Margaret Thatcher: The Authorized Biography (95 page)

met by G Howe who hustled into adjoining room – begged BG not to be too critical – ‘She’s in a very odd mood …’ Hour with PM. Twice, says BG, near to tears. What had gone wrong? Speechless on the Governor of the Bank of England … BG much depressed by the experience. Clearly feels that Chancellor has lost grip. (Remind him how far PM & C o E are tied together. Shades of Macmillan/Selwyn Lloyd in 1962.) [Griffiths] left unclear as to purpose of summons, save that we agree January 1981 may prove decisive …
⁷⁶

Mrs Thatcher was very badly rattled, and doubtful of her lieutenants.

It was Geoffrey Howe, though, who gave the fairest assessment of the situation. At the turn of the year, he wrote to Mrs Thatcher to comment on the latest caustic and pessimistic strategy paper from John Hoskyns. ‘You will be disconcerted, as I was,’ he told the Prime Minister, ‘to find the transatlantic commentators referring to “Thatcherisation” as a condition to be avoided, if possible!’, but he went on to say, with a touch of flattery, that there was an underlying strength in the government’s position: ‘the Thatcher factor. People
do
have a sense that this Government – more particularly you … is possessed of a tenacity, which might just work, if only
its [sic] sustained.’ ‘More than a few people think we’re quite mad!’ he continued. ‘Yet
very
few are able … to proffer … a coherent alternative solution.’
⁷⁷
Bernard Ingham minuted the Prime Minister with the prediction from the latest edition of the venerable soothsaying publication
Old Moore’s Almanack
: ‘There are rare moments in history,’ it said, ‘when one man or woman can, almost alone, shape the future of the nation. Now is such a moment. Margaret Thatcher is such a woman. The compelling pattern of her fate is so intimately interwoven with the present destiny of the UK that it is impossible to imagine that she will pass from power before her mission to heal and reinvigorate Britain is complete.’
⁷⁸
Howe, Ingham and Old Moore were on to something. ‘Thatcherism’ was never a philosophy, but a disposition of mind and character embodied in a highly unusual woman.

Brooding over Christmas, Mrs Thatcher planned a reshuffle. Given her irritation with several in her Cabinet, the smallness of the changes shows that she did not feel in a strong position. No one seemed to have noticed a wide-ranging and remarkably frank interview that she had given to the American magazine
People Weekly
at the end of July. There she was asked what she thought of being called the ‘Leaderene’, a satirical coinage of the Leader of the House, Norman St John-Stevas. She replied ominously that the author was usually a witty person and should have shown ‘a bit more style’.
⁷⁹
St John-Stevas was the notable casualty of her reshuffle, which was announced on 5 January 1981. Francis Pym, whose stout and largely successful resistance to defence cuts had annoyed her, was moved to replace Stevas. He was also put in charge of policy presentation, an extraordinary choice given his own scepticism about the direction of policy and his melancholy, nervous disposition. John Nott replaced him at Defence. John Biffen, who had not been strong enough in the spending negotiations, replaced Nott at Trade, and was in turn replaced by Leon Brittan, a close friend and ally of Geoffrey Howe. Mrs Thatcher had shifted the centre of gravity only very slightly in her favour.

Bernard Ingham, her press secretary, wrote a blunt note to the newly installed Pym, copied to the Prime Minister. The government, he said, ‘is prone to operate on the basis of that well-known hymn: you in your small corner and I in mine … The Government is divided and seen to be divided; nothing has done more damage than the 1981–82 public expenditure review. This was taken as a licence to hold the Cabinet in public … It is to be hoped that the reshuffle marks the point of departure.’ The government was also getting the worst of both worlds, said Ingham: ‘it is criticised at once for unfeeling monetarism, while at the same time money supply, on one definition at least, is soaring along with the PSBR.’
⁸⁰

