The Iron Lady

by John Campbell

  A man’s right to work as he will, to spend what he earns, to own property, to have the State as servant and not as master – these are the British inheritance. They are the essence of a free country and on that freedom all our other freedoms depend.

  ‘We want a free economy,’ she conceded, ‘not only because it guarantees our liberties but also because it is the best way of creating wealth.’ There followed a fairly standard recital of the need to stimulate private enterprise, cut the share of the economy taken by public spending and rebuild profits and incentives. The purpose of increasing prosperity, she proclaimed, was ‘not merely to give people more of their own money to spend as they choose but to have more money to help the old and the sick and the handicapped’. Yet she ended with another explicit endorsement of inequality: ‘We are all unequal,’ she declared boldly.

  No one, thank heavens, is quite like anyone else, however much the Socialists may like to pretend otherwise. We believe that everyone has the right to be unequal. But to us, every human being is equally important… Everyone must be allowed to develop the abilities he knows he has within him – and she knows she has within her – in the way he chooses.

  Finally, after a strong assertion of the primacy of law and order, and a pledge to uphold the Union with Northern Ireland, she returned to her intensely patriotic personal faith.

  I believe we are coming to yet another turning point in our long history. We can go on as we have been going and continue down, or we can stop and with a decisive act of will say ‘Enough’.18

  The representatives in the hall loved it. The press loved it. ‘Now I am Leader,’ she told her entourage, accepting that she had been on probation up to that moment.19

  Back at Westminster for the autumn session, however, Wilson continued effortlessly to dominate her at Prime Minister’s Questions every Tuesday and Thursday, alternately taunting her with her shared responsibility for 1970 – 74 and chiding her if she disowned it. He patronised her inexperience: ‘It is a pity she never served on the Public Accounts Committee or she would have known these things.’20 He mocked her reluctance to intervene more often, and once caught her out quoting newspaper reports of a White Paper instead of the paper itself.21

  Emergence of the ‘Iron Lady’

  Mrs Thatcher maintained her attack on the Helsinki process with several more speeches during 1976. It was the first, delivered at Kensington Town Hall in January, which succeeded in striking a most satisfactory response from the Soviets. Russia, she bluntly asserted, was ‘ruled by a dictatorship of patient, far-sighted men who are rapidly making their country the foremost naval and military power in the world’.They were not doing this for self-defence: ‘A huge, largely landlocked country like Russia does not need to build the most powerful navy in the world just to guard its own frontiers.’

  No. The Russians are bent on world dominance, and they are rapidly acquiring the means to become the most powerful imperial nation the world has seen. The men in the Soviet Politburo do not have to worry about the ebb and flow of public opinion. They put guns before butter, while we put just about everything before guns. They know that they are a superpower in only one sense – the military sense. They are a failure in human and economic terms.22

  This was breathtakingly undiplomatic. She was immediately attacked for warmongering. Such bluntness was simply not the language of serious statesmanship. Old hands like Callaghan and Wilson prided themselves on their ability to do business with the enduring Soviet Foreign Minister, Andrei Gromyko, and his hard-faced colleagues. Calling the Soviet leaders dictators bent on world domination was in this view merely childish and counterproductive. It certainly annoyed them. A few days after the Kensington speech the Soviet army newspaper Red Star denounced the Conservative leader, calling her – in what was meant to be an insult – ‘the Iron Lady’. As she later noted, ‘They never did me a greater favour.’23 She immediately seized on the sobriquet and made sure it stuck. If ever there was a doubt that a woman could be Prime Minister, this Soviet epithet did more than anything else to dispel it.

