by Andy McSmith
These events were against the background of changes in the Labour Party. The promise to pull Britain out of the EU had disappeared from party policy documents midway through the decade, and Labour was repositioning itself to be more pro-EU than the Conservatives. John Smith, the shadow chancellor, had only one act of indiscipline on his long parliamentary record when, in 1972, he was one of the group of Labour MPs that had included Roy Jenkins and David Owen who broke the whip to vote in favour of Britain joining the EU, or Common Market as it was then called. His deputy, Gordon Brown, was also committed to ERM membership; so was Neil Kinnock, after being persuaded of the case for membership by his economic adviser, John Eatwell. When Eatwell and Kinnock’s former press secretary, Patricia Hewitt, set up a new think tank, the Institute for Public Policy Research (IPPR), in July 1989, its first publication was a paper by the Goldman Sachs economist, Gavyn Davies, a future chairman of the BBC. He argued that sterling should join the ERM without delay. There was one important dissenter in the shadow cabinet – Bryan Gould, the shadow trade and industry secretary. He headed the committee in charge of revising the party’s economic policy, which was presented to Labour’s annual conference and formally adopted as party policy on 4 October 1989. It announced, baldly: ‘We oppose moves towards a European Monetary Union’ and that ‘substantial changes would be required before the next Labour government could take sterling into the Exchange Rate Mechanism’.23
Within three weeks, what had been party policy, was party policy no more. John Smith and Gordon Brown went on a tour of three European capitals, which convinced them that the plans for a single currency were serious. They were in mid-air, between capitals, when they read an article written by Thatcher’s adviser Alan Walters months earlier and reprinted in the Financial Times on 18 October, which described the EMS as ‘half-baked’, and they guessed how irritating that must be for Nigel Lawson. On 24 October, there was a Commons debate on the economy, called by Labour, which Smith used to announce casually that Labour was committed to joining the ERM under the right conditions. Challenged by Tory MPs to say when this had become party policy, Smith blithely acted as if it always had been.24 Gould, who was out of the loop, had taken to the airwaves to defend what he thought was party policy, only to learn that party spin were quietly advising journalists that he had got it wrong. In November, he was shifted to the less sensitive job of shadow environment secretary and replaced by Gordon Brown, whose position as one of the half-dozen most influential figures in the party was thus publicly confirmed.
That was by the by, however. Smith’s and Brown’s immediate aim was to bait Lawson: ‘I advise the Chancellor to make an early decision on the important question of whether he will jump or be pushed,’25 said Smith. Later, Brown chimed in to assure Lawson that he was not paranoid because ‘they really are out to get him’. Television cameras had just been introduced to the Commons for the first time and caught Lawson’s scowl as Labour MPs jeered: ‘Go on – smile!’
That was Tuesday. On Thursday, Lawson told the prime minister that it was impossible for them to work together while Alan Walters remained in place as her adviser, and he resigned. Interviewed the following day, Mrs Thatcher seemed unable to comprehend why he should have done such a thing. ‘To me, the Chancellor’s position was unassailable. I always support him,’26 she said.
The more interesting question now, though, was whether or not Margaret Thatcher’s position was ‘unassailable’. Under Conservative Party rules, it was remarkably easy for anyone to challenge the incumbent leader. Only two nominations from fellow MPs were required, and their names were not made public. However, the opportunity came round only once a year, at the start of the new parliamentary term in November. A number of pro-EU Tory MPs thought that November 1989 provided an opportunity to remove Thatcher. The obvious challenger was Michael Heseltine, who had flounced out of the cabinet in 1986 over the Westland affair, a seemingly obscure row ostensibly about the future of a small firm that manufactured helicopters. The argument, which ended two cabinet careers, one permanently, was given edge because the dispute over Britain’s future in Europe lay at its heart. Heseltine, who was then defence secretary, wanted the ailing Westland company to be taken over by a European consortium to ensure that Europe had the independent capacity to produce military helicopters. Thatcher preferred the bid from the US company, Sikorsky. After a titanic personality clash, Heseltine resigned. Leon Brittan, the trade secretary, also had to go, for authorizing the leak of a confidential document to undermine Heseltine. Ever since, Heseltine had been a formidable presence on the backbenches, with an undisguised ambition to be prime minister. But he was not interested in implicating himself in a bid to remove Thatcher unless he could be sure of success.
