Geoffrey

The Politics of the
Thatcher Revolution
An Interpretation of British Politics, 1979–1990
Geoffrey K. Fry
The Politics of the Thatcher Revolution
Also by Geoffrey K. Fry
STATESMEN IN DISGUISE
THE GROWTH OF GOVERNMENT
THE ADMINISTRATIVE ‘REVOLUTION’ IN WHITEHALL
THE CHANGING CIVIL SERVICE
REFORMING THE CIVIL SERVICE
POLICY AND MANAGEMENT IN THE BRITISH CIVIL SERVICE
THE POLITICS OF CRISIS
THE POLITICS OF DECLINE
The Politics of the
Thatcher Revolution
An Interpretation of
British Politics, 1979–1990
Geoffrey K. Fry
Emeritus Professor of British Government and Administration
University of Leeds, UK
© Geoffrey K. Fry 2008
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Contents
Preface ix
1 What Kind of Revolution? 1

The IMF crisis of 1976: the centre cannot hold 1
Apocalyse now: the challenge from the Left 6
The challenge from the Right: Margaret Thatcher 12
2 The Conservative Ascendancy: The Pattern of British

Politics, 1979–90 19
Three Tory General Election victories 19
A one major party electoral model, 1979–90 27
Socialist nightmare: the Labour Opposition, 1979–90 30
‘A better yesterday’: the Liberals and their allies, 1979–90 37
3 The Thatcher Cabinets and Governments, Her Court, and

‘an Old Whore’ of a Party 43
‘Where there is error may we bring truth’ 43
Listening to ‘voices’: the Prime Minister’s court, her favourites,
and her advisers 44
‘Where there is discord’: the early Thatcher Cabinets 49
The Falklands War Cabinet and its immediate successors 53
The Westland Affair of 1985–86 58
‘Outstaying her welcome’: the decline and fall of Mrs Thatcher 63
4 The Economic Liberal Crusades I: The Quest for an

Economic Renaissance 71
‘A Holy War of the Just against the Unjust’ 71
Grand strategy: the restoration of the market economy 76
The privatization of public enterprise 94
The attack on trade-union power 99
5 The Economic Liberal Crusades II: The Recasting of the

Welfare State 105
Only one ‘social revolution’ 105
Housing: the jewel in the crown 110
‘Saving’ the National Health Service 115
‘Tinkering’ with social security 122
Confronting the educational establishment 127
vii
viii Contents
6 The Economic Liberal Crusades III: The Reconstruction

of the Civil Service 137
‘Terrified’ of ‘the Lady’? 137
The Higher Civil Service as an adversary 140
Seeking a management revolution in the Civil Service 147
‘Radical reforms’ and the Next Steps programme 154
7 The Economic Liberal Crusades IV: The Confrontation

with Local Government 159
Less than ‘brutishly Napoleonic’ 159
‘The battle with local government’ 164
The saga of the Community Charge 174
8 The Governments of the ‘Iron Lady’ and the Defence of

the National Interest 180
Farewell to the ‘Suez Syndrome’ 180
Dealing with the Legacies of Empire 185
Waging and winning the Cold War 206
Thatcher and ‘Europe’ 211
9 The Unfinished Revolution 222

Thatcher: the ‘Outsider’ in 10 Downing Street? 222
Thatcherism, Conservatism, and the real revolution 224
Notes and References 238

