The Murdoch Archipelago

by Bruce Page

  It was hard for the Thatcher Cabinet to meet Melbourne’s requirement because, in Lord Howe’s words, it dwelt in a ‘leak-driven world’ there is of course a similar account from James Prior cited in Chapter 8. Howe had served in Edward Heath’s Tory administration, and says leaks were then so rare that he recalls no example. The Heath Cabinet could spend a day on economic scenarios ‘– some of them deeply gloomy without seeing them splashed all over the newspapers. Margaret Thatcher and her colleagues were never able to do the same.’ Howe believes that the fish-tank condition of the administration did heavy damage, still unrepaired, to basic democratic processes – to open thinking within the government, and between government and people. Rational discussion, in his argument, requires participants who know what audience they are speaking to, and need not fear the use of selective confidentiality for its tactical effect. ‘A truly plural democratic society cannot hope to survive without a renewal of confidence and trust between government and media.’

  Lord Howe’s point is obviously serious. But our story suggests that the harm he sees was caused by an extreme over-confidence – within part of the government and a dominant part of the media. ‘Trust’ may not be the right second term, but ‘mutual dependence’ might do – making a good fit, also, for the link between News Ltd and the honchos of the ALP in the previous decade. Relationships in the boundary layer dividing journalism and politics have been subject to plenty of argument, and a good case can be made that in twentiethcentury Britain they were generally too close, trespassing on the separateness which adult growth requires. And explanations can be guessed at – such as the mid-century wartime consensus.

  But for the Thatcher team the boundary had no significance wherever drawn. Their world’s only division was between Us, a votive band, and Them, an inertial mass. Temperamentally Mrs Thatcher was far away from Lord Melbourne’s remark that he did not know whether people’s good or bad intentions did the greater harm. Certainty reigned. ‘The “Thatcher Revolution” is working: there is still much to be done, but it is happening,’ wrote an exhilarated admirer. The language was representative, as was the fact that it came from a knighted longservice bureaucrat for the revolutionary jacquerie were largely unelected officials and advisers. Fewer and fewer, as the 1980s progressed, were ministers of genuine standing in the Prime Minister’s own party, and the administration developed as an autocracy, with deadly internal strains – Westland being a decisive station on the way.

  The Thatcher government comes into this story as the largest material cause in the rise of Newscorp. I attempt no general assessment of it, beyond suggesting that much of its record might have been written by another Tory government – or by Mrs Thatcher’s, served and organised otherwise – and certainly not all of it was wrong. During its time, for instance, other revolutionists offered themselves, such as the miners’ leader Arthur Scargill, who proposed an insurrection to be followed by nationalisation of the news media. The present writer is grateful that Mrs Thatcher defeated him, and, while others might have done as much, the credit is hers.

  Lord Howe suggests that sometimes the Prime Minister was served too loyally and too well by unelected supporters. He means officials. But it is still more true of her media allies. The Sun liked to say of the 1979 election, ‘IT’S THE SUN WOT WON IT’. Psephologists quibble. But the creation of a constitutional crisis over the fate of the small helicopter firm Westland might well be headlined ‘IT’S THE SUN WOT DUN IT’.

  Explaining the interaction of the Thatcher and Murdoch enterprises during the later months of 1985 and the first weeks of 1986 requires a time-sliced narrative. But the essential is that the Prime Minister became involved in a mortal duel with her Secretary of State for Defence – one she neither expected not desired – just after Murdoch set in motion his plan for disposing of his London workforce and shattering their union leaders. He was committed irrevocably before he realised that the Prime Minister might not be there to assure his victory – which accounts for his remark to Woodrow Wyatt cited at the head of this chapter.

  It is a fair bet that for most of 1985 Murdoch was far too busy financing Fox to think much about United Technologies, where he was a non-executive director. United’s subsidiary Pratt and Whitney is one of the Big Three aero-engine makers, and via Ansett (the airline investment he had tried to use to gain Channel 10 Melbourne) Murdoch carried weight in antipodean aviation. But a lesser part of United Technologies, Sikorsky Aircraft, builders of the Black Hawk and other famous helicopters, decided in 1985 to pay £30 million for its small, bankrupt British competitor Westland Aircraft. This sum (£55 million today) was welcome to Sir John Cuckney, a City proconsul installed as chairman to rescue something for Westland’s bankers. Admiral Sir Ray Lygo, chairman of British Aerospace (BAe), thought it was a lot for a sackful of liabilities, and suspected that Sikorsky must intend penetrating the European defence market.

