Margaret Thatcher: The Autobiography

by Margaret Thatcher

  Foreign visits allowed me to meet, talk to and seek to influence heads of government on their own ground. These visits gave me insights into the way those I dealt with in the clinical atmosphere of great international conferences actually lived and felt.

  In the Far East, the dominant long-term questions concerned the future role and development of a political and military super-power, the People’s Republic of China, and an economic super-power, Japan; for Britain, it was the future of Hong Kong which had to take precedence over everything else.

  In the Middle East, it was the Iran-Iraq War, with its undercurrent of destabilizing Muslim fundamentalism, which cost most lives and threatened most economic harm. But I always felt that the Arab-Israeli dispute was of even more abiding importance. For it was this which time and again prevented the emergence – at least until the Gulf War – of a solid bloc of more or less self-confident pro-western Arab states, no longer having to look over their shoulders at what their critics would make of the plight of the landless Palestinians.

  Finally, in Africa – where, as in the Middle East, Britain was not just another player in the great game, but a country with historic links and a distinct, if not always favourable, image – it was the future of South Africa which dominated all discussion. For reasons which will become clear, no one had a better opportunity – or a more thankless task – than I did in resolving an issue which had poisoned the West’s relations with black Africa, left isolated the most advanced economic power in that continent and been used, incidentally, to justify more hypocrisy and hyperbole than I heard on any other subject.

  China

  My visit to China in September 1982 and my talks with Zhao Ziyang and Deng Xiaoping had had three beneficial effects. First, confidence in Hong Kong about the future had been restored. Second, I now had a very clear idea of what the Chinese would and would not accept. Third, we had a form of words which both we and the Chinese could use about the future of Hong Kong which would provide a basis for continuing discussion between us. But there was a real risk that each of these gains would be transitory. And – what I found most worrying – the Chinese proved very reluctant to get on with the talks which I had envisaged when I left Peking.

  On the morning of Friday 28 January 1983 I held a meeting with ministers, officials and the Governor of Hong Kong to review the position. We had learnt that in June the Chinese were proposing unilaterally to announce their own plan for Hong Kong’s future. We were all agreed that we must try to prevent this happening. I proposed that in the absence of progress in the talks we should now develop the democratic structure in Hong Kong as though it were our aim to achieve independence or self-government, as we had done with Singapore. This would involve building up a more Chinese government and administration in Hong Kong, with the Chinese members increasingly taking their own decisions and with Britain in an increasingly subordinate position. We might also consider using referenda as an accepted institution there. Since then legislative elections have demonstrated a strong appetite for democracy among the Hong Kong Chinese, to which the Government has had to respond. At that time, however, nobody else seemed much attracted by my ideas, but I could not just leave things as they were, so in March 1983 I sent a private letter to Zhao Ziyang which broke the deadlock and got Anglo-Chinese talks off the ground again. In Peking I had told Mr Deng that I would be prepared to consider making recommendations to Parliament about Hong Kong’s sovereignty if suitable arrangements could be made to preserve its stability and prosperity. I now subtly strengthened the formulation:

  Provided that agreement could be reached between the British and Chinese Government on administrative arrangements for Hong Kong which would guarantee the future prosperity and stability of Hong Kong, and would be acceptable to the British Parliament and to the people of Hong Kong as well as to the Chinese Government, I would be prepared to recommend to Parliament that sovereignty over the whole of Hong Kong should revert to China. [my italics]

  Geoffrey Howe and the Foreign Office argued strongly that I should concede early in the talks that British administration would not continue. I saw no reason to make such a concession. I wanted to use every bargaining card we had to maximum effect. Just how few such cards there were, however, quickly became apparent.

  There were three rounds of talks over the summer and when we took stock of the situation at a meeting on Monday 5 September it was clear that the talks would break down when they resumed on 22 September unless we conceded administration as well as sovereignty to the Chinese. One particular problem was that the timing of the talks was publicly known and it had become the practice at the end of each session to announce the date of the next. If the Chinese decided to hold up progress or break off altogether it would immediately become apparent and damage would be done to confidence in Hong Kong.

  This is indeed what happened after the 22–23 September talks. Intensified Chinese propaganda and anxiety at the absence of any reassuring element in the official communiqué caused a massive capital flight out of the Hong Kong dollar and a sharp fall in its value on the foreign exchanges.

  Early on Sunday morning, 25 September, I received a telephone call from Alan Walters, who was then in Washington and had been unable to track down either Nigel Lawson or the Governor of the Bank of England. Alan was convinced that the only way to prevent a complete collapse of the currency and all the serious political consequences that entailed was to restore the currency board system – backing the Hong Kong dollar at a par value with the United States dollar. Although I was largely convinced and accepted the urgent need for action, I still had some concerns – mainly whether our exchange reserves would be put at risk. But I informed the Treasury of what I considered was a dangerous crisis that needed immediate defusing, and they got in touch with Nigel and the Governor of the Bank. The following Tuesday I met Nigel, the Governor and Alan at the Washington embassy. Although Nigel was at first reluctant and the Governor had reservations, they eventually agreed with me that a restoration of the currency board was the only solution. As always this news soon leaked out to financial markets, confidence was restored and the crisis of the Hong Kong dollar was over.

