In her interrogations of Evans about the industrial impact of the deal, the Prime Minister extracted from him the information that one new manufacturing job created by Al Yamamah at his company’s factories in places like Wharton, Brough, Salmesbury and Kingston created another twenty new jobs in the aerospace supply chain. These jobs were secured for subcontractors, principally in Lancashire and the wider North West of England, also stretching down into the West Midlands.
‘Do you realise how powerful your company is, Dick?’ Margaret Thatcher asked him. ‘No British political party can be elected to power unless they win the key marginals. You represent to me the largest number of critical seats in the key areas of the North West and the West Midlands.’ Ticking off a number of named constituencies on her fingers she asserted, ‘Jobs in towns and cities like these are absolutely vital to national prosperity and to our government’s electoral prospects’.15
The concept of Al Yamamah as an engine for winning domestic elections may not have occurred to anyone else but Margaret Thatcher the perceptive and sometimes parochial politician. But she also kept her side of her strategic bargain with King Fahd as Margaret Thatcher the international statesman.
For when Saudi Arabia tottered and swayed at the prospect of being the next target for Saddam Hussein in the days after his 1990 invasion of Kuwait, Margaret Thatcher was the Kingdom’s earliest and most robust defender. She despatched some of the first British forces and aircraft to the Gulf – many of them landing at the new bases built under the Al Yamamah contract. She also most effectively exhorted the first Bush administration to put its military might behind Saudi Arabia, delivering the memorable line to the President, ‘George, this is no time to go wobbly’.* As always, she was a loyal and far-sighted international ally.
Margaret Thatcher pulled off large export deals for many British companies in many countries. She saw this as a vital part of her role as Prime Minister, often describing it as ‘Batting for Britain’. In Saudi Arabia she played her finest captain’s innings.
REFLECTION
Al Yamamah was a triumph for Margaret Thatcher but it was not without subsequent controversy. Because of the jobs created there was always bi-partisan support for the contract in Parliament. But some MPs and journalists took a hostile stance, attacking the project on the political grounds that it was an unsavoury arms deal with a reactionary monarchy. There were also allegations of corruption linked to the deal, including unsubstantiated insinuations that Mark Thatcher had benefited from it.
Most of these claims, although published by some British newspapers, originally surfaced in underground Arab magazines such as Sourakia. The informants for these stories often had axes to grind that were linked to some score settling between factions within the Kingdom. So assessing the reliability of such reports was difficult.
Inevitably it was true that some individual Saudis and Saudi companies made fortunes from Al Yamamah. Commissions, consultancies and success fees are the way of life in the Middle East, par for the course on business deals great and small. Did Mark Thatcher benefit in this way? The allegation has always been denied and not an iota of proof has ever been produced to underline these denials. I believe them, first because it is so difficult to see what value he could possibly have added to any part of the project, and second because Denis worked so hard to keep his son out of the deal.
In 1992 I was appointed Minister of State for Defence by Prime Minister John Major and given responsibility for Al Yamamah which by then was in its seventh year of operation. I had long talks and negotiations with King Fahd and Prince Sultan which resulted in Al Yamamah Two, the first of several massive extensions of the contract which continues to this day. In that job† I learned many Al Yamamah secrets, none of which yielded anything but credit to Margaret Thatcher. During my meetings in Riyadh I sometimes had the impression that King Fahd would much rather be negotiating with her than with me, so often did he refer to her personality and even her beauty in the warmest of terms!
The Public Accounts Committee (PAC) in the House of Commons, under the chairmanship of the former Labour Treasury minister Robert Sheldon, conducted its own report on Al Yamamah in 1992. It gave the financial aspects of the project handled by the British government a clean bill of health. But the PAC report was never published, not because of any financial irregularities but because the nuclear wiring of the Tornados sold to Saudi Arabia was then deemed to be far too sensitive a secret to be revealed.
Some of the key figures in the deal stayed close to Margaret Thatcher. King Fahd invited her to Riyadh soon after she ceased to be Prime Minister. He paid her the unprecedented compliment of meeting her at the front steps of her arriving aircraft accompanied by his entire cabinet.
Prince Bandar was a regular visitor to her in retirement. Wafic Saïd became a lifelong friend, often having her to stay at Tusmore, his Oxfordshire estate. During her last years Margaret Thatcher enjoyed long breaks in the Clock House of Tusmore, accompanied by her carers.
Sir Richard Evans, as he became, remained a confidant of Denis Thatcher, often dining with him or à trois with Bill Deedes in the East India Club. ‘Denis was one of the heroes of Al Yamamah’, said Evans. ‘His only motives for being so incredibly helpful was that he loved his wife and he loved his country. He was the best British patriot I ever saw.’
Patriotism explains much about Margaret as well as Denis Thatcher over their roles in the Al Yamamah story. She took patriotic risks in her dealings with the Saudis but they paid off handsomely in terms of jobs, exports and a revived, indeed a saved, aerospace industry for Britain. Why did she omit any mention of this success story from her memoirs? Perhaps she felt vulnerable about Mark’s rumoured involvement. She need not have done. As usual she was in the dark about her son’s business activities. Had she been in the know, she would have been grateful that Denis protected her from filial embarrassment while playing his usual quiet but pivotal role as her loyal consort. In this instance both Thatchers deserve praise for steering the largest export contract of the twentieth century from France to Britain.
________________
* See Chapter 35.
† Like many other people linked to Al Yamamah I was subjected to vague press insinuations that I was corruptly involved in the deal. This was completely untrue. The only allegations to this effect were withdrawn in the High Court in June 1997.
26
Unions and miners
STEPPING STONES TOWARDS SOLVING THE PROBLEM
The most important achievement of Margaret Thatcher’s second term as Prime Minister was the defeat of the National Union of Mineworkers’ strike in 1984–1985. It exorcised the demon of militant trade unionism, which had done such damage to the economy throughout the 1970s, and driven two prime ministers – Ted Heath and James Callaghan – from office.
Yet, although the economic and constitutional benefits to the nation from victory in the miners’ strike were enormous, there were two surprises about Margaret Thatcher’s handling of the union militancy problem. The first was how cautiously and falteringly she initially faced up to it. The second was how little credit she and her government were given for solving it. These paradoxes deserve explanation.
From the time when she replaced Ted Heath as Tory leader, Margaret Thatcher realised that she would one day have to confront the union extremists. Unfortunately, she had no coherent idea how or when to do this. The clarity of decision-making that was usually the hallmark of her personality was noticeably absent from her early attitude towards trade-union issues. Her main difficulty was that she was boxed in by a combination of political history, parliamentary fears and cabinet caution.
In the light of 1970s political experience, the conventional wisdom of the Tory Party was that picking a fight with the unions was the kiss of political death. At one of Margaret Thatcher’s early shadow cabinet meetings, Lord Carrington quoted Harold Macmillan’s dictum: ‘No Government should ever take on the Brigade of Guards, the Vatican or the National Uni
on of Mineworkers.’1
As Ted Heath had just lost the February 1974 election because of his unsuccessful battle with the miners, the axiom seemed to have been proved. So if there was any strategy at all within the Conservative Party towards the unions in the mid-1970s it was the ‘softly, softly’ approach personified by Jim Prior. Margaret Thatcher instinctively believed it was inadequate, but for a long while did nothing to change it.
The first stirrings of change came at the end of 1977 when she read a confidential briefing paper titled Stepping Stones. Its authors, who had been introduced to her by Keith Joseph, were two independent-minded businessmen, John Hoskyns and Norman Strauss.
