On Wednesday 8 October Mrs Thatcher left Number 10 for Brighton. The Conservatives were out in force for their party conference, and by the time Mrs Thatcher arrived on the Sussex coast, the streets were packed with demonstrators. ‘The whole approach to the hotel and to the conference hall itself was filled with absolute hatred for all of us, with the police, on foot and mounted, barely protecting us from what appeared to be a lynch mob,’ wrote John Hoskyns. It was just as well, then, that he was preoccupied by Mrs Thatcher’s ‘bloody speech’, which he was writing with Ronnie Millar. It was not going well. Two days earlier, Mrs Thatcher had got herself into a panic about it, and the next day she and Millar had had a ‘shouting match at dinner’. All this was par for the course in the run-up to a major speech. But perhaps it also said something about the mounting pressure.39
Heavy rain was falling when, on Friday morning, the Tory faithful began trooping into the Brighton Centre for their leader’s speech. Outside the grey concrete fortress stood two long lines of policemen, with dozens of mounted reinforcements stationed outside the Grand Hotel. The mood was awful, the police dogs barking and baying above the chants of thousands of Right to Work demonstrators. ‘Tory scum! Tory scum!’ they yelled, waving their sodden Socialist Workers’ Party placards. ‘Maggie, Maggie, Maggie! Out, out, out!’ The rain hammered down; the atmosphere became ever grimmer. At one stage the demonstrators began throwing flour-bombs, prompting the police to charge the crowd and make a handful of arrests. ‘They want a good wash and a good hiding,’ said one Tory activist, who had just emerged from a ‘brief and unpleasant encounter with a Socialist Worker’. And as the minutes ticked down to Mrs Thatcher’s entrance, the staff in the conference foyer began to build a huge pile of blankets. ‘They are to cover the bodies,’ a steward explained grimly.
At 2.30, having been escorted through a back door to avoid the mob, the Prime Minister took the stage. Even now there was no escape from the tension. Only moments after she had got to her feet, two demonstrators started shouting: ‘Tories out! Power to the workers!’ The security guards were on them in a flash, but on the platform Mrs Thatcher barely missed a beat. ‘Never mind, it’s wet outside,’ she said coolly, as the television pictures showed one of the men being dragged away. ‘You can’t blame them. It’s always better where the Tories are.’40
In its way, this brief outbreak of mayhem was entirely fitting, underlining what the Guardian’s Ian Aitken called ‘the atmosphere of the Palace of Versailles before the French Revolution’. Much of Mrs Thatcher’s speech was the familiar diagnosis of national decline and the usual defence of her harsh medicine as the only way to save the patient. But this time she went out of her way to sympathize with those who were suffering, dramatically lowering her voice when she came to the crucial passage:
The fact remains that the level of unemployment in our country today is a human tragedy. Let me make it clear beyond doubt. I am profoundly concerned about unemployment. Human dignity and self-respect are undermined when men and women are condemned to idleness. The waste of a country’s most precious assets – the talent and energy of its people – makes it the bounden duty of Government to seek a real and lasting cure.
If I could press a button and genuinely solve the unemployment problem, do you think that I would not press that button this instant? Does anyone imagine that there is the smallest political gain in letting this unemployment continue, or that there is some obscure economic religion which demands this unemployment as part of its ritual? This Government are pursuing the only policy which gives any hope of bringing our people back to real and lasting employment.
But nobody remembered this part of the speech. They remembered what came next, when she addressed the idea that she would have to change course eventually. No, she said. ‘To those waiting with bated breath for that favourite media catchphrase, the “U” turn, I have only one thing to say.’ She paused for effect. ‘You turn if you want to.’ The audience laughed, and a wave of applause rippled through the hall. On the platform, Mrs Thatcher stood motionless, imperious, utterly unsmiling. ‘The lady’s not for turning.’41
Despite its reputation, Mrs Thatcher’s ‘not for turning’ line was nothing new. She had been saying something like it for months, and the reference to Christopher Fry’s play The Lady’s Not for Burning (1948) probably went completely over the heads of younger listeners. But it mattered. It mattered because the parable of a shameful retreat from radical commitments had become so deeply embedded in the Thatcherite version of history. Most of her supporters remembered Heath’s screeching reversal in the early 1970s, when, as they saw it, he had surrendered to the unions and betrayed his promises. No wonder, then, that they cheered what Edmund Dell called ‘the ultimate statement that she was different from Heath’.