  His calculation reveals why a minor deal had high explosive potential: Westland stock’s value, if any, was a function of European defence-procurement politics. Sikorsky, sagaciously, hired the best bomb-disposal talent: GJW Ltd, pioneers of Westminster commercial lobbying, plus Gordon Reece, chief author (after herself) of Mrs Thatcher’s image. Reece (he was about to become Sir Gordon) had coached her through the arduous process of lowering her public speech from soprano to contralto, and in doing so became a personal friend. How could Sikorsky lose?

  On 21 September 1985 – just after Rupert Murdoch became a US citizen, just before plans for the new Fox network were announced – the British Defence Secretary, Michael Heseltine, met Bill Paul of Sikorsky and ‘the scales fell from his eyes’. Heseltine concluded that the Sikorsky deal, though nice for the banks, did nothing for Westland’s shareholders, and nothing for the British taxpayer, who had put large sums into Westland, only to provide a European launch-pad for Sikorsky. He thought alternatives should at least be canvassed, and made doing so his responsibility.

  Heseltine was then at the height of his powers, which have not often been equalled. As a self-made multi-millionaire his free-market credentials were beyond challenge, but he was at the same time zealous for government action any time markets seemed to go astray. He was a natural enthusiast, in which he resembled many True Believers – but, unlike them, he was a natural moderate philosophically. The combination was unsettling. Indelibly he was Them, not Us. He was just then enjoying the glow of achievement, having helped complete the deal for the multi-national Eurofighter (it is now in service), and he thought a similar consortium might buy Westland and expand it to build a forthcoming military helicopter, the EH101.

  Expertly blending reason, pressure and chutzpah, Heseltine brought the National Armament Directors (NADs) of Britain, France, Germany and Italy to London on 29 November. They roughed out a procurement policy for the EH101: a very suitable supplier could be Westland, reorganised by BAe, MesserschmittBolkow-Blöhm of Germany and the Italian helicopter specialists Agusta. Sikorsky of course could compete. (And Bruce Springsteen could apply to conduct the Berliner Philharmoniker.) The achievement much impressed Cabinet colleagues – not only Geoffrey Howe and Nigel Lawson, but Thatcherite trusties like John Biffen and Norman Tebbit. It was an unwelcome surprise for the Prime Minister, but not yet a crisis.

  Tension meanwhile racked up on the Wapping front. In October The Times’ lead story had been union agreement to discuss manning arrangements for work at the new but still-idle plant. Officially, this had been equipped to produce a new paper called the London Post. Murdoch put up a tough set of demands at November’s end, which the unions rejected on 9 December with suggestions of their own and requests for a new meeting. Murdoch told them they had no ‘Godgiven right’ to work at Wapping, and made it clear that he could run the plant with members of the Electricians Union. (This connection had been made in great secrecy by Woodrow Wyatt earlier in the year.)

  A basic point about the Westland row is that there was little in the underlying merits. The helicopter would be – h
as been – built anyway. ‘Anti-European’ and ‘anti-American’ epithets were tossed about, though with slight justice: the aerospace industry is heavily American, but European interests then as now persist, and transatlantic co-operation is routine. (This time FIAT of Italy allied its helicopter division to Sikorsky.) Certainly the swift construction of the consortium was a fine example of Heseltine’s organisational creativity, and it delighted Westland’s institutional shareholders: counter-bidding might restore value to an equity long despaired of. Cuckney, on the other hand, had done patient work which would go to waste should the consortium drive Sikorsky off and then vanish, leaving his banks (who had no equity upside) unpaid. The real argument concerned the rules of Cabinet government and media lobbying. And the limits of Prime Ministerial power.

  Initial exchanges were quite mild. On 16 December The Times stated, in the oracular lobby style, that reports of Cabinet support for Heseltine ‘are wrong … Ministers believe the European offer … is a hollow one.’ This meant that Ingham had told The Times it was hollow. The leader-writers of the Financial Times, supported by the Daily Telegraph, thought it solid enough to pursue.