The conspirators then turned to the former cabinet minister, Ian Gilmour, but he also did not want to impale himself in a contest he was sure to lose. At this point, a little-noticed MP named Sir Anthony Meyer stepped forward. Meyer was an old Etonian, a former diplomat, and a man whose pro-Europeanism meant that he had never been considered for a government post. His decision to challenge Thatcher ended his parliamentary career, when his constituency party sacked him. It also prompted the tabloids to uncover his long affair with a black blues singer, which came as no surprise to his forgiving wife. Despite these handicaps, he drew 33 votes to Thatcher’s 314. Though the figures looked decisive, George Younger, a former cabinet minister who had been part of Thatcher’s campaign team, warned her that it was a sign of discontent within the party.27
The most sensible conclusion that Thatcher could have drawn from this warning, as it related to personnel management, was not to risk offending Sir Geoffrey Howe any further. He was the person most likely to follow Lawson out of the cabinet and was a much respected figure on the Conservative backbenches. In the early 1980s, he had done more than anyone, apart from Thatcher herself, to put Thatcherism into effect. By summer 1990, he was the only member of the original 1979 cabinet still there, again apart from Thatcher. Unfortunately, she could not resist humiliating him. During the Conservative Party conference, Patrick Nicholls, the transport minister in charge of lecturing the public on the dangers of drinking and driving, had been stopped by the police, drunk at the wheel, and had to resign. Mrs Thatcher was very distressed to learn that Nicholls would not receive redundancy to compensate him for having to live off an MP’s salary instead of the higher pay and perks of a government minister, because the appropriate legislation had not yet been passed. She also discovered that the House of Lords had very little legislation to debate. All this she blamed on Geoffrey Howe, to whom she delivered a dressing down in front of the rest of the cabinet, one of whom described the scene later: ‘It was as if she was hitting him round the head: boom, boom, boom. And he just sat there, soaking it all up.’28
As mentioned in Chapter 1, the most famous comment ever made about Howe was Denis Healey’s observation that being attacked by him was like ‘being savaged by a dead sheep’. Possibly, Thatcher calculated that the sheep had no bite. Besides, he seemed to have no further cause for complaint over the main issue that had divided them when, in October 1990, she allowed her new chancellor, John Major, and her new foreign secretary, Douglas Hurd, to persuade her to join the ERM – a decision that would bring catastrophe to the Conservative government two years later.
Thatcher spent the last weekend of October 1990 at an EU summit in Rome, where she clashed with European Commissioner Jacques Delors over his blueprint for EU integration. On her return, she delivered a report to the Commons, where Neil Kinnock accused her of setting the rest of Europe against her and dividing the Conservative Party. This set Thatcher off. Delors, she said, ‘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!’29 Some minutes earlier, Kinnock had suggested that since there appeared to be an underhand campaign by her acolytes to denigrate Geoffrey Howe she should say some
thing in his defence. She answered dismissively that Howe was ‘too big a man’ to need a ‘little man’ such as Kinnock to speak for him.30 Howe listened to all this and decided that he could take no more. Two days later, on 1 November, he resigned.
