by Andrew Marr
The Nottinghamshire miners turned out to be critical. Without them the power stations, even with the mix of nuclear and oil and the careful stockpiling, might have begun to run short and the government would have been in deep trouble. Using horses, baton charges and techniques learned from the street riots of the previous few years, the police defended the working miners with a determination which delighted the government and alarmed many others. A battle at Orgreave in South Yorkshire was particularly brutal. As the strike went on, macho policing was matched by violence from striking miners. Scargill could count on almost fanatical loyalty to the union in towns and villages across the land. Miners gave up their cars, sold their furniture, saw their children suffer and indeed lost materially all they had in the cause of solidarity. Food parcels arrived from other parts of Britain, from France and even from Russia. There was a gritty courage and selflessness in mining communities most of the rest of country could barely understand. The other side of the coin was a desperation to win which turned ugly. A taxi-driver taking a working miner to work in Wales was killed when a block of concrete was dropped on his car. There were murderous threats to ‘scabs’ and their families. When Norman Willis, the affable general secretary of the TUC spoke at one miners’ meeting, a noose was dangled above his head.
Violence relayed to the rest of the country on the nightly news, followed eventually by legal action on the part of Yorkshire miners complaining that they had been denied a ballot, put the NUM on the back foot. Scargill’s decision to take money from Libya found him slithering from any moral high ground he had once occupied, though some believe this was part of a Security Service ‘sting’ operation to discredit the NUM leadership. As with Galtieri, Thatcher was lucky in her enemies. Slowly, month by month, the strike began to crumble and miners began to trail back to work, first in tens and scores, then in their hundreds, then in their thousands. There were many crises on the way – a possible dock strike; a vote to strike by pit safety officers and overseers, which would have shut down the working pits too and was promptly bought off, and problems with local courts too overloaded to prosecute strikers. But by January 1985, ten months after they had first come out, strikers were returning to work at the rate of some 2,500 a week; by the end of February more than half the NUM’s membership was back at work. In some cases they marched back behind pipes and drums, weeping.
Scargill’s gamble had gone catastrophically wrong. He has been compared to a First World War general, a donkey leading lions to the slaughter. There is something in the comparison. The political force ranged against the miners in 1984 was entirely different from the ill-prepared, Heath administration they had defeated ten years earlier. A shrewder non-revolutionary leader would not have chosen that fight at that time or, having done so, would have found a compromise after the first months of the dispute. Today, there are a handful of thousand miners left of the 200,000 who went on strike. Scargill himself lingers on as an official of an international miners’ union because he has run out of miners to lead at home. He might once have dreamed the revolution would raise a statue to him. If anyone does, it should be the green lobby, in a spirit of irony. An industry whose origins went back to the Middle Ages and which made Britain a great industrial power, but which was always dangerous, dirty and polluting, lay down and died. For Conservatives, indeed for the majority of people, Scargill and his lieutenants were fighting parliamentary democracy and were an enemy which had to be defeated. But the miners of Kent, Derbyshire, Fife and Yorkshire, Wales and Lancashire were nobody’s enemy, just abnormally hard-working, traditional people worried about losing their jobs and overly loyal to their wild and incompetent leader.
90
Whirlybird Madness
It is a reasonably safe rule in politics that the big fights are about big issues. The great Westland Helicopter crisis that broke over the Thatcher government in the winter of 1984-5 was on the face of it a barmy thing for ministers to fight about. Should a European consortium of aerospace manufacturers or an American defence company, working with an Italian firm, be favoured to take over a struggling West Country helicopter maker? Who cared? This was a government that boasted about its refusal to micro-manage industry, yet the fight about the future of a Yeovil manufacturer cost two cabinet ministers their jobs and led at one point to Margaret Thatcher herself doubting whether she would last the day as Prime Minister. It pitted her against the only other member of her government with real glamour – and as big a shock of hair as hers – and it dominated political life for months. It produced the only walk-out resignation from a cabinet meeting in modern times, indeed since 1903, and the only spontaneous one ever. So what was it all about?