  The next month her personal rating shot up by seven points. Realising that she was on to a winner, she kept up the attack. She undertook an extensive programme of globetrotting over the next three years – partly to spread her message and polish her credentials as a world leader in waiting, partly to educate herself and meet the other leaders with whom she hoped to deal once she had attained office. In all she visited twenty-three countries, including all Britain’s major European partners at least once, and one or two outside the EC like Switzerland and Finland. She visited the two Iron Curtain countries least controlled by the Soviet Union – Ceauşescu’s Romania and Tito’s Yugoslavia; but was – unsurprisingly – not invited to Moscow. Her strong anti-Soviet stance did, however, earn her an invitation to China in April 1977. She visited Egypt, Syria and Israel in early 1976, and later the same year made an extended tour of India, Pakistan and Singapore, going on to Australia and New Zealand. She did not set foot, however, in sub-Saharan Africa, South America or the Gulf. For the most part she did not lecture her hosts about free markets – where she tried it, in Australia, it went down badly. But she did project herself successfully as a staunch defender of Freedom with a capital F, capitalising skilfully on the curiosity which attended a forceful woman politician. In Israel she visited a kibbutz and predictably did not like it. She then infuriated the Israelis by inspecting a Palestinian refugee camp in Syria; but she was even-handed in her condemnation of terrorism and refused to recognise the PLO.

  On her main battleground of Helsinki and the Cold War, however, she made an undoubted impact, at least while the Republican administration of Ford and Kissinger was still in the White House. Jimmy Carter, elected in November 1976, was a different kind of President, genuinely but naively determined to work for disarmament and human rights. Mrs Thatcher met him on her second visit to the States in September 1977 – a mark of some respect in itself, since Carter did not normally receive opposition leaders. She could not help liking him and was impressed by a mastery of detail equal to her own; but she was dismayed by his determination to pursue a nuclear test ban treaty and did not let him get a word in for forty-five minutes while she told him so. Even Carter, however, was constrained by the evidence that the Soviets were flouting the assurances they had given at Helsinki. Several prominent dissidents, including the founder of the Helsinki monitoring group,Yuri Orlov, were sentenced to long spells in labour camps. Despite her enthusiastic reception in 1975, Mrs Thatcher’s influence in Washington should not be exaggerated. She was only a British opposition leader, and Carter had very good relations with Jim Callaghan. Yet by pointing out loudly and repeatedly the nature of the Soviet regime she certainly contributed to a general stiffening of Western resolve, evidenced in NATO’s decision to increase defence spending by 3 per cent a year from 1977 and the agreement of West Germany and other European countries to accept American nuclear missiles on their soil to counter the Soviet deployment of SS-20s. These were both decisions which Mrs Thatcher strongly supported in opposition and implemented when she came to power.

  Another sign of hardening American opinion was the emergence of Ronald Reagan as a presidential challenger. Mrs Thatcher first met Reagan soon after her election as leader, when he happened to be visiting London and called on her at the House of Commons. Their meeting was scheduled to last forty-five minutes, but actually lasted twice as long. ‘We found’, Reagan told Geoffrey Smith, ‘that we were really akin with regard to our views of government and economics and government’s place in people’s lives and all that sort of thing.’24 In fact, Mrs Thatcher already knew of Reagan’s reputation as a successful Governor of California who had got rid of a lot of controls and cut expenditure: Denis had heard him speak to the Institute of Directors back in 1969. ‘In a way’, she recalled, ‘he had the advantage of me because he was able to say: “This is what I believe! This is what I have done!”’25 Yet in 1975 few took the former film star seriously as a
potential President. They met a second time when Reagan next came to London three years later, and again got on exceptionally well. This time their conversation ranged across international as well as domestic politics, defence as well as economics: on both their views instinctively tallied. It was not until five years later that Reagan, two years into his Presidency, called the Soviet Union ‘the evil empire’. But those two words precisely encapsulated what Mrs Thatcher had been saying in her speeches ever since Chelsea.

  In March 1976 the nature of Mrs Thatcher’s domestic task suddenly changed when Harold Wilson unexpectedly resigned. When told the news, Mrs Thatcher thought for a moment that the whole Government had resigned. Instead she had to pay gracious tribute to Wilson and adjust to the challenge of a new antagonist in Number Ten.