Bibliography 266
Political and constitutional history 266
Diplomatic and military history 274
Economic and social history 277
Index 285
Preface
This book is called The Politics of the Thatcher Revolution, and it is the final vol-
ume of a trilogy that began with The Politics of Crisis: An Interpretation of British
Politics 1931–1945, published in 2001, followed by The Politics of Decline:
An Interpretation of British Politics from the 1940s to the 1970s, published in
2005.
By the end of the 1960s, it seemed to me that the Keynesian order had
broken down irreparably, and that, in the coming contest for the succession,
economic liberalism rather than socialism would eventually become the rul-
ing ideology in British politics. Almost everybody in university life and in
higher journalism thought otherwise, even after Margaret Thatcher became
the Leader of the Conservative Party in 1975, and, thus, according to those
who thought like me, the next Prime Minister. The conventional wisdom
was that there was not going to be a Thatcher era, and then when there was
a Thatcher Government the argument ran that it was going to be doomed
to suffer the same fate as the wretched Heath Government, with an explicit
U-turn into supposed political and economic reality after about two years,
and, of course, nobody was supposed to be able to break the unions and
render Britain ‘governable’ once more, and capable of an economic renais-
sance. There seems no reason to set out the thesis of this book beyond stating
that those who followed ‘respectable’ opinion in these matters got it wrong,
and, for whatever reasons, which the present writer would concede included
much in the way of luck, those who took the opposing line got it right,
though inevitably not in detail. Many who argued against me were later
more generous in defeat than I fear that I would have been in similar circum-
stances, especially as they tended to be political animals in the Aristotelian
sense, whereas, aside from patriotism, my own interest was one of profes-
sionalism. I am not and never have been an economic liberal, and, unlike
many who write about politics, I have never belonged to any of the political
tribes. In relation to the Thatcher revolution itself, I would describe myself
as an untrue believer. What did happen was that I thought would happen,
though, inevitably, only in broad terms.
As with my previous eight books, I am indebted to many people for their
help with The Politics of the Thatcher Revolution, not least Lynne Thompson,
Lindsay Scutchings, Susan Grayson, and Amanda Willis of the Brotherton
Library at the University of Leeds, and all the Inter-Library Loan staff too.
Many of my serving and former academic colleagues at the University of
Leeds have encouraged me in the writing of this book, led by Heather Fry and
family, Owen Hartley, James Macdonald, Richard Whiting, Edward Spiers,
David Murdoch, David Bell, Alan Deacon, Kevin Theakston, David Seawright,
ix
x Preface
Patrick Bell, Christopher Lord, Neil Winn, Clive Jones, Rodney Lowe, Morris
Szeftel, Michael Wilson and Glen Wilson. To put the matter mildly, these
academics do not and did not necessarily agree with my interpretation of
the Thatcher era, which makes their help all the more admirable. As I have
written before, Edward Boyle, when Vice Chancellor at the University of
Leeds, gave me considerable help and encouragement, despite disagreeing
with me about almost everything, not least the future of socialism. I saw
no reason to defer to socialism or to socialists myself, though I did take the
precaution of reading The Collected Works of Marx and Engels, among many
other socialist works. My antipathetic attitude was not influenced by having
been taught by Michael Oakeshott, though he gave me excellent advice at
one time, but followed from my own working-class family background, and
my youth spent in the ranks of the Armed Forces, and my continuing con-
tact with the mass opinion through my addiction to football. Of the many
other people who have helped me so often in the past, I acknowledge that
given by Richard Dickason, and the encouragement of George Jones, Peter
Hennessy and Anthony Seldon. In relation specifically to this book, Andrew
Riley of Churchill College, Cambridge proved, to be an excellent guide to
the Thatcher Archive, and I am also very grateful to the other archivists and
copyright holders for their help. I found the Thatcher CD-ROM invaluable
too, not least in checking what Mrs Thatcher actually said as opposed to what
