The Iron Lady

by John Campbell

  At an official level, too, a significant shift had already occurred. Though monetarism – the theory that there was a direct causal relationship between the amount of money in the economy and rising inflation – was still deeply controversial, disputed by many economists and used by politicians as sloppy shorthand for all manner of right-wing extremism, it had in practice been largely accepted and quietly applied by the Labour Government, under the instruction of the International Monetary Fund, for the past two years. Callaghan and his Chancellor, Denis Healey, had kept a tight squeeze on monetary growth on pragmatic, not dogmatic, grounds; the new Conservative Government – or at least the inner group of ministers who would direct its economic policy – believed in controlling the money supply as a matter of principle, even of faith. But the soil had already been prepared for them, and the change of policy within the Treasury was more cosmetic – a matter of presentation – than real. The incoming Government was actually a good deal less innovative in this respect than either the Tories pretended or Labour ex-ministers liked to acknowledge.

  The third enormous benefit the new Government enjoyed, which cushioned to some extent the impact of the policies it intended to pursue, was the coming on flow of North Sea oil. It was in June 1980 that Britain became for the first time a net oil exporter. The effect of this fortunate windfall was disguised by the fact that the Government’s coming to power coincided with the onset of a major world recession, so that for the first two or three years the economic news appeared to be all bad as unemployment and inflation soared. But the impact of the recession would have been a great deal worse, and maybe politically unsustainable, had it not been for the fortuitous subsidy that Britain’s independent oil supply gave to both government revenue and the balance of payments.

  Unlike all her recent predecessors, Mrs Thatcher’s purpose was not to run the economy from Whitehall, but to teach British industry to survive by its own competitiveness instead of looking to the Government for its salvation. Her immediate priority, therefore, was to take three or four big, bold decisions and then have the courage to stick to them. As it happened, this turned out to be more difficult than anticipated as the recession bit, provoking a concerted demand from every shade of the political spectrum that the Government must set aside its ideological preconceptions and act in the national interest in exactly the ways Mrs Thatcher was determined to eschew. It took a strong nerve to resist this chorus of advice, but Mrs Thatcher was morally armoured by her certainty that what she was trying to do was right. Indeed, her combative nature positively relished the adversity. The more the apologists of the old consensus insisted that she must change course, the more determined she became not to be deflected, until the importance of being seen not to be deflected became an end in itself, irrespective of the economic arguments. Thus the style of the Thatcher premiership was forged in these first two testing years.

  A traditional Tory Cabinet

  The formation of the Cabinet reflected this mixture of long-term determination and short-term realism. For all her brave talk in opposition of having a ‘conviction Cabinet’ with ‘no time for internal arguments’,9 Mrs Thatcher had in practice no choice but to confirm in office most of those who had comprised the Shadow Cabinet before the election. Having maintained a broad front of party unity in opposition, she could not suddenly appoint an aggressively Thatcherite Cabinet in the moment of victory. As it was, when she sat down that first evening in Downing Street with Willie Whitelaw and the outgoing Chief Whip, Humphrey Atkins, to settle the allocation of departments to be announced next day, she let herself be guided to a great extent by Whitelaw. With one major exception, no figure of importance was left out and no new faces were brought in, while several old ones were brought back. It did not look like a Cabinet to launch a social revolution. Yet at the same time Mrs Thatcher made sure that the key economic jobs were reserved for those she called ‘true believers’.

  So far as most commentators were concerned, her trickiest dilemma was whether to include Ted Heath. In fact she never seriously considered it. As she frankly explained to one of her first biographers: ‘He wouldn’t have wanted to sit there as a member of the team. All the time he would be trying to take over.’10 She sent him by motorcycle a brief handwritten letter informing him that, after thinking ‘long and deeply about the post of Foreign Secretary’, she had ‘decided to offer it to Peter Carrington who – as I am sure you will agree – will do the job superbly’.11 She later added public insult to this perceived injury by offering Heath the Washington Embassy – a transparent way of trying to get him out of domestic politics – even though he had made clear his determination not to leave the Commons. For the next eleven years the former Prime Minister’s glowering resentment on the front bench below the gangway served as the most effective deterrent to Tory malcontents tempted to criticise the Government.

