Margaret Thatcher: The Authorized Biography (113 page)

Her doubts about Howe were part of a wider problem, produced by the stress of the year, that she was almost as irritated with her allies as with her opponents, and they with her. In the first week of August, Hoskyns settled down to what he called a ‘blockbuster’ memo to his boss. To avoid her dismissing it as ‘just me being disagreeable’, he got David Wolfson and Ronnie Millar to add their names to his (though, since the paper mentions the merits of Millar by name, the pretence that he was one of its authors cannot have fooled Mrs Thatcher). The rather surprising involvement of Millar, who never saw government papers and was in no way a policy-maker, was sought by Hoskyns because Millar was, for Mrs Thatcher, ‘that rare thing, a trusted friend who wanted her to succeed and was therefore prepared to tell her things she did not want to hear’.
⁸²
Millar was extremely fond of Mrs Thatcher and used to say, ‘Bless her little cotton socks!’ when he spoke of her,
⁸³
but he felt desperate at the idea that, partly through her own fault, her great enterprise might founder. The fact that Wolfson, so close an associate, was prepared to help Hoskyns is also striking. The frankness of the paper showed how bad they all felt the situation was. The paper was put into the Prime Minister’s red box as she went on holiday on 20 August. It was entitled ‘Your Political Survival’.
⁸⁴

The ‘blockbuster’ was quite possibly the bluntest official document ever seen in Downing Street. Although it recognized that ‘your Government
has
achieved the beginnings of a near-revolution in the private sector and especially in Industry,’ and ‘things in the economy are better than people realise,’ the note warned that ‘it is exactly at this moment that colleagues’ nerves begin to crack and internal revolt (now clearly recognised in all the newspapers), threatens your own position.’ Hoskyns told her that ‘Your own credibility and prestige are draining away very fast.’ The most likely outcome was ‘you as another failed Tory prime minister sitting with Heath’, but it was a serious possibility that she would be simply thrown out before the next election. He then listed her faults. ‘
You lack management competence
’ was the headline of one paragraph. ‘
Your own leadership style is wrong
’ was another. He warmed to his theme: ‘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 you are too ready to blame others when things go
wrong.’ ‘
The result
’, the next paragraph was headed, ‘
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. And people are starting to speculate as to who might reunite the Party, as Macmillan did after Suez, if you go. But no-one tells you what is happening, just as no-one told Ted.’ To survive, ‘you have an absolute duty to change the way you operate.’

The Hoskyns memo called for Mrs Thatcher to ‘
Lead by Encouragement, not by Criticism
’: ‘Churchill provided the element of will and courage, as you do, without which nothing could have been achieved. But when the Battle of Britain was over, he gave
all
the credit to others. You must make the members of your team feel ten feet tall, not add to their own human fears and self-doubts. Say “we” and not “I”.’
*
Hoskyns wanted a new party chairman, a thoroughgoing reshuffle and a ‘Cabinet steering group’ to provide direction, and movement towards ‘a Radical Cabinet for the next Parliament’. Mrs Thatcher should restore her public image, taking more advice from Ronnie Millar and cut her diary commitments: ‘To be frank, I believe you fill your diary because it’s a good way to avoid having to do the unpleasant strategic thinking, involving unknowns and uncertainties, which you don’t enjoy and which is not your forte.’ He concluded: ‘There is no other Politician … who is likely even to attempt to lead the country in the right direction. But it will be no comfort to you, to us, or to the Country as a whole if you go into the history books with the prize for the “Best Loser”.’ He begged for the chance to ‘talk through this paper calmly and carefully’.

In Hoskyns’s view, the ‘blockbuster’ failed: ‘Two or three weeks later she hissed at me, out of the corner of her mouth as we sat down to start a meeting in her study: “I got your letter. No one has ever written like that to a prime minister before” … She had clearly never experienced advice of this kind before, and our working relationship, often uneasy at the best of times, was undoubtedly damaged … Only if we had talked it through together could the letter have been helpful to her. But we never did. I suspect that it marked the point at which she decided she had had enough of me.’
⁸⁵
Hoskyns continued ever afterwards to believe that 1981 was the time when Mrs Thatcher first began to suffer the isolation of high office: ‘however it happened, the seeds of her downfall were being sown.’
⁸⁶
This analysis may be right, but he surely underplayed the simple fact that almost no human
being, particularly one, like Mrs Thatcher, under intense strain, can be expected to take such brutal criticism easily. In his frustration at the inadequate use she made of the Policy Unit, Hoskyns made personal criticisms that were so negative that it was hardly possible for Mrs Thatcher to discuss them ‘calmly and carefully’.

But Hoskyns’s anger did reflect widespread views among people sympathetic to Mrs Thatcher. As well as being, in their eyes, inspiring, admirable, brave and, to many, surprisingly loveable, she was also intensely annoying. Hoskyns’s criticisms of her overwork, lack of consideration for Cabinet colleagues, dislike of long-term thinking and poor management were essentially true, though he never made enough allowance for her remarkable political gift for seeing when the time was ripe and when it was not. His ‘blockbuster’ is testimony to how very trying she could be, even – perhaps particularly – to her friends. It is evidence, too, of the sense of crisis that prevailed in her administration that summer.

Although she never acknowledged the justice of criticism directly, Mrs Thatcher did have ways of listening to it. The sort of changes for which Hoskyns, Millar and Wolfson argued did take place. Mrs Thatcher deputed Ian Gow to fly to Venice, where Thorneycroft was on holiday, to ask him to resign as party chairman. It was a frosty encounter. Following it, on 25 August, Thorneycroft wrote to Mrs Thatcher offering his resignation. His letter included carefully phrased praise for ‘the determined, undogmatic and caring party which we have always been’.
⁸⁷
The next day, Mrs Thatcher, already back from a brief respite at the flat in Scotney Castle (she had earlier in the month spent a few days with the Wolfsons in Cornwall, where, Wolfson told Hoskyns, she had ‘seemed like a zombie’ because of the strain and tiredness),
⁸⁸
revealed the main parts of her proposed Cabinet reshuffle to a meeting of Hoskyns, Wolfson and Ian Gow. The most important thing was that Jim Prior would be replaced at Employment by Norman Tebbit, and would be offered Northern Ireland instead. Cecil Parkinson would succeed Thorneycroft as chairman. At his own request, Keith Joseph would move from Industry to Education. Christopher Soames would be out. Ian Gilmour would go from his position as number two at the Foreign Office, and be replaced by Douglas Hurd. David Howell would move to Transport and Nigel Lawson would take his job at Energy.
⁸⁹
This preview was fulfilled in all particulars, except that it was not Douglas Hurd, but Humphrey Atkins, moving from Northern Ireland, who displaced Gilmour.

Jim Prior heard what was afoot, however, and decided to resist. His determination was sharpened when he heard the rumour that he was to be succeeded by Tebbit, whom the Wets considered particularly rough and socially inferior. The next day’s
Daily Mail
carried a big interview with
Prior under the headline ‘I’ll fight like hell’.
⁹⁰
On 2 September, Mrs Thatcher, Prior and others met to discuss the reform of trade union immunities now that the consultation period for his green paper had ended. The meeting was ill-tempered. Prior dug his heels in, saying that ‘History showed that the unions could defeat legislation if they wanted to.’ Mrs Thatcher said his ideas, such as the ending of union-only agreements, were ‘far too modest’. Thinking of the SDP, she warned that ‘The field should not be left open to others to put proposals which would secure electoral support.’
⁹¹
There was impasse. It was widely believed that Mrs Thatcher was not in a strong enough position to move Prior. As the reshuffle approached, however, Prior’s camp overplayed their hand. Richard Needham,
*
one of his young supporters in Parliament, told the press that Prior would resign if he were offered Northern Ireland. This gave the damaging impression that he regarded the job as unimportant, even perhaps that he was frightened of its dangers. A television interview that he gave sitting on his combine harvester at his Suffolk farm added to the feeling that he was presenting such a direct challenge to Mrs Thatcher’s authority that she had to move him. Besides, for the first time since the general election, the politics of confronting the trade unions were starting to shift. The emergence of the SDP, which was vigorously anti-trade union political power, meant that the Tories could no longer assume that they had the monopoly of anti-union votes. Prior’s caution on the subject might lead his party to be outflanked: his position was not as strong as he had believed.

