge and tenacity of Arthur Cockfield’.244 According to Denman, ‘Cockfield soon became a convert to the European cause’, and a tactless one too in that when the Prime Minister insisted that the Treaty of Rome did not make provision for the harmonization of indirect taxes, Cockfield made a point of reading out the contents of Article 99. Thus, ‘he had contradicted and found wrong the Great She-Elephant’.245 Mrs Thatcher observed that this ‘natural technocrat of great ability’ proved to be ‘the prisoner as well as the master of his subject. It was all too easy for him, therefore, to go native and to move from deregulating the market to re-regulating it under the rubric of harmonization’.246 Howe agreed that Cockfield’s ‘campaign for tax harmonization’ had been ‘a tiresome nuisance’, and, when he failed to save him, he successfully recommended Leon Brittan as his successor.247 From Mrs Thatcher’s point of view, Brittan’s appointment proved to be another mistake. For Brittan went ‘native’ too, pouring scorn on those ‘whose vision (if vision it can be called) of Europe is that of little more than a glorified free trade area’.248 That was what the limit of what most British Governments had wanted, and, according to Denman, though they were made


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aware not least by their officials that ‘Europe’ involved closer political integration, the country’s political leaders from Macmillan onwards judged that it was inadvisable ‘to put such issues to the people’. Denman thought that such behaviour was timorous, ‘but that is the democratic system’.249 Others would call it a denial of democracy, but the deliberately encouraged ignorance of the mass of the electorate was less remarkable than the numbers in the political class who failed to see there was more to ‘Europe’ than the Common Market, or who chose to believe that this was so, or needed to. ‘The Single Market – which Britain pioneered – was intended to give real substance to the Treaty of Rome and to revive its liberal, Free Trade, deregulatory purpose’, Mrs Thatcher believed, adding: ‘I realized how important it was to lay the groundwork in advance for this new stage in the Community’s development.’250 Others, though, had beaten her to it, for by the time that Delors became President he inherited the product of four years of specific preparatory work completed in and around the Commission.251 Afterwards, Mrs Thatcher came to believe that in negotiating the Single European Act we in Britain made two understandable but undeniable mistakes. The first was to assume that the increased powers given to the Commission would cease to be used to any great extent once the Single Market programme had been completed. After all, if one accepted that the whole purpose of the changes made was to establish a properly functioning market, there was no reason to imagine that the process would be anything other than finite. True, one could not hand back vetoes that had been removed as part of the Single European Act, because Governments might subvert the progress that had been made. But there was no reason to think the Commission would need to keep legislating at the same rate, let alone spread its legislative tentacles much wider.252 This was classic bureaucratic behaviour of the kind that Mrs Thatcher had striven to combat at home, and she was stating the obvious when she observed that French political culture was ‘dirigiste by tradition’.253 The ideas of Colbert and of practice of the Prussian State were traditions in Western Europe that continued to ensure that the intellectual export market for the thinking of the heirs of the British Classical Economists or, if one prefers, the Manchester School were not going to go unchallenged, and made it unsurprising that – in Mrs Thatcher’s words – ‘the provisions of the Single European Act were abused to push corporatist and collectivist social legislation by the back door’. Mrs Thatcher thought that the second error, which was closely linked to the first, was then and later to take at face value the assurances we were given. I do not now believe that the European Commission or the majority of European Governments were ever much interested in economics. They viewed, and still view, policy


as equivalent to politics, and politics as about power – and only power. The Single Market thus appealed to these forces. . . as a device for centralizing more decision-making in the hands of Europe. And the idea that these extra powers should be limited to the purpose for which they were actually being given probably never seriously occurred to them. The European Commission and the European Court of Justice worked together to explore, exploit, and widen every loophole. And as they did so they could rely on the support of most of the member countries and the European Parliament which both shared the federalist dream, and in this way ‘the drive for a “Social Europe”, so beloved of Jacques Delors. . . soon adopted at least as much importance as the “Economic Europe” which the Single Market sought to create’.254 ‘I’ve always believed in the European ideal, but today it’s no longer a question of idealism, it’s a matter of necessity’, Delors had stated in 1983, ‘Our only choice is between a united Europe and decline’,255 later declaring that ‘I reject a Europe that would be just a market, a free trade zone without a soul, without a conscience, without a political will and without a social dimension.’256 The degree of close control of public policy envisaged was suggestive at times of a unitary State rather than a federal one, and ambitions ran to a common defence policy and a common foreign policy. At the London European Council of December 1986, at which Mrs Thatcher was congratulating herself on the ‘adoption of or agreement to a record number of measures to implement the Single Market’, she also noted the emergence of ‘Delors as a new kind of European Commission President – a major player in the game. . . a tough, talented European federalist, whose philosophy justified centralism.’257 Ironically, Mrs Thatcher had played a part in ensuring that Delors had become President at the expense of Claude Cheysson, whose past record indicated that under his leadership the Commission would have been characterized by not much more than high minded generalizations.258 With little modesty, Delors was to say that ‘I became the symbol of an idea of Europe’,259 but his ambitions both for himself and for ‘Europe’ would have counted for little had not – as Mrs Thatcher noted – ‘a Franco-German bloc with its own agenda. . . re-emerged to set the direction of the Community’. Though Britain ‘could. . . look to the veto, to legal safeguards, and to declared exemptions’, Mrs Thatcher found that ‘in the future. . . these would increasingly be circumvented where they were not overthrown entirely’.260 Though the Single European Act involved giving up national vetoes in the relevant areas of public policy, Howe thought that the Luxembourg Compromise was still ‘untouched and unaffected’ by it, and he assured the House of Commons that this was so, and as the Compromise was a convention and not a creature of law in principle that might still be the case and, Howe later thought, possibly still in practice. Howe, though, recorded that ‘we found ourselves facing on some social and environmental matters a more extensive use of


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Community powers than we had regarded as foreseeable or legitimate’.261 Cradock observed that the shift from unanimity raised the issue of how far Britain would be prepared to accept majority voting on proposed extensions of Community law in, for example, matters of immigration, health, or conditions of employment. Having unlocked the gates in the areas where we wanted progress, we could not be surprised if others with differing ideas of the Community’s ultimate form sought to exploit the new freedom for their own purposes. . . The main debit entry. . . lay in the inclusion in the Single European Act of references to economic and monetary union.262 Mrs Thatcher maintained that the Treaty’s words on the EMU did not mean anything, and that if they had she would not have agreed to them. Delors, though, said that the relevant short chapter in the Treaty was ‘like Tom Thumb lost in the forest, who left white stones so he could be found. I put in white stones so we would find monetary union again.’263 So, as Cradock, close to the action, observed, ‘there was a fundamental clash between the Prime Minister’s Gaullist conception of a Europe des patries, members of a single market but independent and sovereign, and the more dynamic, integrationist, political vision of her European colleagues’, and ‘this external clash was complicated by growing divisions between the Prime Minister and her Ministerial colleagues. . . on tactics. . . and the nature of the ultimate relationship between Britain and Europe’. Thus, though, since 1979, Britain had been committed to join the Exchange Rate Mechanism of the European Monetary System ‘when the time was ripe’, for several years Mrs Thatcher resisted pressure from Howe and Lawson as Chancellor to go ahead, only relenting shortly before she left office, and still ruling out a single currency.264 Meanwhile, in July 1988, Delors told the European Parliament that ‘we are not going to manage to take all the decisions needed. . . unless we see the beginnings of European Government in one form or another’, and predicted that within ten years the Community would be the source of ‘80 per cent of our economic legislation and perhaps even our fiscal and social legislation as well’. In September 1988, Delors addressed the TUC and called for measures to be taken on collective bargaining at the European level.265 Fired up, Mrs Thatcher delivered a speech at the College of Europe in Bruges on 20 September 1988 that she recorded provoked ‘stunned outrage’ and horror on the part of ‘the Euro – enthusiasts who believed that principled opposition to federalism had been ridiculed or browbeaten into silence’.266 The content of what became known as the Bruges Speech did not live up to its subsequent reputation. ‘It is ironic that just when those countries, such as the Soviet Union, which have tried to run everything from the centre, are learning that success depends on dispersing power and decisions away from the centre, some in the Community seem to want to move in the opposite


direction’, Mrs Thatcher observed, adding: ‘We have not successfully rolled back the frontiers of the State in Britain only to see them reinforced at a European level, with a European Super State exercising a new dominance from Brussels. . . Let Europe be a family of nations, understanding each other better. . . but relishing our national identity no less than our common European endeavour.’ Mrs Thatcher did say that ‘willing and active co-operation between independent sovereign states is the best way to build a successful European Community’ and that ‘it would be folly to try to fit them into some sort of identikit European personality’, and she did emphasize the importance of NATO and warned against Franco–German initiatives suggesting that the Western European Union could serve as an alternative.267 As regards its overall content, the Speech was well-described by The Economist as ‘a thoughtful, elegant essay’.268 Pious conformity with the ‘European’ ideal, though, was by now a requirement of being ‘respectable’ in the political class. Howe was appalled, concluding that ‘for Margaret the Bruges Speech represented, subconsciously at least, her escape from the collective responsibility of her days in the Heath Cabinet – when European policy had arrived, as it were, with the rations’, and, as the Prime Minister had now revealed an antipathy to ‘Europe’ that he seemed not to have detected before, his position as Foreign Secretary had become ‘a little like being married to a clergyman who had suddenly proclaimed his disbelief in God’.269 A belief in ‘Europe’ was not comparable with a religious faith that could not be questioned. Nonetheless, for true believers in the project that seemed to be their position, with Mrs Thatcher deemed to be obstructing the path to some kind of earthly paradise. The Prime Minister’s behaviour in the House of Commons on 30 October 1990 proved to be the last straw for Howe. The offending sentences that Mrs Thatcher uttered ran as follows: The President of the Commission, Mr Delors said at a press conference the other day that he wanted the European Parliament to be the democratic body of the Community, he wanted the Commission to be the Executive and he wanted the Council of Ministers to be the Senate. No. No. No.270 If, as so often, Mrs Thatcher had made trouble for herself by taking Delors too seriously, given that the likelihood of his preferred institutional structure emerging in the near future was slender, what, less understandably, she underestimated was the depth of ‘European’ feeling among the political class at that time, and not much more than three weeks afterwards Mrs Thatcher had been deposed as Prime Minister. The enthusiasm for ‘Europe’ that gripped the British political nation in the latter 1980s played its part in sweeping Mrs Thatcher aside, but, once the political dimension of the Community had been belatedly grasped by the wider public, in part as a result of her efforts, the lack of popular enthusiasm was a perennial embarrassment to the believers. By the early


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1990s, Hurd, at least, thought that ‘the Monnet doctrine had just about run its course’,271 and, if so, in terms of the rhetoric resorted to and the bureaucratic imperialism involved there was no need to mourn its passing. Beneath the ideological veneer, the Community was no more than an international organization involving sovereign states. The most serious aspect of the project, and not only at first, had been concerned with what to do about Germany, a country who had caused three major wars within three-quarters of a century. The European State system had to be made to work better, and Germany had to be allowed back into it, though subject to safeguards and within structures that constrained her. When the Soviet Empire collapsed, Mitterrand seemed to think that its East German colony would survive as an independent entity, and appeared at first to side with Mrs Thatcher in opposing any possibility of German reunification.272 Cradock’s advice to the Prime Minister was that ‘unification was going to happen whether we liked it or not’, but she took no notice and was as eloquent in public in her opposition as Mitterrand was in private.273 Mrs Thatcher later conceded that ‘my policy on German reunification’ was the ‘one instance in which a foreign policy I pursued met with unambiguous failure’.274 Meanwhile, Mitterrand changed tack and maintained that he was not against reunification, having somehow convinced Chancellor Kohl of his consistent support, while adding, inevitably, that it should take place within a European framework.275 Germany had always been too big for Europe, and that was what Mrs Thatcher feared, but one difference this time was that West Germany had to absorb an East German economy that had been subject to Communism for nearly half a century and, thus, ruined. The collapse of the Soviet Union also raised the prospect of further enlargement of the Community, which might well alter its character and make it more difficult for France and Germany to control. Britain had joined the Community too late for it to be shaped to suit its interests, and the most that membership merited was pragmatism about access to a large market and one in which the City of London could continue to flourish, and which was also an arena in which the English language could continue on its conquering way. As for the role in the world that those like Delors sought for ‘Europe’ in terms of a common defence and foreign policy, the Community was best seen as an expression in the international system of what Francois Duchene called civilian power as opposed to traditional military and political power, which recalled idealist or progressive approaches to international relations in the 1920s.276 What did not follow was that the rest of the world would co-operate. So, as Mrs Thatcher left the scene, it was not surprising that the Gulf War left ‘Europe’ in disarray. ‘Europe’ was ‘rather ineffectual’, Delors admitted,277 though Alan Clark caught the reality better when he described many of Britain’s allies as ‘heading for their cellars’.278

9 The Unfinished Revolution

Thatcher: the ‘Outsider’ in 10 Downing Street? ‘Mrs Margaret Thatcher is the first outsider to reach 10 Downing Street since Bonar Law’, Jock Bruce-Gardyne was later to observe admiringly: Several others – Ramsay MacDonald, Ted Heath, Jim Callaghan – may have started from the wrong side of the tracks. But long before they reached the pinnacle of the political system all of them had been welcomed to the Club. Not so Mrs Thatcher. . . No matter how long she remains at Downing Street, she will never be absorbed by the Establishment.1 It does seem true to say of twentieth-century British Prime Ministers, only the exotic Lloyd George, the short-lived Bonar Law, and Mrs Thatcher did not become creatures of the Establishment. By this was meant the established institutions of the British State and the social arrangements that surround them – the Monarchy and the various estates of the Realm, the Church of England, the learned professions, Oxford and Cambridge, the Public Schools, the Foreign Office, the Higher Civil Service generally, and, in former days, The Times newspaper. What Bruce-Gardyne’s analysis neglected was that there was another Establishment, the Establishment of ideas, what it would be reasonable to call the ‘liberal’ Establishment. These ideas had penetrated the social Establishment, and had seemed even to overwhelm a once serious institution like the BBC. Indeed, ‘liberal’ thinking had come to dominate many areas of public policy, perhaps most, and in 1979 such ideas were only in retreat in the area of economic policy. Mrs Thatcher was neither a member of the social Establishment nor of the Establishment of ideas, nor did she aspire to be. From the perspective of both Establishments, Mrs Thatcher was a worrying figure, at times, for some, one that induced terror, and the ‘liberal’ intelligentsia did not disguise their loathing of her. Much of this, of course, was bound up with her lower-middle-class origins. Of this class prejudice, Kingsley Amis observed shrewdly, ‘It’s a hate that dare not speak its name.’2 222

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That the High Tories, too, despised Mrs Thatcher mattered less than most commentators expected because for many years and for the first time since Neville Chamberlain, the Conservative rank and file both in Parliament and at the constituency grassroots had a leader who instinctively reflected their prejudices. Bruce-Gardyne recognized this,3 but failed to emphasize another aspect of the Thatcher political style which marked her off from her immediate predecessors. This was her apparent willingness to appeal to the electorate directly and in terms of what she believed to be mass opinion. That she proved to be misguided in her assumptions about popular attitudes in some important areas of public policy neither deterred her nor did it provide consolation for members of the political class. What alarmed them was that the appeal was made at all. The thesis that Mrs Thatcher was supposedly advocating a form of ‘authoritarian populism’ was advanced on the Left, but, even if one adds in homespun versions of economics in the vein of ‘private enterprise knows best’, and a talent for annoying foreign political leaders, apart from Americans, such populist credentials as Mrs Thatcher had largely depended on her association with the advocacy of capital punishment for murder. Social attitude surveys consistently showed that two thirds of those sampled supported capital punishment and some polls gave a figure of well over 80 per cent. That being so, the abolition of the death penalty in the 1960s, which had the support of that supposed populist Enoch Powell, and the continuance of that policy in the face of popular opinion was testimony to the ‘liberal’ character of contemporary British representative government. Mrs Thatcher was to complain about the behaviour of the Tory-dominated 1983 Parliament in rejecting the restoration of the death penalty for murder, but what had become House of Commons opinion on ‘moral’ questions was well known by that time, and the obvious way to restore capital punishment was to restort to direct democracy. Yet, in 1978, Mrs Thatcher had allowed Whitelaw to block a referendum on capital punishment becoming Tory Party policy, and no such referendum was ever held. For all the talk of being tough on crime and criminals, Hurd as Home Secretary found Mrs Thatcher to be ‘alarmed by the public expenditure side and the cost of more prisons’. As for the politics of race, Mrs Thatcher’s only important personal intervention was the well known ‘swamping’ remark made in 1978. However distasteful to the ‘enemy’, one of whose number mentioned it no less than three times in a biography, nothing much resulted from Mrs Thatcher’s supposed populism in relation to matters of race and immigration once she became Prime Minister. Those who portrayed Mrs Thatcher as a right wing ogre did not normally refer to her record in the 1960s when she supported the reform of the law relating to abortion and also greater freedom for homosexuals. For all the later criticism of Mrs Thatcher supposedly pandering to the prejudices of the masses of southern England, her alleged rapport with ‘Essex Man’ was not obvious when it came to the Poll Tax, and absent entirely in relation to football, the ‘opium’ of the British male


masses. The Football Spectators Act of 1989 was designed to impose a national identity scheme upon such spectators, and it was described as evidence of the ‘fearsome force’ of Mrs Thatcher’s prejudices. If so, they were scarcely populist prejudices. Most football supporters were against the scheme, seeing it as being directed against the law-abiding majority, and refusing to be fooled by the Prime Minister’s pretence that soccer hooliganism was not a law and order issue. The scheme was only abandoned after the Hillsborough Stadium disaster of 15 April 1989, with Lord Taylor’s inquiry report giving its authority to well-known, indeed obvious, criticisms. With the Labour Party in the grip of ‘liberal’ elitism, for those who feared populism a form of ‘Tory democracy’ with teeth had to be the imagined danger, but, but when one takes into account the full range of her views and her behaviour over her career, Mrs Thatcher was more obviously a Parliamentarian than a populist.4

Thatcherism, Conservatism, and the real revolution To be conservative. . . is to prefer the familiar to the unknown, to prefer the tried to the untried, fact to mystery, the actual to the possible, the limited to the unbounded, the near to the distant, the sufficient to the superabundant, the convenient to the perfect, present laughter to utopian bliss. So, famously, wrote Oakeshott,5 adding that, of course, though, ‘changes. . . have to be suffered’,6 since ‘innovation entails certain loss and possible gain. . . the onus of proof, to show that the proposed change may be expected to be on the whole beneficial, rests with the would-be innovator’. It followed that ‘the man of conservative temperament. . . is not in love with what is dangerous and difficult; he is unadventurous; he has no impulse to sail uncharted seas. . . If he is forced to navigate the unknown, he sees virtue in heaving the lead every inch of the way.’7 For all its intellectual elegance, Oakeshott’s essay called ‘On Being A Conservative’ did not closely relate to the actual political conduct of the Conservative Party, which was not often well-described as conservative, though, of course, those who believed Mrs Thatcher not really to be a Conservative would derive some satisfaction from the contrast between her image and that of the creature of caution described by Oakeshott. A perceptive interpretation of Mrs Thatcher’s political behaviour was that ‘the daring and the caution proceed on parallel lines: the dialectic between them is never resolved into a simple issue of ends and means’. It followed that Mrs Thatcher is an extraordinary mixture of recklessness and caution. When she is in her reckless mood, she is in effect a permanent revolutionary, deeply dissatisfied with the Government’s record, and convinced that, but for her unceasing vigilance, the whole country would instantly slide into sloth and chaos. In this mood, she is almost Maoist in her suspicion of established institutions, seeing them as mere encrustations of