  The price of excluding Heath was that Mrs Thatcher was bound to fill her Cabinet with his former colleagues. Thus Whitelaw became Home Secretary, Francis Pym had to settle for Defence and Carrington asked for and was granted Ian Gilmour as his deputy in the Commons, with a seat in the Cabinet as Lord Privy Seal. James Prior was confirmed as Employment Secretary. Most significantly, Peter Walker was brought back as Agriculture Secretary. It was widely assumed that she considered Walker (unlike Heath) too dangerous a potential critic to leave on the back benches. In fact, she had always regarded him as an effective minister, as she proved by keeping him in a succession of departments for the next ten years.

  She had much less regard for Michael Heseltine, whom she already distrusted as dangerously ambitious as well as ideologically unsound, but she could not afford to leave him out. In opposition Heseltine had accepted the shadow Environment portfolio only on condition that he would not have to take the same job in government; but after turning down the Department of Energy he reluctantly accepted Environment after all, and then found that it suited him admirably.

  Other former Heathites filled most of the spending departments. The engine room of the new Cabinet, however, lay in the economic departments. The relationship between the Prime Minister and Chancellor is central to the success of any Government. Four years earlier Mrs Thatcher had chosen the dogged Geoffrey Howe, rather than her intellectual mentor Keith Joseph, to be her shadow Chancellor and now, slightly reluctantly, she kept faith with him. Howe had worked hard in opposition to lay the groundwork of monetarist policies and was said to be ‘the only man who can work with Margaret at his shoulder’;12 but she always found his mild manner exasperating and was already inclined to bully him.

  Howe was joined in the Treasury by John Biffen as Chief Secretary (in the Cabinet) and the most brilliant of the younger monetarists, Nigel Lawson, as Financial Secretary (outside the Cabinet). Keith Joseph went to the Department of Industry – amid accurate predictions that he would prove too compassionate in practice to implement the sort of ruthless withdrawal of subsidies which he advocated in theory;13 while John Nott got the Department of Trade. These five – Howe, Joseph, Biffen, Nott and Lawson – with Mrs Thatcher herself, formed the central group in charge of the Government’s economic strategy. The only non-monetarist allowed near an economic job was Jim Prior, whose appointment to the Department of Employment was welcomed as a signal that the new Government did not want an early confrontation with the unions. Mrs Thatcher accepted this analysis. ‘There was no doubt in my mind’, she wrote in her memoirs, ‘that we needed Jim Prior… Jim was the badge of our reasonableness’.14

  Most press comment found the moderate composition of the Cabinet reassuring and failed to anticipate the way Mrs Thatcher would get around it. In fact, with an instinct for the reality of government which belied her relative inexperience, Mrs Thatcher had calculated better than either her supporters or her opponents that neither the individuals nor the numbers around the Cabinet table mattered. So long as those she came to call the ‘wets’ had no departmental base from which to develop an alternative economic policy, she and her handful
of likeminded colleagues (who naturally became the ‘dries’) would be able to pursue their strategy without serious hindrance. Short of resigning – which none of them was keen to do – the ‘wets’ could only stay and acquiesce in policies they disliked, in the belief that political reality must force a change of direction sooner or later.

