It was true (and would become truer) that Heseltine instinctively preferred European projects and Mrs Thatcher instinctively favoured American ones. Heseltine, for example, was proud of his role in advancing the European Fighter Aircraft: European defence co-operation was the sort of ‘seat-at-the-top-table’ corporatism which he favoured. It was also true that Mrs Thatcher thought in terms of free markets and Heseltine in terms of government intervention and ‘picking winners’. They were always philosophically at odds. But the Westland issue was not framed in pro- or anti-European terms, or even much in terms of market theory, at this time. In this, the year before the Single European Act, Mrs Thatcher was not invariably suspicious of European projects, especially when they involved strengthening defence. Nevertheless, a difference of emphasis began to emerge. Tebbit, Charles Powell and – most important – Cuckney suspected the motives of the European bid. Cuckney told a DTI official that ‘The interest of all three [European] companies was totally negative: they were only interested in blocking Sikorsky.’21 Throughout the saga, he knew he must take a real European bid seriously, but ‘we [the Westland board] were put off by the lack of cohesion displayed by the so-called consortium’.22 Heseltine, on the other hand, pressed on with European discussions. He came to believe that Sikorsky wanted Westland solely to turn the company into a vehicle for selling their own Black Hawk helicopters to the Ministry of Defence.
Emboldened by his victory over Cammell Laird, Heseltine now sought a new one over Westland. By his account, he told Charles Powell early in the struggle that it was like when Tebbit was trying to ‘fix the competition’ during the row over the new naval frigates.23 In Powell’s version, when he encountered Heseltine sitting outside the Cabinet Office, he said: ‘She’s not going to beat me on this one.’24 So Powell prepared her for battle.
On 29 November 1985, two separate but closely related meetings took place in London, both organized by Heseltine and held at the MOD. One was of the European companies and their bid’s bankers, Lloyds Merchant Bank; the other was of the National Armaments Directors (NADs) of the four countries involved, previously obscure functionaries whom Heseltine now decided to mobilize on behalf of his European idea. Although the meetings concerned the future of Westland, no one from the company was present. What Heseltine brilliantly, if precariously, cobbled together at speed was an agreement for a European bid for Westland, combined with an understanding among the NADs by which European governments would buy helicopters only from European companies. If this were to stand, a European defence cartel would be established and the Sikorsky bid would have no chance.
Cuckney had for some time been worried by disagreement over Westland between the MOD and Brittan’s DTI. Well connected, and supported by Gordon Reece’s advice, he decided: ‘The monkeys are squabbling. I must go to the organ grinder’ in No. 10.25 Before the Heseltine meetings had even taken place, Charles Powell reported to Mrs Thatcher that Cuckney felt uneasy about what was going on, worrying that Sikorsky might ‘take umbrage and withdraw their bid, while the European offer goes the way of the Cheshire cat’s smile’.26 After the meetings, Cuckney felt double-crossed: ‘Heseltine hadn’t explained to me why he was attracted to the European bid.’27 With the Defence Secretary playing like a god with the future of his company, Cuckney appealed to a higher deity. He wanted Mrs Thatcher on his side.
Whitehall battle was joined. John MacGregor, the Chief Secretary to the Treasury, informed Heseltine he was disturbed by the recommendations of the NADs: ‘Such a departure from our policy of competition would be questionable in any circumstances.’ It had ‘placed Westland in an impossible position’.28 Leon Brittan agreed with this, and Mrs Thatcher supported him. Her Policy Unit summed it up in the way best calculated to rouse her ire against Heseltine, comparing it to Harold Wilson’s reconstruction of the motor industry in the 1960s.
Michael Heseltine is proposing that a Conservative Government should intervene to kill a private sector rescue of Westlands – which amazingly costs the Government nothing – in order to promote a European deal which will reduce competition and result in the stripping of Westlands, such that it will only survive long term with state subsidy. This surely isn’t on.29
Mrs Thatcher strongly agreed.
