Bang!: A History of Britain in the 1980s (90 page)

The first benefactor – or so it then seemed – of Thatcher’s weakening grip was her new Chancellor, John Major, who transpired to be as keen as his predecessor on securing
sterling’s entry into the ERM. While the prime minister’s conditions were that entry could only follow a decisive fall in inflation, Major argued that this was putting the cart before
the horse, since it was the discipline exerted by ERM membership that would curb rising prices and ease pressure on the pound. Indeed, having publicly made it clear that entry was imminent, failure
to follow through would risk undermining market confidence. Thus, despite the fact that inflation was running at 10.9 per cent, Major won the Treasury’s long-running battle with Thatcher and,
on 5 October, Chancellor and prime minister approached the press microphones outside 10 Downing Street. Putting on a brave face, Thatcher announced that sterling was joining the ERM. The BBC deemed
the glad tidings worthy of interrupting its schedules with a news flash.

Overwhelmingly, ‘informed’ opinion rejoiced: the
Guardian
headline ‘Shares Rocket In Market Euphoria’ summing up the business response, while the
Financial
Times
pronounced that ‘both politically and economically, entry is shrewdly timed’.
⁶⁰
Under the terms of entry, sterling’s
value was fixed within a 6 per cent band either side of DM2.95. This was roughly the rate at which the currency was trading at that moment – but proved sustainable thereafter only through a
prolonged period of high interest rates, which certainly dampened down inflation, although at the cost of transforming what might have been a brief recession into a far more severe one. The
dramatic denouement in September 1992, when sterling was pulled out of the ERM, left the policy’s defenders hypothesizing that the problem had not been the principle of ERM membership but
merely the rate to which sterling had been pegged – a more sustainable rate supposedly having been available during the years in which Thatcher had kept sterling out of the mechanism.
Whether, in the long term, there was any such thing as a ‘right’ exchange rate remained the greater economic and philosophic question, but by then the Cassandra who had warned that the
market could not be bucked could take little pleasure from the fulfilment of her prophecy, having herself been bucked by the enthusiasts for European currency-fixing.

It was two days in Rome that sealed her fate. There, at a summit of European heads of government on 27–8 October, Thatcher stood out as the lone voice opposing stage two of the Delors
report’s plan to move towards
a single European currency. When she returned to Westminster to deliver her assessment to MPs, the mood in the Commons chamber was
febrile. ‘Her tantrum tactics,’ taunted Kinnock, ‘will not stop the process of change or change anything in the process of change.’ The Liberal Democrat leader, Paddy
Ashdown, was equally keen to be associated with the anticipated march of progress, announcing that ‘as long as she hangs on to power, so long will Britain be held back from its future . . .
she no longer speaks for Britain, she speaks for the past.’ Rising to the challenge, Thatcher was not to be easily cowed, delivering her put-down of Kinnock as ‘little Sir Echo’
and insisting that, given the scale of the issues at stake, isolation was a price worth paying:

Her remaining supporters cheered this defining articulation of opposition to submerging Britain into a federal Europe – the inevitable consequence, she maintained, of
economic and monetary union. Rallying to her cry, the next day’s headline in
The Sun
was ‘Up Yours Delors’. It was memorable, but as far as Thatcher’s survival was
concerned, it was not helpful, for it was exactly the sort of shrill tone that convinced EMU’s supporters that Euroscepticism was merely an expression of vulgar xenophobia. Most importantly
of all, it offended the sensibilities of the deputy prime minister and Leader of the House, Sir Geoffrey Howe. He believed a parallel European currency (the ‘hard ecu’) could develop
alongside national currencies and, if successful, replace them as a single European currency. Thatcher, however, had made it clear that would not happen on her watch, when she assured the Commons:
‘This government has no intention of abolishing the pound sterling. If the hard ecu were to evolve and much greater use were to be made of it, that would be a decision for future parliaments
. . . This government believe[s] in the pound sterling.’
⁶²

