In such an atmosphere it was natural that the Labour Party would claim that the 1989 European elections were a ‘referendum’ on Thatcherism in general and the Bruges approach in particular. I might have accepted that the European elections were a sort of judgement on Bruges if we had had European candidates who were Brugesist rather than federalist. With a few notable exceptions that was not the case.
The overall strategy was simple. It was to bring Conservative voters – so many of whom were thoroughly disillusioned with the Community – out to vote. Perhaps it might have worked if the message had been got across with greater conviction and vigour by the candidates themselves and if we had been free of highly publicized attacks from Ted Heath and others. In fact, at the very last moment there was a late surge to the Green Party which undercut our vote. People had treated the European elections rather as they would a by-election, voting not to effect real changes in their lives but to make a protest against the sitting government. Labour were the beneficiaries and gained thirteen seats from us. For all the mitigating factors, I was not happy. The result would encourage all those who were out to undermine me and my approach to Europe.
This did not take long to occur. I have already described how Geoffrey Howe and Nigel Lawson tried to hustle me into setting a date for sterling’s entry into the ERM and how I avoided this at the Madrid Council in June 1989. In fact, the ERM was something of an irrelevance at Madrid. The two real issues were the handling of the Delors Report on EMU and the question of whether the Community should have its own Social Charter.
I was, of course, opposed root and branch to the whole approach of the Delors Report. But I was not in a position to prevent some kind of action being taken upon it. Consequently, I decided to stress three points. First, the Delors Report must not be the only basis for further work on EMU. Second, there must be nothing automatic about the process of moving towards EMU either as regards timing or content. In particular, we would not be bound now to what might be in Stage 2 or when it would be implemented. Third, there should be no decision now to go ahead with an Inter-Governmental Conference on the Report. A fall-back position would be that any such IGC must receive proper – and as lengthy as possible – preparation.
As regards the Social Charter, the issue was simpler. I considered it quite inappropriate for rules and regulations about working practices or welfare benefits to be set at Community level. The Social Charter was quite simply a socialist charter – devised by socialists in the Commission and favoured predominantly by socialist member states.
Most of the first day’s discussions in Madrid were taken up with EMU. Late in the afternoon we turned to the Single Market and the ‘social dimension’. I have already described how I used my first speech to spell out my conditions for entering the ERM. But I also backed Poul Schlüter who challenged paragraph 39 of the Delors Report, which essentially spelt out the ‘in for a penny, in for a pound approach’ which the federalists favoured. The other extreme was represented by France. President Mitterrand insisted on setting deadlines for an IGC and for completion of Stages 2 and 3, which at one point he suggested should be 31 December 1992.
The argument then turned to the Social Charter. I was sitting next to Sr Cavaco Silva, the rather sound Portuguese Prime Minister who would doubtless have been sounder still if his country was not so poor and the Germans quite so rich.
‘Don’t you see’, I said, ‘that the Social Charter is intended to stop Portugal attracting investment from Germany because of your lower wage costs? This is German protectionism. There will be directives based on it and your jobs will be lost.’ But he seemed unconvinced that the charter would be anything other than a general declaration. And perhaps he thought that if the Germans were prepared to pay enough in ‘cohesion’ money the deal would not be too bad. So I was alone in opposing the charter.
The European election results had no particular significance in themselves. But they had revealed a groundswell of discontent which could not be ignored. A minority of Conservative MPs were uneasy about the line I was taking on Europe. But more important was the fact that there was a widespread restlessness because avenues of promotion into the ranks of the Government seemed blocked. I too felt that changes were required. When a Prime Minister has been in power for ten years he or she must be that much more aware of the dangers of the Government as a whole appearing to be tired or stale. I decided to make some changes in the Cabinet to free up posts at every level and bring on some new faces.
I had also been thinking about my own future. I knew that I had a good few more years of active service left in me and I intended to see through to the end the restoration of our economic strength, the fulfilment of our radical social reforms and that remodelling of Europe on which I had embarked with the Bruges speech. I wanted to leave behind me when I went, perhaps halfway into the next Parliament, several candidates with proven character and experience from whom the choice of my successor could be made. For various reasons I did not believe that any of my own political generation were suitable. If one considers the possibilities – first among those who were of my own way of thinking: Norman Tebbit was now concentrating on looking after Margaret and on his business interests; Nick Ridley who never suffered fools gladly would not have been acceptable to Tory MPs; Cecil Parkinson had been damaged in the eyes of the old guard. Geoffrey Howe I shall come to shortly. Nigel Lawson had no interest in the job – and I had no interest in encouraging him. Michael Heseltine was not a team player and certainly not a team captain. Anyway, I saw no reason to hand over to anyone of roughly my age while I was fit and active. In the next generation, by contrast, there was a variety of possible candidates: John Major, Douglas Hurd, Ken Baker, Ken Clarke, Chris Patten and perhaps Norman Lamont and Michael Howard. I felt it was not for me to select my successor. But I did have the obligation to see that there were several proven candidates from whom to choose.