And because the obstinate message so perfectly captured her public image, the tabloids loved it. The Express, for example, put it on the front page, while the Mirror devised a more damning version: ‘The lady’s not for learning.’ For a woman who boasted of her hatred of compromise, it became an enduring mantra. The irony is that it had taken considerable effort to get her to understand the joke. As Ronnie Millar recalled, she simply ‘could not grasp that the first “You” needed to be stressed, to echo the “U-turn” in the preceding sentence’. But since it became a defining part of her legend, his efforts were worth it. A couple of days later, she sent him twenty-five cigars to say thank you.42
Mrs Thatcher’s catchphrase meant everything and nothing. In public, it became the supreme symbol of her determination to stay the course. Yet even as she boasted of her inflexibility, her officials were preparing an adjustment to the route. At the Treasury, Howe’s special adviser Adam Ridley told his boss that their approach had been far ‘too severe’. At Number 10, John Hoskyns, never knowingly understated, compared their efforts to ‘someone pouring buckets of water on a fire, when the realist would have recognised that it was time to dial 999 for the fire engines’. And at the Bank of England, Gordon Richardson’s deputy, Kit McMahon, wrote that the high pound was ‘now clearly intolerable. There is no other country in the world who would permit – or has permitted – the rate of deterioration of competitiveness that we have suffered in the last year or so.’ McMahon knew Mrs Thatcher treated the Bank’s advice with utter contempt. But she needed to be ‘rescued’, he wrote, from the ‘over-severity’ of her own policies.43
On the Monday after the party conference, the principals reassembled at Number 10 to begin the laborious process of changing tack. It was Mrs Thatcher’s fifty-fifth birthday, but instead of bringing a cake, Richardson presented her with another barrel-load of gloom. Looking forward, he was ‘extremely pessimistic’. The recession was ‘likely to intensify and continue into 1982’, when unemployment would almost certainly hit 3 million. Worse, ‘because of our loss of competitiveness, recovery in the UK looked far less certain than in other countries’. So far, Richardson said, ‘industrial closures had largely taken place where, because of inefficiency, they should be happening anyway’. But now the recession was destroying ‘well-managed’ firms, which ought to have been able to weather the tempest, and on which Britain’s recovery should have been based.
So what to do? Mrs Thatcher tried to revive her hobbyhorse of Monetary Base Control. But Richardson and Howe insisted that it was better to cut interest rates, which meant they also needed to cut government borrowing. That would mean a very tough Budget in 1981. And at this supremely inappropriate moment, recalled the Bank of England’s Charles Goodhart, ‘there was wheeled out into this room a cake, a large cake. I have to say it was one of the most hideous cakes I’ve ever seen in my whole life.’ The birthday girl immediately began carving slices for her officials. Goodhart remembered that it ‘had brown icing sugar on top of which was a picture of the House of Commons picked out in green icing sugar. It looked absolutely revolting.’ His colleague Eddie George whispered: ‘I just don’t think I can eat this.’44
By early November the new d
irection was more or less settled. Ideally, the Treasury wanted to cut interest rates by 2 per cent. But as Howe told the Cabinet, he would only get away with slashing rates if he cut the budget deficit by at least £2½ billion, which would mean some ‘very difficult and disagreeable decisions’ on spending. Some of his colleagues were outraged: when the Cabinet discussed Howe’s plans, they argued that cutting spending ‘could force out of business … some of the best companies in the country on whom the prospects of recovery would depend’. ‘It’s really Geoffrey and me against the rest of them,’ Mrs Thatcher told a sympathetic backbencher. But since she was the boss, her voice was crucial. And with the exception of defence, where Francis Pym fought like a tiger to protect his departmental budget, Howe got his way.45