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temporising and vested interest, and, above all, as obstacles to change, change, change. At such moments, Permanent Secretaries, Governors of the BBC – and her Ministerial colleagues – are perhaps fortunate that the British system denies her the power to send them off to work in the fields. Yet, ‘throughout her years at no. 10 she has always used her most senior colleagues as a handbrake on her own impetuosity, without acknowledging the fact to herself. Her cautious side leads her to give way to them – but she reserves, and exercises, the right to blame them for her having done so.’8 After the Thatcher years, few would deny the importance of personality in British politics, and many believed that there was something called Thatcherism. ‘The essential features of Thatcherism are that it is a form of practical politics devoted to achieving certain concrete results in Britain at the end of the twentieth century’, Shirley Letwin wrote, ‘Its aim has been to emphasize and promote the vigorous virtues in individuals, promote the family as the organization in which those virtues in individuals are transmitted and nurtured, and make Britain a flourishing island power through the liberation of the vigorous virtues. And, unlike other modern political enterprises, it never expected positive action fully to achieve its aims.’9 On the other hand, the Conservative philosopher, T.E. Utley, maintained that there is no such thing as Thatcherism. The illusion that [it exists was] in part a deliberate creation of Mrs Thatcher’s enemies. They have proceeded on the age old maxim that there is nothing. . . more likely to injure the reputation of a British politician than the suggestion that he has an inflexible devotion to principle. . . The illusion is in part also the creation of a coterie of admiring friends by whom Mrs Thatcher has been surrounded. Some of them, for cultural and sometimes ethnic reasons, have little sympathy with the English political tradition, which they regard as a fraud perpetrated on the people by an oppressive and incompetent political Establishment. The illusion, however, could never have achieved its present proportions without some assistance from its victim. Mrs Thatcher is not by temperament averse to the Messianic role. As for that element in Thatcherism which related to Britain’s place in the world, Utley thought that ‘[Mrs Thatcher] belongs to that militant Whig branch of English Conservatism which took over when Churchill became Prime Minister in 1940’, and ‘in terms of theory. . . she has contributed nothing new’. Utley also remarked that it was not Mrs Thatcher who had ‘discovered’ Hayek but Churchill in 1945 and this meant that ‘the advocacy of a free and competitive economy’, which was the supposed ‘chief plank’ of Thatcherism, was better described as a ‘permanent ingredient in modern Conservative philosophy’. Utley thought that the distinction between ‘the politics of conviction’ and ‘the politics of consensus’ was ‘a silly dichotomy


invented by inferior journalists’, and, though he conceded that Mrs Thatcher liked to see herself as an exponent of the former, he believed that ‘it is harder to imagine anything farther from the truth’ than the implication that she was ‘starting from scratch’ and was ‘in no sense a product of history’.10 It was one thing to utter slogans or to express general sentiments and another to take action however of necessity incomplete, and Utley seemed to have forgotten that in 1949 he had written that the present or some future Socialist Government may fail, but the socialist economic system which it has created will remain, and the public will demand not a Government of Liberal revolutionaries to restore the economic system of the nineteenth century, but a competent technocracy to apply the ultra revolutionary and coercive measures necessary to rescue a socialist economy from disaster.11 In 1970, the rescue of what it would be more accurate to describe as a semisocialist economy in the technocratic manner described had been at the heart of the Heath experiment. Heath seemed to regard the Conservative Party as an instrument for what passed for his ideas on public policy, which, aside from political convenience, Lord Boyle, who worked closely with him on policy preparation, was convinced were not those of economic liberalism; and in relation to public administration Heath’s thinking was little different from that of the Fabians in believing in its ability to work wonders. After the dismal failure of the Heath experiment, all Heath and his followers had was ‘Europe’ to which, not surprisingly, along with other believers, they clung with a fanatic zeal, though Mrs Thatcher proved unable to comprehend the depth of their commitment to a politically integrated Community. Otherwise, those dubious about Thatcherism and its intellectual content could do worse than suggest that Mrs Thatcher’s political behaviour was often informed by doing the opposite of what Heath did as Prime Minister from 1972 onwards. Since Thatcherism was a noumenon in the Kantian sense, it existed at least in political debate,12 and in the terms in which that debate was conducted it tended to be seen as economic liberalism plus some populist sentiments. As has been shown, the populism amounted to little, and her ally John Nott considered that ‘Margaret Thatcher never believed in liberal economics – it is a complete misreading of her beliefs to depict her as a nineteenth century Liberal. Cecil Parkinson and I used to argue Free Trade with her, but emotionally she was authoritarian and a Protectionist.’13 English Conservatism, though, embraced Tory Paternalism or Statism on the one hand, and economic liberalism on the other, and which side of the Conservative tradition was in the ascendant at a particular time depended on the political situation and how it was interpreted by the contemporary leading figures in the Tory Party. Tory Paternalism was mainly concerned with State social provision, but those who contrasted the One Nation approach with that of Mrs Thatcher


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tended to forget that Disraeli was an economic liberal, and one historian of the Tory Party by no means of the Right argued that the real divagation from Conservative tradition occurred in the two decades after 1945,14 meaning when the Party embraced the Keynesian Welfare State. Hoskyns learnt with horror that Macmillan had written to Butler at the time of the Industrial Charter that ‘there does not seem to be much harm’ in this form of ‘milk and water socialism’,15 but electoral considerations not only dictated that approach but also restricted what the coalitions of opinion to be found in the One Nation Group and the Bow Group could propose, and with the exception of Howe on the Welfare State the most that was risked most of the time was ‘milk and water economic liberalism’. The economic liberal order had been sufficiently durable for it to take the effects of two total wars in a generation to replace it with Keynesian collectivism, but Protection in the form of Empire Free Trade was in the Chamberlain tradition within the Conservative Party as well as in the thinking of Baldwin, and the National Governments of the 1930s not only introduced the Import Duties Act but also other forms of State intervention. The National Governments had continued to practise economic liberalism when it came to public finance, but that orthodoxy was supplanted by Keynesianism during the Second World War. With the Keynesian dispensation palpably malfunctioning by the 1960s, it was its defenders who were the conservatives in wishing to shore it up, which meant that, when Heath and technocracy had failed to turn things around, as Patten was belatedly later to recognize, there was not much left of the case for continuity and consensus by 1979.16 Nonetheless, though all consensus meant was agreement, and that had gone, almost all mainstream politicians and commentators still believed that, despite its association with relative national decline, respecting the Keynesian order was imperative for electoral survival. There could be no going ‘back to 1914’. That had been tried in the inter-war years, and the result was failure. There could be no going back to the unemployment of the 1930s. The present-day electorate would not stand for it. So, really, the argument ran, modern and mainstream British politics began in 1945, which meant that the overwhelming majority of voters not only knew nothing else but the Keynesian order and its assumptions, meaning that they would have little sustained tolerance for an economic liberal alternative programme. Further, there were only too many people with a vested interest in the existing arrangements persisting unmolested, not least in the public-sector electoral constituency that recent Labour Governments had cultivated, and in any case trade-union power remained there to frustrate any Government trying to establish the conditions for a more competitive economy to flourish. So, what was being predicated by those who subscribed to the conventional wisdom was that both the electoral arithmetic and the balance of political power favoured the status quo or at least the retention of as much of the post-1945 dispensation as could be salvaged even if this meant continued decline in as much comfort as could


be obtained by economic management. So, it was confidently predicted that within two years the Thatcher Government would be forced to undertake an overt U-turn in economic policy. Since few people go out of intellectual business as a result of underestimating human nature, at first sight, the mainstream commentators and the politicians who shared their outlook seemed to be on safe ground in being pessimistic about the prospects for the Thatcher project, and not least about its electoral appeal. Using the titles of two of J.S. Mill’s major works, one would recognize that electorates had come to use the political benefits that came to them from Representative Government to offset the workings of The Principles of Political Economy. If economic liberalism was now to be brought in from the cold, what was bound to survive the Thatcher era largely intact would be the apparatus of State social provision derived originally from the Bismarckian example. This was because, though they had rarely heard of Mill and the Classical Economists or, for that matter, Hayek or Friedman, it did not take much imagination on the part of electors to recognize what most intellectuals had failed to do, which was that the market was the real revolution. Once the market was let loose, nothing and nobody was safe. The weakest went to the wall, and the strong prevailed, until, of course, others supplanted them. As might be expected, and as Adam Smith had spelt out, the natural inclination of the producers was to limit competition between themselves so as to rig the market in their favour. By the time of the Thatcher era, the best description of the most common of the market forms in the private sector was that of monopolistic competition.17 However, to most of the electorate, imperfect competition may well have seemed preferable to none at all as the case with the public sector. This was, of course, when that electorate was wearing its other face, that of consumerism. The Keynesian dispensation still had its attractions and obvious ones for those employed in the public sector, but the Safe New World of the 1940s in which it had been originally constructed had a different character from the British society that had later emerged with wider home-ownership and the perennial quest for a higher standard of living. Once consumerism was unleashed, the popular appetite for it never did seem to abate, and with the ‘haves’ coming to outnumber the ‘have-nots’ the Thatcher Governments always had a prospective majority to aim for, even though it was a formidable task for those Governments to keep the affluent majority even mildly content with their lot, given the level of their greed, their self indulgent view of what constituted hardship, and the belief of many that increased wealth should simply arrive as in the form of appreciating house prices. Those mainstream politicians and commentators who thought that the high level of unemployment would bring down the Thatcher Governments misread the nature of the contemporary electorate because they were not pessimistic enough about its character. ‘What I am determined to do is to get the position turned’, Mrs Thatcher declared in 1979, ‘That after all is why, I believe, we were elected at the


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General Election.’18 The motives of those who had voted Conservative then were many and various, and their numbers only constituted a plurality of those concerned enough to turn up at the polling booths, with the others seemingly given over to fatalism or to a belief in an easy way out or still more appeasement of sectional interests and pursuing ‘reasonable’ policies, and there were also those who still believed in socialism and those in the trade-union movement who thought that they had the power to impose it. Since few electors had any illusions about what ‘the Russian experiment’ had led to, there were more votes for ‘the Thatcher experiment’ than for anything that could be seriously described as socialism, and to Lenin’s famous question What Is To Be Done? Mrs Thatcher and the economic liberals had a set of answers that represented a programme of a kind and one that had not failed recently, which was more than their democratically inclined rivals could say. So, Mrs Thatcher could declare that There Is No Alternative, since the Keynesian dispensation had led to a situation in which, as Patten later recalled, there were even those of a ‘liberal’ outlook who feared that Britain in 1979 was facing the prospect not just of continued relative economic decline but absolute decline,19 thus becoming the first developed country to become an underdeveloped country. It may well be that only in such a desperate situation that somebody like Mrs Thatcher could become Prime Minister and not yet another version of Baldwin. What did not follow was that her Governments would be successful, not least because, especially at first, and together with those consumed by ambition, there were Conservatives in and around those Governments who seemed ready for them to fail rather than sacrifice a certain political and, above all, social style. At the heart of the Thatcher project was the belief that if the conditions were made right, then an entrepreneurial class would emerge to lead the way in bringing about a British economic renaissance, although this did not mean that it would be solely British in composition, and American business culture seemed to be the ideal pursued. Mrs Thatcher soon found that not every [British] capitalist had my confidence in capitalism. I remember a meeting in Opposition with City experts who were clearly taken aback at my desire to free their market. “Steady on!” I was told. Clearly, a world without exchange controls in which markets rather than Governments determined the movement of capital left them distinctly uneasy. They might have to take risks.20 As the title of the best book about the effects of the Big Bang would suggest, The Death of Gentlemanly Capitalism was the fate that awaited the City of London when the Americans were allowed in with their working breakfasts, their working lunches and their working dinners, consigning to history the world in which weekends began on Thursday, and rendering irrelevant the bitter divisions between the social elite and the rest that had previously


characterized the City.21 The Death of Gentlemanly Capitalism was the likely fate of the rest of the private sector, too, once market philosophy was let loose in the wider economy, and if those conscious of social distinctions would protest that the supposed captains of industry and commerce were not often well-described as gentlemen anyway despite only too often striving to appear to be, in terms of international competition the record showed only too often that they were not fitted to be serious players. So, there was a need for the import of foreign talent. In addition, the radical opening up of markets was bound to also lead to a growth in foreign ownership of British assets, and the eventual scale of this suggested that insufficient notice had been taken of Adam Smith’s maxim that ‘defence. . . is more important than opulence’.22 From the outset, the intentions behind the Government’s overall strategy were clear. As Howe said in his first Budget Speech in 1979, the Government would conduct itself on the basis that ‘finance must determine expenditure, not expenditure finance’,23 Of course, it was one thing to announce the return of ‘sound finance’ and the Balanced Budget, ideally balanced at the lowest attainable levels of public expenditure and taxation, and another to practise it, not least because of the scale of the inherited commitments and expectations, but at least the signal had gone out that the days of the State promising to be the Universal Provider were over. Further, in the hope of killing two birds with one stone, the public sector electoral constituency was attacked, with the hiding places in the Civil Service and the universities either closed off or made more uncomfortable to inhabit, and previously safe havens in local government were denied peace and quiet too. As for the nationalized industries, whereas previous Governments had tinkered with reorganizing them and with unsuccessfully encouraging the public corporations to imitate private sector practice in their operations, the Thatcher Governments were to go the whole hog and privatize them. Since the nationalized industries were the citadels of the trade unions, sooner rather than later the Thatcher Government would have to defeat the wider Labour Movement, and in the savage Coal Strike of 1984–85, the previously feared NUM was broken. After that union was defeated at Orgreave, one of its officials stated that ‘1972 and Saltley was an age away. It was a Government of a completely different order from [that of] Heath.’24 It was, indeed. What did not follow was that Mrs Thatcher and her allies in the Conservative Governments of 1979–90 were engaged in economic liberal crusades bereft of political calculation or ‘statecraft’.25 In the first two years, the Thatcher Government seemed more Monetarist than Friedman, who believed that ‘controlling the money supply is not a mechanism for controlling the economy. It is a means of providing a stable monetary framework for an economy, including the control of inflation.’26 Ever since the Gold Standard had been finally abandoned in 1931, British Governments had seemed to look for some form of rule that had to be respected or, so the public could be told, calamity would result. The sterling exchange rate had


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served this purpose under the Bretton Woods system. Lawson designed the Medium-Term Financial strategy (MTFS) as ‘a self-imposed constraint on economic policy making, just as. . . the ERM came to be for most European Community countries in the 1980s’.27 In this way it was supposed to be spelt out that the Government was sticking to its guns, and nobly resisting temptation. Those who had predicted that a U-turn would be necessary after about two years of economic liberal medicine being applied because political necessity and realism would dictate this looked well-placed by the spring of 1981, not least given the level of unemployment. What was being predicted was that an overt U-turn in economic policy was a political imperative for the Government to survive and for the economy to revive, and a generation or so of economists harmed their reputations by getting it wrong, along with most politicians, including many Tories. Such was the spell of Mrs Thatcher’s rhetoric and the solemnity of Howe’s pronouncements that economic policy was modified, but the Government could present itself as not having deviated in any way, and since the liberal economy commonly turns up eventually anyway the Government would get the credit for this and for supposedly displaying consistency all along. Mrs Thatcher and her allies in her Governments did conduct economic liberal crusades, as many in the public sector had cause to know, but in many areas of public policy the rhetoric did not match the pragmatism displayed. Thus, in 1986, the Prime Minister was denounced by The Economist as ‘the Tin Lady’ for her Government’s behaviour in financially supporting Rio Tinto Zinc’s mining operations in Cornwall in the face of familiar Liberal agitation favouring subsidies. ‘Economically, it is nonsense’, the journal declared, ‘The sooner the uneconomic Cornish tin mines follow uneconomic coal mines into closure, the better for. . . the British taxpayer and the British economy.’28 Then again, Peter Walker recalled: Under any sort of free market force doctrine British Leyland would have been allowed to disappear, and would have gone to the wall very quickly. But [Mrs Thatcher] and the Cabinet were in total agreement that the disastrous effect of that on the economics of the Midlands, on unemployment, on the balance of trade, was such that you had to go and pour vast sums of public expenditure in to see that it is rescued and saved. And so I think the purist doctrines that you can enjoy when you’re in Opposition, when you don’t have the responsibilities of government, look different when you have to take the practical decisions. I think perhaps one of the problems is that the rhetoric is often different from the performance. And I’m glad to say that quite often the performance is better than the rhetoric.’29 The Prime Minister’s former adviser, Ferdinand Mount recognized that looking back the punctilious historian may be somewhat puzzled. He will find Mrs Thatcher unremittingly abused by all Opposition MPs and many


of her own party for hostility to ‘the infrastructure’. Yet he will note that it was while she was Prime Minister that the London orbital motorway was completed, the East Coast line to Scotland electrified, Stansted chosen as London’s third airport, the London and Mersey docklands rebuilt, including the first new surface railway for years, and now the Channel Tunnel begun. As for the motivation in the case of the Channel Tunnel, Mount was clear: ‘If unemployment stood at 1.9 million and falling, instead of three million plus and more or less flat, would the Government really be considering a Tunnel at all?’30 Before the end of 1986, Mount had more to concern himself about when it came to containing the growth of public expenditure, and, though Lawson as Chancellor had dismissed critics of his conduct of economic policy as ‘teenage scribblers’, in the absence of Lawson and the Government sticking to a broad money target, the Monetarist economist, Tim Congdon, got it right when he predicted that ‘the Lawson boom’ would end with inflation in double figures and a recession. By 1988, Congdon believed that in the previous three years Lawson had ‘effectively destroyed all that he stood for, in the structure of policy, in the previous five’.31 That the behaviour of the Thatcher Governments failed to match their image or meet the tests of economic liberalism as a form of theology did not mean that they lacked ‘la puissance d’une idée en marche’.32 Since 1945, only the Attlee Government and then only down to 1948 had about it that sense of strategy and purpose that Mrs Thatcher and the economic liberal allies in her Governments possessed. Whether friend or foe, few could plead that they did not know in which political direction Mrs Thatcher wanted public policy to go, and across its range. In the conduct of such policy, Attlee and his Ministers were in important respects following on from the Coalition Government’s plans and thinking in completing the construction of the Keynesian order. Running that order with varying degrees of efficiency was the main domestic political business of the Governments that followed 1948, and if that of Heath had more ambition than most its sad reward was failure on the grand scale. The way was not then opened for a fresh start, because in the conduct of public policy there is rarely a clean sheet to work with. The way was opened up for an economic liberal counter-revolution. Not surprisingly, though they were effectively required by the IMF to make a beginning with this task, the Labour Governments of the 1970s had little enthusiasm for this, and Patten captured the then High Tory attitude when he recalled: I always thought it was both impossible and wrong to change what had been conceived of as the middle ground intellectually and politically in our political argument. If you look at the way we’ve managed the economy previously – demand management, incomes policy and so on, I’d always


