As the Conservatives’ annual party conference approached, an amendment was put down by party representatives to support the unilateral lifting of sanctions against Rhodesia as a positive response to the internal settlement. When the Shadow Cabinet discussed the matter the week before the conference, Mrs Thatcher asked for very full minutes to be kept to help those preparing for Blackpool. These show Lord Carrington, though he was not shadow foreign secretary, leading resistance to the amendment on the grounds that it would be a diplomatic disaster and would prevent a Tory government from being a ‘bridge between the various parties’. They also show Mrs Thatcher looking for some way of calming matters down at the conference, rather than expressing any personal preference for or against sanctions: ‘Mrs Thatcher suggested that the obvious response would be on the lines that we understood and sympathised with the powerful emotions of the floor, but could not accept that the motion would bind any future Conservative government.’39 At the conference, the feared revolt duly took place and John Davies’s weak speech on behalf of the Shadow Cabinet was savaged from the floor. (It later turned out that Davies had been suffering from an acute headache caused by the brain tumour which was to kill him a few months later.) In her memoirs, Mrs Thatcher describes Carrington’s line as ‘contorted and unpopular’,40 but she acquiesced in it at the time. When the renewal of sanctions came to the vote in the House of Commons, the frontbench decision to abstain caused the largest Tory rebellion since the Second World War, with 114 Conservatives disobeying the whip and two frontbenchers, John Biggs-Davison and Winston Churchill, resigning. Mrs Thatcher later claimed that she would rather have opposed the renewal, and explained her decision to back abstention purely in terms of party management: ‘it was better to have a full-scale backbench revolt than to lose members of the Shadow Cabinet at this delicate juncture,’41 the ‘delicate juncture’ being the fact that the general election, though delayed, was certain within a year, and that the party was faltering in the polls and continued to be publicly split on incomes policy. She used a technique which was to serve her well in many tight spots – to make clear her sympathy with grass-roots, usually right-wing, feeling while giving the party establishment most of what it wanted.
Rhodesia evoked particularly strong emotions in Tory breasts, but it was a much easier issue for Mrs Thatcher to manage than that of devolution for Scotland. Ever since Ted Heath’s Declaration of Perth in 1968, the Conservative Party had maintained a theoretically devolutionist position, though Heath’s government had not implemented its own proposals for a Scottish assembly. Scottish nationalism was growing fast, and the call for the North Sea oil, which was beginning to be extracted off the coast of Aberdeen, to be treated as ‘Scotland’s oil’ became popular. For the election campaign of October 1974, the Conservatives promised a Scottish assembly, though its nature was not specified. In that election, the Scottish Nationalists returned triumphant with eleven seats in Scotland, and the Conservative Scottish representation fell to sixteen, its lowest since the introduction of universal suffrage. At first, under pressure from her leading Scottish MPs, Mrs Thatcher reluctantly renewed the commitment to an assembly, speaking to this effect in Perth in May 1975. It survived even into the text of The Right Approach in October 1976, which spoke of ‘a directly elected Scottish assembly, acting as another chamber of the UK Parliament’, a phrase which indicated disagreement with the Labour idea of a separate Scottish executive. But beneath the surface the policy began to shift, for several reasons.
The first was that the majority of English Tory MPs (and of Tory MPs in Wales, where Conservative opposition to devolution was much more nearly unanimous) felt increasingly uncomfortable with anything which might lead to the break-up of the Union. The second was that those Tories who did support devolution – Ian Gilmour, Francis Pym and Alick Buchanan-Smith,* the shadow Scottish Secretary, were among the most prominent – tended also to be those who were attracted by ‘national’ or coalition government. Many of them favoured proportional representation which, they believed, would contain Scottish separatism and make for permanent moderate government across the United Kingdom. All this was anathema to Mrs Thatcher, and aroused her suspicion of the motives of those who promoted it. Besides, devolution began to emerge as Labour’s problem. It was Labour which had more seats than any other party to lose in Scotland, Labour which had the most serious rebellions on the subject, and Labour which had the almost impossible task of preserving its House of Commons majority on such a controversial matter.
Mrs Thatcher contemplated the question with quite a cold eye. Although she was certainly an instinctive Unionist, it did not engage her passionate interest. As with Northern Ireland, which in opposition she delegated almost entirely to Airey Neave, she always hoped that the subject of devolution would go away. She was very conscious, however, that Scotland was an area of weakening Tory support, and when she became leader she immediately sought to remedy this with a series of Scottish visits, three in her first seven months, all of them considered successful. She needed to work out whether Conservative support for devolution was an electoral plus or minus north of the border. This was hard to do, because her Scottish party was divided into bitter factions, so bitter that, in one of their conferences, they actually starting scuffling with one another. Broadly speaking, the more upper-class and rural elements, which dominated the party hierarchy and produced two-thirds of the Scottish MPs, were pro-devolution, and the more urban and working-class elements were anti. A vote on the subject at a special conference in Edinburgh in January 1976 produced 103 for devolution, with 60 against and 40 abstentions. Given the efforts of the party establishment to control the voting, this result showed how powerful was the undertow of opposition.
These first Tory explosions on the subject were just about contained. Mrs Thatcher’s Iron Lady speech in Kensington in January helped overshadow the party’s muddles on devolution. But in the course of the year, the situation worsened. She felt irritated to be saddled with Heath’s commitment, writing to Maurice Macmillan, an opponent of devolution in March 1976: ‘The one clear lesson seems to be – never make major pronouncements in Opposition.’42 The obvious solution for the party was to try to unite round opposing the Labour government’s plans rather than tear itself apart on the principle. This was possible because the Tory position, formally expressed in Alec Home’s report on the subject, was in favour of ‘a directly elected assembly tied to the Westminster legislative system’, whereas the Labour plan was for a separate Scottish parliament with its own executive. Willie Whitelaw, Scottish by birth, and sitting for a Border seat, moved from earlier support for devolution to this anti-Labour stance, thus shifting the balance of opinion. As Mrs Thatcher put it, the Conservatives wanted ‘a diffusion of power and not a confusion of power’.43 This stance was intended to make it possible for pro- and anti-devolution Tories to stay loyal. In this spirit, in her reshuffle of November 1976, Mrs Thatcher actually promoted Francis Pym, a devolutionist, to be party spokesman on the subject.
Almost as soon as Pym was appointed, however, the strain became intolerable. The Labour government now wanted to push forward with its Bill, and the Conservatives therefore had to decide whether or not to oppose it on second reading. A faction led by Buchanan-Smith was adamant that they should vote for the Bill, but the Shadow Cabinet went the other way. He and his juniors, including the young Malcolm Rifkind,* threatened to resign their frontbench posts. Mrs Thatcher did almost everything in her power to stop them. She asked all the troubled Scots, led by Buchanan-Smith and Rifkind, to come and see her. In a note written shortly after the meeting, Rifkind recorded:
Margaret stated categorically that she was not prepared to contemplate our mass resignations and that some compromise must be found. First, our departure would destroy the party in Scotland. Secondly, she stressed that she felt committed to a directly-elected Scottish Assembly. If we went she would have to appoint antis like Teddy Taylor† as Scottish front-bench spokesman and this would be imp
ossible … She remarked, laughingly, that if we had to resign, she would appoint us again the following day if necessary!
She promised that a Tory government would put proposals for a Scottish assembly before Parliament. Rifkind concluded, ‘After the meeting we felt we had lost the battle but won the war!’44 In the event, Rifkind and Buchanan-Smith did resign, but others were dissuaded from doing so, and Mrs Thatcher showed maximum flexibility in keeping people on board. When Ian Gilmour threatened to resign, she persuaded him to absent himself from the vote instead with an excuse of attending to party business.45 Faced with her losses, Mrs Thatcher approached three other MPs to be shadow Scottish secretary before turning, in desperation, to the man she had tried to avoid, Teddy Taylor, who was unaware of the manoeuvrings behind the scenes.46 Taylor, a tough and eccentric working-class Glaswegian whose seat in that city depended on high Scottish Nationalist support taking Labour votes, remembered that Mrs Thatcher told him: ‘I want you to destroy the SNP.’ Taylor was more than willing to try, but replied: ‘If we do that, I’ll destroy my seat too.’47* In the parliamentary vote, twenty-seven Conservatives, including Heath, abstained, and five voted with the government. A comparable number of Labour MPs rebelled against their whip the other way.