The reshuffle took place on 14 September 1981. Prior accepted Northern Ireland, with the sop that he could remain on E Committee, and take the ultra-Wet junior minister Nicholas Scott with him to the province. Christopher Soames reportedly complained to friends that he would have sacked his gamekeeper with more courtesy than Mrs Thatcher had shown him (though why one should expect gamekeepers to be shown less courtesy than Lord Soames in matters of employment was not clear). Soames was replaced as leader in the Lords by Janet Young, an old friend of Mrs Thatcher with a background in Oxford city politics, the first and last woman ever appointed to her Cabinet. Gilmour wrote to Mrs Thatcher, in the normally courteous exchange of letters customarily published when a minister departs: ‘You asked for my resignation … this was, in view of our disagreements, neither surprising nor unwelcome.’
⁹²
But of course it
was
unwelcome: the Wets looked much less dignified sacked than they would
have looked if they had resigned on principle; and there was something in their sense of affront at being sacked by a woman which was haughty. They had not bargained for this. Reporting the press reaction to the reshuffle to Mrs Thatcher, Bernard Ingham noted ‘A good welcome (apart from
Mirror
and a v. sourpuss
Guardian
)’.
⁹³
In the
Daily Mail
, Paul Johnson called it the ‘most magisterial demonstration of a prime minister’s authority since the Night of the Long Knives [Harold Macmillan’s dismissal of a third of his Cabinet in July 1962]’. Mrs Thatcher still did not have a majority of true believers in her Cabinet, but by the addition of Tebbit, Parkinson and Lawson she had installed a new generation of active, clever, enthusiastic supporters. Equally important, she had proved that she could sack the grandees without the heavens falling.

There was no obvious or immediate improvement, however, in Mrs Thatcher’s fortunes. On the same day as the reshuffle, interest rates, lowered with a fanfare at the time of the Budget, went up by 2 per cent to protect sterling. A combination of rising world interest rates, the great expansion of private domestic credit because of the relaxation of controls and worries about the gilts market forced the government to act. On 23 September the stock market index fell to its lowest level for seventeen years. On 1 October interest rates rose by 2 points yet again to 16 per cent, which was agonizingly high.
*
A Gallup poll privately conducted for the Conservatives showed that if a Social Democratic Alliance were to come into being, 40 per cent of voters would support it, and only 16 per cent would support the Conservatives.
⁹⁴
In a decision which probably saved the party from complete collapse, Labour voted narrowly for the moderate Denis Healey as its deputy leader, rather than Tony Benn.

Ted Heath chose the run-up to the party conference to launch his fiercest and most direct attack on the government’s economic policy: ‘If more than three million unemployed are needed to get inflation down to a level higher than it was 2½ years ago, how many more millions of unemployed will be required to bring it down to … to what level? – to a level that has never been revealed?’ He said that ‘The time has come to speak out.’ He wanted
‘a return to consensus politics’, membership of the ERM and the reintroduction of exchange controls, as well as much more capital investment and a ‘massive’ retraining programme.
⁹⁵
Angrily, he exclaimed, ‘How dare those who have run the biggest budget deficit in history reproach others with the heinous crime of printing money?’

Heath’s advance text reached Mrs Thatcher, who was in Australia. She interpolated her repudiation of it into the Sir Robert Menzies Lecture about the virtues of choice which she was giving in Melbourne. Consensus, she said, was ‘the process of abandoning all beliefs, principles, values and policies in search of something in which no one believes, but to which no one objects’.
⁹⁶
In fact, as was almost always the case, Heath’s intervention was useful to Mrs Thatcher. It made the dispute look personal, and as soon as that happened the party faithful naturally rallied to the leader.

In the same week, representatives of the younger generation of Conservative MPs produced a pamphlet called
Changing Gear
, which politely but definitely put down a marker against the trend of Mrs Thatcher’s policies. The pamphlet issued from an informal group known as the Blue Chips, which included most of the brightest and best connected of the 1979 intake. Led by Chris Patten and William Waldegrave, the group also included Lord Cranborne, John Patten,
*
Tristan Garel-Jones
^†
and Richard Needham. Soon afterwards, it was joined by John Major. It was seen by its own members as a rather grand network,
⁹⁷
and even had its group portrait painted by Lord Cranborne’s sister, Lady Rose Cecil. Most members of the group eventually attained ministerial and often Cabinet rank, and many people came, in later years, to see the Blue Chips as conspirators. In 1981, they were clearly ambitious young men, and the fact that, in Chris Patten’s phrase, ‘we asked one question too many’,
⁹⁸
was an ill omen for Mrs Thatcher. By the time the pamphlet was published, Waldegrave had actually taken a junior post in the government.