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thought that you couldn’t shift polite opinion on those sort of issues. Well, [Mrs Thatcher] shifted it.33 In fact, Mrs Thatcher as Prime Minister never won over ‘polite opinion’ on any subject at all, and seemed to delight in trampling all over their beliefs. In the case of the High Tories, by 1979 the policies that they favoured had been already tried and had failed, which largely left them with no more than presentational arguments about public policy, and the belief that the implementation of anything resembling a Radical Right programme was electoral death, which belief seemed to survive a succession of victories. That such a New Right programme was only imperfectly translated into public policy naturally disappointed the ideologues and even tempted one study to conclude that, as a result, ‘the Thatcherite revolution [was] more a product of rhetoric than of the reality of policy impact’.34 That revolution was bound to be primarily directed at the Keynesian inheritance rather than that of Beveridge, not least because, though the many forms of State social provision involved massive public expenditure and, thus, in principle, represented an inviting target for being cut back, the Thatcher Governments could have no illusions about the electoral popularity of the Welfare State. So, in practice, there were few Radical Right inroads into that area, with such cuts as were made in the relevant areas of public spending tending to be in its rate of growth. The overriding task of the Thatcher Governments was to try to halt the relative economic decline of the British economy that dated back to Victorian times. There were many and various explanations of that decline, some sophisticated and even convincing in terms of culture and the particular nature of the British social class system. Few doubted that ‘America’s business was business’, but nobody would say the same of twentieth-century Britain and though it might be melodramatic to describe what Mrs Thatcher set out to do in terms of a kulturkampf, she did succeed in enhancing the status of business as an activity in British life, with it becoming the first destination for many of the most talented people, which had not been the case for many decades. In the short run, the harsh reality remained that British private enterprise was flattered by being so described, and continued to look vulnerable in the face of foreign competition. The record of the Thatcher Governments in the sphere of economic policy naturally attracted fierce debate among economists,35 but when The Economist asked in 1990 ‘Whatever became of the Thatcher Miracle?’36 one obvious reply was that the balance of evidence suggested that there had not been a British economic miracle in the 1980s anyway. The most that could be said by a relatively friendly economist was that in the aftermath of the Conservative Governments longterm prospects for economic growth were better than had seemed possible in 1979, and that, combined with a slowdown in competitor countries, made possible the reversal of Britain’s relative economic decline. The economist who wrote this added that


while most of the Governments’ macro-economic gambles failed miserably, micro-economic radicalism paid off handsomely through privatisation, improved industrial relations, and de-coupling the UK from the European tendency to excessive government budgets. Nevertheless, opportunities to push through this agenda more fully were badly missed, notably in the areas of welfare and tax reforms, and the Conservatives’ short-termism was frequently only too apparent.37 The same observer recognized that ‘as always, radicalism was tempered by the need to get elected’, and thought that ‘short-term macro-economic management remained problematic throughout’.38 No doubt, ideally, the Thatcher Governments could and should have done better in their overall management of the economy, and one could see that they offended against economic liberal mores in many ways, not least in relation to inflation and the control of public expenditure and lessening the tax burden. Ironically, the supposedly unreasoning ideological commitment of Mrs Thatcher and her allies was a charge commonly levelled at them by critics who were only too often advocates of economic policies that had failed before, and these critics were by no means confined to the ranks of their political opponents. In addition to running this gauntlet, a host of vested interests had to be contended with, most obviously involving confrontation with the wider Labour Movement. Yet for all the compromises and sins of omission and outright failures that characterize all governments, the governments of Margaret Thatcher freed up the capital markets, making a dramatic beginning by abolishing exchange controls, and by breaking the negative power of the trade unions they freed up the labour markets too, and, while this did not lead to a British economic miracle, what was brought about was a British economic renaissance. Few believed that such a renaissance would have taken place if Margaret Thatcher had not become Prime Minister. Together with, most would say, Attlee, she was a peacetime Prime Minister that ranked among the outstanding political figures of British twentieth-century politics, with the other such figures being Churchill, Lloyd George and, above all, Bevin. ‘She pulled Britain up by its bootstraps, demonstrating that a determined individual can make an enormous difference in a country’s attitudes’, the adoring Wyatt observed,39 who said of Mrs Thatcher that ‘she is a revolutionary or she is nothing’,40 which was, of course, the ‘she’s a Manchester Liberal’41 argument once more. In what Wyatt called ‘her transformation from being an ordinary, conventional Conservative into having her mission to save the country’42 there was only the economic liberal direction to go. Mrs Thatcher believed that the ‘practical economics’ practised by her father in his Grantham grocery store meant that ‘I had been equipped at an early age with the ideal mental outlook and tools of analysis for reconstructing an economy ravaged by State socialism’,43 but she never stopped learning and few could match Mrs Thatcher’s talent for recruiting intellectuals to her side and using their


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ideas. While, like all ideologies, economic liberalism had the advantage that the true believer always has an answer, Mrs Thatcher was usually a shrewd enough politician to identify the wrong answer. As was so often the case with British politicians, her Achilles heel was social class. ‘Oh those poor shopkeepers’ was her natural reaction to the Toxteth riots in 1981,44 and she really did believe that her class was the most admirable in English society. The Poll Tax was many things, but for Mrs Thatcher it was the fulfilment of a lower-middle-class fantasy that the irresponsible could be made to pay their share of local government expenditure and so ease the burden from those currently keeping the show on the road. Amis had the social elitism of the Tory Party in mind when he said that ‘it was pure snobbery which did her down’, but if ‘they thought her so common’45 they were wrong in the sense that plainly she was not ‘common’ enough, which was one reason why her ‘populism’ had so little substance. As for ‘Europe’, which also played its part in bringing her down, Mrs Thatcher was an author of her own misfortunes. Though she was a member of a British political class, that with few exceptions, was well-described as being determinedly ignorant of ‘Europe’, there was no excuse for not taking the Community’s ambitions about closer political integration more seriously, even if the workings of what passed for British democracy meant that for fear of losing votes its political leaders tended to judge it advisable to play this down. Nevertheless, for the true believer it was no secret, as one official wrote, that the future of British politics was to be ‘the local government of a State within a major one’,46 or, as he said privately, ‘Westminster’s going to be a parish council.’47 Mrs Thatcher could not be expected to be aware of such private thoughts, but the nature of the Monnet Dream and the ambitions of those who subscribed to it and of the Brussels bureaucracy were surely obvious. Yet, Mrs Thatcher allowed herself to be outwitted by Delors over the Single European Act, and then campaigned against what she had done, as if somebody else was responsible for the mistake made. The tidal wave of opinion in favour of ‘Europe’ that swept the British political class from the latter 1980s onwards only to abate with the ERM debacle of 1992 engulfed Mrs Thatcher. She must have hoped in the name of robust patriotism to appeal over the heads of the political class to the voters, but the grievances that had been accumulating elsewhere over the field of public policy since 1979 proved too much at least for the Conservative Party, along with the Poll Tax. Mrs Thatcher’s luck ran out at long last, and, though there was much more to her past successes than luck, there was no doubt that she had been fortunate in both her rivals and her formal opponents. She had been lucky in 1975 when Heath had effectively robbed his allies of the succession and handed it to her. She had been lucky when those who led the way with the Winter of Discontent kicked the corpse of the Keynesian order to pieces. She was lucky that her Governments had the proceeds of North Sea oil to sustain them, and that she survived the Brighton bomb. She was fortunate too that Callaghan effectively handed the Labour leadership to Foot


rather than to Healey, and that she was faced with a divided Opposition, and that Kinnock eventually became the Leader of the Opposition. She had been lucky too at the time of the Falklands War that the Galtieri Junta attacked when it did and did not wait until Nott’s defence cuts had done their work, and lucky also when the Junta turned down the Peruvian peace proposals designed to save their face and to frustrate British ambitions. She was lucky that the Anglophile Weinberger was the American Secretary of Defence at the time of the Falklands War, and that Reagan was the American President then and felt he needed her as a crucial ally in waging and winning the Cold War, and her relationship with Reagan was obviously an important factor in explaining the success that marked most of her interventions in international politics, though it was not the only explanation. When it came to the crucial domestic challenge facing her Governments, that from organized labour, she was lucky to have Scargill as her opponent in the Coal Strike, effectively offering up the NUM for destruction. Further, as Ridley observed, the timing has to be right. . . Margaret Thatcher would never have succeeded in the 1950s or 1960s. . . we had to get to the degradation of the 1970s. . . the nation was oppressed by many dragons in 1979, and Margaret Thatcher came forth to slay them. After she had slain them, the nation no longer had need of her.48 For Mrs Thatcher, though, the revolution was always incomplete. She had inherited a political crisis in which the Establishment view, as a Head of the Civil Service had expressed it well, was that the best that could be hoped for Britain was ‘the orderly management of decline’,49 and aware of Sir William Armstrong’s remark,50 Mrs Thatcher was clear that she ‘preferred disorderly resistance to decline rather than comfortable accommodation to it’,51 and the Civil Service was to be a continuing target for radical change and local government was to become composed of enabling authorities, and there was scope for further privatization of nationalized industries, aside from the railways, apparently deemed to be beyond rescue. Mrs Thatcher’s chosen image of economic liberal crusader did not always cohere with her behaviour or that of her Governments or the facts, but it was plain to all that her overriding ‘flagship’ ambition was to bring about a British economic renaissance. For Mrs Thatcher to accord comparable status to the Poll Tax only played into the hands of those who believed her to be imprisoned by lower-middle-class prejudices, those of ‘our people’, and even natural allies had cause to question why a Conservative Government of this kind was levying a new tax when its strategy was supposed to be to lessen the tax burden. By 1990, as one of Mrs Thatcher’s advisers observed, the new dragons [were] perceived to be of the Government’s own making. . . the Community Charge, the trade gap, interest rates, the


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mortgage rate, Tory splits, Europe. The result of this [was] that people no longer knew what they needed Mrs T for.52 In the aftermath of Mrs Thatcher’s fall, Ridley wrote, ‘normal, humdrum government has been resumed’,53 and remembering T.S. Eliot’s maxim that ‘human kind cannot bear very much reality’, no doubt many were relieved to see Mrs Thatcher leave Downing Street, with her revolution incomplete. The quest for a quiet life, though, was bound to end in disappointment, because the market had been unleashed, and so its form of permanent revolution would persist. It was not, of course, the revolution that many had wanted, especially most intellectuals. What the Thatcher Governments had done offended against the Idea of Progress. Trotsky had got it wrong. If anybody was destined for ‘the dustbin of history’ it was the Left. ‘All political lives, unless they are cut off in midstream at a happy juncture, end in failure, because that is the nature of politics and of human affairs’, Powell wrote in a study of Joseph Chamberlain,54 but this was not true of Margaret Thatcher. She had much in common with ‘Radical Joe’ and with Powell too, and she believed that she had been ‘cut off in midstream’ when forced from office, but there would be few, especially among the defeated, who would fail to recognize that Mrs Thatcher was a formidable Prime Minister, and if many believed Britain to be ‘ungovernable’ in the 1970s there was no cause to think this by 1990. ‘The Conservative Party have never put the clock back a single second’, Evelyn Waugh famously complained,55 but Margaret Thatcher did much more than that when seeking to shape the future of the British political economy in accord with her own perception of Progress, an ambition she pursued with panache and with considerable success.

Notes and References 1 What Kind of Revolution? 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42.

The Economist, 18.12.1976, p. 9. III[B] Fry, 1979, p. 233. I[D] Hollis, 1957, p. 313. The Economist, 2.10.1976, p. 12. III[B] Dell, 1991, p. 287. I[C] Benn, 1990, p. 37. I[C] Benn, 1990, p. 121. I[D] Fry, 2005, pp. 199–201. III[B] Dell, 1991, p. 287. I[D] Fry, 2001, pp. 4–47. I[C] Benn, 1990, p. 667. I[D] Mackenzie and Mackenzie, IV, 1985, p. 79. III[B] Symons, 1957, p. 17. I[D] Feiling, 1946, pp. 79–80. I[D] Blake, 1955, pp. 411–13. I[D] Morgan, 1974, p. 139. III[B] Symons, 1957, p. 5. I[B] H.C. Deb., 1.7.1926, col. 1379. I[D] Williamson, 1999, pp. 167–202; III[B] McDonald and Gospel, 1973, pp. 807–29. I[D] Catterrall, 2004, p. 91. I[D] St John-Stevas, V, 1974, p. 222. I[D] Williamson, 1999, p. 322. I[D] Laski, 1938, pp. 105–06. I[D] Laski, 1938, p. 84. I[D] Kramnick and Sheerman, 1993, p. 336. III[B] Scargill, 1975, p. 19. III[B] Scargill, 1975, p. 10. III[B] Scargill, 1975, p. 19. III[B] Scargill, 1975, pp. 23–24. III[B] Scargill, 1975, pp. 30–31. III[B] Scargill, 1975, p. 26. III[B] Scargill, 1975, p. 23. III[B] Scargill, 1975, p. 33. I[D] Williams, 1983, pp. 26–55. I[D] Minkin, 1978, p. 330. I[B] LPACR 1970, p. 121. I[C] Wilson, 1979, p. 43. I[C] Barnett, 1982, p. 51. I[C] Barnett, 1982, p. 49. I[C] Barnett, 1982, p. 134. I[B] LPACR 1973, p. 11. I[D] Shaw, 1988, pp. 172–77. 238

Notes and References 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75. 76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88. 89.

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I[D] Minkin, 1978, pp. 329, 403. III[B] Scargill, 1975, p. 30. I[C] Crosland, 1983, p. 210. I[C] Crosland, 1983, p. 204. I[C] Crosland, 1983, pp. 242–43. I[C] Crosland, 1983, p. 210. I[D] Fry, 2005, pp. 207–08. I[C] Benn, 1988, p. 292. I[C] Benn, 1988, p. 284. I[C] Benn, 1990, p. 11. I[C] Benn, 1990, pp. 36–37. I[C] Benn, 1990, p. 33. III[B] Wickham-Jones, 1996, p. 91. I[C] Benn, 1990, p. 302. I[C] Benn, 1990, p. 680. I[C] Crosland, 1983, p. 216. I[D] Jenkins, 1987, p. 72. I[D] Jenkins, 1987, p. 58. I[C] Maudling, 1978, pp. 45–46. I[D] Howard, 1987, pp. 176–77. I[D] Cowling, 1971, p. 2. I[D] Fry, 2005, pp. 211–29. I[D] Fisher, 1977, p. 147. I[C] Prior, 1986, p. 101. I[C] Heath, 1998, p. 528. I[C] Whitelaw, 1989, pp. 178–84. I[D] Fisher, 1977, p. 155. I[D] Thorpe, 1996, pp. 446–47. I[D] Fisher, 1977, p. 159. I[C] Denham and Garnett, 2002, p. 271. I[D] Fisher, 1977, pp. 159–63. I[C] Thatcher, 1995, p. 266. I[D] Kelly, 1989, pp. 119–20. I[C] Thatcher, 1995, p. 268. I[C] Campbell, 2000, pp. 109–21. I[C] Prior, 1986, p. 117. I[D] Young and Sloman, 1986, p. 23. I[D] Young and Sloman, 1986, p. 33. I[D] Whitehead, 1985, p. 327. I[C] Thatcher, 1995, p. 181. I[C] Thatcher, 1995, pp. 245–48. I[D] Young and Sloman, 1986, pp. 31–32. I[C] Thatcher, 1995, p. 267. I[D] Whitehead, 1985, p. 327. I[D] Fisher, 1977, p. 169. I[C] Prior, 1986, p. 100. I[D] Fisher, 1977, pp. 173–80; I[C] Whitelaw, 1989, pp. 184–85; I[C] Thatcher, 1995, pp. 277–81; I[C] Garnett and Aitken, 2003, pp. 201–11. 90. I[D] Young and Sloman, 1986, p. 33. 91. I[D] Whitehead, 1985, p. 330.

240 Notes and References 92. 93. 94. 95. 96. 97.

I[D] Whitehead, 1985, pp. 328–29. I[D] Cowley and Bailey, 2000, pp. 599–629. I[D] Wickham-Jones, 1997, pp. 85–86. I[D] Fry, 2005, p. 225. I[D] Gilmour, 1977, p. 143. I[D] King, 1976, p. 59.

2 The Conservative Ascendancy 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39.

I[D] Dale, 2000, p. 266. I[D] Butler and Kavanagh, 1980, pp. 353–54. I[D] Butler and Kavanagh, 1980, pp. 392–93. I[C] Benn, 1990, p. 494. I[B] H.C. Deb., 15.5.1979, col. 76. I[D] Butler and Kavanagh, 1980, pp. 338–39. I[C] Prior, 1986, p. 115. The Times, 31.3.1981. I[D] Bruce-Gardyne, 1984, p. 105. I[D] Bruce-Gardyne, 1984, p. 104. I[D] Butler and Kavanagh, 1984, p. 330. I[D] Clark, 2000, p. 276. I[D] Bruce-Gardyne, 1984, p. 106. I[D] Butler and Kavanagh, 1984, pp. 20–21. I[D] Clark, 2000, p. 310. For a debate about this see I[D] Sanders, Ward, and Marsh, 1987, pp. 281–313; I[D] Clarke, Mishler, and Whiteley, 1990, pp. 63–81; I[D] Sanders, Ward and Marsh, 1990, pp. 83–90. I[D] Dale, 2000, p. 285. I[D] Dale, 2000, p. 280. I[D] Dale, 2000, p. 285. I[D] Dale, 2000, pp. 268–70. I[D] Dale, 2000, 288–90. I[D] Dale, 2000, pp. 291–92; c.f. I[D] Dale 2000, p. 272. I[D] Dale, 2000, p. 271. I[D] Dale, 2000, pp. 296–97. I[D] Clark, 1993, p. 7. I[D] Butler and Kavanagh, 1984, pp. 299–300. I[D] Butler and Kavanagh, 1984, pp. 306, 346. I[D] Butler and Kavanagh, 1984, p. 333. I[D] Butler and Kavanagh, 1984, p. 338. I[D] Butler and Kavanagh, 1984, p. 363. I[D] Butler and Kavanagh, 1984, p. 336. I[D] Butler and Kavanagh, 1984, p. 289. I[D] Bruce-Gardyne, 1984, p. 183. I[D] Bruce-Gardyne, 1984, p. 153. I[C] Clark, 1993, p. 99. I[C] Prior, 1986, p. 153. I[C] Clark, 1993, p. 127. The Listener, 31.7.1986, p. 6 [ J. Cole]. The Guardian, 13.11.1986.

Notes and References 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75. 76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88.

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The Times, 30.3.1987 [R.W. Johnson]. The Times, 19.5.1987 [B. Pimlott]. I[C] Tebbit, 1989, p. 313. I[D] Dale, 2000, p. 313. I[D] Dale, 2000, pp. 316–17. I[D] Dale, 2000, p. 351. I[D] Dale, 2000, p. 314. I[C] Tebbit, 1989, pp. 332–33. I[C] Young, 1990, p. 220. I[C] Young, 1990, p. 222. I[D] Butler and Kavanagh, 1988, p. 345. I[D] Butler and Kavanagh, 1988, p. 283. I[D] Butler and Kavanagh, 1988, pp. 305–09. I[D] Butler and Kavanagh, 1988, p. 283. I[C] Tebbit, 1989, pp. 336–37. I[D] Butler and Kavanagh, 1988, p. 265. I[C] Thatcher, 1993, p. 585. I[C] Thatcher, 1993, p. 573. I[C] Tebbit, 1989, p. 335. I[C] Garnett and Aitken, 2003, p. 319. I[D] Drucker, 1979, p. 1. I[D] Dangerfield, 1935, p. 14. I[D] Dangerfield, 1935, p. 22. I[D] Seawright, 1999, p. 2. I[C] Thatcher, 1993, p. 619. I[D] Seawright, 1999, pp. 147–55; this interpretation was contested by I[D] Devine, 2006, pp. 163–80. I[C] Thatcher, 1993, pp. 619–20. I[C] Thatcher, 1993, p. 624. I[D] Seawright, 1999, pp. 127–45. I[C] Thatcher, 1993, p. 618. I[D] Seawright, 1999, p. 157. I[C] Thatcher, 1993, pp. 619–20. I[D] Butler and Kavanagh, 1980, pp. 366, 372, 377. I[D] Butler and Kavanagh, 1988, pp. 295, 298, 301, 302, 304. I[C] Thatcher, 1993, p. 620. I[D] Hobsbawm, 1989, pp. 9–22. I[D] Butler and Kavanagh, 1980, p. 354. II[B] Kerr, 1969, p. 66. I[D] Bernstein, 1909, p. xvi. I[D] Bernstein, 1909, xi–xii. I[D] Bernstein, 1909, p. xiv. I[D] Mitchell, 1983, pp. 37–38. I[C] Healey, 1990, p. 466; I[C] Morgan, 1999, p. 703. I[C] Benn, 1990, p. 551. I[C] Benn, 1992, pp. 5–10; I[D] Mitchell, 1983, pp. 41–45. I[D] Whitehead, 1986, p. 354. I[B] LPACR 1980, pp. 31–32. I[C] Benn, 1992, pp. 31–32. I[C] Benn, 1992, p. 59.