The small storm of Westland gave early notice of the weaknesses that would eventually destroy the Thatcher government, though not for another five years. One was the divide throughout the Tory Party about Britain’s place in the world. Helicopters were by the mid-eighties no longer a marginal defence issue. For projecting Western power in countries as far afield as Somalia, Bosnia and Iraq, they would be crucial – the new army mule hauling cannon over mountains, the new floating gunship. Supply an army’s helicopters and you have a big hold over that country. United Technologies, the American company whose Sikorsky subsidiary built the Black Hawk helicopter, wanted control over part of Britain’s defence industry. Alexander Haig, the US Secretary of State who had been so helpful during the Falklands War, was now back with his old company, and ‘called in his markers’ for the American bid. The Prime Minister, adopting a position of outward neutrality, would probably have favoured it anyway as further strengthening of the British-American alliance. But on the other side, supporting the European consortium of companies, were those who felt that the EU had to be able to stand alone in defence technology. Michael Heseltine and his business allies thought this was vital to preserve jobs and the cutting-edge science base. The United States must not be able to dictate prices and terms to Europe. So this was about where Britain stood: first with the US, or first with the EU? It was a question which would grow steadily in importance through the eighties until, in the nineties, it tore the Conservative Party apart.
The second issue thrown up by Westland mattered almost as much. It was the Thatcher style of government, which was more presidential and disdainful of her cabinet than that of any previous Prime Minister. We have already seen how she despatched the ‘wets’ who challenged her on economic policy. She would rage against, mock and browbeat ministers who were on her side too. Sir Geoffrey Howe in particular had a miserable time from her tongue-lashings. The satirical television puppet show Spitting Image began to dress their Thatcher figurine in trousers and summed up the popular perception in a sketch showing her lunching with her ministers. She orders her beef. Asked by the waiter, ‘What about the vegetables?’ her puppet snarls, ‘They’ll have the same.’ Rather more seriously in the real world, she was conducting more and more business in small committees or bilaterally, with one minister at a time, ensuring her near-absolute dominance. A small clique of advisers assumed more significance than the ministers with their grand offices and titles. Later, just before her fall, Nigel Lawson would conclude that she was taking her personal economic adviser Sir Alan Walters more seriously than she was taking him, her Chancellor of the Exchequer. Throughout it all, she was using her beloved press officer Bernard Ingham to cut down to size any ministers she had taken against, using the then-anonymous lobby system for Westminster journalists to spread the message.
In her memoirs she portrays Heseltine as a vain, ambitious and unprincipled man who flouted cabinet responsibility. The Westland crisis, in her view, was simply about his psychological flaws. Ingham, in his memoirs, angrily defends himself against improper briefing. Yet there are too many other witnesses who found the Thatcher style more like a Renaissance court than a traditional cabinet, a place which demanded absolute loyalty and was infested with favourites. It would destroy her, as it would cripple New Labour, this way of ruling. But in the mid-ei
ghties it was a new phenomenon and to ministers on the receiving end, freshly humiliating. And if there was one minister unlikely to take such treatment for long, it was Michael Heseltine. He was the only serious rival as darling of the party and media star in the glory days of Thatcherism. Handsome, glamorous, rich and an excellent public speaker, he was popularly known as ‘Tarzan’. The story was told about him by his fellow Tory MP, friend and biographer Julian Critchley, that at Oxford he had mapped out his future career on the back of an envelope, running through the need to make a fortune, marry well, enter Parliament and then, ‘1990s, Prime Minister’. Though Heseltine said he could not remember doing this it was in character. As a young man he had flung himself into the characteristic sixties businesses of property investment and magazine publishing, coming close to bankruptcy before handing his worldly goods to his bank manager and slowly turning his companies round. A passionate anti-socialist, he had won a reputation for hot-headedness since once picking up the Mace, symbol of parliamentary authority, and waving it at the Labour benches during a Commons row about steel nationalization. His speeches to Tory Party conferences were music-hall extravaganzas, full of blond hair-tossing, hilarious invective and fist-thwacks-palm drama. So macho that he was almost camp, he was known for the swoop on Merseyside already described and for dressing up in army gear while taking on the female CND protesters of Greenham Common. As an experienced businessman with a relish for vehement anti-Labour rhetoric he was hardly a typical ‘wet’, and indeed agreed with Thatcher about much. But he was a more committed anti-racialist than her and deeply in favour of the EU; she always regarded him as a serious and dangerous rival. The two biggest beasts of the Tory Party in the eighties had been eyeing each other and quietly sharpening their claws under the cabinet table well before Westland.