  From the start, the full Cabinet never discussed economic policy at all. Yet in her early days as Prime Minister Mrs Thatcher operated for the most part quite conventionally through the Cabinet committee structure: economic policy was determined by the ‘E’ Committee, chaired by herself. She held weekly breakfast meetings with the monetarist inner circle, Howe, Joseph, Biffen and Nott, with just one or two of her own staff in attendance. These Thursday breakfasts remained secret until they were revealed by Hugo Young in the Sunday Times in November 1980 – by which time they had achieved most of their purpose and the group was anyway beginning to unravel. On wider matters Mrs Thatcher allowed much freer discussion in the Cabinet than Ted Heath had ever done; partly because she lacked his personal authority among her colleagues (nearly half of whom were older than her and several much more experienced), partly because she always enjoyed a good argument. In the early years she quite often lost the argument; but she never lost control, not only because she had her key allies in the posts that mattered, but also because in a crunch Willie Whitelaw and Peter Carrington would not let her be seriously embarrassed. She never held a vote, so she could not be outvoted. At the same time it was undoubtedly good for her to have powerful opposition within the Cabinet, composed of colleagues of her own age and independent standing who would argue with her, even though she could usually prevail in the end. In later years, when her colleagues were all much younger and owed their positions entirely to her, she lacked that sort of opposition. For this reason her first Cabinet was in some respects her best.

  The linchpin of her authority was Whitelaw. It was many years later that she made the immortal remark that ‘Every Prime Minister should have a Willie’,15 but it was in her first term that she needed him most. As the acknowledged leader of the paternalistic old Tories, he could easily have rallied a majority of the Cabinet against her had he chosen to do so. Instead, having stood against her in 1975 and been defeated, he made it a point of honour to serve her with an almost military sense of subordination to his commanding officer. He had strong views of his own on certain matters which he did not hesitate to argue, normally in private. He would warn her when he thought she was getting ahead of the party or public opinion. But he saw his job as defusing tension and ensuring that she got her way. In the last resort he would never set his judgement against hers or countenance any sort of faction against her. Some of his colleagues felt that he thereby abdicated his proper responsibility to act as a traditional Tory counterweight to her more radical instincts; but so long as Willie stood rocklike beside her it was impossible for any other group in the Cabinet successfully to oppose her.

  In effect she used him to chair the Cabinet. In business terms Mrs Thatcher acted more like a chief executive than a chairman, concerned not with seeking agreement but with driving decisions forward. She would normally speak first, setting out her own view and challenging anyone with a good enough case to dissent. ‘When I was a pupil at the Bar,’ she once told the House of Commons, ‘my first master-at-law gave me a very sound piece of advice, which I tried to follow. He said: “Always express your conclusion first, so that people do not have to wait for it.”’ As Prime Minister she made this her regular practice.16 After a brisk exchange of views, often head-to-head with a single colleague, she would then leave Whitelaw to sum up, which he would do with skilful bonhomie, blandly smoothing away the disagreements while making sure the Prime Minister got her way, or at least was not visibly defeated.

  ‘She certainly was aggressive,’ one member of that Cabinet confirms, but ‘I never felt that she was dominant… On all sorts of issues there was a pretty good ding-dong discussion…’ Yet more often than not she did dominate, not only because she was always thoroughly prepared, but because she had no hesitation in berating ministers in front of their colleagues if she thought they did not know their stuff. Moreover, as Jim Prior wrote, colleagues were given no time to develop an argument at length. ‘If a minister tended to be in the slightest bit longwinded, or if she did not agree with his views, Margaret would interrupt.’17 She was the same in smaller meetings, with both ministers and officials.

  She was in fact a very good listener when she respected the expertise of the person she was talking to, and really wanted to hear what he had to tell her. To hold her attention, however, it was essential to make your point quickly and then stick to it. ‘Waffle was death,’ a senior mandarin recalled.18 Much of her irritation with Geoffrey Howe stemmed from the fact that he never learned to make his point quickly. She relished argument for its own sake, and would often take a contrary line just to provoke one. It was through argument that she clarified her own mind. ‘She would argue vigorously,’ the head of her policy unit, John Hoskyns, recalled, ‘to satisfy herself that the thinking she was being given was good.’19 Though she read all the papers, her staff quickly learned that she was never persuaded of anything on paper alone: she had to test the case in argument before she would accept it.20

  At the same time she was extraordinarily difficult to argue with, because she would never admit to losing an argument, but would become ‘unbelievably discursive’ and illogical if the point was going against her, abruptly changing the subject in order to retain the upper hand.21 Alan Clark, recording a bout with the Prime Minister some years later, characteristically saw her illogicality as quintessentially feminine: ‘no rational sequence, associative lateral thinking, jumping rails the whole time’.Yet he concluded: ‘Her sheer energy and the speed with which she moves around the ring makes her a very difficult opponent.’22 She argued not merely to clear her mind, but to win.