242 Notes and References 89. 90. 91. 92. 93. 94. 95. 96. 97. 98. 99. 100. 101. 102. 103. 104. 105. 106. 107. 108. 109. 110. 111. 112. 113. 114. 115. 116. 117. 118. 119. 120. 121. 122. 123. 124. 125. 126. 127. 128. 129. 130. 131. 132. 133. 134. 135. 136. 137. 138.

I[C] Morgan, 1999, p. 719. I[C] Morgan, 1999, p. 715. I[C] Healey, 1990, pp. 477–79. I[C] Benn 1992, p. 43. I[B] LPACR 1981, p. 26. I[C] Benn, 1992, p. 154. I[D] Minkin, 1991, pp. 339–42. I[C] Benn, 1992, p. 46. I[A] LPACR 1982, pp. 184–85. I[D] Dale, 2000, p. 280. I[D] Dale, 2000, p. 250. I[D] Dale, 2000, p. 245. I[D] Dale, 2000, p. 251. I[D] Dale, 2000, p. 250. I[D] Dale, 2000, p. 248. I[D] Dale, 2000, p. 249. I[D] Dale, 2000, pp. 252–53. I[D] Dale, 2000, p. 247. I[D] Dale, 2000, pp. 257–68. I[D] Dale, 2000, p. 246. I[D] Dale, 2000, p. 247. I[D] Dale, 2000, p. 246. I[C] Healey, 1990, p. 500. I[C] Benn, 1992, p. 295. I[C] Benn, 1992, p. 298. I[B] LPACR 1983, p. 15. I[B] LPACR 1983, p. 29. I[B] Benn, 1992, p. 319. I[D] Kinnock, 1994, p. 543. I[D] Kinnock, 1994, p. 543. I[D] Kinnock, 1994, pp. 539–40. I[D] Kinnock, 1994, p. 535. I[D] Kinnock, 1994, p. 542. I[B] LPACR 1985, p. 128. I[B] LPACR 1985, p. 155. The Guardian, 2.10.1985. I[D] Smith and Spears, 1992, pp. 217–18. I[D] Smith and Spears, 1992, p. 320. I[B] TUCACR 1988, pp. 568–70. II[B] Denman, 2002, p. 207. The Listener, 29.11.1979, pp. 733–38. III[B] Keynes, X, 1972, p. 24. I[D] Jenkins, 1987, p. 135. I[D] Owen, 1981, pp. 66–67. I[D] Owen, 1981, p. 529. I[D] Owen, 1981, p. 67. I[C] Steel, 1989, p. 272. I[D] Jenkins, 1987, p. 366. I[C] Steel, 1989, p. 263; I[D] Crewe and King, 1995, pp. 3–127. I[C] Jenkins, 1992, p. 532.

Notes and References 139. 140. 141. 142. 143. 144. 145. 146. 147. 148. 149. 150. 151. 152. 153.

243

I[C] Owen, 1991, p. 519. I[C] Healey, 1990, p. 480. I[C] Steel, 1989, p. 274. I[C] Owen, 1991, p. 526. The Spectator, 21.3.1981, p. 5. I[C] Steel, 1989, p. 299. I[C] Jenkins, 1992, pp. 575–77; I[D] Crewe and King, 1995, pp. 203–10. I[C] Jenkins, 1992, p. 533. I[C] Jenkins, 1992, p. 532. I[C] Jenkins, 1992, p. 593. I[C] Steel, 1989, pp. 328–31; I[D] Crewe and King, 1995, pp. 350–53. I[C] Steel, 1989, pp. 343–46. I[C] Steel, 1989, p. 356. I[D] Butler and Kavanagh, 1992, p. 71. I[C] Healey, 1990, p. 83.

3 The Thatcher Cabinets and Governments 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29.

I[C] Thatcher, 1993, p. 19. III[B] Hastings, 2001, p. 699. III[B] Hastings, 2001, p. 592. I[C] Prior, 1986, p. 113. I[C] Thatcher, 1993, p. 19. I[C] Thatcher, 1993, pp. 19–20. II[B] Cradock, 1997, pp. 9–10; I[C] Heseltine, 2001, p. 226. I[D] Ranelagh, 1991, p. 239. I[C] Thatcher, 1993, p. 126. I[D] Ranelagh, 1991, p. 13. I[C] Howe, 1994, p. 201. I[C] Thatcher, 1995, p. 306. I[D] Curtis, II, 1999, p. 117. I[D] Curtis, II, 1999, pp. 299–300. I[D] Curtis, II, 1999, p. 256. I[D] Wyatt, 1977, p. 7. I[D] Wyatt, 1977, p. 163. I[D] Wyatt, 1977, p. 166. I[D] Wyatt, 1977, p. 177. I[D] Curtis, II, 1999, p. 117. I[D] Cockett, 1995, pp. 228–30, 351–52. I[D] Cockett, 1995, p. 294. I[D] Cormack, 1978, pp. 50–59, 74–104. I[C] Thatcher, 1995, p. 77. I[D] Amis, 1991, pp. 315–19. II[B] Amis, 2002, pp. 22, 272. I[D] Amis, 1991, pp. 37, 45. I[C] Thatcher, 1995, p. 78. I[C] Young, 1991, pp. 406–07; I[D] Ranelagh, 1991, p. 187; I[D] Cockett, 1995, p. 218. 30. I[D] Urban, 1996, p. 2.


I[D] Urban, 1996, p. 90. I[D] Urban, 1996, pp. 172–73. I[D] Cockett, 1994, pp. 316–18. I[D] Hoskyns, 2000, p. 127. I[D] Kandiah, 1996, p. 120. I]D] Hoskyns, 2000, p. 120. I[D] Kandiah, 1996, p. 123. I[D] Kandiah, 1996, p. 121. I[D] Kandiah, 1996, pp. 122–23. I[D] Hoskyns, 2000, pp. 359, 362, 369, 375. I[C] Ridley, 1991, p. 38. I[C] Thatcher, 1993, p. 277. I[D] Mount, 1993, p. 129. I[C] Ridley, 1991, pp. 36–37. I[D] Ingham, 1991, p. 169. I[C] Thatcher, 1993, p. 20. I[D] Harris, 1990, p. 83. I[D] Tracey, 1983, p. 315. I[D] Marr, 2004, p. 323. I[D] Ingham, 1991, pp. 354–56. I[D] Ingham, 1991, p. 357. I[C] Ridley, 1991, p. 28. I[C] Thatcher, 1993, p. 149. I[C] Thatcher, 1993, p. 421. I[C] Campbell, 2003, p. 220. I[C] Ridley, 1991, pp. 40–41. I[C] Ridley, 1991, p. 35. I[D] Hennessy, 1994, p. 447. I[D] Ranelagh, 1991, p. 14. I[C] Thatcher, 1993, p. 27. I[C] Ridley, 1991, p. 25. I[D] Lawson and Armstrong, 1994, p. 447. I[C] Lawson, 1992, p. 129. I[C] Ridley, 1991, p. 26. I[C} Ridley, 1991, p. 25. I[C] Heath, 1998, p. 574; I[C] Campbell, 1993, pp. 714–15. I[C] Prior, 1986, p. 115. I[D] Bruce-Gardyne, 1984, p. 17. I[D] Bruce-Gardyne, 1984, p. 18. I[C] Walker, 1991, pp. 161–62. I[C] Nott, 2002, p. 185. I[C] Ridley, 1991, p. 37. I[C] Nott, 2002, pp. 184–85. I[C] Walker, 1991, pp. 159–60. I[C] Thatcher, 1993, pp. 151–52. I[C] Pym, 1984, p. 2. I[C] Ridley, 1991, p. 31. I[C] Clark, 2000, p. 311. II[B] Dorman, Kandiah, and Staerck, 2002, pp. 14–15; I[C] Nott, 2002, p. 257. II[B] Dorman, Kandiah, and Staerck, 2002, p. 16.

Notes and References 81. 82. 83. 84. 85. 86. 87. 88. 89. 90. 91. 92. 93. 94. 95. 96. 97. 98. 99. 100. 101. 102. 103. 104. 105. 106. 107. 108. 109. 110. 111. 112. 113. 114. 115. 116. 117. 118. 119. 120. 121. 122. 123. 124. 125. 126. 127. 128.

245

I[C] Nott, 2002, p. 261. I[C] Nott, 2002, p. 264. I[C] Parkinson, 1992, p. 190. I[C] Nott, 2002, p. 264. I[C] Parkinson, 1992, p. 190. I[C] Nott, 2002, p. 265. I[C] Clark, 2000, p. 313. I[C] Nott, 2002, p. 268. I[C] Clark, 2000, p. 313. I[C] Carrington, 1988, p. 371. I[C] Thatcher, 1993, pp. 185–86. I[C] Thatcher, 1993, pp. 188–89. I[C] Parkinson, 1992, pp. 192–95; I[C] Nott, 2002, p. 285: II[B] Dorman, Kandiah, and Staerck, 2002, pp. 62–65. II[B] Dorman, Kandiah, and Staerck, 2002, p. 20. I[C] Clark, 2000, pp. 315–18. I[C] Clark, 2000, p. 323. I[C] Thatcher, 1993, p. 187. I[C] Nott, 2002, pp. 286–87. I[C] Parkinson, 1992, p. 198. I[C] Nott, 2002, p. 286. I[C] Parkinson, 1992, p. 197. II[B] Dorman, Kandiah, and Staerck, 2002, pp. 28–29. I[C] Parkinson, 1992, p. 201. I[C] Nott, 2002, p. 286. I[C] Nott, 2002, p. 287. I[C] Nott, 2002, pp. 320–21. I[C] Pym, 1984, p. ix. I[C] Thatcher, 1993, pp. 306–12. I[D] Ingham, 1991, p. 334. I[C] Thatcher, 1993, p. 419. I[D] Ingham, 1991, p. 335. I[D] Ingham, 1991, p. 336. I[C] Heseltine, 2001, p. 310. I[D] Ranelagh, 1991, p. 208. I[C] Clark, 1993, p. 131. I[C] Heseltine, 2001, p. 311. I[C] Heseltine, 2001, p. 29. I[C] Thatcher, 1993, p. 433. I[C] Clark, 1993, pp. 133–34; I[A] H.C. Deb., 23.1.1986, cols. 449–61; I[D] Woodhouse, 1994, pp. 115–20. I[C] Clark, 1993, p. 134. I[D] Ingham, 1991, p. 337. I[C] Clark, 1993, p. 135; I[B] H.C. Deb., 27.1.1986, cols. 646–90. I[C] Thatcher, 1993, p. 561. The Economist, 18.1.1986, p. 13. The Times, 10.1.1986. I[C] Baker, 1993, p. 303. The Spectator, 1.2.1986, p. 7. The Economist, 18.1.1986, p. 14.


I[C] Thatcher, 1993, p. 832. I[C] Parkinson, 1992, pp. 218–19. I[C] Clark, 1993, p. 319. I[C] Ridley, 1991, p. 52. I[C] Thatcher, 1993, p. 436. I[C] Thatcher, 1993, p. 440. I[C] Hurd, pp. 258–59. I[C] Lawson, 1992, p. 129. I[C] Howe, 1994, p. 251. I[C] Howe, 1994, pp. 393–94. I[D] Ranelagh, 1991, pp. 284–85. I[C] Howe, 1994, pp. 646–47. I[C] Ridley, 1991, p. 39. I[C] Thatcher, 1993, p. 832; c.f. I[C] Hurd, 2003, p. 399. I[C] Thatcher, 1993, p. 756. I[C] Baker, 1993, pp. 120–21. I[C] Ridley, 1991, p. 236. I[C] Baker, 1993, p. 329. I[C] Baker, 1993, p. 331. I[D] Hennessy, 1994, p. 445. I[D] Lawson and Armstrong, 1994, pp. 444–45. I[C] Clark, 1993, p. 223. I[C] Thatcher, 1993, p. 712. I[C] Lawson, 1992, pp. 960–68. I[C] Thatcher, 1993, pp. 721–24. I[C] Clark, 1993, p. 289. I[C] Howe, 1994, pp. 648–50. I[C] Clark, 1993, p. 345. I[C] Clark, 1993, p. 347. I[C] Baker, 1993, p. 386. I[C] Baker, 1993, p. 384. I[C] Baker, 1993, p. 386. I[B] H.C. Deb., 30.10. 1990, col. 865. I[B] H.C. Deb., 13 11.1990, col. 465. I[C] Baker, 1993, p. 386. I[C] Clark, 1993, p. 348. I[C] Clark, 1993, pp. 180–81. I[D] Curtis, II, 1999, p. 245. I[D] Curtis, II, 1999, pp. 290–91. I[C] Clark, 1993, p. 359. I[D] Curtis, II, 1999, p. 399. I[C] Thatcher, 1993, p. 840. I[C] Thatcher, 1993, p. 841. I[C] Walden, 1999, p. 302. I[C] Clark, 1993, p. 358. I[C] Thatcher, 1993, p. 835. I[C] Thatcher, 1993, p. 855. I[C] Clark, 1993, p. 366. I[C] Thatcher, 1993, p. 855. I[C] Thatcher, 1993, p. 832.

Notes and References 179. 180. 181. 182. 183. 184. 185. 186.

247

I[C] Hurd, 2003, p. 404. I[C] Thatcher, 1993, p. 860. I[C] Hurd, 2003, p. 404. I[D] Curtis, II, 1999, p. 429 [Patrick Minford]. I[C] Clark, 1993, p. 360. I[D] Curtis, II, 1999, p. 403. I[C] Clark, 1993, pp. 383–84. I[D] Curtis, III, 2000, p. 659.

4 The Economic Liberal Crusades I 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37.

I[B] H.C. Deb., 15.5.1979, col. 48. I[B] H.C. Deb., 2.7.1970, col. 46. I[C] Thatcher, 1993, p. 26. III[B] Bosanquet, 1981, pp. 324–25. I[C] Thatcher, 1993, p. 26. I[C] Thatcher, 1993, pp. 27–28. I[C] Nott, 2002, p. 198. I[D] Ranelagh, 1991, p. 183. III[A] H.C. 720, 1979–80, p. 56. I[D] Heffer, 1998, p. 469. I[C] Howe, 1994, p. 104. III[B] Hoskyns, 2000, p. 75. I[C] Nott, 2002, p. 172. I[C] Howe, 1994, pp. 107–08. II[B] Walters, 1986, pp. 4–5. The Spectator, 19.3.1983, p. 4. I[C] Thatcher, 1993, p. 421; I[C] Young, 1990, pp. 153–90; III[B] Gregg, 1990, pp. 49–58. III[A] Lawlor, 1990, pp. 601–08. I[B] H.C. Deb., 17.3.1987, col. 815. I[B] H.C. Deb., 15.3.1988, col. 993. I[B] H.C. Deb., 14.3.1989, col. 294. I[C] Lawson, 1992, p. 247. The Economist, 19.3.1963, p. 11. I[D] Whitehead, 1985, p. 367. I[C] Howe, 1994, p. 147. I[D] Whitehead, 1985, p. 367. I[D] Whitehead, 1985, p. 369. I[D] Butler and Kavanagh, 1980, pp. 162, 188. I[D] Whitehead, 1985, p. 369. I[C] Nott, 2002, p. 178. I[B] H.C. Deb., 12.6.1979, cols. 239–41. I[B] H.C. Deb., 12.6.1979, cols. 241–43. I[B] H.C. Deb., 12.6.1979, cols. 449–250; c.f. I[D] Dale, 2000, p. 271. I[B] H.C. Deb., 12.6.1979, cols. 258–61. I[B] H.C. Deb., 12.6.1979, col. 250. I[C] Howe, 1994, pp. 130–31. The Economist, 16.6.1979, pp. 11–12.


I[B] H.C. Deb., 12.6.1979, cols. 244–45. I[B] H.C. Deb., 23.10.1979, cols. 202–03. The Economist, 27.10.1979, p. 69. I[B] H.C. Deb., 23.10.1979, cols 203–04. The Economist, 27.10. 1979, p. 69–70. I[C] Howe, 1994, p. 142: I[C] Lawson, 1992, p. 40. I[C] Howe, 1994, p. 143. I[C] Nott, 2002, p. 191. The Economist, 29.3.1980, p. 15. I[B] H.C. Deb., 26.3.1980, col. 1441. I[B] H.C. Deb., 26.3.1980, cols. 1443–44. I[C] Howe, 1994, p. 155. I[C] Lawson, 1992, p. 69. I[C] Lawson, 1992, pp. 72–73. I[B] H.C. Deb., 26.3.1980, cols. 1487–89. The Economist, 29.3.1980, p. 33. I[D] Whitehead, 1985, p. 376. I[C] Thatcher, 1993, p. 26. I[C] Clark, 2000, p. 207. The Economist, 15.11.1980, p. 65. I[D] Holmes, 1985, p. 155. I[D] Whitehead, 1985, p. 264. I[D] Dale, 2000, pp. 272–73. III[B] Edwardes, 1983, pp. 224–31. I[D] Hennessy, 1989, pp. 432–33. I[B] H.C. Deb., 26.1.1981, cols. 639–40. I[B] H.C. Deb., 26.1.1981, col. 641 [G. Robinson]. I[B] H.C. Deb., 26.1.1981, col. 643. The Economist, 31.1.1981, p. 48. III[B] Wilks, 1985, pp. 222–23. I[C] Nott, 2002, pp. 180–83. I[C] Parkinson, 1992, pp. 87, 242–49, 254. I[C] Lawson, 1992, pp. 398–401. III[B] Edwardes, 1983, pp. 273–74. The Times, 12.11.1980. The Economist, 22.11.1980, p. 83. I[C] Nott, 2000, pp. 183–84. I[C] Prior, 1986, p. 130. I[C] Prior, 1986, p. 132. I[C] Lawson, 1992, p. 88. I[B] H.C. Deb., 10.3.1981, col. 766. I[B] H.C. Deb., 10.3.1976, cols. 768–69. I[B] H.C. Deb., 10.3.1981, col., 763–64. I[B] H.C. Deb., 10.3.1981, cols. 773–75. I[C] Clark, 2000, p. 211. III[B] Walters, 1986, p. 15. I[C] Lawson, 1992, p. 98. I[C] Howe, 1994, pp. 203–04. I[C] Lawson, 1992, p. 98. I[C] Thatcher, 1993, p. 133.

