Margaret Thatcher: The Authorized Biography, Volume 2

by Charles Moore

  The privatized companies were also now owned, in a real and not merely nominal sense, by millions of people. The campaign for wider share ownership was by no means an unqualified success, however. Although there were 3 million private shareholders in Britain in 1979 and 11 million when Mrs Thatcher left office in 1990, in many cases their ownership resembled those seeds in Jesus’ Parable of the Sower which shoot up well at first but are then strangled by weeds. As John Moore put it, ‘We didn’t insist on creating a people’s market-place. We allowed the City to fold back into its elitist attitudes.’184 The institutions soon resumed their sway. In the view of Andrew Turnbull, who was much involved, the ownership of shares by Sid ‘turned out to be a complete failure’.185 This is unduly harsh. Most British people did not become serious long-term holders of equities, but it is clear that Mrs Thatcher’s slogan of ‘every earner an owner’ acquired meaning in her time. Owner-occupied houses, shares, portable pensions, employee ownership, much greater opportunities to start up companies with small initial outlay, and even the highly controversial loosening of controls on personal credit, all helped create prosperity and greater financial freedom for classes of British citizens who had never known such things before. It was partly the success of privatization and the opening up of the City which emboldened Nigel Lawson to start Personal Equity Plans (PEPs) in 1986. These permitted owners of small but not insignificant amounts of shares to shelter them wholly from tax and add the same amount each year. These were reformed but not abolished by New Labour after 1997. In the form of ISAs, they remain an important part of many people’s provision for their retirement. There is some truth in the accusation that Mrs Thatcher’s policies, especially when oversold in the Lawson boom of the late 1980s, encouraged people to ‘get rich quick’, but most of the achievements did not melt away. Besides, getting rich, quick or otherwise, is broadly speaking better for a country than getting poor slowly, which was the situation Mrs Thatcher’s policies sought to remedy.

  Despite his ultimate quarrel with Mrs Thatcher, Nigel Lawson made the simple point that ‘it has not sufficiently come out in most accounts that the great success of Mrs Thatcher on the economic front was the reform and transformation of the economy.’186 In the end, this mattered more than all the later rows about interest rates and exchange rates. It is what made the difference.

  Part Two

  * * *

  SHOCKS

  8

  Glasnost in the Chilterns

  ‘For heaven’s sake, try and find me a young Russian’

  The year 1984 had a symbolic significance in Western minds because of George Orwell’s famous novel of that name. Writing in 1948 (and deliberately reversing its last two digits), Orwell had imagined a grim future in which the world was divided between a few, warring, totalitarian superpowers and freedom had been snuffed out. Although Orwell was on the left, he was much admired by many on the right, including Mrs Thatcher, for his vision of the evil of Soviet Communism. As the year itself approached, people naturally asked whether Orwell’s warning had come to pass. Mrs Thatcher herself, thanking her political office for a Christmas present, wrote of the ‘Orwellian year to come’.1 It was a moment when people assessed the Cold War, and wondered who was winning.

  For Mrs Thatcher, as for her American allies, there was a feeling of greater strength than at any time since the 1960s, but an accompanying sense that the onus now fell on them to make progress. The Soviets, who had walked out of the ongoing arms control talks in Geneva in protest at the deployment of Intermediate Nuclear Force (INF) missiles to Europe, offered little encouragement. Just before Christmas 1983, Mrs Thatcher, giving dinner to Henry Kissinger, complained that ‘She could barely recall a situation where there was at once so much uncertainty and so little contact.’2 She felt encouraged to try, however, by the attitude of Reagan himself. As Kissinger put it to her, the European perception of Reagan was ‘totally wrong … He was not a monarchical cowboy but was in fact slightly softer than Nixon.’3 Following her Chequers seminar the previous September (see Chapter 5), Mrs Thatcher made it her business to seek out the next generation of Soviet leaders. The year 1984 was to mark her first dramatic success in this search.