was actually reported. I am grateful to Lord Powell of Bayswater for his help.
I dedicate this book to my great friends from Portsmouth, Paddy and
Marlene Thomas, and Jim Riordan.
GEOFFREY K. FRY
1
What Kind of Revolution?
The IMF crisis of 1976: the centre cannot hold
‘The good news . . . was that the loan from the International Monetary Fund
will be doled out in instalments up to some time in 1978, with audits to
check whether Britain is fulfilling the loan’s terms’, The Economist observed
in late 1976. ‘This period of rule by IMF Inspectorate General should give
the country better government than successive teams of British politicians
have done.’1 British experience had shown that the State could not, at one
and the same time, perennially increase real incomes, attain price stability,
sustain full employment, and continually expand the social services, as the
Keynesian dispensation had led people to believe. Yet such a role for the
State had become an integral part of Britain’s liberal democracy,2 and it was
only obvious and regularly displayed excess on the part of the British trade
unions together with a succession of external blows culminating in the Oil
Crisis of 1973 and the IMF loan conditions of 1976 that eventually created
the political climate in which the Governments of Margaret Thatcher could
pursue their programmes of radical change.
‘British political life is not a record of steady, continuing, gradual progress
on the Tennysonian plan’, or so one well-known essayist had concluded
twenty years earlier, ‘The picture is rather of a certain broadly accepted form
of society, a generation of petty bickering about small details and then, from
time to time, a sudden jump forward to a new order’, as in 1945, and at such
times it was as well that electoral arrangements were in place that enabled
‘the electorate. . . to turn out Tweedledum and put in Tweedledee.’3 What
had happened, though, was that governments primarily composed of High
Tories on the one hand and mainly drawn from the Right and Centre of
the Labour Party on the other had alternated in office, and, this side of
1955, they all had obvious economic failure in common. When the Heath
Conservative Government of 1970–74 tried to blast the British economy on
to a higher growth path, not least to prove that membership of the European
Community meant economic success, it only succeeded in demonstrating
1
2 The Politics of the Thatcher Revolution
that the Keynesian era was over. The prominence of the role that aggres-
sive trade unionism had played in the Heath Government’s downfall seemed
to some to call even the future of the political system into question. Had
union power together with continuing economic failure and relative decline
rendered Britain ungovernable? ‘Too much is impossible in Britain today’,
The Economist was not alone in thinking in reviewing the state of British pol-
itics by the second half of 1976. The rise of Mrs Thatcher to be the Leader of
the Conservative Party in 1975 meant that ‘for the first time in its post-war
history the country lacks an Opposition which could govern in the Govern-
ment’s place without provoking an extra-Parliamentary lurch against it which
would threaten Parliamentary Government itself’. The Economist believed
that ‘if all 635 Members of the House of Commons voted now the way they
think, instead of for the Party Whips, Mr Callaghan would have the major-
ity he needs to turn Britain round’. Though at the head of the Labour
Government, James Callaghan was ‘the best conservative Prime Minister
Britain could get’.4
There were those like Edmund Dell, one of Callaghan’s Cabinet colleagues,
who believed that a Grand Coalition between the major parties would have
been the best means of dealing with the political and economic crisis of the
mid-1970s,5 and, given that another colleague, even one by now on the Left,
Tony Benn, saw Callaghan as ‘so avuncular and agreeable’,6 it was not surpris-
ing that the Labour Foreign Secretary and then Prime Minister was thought
of by the superficially minded as the ideal leader of a National Government.
After Heath had led his Tory Government to defeat in the February 1974
General Election on a ‘who governs?’ platform, there had been much talk
in politics about the need for a Coalition Government, some of it emanat-
ing from Heath himself, who campaigned in favour of a Government of
National Unity in the next Election held eight months later, without success.