Notes and References 88. 89. 90. 91. 92. 93. 94. 95. 96. 97. 98. 99. 100. 101. 102. 103. 104. 105. 106. 107. 108. 109. 110. 111. 112. 113. 114. 115. 116. 117. 118. 119. 120. 121. 122. 123. 124. 125. 126. 127. 128. 129. 130. 131. 132. 133. 134. 135. 136. 137.

III[B] Hoskyns, 2000, p. 283. III[B] Hoskyns, 2000, pp. 284–85. The Economist, 14.3.1981, p. 21. I[B] H.C. Deb., 10.3.1981, col. 756. The Spectator, 14.3. 1981, p. 4. I[C] Thatcher, 1993, pp. 143–44. I[C] Nott, 2002, pp. 196–97. I[C] Thatcher, 1993, pp. 148–49. III[B] Keegan, 1984, p. 173. I[D] Howell, 1986, p. 150. I[B] H.C. Deb., 9.3.1982, col. 757. The Spectator, 13.3.1982, p. 5 [A. Rudd]. The Economist, 13.3.1982, p. 12. The Spectator, 13.3.1982, p. 4. I[B] H.C. Deb., 9.3.1982, cols. 754–56. The Economist, 13.3.1982, p. 20. I[B] H.C. Deb., 9.3.1982, col. 730. The Economist, 19.3.1983, p. 11. I[B] H.C. Deb., 15.3.1983, col. 156. The Spectator, 19.3.1983, p. 3. I[C] Howe, 1994, p. 157. The Economist, 12.3.1988, p. 20. I[B] H.C. Deb., 13.3.1984, col. 288. I[B] H.C. Deb., 19.3.1985, cols. 784–85. I[B] H.C. Deb., 18.3.1986, cols. 169–70. I[B] H.C. Deb., 17.3.1987, col. 817–1988. I[B] H.C. Deb., 15.3.1988, col. 995. I[B] H.C. Deb., 14.3.1989, cols. 295–96. I[B] H.C. Deb., 17.3.1987, col. 817. The Spectator, 17.3.1984, p. 5 [ J. Bruce-Gardyne]. The Economist, 17.3.1984, p. 11. I[B] H.C. Deb., 13.3.1984, col. 304. I[D] Sherman, 2005, p. 141. The Spectator, 23.3.1985, p. 3. The Economist, 23.3.1985, p. 21. I[B] H.C. Deb., 19.3.1985, cols. 783–800. I[B] H.C. Deb., 18.3.1986, cols. 166–84. I[B} H.C. Deb., 17.3.1987, col. 818. I[B] H.C. Deb., 18.3.1986, col. 182. I[B] H.C. Deb., 17.3.1987, col. 828. The Economist, 21.3.1987, p. 25. The Economist, 17.1.1987, p. 29. The Spectator, 15.11.1986, p. 6. The Economist, 15.11.1986, p. 19. The Economist, 31.10.1987, p. 13. I[B] H.C. Deb., 15.3.1988, col. 1013. I[B] H.C. Deb., 14.3.1989, col. 295. The Economist, 18.3.1989, p. 15. I[C] Thatcher, 1993, p. 690. I[C] Thatcher, 1993, p. 691.

249

250 Notes and References 138. The Spectator, 24.3.1990, p. 6 [A. Howard]. 139. I[C] Lawson, 1992, p. 198; c.f. I[D] Howell, 1970, p. 8, where Howell actually cited Peter Drucker as inventing the term ‘privatization’. 140. I[C] Lawson, 1992, p. 199. 141. I[C] Ridley, 1991, p. 16. 142. Thatcher Archive: THCR 2/6/1/37 and 2/6/1/63; The Economist, 27.5.1978, pp. 21–22. 143. I[B] H.C. Deb., 14.6.1977, Written Answers, cols. 141–42; The Economist, 18.6.1977, p. 126. 144. I[D] Dale, 2000, p. 272. 145. I[C] Howe, 1994, p. 254. 146. I[C] Lawson, 1992, p. 200. 147. I[C] Howe, 1994, p. 154. 148. I[C] Lawson, 1992, p. 201. 149. I[C] Lawson, 1992, pp. 207–08. 150. I[C] Lawson, 1992, p. 208. 151. I[C] Lawson, 1992, p. 209. 152. I[C] Lawson, 1992, pp. 222–24. 153. I[C] Lawson, 1992, p. 215. 154. I[C] Walker, 1991, pp. 190–92. 155. I[C] Lawson, 1992, p. 216. 156. I[C] Walker, 1991, p. 193. 157. I[C] Lawson, 1992, p. 241. 158. I[C] Thatcher, 1993, p. 682; I[C] Parkinson, 1992, pp. 119, 257–80. 159. I[C] Lawson, 1992, pp. 205–06. 160. III[B] Inns of Court Conservative and Unionist Society, 1958, p. 53. 161. I[C] Hurd, 1979, p. 150. 162. Thatcher Archive: THCR 2/6/1/37 and 2/6/1/63; The Economist, 27.5.1978, pp. 21–22. 163. III[B] Hoskyns, 2000, p. 45. 164. III[B] Hoskyns, 2000, p. 47. 165. I[D] Dale, 2000, pp. 268–69. 166. I[C] Prior, 1986, p. 115. 167. I[C] Prior, 1986, p. 119. 168. I[C] Prior, 1986, p. 155. 169. I[C] Prior, 1986, p. 162. 170. I[C] Prior, 1986, p. 156. 171. I[B] H.C. Deb., 17.12.1979, cols. 58–71; III[B] Taylor, 1994, p. 534. 172. I[B] H.C. Deb., 26.3.1980, cols. 1462–63; I[C] Prior, 1986, p. 165; I[C] Thatcher, 1993, p. 55; I[C] Howe, 1994, p. 166. 173. I[C] Tebbit, 1989, p. 233. 174. I[C] Tebbit, 1989, p. 235. 175. I[B] H.C. Deb., 8.2.1982, cols. 737–47; III[B] Taylor, 1993, p. 534. 176. I[B] H.C. Deb., 8.11.1983, cols. 157–64; III[B] Taylor, 1993, p. 534. 177. III[B] Geary, 1985, pp. 88–91; I[D] Holmes, 1985, pp. 139–40. 178. I[C] Prior, 1986, pp. 142–43; I[D] Holmes, 1985, p. 142. 179. I[D] Holmes, 1985, pp. 143–45. 180. The Economist, 26.2.1983, p. 16. 181. I[D] Holmes, 1985, pp. 140–42. 182. III[B] MacGregor, 1986, pp. 11–15.

Notes and References 183. 184. 185. 186. 187. 188. 189. 190.

191. 192. 193. 194. 195.

III[B] MacGregor, 1986, pp. 146–49. III[B] Taylor, 1993, pp. 293–94. III[B] Adeney and Lloyd, 1986, pp. 100–03. III[B] Adeney and Lloyd, 1986, p. 112. I[C] Benn, 1992, p. 400. III[B] Aston, Morris, and Willman, 1989, pp. 81–92. III[B] Taylor, 1993, p. 297. III[B] Brown and Wadhari, 1990, pp. 57–70; III[B] Brown and Walsh, 1991, pp. 44–59; III[B] Claydon, 1989, pp. 214–24; III[B] Lewis, 1991, pp. 60–75; III[B] Minford, 1991; III[B] Metcalf, 1989, pp. 1–31; III[B] Metcalf, 1991, pp. 18–32; III[B] Nolan, 1989, pp. 81–92; III[B] Purcell, 1991, pp. 33–43. III[B] Daniel and Millward, 1983. III[B] Millward and Stevens, 1986. III[B] Daniel, 1987, p. 260. III[B] Millward, Stevens, Smart, and Hawes, 1992, p. 352. III[B] Millward, Bryson, and Forth, 2000, pp. 234–35.

5 The Economic Liberal Crusades II 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.

251

III[B] Bellairs, 1977, pp. 7–8. III[B] Walley, 1972, pp. 41, 48, 53, 58–60, 62. I[C] Thatcher, 1993, p. 8. I[C] Thatcher, 1993, p. 5. I[C] Thatcher, 1995, p. 44. III[B] Sen, 1983, pp. 153–69; III[B] Piachaud, 1987, pp. 147–64. I[C] Fowler, 1991, pp. 208–09. III[B] Titmuss, 1974, pp. 30–31, 122. Woman’s Own. 31.10.1987. The Spectator, 14.7.1984, p. 3. The Spectator, 14.7.1984, p. 5. The Spectator, 23.3.1985, p. 7. The Economist, 7.12.1985, p. 30. London Weekend Television Weekend World, 6.1.1980. III[B] Pemberton, 1990, pp. 281–98; III[B] Anderson, 1990, pp. 553–55. I[C] Thatcher, 1993, pp. 629–30. I[C] Thatcher, 1995, pp. 538–64. I[C] Thatcher, 1993, p. 631. I[C] Thatcher, 1993, p. 630. I[B] H.C. Deb., 2.4.1984, col. 658. I[C] Fowler, 1991, pp. 154–55. I[C] Tebbit, 1989, p. 125. I[B] H.C. Deb., 15.1.1980, col. 1443. I[B] H.C. Deb., 15.1.1980, col. 1470. I[B] H.C. Deb., 22.4.1952, cols. 236–37. I[B] H.C. Deb., 22.4.1952, col. 239. III[B] Murie, 1980, pp. 292–94. I[D] Donoughue, 2003, pp. 103–08; c.f. I[D] Haines, 1977, pp. 94–111. I[D] Dale, 2000, pp. 214, 244. I[D] Walker, 1977, pp. 163–72.


I[C] Walker, 1991, pp. 140–41. I[D] Dale, 2000, p. 277. I[C] Heseltine, 2000, p. 194. The Economist, 4.8.1979, p. 16. I[C] Heseltine, 2000, pp. 195–96; III[B] Smith, 1981, pp. 5–16. III[B] Wilcox, 1994, p. 44; III[B] Timmins, 1995, pp. 380–81. III[B] McCrone and Stephens, 1995, p. 151. III[B] Bowley, 1945, pp. 3–5. III[B] Donnison, 1967, p. 228. III[B] McCrone and Stephens, 1995, p. 151. I[D] Dale, 2000, pp. 277–78. I[C] Heseltine, 2000, pp. 197–98; III[B] Smith, 1981, pp. 29–37. III[B] Malpass, 1990, p. 16. III[B] Forrest and Murie, 1991, p. 147. III[B] Timmins, 1996, p. 381. III[B] Forrest and Murie, 1991, p. 160. III{B} Greve, Page, and Greve, 1971. III[B] Hills, 1990, pp. 166–70. I[C] Thatcher, 1993, pp. 603–04. III[B] Johnson, 1990, p. 145. III[B] Wilcox, 1993, pp. 47–49. III[B] Hills, 1990, pp. 201–02. III[B] Timmins, 1996, p. 380. III[B] Cmnd. 7615, 1979, para. 21.5. I[C] Lawson, 1992, pp. 612–13. I[C] Fowler, 1991, pp. 167–69. I[C] Fowler, 1991, p. 173. The Economist, 13.11.1982, p. 49. The Economist, 18.12.1982, pp. 29–30. I[C] Fowler, 1991, p. 184. I[B] H.C. Deb., 30.7.1982, Written Answers, col. 860. The Economist, 18.9.1982, p. 25. I[C] Thatcher, 1993, p. 277. The Economist, 9.10.1982, p. 22. I[C] Howe, 1993, pp. 258–59. I[C] Lawson, 1992, p. 303. I[C] Fowler, 1991, pp. 183–87. I[C] Clark, 1993, p. 197. I[C] Clark, 1993, p. 215. I[C] Clark, 1993, p. 197. I[C] Clark, 1993, pp. 275–76. I[C] Thatcher, 1993, pp. 608–09. I[C] Thatcher, 1993, p. 614. I[C] Clark, 1993, p. 273. III[B] Enthoven, 1985, p. 28. III[B] Enthoven, 1985, pp. 38–41. III[B] Enthoven, 1985, p. 34. III[B] Hills, 1990, pp. 126–27. III[B] Hills, 1990, p. 118. III[B] Enthoven, 1985, pp. 41–42.

Notes and References 81. 82. 83. 84. 85. 86. 87. 88. 89. 90. 91. 92. 93. 94. 95. 96. 97. 98. 99. 100. 101. 102. 103. 104. 105. 106. 107. 108. 109. 110. 111. 112. 113. 114. 115. 116. 117. 118. 119. 120. 121. 122. 123. 124. 125. 126.

253

III[B] Hills, 1990, pp. 92–93; The Daily Telegraph, 8.1.1986. I[C] Thatcher, 1993, p. 613. III[B] Edwards, 1993, p. 146. III[A] Cm. 555, 1989, pp. 4–6. III[A] Cm. 555, 1989, p. 12. III[B] Edwards, 1993, pp. 156–57. The Economist, 28.10.1989, p. 20; III[B] Edwards, 1993, pp. 155–65. III[B] Enthoven, 1999, p. 58. III[B] Enthoven, 1999, p. 60. III[B] Hills, 1990, p. 126. I[D] Marsh and Rhodes, 1992, p. 111. I[B] H.C. Deb., 2.4. 1984, col. 653. The Economist, 7.4.1984, p. 19. I[C] Fowler, 1991, p. 208. I[D] Fry, 2005, pp. 21–22, 28–31. I[C] Fowler, 1991, p. 208. III[A] Cmnd. 9517, 1985, pp. 1–3. III[A] Cmnd. 9518, 1985, pp. 59–62. III[A] Cmnd. 9691, 1985, p. 1. I[C] Fowler, 1991, p. 209. I[C] Lawson, 1992, pp. 596–97. I[C] Lawson, 1992, p. 434. I[C] Young, 1990, p. 174. I[C[ Lawson, 1992, pp. 433–34. I[C] Fowler, 1991, p. 216. I[C] Lawson, 1992, pp. 587–92. I[C] Fowler, 1991, pp. 211–23. III[A] Cmnd. 9691, 1985, pp. 12–14. III[A] Cmnd. 9691, 1985, p. 15. I[C] Fowler, 1991, p. 224. I[D] Marsh and Rhodes, 1992, p. 18. I[D] Marsh and Rhodes, 1992, p. 87. I[C] Fowler, 1991, pp. 223–24; III[A] Cmnd. 9691, 1985, pp. 36–45. I[D] Marsh and Rhodes, 1992, p. 96. I[C] Baker, 1993, p. 161. I[C] Lawson, 1992, p. 600. I[C] Thatcher, 1995, p. 167. [IIIB] Wolf, 2001, p. 244. I[C] Thatcher, 1995, pp. 186–87. I[C] Lawson, 1992, p. 600. I[B] H.C. Deb., 2.7.1981, Written Answers, col. 453. I[B] H.C. Deb., 8.7.1981, cols. 467–68. The Economist, 11.7.1981, p. 24. The Spectator, 8.12.1984, p. 8. I[B] H.C. Deb., 5.12.1984, cols. 360–61. The Observer, 9.12.1984; I[C] Halcrow, 1989, p. 183; I[C] Denham and Garnett, 2001, p. 394). 127. The Spectator, 8.12.1984, p. 8 [C.Moore]. 128. I[C] Baker, 1993, pp. 237–38. 129. I[C] Baker, 1993, pp. 234–35.

254 Notes and References 130. 131. 132. 133. 134. 135. 136. 137. 138. 139. 140. 141. 142. 143. 144. 145. 146. 147. 148. 149. 150. 151. 152. 153. 154. 155.

Encounter, July 1960, p. 9. The Times Higher Education Supplement, 1.6.1973 [C. Price]. I[C] Baker, 1993, p. 239. I[C] Baker, 1993, pp. 243–44. I[C] Thatcher, 1993, p. 599. I[C] Denham and Garnett, 2001, p. 367. I[C] Thatcher, 1995, pp. 188–89. I[C] Thatcher, 1995, p. 157. III[B] Eysenck, 1973; III[B] Hearnshaw, 1979; III[B] Mackintosh, 1995, pp. 130–48. I[C] Thatcher, 1995, pp. 173–74. I[B] HL Deb., 21.11.1990, cols. 705–06. I[C] Halcrow, 1989, p. 172. Private information; c.f. I[C] Halcrow, 1989, pp. 173–74. III[A] Cmnd. 9469, 1985, p. 86. I[B] HL Deb., 21.11.1990, col. 707. III[A] Cmnd. 9469, 1985, p. 30. I[C] Halcrow, 1989, pp. 174–75. I[C] Baker, 1993, p. 172. I[C] Baker, 1993, pp. 175–76. I[C] Lawson, 1992, p. 606. I[C] Baker, 1993, pp. 172–76. I[C] Lawson, 1992, pp. 606–10. I[C] Baker, 1993, pp. 160–231. I[B] HL Deb. 21.11.1988, col. 708. I[B] HL Deb., 21.11.1988, col. 707. Contemporary Record, Spring 1987, pp. 30–31.

6 The Economic Liberal Crusades III 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

I[C] Thatcher, 1993, p. 18. II[B] Denman, 2002, pp. 254–58. I[D] Young and Sloman, 1986, pp. 48–49. I[C] Thatcher, 1993, p. 6. I[D] Fry, 1985, pp. 1–4; Civil Service Statistics 1994, p. 41. Red Tape, December 1969, pp. 69–70. Whitley Bulletin, December 1979, p. 165. The Times, 12.8.1980. The Economist, 26.7.1975, pp. 25–26. I[C] Clark, 1993, p. 22. I[C] Thatcher, 1995, p. 166. I[C] Young, 1993, p. 72; I[C] Campbell, 2000, p. 216. I[D] Hennessy, 1989, p. 626. I[D] Young and Sloman, 1986, p. 49. I[C] Thatcher, 1993, p. 48; c.f. I[D] Hennessy, 1989, p. 629. I[D] Fry, 1995, pp. 39–40. I[D] Hoskyns, 1983, p. 142. I[D] Fry, 1995, p. 40 [R.Wilding]. I[D] Hoskyns, 1983, p. 142.

Notes and References 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67.

255

The Listener, 11.12.1980, p. 775. David Dimbleby in Conversation with Sir John Hoskyns, BBC1, 7.12.1982. I[D] Worcester and Harrop, 1982, p. 9; I[D] Sarlvik and Crewe, 1983, p. 119. David Dimbleby in Conversation with Sir John Hoskyns, BBC1, 7.12.1982. I[D] Hoskyns, 1984, p. 12. I[D] Hennessy, 1989, p. 628. FDA News, April 1985, pp. 1–2; I[B] H.C. Deb., 18.3.1985, Written Answers, cols. 365–66. Annual Report of the Civil Service Commissioners 1984, p. 7. II[B] Denman, 2002, pp. 254–55. II[B] Denman, 2002, p. 258. I[C] Thatcher, 1993, p. 48. I[C] Thatcher, 1993, p. 46. I[D] Fry, 1995, pp. 42–43. I[B] H.C. Deb., 26.10.1989, col. 1044. I[C] Fowler, 1991, p. xi. I[D] Letwin, 1992, p. 40. I[C] Prior, 1986, p. 136. II[B] Denman, 2002, p. 255. I[C] Clark, 1993, p. 22. I[A] PRO: BA1/3. I[D] Fry, 1995, p. 74. I[D] Fry, 1995, p. 40. I[D] Ponting, 1985, pp. 7–8. The Spectator, 16.2.1985, p. 4 [C. Moore]. I[B] H.C. Deb., 18.2.1985, cols. 733–50. The Times, 19.2.1985. I[B] H.C. Deb., 26.2.1986, Written Answers, cols. 128–30. I[D] Wass, 1984, pp. 48–51. I[D] Wass, 1984, p. 53. I[D] Turnbull, 1988, p. 75. I[D] Turnbull, 1988, p. 205. I[C] Campbell, 1993, p. 760. I[D] Rayner, 1984, p. 16. I[D] Fry, 1993, pp. 57–71. I[D] Chapman, 1978, pp. 9–55. I[C] Thatcher, 1993, p. 46. III[A] Cmnd. 8147, 1961, p. 20. Red Tape, December 1969, p. 69. I[D] Fry, 1985, pp. 139–40. The Economist, 6.6.1981, p. 30. I[C] Prior, 1986, p. 142; I[C] Gilmour, 1992, p. 42; I[C] Garnett and Aitken, 2003, p. 271. I[C] Howe, 1994, p. 221. III[B] Hoskyns, 2000, p. 324. III[B] Hoskyns, 2000, p. 309. The Guardian, 9.3.1981. III[B] Hoskyns, 2000, p. 324. CCSU Bulletin, September/October 1981, pp. 121–22. I[D] Fry, 1985, p. 137.