All the time, clouds gathered over the Palace of Westminster. When the Tory backbench finance committee met to discuss the government’s strategy, the words ‘failed’ and ‘failure’ came up again and again, especially when it came to controlling the money supply and cutting public borrowing. Yet even as many Conservative MPs sank into despair, one familiar face took great pleasure in Mrs Thatcher’s plight. On 27 October Alan Clark sat down in the Commons chamber, only to find Ted Heath rumbling ominously beside him, like a long-dormant volcano beginning to smoke. ‘He swivelled massively in his seat,’ Clark recorded, ‘and said, “At last you’re beginning to learn something”, then swivelled ponderously back and stared ahead.’ Clark knew what he meant: ‘All of you idiots who voted for The Lady are now beginning to realise the mess you are getting yourselves into.’46
It was easy for Mrs Thatcher’s supporters to ignore criticism from the least gracious loser in modern political history. But it was more difficult to dismiss complaints from their natural supporters. By the autumn of 1980, more and more businessmen were joining the chorus of protest. A survey by the Confederation of British Industry found that most firms were slashing investment, laying off workers and digging deep into their reserves – that is, if they were managing to survive at all. In some areas – chemicals, coal, textiles, clothing – the output figures were so bad they were barely credible: in metal manufacturing, for example, production fell by almost 20 per cent between August and October 1980. And although ministers insisted that the recession would leave industry ‘leaner, fitter [and] more efficient’, The Times’s Peter Hill thought most firms were more likely to stagger into the daylight ‘weak, emaciated and debilitated’. Few people disputed that ‘there was scope for industry to trim its fat’. But this was not a trim. It was a massacre.47
On 17 October the boss of the house-building giant Taylor Woodrow, Sir Frank Taylor, resigned from the Centre for Policy Studies with a blistering denunciation of the government’s approach. ‘Businesses are going broke,’ he wrote angrily: ‘unemployment is growing, the monetary situation is out of hand and Government spending is astronomical.’ Three days later, ICI’s chairman visited Number 10 to warn Mrs Thatcher that his firm, the ‘bellwether of British industry’, was about to announce the first quarterly losses in its history. And although not every industrialist was as outspoken as Sir Frank Taylor, such criticisms were becoming increasingly common. Businesses might be able to live with a ‘deep world recession’, ‘severe government policies’ and even ‘high interest rates’, said the chairman of the Yorkshire CBI. What they could not do, though, was ‘survive all these and a high exchange rate as well’.48
Where Yorkshire led, Britain followed. On 11 November the CBI’s director general Sir Terence Beckett rose to address his annual conference in Brighton. Never, he said, had the economic outlook been bleaker. But the government was in danger of destroying so ‘much of our industrial capacity’ that Britain ‘might win the battle against inflation but lose the war for prosperity’. Indeed, many CBI members had told him that ‘if we are not careful a lot of industry won’t be around when the revival comes’. Yet Mrs Thatcher’s ministers refused to listen. ‘How many of them in Parliament or the Cabinet’, he asked, ‘have actually run a business?’ So unless business leaders wanted an ‘inexorable and miserable decline into shabby gentility, if we are lucky, or, more probably, Bennery’, they should ‘take the gloves off and have a bare-knuckle fight’ with the government. They should think of it as the political equivalent of ‘the SAS rescue at the Iranian Embassy’.49
For the head of the CBI to attack any government in such stark terms was sensational enough. For him to attack a Conservative government was simply extraordinary. For some Tory MPs, Beckett’s remarks were tantamount to treason, and a handful of firms resigned from the CBI in protest. The irony was that Beckett should have been a natural Thatcherite. A Black Country grammar-school boy, he had served in the army in India and Malaya before working his way up the ladder at Ford, ending up as chief executive and chairman. What was more, he agreed with Mrs Thatcher’s diagnosis of decline, and had taken the job at the CBI precisely because he believed that ‘our whole way of life’ was at stake. What he had not expected was that the threat would come from the right.50
Not even the CBI’s friendly fire, though, could shake Mrs Thatcher’s resolve. When Private Eye’s Denis Thatcher mentions the plight of British manufacturing to his wife, recounting the woes of a chap called Sharples, ‘who runs a biro factory near Chislehurst’, the Boss says coldly that ‘there were bound to be some innocent casualties in the war against inflation’. And although she was not quite so blunt in real life, she had no intention of giving ground. In an interview with Thames TV’s Judith Chalmers, she came close to blaming industry itself. The basic reality, she said, was that ‘British industry is not as competitive as some of our other countries, as Germany, as Japan, as Switzerland … we’re over-manned, full of restrictive practices … The result has been, they’ve got the business and the jobs and we haven’t.’ She pointed out that more than half of all cars bought in Britain in 1980 had been made abroad. ‘We in this country weren’t producing either the models or the price, or the delivery that other people were, so we have to look at the state of our industry … If we’re not going to buy our own goods, how can we expect other people to?’51
On 25 November Howe unveiled his Autumn Statement to the Commons. The main features were the much-discussed 2 per cent cut in interest rates, as well as a new petrol tax and a 1 per cent increase in employers’ National Insurance contributions. Yet although cutting interest rates marked a striking departure from the government’s previous approach, most commentators were preoccupied with the fact that, at a time of unprecedented economic misery, the Chancellor seemed to be piling on the pain. And when Howe met Tory backbenchers later that afternoon, the mood was astonishingly aggressive. The government was ‘running out of time’, said Terence Higgins. They had failed to ‘get public spending under control’, said Julian Amery. Cutting interest rates was ‘totally unjustified by the present state of the money supply or public sector borrowing’, fumed Alan Clark. ‘It is perfectly plain that Government policy is now seriously off course – with consequences that can only be bad both for the Party and the country.’52
‘Unemployment is now rising by one person every 30 seconds, around the clock, seven days a week,’ began the lead story in The Times the next morning. After the biggest monthly increase since the war, the jobless total had now reached 2.16 million. Yet this was only the official figure. Most experts thought the real total, which included people who had not bothered to register, was already well over 3 million. Turning Mrs Thatcher’s favourite metaphor against her, the TUC’s Len Murray described the figures as a ‘thermometer of misery, recording the nation’s growing sickness’, and compared her ministers to ‘medieval physicians who thought blood letting was a cure for anaemia’. For the Mirror, meanwhile, the ‘working heart of Britain’ was ‘being sacrificed to economic theories better confined to a madhouse … Last month’s rise ALONE was equal to the population of Cambridge.’ But as the Mirror admitted, the news was so bad that it provoked a kind of stunned apathy rather than national outrage. ‘Wh
o can visualise 2,163,000 unemployed? Who can imagine a dole queue stretching from here to Siberia?’53
The next day brought a mini-eruption from the reawakening Mount Heath, who chose a debate on the economic situation to make his first major attack on Mrs Thatcher’s policies in the House of Commons. As if picking the ideal moment to infuriate his own party, he spoke directly after his old foe Jim Callaghan. He and Callaghan, he said, belonged to a political generation who had been ‘determined to prevent what happened in the 1930s from occurring again’. For a quarter of a century, they had given people a ‘better standard of living, bigger and better homes, better education, a better Health Service, better roads and better transport’. But thanks to Mrs Thatcher’s mismanagement, their achievements were threatened, while the Conservatives would be tarred forever as the ‘party of unemployment’. That went down about as well as could be expected. ‘How many elections did you lose?’ yelled the Tory monetarist Jock Bruce-Gardyne. When the former Prime Minister sat down, said The Times, there were ‘roars of applause from the Labour benches and a grim silence from Conservatives’. Deep down, more than a few of Mrs Thatcher’s MPs shared Heath’s views. But they were never going to show it.54
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