Margaret Thatcher's files as Prime Minister, 1980

Afghanistan & Iran

Foreign policy played a larger than expected (or hoped for) role in the year, fully reflected in the releases this December. The Soviet invasion of Afghanistan at Christmas 1979 produced the biggest single crisis, adding greatly to the anguish already generated in the US and the wider West by the seizure of the American Embassy in Tehran in November. The Carter Administration entered its long terminal phase, all too obviously helpless in the face of these separate but deeply interacting assaults.

Files on this site from the Carter Library show that the President was disappointed with the British and European response to both events, a perception that would have upset MT had she known it at the time. The files now released at Kew show MT working hard to align allies behind US leadership, particularly in relation to Afghanistan where the focus of the diplomatic response became the upcoming Moscow Olympics. On Iran too there was fundamental agreement, although tactical differences began to emerge as the Soviet invasion undercut US efforts to isolate Iran. Divergent commercial British and US interests also played a role, BP (and Shell) attracting the particular ire of the Carter Administration for doing business with the new Iranian regime, albeit under duress.

Britain experienced its own Iranian crisis at the end of April when the Iranian Embassy in London was seized by terrorists. This act of hostage-taking was resolved much more speedily than the one in Tehran, British special forces (the SAS) successfully retaking the building on 5 May. The main Prime Ministerial file on this event has been held back, but elements of the story can be pieced together from Foreign Office files, which will be added to the site in January.

PREM19/135	Afghanistan (Soviet Invasion) Part 2	[1980 Jan 6 - 20]
PREM19/136	Afghanistan (Soviet Invasion) Part 3	[1980 Jan 21 - Feb 28]
PREM19/273	Iran (Internal situation) Part 3	[1979 Dec 23 - 1980 Jan 8]
PREM19/376	Sport (Moscow Olympics - UK participation) Part 3	[1980 May 9 - Jul 30]

Economic files

At the heart of the Thatcher Government's new approach to Britain's economic problems lay a commitment to monetary targets as the key mechanism for the control of inflation, itself the centrepiece of economic policy. The files on this topic trace a long and winding road.

PREM19/177	Economy (Domestic Monetary Policy) Part 3	[1980 Jan 7 - May 2]
PREM19/178	Economy (Domestic Monetary Policy) Part 4	[1980 May 6 - Sep 22]
PREM19/179	Economy (Domestic Monetary Policy) Part 5	[1980 Sep 23 - Oct 28]

A visitor from the past

On Saturday 2 August 1980 former Conservative Prime Minister Harold Macmillan visited the Thatchers at Chequers for an overnight stay. It seems there were no other guests: this was an intimate occasion, and a singular mark of respect on MT's part. Macmillan had been Prime Minister when MT had first entered the Commons in 1959 and had given her her first step on the ministerial ladder a year later. Although well aware that his politics were those of a previous generation, patrician and interventionist, MT was always respectful to this charismatic elder statesman of the party and would have enjoyed the opportunity to honour her predecessor in the setting of Chequers, which she adored. (Macmillan, on the other hand, had a country house of his own, and preferred it.) He was still a figure with considerable political standing, not least as a link to the 1950s, an era of Conservative political dominance when the party had won three successive terms in office. A recent speech he had given to Young Conservatives had provided the basis for a Conservative Party Political Broadcast only weeks before the 1979 election.

No record of the conversation has yet surfaced, but writing MT his thanks a few days later, Macmillan ominously remarked that he would be sending her "a short memorandum of my views on the economic situation", expressing the hope that it "may be of use to you after the House [of Commons] has risen". "Since I have plenty of time I hope to be brief!"

Two weeks later an 11 page document arrived at No.10 damning the Government's economic policy from a perspective of unreconstructed Keynesianism. The perspective will have been no surprise: Macmillan's company had been Keynes' publisher and he had been one of the earliest politicians on either side of the House of Commons to embrace the message of The General Theory when it came out in 1936. His term as Prime Minister had been one of the high tide points of the Keynesian era. But the document was probably a shock in other ways. Far from being intended to be helpful, quite clearly the reverse was the case. By putting such views in writing Macmillan was making a potent political threat - that those views would sooner or later, by some means or other, reach the public.

MT evidently discussed the document with close colleagues. She asked for comment from the Party Chairman, Lord Thorneycroft, who had resigned as Macmillan's Chancellor in 1958 in apparent root-and-branch rejection of his economic thinking. (In fact he later confessed to doubts about government strategy not so very different from Macmillan's, and was dropped.) Thorneycroft submitted a note personal to her urging that common ground somehow be found. MT seems also to have talked with the Chancellor, Geoffrey Howe, and her Private Office asked the Treasury to prepare a brief rebutting Macmillan's arguments but likewise finding something that could be agreed upon. This document arrived as late as 3 October, written in an undertone of some irritation, even pettiness: Macmillan's memorandum had mis-spelled the name of the Chief Secretary - 'Biffin' for 'Biffen' - but honour was served, the Treasury dubbing him 'MacMillan'.

An unannotated copy of the memorandum can be found in the official files released at Kew. But in her private papers MT's version survives, with other documents, and these have been released six weeks ahead of time so as to be available alongside the official file. The private version shows that MT paid very close attention to the document. She seems to have read it carefully at least twice, underlining in different coloured inks. Similarly she digested the Treasury briefing with care.

Her private file though is incomplete on a key point: how did she in fact reply? It is likely she will have written to Macmillan, and possibly seen him quietly also. One of the documents in her file is a summary of the main points of the memorandum, in her own hand, the kind of thing she would have done as an aide-mémoire for a discussion.

Whatever her reply, Macmillan duly found an opportunity to make public his views in a lengthy TV interview with Bob Mackenzie, a platform helpfully provided by the BBC on 14 October, two days after MT promised, in her party conference speech, that "the Lady's Not For Turning". Points made in the August memorandum figure almost word for word in his remarks. Submitting the transcript to MT, her Private Secretary warned that Labour would probably bring up the issue at Parliamentary Questions on 25 October. But curiously the Opposition passed up the chance to draw attention to these wounding Conservative divisions.

Within MT's inner circle Macmillan's enmity was not undestimated. Nor was it forgotten. In March 1981 Gordon Reece was telling her to be ready for an approach from "Macmillan, Thorneycroft and Du Cann ... to tell her to stand down" (Hoskyns diary, 20 March 1981, Just In Time, p288). And Macmillan himself remained a public critic on occasion while also speaking privately with some scorn of MT. Meeting the editor of this site (then a young graduate student) in Oxford in summer 1982, he praised her performance during the Falklands but jokingly quoted Belloc to characterise her then-dominance over the Conservative Party: children should "always keep a-hold of Nurse/For fear of finding something worse".