256 Notes and References 68. 69. 70. 71. 72. 73. 74. 75. 76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88. 89. 90. 91. 92. 93. 94. 95. 96. 97. 98. 99. 100. 101. 102. 103.

I[C] Garnett and Aitken, 2002, p. 270; c.f. I[C] Thatcher, 1993, p. 139. I[D] Ranelagh, pp. 17–18. I[C] Thatcher, 1993, p. 48. I[D] Fry, 1969, pp. 415–24. III[B] Fry, 1983, pp. 90–96; III[A] Cmnd. 8590, 1982. I[C] Thatcher, 1993, p. 47. I[D] Fry, 1995, pp. 74–75: Civil Service Statistics 1984, p. 6: Civil Service Statistics 1986, p. 6. I[C] Thatcher, 1993, p. 46. CCSU Bulletin, May 1989, p. 69. CCSU Bulletin, December 1984, p. 149. I[D] Fry, 1995, p. 73. I[D] Fry, 1995, p. 75. I[C] Thatcher, p. 47. Interview: Lord Bancroft. I[D] Fry, 1985, pp. 147–49; I[D] Fry, 1995, pp. 63–65. I[C] Thatcher, 1993, p. 424. I[D] Heseltine, 1987, p. 22. I[B] Cmnd. 8616, 1982, para. 13. I[D] Fry, 1985, pp. 149–52; I[D] Fry, 1995, pp. 65–68. I[C] Thatcher, 1993, p. 49. I[D] Fry, 1995, p. 2. I[D] Fry, 1995, pp. 100–102. I[B] Efficiency Unit, 1988, para. 5. I[B] Efficiency Unit, 1988, para, 44. I[B] Efficiency Unit, 1988, para. 46. I[D] Fry, 1995, pp. 105. I[C] Lawson, 1992, pp. 390–93. I[D] Fry, 1995, p. 112. I[C] Lawson, 1992, pp. 390–93. I[B] H.C. Deb., 24.10.1988, Written Answers, col. 14. The Economist, 2.3.1985, p. 45. Civil Service Statistics 1994, p. 41. I[D] Fry, 1985, pp. 53, 63. I[D] Hennessy, 1989, p. 346. I[D] Fry, 1984, p. 150 [P. Nash]. I[D] Kavanagh and Seldon, 1989, p. 114 [P. Hennessy].

7 The Economic Liberal Crusades IV 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

I[D] Stevas, V, 1974, pp. 394–95. I[D] Stevas, V, 1974, p. 339. I[D] Mount, 1993, p. 264. I[D] Mount, 1993, p. 251. I[D] Graham and Prosser, 1988, p. 95 [S. Leach and G. Stoker]. I[D] Jenkins, 1996, p. 41. I[D] Jenkins, 1996, p. 163. I[D] Donoughue and Jones, 2001, pp. 125–27, 203–06. I[A] PRO: CAB 128/1. III[B] Spoor, 1967, pp. 436, 569–70.

Notes and References 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.

I[D] Donoughue and Jones, 2001, p. 206. I[D] Donoughue and Jones, 2001, p. xxxi. I[A] HL Deb., 29.11.1961, col. 1148. I[A] HL Deb., 29.11.1961, cols. 1146–47. I[A] HL Deb., 14.3.1962, col. 188. I[D] Walker, 1977, pp. 182–83. I[D] Wilson and Game, 1994, p. 43. I[C] Walker, 1991, pp. 79–80. I[D] Dale, 2000, p. 242. I[D] Mount, 1993, p. 252. I[C] Lawson, 1992, pp. 562–63. I[C] Lawson, 1992, p. 565. I[D] Burke, II, 1790, p. 320. I[C] Heseltine, 2001, p. 203. I[D] Dale, 2000, p. 271. I[C] Heseltine, 2001, pp. 201–03. I[C] Heseltine, 2001, pp. 204–06. I[C] Lawson, 1992, pp. 564–65. I[C] Lawson, 1992, p. 312. I[D] Heseltine, 1987, p. 43. I[D] Heseltine, 1987, pp. 40–41. I[D] Heseltine, 1987, pp. 36–38. I[C] Heseltine, 2001, p. 206. III[A] Audit Commission, 1984, pp. 1–2. III[A] Audit Commission, 1984, p. 61. III[A] Audit Commission, 1984, p. 5. I[D] Butler, Adonis, Travers, 1994, p. 61; I[C] Heseltine, 2001, pp. 207–08. III[A] Cmnd. 8449, 1981, p. 59. I[C] Heseltine, 2001, p. 208. I[C] Heseltine, 2001, p. 204. I[D] Heseltine, 1987, pp. 134–36. I[C] Howe, 1994, p. 110. I[C] Heseltine, 2001, pp. 212–13. III[B] Thornley, 1991, p. 181. I[D] Hennessy, 1989, p. 699. I[C] Heseltine, 2001, pp. 216–29. I[D] Boddy and Fudge, 1984, p. 270. Marxism Today, November 1981, pp. 17–18. I[D] Boddy and Fudge, 1984, p. 265. I[D] Boddy and Fudge, 1984, p. 244. I[D] Boddy and Fudge, 1984, p. 246. I[D] Boddy and Fudge, 1984, p. 247. I[D] Boddy and Fudge, 1984, p. 243. I[D] Dale, 2000, p. 304. I[B] Cmnd. 9063, 1983, pp. 2–4. I[B] H.C. Deb., 5.6.1991, cols. 298–99. III[A] Cmnd. 9004, 1983, pp. 3, 6. I[D] Hebbert and Travers, 1988, pp. 38–43, 56–88. The Economist, 20.8.1994, p. 11. I[D] Leach, Davis, Game, Skelcher, 1991, p. 185.

257

258 Notes and References 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75. 76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88. 89. 90. 91. 92. 93. 94.

III[B] Cmnd. 9008, 1983, p. 14. III[B] Cmnd. 9008, 1983, p. 15. I[D] Loughlin, Gelfand and Young, 1985, p. xii. I[D] Bogdanor, 2003, p. 542 [M. Loughlin]; I[D] Loughlin, Gelfand, and Young, 1985, p. 237. The Economist, 6.8.1983, p. 12. I[D] Taaffe and Mulhearn, 1988, p. 35. I[D] Taaffe and Mulhearn, 1988, p. 337. I[D] Taaffe and Mulhearn, 1988, p. 178. I[D] Taaffe and Mulhearn, 1988, pp. 179–201. I[D] Taaffe and Mulhearn, 1988, pp. 202–26. I[D] Taaffe and Mulhearn, 1988, pp. 337–59. The Spectator, 23.11.1985, p. 8. The Economist, 30.11.1985, p. 20. I[D] Davies, 1988, p. 91. I[D] Pratchett and Wilson, 1996, pp. 1–19. I[D] Davies, 1988, pp. 93–95. I[D] Dale, 2000, p. 344. I[D] Butler, Adonis, Travers, 1994, pp. 11–14. III[B] Smith, 1776, pp. 310–11. I[C] Lawson, 1992, p. 607. I[C] Lawson, 1992, p. 104. I[C] Lawson, 1992, p. 564. I[C] Baker, 1993, pp. 122–26. III[B] Cmnd. 9714, 1986, p. 76. I[B] H.C. Deb., 18.1.1990, cols. 464–67. I[D] Butler, Adonis and Travers, 1994, pp. 296–97. I[C] Baker, 1993, p. 127. I[C] Ridley, 1991, pp. 127–28. I[C] Baker, 1993, pp. 128–29. I[C] Lawson, 1992, pp. 580–81. The Economist, 7.4.1990, p. 16. I[C] Thatcher, 1993, p. 662. I[C] Thatcher, 1993, p. 667. I[C] Thatcher, 1993, p. 661.

8 The Governments of the ‘Iron Lady’ and the Defence of the National Interest 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

II[B] Urban, 1996, pp. 177–78. II[A] Cmnd. 7099, 1978, p. 10. II[A] Cmnd. 6432, 1976, p. 1. I[C] Thatcher, 1993, p. 9. II[B] Henderson, 1994, p. 492; II[B] Hargrove, 1988, pp. 161–93. I[C] Thatcher, 1993, pp. 68–69. I[C] Thatcher, 1993, p. 156. I[C] Thatcher, 1993, pp. 8–9. I[D] Neale, 1934, p. 298. I[C] Thatcher, 1995, p. 362.

Notes and References 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25.

26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57.

259

II[B] Henderson, 1994, p. 315. II[B] Henderson, 1994, pp. 286–87. II[B] Henderson, 1994, p. 287. I[C] Thatcher, 1993, p. 309. II[B] Henderson, 1994, p. 5. I[D] Collings, 1991, p. 596. I[B] H.C. Deb., 21.11.1979, cols. 402–10; II[B] Boyle, 1980, pp. 485–511. I[D] Hennessy, 1989, pp. 646–47. II[B] Cradock, 1997, pp. 3, 7, 37. I[C] Thatcher, 1993, p. 454. I[D] Fry, 1981, pp. 120–25. I[C] Thatcher, 1993, p. 250. I[C] Nott, 2002, p. 233. II[A] Cmnd. 9315, 1984, pp. 4–5. I[B] HL Deb., 13.6.1984, col. 1169; c.f. I[D] Lyman, 1957, p. 106 for similar remarks made by the first ever Labour Secretary of State for War, Stephen Walsh. I[C] Heseltine, 2001, pp. 262–65; II[B] Hobkirk, 1985, pp. 45–50. I[C] Thatcher, 1993, pp. 156–57. II[B] Reagan, 1990, p. 357. II[B] Parry and Kornbluh, 1988, pp. 3–30. II[B] Henderson, 1994, p. 486. I[C] Carrington, 1988, p. 48. The Economist, 2.6.1979, pp. 29–40. II[B] Henderson, 1994, p. 271. I[C] Carrington, 1988, p. 280. I[C] Carrington, 1988, pp. 90–92. I[C] Carrington, 1988, pp. 169–76. I[C] Carrington, 1988, p. 286. II[B] Smith, 1997, p. 409. II[B] Smith, 1997, pp. 159–222. II[B] Smith, 1997, pp. 249–96. I[C] Carrington, 1988, pp. 290–92. II[B] de Waal, 1990, pp. 34–35. II[A] Cmnd. 7712, 1979, p. 5. I[C] Carrington, 1988, pp. 299–302. II[B] de Waal, 1990, p. 39; II[B] Godwin and Hancock, 1993, p. 268. The Spectator, 8.3.1980, p. 7 [Xan Smiley]. I[B] HL Deb., 4.3.1980, col. 143. I[B] HL Deb., 4.3.1980, col. 147. I[B] HL Deb., 6.2.1980, col. 1343. II[B] Smith, 1997, pp. 409–10; II[B] Godwin and Hancock, 1993, p. 373. II[B] Godwin and Hancock, 1993, p. 269. The Spectator, 8.3.1980, p. 3. II[B] Godwin and Hancock,1993, p. 275. II[B] de Waal, 1990, p. 32. I[C] Carrington, 1988, p. 298. Lord Powell of Bayswater confirmed to me that these observations cohered with his memory of events: c.f. I[C] Thatcher, 1993, pp. 528–35. I[B] H.C. Deb., 9.2.1982, cols. 856–57.

260 Notes and References 58. II[A] Freeman, I, 2005, pp. 83–86. 59. I[C] Callaghan, 1988, pp. 370–78; I[B] H.C. Deb., 30.3.1982, col. 168; I[B] H.C. Deb., 8.7.1982, cols. 479–82; c.f. I[C] Morgan, 1997, pp. 460–62, 594, 725. 60. II[A] Freedman, I, 2005, p. 86. 61. II[B] Freedman, I, 2005, pp. 48–49. 62. II[A] Freedman, I, 2005, pp. 46–47. 63. II[B] Hughes-Wilson, 2004, p. 264. 64. II[A] Freedman, I, 2005, p. 36. 65. II[A] Freedman, I, 2005, p. 18. 66. II[A] Freedman, I, 2005, p. 223. 67. I[B] H.C. Deb., 3.4.1982, col. 637. 68. I[C] Carrington, 1988, pp. 352–56. 69. II[A] Freedman, I, 2005, pp. 113–23. 70. I[B] H.C. Deb., 18.12.1980, col. 651. 71. II[A] Freedman, I. 2005, pp. 132–33. 72. II[A] Freedman, I, 2005, pp. 126–27. 73. I[B] H.C. Deb., 2.12.1980, cols. 128–34. 74. II[A] Freedman, I, 2005, p. 83. 75. II[B] Carver, 1992, p. 138. 76. II[B] Dorman, Kandiah, and Staerck, 2002, p. 6. 77. I[C] Nott, 2002, pp. 254–55. 78. II[A] Freedman, I, 2005, p. 149. 79. II[B] Hughes-Wilson, 2004, pp. 304–05. 80. II[B] Freedman and Gamba-Stonehouse, 1989, p. 97. 81. II[A] Cmnd. 8787, 1983, p. 74. 82. II[A] Freedman, I, 2005, pp. 220–21. 83. II[B] Hughes-Wilson, 2004, p. 278. 84. II[B] Dorman, Kandiah, and Straerck, 2002, pp. 11–12. 85. II[B] Hughes-Wilson, 2004, pp. 280–83, 290. 86. II[B] Hughes-Wilson, 2004, p. 262. 87. I[B] H.C. Deb., 3.4.1982, col. 650 [E. Rowlands]. 88. The Listener, 1.4.1982, pp. 2–4. 89. I[B] H.C. Deb., 8.7.1982, col. 481. 90. II[A] Freedman, I, 2005, p. 218. 91. I[C] Garnett and Aitken, 2003, p. 281. 92. I[B] H.C. Deb., 3.4.1982, col. 637. 93. I[B] H.C. Deb., 3.4.1982, cols. 653–55 [Ray Whitney]. 94. I[C] Clark, 2000, p. 318. 95. II[B] Dorman, Kandiah, and Staerck, 2002, p. 18. 96. The Economist, 3.3.1984, p. 25. 97. II[A] Freedman, II, 2005, pp. 39–48; II[B] Parsons, 1983, pp. 169–72. 98. I[C] Thatcher, 1993, p. 227. 99. The Economist, 3.3.1984, p. 23. 100. II[B] Thornton, 1998, pp. 19–20, 54–57, 242, 244. 101. II[B] Reagan, 1990, p. 358. 102. II[B] Wills, 1987, p. 248. 103. II[B] Haig, 1984, pp. 269–70. 104. II[B] Thornton, 1998, pp. 120–21. 105. II[B] Haig, 1984, p. 160. 106. II[B] Haig, 1984, p. 149.

Notes and References 107. 108. 109. 110. 111. 112. 113. 114. 115. 116.

117. 118. 119. 120. 121. 122. 123. 124. 125. 126. 127. 128. 129. 130. 131. 132. 133. 134. 135. 136. 137. 138. 139. 140. 141. 142. 143. 144. 145. 146. 147. 148. 149. 150. 151. 152.

261

II[B] Dorman, Kandiah, and Staerck, 2002, p. 28. II[B] Dorman, Kandiah, and Staerck, 2002, p. 26. II[B] Haig, 1984, p. 307. II[B] Henderson, 1994, p. 481. II[B] Reagan, 1990, p. 361. II[B] Reagan, 1990, p. 358. II[A] Freedman, II, 2005, p. 155. II[B] Weinberger, 1990, p. 151. II[B] Dorman, Kandiah, and Staerck, 2002, p. 45. The Economist, 3.3.1984, pp. 24–25; II[B] Wineberger, 1990, pp. 149–51; I[C] Thatcher, 1993, pp. 226–27; II[B] Dorman, Kandiah, and Staerck, 2002, pp. 26, 56–57; I[C] Nott, 2002, pp. 269–70; II[A] Freedman, II, 2005, pp. 62–67, 379–85. II[B] Dorman, Kandiah, and Staerck, 2002, pp. 18–19. II[B] Wineberger, 1990, p. 151. II[B] Dorman, Kandiah, and Staerck, 2002, p. 27. II[A] Cmnd. 8758, 1982, p. 6. II[B] Dorman, Kandiah, and Staerck, 2002, pp. 35–36; II[A] Freedman, 2005, pp. 772–80. II[B] Dorman, Kandiah, and Staerck, 2002, p. 34. II[A] Freedman, II, 2005, pp. 736–46. The Economist, 3.3.1984, p. 23. I[C] Clark, 2000, p. 333. I[C] Clark, 2000, p. 348; c.f. I[C] Nott, 2002, p. 317. II[B] Reagan, 1990, p. 473. I[C] Thatcher, 1993, p. 330. II[B] Weinberger, 1990, p. 15. II[B] Weinberger, 1990, p. 113. II[B] Reagan, 1990, p. 451. II[B] Reagan, 1990, p. 449. II[B] Reagan, 1990, p. 451. II[B] Reagan, 1990, p. 458. II[B] Schultz, 1993, p. 340. II[B] Schultz, 1993, p. 151. II[B] Schultz, 1993, p. 152. II[B] Williams, 2001, pp. 208–30. II[B] Weinberger, 1990, pp. 82, 92–93. The Economist, 10.3.1984, p. 24. I[D] Pimlott, 1996, pp. 497. The Economist, 10.3.1984, p. 24. I[C] Thatcher, 1993, pp. 331–32. II[B] Schultz, 1993, p. 340. The Economist, 10.3.1984, p. 24. I[C] Howe, 1994, p. 337. I[C] Thatcher, 1993, p. 333. II[B] Schultz, 1993, p. 152. I[C] Thatcher, 1993, p. 332. I[C] Howe, 1994, p. 363. II[B] Chang and Halliday, 2005, p. 651. II[B] Chang and Halliday, 2005, p. 590.

262 Notes and References 153. 154. 155. 156. 157. 158. 159. 160. 161. 162. 163. 164. 165. 166. 167. 168. 169. 170. 171. 172. 173. 174. 175. 176. 177. 178. 179. 180. 181. 182. 183. 184. 185. 186. 187. 188. 189. 190. 191. 192. 193. 194. 195. 196. 197. 198. 199. 200. 201.