Then, following the June 1975 Referendum on continued membership of the
European Community, there was some speculation that the victorious ‘Euro-
peans’ such as Heath, Roy Jenkins, and other ‘moderates’ might in some
way get together to form a Coalition Government. In the event, Harold Wil-
son’s Labour Government soldiered on with its tiny majority, and when that
majority was eroded the Lib–Lab Pact of 1977–78 was eventually devised to
keep what had become the Callaghan Labour Government in office and to
keep out Mrs Thatcher and the Conservatives. The Labour Movement and
the trade unions in particular had good cause to fear Mrs Thatcher, though
Benn had even been afraid that the formation of a National Government of
‘moderates’ would mean that ‘we will be absolutely clobbered’, presumably
meaning the wider Labour Movement.7 It had to be difficult to know who
among the ‘moderates’ would do this ‘clobbering’, given that, for example,
few of them had shown much, if any, political courage in previous confronta-
tions with the trade unions. Indeed, when, in 1969, the Wilson Government
had brought forward the In Place of Strife legislation to regulate the activities
What Kind of Revolution? 3
of the trade unions, from within the Cabinet Callaghan had led the way in
undermining the Bill.8 When the Heath Government’s Industrial Relations
Act had failed to do the job too, it was never very likely that a subsequent
Coalition Government largely led by those who had failed before and who
were still tied to the existing and now discredited economic and social order
would do any better. One reason for pessimism about such a political venture
was that there was nobody to play the necessary role in the political context
of the time of the union man that J.H. Thomas, founder of the National
Union of Railwaymen, had done in the National Government of the 1930s.
The Inland Revenue Staff Federation was the best that Callaghan could come
up with as trade union experience, but he was the only candidate and he was
never likely to wish to follow in the footsteps of ‘Traitor Thomas’. Dell had
blamed the ideological incompatibility of the two major parties as the main
reason why a Grand Coalition had never been practical politics even at a time
of national crisis in the 1970s,9 but Callaghan – the crucial figure – could not
be seriously described as having an ideological commitment. What Callaghan
had was a tribal loyalty to the Labour Party added to knowledge of what had
happened the last time that a National Government had been formed dur-
ing the political crisis of 1931. Then, Ramsay MacDonald, the Labour Prime
Minister, had been persuaded to become the head of a National Government,
which also included Thomas among others from Labour’s leadership group,
thus dividing the Labour Party, which spent the 1930s in embittered and
inept Opposition.10 In the decisive Cabinet meeting, Callaghan refused to
agree with Benn that the IMF Crisis of 1976 was comparable with that of
1931,11 which in terms of the remedies deemed necessary by financial opin-
ion for its resolution was unconvincing. What Callaghan was determined
upon was to ensure that if and when the IMF’s economic liberal medicine
worked, the Labour Party would still be in office to take the credit, drawing
support not least from those groups and their unions in the public sector as
well as elsewhere whose interests seemed threatened by the prospective rad-
icalism of Mrs Thatcher. As a strategy for winning the next General Election
that had to be held at the latest by the autumn of 1979, Callaghan’s brand
of conservatism had some promise, or so experts undeterred by failing to
correctly predict the previous three Elections came to believe. As a means of
arresting, let alone reversing, national decline, Callaghan’s conservatism had
no merit at all, since his form of tribal loyalty dictated that the Fifth Estate
had to retain its privileges when their removal was a condition of economic
advance, and few, including presumably Callaghan himself, failed to recog-
nize how ironic it was when eventually the trade unions added the Callaghan
Government to its list of political scalps.
The year 1976 not only invited comparisons with 1931: it was also the
fiftieth anniversary of the defeat of the General Strike, which Beatrice Webb
famously dismissed as ‘little more than a nine days’ world wonder’.12 When
Stanley Baldwin, the then Conservative Prime Minister, bought off the
Miners Federation of Great Britain by temporarily subsidizing the coal indus-