In their attempt to bring the nationalized industries under proper financial control, Mrs Thatcher and Geoffrey Howe did not intend to spare the coal industry. As soon as she had come into office in May 1979, Mrs Thatcher had demanded action to prepare for battle with the National Union of Mineworkers. She summoned Willie Whitelaw and Sir Robert Wade-Gery, the Deputy Secretary to the Cabinet, and announced: ‘The last Conservative Government was destroyed by the miners’ strike. We’ll have another one, and we’ll win. And you, Willie, will do it.’
⁸¹
Whitelaw chaired the Civil Contingencies Unit, which tried to draw up the strategic principles and practical measures. It realized, for example, that if there was to be a strike it should begin in the spring and it should be over pit closures, which tended to divide miners, rather than over pay, which tended to unite them. It also sought to persuade the Treasury of the need for the ‘dual firing’ of power stations by oil and coal, and above all to plan the accumulation of coal stocks, not only at pitheads but at power stations. The immediate problem the unit encountered, however, was to get any department to listen. As Wade-Gery remembered it, people said, ‘The woman’s mad. You can’t win miners’ strikes. All you can do is buy them off.’
⁸²
Besides, there was as yet no co-ordination in government between civil contingencies – the thinking that had emerged in reaction to the General Strike of 1926, which was essentially a military task – and the management of tactics about pay and closures.

There was a further problem. While it might make political sense to pile up the coal, it made no immediate financial sense. From the first, the Treasury sought to run down coal production and cut where it could in order to help bring the industry’s atrocious overspending under control. The lack of overall strategy meant that this conflict was not, for a long time, resolved. The Treasury itself recognized this. In April 1980, Howe’s private secretary wrote to Clive Whitmore about the need to co-ordinate policy, giving as his example ‘the cost to electricity including of coal stocks versus the risk of a miners’ strike. We tried to raise this whole question with the Prime Minister in the context of the miners’ pay award last autumn, but it was not at the time sufficiently near the top of everybody’s list.’
⁸³

Forty per cent of the energy requirements of nationalized industries, including two-thirds of electricity production, were met by coal. And international pressure to keep down the consumption of oil encouraged – in the absence of more nuclear power stations – greater dependence on coal in the future. Although high wage increases (setting a bad example to other nationalized industry workers) had restrained industrial militancy among the miners, the National Coal Board was being told by the government to meet its severe financial targets. In June, a briefing to E Committee from the relevant officials predicted that, by the turn of the year, stocks of five
to six weeks would have been built up. They added, though, that the ‘survival period depends on the extent of picketing outside the industry itself and, if there is secondary picketing, the extent of stockholdings that are vulnerable to picketing’.
⁸⁴
The state of the law on the subject did not inspire confidence. As for contingencies, ‘No plan involving servicemen is now considered practicable.’
⁸⁵

In September 1980 the Energy Secretary, David Howell, presented his Strategy for Coal to E Committee. He saw a growth of coal production ‘as supplies of other fossil fuels decline’, but believed this could come from low-cost pits and that many existing, high-cost pits should be closed. He warned that ‘There could be an explosion over closures,’ and recommended that the coming winter pay claim be got out of the way before closure plans were presented to the miners.
⁸⁶
On her copy of the document, Mrs Thatcher wrote: ‘
Thin
– what I don’t find in these papers is any attempt to
cut
the
costs
of production. That is what private industry would have to do.’ She did not, at this point, indicate any anxiety about industrial unrest. Closure plans pressed ahead.

In November, the miners’ annual pay claim was settled. In his daily press digest, Bernard Ingham reported to the Prime Minister thus: ‘Miners settle for 9.8 per cent … for 10 months. Generally portrayed as 13 per cent but as a triumph for government policy …’
⁸⁷
The details of pit closure plans continued to be developed in secret, although the news of a coming, comprehensive closure plan attracted press criticism (‘The Great Pit Blunder’, said the
Daily Mail
of 17 January) for making it easy for the union to co-ordinate resistance. On 29 January, three days after Keith Joseph had announced his rescue package of £990 million for British Leyland, in a meeting with Sir Derek Ezra, the chairman of the Coal Board, Mrs Thatcher backed the closure plans on the grounds that there was ‘no alternative’.
⁸⁸
Twenty-three pits were to be closed, though rumour quickly raised this number to fifty. At its meeting with the National Union of Mineworkers on 11 February, the NCB still refused to give the precise list of proposed closures, and did not mention the improved redundancy terms which it would offer. It also tried to join the union in pressing the government for more subsidy and more protection from coal imports. The famed ‘triple alliance’ between railwaymen, steelworkers and miners appeared to be in place. Suddenly, a national strike against closures seemed possible.

