At subsequent summits Reagan treated Mrs Thatcher explicitly as his prime ally. He was particularly pleased that she found time to attend the Williamsburg summit in the middle of the June 1983 election. White House files show how his staff coordinated with hers to advance their joint agenda, and afterwards he thanked her for her help. ‘Thanks to your contribution during Saturday’s dinner discussion of INF [Intermediate-range Nuclear Forces],’ he told her, ‘we were able to send to the Soviets a clear signal of allied determination and unity.’24 And before the London meeting the following year he wrote to her that he planned to provide her with ‘the same stalwart support’ that she had given him at Williamsburg.25 They made a powerful and well-rehearsed double act.
From now on Mrs Thatcher invited herself to Washington at the drop of a hat. As soon as she had secured her re-election in June 1983 she asked to come over in September ‘to continue bilateral discussions with the President’.26 ‘She will speak plainly about British interests’, the US Embassy in London warned, ‘and will appreciate plain speaking from us’.27 Henceforth this was the basis of the relationship, as Lady Thatcher explicitly acknowledged in her memoirs: ‘I regarded the quid pro quo for my strong public support of the President as being the right to be direct with him and members of his Administration in private.’28 ‘She not only had her say,’ Richard Perle remembered, ‘but was frequently the dominant influence in decision-making.’29
If, as an outsider, she was able to have this degree of influence, it was because, compared withWhitehall,Washington is highly decentralised. American government is a continuous struggle between different agencies – the State Department, the Pentagon, the National Security Adviser, the CIA and others – all competing for the President’s ear. Well briefed by the British Embassy, Mrs Thatcher knew the balance of views on every issue and where her intervention, judiciously applied, might be decisive. It was well known that Reagan did not like quarrelling with her, so those Presidential advisers on her side of a particular argument had every incentive to deploy her to clinch their case. George Shultz, who replaced Al Haig as Secretary of State in the summer of 1983, recalled that he always found her influence with Reagan ‘very constructive’, and was ‘shameless’ in calling on her aid when required.30 Others, however, found her interventions maddening.
When she could not come to Washington in person, she would write or telephone. She regularly reported to Reagan her views on other leaders she had met on her travels, and pressed her ideas of the action he should take in the Middle East or other trouble spots. Sometimes their letters were purely personal, as when they remembered each other’s birthdays, congratulated one another on being re-elected, or expressed horror and relief when the other narrowly escaped assassination. At least once, at the height of the miners’ strike in 1984, Reagan simply sent his friend a note of encouragement. ‘Dear Margaret,’ he wrote:
In recent weeks I have thought often of you with considerable empathy as I follow the activities of the miners and dockworkers’ unions. I know they present a difficult set of issues for your government. I just wanted you to know that my thoughts are with you as you address these important issues; I’m confident as ever that you and your government will come out of this well. Warm regards, Ron.31
Two years later, when Reagan in turn was in trouble over damaging revelations about his administration’s involvement in the exchange of arms for the release of Iranian hostages, in defiance of its declared policy, Mrs Thatcher rushed publicly to his defence: ‘I believe implicitly in the President’s total integrity on that subject,’ she told a press conference in Washington.32 As the Iran – Contra scandal deepened the following year and America was seized by a mood of gloomy introspection, she visited Washington again – fresh from her own second re-election – and toured the television studios, vigorously denying that Reagan was politically weakened and defending his honour. ‘I have dealt with the President for many, many years,’ she told a CBS interviewer, ‘and I have absolute trust in him.’ Moreover, she insisted, ‘America is a strong country, with a great President, a great people and a great future. Cheer up! Be more upbeat!… You should have as much faith in America as I have.’33
Such fulsome encomiums, repeated every time she went to Washington and lapped up by the American media, were regularly condemned by her opponents at home for showing an excessive degree of grovelling subordination.Yet the truth is that in her private dealings with Washington she never grovelled. On a whole range of issues, from the Falklands to nuclear disarmament, on which she had differences with the Americans, she fought her corner vigorously. As Richard Perle remembered: ‘She never approached the conversations she had… with American officials and with the President from a position of supplication or inferiority. Quite the contrary.’34
Her first battle was over the consequences for British firms of American sanctions on the Soviet Union following the imposition of martial law in Poland in December 1981. She passionately supported the Polish Solidarity movement and was all in favour of concerted Western action to deter the Russians from crushing the flicker of freedom in Poland as they had done in Czechoslovakia and Hungary. But the Americans’ chosen sanction was to halt the construction of an oil pipeline from Siberia to Western Europe, which they proposed to enforce by applying sanctions to European firms, including the British company John Brown Engineering, which had legitimate existing contracts to build the pipeline. This, Mrs Thatcher objected, would hurt the Europeans more than the Russians, while it was not matched by comparable American sacrifices: the Americans had actually ended an embargo on grain exports to Russia which was hitting American farmers in the Midwest. She also objected to the Americans trying to impose American laws on British firms operating outside the USA.
For once she was speaking for Europe against America. In truth she was fighting for British interests, but, with her usual ability to clothe national interest in a cloak of principle, she was also standing up for sovereignty and the rule of law against American extraterritorial arrogance. ‘The question is whether one very powerful nation can prevent existing contracts being fulfilled,’ she told the House of Commons on 1 July. ‘I think it is wrong to do so.’35 The British Government instructed John Brown not to comply with the US embargo.
Yet her main concern was still to prevent damage to the Alliance. ‘The only fly in the ointment,’ she told Weinberger in September, ‘is the John Brown thing.’ ‘She fervently hoped,’ he cabled Reagan, ‘that what the US did would be so minimal that she could ignore it. She desperately needed some face-saving solution.’ Characteristically she was worried about fuelling anti-Americanism. ‘Mrs Thatcher said she had a serious problem with unemployment and bankruptcies, and she didn’t want her closest friend, the United States, to be blamed by her people.’36
As so often, she knew that she had allies in Washington. In this instance her pressure helped the new Secretary of State, George Shultz, to get the pipeline ban lifted in return for a package of joint measures limiting Soviet imports and the export of technology to Russia.Telling her of his decision on 12 November, Reagan thanked her – and Pym and the British Ambassador in Washington, Sir Oliver Wright – for helping achieve this consensus.37 This was the special relationship in action.
But the Polish pipeline question was just one of a number of ‘chronic economic irritants’ which Mrs Thatcher felt she had to raise with the Americans every time she visited Washington in the mid-1980s. 38 First there was the fallout of British Airways’ price war with Freddie Laker’s independent airline, Laker Airways, which succeeded in forcing the price-cutting upstart out of business in 1982. Much as she admired Laker as a model entrepreneur, Mrs Thatcher was worried that an American Justice Department investigation into BA’s unscrupulous methods was holding up plans to privatise the national carrier. In March 1983 she appealed ‘personally and urgently’ to Reagan to suspend the investigation, once again threatening that it ‘could have the most serious consequences for British airlines’ and warni
ng that if it was not stopped, ‘our aviation relationship will be damaged and the harm could go wider’.39 Advised by his staff that he could not interfere in the judicial process, Reagan replied regretfully that ‘in this case I feel that I do not have the latitude to respond to your concerns’.40 But seven months later he did stop the investigation – an ‘almost unprecedented’ intervention which left the Justice Department ‘stunned’. In March 1985 Reagan intervened again to persuade BA’s biggest creditors to settle out of court, thus clearing the way for privatisation to begin in 1986.
Another running sore was the attempt of some American states to tax multinational companies on the proportion of their profits deemed to have been earned in that state. British objections to this ‘unitary taxation’ – at a time when British companies were investing heavily in America – bedevilled several of Mrs Thatcher’s meetings with Reagan and his colleagues, before this too was eventually settled to her satisfaction. In this case, however, the resolution probably owed more to American multinationals making the same complaint than it did to Mrs Thatcher’s protests.
Above all, she worried about the impact on Europe of the Americans’ huge budget deficit, caused by the Reagan administration’s policy of tax cuts combined with increased defence spending. After five years the deficit was running at $220 billion a year and the US was the world’s largest debtor nation – especially heavily indebted to Japan. This was Mrs Thatcher’s one serious criticism of her ally’s economic policy. When she had been unable to bring spending under control in 1981 she had felt bound to raise taxes and she could not understand Reagan’s insouciance. At successive G7 summits she warned that the unchecked deficit would raise interest rates and ‘choke off world recovery’.41 In fact US interest rates fell in the second half of 1984 and the booming US economy led the world out of recession. But still Mrs Thatcher worried, though she was reluctant to criticise in public. She wrote to him that she remained ‘very concerned by… the continuing surge of the dollar’:
A firm programme for the reduction of the budget deficit is the most important safeguard against financial instability and I wish you every success with your Budget proposals to Congress.
Reagan tried, in his fashion; but in practice the conflicting priorities of the Republican White House and a Democrat-dominated Congress ensured that the deficit persisted for the rest of the decade.
An even more sensitive issue on which Mrs Thatcher’s intransigence exasperated Washington was the future of the Falklands. The Americans had, with some misgivings, eventually backed what the Washington Post called her ‘seemingly senseless, small but bloody war’ in the South Atlantic.42 But as soon as the fighting was over, Washington’s priority was to resume normal relations with Argentina (and South America as a whole) as quickly as possible, and renew the search for a lasting peace settlement. Even in his message of congratulation on her victory, Reagan stated firmly that ‘A just war requires a just peace. We look forward to consulting with you and to assisting in the building of such a peace.’43 An invitation to her to visit Washington a few days later was couched explicitly as an opportunity to consider how to achieve this goal.44
But Mrs Thatcher was not interested in a just peace. So far as she was concerned, she had defeated the aggressor, at great risk and considerable sacrifice, and she was not now willing to negotiate away what her forces had won. As she defiantly put it: ‘We have not sent British troops and treasure 8,000 miles to establish a UN trusteeship.’45
The first test of her flexibility came that autumn, when several Latin American countries sponsored a UN resolution calling for renewed negotiations to end what they called ‘the colonial situation’ in the Falklands. Mrs Thatcher immediately cabled Reagan asking that the US should oppose the resolution. But George Shultz and others in the administration – not least Jeane Kirkpatrick, still the American Ambassador at the UN – believed that the US should support it, since the whole purpose of the UN was to promote the peaceful resolution of disputes. Shultz initially feared that Reagan would take Mrs Thatcher’s side. ‘But I found that he too was getting a little fed up with her imperious attitude in the matter.’46 The President ticked his agreement to Mrs Kirkpatrick backing the resolution, and wrote a delicate letter – in reply to what his staff called ‘Mrs Thatcher’s latest blast’ – to explain why. Nevertheless the sting was that he was still going to support the UN resolution, which was duly carried by a large majority, with only a dozen Commonwealth countries joining Britain in opposing it.
Mrs Thatcher continued adamantly to reject any possibility of negotiations on the question of sovereignty. A year later, however, with a democratically elected government now installed in Buenos Aires, the State Department took a further step towards normalising relations by ‘certifying’ Argentina as eligible for a resumption of American arms sales. This, Reagan assured Mrs Thatcher, merely ended the embargo imposed in 1982. ‘Certification does not mean arms sales.’47 The announcement was tactfully postponed for a day to spare her embarrassment in the House of Commons; Vice-President George Bush thanked her for her understanding response.48 For the next three years Reagan deferred to her sensitivity, and no arms were sold; but by 1986 the pressure from the Pentagon was becoming irresistible. Once again Mrs Thatcher went straight to the top. ‘You should expect a typical Thatcher barrage,’ John Poindexter briefed Reagan before their meeting at Camp David following the Reagan – Gorbachev summit at Reykjavik. ‘You will want to tell Mrs Thatcher that we cannot continually put off how best to nurture Argentina’s democracy.’49 But this time she was more subtle, waiting until almost the last minute before dropping a final item almost casually into the conversation, as Geoffrey Smith described. ‘“Oh, arms to Argentina,” she said, for all the world like a housewife checking that she had not forgotten some last piece of shopping. “You won’t, will you?”’To the horror of his officials, Reagan fell for it. ‘“No,” he replied. “We won’t.” So in one short sentence he killed weeks of careful preparation within his administration.’50
The most serious public disagreement of their whole eight-year partnership came in October 1983, when the Americans sent troops to the tiny Caribbean island of Grenada to put down a coup by a gang of left-wing thugs against the elected – but already Marxist – government led by Maurice Bishop. The Americans were always concerned about any left-wing takeover on their Caribbean doorstep and, fearful of another Cuba, had already been doing their best to destabilise Bishop’s regime ever since 1979. But Grenada was a member of the Commonwealth, whose head of state was the Queen. The Foreign Office was alarmed at events on the island, but believed there was nothing to be done, since Grenada was a sovereign country. Several neighbouring Caribbean states, however, concerned for their own security, did want something done, and appealed to Washington for help. The Americans responded by diverting ships to the island, ostensibly to evacuate several hundred American students, but in fact to mount a counter-coup. They did so without consulting or even informing Mrs Thatcher until it was too late to halt the action. As a result she was humiliated by the revelation that her vaunted relationship with Washington was rather less close than she pretended.
The story of her reaction to the news of the American invasion has been vividly told from both sides of the Atlantic. According to Carol’s life of Denis, Reagan telephoned while her mother was attending a dinner – ironically at the US Embassy. As soon as she got back to Downing Street she phoned Reagan back and railed at him for several minutes: some versions say a quarter of an hour. ‘She didn’t half tick him off,’ Denis told Carol. ‘“You have invaded the Queen’s territory and you didn’t even say a word to me,” she said to him, very upset. I think that Reagan was a bit shocked. There was nothing gentle about her tone, and not much diplomacy either.’51
The diplomatic exchanges tell a slightly different story. Washington received the call for help from the Organisation of Eastern Caribbean States (OECS), led by the formidable Mrs Eugenia Charles, Prime Minister of Dominica,
on Sunday 23 October. The same day a suicide attack in Beirut killed some 300 American soldiers serving in the multinational peacekeeping force in Lebanon. There was no logical connection, but there was no doubt in British minds that the American resolve to act quickly in Grenada was fuelled by the outrage in Beirut: it was easier to hit back in Grenada than in Lebanon. Reagan and his military advisers decided almost immediately to accede to the OECS request and began planning the operation in the greatest secrecy. At four o’clock on Monday afternoon, in reply to a question from Denis Healey about the possibility of American intervention in Grenada, Howe told the Commons in good faith that he knew of no such intention: American ships were in the area solely to take off US citizens if it should become necessary, just as Britain had HMS Antrim in the area for the same purpose. Pressed further by a Labour MP, he assured the House that ‘we are keeping in the closest possible touch with the United States Government… I have no reason to think that American military intervention is likely.’52
Less than three hours later, however, at 6.47 p.m., while Mrs Thatcher was still in Downing Street hosting a reception, there came a cable from Reagan telling her that he was giving ‘serious consideration’ to the OECS request. He assured her that if an invasion did go ahead, the British Governor-General would be the key figure in appointing a provisional government as soon as the troops had landed. He also promised categorically: ‘I will… undertake to inform you in advance should our forces take part in the proposed collective security force, or of whatever political or diplomatic efforts we plan to pursue. It is of some assurance to know I can count on your support and advice on this important issue.’53
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