  It was a curious situation. The power to decide between Sikorsky and the consortium lay with the Westland shareholders – just a stock-market judgment, in theory. In fact the relative value of the bids depended on the sentiment of the British Cabinet: not quite whether it liked, but whether it would go along with, or fail to stop, the NADs-EH101 scheme – now acquiring Euro-interest – and anyway to what effect. The shareholders had to evaluate the lobby’s output, market-sensitivity added to the political.

  Obviously the Prime Minister was hostile and this put some truth into Ingham’s claim of declining support. The Cabinet rank and file quite liked the NADs idea, but hated the risk of Cabinet civil war. In early-December discussion the Prime Minister laid down that the correct, collective policy could only be silence and strict neutrality. Nothing should be said to encourage or discourage Sikorsky or the consortium. It was an argument impossible to oppose: all variorum views must remain Officially Secret.

  Informally, unattributably and, on his own exposition of the law, illegally, Bernard Ingham then briefed the lobby that Heseltine was isolated, that the consortium was Euro-moonshine and Sikorsky the hands-down winner. Though unattributable, it was utterly transparent. Woodrow Wyatt – pitching in for Sikorsky via his Times column – found himself talking to Lord Prior, now an exminister with a watching brief on defence as one of Arnold Weinstock’s directors. Prior and Weinstock saw trouble ahead for the Prime Minister, and Wyatt was plaintive.

  Wyatt: Why should it affect her? Her position is absolutely neutral leaving it for the board and the shareholders to decide.

  Prior: She should tell Bernard Ingham. That’s not the press stories he’s putting out …

  Ingham’s dominance of the lobby – gift of the Murdoch papers – was a weapon of tempting power, but dangerously visible in use. And its target was a master of close Whitehall combat, now seriously enraged. Heseltine believed that Thatcher’s officials were bending the rules to keep Westland off the Cabinet agenda (the claim was and is disputed, but the minutes he produces are hard to dismiss).

  Ingham’s briefings were not enough to counter all the shareholder fears Sikorsky had to deal with: would Westland under US control become ‘nonEuropean’, and ineligible for bonanzas like the EH101? On 30 December Westland addressed this issue in a letter to the Prime Minister what was the government’s view? Cuckney was nervous of the response, but Gordon Reece, Mrs Thatcher’s good friend (indeed her Christmas guest five days previously), assisted in the drafting. Murdoch had just announced that as union talks had ‘broken down’ he was bringing Wapping to ‘operational readiness’.

  A collective reassurance for Westland was tricky. Downing Street’s first effort said Sikorsky ownership would make no difference provided Westland kept its UK domicile. Heseltine consulted the Solicitor-General, Sir Patrick Mayhew, the Cabinet’s acting legal conscience with the Attorney-General away. Were Number 10 going too far: was this ‘material inaccuracy’? The phrase has a dark, fraudulent flavour, but Mayhew thought yes. There must be qualifications: Westland could lose some Euro-business. The Prime Minister conceded, but then qualified the qualification: the government would ‘resist to the best of its ability’ any such Euro-discrimination.

  Heseltine had to leave it there. But when the next day’s selective briefings gave Westland a simple all-clear, he decided the gloves were off and got the consortium side to write some patsy questions to him. To these he replied on his own responsibility that there were ‘indications available to HMG from both the other governments and the companies concerned that a Westland link with Sikorsky/Fiat would be incompatible with participation by that company on behalf of the UK in the collaborative battlefield helicopter and NH90 projects’.

  This gobbledygook hit Downing Street like the rhetorical equivalent of a helicopter gunship. But, appallingly, it broke no collective rules it was essentially the language which Mrs Thatcher had conceded in her own letter, and which had been excluded from the highly selective briefings. Now, unless Heseltine could be zapped, Westland’s shareholders might bolt. Counter-strike was essential, and the Prime Minister’s team applied themselves to this throughout the weekend of 4–5 January 1986 (Woodrow Wyatt phoning in as Sir John Cuckney’s emissary).

  Two, surely, could play ‘material inaccuracies’: if Heseltine had not checked his letter with Mayhew, perhaps there was something wrong with it? And, traced on Saturday evening, the Solicitor-General agreed it might contain misleading statements. A fine circularity now enters, because Mayhew seems to have been reading The Times – which was reflecting the Number 10 view. The parallel department for Westland’s affairs was Trade and Industry. Its Secretary of State, Leon Brittan, asked Mayhew, at Mrs Thatcher’s behest, to put his view urgently in writing.