try to give the Labour Movement the triumph of Red Friday – 31 July 1925 –
the Home Secretary, Sir William Joynson-Hicks had protested: ‘Is England to
be governed by Parliament and the Cabinet or by a handful of trade union
leaders?’13 Much the same question was asked from the late 1960s onwards
when aggressive trade unionism, with what was now called the National
Union of Mineworkers leading the way, had reduced both Labour and Conser-
vative governments to the role of supplicant, and there was much talk, espe-
cially among upper and middle-class intellectuals, about the ‘inevitability’
of socialism, enforced if necessary, and, thus, of revolution. If there had
been many more governments led by inept ‘moderates’, then those whom
Neville Chamberlain once described as having ‘unsteady brains’14 might
have got their wish, but what actually happened was the Thatcher Counter-
Revolution. Half a century before, if the First World War had been lost, then
there might have been the British Socialist Revolution of 1919–21, but as
that conflict was won the most that the established order had to face was
the continuance of the strike wave that had disfigured the British polity and
economy since 1911. Far from having to confront ‘moderates’, the Triple
Alliance of miners, railwaymen and transport workers had to contend with
the Coalition Government that had won the war. This had a Liberal Prime
Minister, David Lloyd George, whose talents for unprincipled opportunism
were much needed in what was a government dominated by the Right, which
was led by Andrew Bonar Law, a Conservative who could match even the
Prime Minister for ruthlessness. When once asked by a society hostess what
people like the Triple Alliance really wanted, Bonar Law pointed to evidence
of her wealth and observed that ‘perhaps they want just a little of all this’.
Nevertheless, Bonar Law believed that the State must win in any confronta-
tion with the Triple Alliance, and he was willing to envisage legislation
empowering the government to seize strike funds and arrest the leaders.15
While not ruling out firm action, Lloyd George preferred specious promises of
nationalization and personal diplomacy in dealing with the unions.16 When
the Triple Alliance finally confronted the government, one sympathetic com-
mentator wrote that ‘the military preparations to combat the strike were plain
for all to see. A State of Emergency was declared, reservists were called to the
colours, machine guns were posted at pitheads, and troops in full battle order
were sent out to many working class areas. Compared with this display of mil-
itancy, the Government’s attitude in [the actual General Strike of] 1926 was
positively pacific.’17 Black Friday – 15 April 1921 – marked the defeat of the
Triple Alliance, though the MFGB (Miners’ Federation of Great Britain) itself
was only defeated later. Red Friday proved to be a short lived revenge, and
the General Strike of May 1926 was swiftly defeated by Stanley Baldwin’s
Conservative Government, though the MFGB fought on until December.
‘The greatest enemy of the working classes that this last generation has pro-
duced is the present Prime Minister’, a Labour MP declared,18 as Baldwin
faced down the MFGB over several months rather than permanently subsidize
the coal-mining industry. As voting behaviour persistently demonstrated,
the working classes and the Labour Movement were not synonymous, and
Baldwin was better described as an adversary rather than an enemy of the
Labour Party and Movement. That Party and Movement had been brought
within the British political nation in 1916 when Arthur Henderson had joined
Lloyd George’s War Cabinet, and for all the determination that he displayed
in defeating the General Strike and its sequel, Baldwin wanted to keep them
there. Baldwin was not antagonistic to the trade unions as such, being a
believer in voluntary collective bargaining because he considered that, as far
as possible, the State should abstain from intervening in industrial relations.
A Prime Minister like Bonar Law might have followed up the defeat of the
General Strike by legislation to remove the legal immunities granted to the
trade unions and their funds by the 1906 Act, but Baldwin preferred to inflict
lesser blows and to promote conciliation in the spirit of the Mond–Turner
talks.19
The Baldwin Model of the Man of Moderation became the dominant
one for prime ministers thereafter, even surviving the immediate damage
done to Baldwin’s reputation by his association with the defence and for-
eign policies of the National Governments of the 1930s. Harold Macmillan
spotted Clement Attlee’s ‘imitation of Baldwin which he does so well,’20
and Macmillan himself was a prime minister of much the same type, and
so was Churchill in his peacetime government of 1951–55, despite his war-
ring relationship with Baldwin in the past. Though not remotely in Attlee’s
league, later twentieth-century Labour Prime Ministers – Wilson, Callaghan
and Tony Blair – played the Man of Moderation game, and possibly had to
go in for this form of reassurance given that the Labour Party was supposed
to be the more radical than its main rival. Others might argue that, since
few prime ministers would be averse to more than twenty years in office, Sir
Robert Walpole was the model, or that the folk memory of the English Civil
War of the 1640s promoted thereafter a political culture that especially valued
peace at any price and leaders who could provide it. ‘The great qualities, the
imperious will, the rapid energy, the eager nature fit for a great crisis are not
required – are impediments – in common times’, Walter Bagehot observed,
‘A Lord Liverpool is better in everyday politics than a Chatham.’ Bagehot rec-
ognized that there had been ‘few catastrophes since our Constitution attained
maturity’, but one of its merits was that when crises came, it was flexible
enough ‘to change the helmsman – to replace the pilot of the calm by the
pilot of the storm’.21 Some would say that ‘the pilot of the calm’ – Baldwin –
had done well enough in putting down the General Strike, and that in the
1930s there was much to be said for his argument that the Labour Movement
should be well treated because ‘one day we may need them’,22 and that time
came in 1940, when, of course, Ernest Bevin was brought into Churchill’s
War Cabinet. From then onwards, the broad acceptance by the Fifth Estate
of public policy deemed by it to affect its interests had been treated as a

