The Downing Street Years, 1979-1990

by Margaret Thatcher

  On the evening of Thursday 6 December I met the Dutch Prime Minister for talks and dinner in Downing Street. I always got on well with him, but I did not envy his position. The notorious instability of coalition governments of the sort he led makes it immensely difficult to get clear decisions and stick to them. On this occasion, Mr Van Agt explained to me in some detail the difficulties he was facing. Apparently, half the sermons in Dutch churches were now dealing with nuclear disarmament and the issue of deployment was endangering his Government’s survival. I agreed with him that the fall of a NATO member government on a NATO issue would be a very serious development. But I added that NATO would have to go ahead with the decision to deploy theatre nuclear weapons or else the alliance would lose its credibility and its purpose. The Netherlands could reserve its position while waiting to see what the attitude of the Soviet Government was in arms control negotiations. The Russians were playing their traditional psychological game to discourage NATO from taking decisions and they must not be allowed to get away with it.

  In fact, in an act of remarkable courage in the face of so much domestic and Soviet opposition, the NATO ministers made the required decision in Brussels on 12 December. The arms control proposals, including the American offer to withdraw 1,000 nuclear warheads from Europe, were agreed. Most important, the alliance agreed to the deployment in Europe of all the 572 new American missiles which had been envisaged. The reservations entered by the Belgian and Dutch Governments were less serious than at one time had seemed likely. The Belgians agreed to accept a share of these missiles, subject to reconsideration after six months in the light of the progress of arms control negotiations. The Dutch Government accepted the proposals as a whole but postponed the decision to take a share of the missiles in Holland until the end of 1981. The latter date was in any case well before any proposed deployment could in practice begin.

  Of course, this was not the end of the matter. In June the following year we announced the sites of the Cruise missiles in Britain — Greenham Common in Berkshire and Molesworth in Cambridgeshire. From that time on Greenham was to be the focus for an increasingly strident unilateralist campaign.

  The Soviet Union’s own alternating bribes and threats continued to work on European public opinion. I was asked in a Dutch television interview on 4 February 1981, when I was on a return visit to see Mr Van Agt, about resistance to stationing Cruise missiles in Holland and Germany. I replied:

  I sometimes wish that those who do resist [Cruise missiles] would really turn all their effort to saying to the Soviet Union: ‘Look! You have the most modern, up-to-date theatre nuclear weapons in the SS-20… you have them targeted on every country in Europe. You increase their numbers at the rate of rather more than one a week. Do you really expect us to sit back and do nothing? If you want us not to have Cruise missiles in Europe, as a deterrent to your using yours, then dismantle yours! Take them down! Agree to be inspected so that we do know what you are doing!’… I know the worries. I do not like nuclear weapons either, but I value my freedom and my children’s freedom, and their children’s freedom and I am determined that it shall continue.

  I learnt afterwards that such plain speaking as this was a rare thing in the Netherlands.

  THE PURCHASE OF TRIDENT

  Another early decision which we had to take, with the greatest long-term consequence for Britain, related to our independent nuclear deterrent. Britain had four nuclear-armed Polaris submarines. The previous Conservative and Labour governments had pressed ahead with a programme of improvement to our Polaris missiles. The programme, code-named Chevaline, had been paid for and managed by the United Kingdom in co-operation with the United States, using some of their facilities for trials and tests. The upgraded Polaris system would maintain the full effectiveness of our strategic deterrent into the 1990s, though at a cost which had alarmingly escalated as the development continued. However, for a variety of technical and operational reasons we could not responsibly plan for the continuance of this system much into the 1990s. If Britain was to retain its deterrent a decision would shortly have to be made about Polaris’s ultimate replacement, given the time required to design or obtain new strategic nuclear forces of the sophistication necessary.

  We began to look at the options from almost the first days in government. These quickly proved a good deal narrower than they at first appeared, though inevitably they seemed wider to those without access to all the information. By late September 1979 we had discarded the option of a successor force of air-launched Cruise missiles because they would be too vulnerable to attack. The possibility of co-operation with France, which retained its own independent deterrent, was rejected for technological reasons. From an early stage the American Trident looked the most promising option.

  We had received firm assurances that the SALT II Agreement, reached between Presidents Carter and Brezhnev in June 1979, would not affect the situation regarding our own deterrent. But our aim was, if possible, to conclude an agreement with the Americans on purchasing Trident before the end of that year, so that it could not get caught up in the argument in the run-up to the expected ratification by the US Senate of the treaty. We also wished to have the decision made before President Carter became too preoccupied with the 1980 presidential election. The Trident missile included the advanced and very important technology of multiple nuclear warheads, each separately targetted (MIRVs). Not only was this the most up-to-date and therefore credible system — as measured against Soviet anti-submarine warfare capability and anti-ballistic missile defences — but by purchasing it from the Americans we could hope to avoid immensely expensive improvement programmes like Chevaline. On 6 December 1979 the ministers concerned agreed that the best system to replace Polaris was the Trident I (C4) MIRV system if it could be purchased from the US, less the warheads and the submarines carrying the system which would be produced in Britain. The decision was later confirmed by Cabinet.

  But at this point the most troublesome and annoying complications began. Although President Carter told me that he would supply us with whatever we needed he was desperately worried that news of his decision would cause him political difficulties. He had invested great political capital in the SALT II Agreement whose chances of being ratified by the Senate were already in doubt. He was worried that the Soviets might respond to his agreement to supply Trident with some action which would result in a failure to ratify. Consequently, I was not able to speak openly about the matter when I saw him with his colleagues in Washington. The Americans were also keen to ensure that the announcement on Trident did not occur before the scheduled 12 December meeting of NATO to decide on deploying Cruise and Pershing. I could see the sense of this. But in view of the problems which SALT II was facing I began to be anxious lest the decision on Trident be postponed well into 1980.

  With the Soviet invasion of Afghanistan at the end of the year the prospects of ratifying SALT II immediately sharply receded. But at this point the US Administration said that it was reluctant to announce the Trident decision because it could be seen as an overreaction to events in Afghanistan. The Americans were similarly unduly worried about the attitude of Chancellor Schmidt to the Trident decision. More hard-headedly, the Carter Administration also pressed strongly for both political and financial returns on the decision to supply us with Trident. They wanted us to agree to a form of words which would commit us to expanding our defence efforts. They were also keen to develop their defence facilities at our island of Diego Garcia in the Indian Ocean — something for which I had a good deal of sympathy. There was the matter of a substantial levy which we would be charged for American research and development costs which they were not prepared to waive.

  I was not happy about some of these demands: it seemed to me that it was as much in America’s interests as ours that we should have an independent strategic deterrent which would, like Polaris, be assigned to NATO and, except where the UK Government decided that supreme national interests were at stake, would be used f
or the purposes of international defence of the western alliance. As with the question of theatre nuclear weapons, it was the Soviet perception of the strategic threat which would ultimately determine its credibility — and whatever doubts they might have about America’s willingness to launch strategic nuclear weapons in defence of Britain, they would never doubt that a British Conservative Government would do so.

  On the afternoon of Monday 2 June 1980, however, I finalized the terms in discussion with Dr Harold Brown, the able US Defence Secretary, in Downing Street. I said that Britain wanted to purchase the Trident I missile on the same terms as regards research and development as Polaris, that is paying a 5 per cent levy. Dr Brown would not agree to this and said that it would have been severely criticized in Congress. But he would accept it providing the British Government bore the cost of manning the Rapier Air Defence Systems which the US intended to purchase for their bases in Britain. I agreed. I also agreed with the objective of extending and increasing US use of the base at Diego Garcia; but this made sense on its own merits and had nothing to do with the Trident decision. Dr Brown accepted this. At last the decision was effectively made and I wrote formally to President Carter requesting purchase of Trident, simultaneously informing President Giscard, Chancellor Schmidt and Prime Minister Cossiga. The decision was announced to the House by Francis Pym on 15 July and at Francis’s suggestion fully debated and endorsed on 3 March 1981.

  In the summer of 1980 we thought that we had made our final decision on the independent nuclear deterrent. But it was not to be. President Reagan came into office in 1981 with a programme of modernizing US strategic nuclear forces, including Trident. On 24 August the new US Defence Secretary, Caspar Weinberger, wrote to me to confirm that President Reagan had now decided to use the Trident II (D5) missile in the Trident submarines. The US Administration would make this missile available to us if we wished to buy it. On 1 October President Reagan formally told me of his decision.

  I well understood and indeed supported President Reagan’s decision to improve the US strategic nuclear capability. I was worried about the advances which the Soviet Union had made both in their technology and in numbers of weapons. However, we now faced a new situation. If we were still to go ahead with Trident I we risked spending huge sums on a system that would be outdated and increasingly difficult to maintain as the Americans went over to Trident II. But if we were to accept President Reagan’s generous offer of the new technology represented by Trident II we risked the increasing costs of any new project. Moreover, a number of political difficulties arose.

  In November 1981 a group of ministers met to discuss what we should do. We argued out all the questions between us; and all the arguments which would be raised in the outside world were discussed, including some feeble and unrealistic ones. One colleague was concerned at the impact on public opinion of choosing a still more powerful missile. Another raised the question whether it would be more difficult to keep a Trident II nuclear strategic force out of future arms control negotiations, as we had managed hitherto. A third was inclined to support the case for Trident II but with fewer missiles. Yet another, while accepting that Trident II was better than the alternatives, felt that the choice raised the more fundamental question of whether the UK could afford to continue to maintain an independent strategic nuclear deterrent at all. For my part I had two anxieties. One was, as I noted above, that the cost of a completely new missile now being developed was bound to be uncertain and on past performance was likely to escalate. The other was my unease about the implications for the strategic deterrent of Soviet developments in anti-ballistic missile defence, including particle beam and laser weapons — a possibility to which I had been alerted some years earlier but which became a matter of public debate only when President Reagan proposed his SDI initiative in March 1983.

