Who Dares Wins

by Dominic Sandbrook

  Of course this never happened; still, the mood in Whitehall was simply awful. ‘The consensus can be summarised in two words: deeply worried,’ reported Bernard Ingham on 8 July, adding that the combination of the recession and the riots seemed likely to send the Conservatives away for the summer ‘in a state of profound agitation, depression and gloom’. Ingham urged Mrs Thatcher to strike a more positive note, and indeed she was due to deliver a televised party political broadcast that very evening. Unfortunately, she had recorded her speech before seeing Ingham’s note, and not in happy circumstances. Suffocating under the pressure, her aides had spent the last few days arguing viciously about whether she should mention Toxteth at all. John Hoskyns and Ronnie Millar urged her to go to Liverpool and record a special address to the nation. That would ‘look like panic’, she said. ‘What could we say about it beyond a couple of paragraphs? How could we fill 4 minutes and 40 seconds?’ At that, Hoskyns lost his temper. ‘Why can’t you just believe Ronnie’s right?’ he snapped at Ian Gow. ‘Why can’t you just drop these fucking stupid arguments?’ There was a sudden, horrified silence. Later, when Hoskyns apologized to Mrs Thatcher, she said simply: ‘I’m quite accustomed to it.’8

  Hoskyns’s mood that summer was close to despair. Ironically, he was at last becoming more optimistic about the economy, and towards the end of July he sent his boss a long note arguing that, despite her ministers’ misgivings, ‘in purely economic terms, we are doing better than many of them think. Despite the agonisingly slow bottoming out, the indications are that the recession is turning. The rise in unemployment is decelerating. Productivity is rising. Inflation is falling.’ But he was tired of fighting to be heard, and tired, too, of Mrs Thatcher’s abrasive style. To put it simply, he was no longer enjoying himself.

  A few weeks later, Hoskyns persuaded Ronnie Millar and David Wolfson to put their names to a ‘blockbuster’ memo, confronting the Prime Minister with her own failings. He sent it to her in August, just before she went away, and even by the standards of most holiday blockbusters it made for excruciating reading. One section, for example, bore the headline ‘You lack management competence’. Another, which began ‘Your own leadership style is wrong’, could scarcely have been more damning:

  You break every rule of good man-management. You bully your weaker colleagues. You criticise colleagues in front of each other and in front of their officials. They can’t answer back without appearing disrespectful, in front of others, to a woman and to a Prime Minister. You abuse that situation. You give little praise or credit, and are too ready to blame others when things go wrong …

  The result is an unhappy ship … This demoralisation is hidden only from you. People are beginning to feel that everything is a waste of time, another Government is on its way to footnotes of history … But no one tells you what is happening, just as no-one told Ted.

  If Mrs Thatcher had listened, the story of her administration might have been different. But as Charles Moore remarks, ‘almost no human being’, especially one under such merciless pressure, could have been expected to take all this on the chin. She did not mention the memo to Hoskyns until a few weeks later, when they were gathering for a meeting in her study. ‘I got your letter,’ she hissed. ‘No one has ever written a letter like that to a prime minister before.’ ‘Margaret, we’re trying to help you,’ Hoskyns said. But their relationship was never the same again.9

  In the meantime, the bad news kept coming. On 16 July the SDP made its electoral debut at the Warrington by-election, with Roy Jenkins surging from nowhere – or at least from Brussels – to within a whisker of victory. The Conservative vote, meanwhile, collapsed to 2,102, down from 9,032 only two years earlier. For dozens of MPs in marginal seats the threat of the Social Democrats, now almost 20 per cent ahead of the Tories in the polls, seemed horribly real. Even the newspapers’ back pages offered scant consolation. Two days after Warrington, England’s cricketers were bowled out in the third Ashes Test and forced to follow on. And even the miracle of Headingley gave ammunition to Mrs Thatcher’s backbench critics. ‘Has my right hon. Friend noticed that England has just won the Test Match?’ wondered the ultra-Wet Charles Morrison. ‘Does not their achievement demonstrate again how often it is possible to snatch victory out of the jaws of defeat by a combination of applied ability and changed tactics?’10