requirement for the successful functioning of the Keynesian Welfare State.
It was one thing, though, for governments to negotiate with trade-union
leaders largely drawn from the Right and Centre of the Labour Movement,
and another to deal with those of the Left. By the 1970s, the Left was in the
ascendant, and the order of their dominance was such that it would take
more than the politics of accommodation to defeat them.
Apocalyse now: the challenge from the Left
‘Until our own day, we have been governed in all fundamental matters by a
single party in the State’, Harold Laski wrote in 1938, ‘ For though that party
has given the appearance, by its technique of division into two main wings,
of bifurcation, the fact always has been until now that both wings did define
in common the ends of Parliamentary Government. These ends, broadly
speaking [were] always within the framework of the private ownership of
the means of production.’23 Now, Laski argued, ‘the striking thing about
the foundations upon which the principles of each party rest is the abyss
by which they are separated. Liberal Government could succeed Conserva-
tive Government before 1924 with the assurance to businessmen that the
basic economic structure of our society would be undisturbed. Anyone who
examines the Short Programme of the Labour Party. . . of 1937 will see that
there is no longer any such assurance. There are promised to the electorate in
the event of a Socialist victory not only wide measures of nationalization, to
be completed within a five year period, but also immense social reforms.’24
Laski implied that the forces of reaction would frustrate the implementa-
tion of this Programme and that Britain faced a prospective revolutionary
situation. Unwisely, in 1945, Laski sued for libel when he was accused of
being a revolutionary, and inevitably lost. Though the manner in which the
court case was conducted was a disgrace to the English legal system, there-
after those like Ralph Miliband, his disciple,25 who argued that Parliamentary
socialism in Britain was unattainable, never said how a socialist system was
going to be established, or for that matter how it would work. The impli-
cation was that such a system was either going to be imposed from outside
by the Soviet Union, whom the Left had to hope would win the Cold War
and in whose interest it was to work for such a victory; or, internally, social-
ism was going to be imposed by the wider Labour Movement once the Left
controlled it. Whether or not the Churchill War Coalition Government of
1940–45 was the most socialist government Britain ever experienced or the
Attlee Labour Governments of 1945–51 better merited that description could
be debated, but the Keynesian Welfare State was anticipated and planned for
by the Coalition Government, and the Attlee Governments implemented
what had been agreed, together with the establishment of a large national-
ized sector of the economy. The Second World War and the years immediately
afterwards had witnessed a social revolution of a kind, but, as both Keynes