I was, however, wrong on one important matter. Of course, I understood that some of my Cabinet colleagues and other ministers were more to the left, some more to the right. But I believed that they had generally become convinced of the rightness of the basic principles as I had. Orthodox finance, low levels of regulation and taxation, a minimal bureaucracy, strong defence, a willingness to stand up for British interests wherever and whenever threatened – the arguments for them seemed to me to have been won. I now know that such arguments are never finally won.
A little earlier I left aside Geoffrey Howe from my discussion of possible leadership candidates. Something had happened to Geoffrey. His clarity of purpose and analysis had dimmed. I did not think he was any longer a possible leader. But worse than that, I could not have him as Foreign Secretary – at least while Nigel Lawson was Chancellor – after his behaviour on the eve of the Madrid Council. I was determined to move him aside for a younger man.
I decided that two ministers should leave the Cabinet altogether. Paul Channon was loyal and likeable. But Transport was becoming a very important department in which public presentation was at a premium – what with the appalling disasters which seemed to plague us at this time and in the light of the traffic congestion which Britain’s new prosperity brought with it. I asked Paul to leave and he did so with perfect good humour. I appointed Cecil Parkinson to his place. Deciding to ask John Moore to go was even more of a wrench. He was of my way of thinking. At Health it was he – rather than his successor Ken Clarke – who had really got the Health review under way. At Social Security, after I split the DHSS into two departments, he had been courageous and radical in his thinking about dependency and poverty. But John had never fully recovered, at least psychologically, from the debilitating illness he suffered while Secretary of State at the old combined DHSS. So I asked him to make way and appointed Tony Newton, a stolid, left-inclining figure but one with a good command of the House and of his brief. I also brought into the Cabinet Peter Brooke who had been a much-loved and utterly dependable Party Chairman. He wanted to be Ulster Secretary and I gav
e him the job, moving Tom King to the Defence Ministry, vacated by George Younger who wanted to leave the Government to concentrate on his business interests. George’s departure was a blow. I valued his common sense, trusted his judgement and relied on his loyalty. His career is proof of the fact that, contrary to myth, gentlemen still have a place in politics.
But there were three main changes which determined the shape of the reshuffle and the reception it received. In reverse order of importance: I moved Chris Patten to the Environment Department to succeed Nick Ridley, who went to the DTI (David Young left the Cabinet at his request and became Deputy Chairman of the Party); I moved Ken Baker to become Party Chairman from the Department of Education, where he was succeeded by John MacGregor. And John was succeeded by John Gummer who entered the Cabinet as Minister for Agriculture.
But first, and crucially, I called in Geoffrey Howe and said that I wanted him to leave the Foreign Office where I intended to put John Major. It was predictable that Geoffrey would be displeased. He had come to enjoy the trappings of his office and his two houses, in Carlton Gardens in London and Chevening in Kent. I offered him the Leadership of the House of Commons at a time when the House was shortly to be televised for the first time. It was a big job and I hoped he would recognize the fact. But he just looked rather sullen and said that he would have to talk to Elspeth first. This, of course, held up the whole process. I could see no other ministers until this matter was decided. Geoffrey also, I believe, saw David Waddington, the Chief Whip, who had advised me to keep Geoffrey in the Cabinet in some capacity. Back and forth to Downing Street messages passed in the course of which I offered Geoffrey the Home Office – knowing in advance that he would almost certainly not accept – then, after conferring with Nigel Lawson, Dorneywood, the Chancellor’s country house which I rightly thought that he would accept, and finally, with some reluctance and at his insistence, the title of Deputy Prime Minister which I had held in reserve as a final sweetener. This is a title with no constitutional significance but which Willie Whitelaw (until his stroke in December 1987 and subsequent resignation) had almost made his own because of his stature and seniority. But because Geoffrey had bargained for the job, it never conferred the status which he hoped. In practical terms it just meant that Geoffrey sat on my immediate left at Cabinet meetings – a position he may well have come to regret.
The delay in concluding the reshuffle was bound to prompt speculation. But it was, I am told, Geoffrey’s partisans who leaked the content of our discussions in a singularly inept attempt to damage me. As a result he received a very bad press about the houses, which he doubtless blamed on me.
John Major was not at first very keen on becoming Foreign Secretary. A modest man, aware of his inexperience, he would probably have preferred a less grand appointment. But I knew that if he was to have a hope of becoming Party Leader, it would be better if he had held one of the three great offices of state. I should add that I had not, contrary to much speculation, reached a firm decision that John was my preferred successor. I had simply concluded that he must be given wider public recognition and greater experience if he was to compete with the talented self-publicists who would be among his rivals. Unfortunately, because of Nigel Lawson’s resignation, he had no opportunity to show what he was made of at the Foreign Office before returning to the Treasury.
In moving Nick Ridley to the DTI I was generally seen to be responding to the criticisms of him by the environmental lobby. This was not so. I knew he wanted a change. I was, of course, quite aware of the fact that the romantics and cranks of the movement did not like it when he insisted on basing policy on science rather than prejudice. I also suspected that from Chris Patten they would get a more emollient approach. Certainly, I subsequently found myself repeatedly at odds with Chris, for with him presentation on environmental matters always seemed to be at the expense of substance. But I also wanted Nick in the second most important economic department because of the need to have his support on the key issues of industry and Europe.