Having flunked resigning over his own demotion the previous summer, this time Howe decided he could tolerate Thatcher no more, handing her his letter of resignation on 1 November. It was a
lengthy epistle built around the theme that Britain needed to be fully engaged in shaping EMU, which it could not do by asserting opposition to it from the outset. His resignation speech was
delivered twelve days later. It proved to be a performance of breathtaking audacity, made all the more wounding by the quietness of Howe’s delivery and the assumption that it represented a
reserved man driven to breaking point by years of off-hand treatment from his boss.
Accusing the prime minister of creating unhelpful ‘background noise’ when her
Chancellor and the Governor of the Bank of England were trying to promote the idea of a ‘hard ecu’, it was, he stated, ‘like sending your opening batsmen to the crease only for
them to find, the moment the first balls are bowled, that their bats have been broken before the game by the team captain’. This was an extraordinarily cutting comment from the man who had
been successively her Chancellor, Foreign Secretary and deputy prime minister, but it was in his peroration that he openly threw down the gauntlet: ‘The time has come for others to consider
their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long.’
⁶³

As Conservative MPs filed out of the chamber, Alan Clark found those not too ‘semi-traumatized’ to speak weighing up whether Thatcher was finished. Norman Lamont seemed astonished at
the thought that any government minister would be so ‘quite monstrously disloyal’ as to vote against the prime minister. To which Clark flashed back: ‘I can see you weren’t
at Eton.’
⁶⁴

With Howe’s departure there remained only one person in Thatcher’s Cabinet who had been there since it was formed in May 1979 – and that was the prime minister herself. Her
longevity gave her the dangerous distinction of being the prime minister who had sacked more ministers than any other in British history. More surprising was her failure to act as patron to those
who were loyal to her. ‘It was not just that she carelessly appointed her enemies (or those who were lukewarm about her) to key positions,’ reflected the junior minister Michael Spicer,
‘she actually fell out with, or sidelined, those who wished to serve her cause. As at the court of Queen Elizabeth I, and as a front-line politician, the closer you were to her the more
brittle became the relationship.’
⁶⁵
The passage of time had also removed from positions of influence loyal colleagues whose support she now
needed: a stroke had forced Lord Whitelaw to retire as deputy prime minister back in January 1988; Lord Young had left the Department of Trade and Industry in July 1989 for the business world;
while Norman Tebbit had retired as party chairman after the 1987 general election in order to care for his wife, who had been permanently crippled by the IRA – a commitment that made him
unable to accede to Thatcher’s blandishments when she asked him to return as education secretary following the Howe denunciation.

In preparing his attack, Howe had not plotted with Heseltine,
⁶⁶
but the latter was inescapably the contender to whom the appeal was addressed.
The following day, Heseltine duly announced his intention to challenge Thatcher for the party leadership. The date for the annual leadership election having been brought forward, the Howe and
Heseltine statements were perfectly timed. Nominations were due to close the next day, 15 November, with the
ballot held on 20 November, all Conservative MPs being entitled
to vote. There would be two candidates, Heseltine and Thatcher, and the winner would be the one who secured a majority by a margin of at least fifty-six votes (this margin representing 15 per cent
of those entitled to vote). A lead of less than fifty-six votes would necessitate the ballot going to a second round, which other candidates might enter.

To backbenchers primarily concerned by the issues most irritating voters, Heseltine was able to make the important promise that, if elected, he would review the poll tax. For those (usually)
more senior politicians alarmed by Thatcher’s Euroscepticism, he reaffirmed his pro-Brussels credentials: indeed, the previous year his book,
The Challenge of Europe
, had made
unambiguously clear his belief that history was moving in one direction, towards unification, and it was necessary for Britain ‘to commit all our national energies to the enterprise of
Europe’.
⁶⁷
With nearly five years outside of the Cabinet, Heseltine was free both to affirm his own beliefs and to offer a fresh start. By
contrast, Thatcher felt that she ‘could not now credibly tell an MP worried about the community charge’ – as she still insisted upon calling the poll tax – ‘that I had
been convinced by what he said and intended to scrap the whole scheme’.
⁶⁸
While Heseltine and his well-drilled lieutenants intensively
canvassed MPs, Thatcher kept to her official schedule, which involved a trip to Northern Ireland and an event she was unlikely to want to miss, a summit in Paris where she was to join Bush,
Mitterrand, Kohl, Gorbachev and other leaders in signing a major arms reduction treaty which would symbolize the end of the Cold War. While, in hindsight, Thatcher might have saved her skin by
absenting herself from the summit and instead devoting the time to listening to the opinions and personal aspirations of her MPs, as she subsequently reflected: ‘Tory MPs knew me, my record
and my beliefs. If they were not already persuaded, there was not much left for me to persuade them with.’
⁶⁹
A perhaps greater handicap was
the ineffectualness of her campaign team. The former Scottish secretary, George Younger, was nominally in charge but appeared unable at this important juncture properly to tear himself away from
his business commitments as chairman-elect of the Royal Bank of Scotland. Canvassing and confirming the support of MPs was run by a small team loosely under the direction of her parliamentary
private secretary, Peter Morrison. Dangerously complacent – Alan Clark entered his office at a critical stage and found him enjoying a snooze – Morrison demonstrated an enviably
optimistic view of human nature, assuring Thatcher that ‘if you have not won then an awful lot of Conservative MPs are lying’.
⁷⁰
According to his calculations, the verdict would go 220 to 110 in her favour.
⁷¹