As the government geared up to settle the matter collectively, Heseltine rushed round trying to inject new elements into his European bid. On 5 December came a note from Heseltine ‘revealing that he has just (?) discovered that BAe would be ready to join a European consortium, thus making it less “foreign” ’ – as Charles Powell put it with sarcastic quotation marks.30 When ministers met to discuss the matter next day, Heseltine presented the issue as whether Westland should come under ‘foreign control’ (that is, Sikorsky) or be rescued by a European consortium ‘ready to return control to United Kingdom hands at any time’,31 which was a rather fanciful way of putting it. Mrs Thatcher, chairing the meeting, said that a ‘clear majority’ was ‘ready to decide there and then that the Government should reject the recommendation from the National Armaments Directors’,32 but a minority ‘strongly opposed’ this view. The minority included Geoffrey Howe and Norman Tebbit, who could see merit in the European bid, and did not agree with Mrs Thatcher’s demand that the meeting rule out the NADs’ recommendation at once. Tebbit later claimed that his motive in supporting delay was to ‘give Michael enough rope to hang himself’, but Mrs Thatcher herself was not aware of this reasoning and held the incident against him. ‘She thought Tebbit was a traitor,’ recalled Heseltine, ‘and was very rude to him.’33 Given the differing views, Mrs Thatcher decided, with an ill grace, not to insist on a decision about the NADs’ recommendation that day, but to refer it to a full meeting of E Committee on Monday. John Cuckney and his colleagues were invited by Mrs Thatcher to attend to explain their views, a highly unusual device which, she believed, would assist his cause. Tension now ran high.
‘The struggle has continued over the weekend,’ Charles Powell minuted his boss.34 Heseltine was firing off new ideas – a French promise for sub-contracts, a deal about money in the space programme – to sweeten the European bid. Powell believed that Leon Brittan was not countering him robustly: ‘In the face of all this figure skating, DTI look positively flat-footed.’35 The latest was that the Westland deadline ‘is not quite so dead as was alleged’, and might now not come until shortly before Christmas,36 a delay which would weaken Brittan and strengthen Heseltine by giving him more time to firm up and lobby for his rushed European bid. Knowing that some ministers were sympathetic, the Defence Secretary might now try to refer the matter to full Cabinet. Powell, who kept in close touch with Cuckney, was driving the DTI to do the same, because a decision had to be made and he was confident that Mrs Thatcher could prevail.
Seen from Heseltine’s office, this ever greater No. 10 engagement was a provocation. Richard Mottram, Heseltine’s private secretary,* believed that the problem of Westland was ‘solvable so long as No. 10 acted for the proper conduct of government rather than taking a highly partisan view … Unfortunately, they decided they’d make it a big issue.’37 It was particularly noticeable that Powell, who felt that Westland came within the defence aspect of his remit, had, in his own words, ‘seized’ the subject.38 Despite his seniority as principal private secretary, Nigel Wicks was ‘squeezed out’,39 as was the new Treasury private secretary, David Norgrove, who might have been expected to cover this territory. Powell’s self-justification was that Wicks ‘was a bit timid’ and ‘someone had to do it’. He felt No. 10 was ‘so isolated’. Mrs Thatcher ‘wanted a robust counter-offensive and Leon Brittan was bad at this’.40† Powell was an effective – perhaps too effective – projection of his principal’s combative personality, bringing out the conflict between Prime Minister and Defence Secretary inherent not only in their views but in their characters. In the past, meeting by chance in the Lobby of the House, Mrs Thatcher had once remarked to Heseltine: ‘You must realize, Michael, you and I are quite similar people.’41 Both
knew what they wanted and, in Heseltine’s words, ‘drove from the front to get it’. Her crisp analysis helps explain the Westland debacle. A collision between these two was becoming almost inevitable. Charles Powell believed that Heseltine, seeing no further advancement for himself under Mrs Thatcher by conventional means, had ‘made up his mind early: it was win or leave’.42 The same ‘win or leave’ mentality well describes Mrs Thatcher – and she had absolutely no intention of leaving.
