She and her team were working on her next day’s setpiece leader’s speech when, at about 11 p.m., Robin Butler was called out of her hotel suite to be told about the first edition of the following morning’s The Times. In it, Miss Keays said that she had been so upset by a leading article in the Daily Telegraph advising her to have an abortion that she had decided to speak out.* She denounced Parkinson and went through exactly how often he had promised her marriage, withdrawn the offer, and then promised it once more.† The story, so carefully timed, was clearly her public declaration of a war which Parkinson was in no position to fight. The Prime Minister needed to be told. Butler wondered whether he should interrupt Mrs Thatcher in the always acutely tense period of last-minute speech preparation. He decided against it, and woke Denis instead, to seek his advice. Denis suggested telling Parkinson first. When he was informed, Parkinson said, ‘I’ve had it, haven’t I?’ Denis agreed that he had. Ferdinand Mount, who was in the suite working on the speech, noted the ‘strange grey deathmask colour’ of Parkinson’s face.96 Ascertaining that Mrs Thatcher herself was no longer in the throes of composition, Denis, Parkinson and Butler broke the news to her.97 Parkinson recalled her characteristic reluctance to make the key decision herself. ‘It’s up to you,’ she said. He resigned.
In her party conference speech the next day, Mrs Thatcher paid tribute to ‘the man who so brilliantly organised the campaign’, but did not name him. One further duty remained. As trade and industry secretary, Parkinson had been booked to open an extension of Blackpool airport on the Friday. Having resigned, he did not do so. Denis Thatcher opened it instead. The commemorative plaque of the occasion, however, inscribed beforehand, still bears Cecil Parkinson’s name.
The loss of Parkinson was a serious blow to Mrs Thatcher. She attracted little odium for having defended her straying Secretary of State, and indeed some admiration for her lack of censoriousness. It was a relief to many that this woman who, as David Wolfson put it at the time, ‘never did anything she could not be photographed doing’,98 was not puritanical about others; indeed, she preferred ‘naughty boys’ to goody-goodies.99 But Parkinson had been her favourite in the Cabinet and perhaps the only one whom she regarded as a private friend. He understood and shared her politics, and was uniquely good at cheering her up and handling her productively.100 She ‘adored the Cecil type of flattery’,101 and found no replacement for it. Now she was like a queen who had lost her most loyal and dashing knight.
As well as making her government look a bit ridiculous and ill-starred, Parkinson’s departure exposed her more clearly than before to the possibility of eventual challenge. In his stead, she promoted Norman Tebbit to the DTI, moving Tom King to replace him at Employment and putting her close ideological ally, Nicholas Ridley,* in the Cabinet for the first time at Transport. It was immediately noted that Tebbit now led the race, on the right at least, to succeed her. According to Parkinson, he had told Tebbit about Sara Keays’s pregnancy for the first time while driving him back from a weekend visit to Chequers in September. ‘Norman’s first reaction was to say: “There were three of us. Now there are only two.” He just couldn’t stop himself.’102† Tebbit meant that Parkinson was now out of the race to succeed Mrs Thatcher. This left, in his opinion, only him and Michael Heseltine. It was the common observation of those surrounding Mrs Thatcher at this time that Tebbit was indeed a challenger, and that this made him surprisingly touchy and awkward.103 He seemed, on the one hand, tough in his public rhetoric, in order to maintain a Thatcherite base, but, on the other, in his governmental capacity, unradical and ‘amazingly uncertain about taking strong positions’.104
Tebbit did not, in later life, deny his ambition. Referring to the DTI, he thought that ‘If Cecil was out of the picture, I was the natural to do that job.’105 Second only to the Chancellorship, it was the post which had most work to do in the Thatcher revolution, transforming the supply side of British business and presiding over the bulk of the privatizations. In comparison, Heseltine, at Defence, lingered in impotent eminence. After he had succeeded Parkinson, Tebbit soon found that ‘Relations with Margaret became quite bad across the waterfront.’ The two had strong disagreements about the motor industry, he wanting a continuing British volume-car base and she thinking that ‘the only thing was to close the whole thing down and stop the money leaking’.