That resignation was damaging enough for Thatcher in itself, but there was worse the next week. Howe was entitled by parliamentary convention to make a resignation statement, to which MPs had to listen in silence, without interrupting. He did so on 13 November, speaking in the usual sheepish mumble, so that Thatcher had to press her ear against the speaker on the back of her seat to hear him. The content belied the delivery. He delivered a long, articulate argument for better relations with Europe; he blamed the high rate of inflation, which would soon tip the UK into recession, on Thatcher’s obstructiveness over the ERM; and ended with the devastating exhortation: ‘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.’31
This was in that brief period of the year when the rules allowed a leadership contest; Howe’s words were a direct invitation to someone to have a go. That obvious someone was Michael Heseltine, who emerged from his Belgravia home the following morning to announce that he was a candidate. There followed one of the most frenetic weeks in recent parliamentary history as the corridors, tea rooms and lobbies became full to bursting with Conservative MPs plotting, taking sides and trying to find out what was going on. Having easily seen off the previous year’s challenger by ignoring him, Thatcher seemed to think that the same tactic would work again. The commentator Alan Watkins wrote: ‘It is difficult to know whether Margaret Thatcher and her advisers realized they had a fight on their hands. The answer is probably that they did realize this, but misjudged its seriousness.’32 Another mystery is who, if anyone, actually ran her campaign. It was an inconvenient time for George Younger, who was busy as chairman of the Royal Bank of Scotland; other experienced whips refused to be implicated, and it seems that the job devolved to a minor player named Sir Peter Morrison, who grossly overestimated her support. She, meanwhile, thought that it would show her up in a good light if she was away from London, acting the world leader, while Heseltine was grubbing in the Commons, looking for votes. She was in Paris on 20 November, when news reached her that though she had beaten Heseltine 204-152, the margin was not enough, under the rules, to prevent a second ballot. She immediately bounced down the steps of the Paris embassy, pushed aside the BBC correspondent John Sergeant, who was broadcasting live, and announced that she would fight on.
The proclamation created serious problems for her cabinet ministers, who saw her authority slipping away and feared that unless a new candidate such as Hurd or Major entered the contest, Heseltine would win. That evening, when she was back in London, John Wakeham, the chief whip, shrewdly arranged for her senior ministers to see her one at a time in her office behind the Speaker’s Chair. First in was Kenneth Clarke. ‘His manner was robust in the brutalist style he has cultivated: the candid friend,’33 Thatcher recalled. He promised her his vote if she went ahead, but advised her to pull out to avoid humiliation. That advice was repeated, in varying forms, by the majority of those who trooped in behind him. Others, meanwhile, led by Norman Tebbit and Michael Portillo, were organizing a campaign to persuade her to hang on. She thought about it overnight, and resigned in the morning, 22 November 1990. It had taken exactly three weeks from Geoffrey Howe’s resignation, and eight days from his resignation speech, to bring her down.
The next week was taken up with choosing her successor in a contest between Heseltine, Hurd and Major. John Major was the youngest, least experienced and least impressive of the three. He had served for a few months as foreign secretary, during which he had put in a mediocre performance at a Commonwealth Summit; then had followed Lawson as chancellor, in which capacity his main achievement was to get the UK into the ERM. On the crucial day when Thatcher was deciding whether to run or not to run, he was shut away in his Huntingdon home recovering from an operation on his wisdom teeth. During the week’s campaigning, he somehow gave the impression that he was the least pro-European of the three candidates and the one least likely to abolish the poll tax. Once elected, he gave Heseltine the job of abolishing the poll tax and proved to be more pro-EU than those who had voted for him realized. Shortly before his election, Mrs Thatcher told a private meeting of party staff who had gathered to bid her goodbye that she would be ‘a very good back seat driver’34 but it did not take her long to discover that her back-seat advice was neither sought nor wanted. All that was left was the long years of inactivity, nursing her sense of betrayal and thinking bitterly about ‘the candid friend Ken Clarke, the candid minister Malcolm Rifkind, the candid loyal friends all with the same message.’ What hurt most of all, she added, warming to the theme of personal betrayal, ‘was that this was treachery – while I had been away, signing a treaty for my country, for the end of the cold war! It was treachery with a smile on its face. Perhaps that was the worst thing of all.’35
She was not alone in thinking that she had been betrayed. The brutal manner of her dispatch served its purpose in the short term in that it delivered another Conservative general election victory, but after that the memory lingered like a festering wound that took more than a decade to heal. Yet there was a sense in which she need not have felt betrayed. Early on, she had declared that her mission was to ‘roll back the frontiers of socialism’, which she had, and after her departure they stayed rolled back even during more than a dozen years of a Labour government. Thatcher had beaten the Left . If she had been less addicted to being in power, if all that she had cared about was whether or not her set of ideological values survived, she could have settled into a contented old age.