They went to war on behalf of the two rival bidders for Westland. She was livid that he was using his considerable leverage as Defence Secretary to warn the company’s shareholders about the dangers of going with the Americans, potentially shutting out European business. She thought he was tipping the scales against Sikorsky, despite Westland’s preference for them. Certainly, Heseltine repeatedly made it clear the Ministry of Defence would not be buying their Black Hawk helicopter and did much to rally the European consortium. Thatcher, meanwhile, was deploying the public line that she was only interested in what was best for the shareholders while trying to make sure the Americans were kept in the race, ahead of the Europeans. Eventually she sought advice from the government law officers about whether Heseltine had been behaving properly. A private reply, meant to weaken his case, was leaked. Furious at this wholly improper act which he suspected was the responsibility of Thatcher and Ingham, Heseltine demanded a full inquiry. During a meeting of cabinet she counter-attacked, trying to rein him in by ordering that all future statements on Westland must be cleared first by Number Ten. Hearing this attempt to gag him, Heseltine calmly got up from the cabinet table, announced that he must leave the government, walked by himself into the street and told a startled solitary reporter that he had just resigned.
The question of exactly who had leaked the Attorney General’s legal advice in a misleadingly selective way to scupper Heseltine and the European bid then became critical. The leaking of the private advice broke the rules of Whitehall confidentiality, fairness and collective government. The instrument of the leak was a comparatively junior civil servant, the Trade Secretary Leon Brittan’s head of communications, Colette Bowe. But who had told her to do this? Many assumed it was her boss, the Number Ten press chief Bernard Ingham. He denied it. He had known she was going to leak the advice and had not ordered her to stop, which he later said he bitterly regretted. But the initiative, he said, had not come from him or Mrs Thatcher. For her part she said she had not known and would not have approved the leaking of the letter had she been asked. None of this matters, except that it nearly finished off the Lady in her prime. After dramatic Commons exchanges during which she seemed vulnerable to the charge of lying to the House, she pulled through. It was Brittan who went for a comparatively trivial mis-statement about another confidential letter – a scapegoat, said the Opposition, which had singularly failed to get the glossy scalp they had hoped for.
After the political row there was a dirty and in some ways even more dramatic struggle for control of the company conducted in hotels and City boardrooms. Some of Thatcher’s greatest business supporters such as Rupert Murdoch weighed in on the side of the American-led bid. Eventually amid accusations of arm-twisting and dirty tricks the Europeans were defeated and the company went to Sikorsky. The storm subsided. But it had revealed the costs of the new Thatcher style. Getting your way at all costs with foreign dictators and militant union leaders was one thing. Behaving similarly with senior politicians in your own party was another. Heseltine later wrote: ‘I saw many good people broken by the Downing Street machine. I had observed the techniques of character assassination: the drip, drip, of carefully planted, unattributable stories that were fed into the public domain, as colleagues became marked as somehow “semi-detached” or “not one of us”.’ The great strength of Thatcher’s way of governing was the way her self-certainty gave her administration and the country a surging sense of direction. Its weakness was it cut out so many others, ignored advice and humiliated anyone not seen as an uncritical supporter.
91
Very Big Bang
The City, with its huge bonuses and salaries, freshly sprouted glass towers, banks and merchants from across the world, is so familiar it can be taken for granted, as naturally British as the Jurassic coast. Yet in the fifties there would be no good reason for an observer to believe that the sleepy world of the London Stock Exchange, the venerable merchant banks and the rest would become a global success story, while British car-making, for instance, with its splendid variety of models and its famous names, would wither to nothing. The great days of the City had been a lifetime earlier in the heady financial markets before the First World War when sterling was a dominant world currency, loans and bonds sluiced freely round the world, and Britain was a great creditor nation. After the Second World War the pound was under almost constant pressure, the dollar was king, postwar exchange controls hobbled any chance of big overseas deals and Britain was a big global debtor.