  First thing on Monday, Mayhew wrote to Heseltine: there seemed to be ‘material inaccuracies’ in what had been said to the consortium. He, Mayhew, thought European attitudes mixed, and he advised Heseltine to write again with corrections. The letter was copied to Number 10 and to Trade and Industry. In the afternoon, Heseltine sent information which convinced Mayhew that no correction was required.

  But by then the leakage tap was in flood – though extra pipework had been installed, suggesting extreme peril had been detected. A junior press officer at the DTI, on the instructions of Leon Brittan, told the Press Association that ‘material inaccuracies’ had been found in Heseltine’s much-publicised letter. For reasons explained later, no clear chain of command was established by inquiry, though the immediate assumption – never seriously challenged – was that Brittan acted at Number 10’s command.

  Once the magic words were in the public domain, Bernard Ingham’s boys were let slip – and so consistent had been the anti-Heseltine briefings that he may not have needed to say very much to them. The Sun, as always, did him proud. Its headline was ‘YOU LIAR’, on a story which said ‘Battling Maggie’ had caught the Secretary of State for Defence in a devious Euro-scam. It probably baffled the Sun’s readers (no briefing on chopper procurement was offered them). To Cuckney and Sikorsky it perhaps looked like the US Marines. But Number 10 seem to have realised that leak had turned to dreadful flood.

  All this went far beyond off-the-record chat about Cabinet headcounts. The Law Officers advise the whole Cabinet, as both professional lawyers and ministers of the Crown – Mayhew’s counsel had been sought under double confidence, as it were. Then his advice had not just been leaked – for crude factional purpose – but selectively leaked, and blown into an insane tabloid libel against one of his oldest colleagues who was a close personal friend.

  Murdoch had no hand in the matter – other than his responsibility for the creation and maintenance of the Sun apparatus, and its assignment to open-ended support of Downing Street. The piece of anti-journalism involved is hard to parallel, in that cursory checking w
ould have shown that Mayhew was really making an inquiry – not an accusation – and one which had been satisfied before publication. The style, though, traces perfectly to the McMahon incident (see Chapter 4 above) now manifest as the attribute of a system.

  Mayhew’s anger was intense – that of his senior, Attorney-General Sir Michael Havers, maybe greater. Havers was returning from illness to find that the government’s propagandists had embroiled the Law Officers in a scandal which attacked the basic principles of their office. He simply wanted the police called in, and criminal charges laid. He could do this on his own authority, he reminded Number 10.

  When Cabinet met on Thursday 9 January the Prime Minister declared that all ministerial statements about Westland must be cleared with her. Heseltine interpreted this as a licence for Ingham and Cuckney to say what they liked, with others having to remain silent. There was, he said, no Cabinet decision justifying this – indeed, there had been no substantive discussion of the issue. He would not serve in a Cabinet subject to arbitrary power. And he walked out. Suddenly, visibly, the Prime Minister was in danger.

  Her regime survived, as we know, for four more years – the means are part of our story. But it survived as an organism increasingly damaging to itself and to the party it represented. Occasionally, history presents itself neatly. The item on the agenda after Westland was the poll tax, in its second incarnation – the project which was to bring rioters on to British streets and ruin the government. The loss of Heseltine from the Cabinet decisively weakened the moderates who hoped to impede that juggernaut by discussion and collective responsibility.

  Now Westland thus far was a most spectacular story. There was a limit to what the daily papers could do with it – it was sprawling, complex, space-hungry. But it was magnetic Sunday broadsheet matter, bringing together major constitutional issues, high technology and huge personal drama. The question of the Prime Minister’s survival was simultaneously the question of whether she was eroding responsible government and substituting personal rule. The Sunday Times of Hamilton and Evans had built much of its reputation on such material. But that weekend’s Sunday Times carried only orthodox coverage of Whitehall and the Westland shareholders meeting: Insight did not try to penetrate the political tempest. It also carried, though, a large front-page announcement that an extra section of the paper would be printed in Wapping next week. Brenda Dean, of the SOGAT union, took this to mean that Murdoch’s plans for a confrontation were live, and she was perfectly correct.