I[C] Thatcher, 1993, p. 262. I[C] Howe, 1994, p. 368. II[B] Cradock, pp. 202–05. I[C] Howe, 1994, p. 371. I[C] Thatcher, 1993, p. 385. I[A] PRO: PREM 15/1004. I[D] Barnes and Nicholson, 1988, pp. 942–43. I[D] Gilbert, IV, 1975, p. 449. I[D] Loughlin, 2004, p. 123. I[C] Hurd, 2003, pp. 302–03. I[C] Thatcher, 1993, p. 400. II[A] Cmnd. 9690, 1985, p. 3. I[C] Hurd, 2003, p. 303. II[B} Kelly, Hogan, and Whyte, 1994, p. 13. I[C] Hurd, 2003, p. 303. II[B] Kelly, Hogan, and Whyte, 1994, p. 10. II[B] Kelly, Hogan, and Whyte, 1994, pp. 12–14. I[C] Hurd, 2003, pp. 303–04. I[C] Howe, 1994, p. 427. The Spectator, 23.11.1985, p. 5. I[B] H.C. Deb., 14.11.1985, col. 682. The Spectator, 23.11.1985, p. 6 [F. Mount]. II[B] Cradock, 1997, p. 205. The Spectator, 23.11.1985, p. 5. I[C] Walden, p. 303. I[B] H.C. Deb., 28.1.1980, cols. 972–73. I[B] H.C. Deb., 28.1. 1980, col. 1082. I[B] H.C. Deb., 26.10.1983, col. 309. I[B] H.C. Deb., 28.1.1980, col. 974. I[B] H.C. Deb., 28.6.1983, cols. 494–98; c.f. I[B] H.C. Deb., 7.4.1987, cols. 197– 201. I[D] Heffer, 1998, p. 831. I[D] Heffer, 1998, p. 879. I[B] H.C. Deb., 3.3.1981, col. 157. II[B] Urban, 1996, p. 3. The New York Times, 9.6.1982; q.v. II[B] Spiers, 1995, p. 4. II[B] Henderson, 1994, p. 473. I[C] Walden, 1999, p. 150. II[B] Schweizer, 2002, p. 90. II[B] Schweizer, 2002, pp. 160–77. II[B] Dallek, 1984, p. 192. II[B] Spiers, 1995, pp. 12–13. II[B] Schultz, 1993, p. 264. II[B] Spiers, 1995, p. 14. II[B] Spiers, 1995, p. 4. II[B] Shevardnadze, 1991, p. 81. II[B] Reagan, 1990, p. 677. II[B] Reagan, 1990, p. 707. II[B] Reagan, 1990, pp. 677–79; c.f. II[B] Brown, 1996, pp. 231–33. II[B] Schultz, 1993, p. 779.

Notes and References 202. 203. 204. 205. 206. 207. 208. 209. 210. 211. 212. 213. 214. 215. 216. 217. 218. 219. 220. 221. 222. 223. 224. 225. 226. 227. 228. 229. 230. 231. 232. 233. 234. 235. 236. 237. 238. 239. 240. 241. 242. 243. 244. 245. 246. 247. 248. 249. 250.

263

II[B] Spiers, 1995, p. 15; II[B] Reagan, 1990, pp. 696–99. II[B] Schultz, 1993, pp. 1030–31. II[B] Cradock, 1997, p. 201. II[B] Sokolovskiy, 1975, p. 210. II[B] Sokolovskiy, 1975, p. 170. II[B] Sokolovskiy, 1975, p. 202. II[B] Weinberger, 1990, p. 135. II[B] Schultz, 1993, p. 687; c.f. I[C] Thatcher, 1993, pp. 443–49. Newsweek, 3.12.1990, p. 37; q.v. II[B] Brown, 1996, p. 335. II[B] Brown, 1996, p. 243. II[B] Schweizer, 2002, p. 267. I[C] Thatcher, 1993, pp. 782–83. II[B] Mervin, 1998, pp. 181–82. II[B] Cradock, 1997, pp. 124–25. II[B] Lord, 1996, p. 117. II[B] Monnet, 1976, p. 362; c.f. Thatcher’s opinion recorded in II[B] Urban, 1996, p. 194. II[B] Jenkins, 1989, p. 37. III[B] Swann, 1984, pp. 36–39. I[C] Carrington, 1988, pp. 314–15. I[A] PRO: FCO/30/1048. II[B] Booker and North, 2005, pp. 167–95. I[C] Walden, 1999, p. 364. II[B] Jenkins, 1989, p. 372. II[B] Urban, 1996, p. 75. II[B] Cradock, 1997, p. 125. II[B] Jenkins, 1989, pp. 374–75. II[B] Jenkins, 1989, p. 22. II[B] Jenkins, 1989, p. 11. II[B] Booker and North, 2005, pp. 600–02. II[B] Jenkins, 1989, pp. 479–80. II[B] Jenkins, 1989, p. 529. I[C] Carrington, 1988, p. 319. I[C] Thatcher, 1993, p. 86. I[D] Gilmour, 1992, pp. 238–41. I[C] Carrington, 1988, p. 319. II[B] Moravcsik, 1998, pp. 349–52. II[B] Cradock, 1997, p. 126; c.f. I[C] Carrington, 1988, p. 319. II[B] Cradock, 1997, p. 126. II[B] Grant, 1994, p. 89. II[B] Grant, 1994, p. 70. I[C] Thatcher, 1993, p. 547. I[C] Howe, 1994, p. 535. II[B] Denman, 2002, p. 214. II[B] Denman, 2002, p. 213. I[C] Thatcher, 1993, p. 547. I[C] Howe, 1994, p. 535. II[B] Brittan, 2000, p. 31. II[B] Denman, 2002, pp. 248–49. I[C] Thatcher, 1993, p. 547.

264 Notes and References 251. 252. 253. 254. 255. 256. 257. 258. 259. 260. 261. 262. 263. 264. 265. 266. 267. 268. 269. 270. 271. 272. 273. 274. 275. 276. 277. 278.

II[B] Sbragia, 1992, p. 51. I[D] Thatcher, 2002, p. 374. I[C[Thatcher, 1993, p. 547. I[D] Thatcher, 2002, p. 375. II[B] Grant, 1994, p. 55. II[B] Grant, 1994, p. 269. I[C] Thatcher, 1993, pp. 558–59. II[B] Ross,1995, p. 28. II[B] Grant, 1994, p. 269. I[C] Thatcher, 1993, pp. 558–59. I[C] Howe, 1994, pp. 457–58; I[B] H.C. Deb., 23.4.1986, cols. 320–21; II[B] Nicoll, 1984, pp. 35–43. II[B] Cradock, 1997, pp. 127–28. II[B] Grant, 1994, p. 74. II[B] Cradock, 1997, pp. 128–33. I[C] Thatcher, 1993, p. 742. I[C] Thatcher, 1993, p. 746. I[C] Thatcher, 1993, pp. 744–45. The Economist, 24.9.1988, p. 16. I[C] Howe, 1994, p. 538. I[B] H.C. Deb., 30.10.1990, col. 873. I[C] Hurd, 2003, p. 417. II[B] Bell, 2005, p. 139. II[B] Cradock, 1997, p. 111. I[C] Thatcher, 1993, p. 813. II[B] Bell, 2005, p. 139. II[B] Bull, 1982–83, pp. 149–50. II[B] Grant, 1994, p. 185. I[C] Clark, 1993, p. 392.

9 The Unfinished Revolution 1. 2. 3. 4.

5. 6. 7. 8. 9. 10. 11. 12. 13.

I[D] Bruce-Gardyne, 1984, p. 1. The Sunday Telegraph, 10.1.1988. I[D] Bruce-Gardyne, 1984, pp. 4–5. I[D] Hall and Jacques, 1983, p. 10; I[C] Young, 1993, pp. 111, 233, 238, 526–27; I[C] Thatcher, 1993, pp. 150, 153; III[B] Davies, 2004, p. 78; III[A] Cm. 962, 1990, para. 424; I[C] Stuart, 1998, p. 188; I[C] Garnett and Aitken, 2003, p. 235. I[D] Fry, 1998, pp. 138–47 gives chapter and verse on why Thatcher and Powell could not be sensibly said to be populists. I[D] Oakeshott, 1962, p. 169. I[D] Oakeshott, 1962, p. 171. I[D] Oakeshott, 1962, pp. 172–73. The Spectator, 26.7.1986, p. 6 [B. Anderson]. I[D] Letwin, 1992, pp. 39–40. The Spectator, 9.8.1986, pp. 12–13. I[D] Letwin, 1992, p. 57. I[D] Kant, 1787, pp. 294–315, 332, 342–43, 422, 447. I[C] Nott, 2002, p. 183.

Notes and References 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35.

36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55.

265

I[D] Blake, 1985, p. 367. III[B] Hoskyns, 2000, p. 56. I[C] Patten, 2006, p. 71. III[B] Chamberlin, 1949, pp. 68–70. II[B] Henderson, 1994, p. 271. I[C] Patten, 2006, p. 71. I[C] Thatcher, 1993, p. 44. III[B] Augar, 2001, pp. xv, 4, 33–40, 109–10, 264–65, 308, 313. III[B] Smith, 1776, I, p. 429. I[B] H.C. Deb., 12.6.1979, col. 246. III[B] Adeney and Lloyd, 1986, p. 113. I[D] Bulpitt, 1986, pp. 19–39. II[B] H.C. 720, 1979–80, p. 61. I[C] Lawson, 1992, p. 67. The Economist, 16.8.1986, p. 14. I[D] Young and Sloman, 1986, p. 69. The Spectator, 25.1.1986, p. 6 [F. Mount]. III[B] Congdon, 1992, p. 158. As was suggested by The Economist, 23.3.1985, p. 16. I[D] Young and Sloman, 1986, p. 75–76. I[D] Marsh and Rhodes, 1992, p. 187. III[B] Allsop, Jenkinson, and Morris, 1991, pp. 68–80; III[B] Artis, 1991, pp. 128–37; III[B] Buxton, Chapman, and Temple, 1994; III[B] Crafts, 1991, pp. 81–98; III[B] Healey, 1989–90, pp. 18–23; III[B] Healey, 1993; III[B] Johnson, 1990; III[B] Layard and Nickell, 1989–90, pp. 6–9; III[B] Mathews and Stoney, 1989–90, pp. 10–16; III[B] Michie, 1992; III[B] Minford, 1991; III[B] Muellbauer, 1991, pp. 99–117; III[B] Oulton, 1990, pp. 71–91; III[B] Smith, 1987; III[B] Vane, 1992, pp. 26–43; III[B] Wallis and Whitley, 1991, pp. 118–27. The Economist, 23.6.1990, pp. 23–26. III[B] Crafts, 1998, p. 35. III[B] Crafts, 1998, p. 9. I[D] Curtis, III, 2000, p. 659. I[D] Curtis, II, 1999, p. 256. I[D] Curtis, II, 1999, p. 117. I[D] Curtis, III, 2000, p. 47. I[C] Thatcher, 1993, p. 11. I[D] Young and Sloman, 1986, p. 86. I[D] Curtis, III, 2000, p. 47. II[B] Denman, 2002, pp. 249, 268, 276. The Independent, 11.4.2006. I[C] Ridley, 1991, p. 267. The Listener, 11.12.1980, p. 774. I[C] Thatcher, 1993, p. 46. I[C] Thatcher, 1993, p. 48. I[D] Ranelagh, 1991, p. 306. I[C] Ridley, 1991, p. 267. I[D] Powell, 1977, p. 151. I[D] Donaldson, 1967, p. 15.

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278 Bibliography Cmnd. 9517 [1985] Reform of Social Security. Cmnd. 9518 [1985] Reform of Social Security. Programme for Change. Cmnd. 9524 [1985] Higher Education in the 1990s. Cmnd. 9550 [1985] Report of the [Leigh-Pemberton] Committee Set Up to Consider the System of Banking Supervision. Cmnd. 9691 [1985] Reform of Social Security. Programme for Action. Cmnd. 9695 [1985] Banking Supervision. Cmnd. 9710 [1986] Final Report of the [Popplewell] Committee of Inquiry into Crowd Safety and Control at Sports Grounds. Cmnd. 9714 [1986] Paying For Local Government. Cmnd. 9756 [1986] The Reform of Personal Taxation. Cm. 81 [1987] [Croham] Review of the University Grants Committee. Cm. 555 [1989] Working for Patients. Cm. 962 [1990] The Hillsborough Stadium Disaster. 15 April 1989. Inquiry by the Right Hon Lord Justice Taylor. Final Report. Lawlor, J., ‘Monthly Unemployment Statistics: Maintaining a Consistent Series’, Department of Employment Gazette, December 1990, pp. 601–8. Cromb, J., ‘Supply Side Performance in the 1980s’, Treasury Bulletin, Summer 1992, pp. 23–36. Hibberd, J., ‘Trends in Public Expenditure 1978–1979 to 1992–1993’, Treasury Bulletin, Summer 1993, pp. 20–32.

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Index Black Papers on education 127 block grant system 166–7 blocks of flats 114 Blunkett, D. 170 Blunt, A.D. 183 Bowe, C. 59 Boyson, R. 176–7 Bridges, Sir E. 140 Brighton bomb 23–4 British Airways 83 British Gas 98 British Leyland (BL) 82–3, 231 British Medical Association (BMA) 121 British Petroleum 95 British Telecom (BT) 97–8 Britoil 97 Brittan, L. 52, 58, 59, 61, 117, 216 Brocklebank-Fowler, C. 40–1 Brown, G. 9 Bruce-Gardyne, J. 21, 23, 222, 223 Bruges speech (1988) 219–20 Budgets 1979 77–9 1980 80–1 1981 84–8 1982 88–9 1983 89 1984 90–1 1985 91 1986 91, 92 1987 91–2 1989 93 Burke, E. 163 Bush, G. 211 Butler, Sir R. 44 Butler, R.A. 12–13, 14

abolitionism 10 academics 128–9, 130, 132 Adam Smith Institute 177 advisers 44–9 Afghanistan 206, 207 agencies, Next Steps 155–7 Alliance 20, 21, 24, 41 Alternative Economic Strategy 11, 34 Amery, L. 203 Amis, K. 45, 46, 235 Andropov, Y. 209 Anglo-Irish Agreement (1985) 203–6 Argentina 189–200 Armitage, Sir M. 193 Armstrong, Sir R. 44, 145–6, 146–7 Armstrong, Sir W. 236 Attlee, C. 5, 160, 232, 234 Audit Commission 121, 166 Bagehot, W.D. 5, 159 Baker, K. 65, 67, 68 Community Charge 175–6, 177, 178 education 127, 131–2, 134–6 Baldwin, S. 3–4, 4–5, 13, 17 Bancroft, Sir I. 138, 140, 144, 151, 152, 157, 158 Banham, J. 166 Barnett, J. 9 Boyle, Lord 109, 226 BBC 48 Beckett, Sir T. 83 Belgrano, General 144–5, 198, 199 Beloff, M. 45, 127–8, 183–4 Benn, T. 2, 19, 35, 102 deputy leadership contest 33–4 European Community 11–12, 33 influence on the Left 10, 32–3 Bernstein, E. 30 Bevan, A. 119 Beveridge, W. 38, 122–3 Bevin, E. 5, 234 Biffen, J. 53, 71, 76, 77, 79, 96 Birch, N. 38 Black Monday (October 1987) 93

Cabinets 49–62 after 1983 election 58 CPRS paper on private health insurance 117–18 early Thatcher Cabinets 49–53 Falklands War Cabinet 53–8 Westland Affair 58–62 285

286 Index Callaghan, J. 2, 3, 32, 33, 189, 235 Campaign for Labour Party Democracy 10–11 capital punishment 10, 223 Carlisle, M. 129 Carr, R. 16 Carrington, Lord 64, 185, 185–6 European Community 213, 215 Falklands War 191, 194; War Cabinet 54, 56 Rhodesia 186–8 Carter, J. 181, 182 Central Office of Information 156 Central Policy Review Staff (CPRS) 47–8 Centre Party (proposed) 39 Centre for Policy Studies 46, 47, 72 Chamberlain, J. 237 Chamberlain, N. 105 Channel Tunnel 232 Chapman efficiency reviews 153 Charles, E. 200 Cheysson, C. 218 Chief of Defence Staff 183 Child Support Act 1991 108 Child Support Agency 108 China 202–3 Christie, C. 139–40 Christie, L. 139–40 Church of England 107–8, 183 Churchill, W.S. 5, 12–13, 180, 203, 225, 234 City of London 83, 229–30 Civil and Public Services Association 139 Civil Service 137–58, 230, 236 Higher Civil Service as adversary 140–7 management revolution 147–54 numbers reduced 148, 157 radical reforms and Next Steps programme 154–8 size and distribution 138–9 Civil Service Commissioners 142 Civil Service Department (CSD) 147, 148, 151 Civil Service Pay Research Unit 148 Clare Booth Luce Award Dinner 180

Clark, A. 16, 21, 22, 23–4, 53, 54, 56, 59, 60, 62, 66, 67, 68, 69, 70, 83, 85, 118, 140, 194, 199–200, 221 Clarke, K. 116, 120, 213 Clegg Commission 77 Coalition Government 2–3 wartime 6 code of conduct for Civil Service 145–6 Cockfield, Lord 216 Cold War 206–11 Commonwealth 212 Community Charge (Poll Tax) 65–6, 167, 174–9, 235, 236 competitive tender 173 comprehensive schools 132–3 Confederation of British Industry (CBI) 83 Confederation of Health Service Employees 117 Congdon, T. 232 Conquest, R. 45, 46 Conservatism, Thatcherism and 224–37 Conservative Party 12–18 general election victories 19–27 Manifestos: 1974 162; 1979 19, 111; 1983 22, 170; 1987 The Next Moves Forward 25–6, 174 1922 Committee 54 consumerism 228 Cooper, Sir F. 140 core curriculum 135–6 core and periphery 155 Cornish tin mines 231 Council of Civil Service Unions (CCSU) 149–50 council estates 114 council housing, sale of 109, 110–12, 115 court, Thatcher’s 44–9 covert task force 189 Cradock, Sir P. 183, 202, 206, 210, 211–12, 214, 216, 219 adviser on foreign policy 44 Cripps, Sir S. 11 Crosby by-election 21 Crosland, A. 10, 12, 39, 110, 132 Crossman, R. 109 Customs and Excise 156 Cutler, H. 169

Index Dangerfield, G. 27 Davies, C. 38 Davies, H. 173 Defence, Ministry of 183 Dell, E. 2, 3, 11 Delors, J. 37, 216, 217, 220, 221 Single European Act 218, 219, 235 Deng Xiaoping 202 Denman, Sir R. 137, 142, 144, 216–17 Department of the Environment (DOE) 153 Department of Health and Social Security (DHSS) 109, 139 Derx, D. 144 detachment 140–1 Douglas-Home, Sir A. (Lord Home) 14, 15–16, 188, 203 Du Cann, E. 14, 15 Duchene, F. 221 Duff, Sir A. 183 Duguid, A. 47 E (DL) Committee 96 E (LF) Committee 175, 178 economic decline, relative 233 economic and monetary union (EMU) 219 economic policy 71–104, 226–34 attack on trade-union power 74, 99–104, 230 economic strategy 71–6 market economy 74, 76–94, 228–30 privatization 74, 94–9, 230 Economic Policy and the Standard of Living 8–9 Economic Reconstruction Group 74 Economic and Social Research Council 130 Economist, The 2, 61–2, 78–9, 81, 82, 88, 89, 90–1, 117, 122–3, 139–40, 172, 178–9 education 109, 127–36, 173 Education Act 1902 106, 185 Education Act 1944 106, 185 Education Reform Act 1988 132, 136 Edwardes, Sir M. 82, 83 Edwards, N. 175 Efficiency Unit 155–6 Eisenhower, D.D. 195

