Margaret Thatcher: The Authorized Biography, Volume 2

by Charles Moore

  Mrs Thatcher hit back. This was not a normal colonial situation, she explained. ‘Her duty, which she felt deeply, was to reach a result acceptable to the people of Hong Kong.’41 She was not contesting the termination of the lease, but the treaties for Hong Kong and neighbouring Kowloon were ‘valid in international law’ and so must be changed only by agreement. She wanted talk ‘based on a certain formula’ which would reassure people – British administration after 1997. Deng flatly refused: ‘Mr Deng Xiaoping said that he was very sorry,’ but sovereignty would return to China in 1997. ‘That was certain.’ It was a precondition of any agreement. He made dark remarks about the danger of ‘disturbances’ in Hong Kong. Mrs Thatcher snapped back that if there were disturbances they would not be caused by Britain: the outside world would draw its own conclusions.

  ‘After two and a half hours,’ according to Robin Butler, ‘it all seemed disastrous,’42 but then, when the question of a communiqué about the meeting was raised, a form of words provided by Cradock, which said nothing about sovereignty, made quick progress. At first, the Chinese wanted the statement to mention ‘differences’ between the two countries, but this was replaced by the more emollient ‘Both leaders made clear their respective positions on this subject.’ The statement also said that both sides wish to secure ‘the stability and prosperity of Hong Kong’ and agreed to start talks. To British surprise, the thing ‘went through as easy as anything’.43 ‘Deng snapped his fingers in approval.’44* As she left the meeting, Mrs Thatcher stumbled on the steps of the Great Hall of the People, which, according to Chinese superstition, was an ill omen.

  A less than auspicious departure from the Great Hall of the People, Peking, in September 1982.

  She flew on to Hong Kong – the first visit there by a British prime minister when in office. Intimations that the tension between the two countries had not been resolved caused the Hang Seng index of the Hong Kong stock market to fall 7.5 per cent in one day. Mrs Thatcher herself welcomed the communiqué to Hong Kong audiences (‘So far, so good,’ she said at the press conference) but was combative: ‘I shall speak not only for Britain but for Britain’s moral responsibility and duty to the people of Hong Kong,’45 she told a lunch of Hong Kong businessmen. Hong Kong people were pleased that she had come in person to tell them what was going on, but were extremely nervous all the same. China’s public comments on the situation were tough. Within ten days of Mrs Thatcher leaving China, the Hong Kong stock market had fallen 25 per cent. Some in Washington were not impressed by her visit. ‘Bah!’ wrote one National Security Council (NSC) staffer against a report from the American Embassy in Peking which suggested that the British had ‘got what they hoped for’.46 As Cradock himself acknowledged, however, Mrs Thatcher’s visit to China did ‘secure our main objective’47 – the agreement to begin talks.

  A war of nerves ensued. The Chinese put out belligerent propaganda, and prevaricated about sitting down for talks. Hong Kong people demanded a clearer British response. The British worried inconclusively about what public line to take, until Mrs Thatcher, who did not share Cradock’s anxiety about what he called ‘widening the circle of knowledge’, authorized Youde to brief the press as he saw fit. Mrs Thatcher, who had been studying the memoirs of Henry Kissinger,* was struck by his point that the Chinese often found a subtle way of giving a signal of their intentions without stating them. Subtle signals were not usually her best thing; but, on a report from Cradock about how the ceding of sovereignty might be turned into a ‘working hypothesis’ in order to get talks started, she wrote: ‘Can’t we use their technique and indicate that we gave them a signal in our opening statement about sovereignty, bearing in mind that I have to put it through Parliament and with as little trouble as possible for all our sakes.’48 What she was saying, in a roundabout way, was that sovereignty was not, for her, a sticking point at all. For political and negotiating reasons, however, she needed to appear robust.