Their central message was that a future Conservative government would have no chance of halting Britain’s economic decline unless it was prepared to implement a determined strategy in facing down the excesses of union power. Hoskyns described it as
a shit or bust strategy … we set out to convince Margaret that it was no use trying to be a Heath Mark II, even if she kept her nerve a bit longer than he did. We were offering something completely different, saying that the unions had to be confronted and that the union militants would have to be destroyed. Without the resolve to do this her efforts to revive the economy would be a case of ‘steady as she sinks!’2
Margaret Thatcher liked blunt-speaking men of action who offered her solutions along the lines of her own instincts. So when Stepping Stones was presented to her by Hoskyns and Strauss, over a four-hour meeting in her office in the House of Commons on 24 November 1977, she was enthusiastic. ‘It’s the best thing we’ve had for many years’,3 she told Willie Whitelaw. But the paper was a long way from being accepted as Tory policy.
Although a Stepping Stones steering group was set up, its main achievement was to steer the radical ideas of Hoskyns and Strauss into a brick wall. This impasse came because of skilful opposition from Jim Prior, Peter Thorneycroft, Chris Patten, Ian Gilmour and other doves. The paper would probably have sunk without trace but for the ‘winter of discontent’. That gave Margaret Thatcher the opportunity to resurrect the Stepping Stones strategy and to seize on one of its principal recommendations, which Hoskyns, a former army officer, called, ‘The charge of the Light Brigade approach’.4 This was the tactic of presenting the Callaghan government’s appeasement of the unions as the major reason why the Labour Party should not be re-elected. Instead of being on the defensive about the Conservatives’ inability to govern because of fear of union conflict, Margaret Thatcher went on the attack with her willingness to fight the dragon of union power. It was a bold move. Its timing was in tune with the mood of the electorate, even if her message made her senior colleagues uneasy.
This adoption of the Stepping Stones agenda brought John Hoskyns and his confrontational ideas back into fashion. After the general election of 1979 he was appointed Head of the Prime Minister’s Policy Unit at Number 10. His arrival in what should have been a position of great influence meant that a beach-head for the strategy of challenging the unions had been established at the heart of the government’s policy-making.
The strategy remained marooned on the beach for many months. This was largely due to Jim Prior whose even gentler approach in government as Employment Secretary meant that little was done to tackle the abuses of union power. As a result the Thatcher government’s first Employment Act of 1980 was modest in its scope. It restricted the closed shop, but did not ban it. It outlawed secondary picketing, but not secondary strike action. It encouraged secret ballots, but did not make them compulsory. Although the Prime Minister publicly defended the legislation as ‘modest and sensible’5 and ‘a very good start’6 her real views were quite different. She became fed up with Prior, who she felt was thwarting the Stepping Stones agenda at every turn. So she moved her Employment Secretary to Northern Ireland, replacing him with Norman Tebbit, whose Employment Act of 1982 widened the scope of reform by making unions liable for damages.
During her first term, Margaret Thatcher had some successes in her dealings with the unions and one major failure. Pay demands became more realistic. Fear of unemployment after the 1981 Budget created a more moderate wage-bargaining climate. Some strikes, notably by train drivers and by health-service workers, ended in stalemate or even humiliation for their organisers. But the atmospherics of industrial relations remained tense. This was because of one elephant, which was not only in the room – it trumpeted its early defeat on the government. The elephant was the National Union of Mineworkers (NUM).
The NUM was Britain’s most powerful and most militant union. In the first eighteen months of the Conservative government it won pay rises for its members of 30 per cent. In 1981 it threatened to strike over a proposal by the National Coal Board to close twenty-three uneconomic pits. The Prime Minister wanted to back the National Coal Board. But she had to make a swift U-turn. She discovered that coal stocks at power stations were much lower than expected.
In various cabinet committees Margaret Thatcher fulminated against Sir Derek Ezra, the National Coal Board Chairman, for failing to move sufficient quantities of coal from the pitheads to the electricity generating stations. She was almost as critical of her first Energy Secretary, David Howell. It was hardly the Prime Minister’s fault that the coal was in the wrong place, but she took it personally. Yet in her despair she was decisive. When she learned that the country would only have thirteen weeks of electricity supplies before coal stocks ran out and the nation would be facing power cuts, she knew she was beaten. To her chagrin, she had to retreat before the battle started. ‘Bring it to an end, David, make the necessary concessions’, she instructed Howell.7 They were expensive. The government had to find £300 million in extra subsidies to keep the twenty-three loss-making pits open. It was a major reversal for the Prime Minister’s strategy to reform the financing of the nationalised industries. She had been defeated by the NUM.
The miners exulted in their easy victory. Amidst their crowing they elected, as their new NUM President, Arthur Scargill. In contrast to his moderate predecessor Joe Gormley, Scargill was a Marxist militant whose skill as a rabble- rousing orator was equalled by his determination to overthrow the elected government. He declared this openly. ‘A fight-back against this Government’s policies will inevitably take place outside rather than inside Parliament’, Scargill told the annual conference of the National Union of Mineworkers in Perth. ‘Extra-parliamentary action will be the only course open to the working class and the Labour movement.’8
Alerted to Arthur Scargill’s intentions, Margaret Thatcher was certain that she would have to face a miners’ strike. Even though John Hoskyns left her team at No. 10 in disillusionment in early 1981, she revived his Stepping Stones credo that confrontation was inevitable. So she prepared for it with great care, starting with an instruction to her new Energy Secretary, Nigel Lawson, to increase the movement of coal from the pitheads to the power stations. This was a wise move, because the miners’ strike of 1984 was destined to become the turning point in the unresolved struggle between union power and government authority.
ARTHUR SCARGILL’S CHALLENGE
Margaret Thatcher not only saw the miners’ strike coming, she regarded it as an unavoidable clash between hard-left militancy and common-sense economics. She was right. Arthur Scargill was an ideological extremist who wanted the strike for political reasons, leading it with contempt for the democratic rules of his own union and disregard for the interests of his members. Short of bringing General Galtieri over from Argentina to lead the NUM, there could not have been a more obtuse and stubborn opponent for Margaret Thatcher in her battle against the abuses of union power. But even if the fight was essential, it was a sad one with melancholy consequences and many lasting scars.
Having lost her opening battle with the NUM, the Prime Minister was determined to win the longer-term war. Her first dispositions involved making three strategic appointments that showed her prescience about the power struggle that was bound to come.
The
day after the 1983 general election, she chose Peter Walker to be her Secretary of State for Energy. He was not her cup of tea politically. As a leading wet, he had opposed most of her economic policy and was a notorious leaker against her, principally to his friend Mark Schreiber of The Economist. But Walker had skills the Prime Minister needed – bustling energy, administrative drive and a capacity for ruthless media management. She told him on the day of his appointment that a Scargill-led strike was to be expected, and that his talent as ‘a skilled communicator’ would be useful in retaining public support for the government’s case when the NUM militants went on the attack.9
The government’s economic case was overwhelming. The coal industry was losing over £200 million a year in 1984. Three-quarters of its pits were uneconomic, and many of them would have to be closed.
To keep herself fully briefed on what was happening in and around the country’s coalmines, Margaret Thatcher reached out to sources wider than the management of the National Coal Board. In January 1984, she asked to see two MPs who were the only Conservatives in the House of Commons whose constituencies covered an entire coalfield. They were Peter Rees (Dover and Deal), and myself (Thanet South). Between us, we represented the 3,000 strong workforce of the small but ultra-militant Kent pits.
The Prime Minister was surprised to learn that the Kent miners were such aggressive supporters of Arthur Scargill that there was no hope of persuading them to act or vote moderately. She wanted answers to detailed questions about where and how the coal they produced was being delivered. When I said that most of it seemed to be piling up at the pithead, which was unnecessary because Richborough Power Station – only six miles away – had plenty of spare storage capacity, Margaret Thatcher’s eyes gleamed. ‘We will make sure that Walter Marshall gets that information,’ she said to her Private Secretary, ‘won’t we?’10
Margaret Thatcher: Power and Personality Page 56
