The Downing Street Years (129 page)

This did not take long to occur. I have already described how Geoffrey Howe and Nigel Lawson tried to hustle me into setting a date for sterling’s entry into the ERM and how I avoided this at the Madrid Council in June 1989.
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In fact, as I had expected, the ERM was something of an irrelevance at Madrid. The two real issues were the handling of the Delors Report on EMU and the question of whether the Community should have its own Social Charter.

I was, of course, opposed root and branch to the whole approach of the Delors Report. But I was not in a position to prevent some kind of action being taken upon it. Consequently, I decided to stress three points. First, the Delors Report must not be the only basis for further work on EMU. It must be possible to introduce other ideas, such as our own of a hard ecu and a European Monetary Fund. Second, there must be nothing automatic about the process of moving towards EMU either as regards timing or content. In particular, we would not be bound now to what might be in Stage 2 or when it would be implemented. Third, there should be no decision now to go ahead with an Inter-Governmental Conference on the Report. A fall-back position would be that any such IGC must receive proper — and as lengthy as possible — preparation.

As regards the Social Charter, the issue was simpler. I considered it quite inappropriate for rules and regulations about working practices or welfare benefits to be set at Community level. The Social Charter was quite simply a socialist charter — devised by socialists in the Commission and favoured predominantly by socialist member states. I had been prepared to go along (with some misgivings) with the
assertion in Council communiqués of the importance of the ‘social dimension’ of the Single Market. But I always considered that this meant the advantages in terms of jobs and living standards which would flow from freer trade.

The Foreign Office would probably have liked me to soften my stance. They liked to remind me of how Keith Joseph in Opposition had written a pamphlet on ‘Why Britain Needs a Social Market Economy’. But the sort of ‘social market’ Keith and I advocated had precious little similarity with the way the term
‘Sozialmarktwirtschaft’
had come to be used in Germany. There it had become a kind of corporatist, highly collectivized, ‘consensus’-based economic system, which pushed up costs, suffered increasingly from market rigidities and relied on qualities of teutonic self-discipline to work at all. The extension of such a system throughout the Community would, of course, serve Germany well, in the short term at least, because it would impose German wage costs and overheads on poorer European countries which would otherwise have competed all too successfully with German goods and services. The fact that the cost of extending this system to the poorer countries would also be financed by huge transnational subsidies paid by the German taxpayer seemed to be overlooked by German politicians. But that is what happens when producer cartels rather than customer demands become dominant in any system, whether it is formally described as socialist or not.

When I went to Madrid I took with me a document setting out all the benefits enjoyed by British citizens — the Health Service, health and safety at work, pensions and benefits for the disabled, training provisions and so on. I also advanced the argument that the voluntary Council of Europe Social Charter was quite sufficient and that we did not need a Community document which would, I knew, be the basis of directives aimed at introducing the Delors brand of socialism by the back door.

Most of the first day’s discussions in Madrid were taken up with EMU. Late in the afternoon we turned to the Single Market and the ‘social dimension’. I have already described how I used my first speech to spell out my conditions for entering the ERM. But I also backed Poul Schlüter who challenged paragraph 39 of the Delors Report, which essentially spelt out the ‘in for a penny, in for a pound approach’ which the federalists favoured. The other extreme was represented by France. President Mitterrand insisted on setting deadlines for an IGC and for completion of Stages 2 and 3, which at one point he suggested should be 31 December 1992.

The argument then turned to the Social Charter. I was sitting next
to Sr. Cavaco Silva, the rather sound Portugese Prime Minister who would doubtless have been sounder still if his country was not so poor and the Germans quite so rich.

‘Don’t you see’, I said, ‘that the Social Charter is intended to stop Portugal attracting investment from Germany because of your lower wage costs? This is German protectionism. There will be directives based on it and your jobs will be lost.’ But he seemed unconvinced that the charter would be anything other than a general declaration. And perhaps he thought that if the Germans were prepared to pay enough in ‘cohesion’ money the deal would not be too bad. So I was alone in opposing the charter.

Ironically, when — on the second day of the Council — it came to the drafting of the section of the communiqué which dealt with EMU it was France who was the odd man out. Insofar as there could be an acceptable text which advanced us towards an unacceptable objective I felt that I had got it. All my requirements were satisfied by it. We could not stop an IGC because all it needed was a simple majority vote, but its outcome had been left open and its timing was unclear. President Mitterrand’s attempt to have a deadline for Stages 2 and 3 inserted in the text was unsuccessful. To the irritation of Sr. Gonzalez, who had hoped to avoid more discussion, I made what I described as a ‘unilateral declaration’. It ran:

The phrasing was unpoetic but the meaning clear. This prompted President Mitterrand to make his own declaration to the effect that the IGC should meet as soon as possible after 1 July 1990. And so the Madrid Council came to an end not with a bang but two whimpers.

My disagreements with the French never led to ill-feeling. This was lucky for I was shortly to attend the G7 in Paris which had largely been overtaken by the hugely expensive — and for Parisians wildly
inconvenient — celebrations of the Bicentennial of the French Revolution. The French Revolution is one of the few real watersheds in the history of political ideas. For most — though not all — Frenchmen it is nowadays accepted as the basis of the French state, so that even the most conservative Frenchman seems to sing ‘the Marseillaise’ with enthusiasm. For most other Europeans it is regarded with mixed feelings because it led to French armies devastating Europe, but it also stimulated movements which led eventually to national independence.