287

electoral college 32, 33 employee shares 96–7 Employment Act 1980 100–1 Employment Act 1982 101 Endurance, HMS 189, 192 Enterprise Zones 168 Enthoven, A. 118–19, 120, 121–2 Establishment 222 European Community 226 Britain’s contribution to 213–16 elections to European Parliament 65 Labour Party and 11–12, 37 Thatcher and 182, 211–21, 235 Evans, M. 34 exchange controls, abolition of 79–80 Exchange Rate Mechanism (ERM) 66–7, 70, 94, 219, 231, 235 Fabians 147 Faith in the City 107 Falkland Islands Company 190 Falklands War 21, 189–200, 236 War Cabinet 53–8 family 108 Family Allowances Act 1945 106 Fieldhouse, Admiral Sir J. 199 Financial Management Initiative (FMI) 153–4 financial stability 74 First Division Association (FDA) 142, 143 Fisher, N. 13, 14 Fisher, Sir W. 152, 157–8 FitzGerald, G. 204 Foot, M. 33, 34, 35, 55, 235 Football Spectators Act 1989 224 Foreign and Commonwealth Office (FCO) 182–3 foreign policy see national interest Fowler, N. 62, 109, 143 NHS 116, 117, 118 social security 106, 108, 122–3, 124, 125–7 France 88, 135, 137, 159, 163, 214–15 Franks Report 193 Friedman, M. 72–3, 230 Fulton Committee Report 147, 152 Galtieri, General L.F. 192–3, 198 Gang of Four 40, 42

288 Index gas pipeline, Siberian 208 General Belgrano 144–5, 198, 199 General Certificate of Secondary Education (GCSE) 134 general elections 1974 13–14 1979 19–20 1983 21–3, 35, 41 1987 24–7, 35, 42 General Strike 3–5 Germany 214–15, 221 reunification 221 West Germany 163 Giant’s Strength, A 99 Gillman, B.A. 149 Gilmour, Sir I. 17, 52, 87, 215 Giscard d’Estaing, V. 214 Gorbachev, M. 209–10, 211 Gould, J. 46 Government Communications Headquarters (GCHQ) 151 Gow, I. 62, 68, 205 grammar schools 109, 132, 133 Greater London Council (GLC) 161, 169–70, 170–1 Greene, H. Carleton 48 Grenada 200–1 Griffin, Sir F. 110 Griffiths, B. 132 Grimond, J. 38 Haig, A. 57, 58, 196 Hard Left 36 see also Militant Tendency Hattersley, R. 33, 35, 109 Hatton, D. 36, 172 Havers, Sir M. 55, 59, 112 Hayek, F.A. 72, 225 Hayward, R. 9 Healey, D. 32, 33, 39, 42, 77, 79, 95 Heath, E. 1–2, 3, 13–14, 14–15, 17, 146–7, 203 approach to policy 226 European Community 212, 213 refusal of post as ambassador to US 50 Thatcher’s challenge for leadership 16 Helsinki Accords 208 Henderson, A. 5

Henderson, Sir N. 57, 182, 183, 185, 196 Heseltine, M. 51, 109, 113 abolition of exchange controls 80 housing 111–12, 113, 115 and Jacklin 44 local government 164–5, 165–9 and management 152, 153 Ministry of Defence 142, 183–4 1990 leadership contest 69, 70 Ponting 145 Westland Affair 24, 58–62 Higher Civil Service 137, 138, 157 as adversary 140–7 Hillsborough Stadium disaster 224 Hobsbawm, E. 30 homelessness 114 Hong Kong 202–3 Hoskyns, Sir J. 46–7, 74, 85–6, 100, 140–2, 150, 227 housing 109, 110–15, 164–5, 173 Housing Act 1980 109, 112 Housing and Planning Act 1986 114 Howe, G. 45, 74, 117, 150, 168, 202, 205, 216, 220 Chancellor 71; Budgets 77–81, 84–6, 88–9, 230 E (DL) Committee 96 Foreign Secretary 58, 201 Luxembourg Compromise 218 Madrid ‘ambush’ 66 relationship with Thatcher 64, 65 resignation 67–8 Howell, D. 76–7, 88 Hurd, D. 63, 70, 99, 204–5, 221, 223 Ibbs, Sir R. 44, 155 income tax 78 Industrial Charter 12–13 inflation 72–3, 79, 89, 93–4 Ingham, B. 48–9, 59, 60, 65 Inland Revenue 156 Inner London Education Authority (ILEA) 161, 171 Institute of Directors 83 Institute of Economic Affairs (IEA) 72 interest rates 93–4 Intermediate Nuclear Forces (INF) Treaty 210 internal market 118–22

Index International Monetary Fund 232 1976 crisis 1–6 IRA 23–4 Iran Contra Affair 184 Iraq 211 Ireland 204–6 Irish Nationalists 27 Irving, C. 67

12, 72,

Jacklin, R. 44 Jay, D. 138 Jenkin, P. 97, 117, 175 Jenkins, D. 107 Jenkins, P. 12 Jenkins, R. 37, 38, 39, 208, 212 European Commission 213, 214–15 SDP 40, 41 Johnson, P. 45 Jones, J. 7, 9 Jones, P. 150 Joseph, Sir K. 15, 52, 71, 82–3, 97 education 127, 130–1, 132, 133–4, 136 Joubert, C. 153 journalism 48–9 Joynson-Hicks, Sir W. 4 Kaufman, G. 35 Kaunda, K. 187 Kemp, P. 156 Kendall, W.L. 139, 148, 149, 150 Keynes, J.M. 38–9 Keynesianism 6–7, 30, 31, 227 King, J. 83 King, T. 101, 167 Kinnock, N. 35–6, 60, 236 Kirkpatrick, J. 195–6 Kissinger, H. 196 Knight, F. 72 Kohl, H. 215, 221 Kolakowski, L. 39 Kuwait 211 Labour Party 6–12, 27–8 high-spending local councils 162–3, 169–71 Labour’s Programme 1973 11 Opposition 30–7 Laski, H. 6

289

Law, A. Bonar 4, 222 Lawson, N. 50, 63–4, 80, 84, 85, 118 Chancellor 58, 83, 89–90, 232; Budgets 76, 90–2 education 127, 129, 134–6 Energy Secretary 52 local government 163, 165, 177; Poll Tax 65–6, 174–6, 178 MTFS 81 Next Steps programme 156 NHS 115–16 privatization 94–5, 96–8, 99 social security 123, 124–5, 126 Leach, Sir H. 53, 198 leadership contests Conservative 15, 65, 68; Thatcher’s accession to leadership 15–18; Thatcher’s fall 69–70 Labour 33, 35 leaks 51–2, 59, 144–5 leaseback policy 191–2 Lebanon 200 Leeds 170 Leonov, N. 209 Letwin, S. 225 Levene, P. 142 Levin, B. 70 Lewin, Sir T. 55 Lib–Lab Pact (1977–8) 2 Liberal Democrats 42 Liberal Party 27–8 and their allies 37–42 1983 Election Manifesto 34–5 SDP–Liberal Alliance 20, 21, 24, 41 Libya 210–11 Liverpool 168–9, 172 Livingstone, K. 169–70, 170–1 Lloyd George, D. 4, 38, 222, 234 local government 159–79, 230, 236 battle with 164–73 Community Charge 65–6, 167, 174–9, 235, 236 expenditure 162–3, 164, 165–6 Local Government Act 1972 161–2 local income tax 167 local sales taxes 167 London 171 GLC 161, 169–70, 170–1 London County Council 160, 161

290 Index London Docklands Development Corporation 171 London Regional Transport 171 Love, S. 193 Lusaka Commonwealth Conference 187 Luxembourg Compromise 218 MacDonald, R. 3 MacGregor, Sir I. 102 Machel, S. 187 Macmillan, H. 5, 55, 110, 227 Main, A. 135 Major, J. 66–7, 70, 94, 178 management revolution 147–54 Mao Tse-Tung 202 market economy 74, 76–94, 228–30 Marshall, A. 30 Marxism 30–1 Mason, D. 177 McAlpine, A. 26 Medium Term Financial Strategy (MTFS) 81, 90, 231 Megaw Committee 150, 151 Mercury Communications 97 Merrison Royal Commission on the NHS 115 Meyer, Sir A. 65 Middleton, Sir P. 143 Miliband, R. 6 Militant Tendency 36, 163, 172 military satellites 198 Miners’ Federation of Great Britain (MFGB) 4–5 miners’ strikes 7 1984–5 24, 36, 102–3, 230, 236 missiles 197–8 Mitchell, A. 31–2 Mitterrand, F. 88, 215, 221 Monetarism 72–3, 230–1 money supply targets 77–8 Monnet, J. 212, 213 Moore, J. 118 Morrison, H. 9, 160–1 Morrison, P. 69 Mount, F. 48, 61, 86, 88, 92, 159, 162, 231–2 Mozambique 186 Mueller, A. 154–5 Mugabe, R. 186, 187, 188

Mulhearn, T. 172 Munich Agreement (1938) 212–13 Muzorewa, A. 186, 187, 188 Namibia 189 Napoleon 159 national curriculum 135, 136 National Governments (1930s) 3, 227 National Health Service (NHS) 109, 115–22, 160–1 national interest 180–221 Britain’s role in the world 181–2 Cold War 206–11 European Community see European Community legacies of Empire 185–206; Anglo-Irish Agreement 203–6; Falklands War 189–200; Grenada 200–1; Hong Kong 202–3; Rhodesia 185–9 relationship with USA 180–1, 184–5 National and Local Government Officers’ Association (NALGO) 161 National Union of Mineworkers (NUM) 102–3, 230 National Union of Public Employees 117 nationalization 160–1 NATO 181 Neave, A. 16, 19 newspapers 48–9 Newton, T. 108 Next Steps programme 154–8 NHS and Community Care Act 1990 121 Niehans, J. 85, 86 Nkomo, J. 186, 187–8 North Sea oil 79–80 Northern Ireland 28 Anglo-Irish Agreement 203–6 Nott, J. 51–2, 74, 77, 80, 87, 183, 226 Falklands War 53–4, 55, 56–7, 57–8, 192 Trade Secretary 72, 83–4 nuclear war 210 Nyerere, J. 187 Oakeshott, M. 224 Office of Telecommunications (Oftel) 97

Index Official Secrets Act 145, 146 oil prices 76–7 Oldfield, M. 189 Open University 131 Organization of African Unity (OAU) 186 Organization of Eastern Caribbean States (OECS) 200 Owen, D. 32, 39, 40, 41, 42, 189, 213 Parkinson, C. 53, 58, 83, 131, 199, 226 Falklands War 55, 57, 58, 199 Parliamentary Labour Party (PLP) 32 Parsons, Sir A. 44, 195 Parsons, T. 183 Part, Sir A. 141 party political system 27–30 Paternalism 185, 226–7 Patriotic Front (Rhodesia) 186, 187, 188 Patten, C. 17, 69, 178, 229, 232–3 pay, Civil Service 148–9, 150, 151, 152, 154 Paying for Local Government 176 pensions 125–6 Phillips, M. 9 Pile, Sir W. 140 Pincher, C. 146 Poland 208 Poll Tax (Community Charge) 65–6, 167, 174–9, 235, 236 polytechnics 129–30, 131 Ponting, C. 144–5 populism 223–4, 226 Powell, C. 44, 62, 65, 72, 73, 183, 211, 216 Powell, E. 10, 15, 183, 205–6, 206–7, 237 Priestley pay system 140, 148–9, 151 Prime Minister’s Policy Unit 46–7, 48 Prior, J. 13, 15, 16, 20, 24, 43, 84, 144, 151 Cabinet 50, 52; Civil Service strike 150 Employment Secretary 72, 100–1 reasonableness 72 private health insurance 117–18 Private Secretaries (10 Downing Street) 143 private rented housing 113, 115

291

private sector 141–2 privatization 74, 94–9, 230 productivity 73 Provisional IRA (PIRA) 203–4, 205 Public Sector Borrowing Requirement (PSBR) 81, 84–5 Pym, F. 52, 53, 55, 56–7, 58 rates 164, 167, 169–70, 173, 174, 177 capping 171–2 Rayner, Sir D. (later Lord) 44, 147, 152–3 Reagan, R. 181, 184–5, 196, 204, 236 Cold War 207–11 Falklands War 193, 195 Grenada invasion 200, 201 redistribution of wealth 169–70 Referendum on Europe 11–12, 212, 213 rent control 113 Research Assessment Exercise 130 residual welfare model 106 Resource Allocation Working Party 119 Restart scheme 125 Rhodesia 185–9 Ridley, N. 47, 48, 49, 50, 51, 52–3, 62, 64, 65, 236, 237 Community Charge 177–8 Falklands War 191–2 privatization 95, 98–9 Transport Secretary 58 Ridley Group 99–100 Rifkind, M. 177, 178 Right Approach to the Economy, The 73–4 ‘Right to Buy’ 109, 111–12, 115 Rio Tinto Zinc 231 riots 87, 168–9, 178–9 Robbins expansion of universities 128 Rodgers, W. 40, 41 Rooke, Sir D. 98 Roosevelt, F.D. 203 Royal College of Nursing 116–17 Royal Mint 156 Runcie, R. 199 Scanlon, H. 7, 8 Scargill, A. 7–8, 36, 102, 236 Schmidt, H. 208, 214 schools 132–6, 173

292 Index Schumpeter, J. 71 Scoon, Sir P. 200 Scotland 28–9, 178 Scott Inquiry 148 Scottish National Party 29 Scottish Office 29 security of tenure, for academics 128–9 Service Ministries 183 Sheffield 170 Shenfield, A. 138 Sherman, A. 46, 74 Shevardnadze, E. 209 shorthold tenure 113 Shultz, G. 196, 200, 201, 209, 210–11 Siberian gas pipeline 208 Silverman, S. 10 Single European Act 217–19, 235 Single Market 216–18 Sinn Fein/PIRA 203–4 Smith, A. 71, 174, 228 Smith, I. 186, 187, 188 Soames, C. (later Lord) 52, 150, 151, 188 social class 235 Social Contract 8–9 social democracy 39–40 Social Democratic Party (SDP) 20, 33, 40–1, 42 SDP–Liberal Alliance 20, 21, 24, 41 ‘social Europe’ 217–18 Social Fund 127 social policy see Welfare State Social Science Research Council (SSRC) 130 social security 106, 108–9, 122–7 socialism 6–12 Sokolovskiy, Marshal 210 Soskice, Sir F. 10 South Africa 186, 189 Soviet Union 195 Cold War 206–11 collapse of 221 Spectator, The 91, 145, 206 Speed, K. 183 Spiers, E. 209 Spycatcher (Wright) 146–7 St John Stevas, N. 17, 52, 76 Stanley, J. 112 State Earnings Related Pension Scheme (SERPS) 125–6

Stationery Office 156 Steel, D. 40, 41, 42 Stepping Stones 74, 100 Stock Exchange 83, 229 Strategic Defense Initiative (SDI or Star Wars) 209, 210 Strauss, N. 44, 46, 47, 74, 100, 151 Streamlining the Cities 170 strikes 99–100, 101–3 Civil Service 139, 149–51 General Strike 3–5 miners see miners’ strikes student grants 130–1 student loans 131–2 Suez Crisis 194, 195 ‘Suez syndrome’ 181–2 Sunningdale Agreement (1973) 205 Sweden 155 Switzerland 125–6 taxation 78–9, 85 Community Charge 65–6, 167, 174–9, 235, 236 and social security system 124–5 teachers 132, 134–5 Tebbit, N. 25, 26, 27, 52, 101, 109 technological universities 129–30 textile industry 83–4 Thatcher, M.H. 19–20, 26–7, 43–70 accession to Party leadership 15–18 arrival in Downing Street 43 attitude to the FCO 182–3 Bruges Speech 219–20 Cabinets see Cabinets Clare Booth Luce Award Dinner 180 court, favourites and advisers 44–9 decline and fall 63–70 ‘Iron Lady’ 182 ‘outsider’ in 10 Downing Street 222–4 society 107 Westland Affair 58–62 Thatcherism 224–37 Thomas, H. 45, 46 Thomas, J.H. 3 Thorneycroft, P. 87 Thursday Breakfast Group 76 Titmuss, R.M. 106 Tocqueville, A. de 72 Todd, J. 186

Index Trade Union Act 1984 101 trade unions 2, 3–6, 7–9, 17–18, 73 attack on power of 74, 99–104, 230 Civil Service 139–40, 148–51 local government 161 NHS 116–17 Social Contract 8–9 strikes see strikes teachers 134–5 Trades Union Congress (TUC) 149 Trafalgar Square riot 1990 178–9 Transport and General Workers’ Union (TGWU) 102 Triple Alliance 4 unemployment 75–6 unified grading 151–2 United Nations Security Council 195 United States (USA) 163, 182 Cold War 206–11 and Falklands War 195–8; military assistance 197–8, 199 invasion of Grenada 200–1 relationship with UK 180–1, 184–5 University Grants Committee (UGC) 128, 129 universities 127–32, 230 Urban, G. 46, 180, 207, 213–14 Urban Development Corporations (UDCs) 168 urban riots (1981) 87, 168–9 Utley, T.E. 225–6 Vaizey, J. 45 Value Added Tax (VAT) 78–9 Viola, General 191, 192 voucher system 136 Waldegrave, W. 175 Walden, G. 69, 206, 208 Wales 28 Walker, P. 231 Cabinet 50–1, 52 local government 161, 162 Minister of Agriculture 72 privatization 98 sale of council housing 110–11

293

Walls, P. 188 Walters, A. 44–5, 66, 74–5, 85, 86, 94 War Cabinet (Falklands War) 53–8 Wardale inquiry 144 Wass, Sir D. 145, 146 water privatization 98–9 Waterloo Bridge 160 Waugh, A. 172 Waugh, E. 237 Webb, B. 3 Weinberger, C. 196–7, 198, 200, 210, 236 Welch, C. 75 Welfare State 6–7, 105–36, 227, 233 education 109, 127–36, 173 housing 109, 110–15, 164–5, 173 NHS 109, 115–22, 160–1 social revolution 105–9 social security 106, 108–9, 122–7 Westland Affair 24, 58–62 Whitelaw, W. 14–15, 27, 58, 68–9, 100, 223 Thatcher Cabinets 49–50, 55, 194 Whitley system 139 Whitmore, Sir C. 143 Widows, Orphans and Old Age Contributory Pensions Act 1925 105 Williams, A. 194 Williams, S. 11, 39, 40, 41, 132 Wilson, H. 2–3, 186 Winter of Discontent 20, 43, 235 Winterton, N. 85 Wolfson, D. 44 Woodward, Admiral S. 197, 198 workfare 125 Working for Patients 120–1 Working Patterns 155 Wright, P. 146–7 Wyatt, W. 45, 68–9, 70, 234 Young, Lord 26, 49, 75, 125 Young, H. 24–5 Younger, G. 65, 167, 175 ZANU 188

Politics of the Thatcher Revolution: An Interpretation of British Politics 1975 - 1990

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Politics of the Thatcher Revolution: An Interpretation of British Politics 1975 - 1990

The Politics of Decline: An Interpretation of British Politics from the 1940s to the 1970s

Almanac of British Politics

The French Revolution and British Popular Politics

British Politics in the Age of Anne

British Politics for Dummies

Change in British Politics (West European Politics)

Transforming Mozambique: The Politics of Privatization, 1975-2000 (African Studies)

The Politics of BSE

The Elements of Politics

The Politics of Unemployment

The Politics of History

The Politics of Torture

The Politics of Misinformation

The Price of Politics

The Nature of Politics

The Psychology of Politics

The Politics of Life

The Politics of Constructionism

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