  On 23 July, three days after Botham’s heroics, Mrs Thatcher’s teammates assembled to consider Howe’s future spending plans. To put it simply, the Chancellor was keen to cut taxes in his next Budget, especially as there might well be an election the following year. Since market confidence was so fragile, however, he was convinced that spending would have to come down by as much as £5 billion to justify it. Both he and Mrs Thatcher knew this would test their colleagues’ patience. Less than three weeks after Toxteth and just seven days since Warrington, most were desperate to offer the nation some much-needed respite, not another course of shock therapy. Indeed, when the Treasury added up all the requests for extra money, they came to a whopping £6½ billion. But Mrs Thatcher’s mind was made up. ‘Before I went down to the Cabinet Room that morning,’ she remembered, ‘I had said to Denis that we had not come this far to go back now. I would not stay as Prime Minister unless we saw the strategy through.’11

  What followed, however, was even worse than she had anticipated. After the Chancellor had opened the batting, Michael Heseltine took the ball and rained down bouncer after bouncer. Howe’s measures would do nothing for the inner cities, nothing to bring more jobs and nothing to calm the growing tension. ‘Colleagues simply don’t understand how bad it is … We have a society which is close to much more violence.’ This was a key moment. Although on the interventionist left of the party, Heseltine was not usually regarded as a Wet. But once somebody with his energy and charisma had dared to speak up, more timid souls followed suit. ‘All at once the whole strategy was at issue,’ Mrs Thatcher recalled. ‘It was as if tempers suddenly broke.’ The situation was ‘desperate’, agreed Peter Walker, who liked Heseltine’s idea of a pay freeze and suggested reviving the planning programmes of Edward Heath’s day. Howe’s proposed cuts would mean ‘the decline and fall of the Tory Party’, said Ian Gilmour. ‘However beautiful the strategy, you should occasionally look at the results.’ Unless they changed course, agreed Jim Prior, the situation might ‘overwhelm us, and destroy what we stand for as a party and as a country’.

  For Mrs Thatcher and her Chancellor, this was a dreadful moment. But then it got worse. To their horror, two of their usual allies, John Nott and John Biffen, joined the chorus of condemnation. The government had cut spending to the bone already, Biffen said. ‘Enough was enough.’ Then the big guns joined the assault. Lord Soames agreed with Heseltine. Lord Carrington said the party’s support was collapsing in the country. Even Willie Whitelaw, usually the soul of loyalty, announced: ‘There comes a time in politics when you have pushed the tolerance of a society too far. We aren’t there, but we aren’t far from it … We just aren’t going to make these cuts.’ And to cap it all, the 73-year-old Lord Chancellor, Quintin Hailsham, added his voice to the chorus. The situation reminded him of American politics half a century earlier, when Herbert Hoover had been struggling to cope with the Great Depression. ‘Hoover succeeded in destroying the Republican Party,’ Hailsham said ominously. ‘We are in danger of destroying our own.’12

  Later, piecing together what happened from various off-the-record accounts, Hugo Young wrote that Mrs Thatcher had been ‘shattered’ by the criticism. Faced with a full-scale Cabinet revolt, she became, by her own account, ‘extremely angry’. ‘We have been here before,’ she said bitterly, harking back to the great U-turn under Ted Heath in 1972. ‘The most frightening thing I’ve heard is that we should abandon [the] policy of keeping inflation down.’ All the same, she agreed that Howe should go back to the Treasury and compile arguments for and against the cuts, and on that note the meeting broke up.

  ‘The whole tenor of the meeting had been
a great shock to us,’ the Chancellor recalled. ‘Margaret and I discussed it more than once in the days that followed.’ As a furious Mrs Thatcher saw it, she had been betrayed by men she had trusted. ‘I had thought that we could rely on these people when the crunch came,’ she wrote. But now she knew better. ‘I was determined that the strategy should continue,’ she recalled. ‘But when I closed the meeting I knew that there were too many in Cabinet who did not share that view. Moreover, after what had been said it would be difficult for this group of ministers to act as a team again.’ She would not change her mind. She would change her ministers.13

  The ordeal did not end there. Later that afternoon, Mrs Thatcher addressed the backbench 1922 Committee, where she rattled off a detailed defence of her record, complete with statistics. She ended on a typically patriotic note, once again quoting Drake’s prayer at Cadiz: ‘Oh Lord God, when Thou givest to Thy Servant to endeavour in great matter, grant us to know that it is not the beginning but the continuing of the same until it be thoroughly finished, which yieldeth the true Glory.’ It was good rousing stuff, and her listeners dutifully thumped the tables, but it changed nothing. Even Alan Clark, usually so loyal, thought the mood was ‘gloomy, sepulchral almost’, and her speech ‘lacklustre’.

  And when, a week later, Ian Gow scribbled some notes on the latest meeting of the 1922 executive, there was no mistaking the anxiety. Again and again the same three letters recurred, like a bell tolling a message of disaster. ‘IS TIME RUNNING OUT … SDP now occupying centre of stage. Govt is perceived NOT TO CARE … Take SDP seriously … MUST CARE … middle ground … SDP … SDP …’14

  *

  Outside Westminster the summer holidays were in full swing. At St Paul’s, Prince Charles married Lady Diana Spencer. The next day, at Edgbaston, England opened the batting in the fourth Test against Australia. Yet to outside observers the celebrations had an almost neurotic quality, as if the crowds waving their Union Jacks were trying a little too hard to banish Brixton and Toxteth. From his concrete fastness in Grosvenor Square, President Reagan’s ambassador, John Louis, filed a bleak report on the ‘troubling political, social, and economic drift’ in Britain. Mrs Thatcher had clearly ‘lost her grip on the political rudder’, while the Labour Party ‘could prove harmful to our security interests’. Whatever happened next, Britain was facing a future of ‘political turbulence’ that could seriously damage ‘the country’s reliability as a U.S. ally’.15

  The ambassador’s opposite number, Nicholas Henderson, was also in London that summer. Two years after filing his infamous despatch, Henderson was struck by how little had changed. The news, he wrote in his diary, was ‘unredeemably bad: economic decline, rising unemployment, hunger-strike deaths and violence in Ulster, riots in many towns in England. I find that the hopes I entertained exactly two years ago that we might be going to turn over a new leaf under Maggie have been dashed.’ Indeed, things were even worse now than during the Winter of Discontent, ‘because we appear to have tried something new and it has failed’. Yet Henderson remembered people saying, when Mrs Thatcher was elected, ‘that it would need time, that there would be great difficulties and that the most important and the most difficult moment would be when everyone started to say that the sacrifices being asked for were too high and that the policy therefore had to be changed’. So this, the ambassador thought, was not ‘the moment to lose faith in her’. And part of him still felt, deep down, that it might ‘come right in the end’.16

  Mrs Thatcher never doubted it. She spent much of August walking on the north Cornish coast and relaxing in one of her favourite boltholes, a rented flat at Scotney Castle, Kent. But she never stopped thinking about politics. Even before that disastrous meeting on 23 July, her backbenchers were talking of the ‘urgent need’ for a Cabinet purge. Ian Gow confided to Alan Clark that ‘there would be a major reshuffle in the autumn and that The Lady would be bringing in many of her friends’. And as rumours of the Cabinet bust-up swept through Fleet Street, The Times’s deputy editor Charles Douglas-Home sent her a forthright personal letter. After talking to Whitelaw, Prior, Pym and Nott, he wrote, ‘I was left with an overwhelming feeling that you cannot let them go on like this: the whole thrust of the government is crippled – even subverted – by your ministers parading their consciences, frustrations, hysteria, snobberies, masculinity or ambitions before an audience.’ But Mrs Thatcher needed little persuasion. She was convinced, she wrote later, that ‘a major reshuffle was needed if our economic policy were to continue, and perhaps if I were to remain Prime Minister’. The ‘dumb bunnies’, as she called them, would have to go.17

  She made her move on 14 September. If she needed to focus her mind, a long story in that morning’s Times reported that the Tories were still stuck on just 25 per cent in the opinion polls, with Labour on 31 per cent and the Alliance on 41 per cent. The bloodletting began at half-past nine, and her first victim was her most biting critic, Sir Ian Gilmour. Their interview took place in her study; to Gilmour’s discomfiture, she insisted on standing while he sat awkwardly in front of her. Perhaps she thought this would make him feel like a small boy being admonished by his headmistress, though, as she remembered it, he became very ‘huffy’ when she broke the bad news. In fact, Gilmour had long reconciled himself to the boot and had already prepared a statement demanding changes in economic policy. ‘It does no harm to throw the occasional man overboard,’ he observed, ‘but it does not do much good if you are steering full speed ahead for the rocks.’ It was a good line. But it would have been more effective if he had said it after storming bravely out, rather than after waiting ineffectually to be sacked.18