Tebbit saw Mrs Thatcher as ‘rather extreme’ in her belief that markets must decide this matter, whereas he saw things rather more pragmatically and was worried about Tory seats in the West Midlands. In his view, the difference between Mrs Thatcher and him was ‘like that between the Vatican and a parish priest: I had to deal with the reality of human life.’106 But it was also, he thought, ‘a case of “Uneasy lies the head that wears the crown”. She was conscious I was receiving a lot of press support.’ At the Conservative conference, in the days before Parkinson fell, Heseltine and Tebbit were the two star turns on the platform. It was noticed that Heseltine, who had long made party conferences his speciality, received a rather more pro forma welcome than usual, whereas Tebbit’s was more heartfelt.
On the Monday following Parkinson’s resignation, Bernard Ingham’s press digest drew Mrs Thatcher’s attention to the headlines: ‘Sun leads with “Tebbit is the Man – ‘worst enemy’ Norman gets Parkinson’s job”.* Mr Tebbit is now just a heartbeat away from Tory leadership.’107
It would be wrong, however, to leave the impression that difficulties in the early months of the second term deflected Mrs Thatcher from her essential purpose. The scale of her victory had finally convinced the Civil Service that, as Ferdinand Mount put it, ‘ “This lot has an ongoing future: we must bend with its wind and learn its language.” Obstruction very much dwindled and ambitious assistant secretaries came up with bright ideas.’108 The global effect was similar. ‘Thatcherism works’ was the simple headline of a piece that Alan Walters wrote in the Washington Post.109 This was a message that most of the world was now ready to hear. The concept of Thatcherism was simultaneously vague – in the sense that it had no agreed sacred text or statement of principles – and strong. It was opposed to big government, high taxes and high deficits, the political power of trade unions, and Communism. It was in favour of individual opportunity and choice, free markets, strict monetary control, nuclear weapons and a vigorous NATO alliance. Its emotional pull was that, after the weakness of the 1970s, it rejected the idea that the left must have everything its way. Instead of conservatism being a method of orderly retreat before the forces of socialist progress, Thatcherism saw it as a dynamic and creative force, the best way of advancing the prosperity and security of the many. Thatcherism set out to prove that the modern world could be shaped in the interests of greater liberty.
Things really had changed. As Ronnie Millar, her thespian speech-writer, wrote to Mrs Thatcher after the election,
I see poor old Foot keeps saying Labour lost because they failed to get their message across. Not so. They lost because they got their message across all too clearly – and the people cared not for it. Let’s hope Kinnock takes over, because then the message will be virtually the same – and so will the people’s answer. Which means, dear, you will have to go on forever.110
In fact, it was under Neil Kinnock that the great Labour rethink would at last begin, but at this stage his party was far too weak and far too embroiled in its own quarrels to produce coherent opposition.
On 8 June, the day before polling day, Ferdinand Mount had sent Mrs Thatcher a paper called ‘The Next Fifteen Months’, written by David Young. Young, a protégé of Keith Joseph, was making a great success of the Manpower Services Commission, the body charged with addressing unemployment. Young’s innovations included a youth training scheme that aimed to provide 460,000 places for school leavers. Mount regarded him as ‘a really energetic independent mind’.111 Young now offered her related but wider thoughts about how to get business and government moving. He had a long list – privatizing nationalized industries, putting a
ll local government operations out to tender, restricting the functions of the Civil Service rather than obsessing about numbers alone, stopping the Inland Revenue frustrating the tax allowances for business start-ups, inventing a training voucher scheme, getting residential house building going by extending capital allowances, overcoming regional policy’s obsession with plant, and so on. As Young put it, ‘The first term has above all else changed attitudes. What we now have to do is to change the real world.’112 This was a capitalist echo, possibly unconscious, of Marx’s famous phrase: ‘Philosophers have only interpreted the world in various ways. The point, however, is to change it.’113
All this was closely linked, in the minds of Mrs Thatcher and her advisers, with employment. Later in June, Mount wrote to her to point out how lucky the Tories had been that unemployment had not been much of an issue in the general election. They would not be so lucky again, he went on, and must get it right by the second and third years of the Parliament. He proposed a mixture of measures – some, like ‘interim retirement benefit’ for workers over sixty, to massage the headline figure down; others, like attacking benefit traps, Wages Councils (which dictated wage levels in some trades) and excessive employment protection, to let new jobs grow.114 Suggesting to Mrs Thatcher a device called ‘a passport for a job’, Lord Cockfield sent her a memo with two sentences encapsulating the key idea which governed Thatcherite thinking on the subject: ‘Our objective is the creation of employment. This will lead to a reduction of unemployment: but it is not the same thing.’115 The old idea of post-war planners and interventionists was that jobs had to be ‘saved’. Mrs Thatcher’s idea was that many old jobs were bound to go: the key question was whether the economy was free enough to create new ones.
