Release of MT's private files for 1980 - (3) The No.10 machine

The No.10 machine: the appointment of Alan Walters

Files released last year show that MT had struggled to find a personal economic advisor at No.10. The files this year show how Alan Walters finally got the job, which he took up in January 1981. This was an appointment of great significance for the history of the 1980s, and an event which provides further evidence of divisions within the core group of Thatcherites, something well beyond the Wets vs Dries.

A note to MT by Alfred Sherman on 24 April tells her that he had taken it on himself to call Walters in the US to persuade him to work for MT as a counterweight to the Treasury, which he described unflatteringly as a "miasma of unreconstructed Keynesianism, intellectual evasiveness, wishful thinking and sheer muddle". There are several documents in the files showing his dissent from the Treasury's version of monetarism, which found echoes in the viewpoint of John Hoskyns at the No.10 Policy Unit. There is also a letter from MT to Hayek, 15 May 1980, in which she responds to criticisms he had made privately to her that “it might have been easier politically to have reduced our borrowing and monetary expansion more rapidly” – “I think this would have caused too much social and economic disruption in the short run for it to have been feasible”.

Walters then held a chair at Johns Hopkins in Baltimore, combined with a job at the World Bank in D.C., and he and his wife enjoyed life in Washington. Apparently an earlier approach by Keith Joseph and MT in Opposition had been rejected. Now, with the Conservatives in office, Walters was more responsive, saying he would come back "if made some reasonable offer". In due course, he was, and he did.

Walters appears in later correspondence arising from a meeting MT had with the Swiss economist, Professor Karl Brunner, during a holiday in Switzerland in August 1980. Invited to meet her at Lake Zug on 20 Aug, Brunner recommended Walters as an advisor and was told that his appointment had already been agreed. This was the meeting that triggered MT's famous assault on the Bank of England for subverting monetarism.

Correspondence with Karl Brunner is found in the files currently being released .

The No.10 machine: visits & hostile receptions

Visits around the country were becoming ever more prone to demonstrations as the year progressed, with security and press increasing in tandem. A walkabout in Salisbury town centre on 15 February saw MT barely able to meet actual shoppers (THCR 6/2/4/7-8). Some of the stress these visits imposed on her occasionally shows through. She was inclined to call off a visit to Calne on the same day when told that 450 people had just lost their jobs in the town: “We can’t go there! Not another occasion like that!” In fact, of course, she did go, and met a deputation from the 450 with local MP Richard Needham in attendance.

On 14 March she visited Hull. One of her Private Secretaries warned her of the sharp deterioration of economic conditions in the town since the visit had been planned: "the final collapse of its deep sea fishing industry has taken place this week". See THCR 6/2/4/9. She met the Hull fishermen – Ian Gow scribbling notes. In this case EC policy ought to have been the villain of the piece - in the form of the Common Fisheries Policy - rather than 'monetarism', but such subtleties were easily lost.

By summer 1980 she is beginning to turn down engagements on grounds of time. DT is protecting her too - "some of us here are getting a bit worried that Margaret takes on that much too much". See THCR 6/2/2/7 f80.

The No.10 machine: handling the press

Files just being released show MT steadily refusing to be interviewed at all during 1979 – she gave only one press interview between May and October 1979, for example (and that was to Jimmy Goldsmith’s short-lived weekly magazine, NOW!) She insisted on giving her first major tv interview to Brian Walden (which held everything up because ITV was blacked out in late 1979 by a technicians strike) and similarly promised her first big newspaper interview to the Sunday Telegraph (the proposed interviewer fell ill – so more delay, since she rejected the alternative of Peregrine Worsthorne, who wrote her a piqued letter).  She turned down FCO suggestions that she take up opportunities on French tv and in the German press to put the British budget case.

Ingham took over as Press Secretary in November 1979 and gradually persuaded her to open up. There is a helpful analysis of what he felt had been achieved in his first year (29 Spt 1980).

BBC journalist Michael Cole, personally friendly with the Thatchers, anticipated reforms introduced under Tony Blair, proposing a monthly Prime Ministerial news conference in place of the lobby system, for which MT had little trust (1 Dec 1980).