The E Committee meeting of 9 December did not go as well for Mrs Thatcher as she had hoped, even though Cuckney, who was present for the first half of the meeting, explained the threat to market confidence of delay (Westland’s terrible accounts, showing losses of £98 million, were due to be published on Wednesday 11 December). He was considered to have performed well, but ministers were irritated that he was there at all. They felt Mrs Thatcher was putting them under undue pressure, and they therefore inclined to sympathize with Heseltine. As Nigel Lawson put it, ‘While the balance of argument was clearly against Michael, sentiment was with him.’43 This meeting took place only a few days after the one (see Chapter 13) in which Mrs Thatcher had found herself isolated among colleagues over ERM entry: there was a lack of friendly feeling. Cuckney was ‘very impressed by the copious notes she took in large writing on foolscap’,44 but felt that things deteriorated when there started to be a disagreement. ‘It was rather like a battalion commander finding a squabble between company commanders. She got a bit rattled by it.’45 There was no groundswell of support for the European bid, but it was considered important that the bid have time to be put together and presented to Westland. The board could then decide whether to recommend the bid to shareholders by 4 p.m. that Friday (13 December), and should be left alone to take its own view. If the board did not endorse the European bid, ministers would reject the NADs’ recommendation, leaving the way clear for Sikorsky. Heseltine did not dissent but, in a rather desperate gamble, asked for a special meeting after the Westland board decision on the Friday afternoon, when ministers were normally scattered across the country. His request was based on his belief in his own persuasive powers once the European bid was better developed. As on 6 December, Mrs Thatcher had to settle for compromise, rather than a final decision at once.
It was the results of these two meetings which enabled Heseltine later to say that ‘I suppose she was pretty unnerved by the fact that she’d lost to me twice with colleagues.’46 She had not lost – on both occasions she was in a clear majority – but she was certainly given pause. She deemed it more prudent not to force the issue. The following day, Westland shares were suspended, pending announcement of a deal.
Without realizing it at the time, ministers departed with different views of what exactly had been agreed about the next steps – an issue that would come to assume great significance. Heseltine ‘believed (or affected to believe)’47 – as Robert Armstrong put it – that a further meeting of the committee had been promised. Mrs Thatcher believed that a meeting had merely been provided for if the circumstances surrounding the European bid had changed sufficiently to warrant a further discussion. Initially, the Cabinet Office had begun to ring round, lining ministers up for a meeting on Friday the 13th, but then pulled the plug. When Heseltine professed outrage, Mrs Thatcher claimed that the ring-round had been only to check availability rather than set a definite meeting. But it was her office that had stopped the ring-round, so suspicion lingered. Heseltine raised the matter at Cabinet on Thursday 12 December, and the difference of opinion about the ring-round was pointed out. According to Robert Armstrong’s scribbled note of proceedings, out of which formal Cabinet minutes were later composed, Heseltine then said, ‘Can I say what I have to?’, and Mrs Thatcher replied, ‘You might give notice,’48 effectively ruling him out of order. According to Heseltine, he made a protest at this point, although none is recorded in Armstrong’s contemporaneous note. Robert Armstrong’s failure to record in the official minutes the protest which Heseltine believed he had made would be later added to his charge-sheet against Mrs Thatcher’s corruption of Cabinet government. ‘There was some force in Heseltine’s claim that there wasn’t a full Cabinet discussion,’ Leon Brittan recalled. ‘I thought he had the right to refer it to the Cabinet.’49