Just before her seminar on the Soviet Union at Chequers in early September (see Chapter 5), Mrs Thatcher held a comparable event there, on two weekdays, on ‘what the next steps should be in the Government’s strategy for creating a more prosperous and enterprising British economy and thus reversing the growth in unemployment’.116 This way of formulating the question was itself part of the answer: successful employment would come from successful enterprise.
She wanted the fact of the meeting, never mind its content, ‘closely guarded’.117 Contributions were invited not only from, first and foremost, Nigel Lawson, but also from Parkinson, Tebbit, Jenkin, Walker and Joseph – that is, Trade and Industry, Employment, Environment, Energy and Education. ‘Mrs Thatcher particularly hopes that each paper will avoid generalities and will concentrate on the specific decisions that need to be taken.’118 As well as the ministers and officials, Mount, Walters and David Young attended. Topics ranged over portable pensions, further reductions in union power, ‘The Taxation system and Employment’, housing and labour mobility, how to give workers and managers the ‘Enterprising Approach they require’119 and a dozen other subjects. Mrs Thatcher wrote separately to each departmental minister to ask for a personal (as opposed to official) paper, as well as circulating Walters’s recent notes on employment, supplementary benefit and relative wages. Nineteen ministerial papers were on the agenda. This was what later came to be called ‘joined-up government’, with a vengeance.
Alan Walters kept rough notes of proceedings for his own benefit (headed ‘Checkers’, as if the name of the place were American). His summaries of Mrs Thatcher’s interventions give the flavour of her way of talking and of jumping between subjects: ‘Wage related pension burden’, ‘Defence exp – cannot go on increasing it’, ‘Orders from Mexico and Brazil for ships’, ‘L’pool [Liverpool] had more money and made things worse’, ‘DES dreadful – portrait of Lenin in one room’, ‘keyboard skills’.120 Nigel Lawson’s recorded interventions, reflecting his more orderly mind, tended to concentrate on tax reform. Although the conversations were almost absurdly wide-ranging, they did produce an effect rather like an orchestra in its first rehearsal of a new symphony. Those taking part were serious about getting the music right.*
In her speech to the party conference the following month, Mrs Thatcher’s economic message tried to advance her economic radicalism as a unifying idea. The Conservatives had discovered at the election, she said, ‘where the heart of the British people lies’.121 ‘We have created the new common ground,’ she said, echoing Keith Joseph, who had used this phrase in 1975 to urge the party to pursue policies with broad public appeal rather than tacking to the political centre. The people had utterly rejected state socialism and understood that ‘There is no such thing as public money; there is only taxpayers’ money.’ Nigel Lawson would make sure that those taxes would be lower: ‘Further action there will be.’