The No.10 machine: private polls & intelligence on opponents

Almost the best thing going for the Conservatives in 1980 was the abysmal and declining condition of the Labour Party. In fact this did not translate immediately into electoral support: the Political Office files from No.10 include weekly private polling reports from Central Office (THCR 2/11/9/27-29), which show Labour generally held up well, even after Foot’s election, until the alternative anti-Conservative force emerged in the form of the Gang of Four (in Jan 1981).

That Labour might split was ever more apparent as the year went on, as Tony Benn’s insurgency gained ground and Callaghan’s leadership faded. Jenkins was the focus of much discussion, particularly after he announced in April that he would return to UK politics when his stint as European Commission President ended (ie, 31 Dec 1980). Rumours and snippets of information reached No.10 as to what he would do, from various sources, good and bad – the leading assumption was that Jenkins would join the Liberals (certainly Gow’s view after Jenkins’s Dimbleby Lecture). But in August some genuine high-level intelligence came their way, from the Labour MP Neville Sandleson, who quietly lunched with Gow, presciently setting out Jenkins’s goals: “The prize for Jenkins would be to detach Shirley Williams, David Owen and Bill Rodgers from the Labour Party, and then to start a new party, which would have an electoral pact with the Liberals”.

The Conservatives expected Healey to succeed Callaghan as Labour leader and thought he would be a formidable opponent: see Thorneycroft note on Strategy for Dealing with the Labour Party, 23 Oct 1980, carefully read by MT (Healey “the most powerful, the most dangerous and the most uncertain of the candidates”). Central Office prepared a huge dossier of Healey speeches, some of which MT read and annotated. See THCR 2/6/2/141.

There is correspondence between City adviser John Sparrow and Richard Ryder about the 1980 Labour leadership election. In December 1977 Sparrow opened a book on the next Labour leader, offering long odds on Foot. Revisiting the topic two days after Callaghan resigned he admitted: “If Michael Foot wins (at 50-1) it will be such a financial disaster that I shall probably have to leave the country, but that might not be a bad policy in the circumstances anyway”. See THCR 2/6/2/165.

MT made several very critical comments on Foot’s election in private correspondence. On 16 November she wrote to Paul [Johnson] thanking him for an analysis of Reagan’s recent victory and adding: "One day you must do the same about the significance of Michael Foot as Leader of the Opposition. I fear it will start with mob oratory in an attempt to create disorder". She also undercut her later stance on Foot as a great parliamentarian (if terrible party leader), writing to Edward Boyle on 16 Nov: "What changes have come over the House of Commons since your day here! [1950-70] And I fear for the worse. Last week was the first time I have ever seen a Leader of the Opposition not support the chair".

The No.10 machine: trivia

In July 1980 MT made a reference in an interview with Woman’s Own to not liking the flock wallpaper in the PM’s Study. This produced a letter of complaint from the Master Guild of Wallpaper Engineers (or some such) explaining how important they were to the economy, exports, etc, and a ludicrous flow of paperwork (officials figuring out what it had cost per roll – a state secret). Eventually she paid to have it replaced herself (THCR 5/2/10).

One of the organisations suffering spending cuts in the grim economic climate of 1980 was “the Clown’s Training School”, which apparently was funded by the Arts Council. MT acknowledged that the public purse was now swinging shut for the CTS, but explained in a letter on 21 March to Class 2 at Edgeside C.of E. School (via local MP David Trippier) that the laughter would not die – indeed, tragically, clowns would continue to receive public funding to some degree.

Comparing appointments, MT and DT discovered that each had been booked to open separate – and rival – antiques fairs in London on the same day (9 Spt 1980). Asked to attend both, which presumably would have smoothed things down, DT replied: "Good grief!! No. One antiques fair per day is enough". THCR 6/2/2/15.

The No.10 Political Office gave the Thatchers a portable radio for Christmas 1979. MT replied from Chequers: "Thank you a thousand times for solving a perpetual family feud as to who should have the radio by providing us with another one. Now we can all listen to the Today programme and all complain to the BBC! It was most generous and we do thank you". (THCR 2/6/2/123 f31)