She was not defeated because of anything in which she positively believed, but because of something in which she did not believe, best encapsulated in her famous statement that ‘there is no such thing as society’. Interviewed for a women’s magazine in the euphoria after her third election victory, she decried what she saw as the modern self-indulgence of expecting the government, or society, to do what people could do for themselves:
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 help look after our neighbour and life is a reciprocal business.36
And in case she had not made the point clear, she repeated: ‘There is no such thing as society. There is 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.’
This vision that there was nothing between the nuclear family and the vagaries of the capitalist system may have held no terrors for a woman brought up in conditions of economic security and who had married into money, but for most people, it was a frightening prospect. She was too blunt in telling people that in order to maximize economic efficiency, it was necessary to destroy many of the social ties that kept people in interdependency. After ten years of upheaval and bewildering change, the British decided that they would rather there was such a thing as society, and turned to less driven, more conciliatory leaders who did not alarm them with that kind of talk.
EPILOGUE
One of the highest grossing Hollywood films of the 1980s was Back to the Future, featuring the mad scientist Doc Brown and his time-travelling DeLorean car. Had someone obtained this marvellous machine in Britain in 1980 and set the controls for 1990, they would have emerged in a land profoundly different from the one they left behind, though it might on superficial examination have seemed to be much the same. The sights would be reasonably similar. Most of the landmarks, traffic jams, crowds, shopping centres and run-down suburbs were much as before, unless the visitor happened to emerge in one of the reg
enerated areas where relics of an industrial past had been torn down and replaced with smart new buildings, such as on the south bank of the Thames around Tower Bridge, in the old Liverpool docklands or on the north bank of the Tyne in Newcastle. They would learn that the Queen was still on the throne, the Conservatives still running the government, and they might even hear the familiar word ‘recession’ crop up in conversation. The British economy began and ended the decade in recession.
What had changed beyond recognition was not the physical landscape but the material circumstances in which people lived and the way they viewed the world. Money, society and politics had changed their meaning. It was a wealthier, more mobile society – except for those who were shut out of the world of work, whose numbers were higher than in 1980. The old saying ‘never a borrower or a lender be’ had fallen into disuse. It was considered downright perverse not to borrow from the banks or the building societies, who were free and willing to lend with an abandon that would have been out of the question ten years earlier. People did not need to go to the bank on Friday to ensure they had enough cash for the weekend. Cash was obtainable night and day in any reasonably sized town, and anyway most businesses accepted credit cards. By the end of 1989, Britain’s consumers owed a grand total of £304 billion, of which about £255 billion was tied up in mortgages and about £7.6 billion was owed on credit cards and store cards.1 Ten years earlier, total debt on everything except first mortgages and bank overdrafts came to about £5 billion; credit card debt was probably only about £750 million.2
As the 1990s dawned, people were more aware of their rights as citizens and consumers, and less deferential of authority, but they were less likely to be involved in any kind of political activity. They were more mobile, particularly if they were young professionals. The idea of staying with one employer throughout a person’s working life, paying compulsorily into the firm’s pension fund, to be presented with a gold watch and chain on retirement, was as dated as the gramophone. Ambitious people switched jobs or switched from employment to self-employment and back, taking with them their newly acquired portable pensions. The proportion of the nation’s income derived from self-employment had doubled during the 1980s.3 Overall, income from wages and salaries accounted for only 62 per cent of household income in 1990, compared with about 75 per cent in 1968. For two sections of the population, money earned through work of any kind was an insignificant portion of their income: those at the bottom, who lived off social security, and those at the top, where their real money came from investments. That was one symptom of the glaring disparity in wealth that was a legacy of the Thatcher years. Another was the continuing ‘north-south divide’. In 1990, the average family in south-east England spent £251 a week; whereas the equivalent for Yorkshire and Humberside was £189.