  She immediately tipped Jim Callaghan to win the succession and predicted that he would be the hardest of the contenders to beat.26 She was right on both counts. Four years older than Wilson and thirteen years older than Mrs Thatcher, Callaghan was the first Prime Minister ever to have held all three of the senior offices of state before finally reaching the premiership. Mrs Thatcher found him just as patronising as Wilson and even harder to come to grips with. As Barbara Castle – no admirer of Callaghan – wrote in her memoirs: he ‘ran rings round an uncertain Margaret Thatcher, metaphorically patting her on the head like a kindly uncle’.27

  When she lectured him on what he ought to know, he thanked her ironically for the information but told her that it was not possessing information which mattered, but what one did with it.28 By now she was much less shy of intervening, since Callaghan was not so skilful as Wilson at turning her questions against her. On the contrary, Labour MPs increasingly complained that she was monopolising Question Time by always taking her permitted three bites at the cherry. She scored one palpable hit when Callaghan called her a ‘one-man band’. ‘Is that not one more man than the Government have got?’ she retorted.29 But she rarely succeeded in disturbing Callaghan’s masterly impersonation of a wise old statesman calmly in control of events, while she fussed about details like a terrier yapping at an elephant.

  The 1976 sterling crisis gave Labour a bad nine months, as further rounds of spending cuts and raising the minimum lending rate to 15 per cent failed to stop the pound sliding to a low point of $1.56 in late October.After rapidly exhausting two previous standby credits from the IMF, the Chancellor of the Exchequer, Denis Healey, could only secure a third on stringent conditions. In the short term this apparent humiliation – as Mrs Thatcher strenuously portrayed it – actually served Callaghan well, enabling him to make a stand against the left and taking much of the wind out of Mrs Thatcher’s sails. In her speech at the Tory conference she was inhibited from making her usual slashing condemnation of the Government by the need not to appear to be talking down the pound. By contrast Callaghan had boldly told his conference the previous week that Keynesianism was dead: the Government could no longer spend its way out of recession.

  For the next two years, under IMF tutelage Healey enforced a regime of strict financial discipline which Mrs Thatcher could only – through gritted teeth – applaud. She was obliged to welcome the Chancellor’s conversion to the importance of controlling the money supply – ‘the only final way in which inflation can be held and reduced. He knows it and we know it.’30 The one benefit of the Government’s conversion to monetary virtue, she wrote in her memoirs, was that ‘it outflanked on the right those of my own Shadow Cabinet who were still clinging to outdated nostrums of Keynesian demand management’.31

  In March 1977 Callaghan lost his Commons majority, but managed to secure the Government’s survival for another two years by means of a pact with the Liberals. This frustrated Mrs Thatcher at the time, but in fact this twilight period worked to her advantage in the long run. Had she come to power in 1977 she personally would have been less experienced, less confident and less prepared for office than she was in 1979, while the tide of intellectual and public opinion which eventually carried her into Downing Street and made possible – just – the uncompromising economic policies which she and Geoffrey Howe pursued in 1980 – 81, would not have been so strong. When the Tories did return to power, it was immensely helpful that Healey and Callaghan had already been keeping a tight grip on monetary policy for the past two years. It is a recurring pattern in politics that when one party reluctantly adopts the other’s policies, the electorate tends to go for the party which actually believes in them. ‘If you want a Conservative government’, she told listeners to Jimmy Young’s morning radio programme in 1978, ‘you’d better have a Conservative government and not a half-hearted Labour government practising Conservative policies.’32 By May 1979 Callaghan and Healey had made much of her case for her.