Heseltine had begun to attribute overwhelming importance to the Westland issue. On the assumption (or at least in the hope) that a meeting would take place on the 13th, he had already sent a passionate last-minute appeal – without informing Leon Brittan – to his three European counterparts, explicitly urging that they should help him go against the Sikorsky bid: ‘Can we let it be said that in so fundamental a matter we are unable to match such resolve [meaning the resolve of Sikorsky]?’50 He also obtained a letter offering GEC’s financial support from his former Cabinet colleague and anti-Thatcherite Jim Prior, now the company’s chairman, for the European bid. GEC’s involvement added to the notion that the European bid was ‘British’. The idea was to get a European bid in, higher than Sikorsky’s, in time to impress colleagues on Friday. Heseltine could see, from everything Cuckney had said, that it was highly unlikely that the Westland board could be persuaded to accept the European bid on Friday. But he felt that if Cabinet colleagues were convinced of the bid, it would be clear that Westland’s future contracts would be assured only by the European option. Then shareholders might be persuaded to reject the board’s likely Sikorsky recommendation. And of course, if the Cabinet came down on Heseltine’s European side, this would be a mighty defeat for Mrs Thatcher. Heseltine was also playing for time: if it had been clear that ministers had already rejected the European bid then it would have stood almost no chance with Westland shareholders. In Heseltine’s mind, ‘If I had accepted the cancellation of the meeting, I would have been finished.’51 Brittan thought this view was correct: ‘It was the only thing he had.’52
Charles Powell obtained a copy of a Cabinet Office memo which complained that at the Cabinet meeting of 12 December Heseltine had ‘sought … to re-open’ the E meeting of 9 December by protesting about the ‘cancelled’ meeting of 13 December. The officials said that the meeting had not been cancelled: it had never been arranged.53 He showed it to Mrs Thatcher: ‘Although not strictly for your eyes, you might like to glance at this helpful account of the lengths to which MOD are going.’54 He urged her to press on: ‘Agree that we should have no inhibition about going public on our rejection of the NADs’ recommendation after 4 p.m. on Friday?’ Mrs Thatcher wrote ‘Agreed,’ but then thought better of it and wrote words that cleaved more closely to the formally correct answer: ‘I think the decision hinges on whether the European deal is acceptable to Westlands.’55 The desire for a fight with Heseltine and the desire to observe the proprieties clashed in her mind.
On the day of the Westland board vote, John Cuckney rang Charles Powell just before the meeting. He warned that, if the board voted for the Sikorsky bid, he would then write Mrs Thatcher a letter complaining about ‘the hostile and harmful actions taken against them by the Ministry of Defence’.56 Cuckney said he had ‘detailed evidence of disgraceful behaviour by the Ministry of Defence … including delayed payments, cancelled or postponed orders and instructions to contracts staff at the Ministry of Defence to treat Westlands as a company about to go into receivership’.57 After the board meeting, Cuckney immediately informed Powell that it had decided not to recommend the European bid to shareholders. A version of his original letter, toned down at Powell’s urging, arrived for Mrs Thatcher. It spoke of several attempts by the MOD (Heseltine was not named) to ‘block a solution to Westlands problems’ and asked that ‘no UK Government statement is made to the effect that Her Majesty’s Government will never purchase the Black Hawk’,58 since to do so would be inconsistent with the policy of full and fair competition.
So ended the first full week of more or less explicit hostilities. Heseltine was, on balance, losing. It was still not impossible, however, that the European bid, constantly topped up with new money, promises and im
plied understandings, might ultimately prevail with the Westland shareholders. And it was clear that Mrs Thatcher had allowed herself to be dragged into something disagreeable. Her private office – really Charles Powell – increasingly took control of the issue because it was not going well in the hands of the DTI. This behaviour was understandable, but it was likely that Mrs Thatcher would be touched with pitch as the fight got nastier. She was as tough as anyone in politics, but not a good Machiavellian.
The dispute over the meeting which Heseltine accused her of cancelling was a case in point. It was almost certainly not true that she had deliberately misled Heseltine about the meeting, but it was the case that Nigel Wicks, her principal private secretary, had quickly countermanded Cabinet Office officials who had begun to ring round to make provisional arrangements for setting one up.59 Wicks had been doing her will, which was to make the meeting as unlikely as possible. She would have done better to have made sure that Heseltine could have his meeting – and make equally sure that he would not prevail in it. In Heseltine’s view, her behaviour over the meeting ensured that ‘the disaster was cast in steel.’60
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