  Then came Jim Prior. For weeks there had been rumours that the Industry Secretary was facing relegation to Northern Ireland, where he would be cut off from the daily realities of economic decision-making. Prior’s friends had urged him to stand firm, and so, in a hapless attempt to show his resolve, he had gone around telling everybody that under no circumstances would he go to Belfast. ‘I Will Resign, Prior Warns’, declared the Observer the day before the reshuffle. But as Prior admitted, this was a colossal own goal. When he went to see Mrs Thatcher, she told him he was moving to … Northern Ireland. This was his moment, his very last chance to walk out of the government on principle. Yet again he missed it. After a great deal of huffing and puffing, he went to see Willie Whitelaw and told him he wanted to quit. But Whitelaw gave him ‘the old guff, as you would expect: how important it was that I should do it, how she really wanted me to do it, what a blow it would be to the party if I didn’t’. Prior pointed out that he had said publicly that he had no desire to go to Belfast. ‘Oh, they don’t mind that sort of controversy over there,’ Whitelaw said blithely. ‘In fact, they rather like that sort of thing.’ So Prior took the post.19

  Of the reshuffle’s other major losers, the nondescript Education Secretary, Mark Carlisle, took his sacking relatively calmly, but the Lord President of the Council, Christopher Soames, had no intention of going quietly. As Churchill’s son-in-law, as well as a former ambassador to France, European Commissioner and Governor of Rhodesia, the Old Etonian Soames was the incarnation of Establishment entitlement. When Mrs Thatcher told him that he was out, he let rip, roaring at her for twenty minutes with such vehemence that the tourists could hear him in Horse Guards Parade. Evidently she gave as good as she got, since Soames later complained that he had never been spoken to so rudely by a woman. In a moment of exquisite non-self-awareness, he added that he would have treated one of his gamekeepers with more courtesy. Evidently it did not occur to him that a grocer’s daughter was more likely to empathize with the gamekeeper than with the gamekeeper’s employer. ‘I got the distinct impression’, she wrote later, ‘that he felt the natural order of things was being violated and that he was, in effect, being dismissed by his housemaid.’ She must have loved every minute of it.20

  There was one other loser from the reshuffle. After his nightmarish stint at the Department of Industry, Sir Keith Jose
ph was probably relieved to be moved to the quieter waters of Education. The days when Joseph had been seen as the power behind Mrs Thatcher’s throne were long gone; by now, he had effectively yielded the mantle of Thatcherism’s chief thinker to Nigel Lawson, who became Energy Secretary. Clever, louche and immensely self-assured, Lawson had been at Sir Geoffrey Howe’s side since 1979, waiting impatiently for a Cabinet post of his own. And now Mrs Thatcher gave him a simple and very telling instruction: ‘Nigel, we mustn’t have a coal strike.’21

  The most eye-catching newcomers were two men who personified the self-reliance and aspiration that Mrs Thatcher prized so highly. One was Norman Tebbit, who took Prior’s old job at Employment. Born to working-class parents in Enfield, north London, Tebbit had gone to his local grammar school before becoming a pilot and entering the Commons in 1970 as MP for Epping in Essex and then Chingford in north-east London. The Observer called him the ‘conscience of the Tory suburbs’, a ‘plain man who speaks his mind, with views that go down well at the golf club … in language that would please Alf Garnett’. In the public mind, he was the scourge of the permissive society, the hammer of the BBC, the sworn enemy of judges, social workers and all things European. The satirical puppet show Spitting Image portrayed him as a bovver boy in a leather jacket. To some extent Tebbit brought this on himself. As one of Mrs Thatcher’s attack dogs in the late 1970s, he had accused Michael Foot of ‘pure undiluted Fascism’ because of his support for the closed shop. Foot hit back by calling him a ‘semi-house-trained polecat’, and the label stuck. Later, after he had been ennobled, Tebbit chose a polecat for his coat of arms. As the ultra-Wet Julian Critchley remarked, ‘his was the wisdom of the saloon bar transported into the corridors of power’.