Thatcher was at the British ambassador’s residence in Paris when the actual result was telephoned through to her: Thatcher 204, Heseltine 152,
abstentions sixteen.
She was four votes short of the 15 per cent rule. Put another way, if two Heseltine voters could have been persuaded to stick with her, she would have won outright. Striding outside to announce to
the press her intention to stand in the second round, she then dressed and headed off to join her fellow world leaders for a banquet amid the gilded infinities of the Palace of Versailles’
Hall of Mirrors. It was when she returned to Downing Street that she discovered the full extent of the disaffection and defection. Morrison suggested she see each of her ministers separately. While
some were clearly angling for her to step down, even many who were loyal to her expressed the fear that if she stood, she would lose. The mood in Westminster seemed to be moving decisively in
favour of Heseltine in the second ballot, the view being that Thatcher was now so badly wounded that it would be better to finish her off than let her limp on. For Heseltine’s opponents, this
meant moving the debate on from saving Margaret to denying Michael. The two obvious alternative candidates were the Foreign Secretary, Douglas Hurd, and the Chancellor, John Major, though because
they had been Thatcher’s proposer and seconder they could only enter the fray if she gave up the fight. Reluctantly, Thatcher bowed to this reality. During the morning of Thursday, 22
November, she announced her resignation at the meeting of the Cabinet and then attended an audience with the Queen. Not that she was quite relieved of her duties – in the afternoon she stood
at the Commons dispatch box to defend herself in a no-confidence debate tabled by Labour. She delivered a performance of such assuredness and command – ‘bravura’ was the term
bandied around in the press – that the cheering and waving of order papers by the MPs packed tightly on the benches behind her gave no indication of the fact that so many of them had just
connived in her downfall.

Five days later, the Conservative Party had a new leader and the United Kingdom a new prime minister, when John Major came out top in the second ballot, gaining 185 votes to Heseltine’s
131 and Hurd’s fifty-six. The Thatcher age was over, its central figure standing briefly outside 10 Downing Street the following day to sum up her efforts: ‘We’re very happy that
we leave the United Kingdom in a very, very much better state than when we came here eleven and a half years ago.’
⁷²
Then the limousine drew
up and, in a flicker of flashbulbs, she was gone.

What might have happened if she had been left to fight a fourth general election in 1992 can only be imagined. All that can be said is that her party won a fourth term with its new leader, a
temperamentally different figure who attracted neither the widespread loathing nor the admiration that everywhere fixed upon the Iron Lady. Heseltine was put in charge of burying the poll tax, but
Major never put to rest the debate over Britain and the European Union. That issue, and the manner in which some of Thatcher’s most senior
colleagues had brought down
the Conservatives’ most electorally successful leader, left a festering and debilitating wound. A presentiment of the internecine conflict to come was on display as early as 4 December 1990,
when the party’s MPs and peers gathered to acclaim Major as their new leader. Sir Geoffrey Howe, the Cassius to Thatcher’s Caesar, found himself standing next to his former Cabinet
colleague Keith Joseph, who had been her formative political and intellectual mentor and the man who by stepping aside had provided her with the chance to stand for the leadership back in 1975.
Howe attempted to make conversation. ‘I’m sorry, Geoffrey,’ cut in Joseph as he prepared to turn his back, ‘we’re not friends anymore.’
⁷³