Although tetchy about Prior’s slowness, Mrs Thatcher was conscious both of the need to carry her Cabinet and of the threat of strikes in the first winter of her government which she was not yet prepared to resist. She therefore let him have most of his way in his first Employment Bill. By the end of 1979, however, the picture of industrial relations had become more desperate. In a court case (McShane v Express Newspapers Ltd) about the extent of permitted trade union action, the Court of Appeal found on 13 December that anything could be considered to be ‘in furtherance of a trade dispute’ if the person doing the disputing thought it was. In other words, the law afforded no protection to firms dragged into a dispute with which they were not concerned. Then, on 2 January 1980, a steel strike began. Against the background of a plan for 52,000 redundancies in the hugely loss-making British Steel Corporation, the steelworkers’ union, the ISTC, called a strike over its pay claim. On 16 January, the union spread the strike to private sector steel producers who were not part of the dispute. Those already dissatisfied by Prior’s foot-dragging became extremely anxious. On 28 January, Hoskyns sent a note to Mrs Thatcher about a conversation he had held with Keith Joseph, David Wolfson and Leon Brittan, at that time the Minister of State at the Home Office.* ‘The only way to penalise unions’, it said, ‘is to attack their funds. Never go after the individual … The only thing the union leaders really care about is their funds.’ Unions were ‘financial enterprises which operate on a no-risk basis’. The law on immunities must therefore change because it is ‘a matter of power’: ‘If we don’t act Frank Chapple [the moderate and robust leader of the Electricians Union] will in due course be replaced by militants, and then the switches could be turned off. Similarly, Scargill will eventually succeed Gormley [as leader of the miners].’116 The government must stand firm in the steel strike, insisted Hoskyns, and act immediately against immunities.
Hoskyns followed this up by reminding Mrs Thatcher that the situation was not unlike that of the previous winter (‘of Discontent’) when, in opposition, colleagues had been divided about whether or not to accept the union status quo. His suggestion, unspoken, was that she should act as she had then, and go public in defiance of Prior’s wishes. On 1 February, Prior wrote to Mrs Thatcher telling her that it would be a terrible mistake to remove the immunities of unions. The immunities, he said, had ‘immense symbolic significance’. He counselled against ‘over-hasty action’. Mrs Thatcher wrote her wiggly line of disapproval under the word ‘over-hasty’.117 On 3 February, Prior got his retaliation in first by telling the BBC’s World This Weekend that he would not rush through changes to immunities: if the government got it wrong on industrial relations, ‘the outlook for our country, and I mean our country, is very bleak indeed.’118 With a fierceness of which, despite his ‘dead sheep’ reputation, he was sometimes capable, Geoffrey Howe wrote to Mrs Thatcher the following day, demanding action on immunities. Unless the Conservatives acted, he wrote, ‘we might as well not have fought (and won) the last General Election.’ He agreed with the principle of ‘step by step’, but added that there would be massive union trouble whatever the government did, and so there was no point trying to avoid it. The union question, said Howe, was ‘the most important issue in the life not just of this Government but of the nation’.119
By now, almost everyone wanted to pitch in. Lord Thorneycroft circulated a hawkish paper to the Cabinet. John Nott inveighed against the union blacking of international shipping. Hoskyns, the Centre for Policy Studies and sympathetic businessmen worked tirelessly against Prior. The Daily Express began to refer derisively to ‘Pussyfoot Prior’. John Methven, the head of the CBI, confused everyone by calling for ‘profound changes’ while also backing Prior. Sir Hector Laing, the chairman of United Biscuits, was a fervent admirer of Mrs Thatcher. ‘I thought she was very attractive a. physically and b. for her command of language,’ he said years later.120 But he was also a friend of Jim Prior, whom he later put on his board. Laing wrote to the Prime Minister thus: ‘You will know what Elizabeth I said to William Cecil: that “without respect of my private will you will give me that counsel you think best.” ’121 What he thought best was Jim Prior’s step-by-step approach; otherwise confrontation would be ‘insupportable’. Mrs Thatcher rang Laing at home that weekend. ‘How are you?’ he asked. ‘I was fine until I got your letter,’ she replied.122 In a private letter answering Laing the following week, Mrs Thatcher put her own position very frankly. If the government did not change the law, she said, ‘we should be telling the law-abiding citizen that we prefer to strengthen the powers of those who inflict injury rather than to help those who suffer from it. That course is not open to anyone who fought the last election on the Conservative manifesto, and it is therefore not open to me.’ Immunity, she said, should be confined to the primary action, and common law remedies should be restored to those who suffered from secondary action. She thought that now was the time:
If we flinch from this task now, when we have public and massive trade union opinion with us, they are not likely to have much faith in us to do it next winter.