Ken Baker’s appointment as Party Chairman was an attempt to improve the Government’s presentation. Ken – like Chris Patten – had started off on the left of the Party. But unlike Chris, Ken had genuinely moved to the centre. In any case his great skills were in publicity. And I never forgot that for every few Thatchers, Josephs and Ridleys you need at least one Ken Baker to concentrate on communicating the message. My appointment of Ken Baker to the chairmanship was a success. He served me with vigour and enthusiasm right to the end, however hot the political kitchen became. We had never been close political allies, so I was doubly indebted to him for this.
After Spain the European Community presidency passed to France. Partly in order to ensure that eastern Europe did not dominate the European Council scheduled for December at Strasbourg, President Mitterrand called a special Council in November in Paris specifically to discuss the consequences of events in the East and the fall of the Berlin Wall. He was also pressing hard for the creation of a European Bank of Reconstruction and Development (EBRD) in order to channel investment and assistance to the emerging democracies. I was sceptical about whether such an institution was really necessary. The case had not been made that aid of this dimension had to go through a European institution, as opposed to national or wider international ones. I conceded the point in Strasbourg; but my wishes were eventually met because the EBRD now sensibly involves the Americans and Japanese, not just the Europeans.
To some extent the French strategy of holding an ‘unofficial’ Paris Council on East-West relations worked because the Strasbourg Council concentrated – at least in its official sessions – heavily on the more narrowly European matters of EMU and the Social Charter. The French aim was to set a date for the IGC and this I still hoped to stave off. Until a few days before the start of the Council we were optimistic that the Germans would support us in calling for ‘further preparation’ before the IGC met. But in a classic demonstration of the way in which the Franco-German axis always seemed to re-form in time to dominate the proceedings, Chancellor Kohl went along with President Mitterrand’s wishes. By the time I arrived in Strasbourg I knew that I would be more or less on my own. I decided to be sweetly reasonable throughout, since there was no point in causing gratuitous offence when I could not secure what I really wanted. It was agreed that the IGC would meet under the Italian presidency before the end of 1990, but after the German elections. As for the Social Charter at which I had directed my fire at Madrid, I reaffirmed that I was not prepared to endorse the text, my determination having been if anything strengthened by the fact that the Commission was now proposing to bring forward no fewer than forty-three separate proposals, including seventeen legally binding directives, in the areas which the charter covered. That effectively ended the discussion of the charter from our point of view. On EMU I would return to the fray in Rome.
In the first half of 1990, however, there was the Irish presidency to contend with. The unwelcome habit of calling extra ‘informal’ Councils proved catching. Charles Haughey decided that another one was needed in order to consider events in eastern Europe and the implications for the Community of German unification. For others this was just an opportunity to keep up the federalist momentum.
‘Political union’ was now envisaged alongside ‘monetary union’. In a sense, of course, this was only logical. But behind the concept of ‘political union’ there lay a special Franco-German agenda. The French wanted to curb German power. To this end, they envisaged a stronger European Council with more majority voting: but they did not want to see the powers of the Commission or the European Parliament increased. The French were federalists on grounds of tactics rather than conviction. The Germans wanted ‘political union’ for different reasons and by different means. For them it was partly the price of achieving quick reunification with East Germany on their own terms and with all the benefits which would come from Community membership, partly a demonstration that the new Germany would not behave like
the old Germany from Bismarck to Hitler.
For my part I was opposed to political union of either kind. But the only way that I could hope to stop it was by getting away from the standard Community approach whereby a combination of high-flown statements of principle and various procedural devices prevented substantive discussion of what was at stake until it was too late. Within the Community I must aim to open up the divisions between the French and the Germans. At home I must point out in striking language just what ‘political union’ would and would not mean if it was taken at all seriously. Far too much of the Community’s history had consisted of including nebulous phrases in treaties and communiqués, then later clothing them with federal meaning which we had been assured they never possessed. Consequently, I decided that I would go to Dublin with a speech which would set out what political union was not and should never be.
There was no doubt about how determined the French and Germans were in their federalist intentions. Shortly before the Council met in Dublin at the end of April President Mitterrand and Chancellor Kohl issued a joint public statement calling for the Dublin Council to ‘initiate preparations for an Inter-Governmental Conference on political union’. They also called on the Community to ‘define and implement a common foreign and security policy’. President Mitterrand and Chancellor Kohl chose at about the same time to send a joint letter to the President of Lithuania urging temporary suspension of that country’s declaration of independence in order to ease the way for talks with Moscow. As I took some pleasure in pointing out in my subsequent speech at the Council, this was done without any consultation with the rest of the Community, let alone NATO – it demonstrated that the likelihood of a common ‘foreign and security policy’ was somewhat remote.
Margaret Thatcher: The Autobiography Page 86