  8

  Thatcherism under Wraps

  Cautious crusader

  THE years of opposition were a peculiarly difficult and ambiguous time for Margaret Thatcher. She was a woman of strong convictions and a powerful sense of mission whose instinct, once she unexpectedly found herself leader, was to lead from the front.Yet at the same time, she was very conscious of the weakness of her political position, a little frightened of her own inexperience and the heavy responsibility which had suddenly been thrown upon her, and well aware of the formidable combination of habit, convention and vested interest that was ranged against her. She did not have the authority to impose a thoroughgoing free-market agenda on the Tory party, let alone project it unambiguously to the country. Moreover, even if she had been in a position to proclaim her long-term vision, there was a huge gap between knowing what was right in theory and translating that knowledge into practical policies that could be compressed into a manifesto.

  Even after she achieved power, and a political dominance she could never have imagined in 1975, it still took her the best part of two terms, with the full resources of the Civil Service at her command, to begin to frame an explicitly ‘Thatcherite’ programme. So long as she was in opposition her overriding priority was to make sure she did not lose the General Election, whenever it came. She could not risk getting too far ahead of her party, so had to disclaim objectives which might alarm the voters or allow her opponents to label her ‘extreme’. She had to be prepared to fight on a vague prospectus that gave only the broadest hint of her true ambition. As a result, for the whole of this period in opposition, she was obliged to speak with two voices – one clear, didactic and evangelical, the other cautious, moderate and conventional – displaying a confusing mixture of confidence and caution. Right up to May 1979 no colleague or commentator could be sure which was the real Margaret Thatcher.

  It is not even certain that she knew herself. Looking back from the perspective of the 1990s, Lady Thatcher in her memoirs naturally subscribed to the heroic legend of a leader who knew clearly from the outset what she wanted to achieve and was only constrained to dissemble her intentions by her dependence on colleagues less clear-sighted and resolute than herself. And, of course, there is plenty of evidence to support this view. ‘This is what we believe,’ she famously told a seminar at the Centre for Policy Studies, producing from her handbag a well-worn copy of Hayek’s The Constitution of Liberty and banging it down on the table.1 More than once she announced that her purpose was nothing less than to eliminate what she called socialism permanently from British public life. ‘Our aim is not just to remove a uniquely incompetent Government from office,’ she declared in May 1976. ‘It is to destroy the whole fallacy of socialism that the Labour party exists to spread.’2

  Yet rarely if ever did Mrs Thatcher speak in public of abolishing exchange controls or serious denationalisation, still less of curbing local authorities or renewing the Tories’ battle with the miners. In an ideal world all this may have been among her long-term aspirations, but it is doubtful if she ever imagined that any of them would become practical politics. In the short term she thought more in terms of stopping things than of pursuing a radical agenda of her own. Her repeated refrain to colleague
s and advisers from the think-tanks who told her what she should do in office was ‘Don’t tell me what. I know what. Tell me how.’ 3 It was by no means certain that the necessary public support would ever be attainable, even if she won the election. Even as Prime Minister, it is clear from the memoirs of Nigel Lawson, Geoffrey Howe and others that Mrs Thatcher was often the last to be persuaded that key ‘Thatcherite’ policies, from the scrapping of exchange controls to the reform of the National Health Service – however desirable in principle – were in fact practicable or politically prudent. She was still more hesitant in opposition.

  The truth is that caution was just as integral a component of Margaret Thatcher’s character as faith. She was pretty sure she would only get one chance, and as an ambitious politician she did not intend to blow it. Nor was it simply that she dare not risk commitments that might split the party. She always had a superstitious fear of giving hostages to fortune or crossing bridges before she came to them. She hated the detailed pledges Heath had forced her to make on rates and mortgages in October 1974. Back in 1968 she had argued in her lecture to the Conservative Political Centre that elections should not be turned into competitive auctions. Now she seized on an essay by the political scientist S. E. Finer which lent academic authority to her distrust of the modern doctrine of the mandate, and quoted it triumphantly to her aides.4 She believed that politics should be a contest between opposed philosophies, not catchpenny bribes. Her purpose was to win the battle of ideas.