of The General Theory and Beveridge of the Report were Liberals, not much
more than a semi-socialist system had been constructed, and by 1948 the Left
wanted the structure to be completed and the Right and Centre of the Labour
Party were for running the established arrangements in competition with the
Conservatives. The latter strategy was the one that was followed, with the
malfunctioning of the Keynesian Welfare State attributed to mismanagement
of the economy by successive Tory Governments between 1951 and 1964, a
form of argument that did not survive Labour’s return to office. More durable
was the belief widely subscribed to outside the Labour Movement that the
negative power of the trade unions was the main obstacle that stood in the
way of Britain developing a successful modern economy. Such negative union
power was certainly important, but it would not have made the difference if
union co-operation had been the common experience. This was because in
most circumstances the unions could not deliver much in any deals made,
even memberships prepared to honour agreements, as the number of unof-
ficial strikes and strikers testified. Men from the Left such as Jack Jones, the
General Secretary of the Transport and General Workers Union and Hugh
Scanlon, President of the Amalgamated Union of Engineering Workers –
the ‘terrible twins’ – and some of the leaders of the NUM (National Union of
Mineworkers) knew what they were against, which was an economy in which
there was private ownership on the existing scale, and which, despite the
scale of State intervention and the high levels of public expenditure, they per-
sisted in calling capitalism. What remained unclear, deliberately so of course,
in some cases, was what they were for. If it was not going to be the Swedish
Middle Way that had captivated Anthony Crosland, was it to be a Soviet
system that worked, and, if that was not the model, where was it to be found?
From what had come to amount to be a form of negative veto to imposed
socialism of a fully developed kind was a long, revolutionary step, but at
times in the 1970s the socialists had reason to hope that the use of union
power would overturn the system. The forces of law and order certainly had
been humiliated at Saltley in 1972 during the then miners’ strike. The Heath
Government had been determined to keep the coke depot there open, but,
when the picketing miners were massively supported by other strikers from
other industries, the Chief Constable of Birmingham had to order the gates
to be shut, and to ask Arthur Scargill, the leader of the Yorkshire miners, to
disperse the crowd. This Scargill did, standing on top of a public lavatory,
according to him using public address equipment thoughtfully provided by
the Chief Constable, having first taken the opportunity of congratulating the
strikers present on having achieved ‘the greatest victory of the working class,
certainly in my lifetime’.26 What this success of what Scargill called ‘a mili-
tary operation’27 demonstrated, he was not alone in believing, was that ‘the
working class had only to flex its muscles and it could bring governments,
employers, society to a total standstill’.28 As his present approach was to use
wage pressure to break the political system, in that sense Scargill was neutral
between Conservative and Labour Governments, being prepared to confront
either of them.29 That said though, he believed that changing the Labour
Party was ‘the ideal way [to] achieve working class power’ by means of estab-
lishing ‘a broad alliance of the whole Left inside the Party’. The Party had to
be compelled to accept Conference decisions, and ‘those who do not accept
this have got to be thrown out’. Scargill had in mind ‘[Reg] Prentice, [Shirley]
Williams, [Roy] Jenkins, all the Tories that are in the Labour Party’, and,
though he was the Leader of the Party and the Prime Minister at the time,
Harold Wilson too. ‘The unions are the foundation of the Party and should
control it’, Scargill said, ‘I’ve always supported the bloc vote and [it] would
become ours if we won the leadership in the unions. Once you win those
votes in the Party Conference you can then win the positions which are nec-
essary to change society.’30 Scargill believed that ‘we could take over all the
means of production, distribution and exchange more or less immediately’,
though quite why sufficient of the electorate would vote for a Labour Party
that would ‘take into common ownership everything in Britain’31 for a Gov-
ernment with the requisite majority to be formed was not explained. ‘A big
strike reminds everyone of the realities of the situation’, Scargill stated,32 and
when asked, after the triumph of socialism in Vietnam, whether conditions
now made possible a socialist revolution in an advanced country, Scargill
replied that ‘the capitalist system is in big trouble’, and following crises of
the kind that Britain had experienced in 1972 and 1974 ‘a socialist revolution
may be that much nearer . . . than many people think’.33
Since the wider Labour Movement had brought the Wilson Labour
Government to its knees in defeating the In Place of Strife trade-union reforms
in 1969, the Left had been making the running in the Labour Party anyway.34
Few pretended that Labour Governments of the 1960s had been anything
but failures, and for many in the Labour Party’s ranks that had been true of
the Government of 1966–70 in particular.35 The Right and Centre got the
blame for this, though they had the consolation that when another Labour
Government was formed they would once more take most of the leading
positions on the basis of having the greater number of talented and experi-
enced politicians in their Parliamentary ranks compared with the Left. In the
meantime, though, they were on the defensive during the period of Opposi-
tion that began in 1970. Scanlon set the tone when he told the Conference
of that year that ‘we will talk about a socialist income[s] policy when we own
the means of production, distribution and exchange’,36 and, through the
mechanism of the Labour–TUC Liaison Committee formed two years later,
a document called Economic Policy and the Standard of Living was devised by
1973 that Harold Wilson chose to portray as an economic strategy, including
food subsidies, price controls, housing and rents, transport and a redis-
tribution of income and wealth, combined with a policy for increasing
investment in industry. Together with the repeal of the Conservatives’