  On 14 October I sent a message to Zhao Ziyang expressing our willingness to explore Chinese ideas for the future of Hong Kong and holding out the possibility of a settlement on those lines. I had by now reluctantly decided that we would have to concede not just sovereignty but administration to the Chinese. On 19 October the talks were accordingly resumed and in November I authorized that working papers on the legal system, financial system and external economic relations of Hong Kong be handed over to the Chinese. But their position hardened. They now made it clear that they were not prepared to sign a treaty with us at all but rather to declare ‘policy objectives’ for Hong Kong themselves. By now I had abandoned any hope of turning Hong Kong into a self-governing territory. The overriding objective had to be to avoid a breakdown in the negotiations, so I authorized our ambassador in Peking to spell out more clearly the implications of my 14 October letter: that we envisaged no link of authority or accountability between Britain and Hong Kong after 1997. But I felt depressed.

  The single most difficult issue which we now faced in negotiations with the Chinese was the location of the ‘Joint Liaison Group’ which would be established after the planned Anglo-Chinese Agreement had been signed to make provision for the transition. I was worried that during the transition this body would become an alternative power centre to the Governor or, worse, that it would create the impression of some kind of Anglo-Chinese ‘Condominium’ which would have destroyed confidence. But I also insisted that it should continue for three years after 1997 so as to maintain confidence after the handover of administration had taken place. Geoffrey Howe had visited Peking in April and now returned in July. He successfully reached a compromise on the Joint Liaison Group, which would not operate in Hong Kong before 1988.

  The terms had three main advantages. First, they constituted what would be an
unequivocally binding international agreement. Second, they were sufficiently clear and detailed about what would happen in Hong Kong after 1997 to command the confidence of the people of Hong Kong. Third, there was a provision that the terms of the proposed Anglo-Chinese Agreement would be stipulated in the Basic Law to be passed by the Chinese People’s Congress: this would in effect be the constitution of Hong Kong after 1997.

  My visit to China in December to sign the Joint Agreement on Hong Kong was a much less tense occasion than my visit two years earlier, but the crucial meeting was with Deng Xiaoping. The most important immediate guarantee of Hong Kong’s future was Mr Deng’s goodwill. I told him that the ‘stroke of genius’ in the negotiations had been his concept of ‘one country, two systems’. He, with becoming modesty, attributed the credit for this to Marxist historical dialectics, or to use what appeared to be the appropriate slogan, ‘seeking truth from the facts’.

  The Chinese had set out in the agreement a fifty-year period after 1997 for its duration. I was intrigued by this and asked why fifty years. Mr Deng said that China hoped to approach the economic level of advanced countries by the end of that time. If China wanted to develop herself, she had to be open to the outside world for the whole of that period. The maintenance of Hong Kong’s stability and prosperity accorded with China’s interest in modernizing its economy. This did not mean that in fifty years China would be a capitalist country. Far from it. The one billion Chinese on the mainland would pursue socialism firmly. If Taiwan and Hong Kong practised capitalism that would not affect the socialist orientation of the bulk of the country. Indeed, the practice of capitalism in some small areas would benefit socialism. (Since then, it has become clear that Chinese socialism is whatever the Chinese Government does; and what it has been doing amounts to a thoroughgoing embrace of capitalism. In economic policy, at least, Mr Deng has indeed sought truth from facts.)

  I found his analysis basically reassuring, if not persuasive. It was reassuring because it suggested that the Chinese would for their own self-interest seek to keep Hong Kong prosperous. It was unpersuasive for quite different reasons. The Chinese belief that the benefits of a liberal economic system can be had without a liberal political system seems to me false in the long term. The crackdown after the Tiananmen Square massacre in June 1989 convinced many outside observers that in China political and economic liberty were not interdependent. Certainly, after those terrible events we reassessed what needed to be done to secure Hong Kong’s future. I was reinforced in my determination to honour Britain’s obligations to those on whom British administration and Hong Kong’s prosperity depended up to 1997. In any case, I always felt Britain would benefit economically from talented, entrepreneurial Hong Kong people coming here.

  So in 1990 we legislated to give British citizenship to 50,000 key people in the Colony and their dependants – though the essential purpose of the scheme was to provide sufficient reassurance to persuade them to stay at their posts in Hong Kong where they were vitally needed. We were also brought under strong pressure immediately to accelerate the process of democratization in Hong Kong. But all my instincts told me that this was the wrong time. The Chinese leadership was feeling acutely apprehensive. Such a step at that moment could have provoked a strong defensive reaction that might have undermined the Hong Kong Agreement. We needed to wait for calmer times before considering moves towards democratization within the scope of the agreement.

  At some point the increasing momentum of economic change in China will lead to political change. Keeping open the channels of trade and communication, while firmly pressing for human rights in China to be upheld, are the best means of ensuring that this great military power, on the verge of becoming a great economic power, becomes also a reliable and predictable member of the international community.

  The Middle East

  Little progress was made during my time as Prime Minister in solving the Arab-Israeli dispute. It is important, though, to be clear about what such a ‘solution’ can and cannot be. The likelihood of a total change of heart among those concerned is minimal. Nor will outside influences ever be entirely removed from the region. The United States, which was the power most responsible for the establishment of the state of Israel, will and must always stand behind Israel’s security. It is equally right that the Palestinians should be restored in their land and dignity: and, as often happens in my experience, what is morally right eventually turns out to be politically expedient. Removing the Palestinian grievance is a necessary condition for cutting the cancer of Middle East terrorism out by the roots. The only way this can happen is for Israel to exchange ‘land for peace’, returning occupied territories to the Palestinians in exchange for credible undertakings to respect Israel’s security. During my time as Prime Minister all initiatives eventually foundered on the fact that the two sides ultimately saw no need to adjust their stance. But that did not mean that we could simply sit back and let events take their course.

  In September 1985 I visited the two key moderate Arab states, Egypt and Jordan. President Mubarak of Egypt had continued to pursue, though with greater circumspection, the policies of his assassinated predecessor, Anwar Sadat. King Hussein of Jordan had put forward a proposal for an international peace conference, as a prelude to which US Ambassador Murphy was to meet a joint Jordanian-Palestinian delegation. The Egyptians were keen to see the Jordanian initiative succeed. But the sticking point was which Palestinian representatives would be acceptable to the Americans, who would have nothing directly to do with the PLO. President Mubarak felt that the Americans were not being sufficiently positive. I had some sympathy for this point of view, though I restated what I said was a cardinal principle for the US, as for Britain, that we would not agree to talks with those who practised terrorism. I felt that President Mubarak and I understood one another. He was a large personality, persuasive and direct – the sort of man who could be one of the key players in a settlement.

  We arrived on the evening of Wednesday 18 September in Amman. I already knew King Hussein well and liked him. Like President Mubarak, but more so, King Hussein was vexed with the Americans, believing that, having encouraged him to take a peace initiative, they were now drawing back under domestic Jewish pressure. I understood what he felt. He had been taking a real risk in trying to promote his initiative and I thought he deserved more support. I wanted to do what I could to help. So when the King told me that two leading PLO supporters would be prepared publicly to renounce terrorism and accept UNSCR 242 I said that if they would do this, I would meet them in London. I announced this at my press conference. It would have been the first meeting between a British minister and representatives of the PLO. When they arrived in London, I checked to see if they were still prepared to adhere to these conditions. One did. But the other could not: he was afraid for his life. So I could not see them. I am glad to say that King Hussein supported me in that decision. But it demonstrated how treacherous these waters were.

  Before leaving Jordan I was taken out to see a Palestinian refugee camp. Denis used to say to me that these camps always tore his heart out. This was no exception. It was clean, well organized, orderly – and utterly hopeless. It was in effect run by the PLO who had, of course, a vested interest in making such camps a permanent recruiting ground for their revolutionary struggle. The most talented and educated Palestinians would not remain long there, preferring to join the Palestinian diaspora all over the Arab world.

  I had been to Israel several times before I became Prime Minister; and each time I visited what for the world’s three great religions is ‘the Holy Land’ it made an indelible impression. Anyone who has been to Jerusalem will understand why General Allenby, on taking the city from the Turks, dismounted to enter it on foot, as a mark of respect.

  I have enormous admiration for the Jewish people, inside or outside Israel. There have always been Jewish members of my staff and indeed my Cabinet. In fact I just wanted a Cabinet of clever, energetic people – and frequently
that turned out to be the same thing. My old constituency of Finchley has a large Jewish population. In the thirty-three years I represented it I never had a Jew come in poverty and desperation to one of my constituency surgeries. They had always been looked after by their own community.

  I believe in what are often referred to as ‘Judaeo-Christian’ values: indeed, my whole political philosophy is based on them. But I have always been wary of falling into the trap of equating in some way the Jewish and Christian faiths. I do not, as a Christian, believe that the Old Testament – the history of the Law – can be fully understood without the New Testament – the history of Mercy. But I often wished that Christian leaders would take a leaf out of the teaching of Britain’s wonderful former Chief Rabbi, Immanuel Jakobovits, and indeed that Christians themselves would take closer note of the Jewish emphasis on self-help and acceptance of personal responsibility. On top of all that, the political and economic construction of Israel against huge odds and bitter adversaries is one of the heroic sagas of our age. They really made ‘the desert bloom’. I only wished that Israeli emphasis on the human rights of the Russian refuseniks was matched by proper appreciation of the plight of landless and stateless Palestinians.