  In January 1982 we had a further and fuller discussion based on a presentation. The more we considered the question the more it seemed that if we were to maintain a credible deterrent, which I was utterly determined we should do, we must indeed have the Trident II. But we must get it on the best possible terms. The issue was put to Cabinet later that month and on 1 February I sent a message to President Reagan saying that I would send officials to Washington to discuss terms.

  Again, as with President Carter’s Administration, there was plenty of hard bargaining. But I always knew that President Reagan and Caspar Weinberger would be conscious of Britain’s and the alliance’s long-term interests and would ultimately do what they believed to be right in defence terms, rather than just expedient or popular with the Congress. As before, the whole question of charges and levies arose. We for our part pressed hard for a fixed percentage of the work on the development of Trident to go to UK sub-contractors. The Americans who were building up their own navy were anxious to discourage us from reducing our surface fleet which we were intending to do following the Defence Review that year. We indicated the possibility of reprieving the amphibious landing ships HMS Fearless and HMS Intrepid, which pleased them. They also pressed for an extension of our armed forces’ engagement in Belize, which has now become a virtually permanent commitment.

  In the end, we concluded an agreement with the United States to buy Trident II on more advantageous terms than Trident I. The missile was to be purchased by us at the same price as the United States Navy’s own requirements in accordance with the Polaris Sales Agreement. But the additional overheads and levies would be lower than would have been the case under the 1980 Agreement to purchase Trident I. In particular, the so-called R & D levy would be a fixed sum in real terms and there would be a complete waiver of the facilities charge which was part of the Trident I deal. The terms protected us completely from the escalation of the development cost. The United States would set up a liaison office in London to advise British industry on how to compete on equal terms with US industry for sub-contracts for the Trident II programme as a whole, including the American programme. We also decided to improve and increase the size of the submarines which would carry Trident, making them more efficient and less detectable, and by running longer between refits make them more available for patrol. The total cost of Trident II and the other changes over the whole period would be £7.5 billion, just over 3 per cent of the total defence budget over the same period. When I learnt of the terms now being offered I was delighted and I gladly authorized their acceptance.

  THE DEFENCE REVIEW

  It is sometimes forgotten, now that the map of Europe and indeed the world has been reshaped with the fall of communism, just how painful were the consequences of the West’s efforts to strengthen its defence effort in the 1980s. The United States was as a result unable to reduce its public spending, with the consequence that the world faced higher interest rates, threatening economic recovery. We in Britain, for our part, had to match the necessary commitment to strengthen our defence with rigorous evaluation of what we could afford and where resources could be best applied. Economic, strategic and technical arguments alike pointed towards a thorough review of our defence commitments and how they should be fulfilled — and not only ours but those of the other NATO allies. Yet, at the same time, I was conscious of the danger that the wrong signals might be given to left-wing opponents of strong defence at home and to our enemies abroad.

  In early November 1980 I chaired a meeting of the Overseas and Defence Committee of the Cabinet (OD) to consider a paper from Peter Carrington and Francis Pym which argued that Britain should take the initiative in proposing a wide-ranging review of NATO to make it more relevant to western defence requirements and more cost effective. In the longer term the members of the alliance should move towards greater specialization. Attractive as the idea was from our viewpoint, it quickly became clear that Chancellor Schmidt was opposed to it, on the grounds that he believed that it would weaken not strengthen NATO. Moreover, with the election of President Reagan, committed to radically different policies from his predecessor, my main emphasis came to be on keeping the al
liance together, united behind American leadership. However, whether matched by international action or not, Britain was forced by pressures of circumstance to conduct its own and — as it turned out — highly controversial defence review.

  I appointed John Nott to Defence in January 1981 with the remit of getting better value for money from the huge sums spent on defence. In February John, Peter Carrington and I had an initial discussion about what would be our 1981 Defence Review. John had already concluded that the defence budget was hopelessly overextended both in the short and long term. The real cost of ever more sophisticated weapons was remorselessly increasing the pressure. More sales of defence equipment could help a little — particularly if we were able to produce equipment more suited to the needs of potential overseas customers. However, defence orders were running way ahead of budget and would have to be cut back if we were to keep within any kind of financial discipline. Some fundamental strategic issues also had to be faced. There was very little scope for reducing our commitment to West Germany. A policy of forward defence was crucial to the alliance’s strategy: moreover the political implications of cuts here for NATO as a whole could be very serious. Nor could savings be found in home defence: indeed the effort here would have to be increased, for example by strengthening the Territorial Army. There was no room for savings on the RAF: on the contrary, additional expenditure would probably be required. This left the navy. The navy needed more submarines and more minesweepers. But it is extremely expensive to keep up a large surface fleet and so that was plainly the area to look for cuts. None of us had any illusions about the sensitivities involved in the approach John proposed, but it was difficult to fault his analysis.