At this point, because of his background in the Department of Energy, Bernard Ingham stepped briefly outside his normal tasks and sent Mrs Thatcher a note. He counselled that the NCB was doing too much, too quickly, and that Joe Gormley, the moderate miners’ leader, would be
forced to act toughly ‘to protect his flank against Scargill’. The public would like the idea of ‘defending one’s livelihood’, he thought, and would therefore be sympathetic to the miners, and he said that ‘behind the scenes we need a much more extensive and vigorous examination of the situation than is implied by an E Committee discussion of coal industry redundancy terms.’
⁸⁹
On 16 and 18 February, Mrs Thatcher had meetings with David Howell at which it became clear that the government was not ready for a strike, and that coal stocks could not withstand one. As Howell remembered the first meeting, Mrs Thatcher held up a copy of the
Evening Standard
which Bernard Ingham brought in with the words ‘That’s that, then, isn’t it.’ The headline proclaimed, ‘Government dithers.’ Mrs Thatcher said, ‘Bring it to an end, David. Make the necessary concessions.’
⁹⁰
Without Cabinet discussion, she decided to give in. In Howell’s view, though he resented her anger with him for his handling of the matter and for bringing on the crisis ‘out of the blue’, ‘she
was
right to cut and run’ because ‘we just weren’t ready.’
⁹¹

After the government’s complete capitulation on 18 February, Ingham minuted Mrs Thatcher on the reaction of the lobby to his briefing. The press, he reported, tried to establish first ‘a massive U-turn’, second whether Howell had been authorized to give in without knowing the cost (he had, in effect), third that there would be ‘profound consequences for the Government’s economic strategy and pay negotiations’ and fourth that there would be ‘an entirely different approach to nationalised industries with flexibility the order of the day’. As Ingham described it, his reply had been that ‘no Government ever gets from A to B in a straight line’.
⁹²
With grim relish, Ingham’s press digest that day departed from its usual practice and quoted virtually every headline about the U-turn – ‘ “Surrender to King Coal”.
Express
. “You’ve won, lads”.
D. Star
’ and so on. And he informed his boss of the
Sun
’s judgment: ‘for the first time since you came to power your credibility at stake.’
⁹³
At a further meeting with Howell on 19 February, Mrs Thatcher expressed her lack of confidence in Derek Ezra, and said frankly that the government’s policy was ‘to go along, to a large extent, with whatever Mr Gormley proposed in order to ensure that the militants did not regain the ascendancy’.
⁹⁴
The government lost £400–500 million by its concessions, and contributed to the myth that the miners were invincible. It seemed to be following the pattern of the Heath government, which gave in to the miners in 1972. By the same logic, people believed, the next confrontation would result in the fall of the Tory government (as in February 1974). Even the loyal
Daily Telegraph
said that the recent reverses in the handling of the nationalized industries, ‘taken together, have been a disaster’.
⁹⁵

It was a timely distraction from the government’s woes that on 24 February 1981 the engagement was announced between the Prince of Wales and Lady Diana Spencer.

The next day, Mrs Thatcher flew to the United States as the guest of the new President, Ronald Reagan. Her previous meetings with Reagan, in 1975 and 1978, provided a firm foundation on which to build a close relationship now that he had been elected. During his election campaign, he had even arranged for his aides Bill Casey
*
and Richard Allen
^†
to visit Mrs Thatcher secretly and brief her on his election strategy and foreign policy stance. ‘It was almost exclusively East–West and NATO-orientated,’ Allen recalled of the meeting, held in July 1980, adding, ‘I think she was quite enthused.’
^96
‡
Allen was right. The day after his inauguration, on 20 January 1981, President Reagan took a call from Mrs Thatcher. She told him that she was ‘thrilled’ by his inauguration speech, and by the release of the American hostages, timed by Iran to deliver maximum humiliation to poor Jimmy Carter. She went on, ‘The newspapers are saying mostly that President Reagan must avoid Mrs Thatcher’s mistakes [about economic policy] so I must brief you on the mistakes.’ Reagan replied genially, ‘I don’t think I have to worry about that,’ and commiserated with her on the ‘uphill battle’ she was fighting in her own country: