MT's private files for 1989 - (2) the European elections & their aftermath

European elections: campaign, defeat, post mortem

Thursday 4 May was the day of the Vale of Glamorgan by-election, which the Conservatives lost to Labour on a 12 per cent swing – the first such defeat in the 1987 Parliament and only the second direct Conservative by-election loss to Labour during the Thatcher governments to date. Party analysis of polling in the first half of the year shows the strong leads of January falling to single figures during spring before disappearing entirely in May and June, coinciding with the European election campaign. By the time of the European poll on 15 June Labour enjoyed a double digit lead.

An almost unthinkable event followed: Labour beat the Conservatives, with 38.7 per cent of the vote to 33.7, securing 13 gains at their expense to become the largest British party in the European Parliament, and more importantly winning their first victory in a national campaign since MT was Leader of the Opposition. The result seems to have been a surprise to her: her private prediction was that the two parties would be neck and neck, implying Conservatives losses of 5 or 6 seats.

There are several post mortems in the files, the principal one by Robin Harris, director of the Conservative Research Department (CRD), acknowledging that the campaign had been too negative and the advertising poor. He placed some stress on party divisions, including those between MT and Lawson, but most interesting of all, he made criticisms that went to the heart of what you might call the Bruges strategy. He suggested that the party had struggled to make the charge of socialism by the backdoor really stick and that the electorate just was not ready for a campaign built around sovereignty.

Others offered more impressionistic verdicts. Party Treasurer Alistair McAlpine criticised the campaign for neglecting domestic issues. MT herself criticised the ads in conversation with the 1922 Executive (“Agree ‘a diet of Brussels’ a bad advert”), but really had no explanation to offer, at least not to this audience. Tim Bell, who ultimately was responsible for the advertising, wrote her an outright apology for the defeat. Ken Baker made comments to the Lobby that seemed to blame her, a fact drawn to her attention by Whittingdale. Conservative Chairman, Peter Brooke, headed his remarks on the topic with some reflections on unity and discipline. The campaign had been notable for some over the top attacks from Edward Heath, including one in which he called Brooke a liar. Earlier he had labelled the No.10 Press Office ‘corrupt’. Heath certainly took some credit for the results in the eyes of many Conservatives.

For critics of the Bruges speech, on the other hand, the roots of Conservative defeat lay in the opposite direction. This was a point well understood in No.10. Although far from blaming MT, some around her, notably Ingham, were very anxious throughout 1989 to head off the growing sense that she was simply hostile to the EC, implacably at odds with it. He tried again and again to stress that the Bruges speech had offered a positive vision of Europe’s future – for example, in his briefing for an important interview on Europe with David English, editor of the Daily Mail. “The UK – and yourself – have a presentational problem. We appear negative, even hostile, to the EC 16 years after joining. The entire approach of the media in my briefings is that we are unreliable members of the club”. His minute lays out the problem with great frankness over several pages, and spells out his solutions in didactic style. Note that the theme persisted; Ingham was saying similar things in December 1989 also.

There was perhaps a little daylight here between Ingham and Powell. The Mail was then a strongly pro-European paper and for the very same interview Powell demanded briefing from the Cabinet Office to help MT puncture its “blithe Euro enthusiasm”:

What the Prime Minister is after is some good examples of where the Community does not work well or does not work to Britain's advantage, with supporting evidence, in order to demonstrate that it is often necessary to resist ill thought-out proposals or fight hard for specific British interests. I think I set out some of the areas which she wanted to tackle in my original note about the interview. It is not a question of being anti-European: indeed the material should demonstrate how we very often display more Community spirit than do others. I recall that in David Williamson's day we used to have a collection of 'stilettos' which the Prime Minister could use. It's something on those lines that we need now.

Even then, Powell recommended her to take a positive line about the EC itself in the interview, reserving her attacks for ‘socialism’. This was the strategy for European election campaign too, as already noted. It was a particular kind of Europe she was supposed to be fighting against, not Europe itself.

Some familiar names from more recent times appear in these European Election files. David Cameron features for the first time, as a CRD officer, fresh down from Oxford, writing briefs on the Single Market. During the campaign he fetched and carried as the designated ‘runner’. And his Chief of Staff at No.10, Ed Llewellyn, more senior then, had a significant role throughout the year, handling relations with the European Democratic Group in the European Parliament, which included the British Conservatives. MT had reservations about its moves toward the Christian Democrats, but had to tread carefully for fear of “Conservative split” stories emerging from Brussels, something the press (and Labour) were well-attuned to, post-Bruges. An internal Labour document on this topic found on a European Parliamentary photocopier in Strasbourg surprised Central Office by its relative sophistication and shrewdness. Comments by Peter Mandelson also reached them, pointing to a new confidence on the Labour side, while professing never to underestimate MT's "amazing powers of recovery".

Aftermath: "The Madrid Ambush"

We have two documents of particular significance to the critical events within the government that followed the European elections, which turned on the European Council at Madrid ten days after, 26-27 June 1989.

Alan Walters, MT’s economic adviser between 1981 and 1984, returned to work for her at Downing Street on 1 May 1989. Officials at No.10 clearly had some doubts whether this arrangement was going to work. Documents we are releasing from Walters’ own archive, which contain a few things on 1988-89, show him being warned to avoid the press. An article he had drafted for the Daily Telegraph before Xmas 1988 was withdrawn on the suggestion of Andrew Turnbull, for example.

Within his first fortnight he produced a reformulation of her policy toward British membership of the ERM and successfully persuaded her to modify her position as to the conditions under which Britain would finally join - as the Thatcher government had all along pledged we would, “when the time was right”. The files contain the only surviving note of the meeting on 17 May at which No.10 officials, including Walters, pulled off this particular trick, jotted down by MT’s PPS, Mark Lennox-Boyd. As a former Treasury whip and PPS to the Chancellor he will have been familiar with the technicalities, rendering it a particularly useful note. The standout point is that Walters argued that the conditions he wanted her to specify would have a wrecking effect. “ERM, after these conditions are met, will be impossible to operate. It would go probably to reference zones with which we could live. I propose to get you off the hook. The system will have to change”. It is plausible that in shifting her position MT was indeed persuaded that she was conceding nothing of substance. Whether Walters and the other officials in the room entirely saw things that way is not so clear. MT’s new position seems not to have been disclosed to anyone outside No.10, although a report that something was afoot appeared in The Times the day after the meeting, receiving a firm denial from Ingham in the Lobby.

The second important document came on the day MT flew to Madrid and it goes to the very heart of the story of the Thatcher Government in its last years. The Foreign Secretary and Chancellor attempted in the run-up to Madrid to force MT to state at the Council that Britain would join the ERM by a certain specified date. They addressed two joint minutes to her, held a meeting with officials present and – when that failed – demanded a final meeting the three of them alone on the eve of the Council, the event that has become known as “the Madrid Ambush”.

We release now MT’s notes on that meeting , which lays out the ultimatum she was given. No official record exists, since ministers met alone, and this document seems to be the only contemporary account on paper. For ease of use, a transcript is interleaved with MT’s original notes. The core of the document is as follows:

G.H. & N.L. – Madrid Conference

Demanded that I give

an undertaking to join the ERM and specify a date.

Precise wording required.

It is our firm intention to join not later than _____

If not – they would both resign.

I said I would give no undertaking about what I would say at Madrid – but for market reasons I thought they should know better than to demand a precise date. [Referred later, after they had gone to Alan’s minute about putting things positively.]

Andrew [Turnbull] & Charles [Powell] utterly appalled that my two chief Ministers should attempt to put me in such a position

I am determined not to give a date.

This event was unprecedented in the history of the Thatcher Governments - the Foreign Secretary and Chancellor, Howe and Lawson, acting in combination to impose a policy on the Prime Minister on pain of resignation. She did not yield to the threat, but speaking at the European Council deployed the Walters conditions and felt vindicated by the result. Her statement was seen as positive even though she had failed to specify a date of British entry. Nor did the ministers resign. In fact everyone claimed victory. But MT was bitterly angry at the confrontation and determined to break up the ministerial common front that had been deployed against her, even though the men had once been among her closest political colleagues and allies.

There is a valuable note, unfortunately unsigned and undated, giving a summary of the views of individual cabinet ministers on ERM after Madrid. It was perhaps the work of Lennox-Boyd or one of the whips. If people were speaking truthfully, it suggests MT was not quite as isolated within cabinet on this topic as some have supposed. Waddington, for example, was strongly against membership, while Rifkind and Clarke professed to be surprisingly relaxed on the topic.