  Next month, Mrs Thatcher, in particularly robust form, gave Kissinger dinner at No. 10. ‘That whole evening was her fighting the idea of giving Hong Kong up at all,’ he recalled. ‘And then seeing various levels of retreat.’49 Having visited the Chinese leadership in October, Kissinger reported that they ‘were not angry with the Prime Minister. They respected her and did not regard her as hostile.’50 The problem was that their style of negotiating was not, like the Russians, to state maximal positions from which they then retreated, ‘because everything then becomes a question of pride’. The best tactic was not to make any demands about sovereignty, but just to discuss administration. A month later, Kissinger wrote to her stressing that the Chinese thought everything was fine in relation to Britain and Hong Kong so long as sovereignty was conceded. They would welcome informal talks.51 But Mrs Thatcher remained unhappy. The Chinese ideas, she replied, ‘still fall a long way short of a really satisfactory package’.52 They wanted an ‘autonomous, capitalist-style Hong Kong under China’s control’. They did not offer ‘any genuine guarantees whatsoever’ for preserving freedom, prosperity and stability.

  On Christmas Eve 1982, Mrs Thatcher called in Sir Frank Cooper, the Permanent Secretary of the Ministry of Defence. The two agreed that ‘there was no realistic prospect of defending Hong Kong from the Chinese if they were determined to take it over.’53 Cooper recommended that, as ‘a defence for the Prime Minister’, she should discreetly get an assessment from the Chiefs of Staff about reinforcing and defending Hong Kong. This was set in hand. The unsurprising official verdict was that Hong Kong could not be militarily defended for any length of time.

  China’s refusal to engage in talks until the question of sovereignty was settled divided the British side. Mrs Thatcher characteristically sought ways of spreading public support for her approach: ‘Perhaps we should now develop the democratic structure [in Hong Kong] as though it were our aim to achieve independence or self-government within a short period.’54 Equally in character, the Foreign Office was anxious to prevent Hong Kong people having a say in the matter, and feared that what it saw as Mrs Thatcher’s impossibilist position would provoke China. In January, reports suggested that China intended to announce its plans for Hong Kong unilaterally by the middle of the year. Francis Pym sent Mrs Thatcher a paper on the future of Hong Kong. In his covering letter, he wrote: ‘We must … think very carefully and realistically about the possibility that … we may have no alternative but to accept Chinese recovery both of sovereignty and administrative control after 1997 … It follows, therefore, that … we should say nothing publicly which would rule out an eventual accommodation.’55 ‘By extension,’ he continued, ‘we must not allow our consideration for the “wishes of the people” to develop into acceptance of the paramountcy of the will of the population.’ The paper itself advocated ‘the avoidance of unhelpful or unrealistic commitments for the future, in particular, the acceptance of responsibility with no power to fulfil it’. It recommended recognizing Chinese sovereignty over the whole of Hong Kong and accepting that British administration should cease ‘when the time is ripe’. The phrase was badly judged: it was already being used, to Mrs Thatcher’s irritation, to express British policy about entry into the Exchange Rate Mechanism of the European Monetary System.

  Ill disposed to Pym at the best of times, Mrs Thatcher put cross wiggly lines under or alongside much of what he wrote. When she got to the paper itself and its caution about accepting responsibility, she exploded: ‘It is not a question of new acceptance of responsibility WE HAVE IT ALREADY BY VIRTUE OF THE TREATIES.’56 At the top of the letter she wrote: ‘This paper is pathetic – it is a recipe for a sell-out. There are other possibilities.’ Her response advocated dual sovereignty after 1997, by which China got back the New Territories, Britain kept Hong Kong proper and the two countries ran the place together.

  As was often the case when she argued most strenuously, Mrs Thatcher was well aware that she was in a tight spot. Her tenderness towards British honour and Hong Kong rights did not blind her to the per
ils. She agreed to a new tactic. On 10 March 1983, she wrote a secret letter to Zhao Ziyang, which Percy Cradock, who devised it, called ‘the first finesse’. The key passage read:

  Provided that agreement could be reached between the British and Chinese Governments on administrative arrangements for Hong Kong which would guarantee the future prosperity and stability of Hong Kong, and would be acceptable to the British Parliament and to the people of Hong Kong as well as to the Chinese Government, I would be prepared to recommend to Parliament that sovereignty over the whole of Hong Kong should revert to China.57

  The letter was carefully worded. It correctly deferred both to Parliament and to Hong Kong people and did not, strictly speaking, concede anything. On the other hand, it effectively acknowledged China’s rights and that Chinese sovereignty would be recognized if all went well. It said that Mrs Thatcher would ‘recommend’, rather than merely ‘consider’, the transfer of sovereignty if the right conditions were in place. The Chinese duly leaked the fact that the letter had been sent, and Zhao, in his reply, deliberately misinterpreted it to be saying that the recovery of sovereignty by China was ‘the premise and basis for further talks’.58 But he also declared the way now open to prepare for negotiations. Mrs Thatcher wrote: ‘We are still treading on eggshells but it looks as if we can start talks.’59 She felt able to tell this to the Cabinet on 12 May. Then came the general election.

  According to the Foreign Office view, the process described above was a year’s work in getting Mrs Thatcher to see reason. The ‘China hands’ knew all along that sovereignty would have to be ceded: they simply had to convince Mrs Thatcher of the inevitable. There is something in this. As time passed, Mrs Thatcher, who always had a ‘genuine regard and affection’60 for Percy Cradock, did end up tacitly accepting many of his arguments. The path towards eventual agreement with China was one strewn with concessions which she did not want and had to make despite herself.

  But there is a counter-case to be made. According to John Gerson,* who at the time was one of the government’s greatest China experts, and who first won Mrs Thatcher’s confidence when he accompanied her on her visit to China as leader of the Opposition in 1977, she understood something which the Foreign Office sinologists did not. She had a very clear sense of the evil of the regime – the fact that, as late as 1978, peasants in Guandong province were so hungry that they were eating children, the vicious persecution of dissidents, the telling statistic that there were often as many as 1,000 people a day trying to escape from China to Hong Kong. People like Cradock, in Gerson’s view, tended to see the nastiness of the Communists as a reason for concessions: ‘It became a mantra that “This is a question of sovereignty for the Chinese,” at which point the Foreign Office always wanted to give in to them.’61 Mrs Thatcher’s opposite reaction – to harden up – gave the Chinese pause. ‘She went without knowing what her final objective would be and brilliantly left them not knowing what theirs was.’ Her treatment of Deng as an equal when they met was ‘completely baffling for the Chinese. It made them say: “Hang on! They’ve just squashed the Argies. They have got Polaris. Perhaps they won’t give Hong Kong back.” ’ In this view, if Mrs Thatcher had behaved according to diplomatic norms, the Chinese would have won hands down. By being bolder, she achieved ‘seismic uncertainty’. Where Cradock and colleagues saw the handover as a classic piece of necessary diplomacy, she saw it as surrendering people for whom Britain was responsible to a totalitarian regime: ‘She felt, “I’m leader of this great nation, and I haven’t made up my mind.” ’62 Because of her stubbornness, both parties had time to adjust and discuss. Luckily, China was changing. By a paradox, Mrs Thatcher’s ‘unreasonableness’ made real negotiation possible in a way that conventional diplomatic behaviour would not have done.

  2

  A radical disposition

  ‘when people are free to choose, they choose freedom’

  The arrival of Helmut Kohl as chancellor of West Germany seemed at the time to be good news for Mrs Thatcher. Although his predecessor, Helmut Schmidt, had been personally tough-minded about the nuclear deterrent, Schmidt’s Social Democrat Party (SPD) was split on the deployment of American cruise and Pershing missiles (known collectively as Intermediate-range Nuclear Forces (INF)) in Western Europe. Kohl’s conservative Christian Democrats, on the other hand, were considered more reliable allies. Mrs Thatcher had met Kohl in January 1982, when he was leader of the German opposition, and she had been pleased by his resistance to neutralism. Kohl, who, though already Chancellor, had yet to win an election, believed Mrs Thatcher’s prestige could assist him politically.

  From his early days as chancellor, Kohl planned to hold federal elections the following March. A few days after he took power in October 1982, a visit to Britain was proposed. The British Ambassador in Bonn, Sir Jock Taylor,* reported that the new Chancellor wanted to visit Mrs Thatcher and ‘lay the basis for an effective personal dialogue with the Prime Minister’.1 Flatteringly, Kohl sought ‘some advice on how to handle his discussions with President Reagan’.2 Mrs Thatcher was happy to help. The visit was quickly arranged for 19 October. In preparation, John Coles wrote to her: ‘I suggest that the main aim, without ever letting it appear obvious, is to begin a process of establishing a special relationship with Germany within the European Community (EC) (in order to balance – we certainly cannot replace – the special Franco-German relationship).’3 Kohl was keen on a public presentation of friendship: Coles suggested a photocall outside 10 Downing Street, ‘emphasising a meeting of minds’.4

  Mrs Thatcher was keen that minds should indeed meet. But even before Kohl had arrived, there was already one area where both parties had their doubts. Taylor reported, after conversation with Kohl before his visit, that ‘The only subject where he thought differences might arise between us was the Community.’5 Mrs Thatcher underlined this message with her pen. She had already been studying Kohl’s address to the Bundestag earlier in the month in which he discussed his government’s vision of Europe. Kohl wanted ‘progress towards the unification of Europe’, driven by Franco-German friendship. European institutions should be reformed. The Council of Ministers should have more power and ‘it must reach its decisions by majority vote … The European Parliament should be strengthened. Its powers should be enlarged and its work on a European constitution developed.’6 This passage was noted down the side by Mrs Thatcher’s hostile wiggly line. It was the sort of stuff to which, six years later, she would say ‘No. No. No,’ with politically fatal results. Francis Pym told her that such ideas were ‘innocuous in substance’.7 She was not, at this point, looking for trouble, but, from the first, she did not agree.

  When the two leaders met in Downing Street, they were mostly in accord. Once satisfied that Kohl was, in his own word, ‘resolved’ to install US missiles on West German soil if disarmament negotiations failed, and determined to be ‘full friends and partners of the United States’, she was inclined to agree with some of Kohl’s criticisms of President Reagan’s aggressive approach. ‘She had the clear impression’, she told Kohl, ‘that the Americans now recognised that the action which they had taken over the [Siberian gas] pipeline [see Volume I, Chapter 20] was a mistake and were looking for a way out.’8 Kohl complained that Reagan did not understand the problems of Europe in relation to the Cold War: ‘The recent action of the Pope [John Paul II] in initiating the canonisation of a Polish priest [Fr Maximilian Kolbe, martyred at Auschwitz] had done more to affect opinion in Poland than the whole of the Reagan policy on sanctions.’9 Mrs Thatcher defended Reagan as ‘a [sic] honest politician with certain strong views’, but she added that ‘in her view the approach proposed by Chancellor Kohl was better.’ The two speculated on the future of the Soviet Union. Kohl said that he was ‘not a fan of Brezhnev but thought that the next generation would be no better’. Mrs Thatcher responded that ‘time was on the side of the West, provided that the West played their cards shrewdly.’10

  There was no set-to about the Eur
opean Community, although Mrs Thatcher reiterated her long-running demand for a permanent settlement of the dispute about Britain’s excessively high contribution to the European budget. In this the Germans, being the only other net contributors, were natural allies; but at root the attitudes of the two countries were entirely different. West Germany saw ever closer European integration as the guarantee of its post-war legitimacy. Britain was constantly worried about any further sacrifice of national independence. Speaking jointly to the press afterwards, Mrs Thatcher used the approved phrase about ‘a true meeting of minds’. Kohl agreed, but also said: ‘I am the first Federal Chancellor who is a child of the post-war generation … and I will do what is in my power to make sure that we will move forward to the unification of Europe in the course of this decade.’11 Mrs Thatcher could not say later that she had not been warned. Their difference of approach was fundamental and unalterable.

  Now it was her turn to visit West Germany. Ten days later, she appeared with Kohl in Bonn. The apparently happy couple announced that they were off to Berlin together to see what Kohl called ‘the division of our fatherland’. ‘That wall’, Mrs Thatcher said, ‘is an ever-present reminder that, when people are free to choose, they choose freedom.’12 In Berlin, on 29 October 1982, Mrs Thatcher was greeted by enthusiastic crowds, who ‘told her that they were heartened by her actions in the Falklands’.13 From the viewing platform in the Potsdamer Platz, she contemplated the Berlin Wall for the first time in her life. Tears came into her eyes. ‘I think it’s even worse than I imagined,’ she told waiting reporters. ‘I laid flowers. There was one young girl [shot trying to escape to the West], she was only 18 … they do these terrible things and they flaunt it publicly, it just shows you the atrocities and barbarism of that system.’14 Speaking at a ceremony to sign the city’s Golden Book, she quoted the moral that ‘It is weakness that tempts the aggressor. It is strength that leads to discussion and negotiation.’ The ‘lesson of Poland’ under Soviet-backed martial law was that ‘pitiless ideology only survives because it is maintained by force’: it would be overcome in the end by popular anger. ‘One day,’ she concluded, ‘liberty will dawn on the other side of the wall.’15