For obvious reasons I have not been able to put this view publicly yet. Judging from my correspondence, a lot of industrialists share it and would go much further. Some want a new criminal offence of ‘unlawful picketing’. I would prefer to see what we can do through the civil law.
You quoted a saying to me. Let me counter with another famous quotation: ‘Our doubts are traitors / And make us lose the good we oft might win / By fearing to attempt.’ Measure for Measure.123
Even as she wrote, however, Mrs Thatcher knew that the practicalities, not to mention Cabinet nervousness, were such that new material on immunities could not be included in Prior’s Bill. On 13 February 1980, E Committee agreed that the Bill should not be amended, but that ‘trade union immunities should eventually be considered’ and a green paper prepared.124
Prior was in no hurry for this document to be completed, so what Mrs Thatcher had feared was likely to come to pass – another winter without the necessary legislation in place. Although the conventional wisdom has it that Jim Prior was right in his tactics, and that ‘step by step’ was indeed the way to deal with union reform, the difference between him and Mrs Thatcher was not only about pace. Prior believed that the point of the whole exercise was not to undermine the structure of union power but to bring about more moderate attitudes which would produce a new era of co-operation. In his daily press digest for the Prime Minister for 11 March, Bernard Ingham reported: ‘Mr Prior on TV stakes his political future on Employment Bill; admits he is on trial politically. No question of attacking union funds while he is Minister.’125 Prior’s ambition at this stage was to be secretary of state for industry126 and he saw establishing a good relationship with the unions as the flip side of doing the same with business, an essentially corporatist approach. Mrs Thatcher, on the other hand, believed that it was only by fundamentally changing the legal rights of trade unions and bringing them under the law which applied to everyone else that progress could be made. Rather than wanting to establish a good relationship with the unions, she wanted to bring about conditions in which government had virtually no need for a relationship with the unions at all. In later years, Prior said, ‘It was really an argument about pace,’ but then added, ‘though perhaps it was more fundamental.’ But he also argued, in retrospect, that the politics of the conflict between himself and Mrs Thatcher worked quite well for the government: ‘It was quite a good position, in government, for her to be pushing Jim Prior and him to be resisting.’127
Mrs Thatcher was now clearly frustrated by slow progress and felt ready to explode. On the weekend of 17 February 1980, she did so. Staying at Chequers that Sunday, she confronted the news that a mass picket at Hadfields, the private steelworks in Sheffield, organized by Arthur Scargill, the militant hero of the Saltley coke depot incident under the Heath government, had succeeded. She took a telephone call that morning from Keith Joseph in which he told her that
the picket had been ‘a massive breach of common law’.128 No, she said, it had surely not been a criminal matter, but a civil one. Angry at her government’s impotence, Mrs Thatcher rang Willie Whitelaw, the Home Secretary. ‘The Government could not sit aside and do nothing,’ she told him: there should be a one-clause Bill that week to prevent such picketing.