Before Christmas that year, Ferdinand Mount left the Policy Unit, feeling a little jaded by his ‘holiday from irony’ under Mrs Thatcher, so different from his normal literary and journalistic milieu.122 John Redwood, the colleague he had chosen as his successor, was a very different character, more trained in economic questions and much more strictly committed to the Thatcher political project. He produced for Mrs Thatcher what Andrew Turnbull,* who handed it over to her, drily called his ‘inaugural’. ‘There is every opportunity for you’, Redwood wrote,
to dominate the popular ground of British politics. Your personal authority and commitment to … restoring individual freedom, responsibility and choice can be used to define what people want, and to find practical ways of giving it to them. Many of the things this Government wants to do or is doing have wide appeal far beyond the bounds of the Conservative Party.123
Redwood listed some of the best issues – home ownership (‘We have won this argument’),124 reducing crime, ‘value for money’ in defence procurement (surely aimed at Heseltine personally), denationalization (‘We must press on’), portable pensions, simplified taxation, competitive buses and more. But he did also observe, without criticizing Keith Joseph directly, that the issue of education was not much further advanced, and that health held ‘dangers for us’. The Tories’ popular ratings remained ‘abysmally low’ on this subject, and there was, as yet, no policy way through. All this was a reasonable summation of the lop-sided situation of Mrs Thatcher’s government – completely in charge of the economic agenda, but still uncertain about the social one. As Ferdinand Mount, who had tried without great success to integrate a family policy with the government’s economic policies, put it, ‘Social policy was not on the back burner, but it was on a neighbouring work surface.’125
‘The work I am initiating’, Redwood told Mrs Thatcher, ‘… is designed to help establish that domination over the debate through careful attention to public attitudes, to make the task of Opposition thankless and difficult, to write the concerns and views of your Government into the grammar book of politics.’126 The metaphor was a good one. The strict, energetic, innovative schoolmistress was indeed teaching a new grammar, and even the most unruly pupils were having to learn it.
Quite a different, anxious, complicated task also awaited Mrs Thatcher after 9 June. In the unsettled question of the future of Hong Kong, her smashing election victory did not seem to strengthen her hand with the world’s largest dictatorship. The very next day, the value of the Hong Kong dollar fell sharply. After nine months of hostile Chinese pressure, confidence trembled. At a meeting the following week, she aired the issues with Geoffrey Howe and others for the first time since she had made him Foreign Secretary. As the Chinese were insisting, she said, on what they themselves called ‘red flag and yellow face’ (that is, neither British sovereignty nor administration after 1997), this was all the more reason to have an ‘umbilical cord … whereby the rights of the people of Hong Kong depended on the United Kingdom and were independent of Peking’. This need not be called ‘British administration’, but she hoped China could get ‘little more than titular sovereignty’. ‘Our major responsibility’, she said, ‘was to the 4 million* Chinese who had sought freedom from Communist rule.’127 Howe, taking his new office’s line, said he was worried about making any settlement conditional on be
ing ‘acceptable to the people of Hong Kong’. Mrs Thatcher retorted that she could not recommend the transfer of sovereignty if it were not acceptable to them. This exchange summed up a difference at the heart of the government.
Nevertheless, the difference worked, on the whole, creatively. Cradock was instructed by the Cabinet to negotiate with China about arrangements post-1997, arrangements between then and 1997, and ‘matters relating to a transfer of sovereignty’, in that order. Mrs Thatcher understood well enough what was happening. As she said privately to the US Vice-President George Bush the following week, she hoped ‘it might be possible to find a solution which salvaged China’s pride but preserved Hong Kong’s system’.128* What she did not add was that she wished to salvage her own pride too.
Negotiations of immense complexity ensued. Although the Americans offered the British team informal advice and, according to US officials, shared intelligence,129 this was a purely UK–China bilateral affair.† Its twists and turns were relayed to London with pellucid clarity and a brilliant, almost insane grasp of nuance by Percy Cradock. In total, Howe calculated, the Foreign Office traffic about the negotiations amounted to 40,000 telegrams. The exact use of words became an art-form. Cradock reported, in a half-suppressed boast, how, by demanding ‘a transfer of sovereignty’ and opposing his counterpart Zhou Nan’s suggestion of ‘the transfer …’, he had left the way open for Zhou to introduce the wording Britain secretly wanted – the use of the phrase ‘transfer of sovereignty’ with no article, definite or indefinite.130 ‘He handled it very well,’ wrote John Coles to Mrs Thatcher. ‘Wonderfully,’ she responded.
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