Aftermath of the Aftermath: July 1989 Reshuffle

An opportunity very soon arose to break up the Howe-Lawson front. We have little in the files on the 1989 reshuffle, except for one crucial document, an aide-memoire dated 19 March by Charles Powell setting out her thinking at that point, as he understood it. Since he saw more of her than almost anyone, and had a greater share of her trust also, the document (marked “Strictly Personal”) has special authority. Please note that there are minor redactions to protect the feelings of some living people. The core of the document is in the section released in full, particularly p1:

If you intend a major reshuffle before the election, it probably has to be this year to enable the Ministers to master their new jobs as fully as possible.

There is a case for quite extensive changes. The feeling is widespread that Labour has youngish and impressive spokesmen in some areas, while some of yours are less impressive. You don't want to go into the election with the risk that people will vote for a change of government when all they want is a change of faces.

The time for a reshuffle is probably the end of July. It won't have the same element of surprise as last time. But Ministers seem to prefer to know their fate before the summer holidays.

What follows is intended to help you clear your mind.

The Big Three

You need to know what you want to do about the big three: the Chancellor, the Foreign Secretary and the Home Secretary.

I imagine you will want the Chancellor to go through to the election, always assuming that his personal plans provide for that.

Your comments suggest that you may consider moving or even dropping the Foreign Secretary and the Home Secretary.

It is only when you reach a decision on these three that a reshuffle can take shape.

These were MT’s thoughts well ahead of the “Madrid Ambush”. Howe and Hurd were both in her sights, possibly for outright removal, while it seems to have been her intention to keep Lawson, for all the tensions between them, if he was willing to stay. There had been speculation in the press for much of the previous year that he was contemplating a career change, perhaps to a big job in the City.

Steamed up as she was, the reshuffle as it actually materialised was notably less radical than these early thoughts. None of the Big Three was dismissed, and only Howe was moved; Hurd came through untouched.

We have little in the files on the grisly aftermath of the reshuffle. Among other things, it received a bad press, and Whittingdale suggested she reach out to editors, inviting more to No.10, noting that Howe “made considerable use of Chevening [the Foreign Secretary’s grace-and-favour house] to entertain both Members of Parliament and editors and undoubtedly the coverage of the reshuffle has reflected this”. MT assented, but commented that she would discuss “full presentational problems with Bernard”. Ingham’s thinking on the topic is clear enough from a briefing he gave her on 4 September for an interview with Nick Lloyd of the Daily Express, at that point probably the Fleet Street editor most on-side:

All my instincts are to say as little as possible about the reshuffle except that you believe you now have substantially the team to win the next election; that you most certainly intend to do just that; and to lead the country well into the ‘90s.

"The Right Team for Britain" was chosen as the slogan of the October party conference, preached with conviction by a beaming Ken Baker. To illustrate the theme a new photo of the cabinet was commissioned from Terry O’Neill, who did a good job, getting away from the formal cricket team shot in favour of a more complex grouping, similar to those done for the Reagan Administration. (Ingham hated it.) The photo was issued on MT’s birthday, 13 October, which unfortunately that year fell on a Friday. Altogether the Right Team played quite well, until Lawson resigned a fortnight later.

It wasn’t all show, or not quite. The files record some quiet efforts to improve relations between MT and Howe after the reshuffle on the part of Lennox-Boyd. It seems that Howe was keen, but that MT was not easily persuaded: see Lennox-Boyd note for MT’s diary secretary on 14 Spt. In the event her engagement diary shows that she met with Howe at Chequers for an hour 3-4pm on Sunday 1 October, following which Lady Howe arrived, probably for tea. MT herself returned to No.10 at 5.30pm.

There is nothing more in her files on this topic, but Wyatt's diary throws some light. On 23 November he recorded Lennox-Boyd saying of Howe "he really does adore her and she ought to pat him on the back and give him some affection from time to time" (The Journals of Woodrow Wyatt: Volume 2, p202). But three weeks later, on 11 December, Peter Carrington gave Wyatt a very different take: "What he [Howe] is saying to me every time I see him, and recently too, is that he hates her and that she has been horrible and he wishes she would go" (p207). Perhaps Lennox-Boyd was simply wrong, or in some measure there were two Howes debating her eventual fate.