For the rest of the day, telephone calls ricocheted back and forth. Joseph rang back with the Lord Chancellor Lord Hailsham’s suggestion that a charge of unlawful affray be brought against Scargill. To this Mrs Thatcher replied that ‘It might suit Mr Scargill very well to be charged.’ The new picketing clause she sought would follow the better route of allowing injunctions to be taken out. Joseph then said that what the record calls ‘the other man’ – a reference to Prior – would be putting in his proposals in the coming week. Mrs Thatcher ‘said she feared that Mr Prior was trying to push the Government into a Court of Inquiry’ over the steel strike. Increasingly heated, she rang the Attorney-General, Michael Havers. At 9.30 p.m., Whitelaw rang her and she told him that ‘the People leader was right. The Hadfields situation had not been a matter of mass picketing but of mass intimidation … The Prime Minister said that the Chief Constables should meet the Law Officers. The Home Secretary said that this would have to be treated with great care, as the Chief Constables could not take direction from the Law Officers.’ Mrs Thatcher then demanded a Cabinet or Cabinet committee the next day because it was too urgent to wait till Tuesday. At 10.45, Whitelaw rang her again to tell her about the state of the Sheerness steelworks, also threatened with mass picketing. The Chief Constable of Kent was ‘quite determined to keep Sheerness working: he hoped that Ministers would support him though he feared they would not.’ Mrs Thatcher repeated her desire for a civil law remedy: ‘The Sheerness steelworks had at present no basis on which to seek an injunction. The proposed new law would provide this. She had just received a telegram from Sheerness wives.’
The record of this hectic, semi-coherent day suggests that Mrs Thatcher was really alarmed. The fact that Arthur Scargill, who appeared for five minutes on the scene at Hadfields, had successfully organized the picket made her fear that she was suffering her own Saltley. Here was the defeat by the unions which she dreaded. Here was the fate of Ted Heath staring her in the face, and here, thanks to Prior, was a government which had not provided itself or employers or, she feared, the police with the necessary legal powers. That was why she was casting about so desperately for last-minute remedies. A special meeting of E the next day agreed that the Attorney-General would remind the Commons of the criminal law about picketing, but that a separate Bill about picketing would not be brought forward. In an additional shaft of rage, announced at Prime Minister’s Questions the next day without consulting Prior, Mrs Thatcher said that the rules would be changed so that strikers claiming benefit would be deemed to have been paid by their union. In an interview with Robin Day on Panorama a few days later, Mrs Thatcher was asked about comments by Prior critical of British Steel’s management which had leaked from an off-the-record lunch. ‘I think it was a mistake,’ she said, ‘and Jim Prior was very, very sorry indeed for it, and very apologetic. But you don’t just sack a chap for one mistake.’129 Perhaps not, but the fact that she spoke about sacking him at all subconsciously reflected her state of mind.
As it turned out, though, the militants’ victory at Hadfields did not signal a wider war between government and unions. The failure to achieve a similar success at Sheerness was very important. The essentially moderate steel union was looking for a deal, not a bloodbath, and British business found ways of getting enough steel to keep going. The government’s policy of not intervening in nationalized industry disputes, but leaving it to management and unions to sort them out, paid off. The expectation had built up over many years of Labour and Conservative government that the secretary of state would come forward with ‘new money’. This did not happen. Keith Joseph stayed out of the negotiations, and the ISTC began to look for a way out. A penalty for the government’s non-intervention was that there was little it could do when the British Steel Corporation wanted a court of inquiry into the dispute. This resulted in a pay award greater than the government would have liked. But although the financial costs of the settlement were too high, the political winner, on points, was the government. The huge internal tension about trade union reform, though the issue was still completely unresolved, eased for a few months. A TUC Day of Action in May 1980 against government policies proved a damp squib. The steel dispute had failed to reverse government policy; indeed, it probably accelerated change. The BSC losses were so bad that the government had a freer hand than before in reorganization. In April a Scottish American businessman called Ian Macgregor* was appointed, at Jim Prior’s recommendation, to succeed the outgoing Sir Charles Villiers as BSC chairman. Mrs Thatcher referred to him in public as a ‘mighty man’, a favourite phrase of Denis about anyone he admired.130 Macgregor had the opportunity and the ability to turn BSC into a functioning business.
Even bigger, and therefore even more disastrous, than British Steel was the car-manufacturer British Leyland. The unhappy product of an amalgamation by the Labour government in 1968, the company employed 160,000 people when Mrs Thatcher came into office. About the same number of jobs again were directly dependent on the company’s existence. Leyland’s UK market share, which had been 33 per cent in 1974, had fallen to 20 per cent by 1979. It was not technically a nationalized industry, but the government owned the controlling share, and paid ever more for the privilege. Although it contained promising bits, such as Land Rover and Jaguar, Leyland was chiefly an unsuccessful volume car maker, with such low levels of productivity, caused mainly by terrible trade union problems, that it could not compete with the likes of Vauxhall and Ford or foreign manufacturers. It was operating under the Ryder Plan for expansion, devised in 1975 to inject £1.7 billion of government money over seven years, and opposed by the Conservatives at the time. Mrs Thatcher was not well disposed to the company. Its dynamic chairman, Sir Michael Edwardes,* who had taken over in 1977, had her to lunch with his board in early 1979, when she was still leader of the Opposition: ‘I put her opposite me so that I could get a dialogue going, but I didn’t have to wait long. She said, “Well, why should I give you any money?” ’131 Once she became prime minister, this was essentially the question which Mrs Thatcher kept asking, and she never felt that she received a wholly satisfactory answer. Nevertheless, she did give the money – more than once and in large quantities.
All Mrs Thatcher’s inclinations, and those of her economic advisers, were that BL should close, or be broken up and its workable bits sold off. Robin Ibbs,† who advised her on the subject from the CPRS, remembered that BL offended her beliefs: ‘She had a practical mind, and she had Denis.’ Denis was good at reading company documents, and telling her what they really meant. In BL’s case, they meant disaster. Ibbs and, in more lurid terms, Alfred Sherman told her that BL was ‘just a sink’, but it was also ‘an appalling problem which no one knew what to do with’.132 The political difficulty confronting Mrs Thatcher in relation to BL was twofold. How could she introduce economic reality without job losses which would cause the Conservatives to lose every seat in the west midlands where people were dependent on the company for their living? How, also, could she support the tough and necessary things which Michael Edwardes was doing to bring about sane industrial relations and at the same time pull the plug?
In September 1979, a new BL ‘Recovery Plan’ sought more money (eventually, an extra £300 million for 1980) on top of what Ryder had promised. John Hoskyns wrote Mrs Thatcher a briefing note setting out the dilemmas. ‘Refusal to rescue’ would produce a wave of industrial unrest, job losses and the loss, short term, of foreign exchange earnings. ‘Rescue’, on the other hand, would weaken the government’s credibility, have a bad impact on the PSBR and mean that ‘we can be 95 per cent certain that the whole problem will come round again.’ Hoskyns considered that t
here was a third way – a form of rescue which ‘buys us other advantages in terms of more responsible union behaviour’ (words which Mrs Thatcher underlined), and would put pressure on unions in other industries to change. If the company were later to collapse, blame would then lie at the door of the unions, not the government. Hoskyns acknowledged that this strategy would conflict with that of Edwardes: ‘His objectives and ours would be quite different. He has nailed his flag to BL’s mast, where we would be using BL simply as a lever for a much larger strategy.’133
In October, Edwardes called a ballot on the plan. ‘Please – no hostages to fortune,’ Mrs Thatcher begged Keith Joseph as he planned his response to the ballot result,134 but of course the government could not ignore the ballot result: 87.2 per cent voted to accept Edwardes’s plan. As Hoskyns put it:
The main difficulty about closing BL now is a psychological one and related really to Edwardes’s own personality and image … In a sense he symbolises the possible renaissance of British management … The BL ballot was seen as the workers putting their faith in good managers instead of politically motivated union activists. To reward Edwardes’s efforts and his work-force backing with closure would seem to be a deliberate blow against everything the Government is trying to encourage.135
Margaret Thatcher: The Authorized Biography Page 69