The thing was a mess, but from it there emerged, from Mrs Thatcher’s pragmatic point of view, a much more satisfactory state of affairs. Pro-devolution Tories felt that they had been politely treated in their desire to express their views; anti-devolutionists knew that things were going their way; all felt more able to unite against Labour. A further chance soon benefited the Tories. Anxious not to have its Bill talked out, the government tried to break the convention that constitutional matters should not be held to a fixed timetable, and put forward a motion to guillotine (that is, cut short debate on) the Bill. It duly lost its guillotine motion by twenty-seven votes. Callaghan then lost the Nationalist support which had given him a small working majority. Two weeks later, after ignominiously refusing to contest an adjournment motion on the subject of public expenditure, the government found itself confronted with a vote of no confidence which, if lost, would produce an immediate general election.
By 22 March 1977, however, it became clear that the Liberals had negotiated an agreement to sustain the government in office, the ‘pact’ which Mrs Thatcher had tended to discount. This was not wholly bad news for the Tories, since they did not feel confident of victory if a general election were called – but the Lib–Lab Pact naturally deflated them and produced in Mrs Thatcher’s contribution to the now redundant no-confidence debate one of her worst parliamentary speeches. ‘Thatcher was very poor,’ Bernard Donoughue recorded, ‘cliché after cliché … She made no adaptation to the fluid and turbulent mood of the House.’48 Privately, Mrs Thatcher told friends that she was conscious of her own failure, and blamed herself. Tory victory in the Stechford by-election of 1 April with a 17.6 per cent swing lifted the gloom.
By the time the Labour government next felt ready to return to devolution, Mrs Thatcher was ready too, with her party in one piece. To pro-devolution MPs demanding a stronger line, she wrote, ‘Our commitment to the principle of a directly elected assembly for Scotland … stands. I have not retracted it and do not intend to do so,’ but she added, ‘I do not believe it would be sensible to put formal detailed proposals at this stage.’49 In the autumn Francis Pym had another go, submitting to the Shadow Cabinet a paper called ‘The Need to be More Positive’, which argued for a directly elected assembly; but he did not prevail. On 2 November the Shadow Cabinet agreed that ‘the best way forward was to set up a Constitutional Conference and put all the alternative proposals into it.’50 As Teddy Taylor recalled, ‘No decision was ever made in the Shadow Cabinet to reject devolution. It just quietly slipped away.’51 Callaghan ploughed on, but he was hampered by an amendment carried by rebels in his own party which prescribed a threshold of 40 per cent of the electorate voting ‘yes’ in the referendums before devolution could be enacted. In the votes in Scotland and Wales on 1 March 1979, this threshold was not reached. Wales, indeed, voted ‘no’ outright. It was the resulting strains with the Nationalist parties which caused the government to fall later that month.
As for the Conservatives, they had been able to oppose the government’s Bill without rejecting the principle of devolution, and to campaign, low-key, for a ‘no’ vote. Their manifesto for the general election of May 1979 confined itself to promising ‘discussions about the future government of Scotland’. At that election, the Tories won a net gain of three seats in Wales and six in Scotland. There were many who would argue that, by edging away from devolution, Mrs Thatcher eventually brought about the collapse of Scottish Conservatism which led the Tories to lose every single seat in Scotland in 1997. But that is probably to impose later problems upon those of the period.* In terms of the calculations required by the strange parliamentary situation and the divisions within her own party between 1975 and 1979, Mrs Thatcher surely acted with qualities which her opponents claimed she lacked – tact, the ability to listen, and a good measure of cunning.