  It was possible to change her mind, but she would never admit to having been wrong. She would furiously resist an argument by every device at her disposal one day, only to produce it unblushingly the next day as her own, with no acknowledgement that she had shifted her ground or that her interlocutor might have had a point.23

  Some colleagues reckoned that this aggressive manner was both necessary, at least in the beginning, and effective. Lord Carrington suggests that it was the only way that Mrs Thatcher, as a woman, could have asserted her authority in the circumstances of 1979 – 81.24 John Hoskyns likewise believes that she had to be ‘impossible, difficult, emotional, in order to try to bulldoze… radical thinking through’ against those he termed ‘the defeatists’ in the Cabinet.25 Even Geoffrey Howe, the butt of so much of her worst bullying, told Patricia Murray in 1980 of the exhilaration of working with Mrs Thatcher in these early days:

  Oh, yes she is dramatically exciting! She has an openness, a frankness, an enthusiasm and an unwillingness to be cowed… which makes her enormous fun to work with.You can never be quite sure on issues you have never discussed with her what her instinctive reaction will be, but it’s bound to be interesting… Even on the days when it isn’t fun, she thinks it is well worth having a try.26

  Others, however – particularly those colleagues less resilient than Howe and less robust than Prior – thought her method of government by combat counterproductive and inimical to sensible decision making. David Howell, a thoughtful politician who had naively imagined that the Cabinet would function as the forum for an exchange of ideas, was disillusioned to discover that, on the contrary, ‘certain slogans were… written in tablets of stone and used as the put-down at the end of every argument’. ‘In my experience,’ Howell concluded, ‘there is too much argument and not enough discussion.’27 Another member of the 1979 Cabinet thought it ‘an absurd way to run a Government’.28 To these critics, Mrs Thatcher’s inability to delegate and her insistence on interrogating her ministers about the smallest detail of their own departments reflected a deep-seated insecurity, not so much politic
al as psychological: she had to be on top all the time, and keep demonstrating that she was on top. The schoolgirl had not only done her homework, but had to prove that she had done it. On this analysis her aggression was essentially defensive.

  The negative results of this method were that she exhausted herself and did not get the best out of others. Though she liked to boast that she was never tired so long as there was work to be done – ‘it’s when you stop that you realise you might be rather tired’29 – and wrote in her memoirs that there was ‘an intensity about the job of Prime Minister which made sleep a luxury’, many of those who worked most closely with her insist that this was not true. Undoubtedly her stamina was remarkable. She could go for several days with four hours’ sleep a night, and rarely allowed herself more than five or six. But her staff could see that she was exhausted more often than she ever admitted: one sign was that she would talk more unstoppably than ever.30 Her refusal to acknowledge physical weakness was another way of asserting her dominance. Any minister unwise enough to admit that he needed sleep would find himself derided as a feeble male. Alternatively, she would express motherly concern; but this, George Walden noted, was another stratagem:

  What she was saying when she commented on how terrible you looked was that you were a man and she was a woman, you were a junior and she was Prime Minister, and yet unlike you she was never tired.31

  In the same way she would insist that other people must have their holidays while refusing to admit that she might need one herself. ‘I must govern,’ she told a member of her staff in the summer of 1979.32 Holidays, she frequently implied, were for wimps.33 But her inability to relax also conveyed the message that she did not trust anyone to deputise for her. She believed that if she stopped for a moment, or let slip her vigilance, the Civil Service would quickly resume its paralysing inertia, her feeble colleagues would backslide and her enemies would combine against her. By not trusting her ministers to run their own departments, however, Mrs Thatcher ultimately diminished them.