The wizened traditions of Money remained – the obscure hierarchies, the bowler hats, the rigid division between brokers and jobbers, the long lunches and coal fires, and the exotic titles of firms that had risen in the days of Queen Victoria, engraved on nameplates between the bombed-out squares. But the City was no longer buccaneering. In the age of Macmillan and Wilson its grandees were forced to concentrate on humble domestic business and the modest trade of the unwinding empire, occasionally pootling along to their masters at the Bank of England to lobby for a loosening of regulations, fruitlessly. Magazines and films still exploited the image of the crisp young banker with a furled brolly and bowler hat. But, in truth, the Square Mile was becoming part of heritage Britain, its declining firms like the cashless Palladian houses of Oxfordshire, in which grumpy men with famous names stamped their feet against the cold and mentally apologized to grandpapa. Perhaps it was inevitable? Historically, financial clout had run alongside commercial and political power. A weak Britain meant a weak pound and a weak City. In the forties, fifties and sixties, the golden age of the great US dollar, it was as obvious that New York would replace the Square Mile, as it was equally obvious that the US fleet would take over from the Royal Navy.
That it did not happen was the result of paranoia and bad judgement far away from London, exploited by bright British financiers. At the height of the Cold War, Moscow and her satrapies declined to let wicked capitalist New York look after their dollars. These dollars ended up instead in (apparently less wicked) London and were used from 1957 by a few far-seeing British banks to finance overseas trade in the capital-hungry post-war world. If you are not allowed to fund the world with home-grown pounds, why not do it wit
h other people’s dollars? The boss of the Bank of London and South America, Sir George Bolton, was heard in clubs and boardrooms loudly asking why London, with her expertise, should not jump into a new age of world capitalism? London’s second opening came thanks to New York itself. Since the war, American bankers had been enjoying the easy pickings from loans to other countries and overseas investors. They were lazily uninterested in the secondary market in such loans. By the early sixties, the ballooning US balance of payments deficit turned the mood in Washington against loans to overseas customers in general. In 1963 President Kennedy worsened Wall Street’s position dramatically with a new tax on Americans buying foreign stocks from foreigners. With New York cut off from a surging new international business, London moved in.
The first such ‘Eurodollar’ loans were negotiated in 1963 between the British merchant banks Warburgs and Samuel Montagu on the one hand, and an Italian state-owned steelmaker and the Belgian government on the other. To avoid British regulations and taxes, deals were done in Holland’s Schiphol airport and Luxembourg. Warburgs dodged and hopped around endless obstacles until at the end they found there was no one to print the new bonds to the high pre-war standards demanded by the London Stock Exchange. At the last moment the playing card manufacturers De La Rue found two very old Czech engravers who were brought out of retirement to do the job. Dollar loans by Hambros for hydroelectric schemes in Norway and by a group of merchant banks for the Austrian government quickly followed. Then a spate of loans for the Japanese…and a new world suddenly opened up for the beaten-up old City of London. Pipelines across the Alps, American oil refineries and exploratory ventures, Japanese office buildings, early computer factories, all would be financed from London, just as in the days of Edwardian finance. As overseas bankers realized what was happening, they began to converge on London for some of the action. European banks were already present, but the big four finance houses in Tokyo opened London offices and so too did the big names on Wall Street. Citibank, Chase Manhattan, Merrill Lynch and Nomura were all there, taking traditional British business as well as trading in the Eurodollar markets. The influence of the Eurodollar and Eurobond market on the culture of the City and by extension British business life generally can hardly be overstated. From the early sixties, it was internationalizing and shaking up London, introducing more aggression, fatter salaries and less of the old school tie. Harold Wilson might complain about sinister international financiers. The traditionalists of the Stock Exchange and the older banks might hint at sharp practice and unsavoury deals. But the Euro-market thrived and grew, shrugging off the crash of 1974 and the Arab boycott of Jewish businesses alike. Just a whiff of the can-do, devil-may-care Wild West spirit was suddenly felt again in the streets of old London.