There was another matter, much less public at that time than devolution, but of far greater long-term significance, which called for Mrs Thatcher’s political management. In the summer of 1978, Chancellor Helmut Schmidt of West Germany and President Valéry Giscard d’Estaing of France decided to push forward with the formal creation on 1 January 1979 of the European Monetary System, which all EEC member states joined from the start. The most important element of the EMS, however, was the Exchange Rate Mechanism, and participation in that was voluntary. An earlier effort at European monetary co-ordination, known as the snake, had been joined by the Heath government for a brief and ignominious six weeks, but now the arrangement was to be institutionalized in the ERM, and so the governments of member states, including Britain, would have to decide whether to take part.
The Conservatives were relieved that the decision fell to Callaghan, whose party was beset by divisions on Europe, and not to them. But they nevertheless had to take up a position on the subject. The views of the party establishment were clear. The Heathites, who had got Britain into the EEC in the first place and carried the day in the 1975 referendum on whether or not to stay in, were still intent on developing their project. In the summer of 1978, Adam Ridley wrote a memo to Mrs Thatcher which, though raising technical difficulties, presented the choice as being between Britain playing a ‘constructive and positive part’ or ‘increasing obscurity on the fringes’.52 In the autumn, as the decision approached, Ridley wrote to her again emphasizing that the question was 95 per cent politics rather than economics, and advocating, rather boldly for an adviser whose chief purpose was technical and economic, that Britain should ‘leap before you look’.53
Two days later, the shadow ministers chiefly concerned – Howe, Pym, Nigel Lawson and John Nott, with Lord Soames (as a senior Tory with relevant knowledge as a former European commissioner) and Adam Ridley in attendance – met to discuss the ERM. In the background was a recent speech by the consistently Powellite Eurosceptic John Biffen which attacked the ERM as a strengthening of the Franco-German axis in Europe. Lawson was extremely cautiously in favour of some sort of mechanism: ‘We have to decide first whether it would work or not; then if terms were right, if we should join.’54 Nott was worried about unpopular devaluations imposed from abroad. Soames and Pym were in favour of the ERM, as was Geoffrey Howe, a strong pro-European all his political life. Howe is recorded as saying: ‘the answer to Biffen’s original threat of a Franco-German axis was to put us on the other end and make a real triangle.’
Lawson and Howe then wrote separately to Mrs Thatcher. Lawson sought to steer a course between ‘Eurofanatics and Europhobes’ and advocated that ‘we should avoid committing ourselves to any firm position on the EMS* for as long as possible … it is a hideously complex and awkward issue, both economically and (more important) politically.’ ‘A case can be made’, he went on, ‘… that no British Government w
ill – in practice – feel able to maintain a sufficiently tight monetary and fiscal policy unless buttressed by the external constraint of a fixed exchange rate.’ On the other hand, the ERM conditions might render the EEC ‘so unpopular as to make support of continuing EEC membership political suicide’. He compared the situation with Britain’s decision to go back on to the gold standard in 1925, and worried about an ‘artificially high sterling parity’. But, by not joining, Britain would ‘risk abdicating for good the leadership of Europe’. Lawson coolly added that the best hope was therefore a quick collapse of the system so that ‘we could propose some alternative and more sensible framework for European economic convergence’. It would be better for the Tories, he thought, if Labour were to enter, but if they did not, the Conservatives could attack Callaghan ‘for being afraid of the big bad Benn’. He concluded: ‘we should not give any undertaking that … we will bring Britain into the EMS. To give such an undertaking would gratuitously split the party.’55
Geoffrey Howe, by contrast, was unequivocal. He supported the ERM both economically and politically: ‘Fundamentally, we do believe in German principles of economic management and should be able to get ourselves alongside them.’ The Tories, he said, should ‘pronounce in favour’ of the ERM for ‘providing greater currency stability and encouraging convergence of economic policies’. He went on: ‘The political case for this conclusion is a strong one: the alternative means surrendering the direction of the EEC … to the Franco-German high table.’ In terms of tactics, Howe argued that it would be impossible to make Britain’s ERM entry conditional on reform of the Common Agricultural Policy (CAP), which fixed agricultural subsidy systems throughout the EEC, and of Britain’s contributions to the EEC budget because ‘our bargaining position is far too weak.’56
Margaret Thatcher: The Authorized Biography Page 51