For me as a British Conservative, with Edmund Burke the father of Conservatism and first great perceptive critic of the Revolution as my ideological mentor, the events of 1789 represent a perennial illusion in politics. The French Revolution was a Utopian attempt to overthrow a traditional order — one with many imperfections, certainly — in the name of abstract ideas, formulated by vain intellectuals, which lapsed, not by chance but through weakness and wickedness, into purges, mass murder and war. In so many ways it anticipated the still more terrible Bolshevik Revolution of 1917. The English tradition of liberty, however, grew over the centuries: its most marked features are continuity, respect for law and a sense of balance, as demonstrated by the Glorious Revolution of 1688. When I was questioned about what the French Revolution had done for human rights by journalists from
Le Monde
on the eve of my visit I felt I ought to point out some of this. I said:

The headline over my remarks in
Le Monde
ran ‘“Les droits de l’homme n’ont pas commencé en France,” nous déclare Mme Thatcher.’

It was on this note that I arrived in Paris for the Bicentennial. I brought with me for President Mitterrand a first edition of Charles Dickens’s
A Tale of Two Cities
, which he, a connoisseur of such things, loved, but which also made somewhat more elegantly the same point as my interview. The celebrations themselves were on the scale which only a Hollywood studio — or France — could manage: an almost
endless procession, a military parade, an opera with pride of place in the set being given to a huge guillotine.

The G7 summit itself definitely took second place to this pageantry. Indeed, this posed a potential problem. A large number of Third World heads of government had been invited to Paris to the celebrations and there seemed some prospect of President Mitterrand suddenly seeking to relaunch another ‘North-South’ dialogue of the sort we had thankfully left behind at Cancún.
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I alerted President Bush — arriving for his first G7 — to this when I had a bilateral meeting with him at the US Embassy before the summit. He said that he thought there was a problem in blocking such a move without appearing a ‘parsimonious bunch of don’t cares’. I said that this did not seem to me to be much of a problem. Nor did it prove to be. The French in the end thought better of introducing this controversial idea, preferring to rest on the level of generalities.

George Bush and I made the familiar pleas for free trade under the GATT. President Mitterrand — with some help from me — got the text of his Declaration on Human Rights (with its obvious revolutionary symbolism) accepted almost word for word. There were discussions of the environment and drugs. In fact, everyone left happy and little of note was achieved. It was the sort of occasion which in earlier years had given international summitry a bad name. But President Mitterrand’s final dinner for heads of government held in the new pyramid in the forecourt of the Louvre was one of the best I have ever eaten. Some traditions are too important for even the French to overthrow.

I returned to London conscious of unfinished business. The European election results had no particular significance in themselves. But they had revealed a groundswell of discontent which could not be ignored. That discontent was most in evidence in the Parliamentary Party. A minority of Conservative MPs were uneasy about the line I was taking on Europe. But more important was the fact that there was a widespread restlessness because avenues of promotion into the ranks of the Government seemed blocked. I too felt that changes were required. When a prime minister has been in power for ten years he or she must be that much more aware of the dangers of the government as a whole appearing to be tired or stale. Since I hardly ever felt seriously tired and never felt stale I had no intention of giving that impression. I decided to make some changes in the Cabinet to free up posts at every level and bring on some new faces.

I had also been thinking about my own future. I knew that I had a good few more years of active service left in me and I intended to see through to the end the restoration of our economic strength, the fulfilment of our radical social reforms and that remodelling of Europe on which I had embarked with the Bruges speech. I wanted to leave behind me when I went, perhaps halfway into the next Parliament, several candidates with proven character and experience from whom the choice of my successor could be made. For various reasons I did not believe that any of my own political generation were suitable. ‘Of course, she would say that, wouldn’t she,’ may be the obvious retort. But closer consideration will, I hope, show I had good reasons. If one considers the possibilities — first among those who were of my own way of thinking: Norman Tebbit was now concentrating on looking after Margaret and on his business interests; Nick Ridley who never suffered fools gladly would not have been acceptable to Tory MPs; Cecil Parkinson had been damaged in the eyes of the old guard. Geoffrey Howe I shall come to shortly. Nigel Lawson had no interest in the job — and I had no interest in encouraging him. Michael Heseltine was not a team player and certainly not a team captain. Anyway, I saw no reason to hand over to anyone of roughly my age while I was fit and active. In the next generation, by contrast, there was a variety of possible candidates who ought to be tested in high office: John Major, Douglas Hurd, Ken Baker, Ken Clarke, Chris Patten and perhaps Norman Lamont and Michael Howard. I felt it was not for me to select my successor. But I did have the obligation to see that there were several proven candidates from whom to choose.

I was, however, wrong on one important matter. Of course, I understood that some of my Cabinet colleagues and other ministers were more to the left, some more to the right. But I believed that they had generally become convinced of the Tightness of the basic principles as I had. Orthodox finance, low levels of regulation and taxation, a minimal bureaucracy, strong defence, a willingness to stand up for British interests wherever and whenever threatened — I did not believe that I had to open windows into men’s souls on these matters. The arguments for them seemed to me to have been won. I now know that such arguments are never finally won.

A little earlier I left aside Geoffrey Howe from my discussion of possible leadership candidates. Something had happened to Geoffrey. His enormous capacity for work remained, but his clarity of purpose and analysis had dimmed. I did not think he was any longer a possible leader. But worse than that, I could not have him as Foreign Secretary — at least while Nigel Lawson was Chancellor — after his behaviour on the eve of the Madrid Council. Perhaps if I had known that Nigel was about to resign I would have kept Geoffrey at the Foreign Office for at least a little longer. As it was, I was determined to move him aside for a younger man.