  On 16 January 1984, President Reagan softened his rhetoric. Addressing the nation, he argued that, while deterrence remained essential, ‘deterrence is not the beginning and end of our policy toward the Soviet Union. We must and will engage the Soviets in a dialog as serious and constructive as possible.’4 This speech was seen as a turning point within the administration. Mrs Thatcher warmly welcomed it publicly, and wrote privately to Reagan,

  If I may say so, I thought you struck exactly the right note and at the right time. As we enter 1984, and against the background of public disquiet at the Soviet interruption of the arms control talks in Geneva and Vienna, it was good to put on record your willingness to establish a constructive and realistic working relationship with the Soviet Union. As you say, this is a long-term policy. We cannot expect rapid changes. The Soviet system is too rigid for that, as their initial public response to your speech has demonstrated. But I am sure that it is right to try: and that the best way is to engage the Soviet Union in a dialogue on a broad range of questions – bilateral and regional, political and economic.5

  On 2 February, Mrs Thatcher travelled to Hungary, her first visit to a Warsaw Pact country (other than her 1979 stopover at Moscow airport) as Prime Minister. Her surprisingly successful meeting with József Marjai, the Hungarian Deputy Prime Minister, in 1983 (see here) helped inform this choice. She had settled on Hungary because it had the greatest economic freedom of all the Soviet satellites: ‘I think she began to sense that talking about “the Soviet bloc” wasn’t quite the right approach. There were important differences that you had to recognise and deal with.’6 She was also aware that the Hungarian leader, János Kádár, could be the conduit for messages to Andropov. The brief supplied by the Foreign Office offered various ‘Points to use in private conversations in Budapest’ and reflected many of Mrs Thatcher’s views. The points included:

  How can we bring the Soviet leaders out of their isolation? Andropov is too ill to receive visitors, much less to travel to the West. [The Soviet Foreign Minister Andrei] Gromyko gives the impression of having made up his mind on all international questions ten years ago, if not twenty. Whom can we talk to, and how?7*

  A covering note from Geoffrey Howe’s office offered messages for Moscow that Mrs Thatcher might plant in Kádár’s mind: ‘after a period of relative inactivity in this field, Britain is once again playing a significant role in East/West relations and has a particular contribution to offer, not least under the present Prime Minister because of our special relationship with the US.’ The note suggested Mrs Thatcher stress that Reagan was ‘a man of peace’, signs to the contrary notwithstanding, and that ‘the cause of peace requires the Russians to find a way … back to the negotiating tables in Geneva and Vienna.’8

  Mrs Thatcher hastened to report her meeting with Kádár to Reagan. Kádár had told her ‘with some conviction’ that he ‘believed the West could do business with the Soviet Union’,9 but he had also made clear that the Hungarian experiment

  is conducted within very strict limits: the single political party, the controlled press, the sham parliament, the state ownership of all but the smallest economic units, but above all the close alliance with Moscow. Kadar … made it perfectly plain that these things cannot change. I believe that it is realistic to formulate our policies on this assumption. It follows that for as far ahead as we can see we have to find a way of living side by side with the Communist system, repugnant as it is.10

  On 9 February 1984, the day Mrs Thatcher’s message landed on Reagan’s desk, Andropov died. Two years earlier Mrs Thatcher had refused to attend Brezhnev’s funeral, but she now made the trip to Moscow. ‘The funeral is a God-send,’ she told Vice-President Bush shortly before she set off. The question now, continued the notes of their meeting, was ‘what to do next
’.11 Mrs Thatcher’s mere presence created a good impression with her hosts. During the outdoor ceremony she endured Moscow’s frigid temperatures stoically, helped by a hot-water bottle concealed about her person. There was also much excitement about her bodyguard, Detective Superintendent Parker:

  He was a large man and it was a very wintry occasion. He would shadow her everywhere with enormous bulging pockets. Russian security were deeply impressed by this heavily armed man. Then they got to the Kremlin afterwards to attend the reception. She took off her coat and then unzipped her boots – whereupon Detective Superintendent Parker produced a pair of high-heeled shoes from his pockets. The Russians were rather disillusioned.12

  Once the obsequies had been concluded, Mrs Thatcher, like many other world leaders, was due to meet Andropov’s successor, Konstantin Chernenko,* who was widely regarded as an elderly stand-in until the successor from the next generation could emerge. During the inevitable waiting around she turned down the offer of a rare behind-the-scenes tour of the Kremlin, insisting the time could be better spent studying her briefing papers. ‘Do you think I’ve come here as a tourist?’ said the woman who always preferred work over leisure.13 When she finally saw Chernenko she found him a sick man. Tony Bishop, who interpreted for Mrs Thatcher, recalled that Chernenko:

  opened with a lengthy typed formal statement, delivered in a high-speed gabble and with the same stumbles, monotony and lack of coherence that we had heard in public earlier in the day during his eulogy to Andropov … In the brief extempore exchanges at the end of the short meeting there was perhaps a rare moment of fleeting warmth in Chernenko’s voice, when he repeated his appreciation of Mrs Thatcher’s gesture in attending Andropov’s funeral. But it was, for her, like meeting an ailing member of her father’s generation …14

  Unlike Vice-President Bush, who reported rather optimistically to Reagan about his conversation with Chernenko, Mrs Thatcher was ‘unimpressed’.15 She ‘treated him with every civility, trying hard to draw him out a little, but with no great success’.16 She did, however, convey her plea for progress: ‘They had a chance, perhaps even the last chance, of securing fundamental disarmament agreements enhancing security.’17 In her Foreign Office briefing material, Mrs Thatcher had underlined the information about Mikhail Gorbachev, marking her interest, but she did not meet him.* On the plane home, discussing the trip with her small team of advisers, she made her frustration with Chernenko clear. ‘For heaven’s sake,’ she exclaimed, ‘try and find me a young Russian.’18

  The Foreign Office was already at work on this task. On 2 February 1984, before Andropov died, an invitation had been sent to Moscow. To avoid problems of inter-government protocol, the Foreign Office had arranged for the invitation to come from the Inter-Parliamentary Union (that is, from British Parliamentarians to their Soviet counterparts). It did not mention any Soviet official by name but merely suggested that a delegation might come to the UK.19 The death of Andropov gave the search for a ‘young Russian’ added urgency. British officials developed a shortlist of three preferred invitees: Grigory Romanov, the mayor of Leningrad, Chernenko’s close associate Viktor Grishin, and Mikhail Gorbachev.20 They swiftly settled on Gorbachev who, under Chernenko, became the de facto number two in the Soviet hierarchy.* He also assumed the honorific position of chairman of the Foreign Affairs Committee of the Supreme Soviet. This made him the automatic person to invite to Britain as leader of a ‘parliamentary’ delegation. His invitation, which made clear that Gorbachev would meet senior government figures as well as backbench MPs, was sent in mid-June. For a long time, it received no reply.

  In the same month, before a visit to Moscow, Geoffrey Howe suggested inviting Chernenko himself to London on behalf of Mrs Thatcher. Charles Powell wrote to his boss disapprovingly. He said it was worth inviting Gorbachev, and his youngish Politburo colleague Heydar Aliyev, who was to be asked for the following year, because ‘there is a chance they will come and it would do them good,’21 but the Chernenko suggestion looked like a ‘routine gesture’. Worse, it came at a time ‘when such gestures might seem rather offensive’ since Mrs Thatcher was campaigning hard for the Soviet dissidents Andrei Sakharov† and Anatoly Shcharansky,‡ both of whom were suffering ill treatment, and in the latter’s case imprisonment, at the time. Beside Powell’s words, Mrs Thatcher wrote, ‘Do not invite Mr Chernenko – it is much too soon.’ When Howe arrived in Moscow, his request to call on Gorbachev was turned down.

  In public, Soviet hostility to dialogue continued, chiefly because of resentment at the US Strategic Defense Initiative (SDI). But towards the end of the summer, the Americans received private signals that contacts might be resumed. Reagan duly invited Gromyko to the White House on 28 September 1984, the first such invitation since the Soviet invasion of Afghanistan. Gromyko accepted. Four days before the meeting, Reagan addressed the General Assembly of the United Nations. Edging further towards dialogue than ever before, he called for ‘regular ministerial or cabinet-level meetings’ with the Soviets.22 He was trying to set the tone for the second term as president for which he was campaigning. Mindful of ‘how deeply you feel about the need to improve US–Soviet relations’, Reagan wrote to Mrs Thatcher two days later, his ‘primary aim’ with Gromyko would be ‘to impress upon the Soviet Government my strong, personal desire to put our relations on a more positive track and, in particular, my commitment to negotiate agreements to reduce arms in a fair, balanced and verifiable manner’.23 Mrs Thatcher wrote back the same day: ‘I wholeheartedly endorse the approach you have outlined to East/West relations. I saw your speech on television and thought it superb.’24

  Although Reagan made no major breakthrough with Gromyko, he felt pleased with the talks: ‘I am personally hopeful that in time, some of the ideas and suggestions for an improvement in our dialogue that we have raised with Mr Gromyko over this past week will eventually be realized,’ he reported to Mrs Thatcher. ‘… I am prepared to be patient,’25 Mrs Thatcher replied, endorsing Reagan’s belief in ‘sober realism, firm resolve and patience’ and characteristically adding the need for ‘careful preparation’. She suggested that ‘Even a change in leadership brought about by Chernenko’s incapacity is not likely to have an immediate impact’, but she was also convinced that ‘progress will be possible only if there is direct communication at the highest level with the Soviet leadership.’26

  In mid-October 1984, just after the Brighton bomb, Mrs Thatcher received a handwritten note from Charles Powell. ‘Something which I think will interest you,’ he wrote: ‘GORBACHEV has just accepted an invitation to the UK and wants to come in December.’27 When a letter arrived from the Foreign Office officially confirming the acceptance, Powell wrote on it: ‘Will you see him here [Downing Street]? Or invite him to your dacha?’ Mrs Thatcher preferred her dacha, writing ‘Lunch at Chequers’.28 Mrs Thatcher sat on the news until she spoke in the Queen’s Speech debate in Parliament on 6 November 1984.

  Not only the fact but also the timing of Gorbachev’s acceptance worked very well for Mrs Thatcher. It clearly followed the Reagan–Gromyko meeting, showing that the rising generation of Soviet leaders saw Britain as the best place to explore Western attitudes. It also complemented Reagan’s landslide victory in the presidential elections on 7 November. Mrs Thatcher was not slow to exploit the moment. ‘What a victory! I cannot tell you how delighted I am,’ she wrote to him the next day. ‘… My fondest hope is that we can continue to work as closely together as we have over the past four years and consult privately and with complete frankness on all major international problems.’29 She slipped in a request: she would be in Peking on 20/21 December to sign the Hong Kong Agreement: ‘if you happened to be in California then, I could stop over for an hour or two on 22 December on my way back to London.’30

  In this request, the geography supplied by the Foreign Office was defective (the return route from Hong Kong to London does not include California), and so was its information about Reagan’s whereabouts. He would not be in Cali
fornia, but at Camp David. ‘I believe we should not encourage her to come to Washington at that time,’ McFarlane advised Reagan,31 who politely declined her request. Feelers were put out by the British about whether Mrs Thatcher could come to Camp David. ‘Frankly we on the staff were horrified,’ recalled Jack Matlock, a senior NSC staffer:

  normally that was private time for the Reagans. They never invited outsiders to Camp David. But it went in to Reagan and he was delighted … so it became almost a family visit in a way. That told us that it was more than just politics. The couple really did like the Thatchers.32

  Needless to say, although the friendship was genuine, Mrs Thatcher had no interest in a purely ‘family’ visit. She had two goals for the Camp David meeting. The first was finding the best way of dealing with the question of SDI so as to support Reagan while persuading him to try to ease European concerns. The second was to report to the President on her meeting with Gorbachev which was to take place a few days earlier.

  The importance of the Gorbachev visit, and thus of the Camp David trip, was increased later in November by a strong sense that the Soviets were ready to come out of the cold. Moscow now proposed that Shultz and Gromyko meet in January 1985 to agree terms for a wide range of nuclear negotiations. It was the perfect moment to help shape the emerging US approach. Mrs Thatcher had now achieved greater salience in East–West affairs than at any time in her premiership.

  Mrs Thatcher’s intensive preparations for the Gorbachev visit included another briefing seminar with academics, held at No. 10 the day before he arrived in Britain.* As if to guard against their own excitement and hers, Mrs Thatcher’s advisers constantly reminded her that Gorbachev, for all his interest in reform, was still a chip off the old, Soviet bloc, and was not yet certain to be the next leader. Mrs Thatcher underlined parts of her Foreign Office briefing that described Gorbachev as ‘intelligent and confident’, while noting there was ‘nothing to suggest he is not a convinced communist or that he intends (or would be able) to make fundamental alterations to the system itself’.33 Any publicity for him as the next leader might damage him with his colleagues, it warned: ‘We should treat him as he is, and not refer publicly to what he might become.’34 The general objectives included ‘to teach him something about how a Western democracy works and what a free market economy can achieve’. The ‘specific’ objectives were chiefly to emphasize ‘the sincerity and willingness of the West in general and President Reagan’ in wanting to negotiate over arms and to set out the areas – nuclear, chemical, outer space – where progress could be made. Under Charles Powell’s guidance, a lunch at Chequers was organized which would permit the maximum freedom of discussion.*