Industrial Relations Act [of 1971], this would ‘engender the strong feel-
ing of mutual confidence [between the unions and the next Labour
Government] which alone will make it possible to reach the wide ranging
agreement which is necessary to control inflation and achieve sustained
growth in the standard of living.’ This was widely interpreted as a volun-
tary agreement to accept restraint in pay demands as part of a wider social
agreement.37
For Wilson, what became popularly called the Social Contract was a means
of securing the return of a Labour Government, and even its most articulate
critic from within that Government – Joel Barnett, the Chief Secretary to the
Treasury – conceded that it may well have helped the Party to obtain office
in 1974.38 ‘The only give and take in the Contract was that the government
gave and the unions took’, Barnett observed,39 adding that, ‘After the first
disastrous year of the Social Contract in 1974/75, when pay rose by nearly
30 per cent, the TUC were extremely helpful in ensuring moderation in pay
settlements, though we paid a high price in levels of public expenditure far in
excess of what we could afford.’40 In the summer of 1975, Jack Jones delivered
a flat-rate wages policy on behalf of the unions that bought some time before
the inevitable reckoning with the IMF. To the extent that the Social Contract
could be considered a serious document, it looked like an attempt to return
to the world of 1948, recreating the Attlee years with no ‘bonfire of controls’
this time and no Tory ‘affluence’ to come. For, this time, the Left believed
that they would win.
With the Left rampant, the maintenance of a list of proscribed organiza-
tions membership of which was incompatible with that of the Labour Party
had been discontinued in 1973, subject of course to the separate identity of
that Party being respected as under Clause II of its Constitution.41 How this
came about was a complex matter,42 but an important reason for the change
would seem to have been an unwillingness in the leadership group to police
the list. In their day, people like Herbert Morrison, George Brown or Morgan
Phillips had done this task with relish, but it may not have been lost on
others that being the hammer of the Left seemed not to have done the polit-
ical careers of Morrison and Brown much good when it came to obtaining
the leadership. The eventual successor to Phillips as General Secretary, Ron
Hayward, who was to hold the post between 1972 and 1982, had been given
the remit that his role was to seek the implementation of Party policy as
laid down by the Conference and the National Executive Committee rather
than the Parliamentary leadership, and, being a man of the Left, Hayward
acted accordingly. The stage was not set for a rerun of the 1930s when the
Conference was king because this time, unlike after 1931, the Parliamen-
tary leadership remained largely intact, even if, as one observer put it, the
politicians concerned had to keep a nervous eye on the groundswell of Party
opinion.43 In particular, though Scargill had dismissed the notion that Tony
Benn could ever be ‘the Messiah of the Left’,44 the politicians of the Right and
Centre had good cause to think that their former social democratic colleague
had that ambition, as Crosland recognized.45 At one time, Crosland, his for-
mer Oxford tutor and then Cabinet colleague, had been given to saying of
Benn that there was ‘nothing the matter with him except he’s a bit cracked’,
even when he suspected Benn of telephoning him pretending to be a mad
farmer,46 instead of affecting to be Jimmy the telephone engineer.47 When
Benn defected to the Left, Crosland’s tolerance departed too. Benn seemed to
see himself as the left-wing answer to Enoch Powell, believing that ‘Enoch has
had more effect on the country than either Party.’48 This ambition ignored
two realities. Firstly, for all Powell’s articulation of overwhelming popular
antipathy to New Commonwealth immigration, not only had public policy
on the matter failed to respond in the manner that most electors wanted, but
also Powell’s estrangement from the mainstream of the Conservative Party
had damaged his career.49 Secondly, Benn had no rallying cry of similar pop-
ular appeal, though, conceivably, campaigning for the restoration of capital
punishment for murder would have done, and admirably so in the sense
that nobody could doubt the scale of public support for hanging murder-
ers, and Benn had come to urge more public ‘participation’ in governmental
policy-making in the name of democracy. However, abolitionist sentiment
had come to conquer the Labour Party, calling into question once more who
exactly it was supposed to represent. Benn was not only an abolitionist: in
1965 he had specifically congratulated Sidney Silverman on getting the rele-
vant legislation through.50 When the Home Secretary, Sir Frank Soskice had
earlier said that ‘I shall have to start hanging again’, Benn described him as
‘an impossibly reactionary man’.51 If so, this description fitted an obvious
majority of the electorate, and, unsurprisingly as a Parliamentarian when it
suited him, Benn’s enthusiasm for ‘participation’ was limited to those issues
on which he thought that he could get the desired responses.
Benn’s idea of a popular cause that would win over the electorate, and one
which he pursued with the zeal of the convert, was to take the Labour Party’s
formal commitment to Parliamentary socialism literally, and to campaign to
bring its policy and organization into line with this ambition. In this way, the
Left would become the Party’s mainstream. Union power was one reason for
believing that this would happen, and another was that the Labour Govern-
ments of the 1960s had demonstrated the intellectual and moral bankruptcy
of the Right and Centre of the Party. It did not, though, follow that, even
if they recognized this redundancy, the politicians concerned would see the
light as Benn had done, or conveniently get out of the way by giving up
their careers. Changes in the distribution of power within the Labour Party
were proposed that would force such people to one side or, indeed, out alto-
gether. From 1973 onwards, a Hard Left group called the Campaign for Labour
Party Democracy sought mandatory reselection of MPs by their local Party
activists; a new method of selecting the Party Leader that would involve
establishing an electoral college in which MPs would only be one element
instead of having a monopoly; and control of the Party’s election manifesto
by the National Executive Committee. In the long run, such a programme
had a good chance of being adopted and of forcing the Labour Party fur-
ther to the Left, but, more immediately, that Party remained a remarkably
disparate coalition even by the standards of its divisions in the past. ‘At the
Home Policy Committee of the N.E.C. there was a discussion about the next
Labour Government’, Benn recorded in his diary for 8 March 1973 referring
to what became known as Labour’s Programme 1973:
They all felt that the programme was so complicated and full that it would
take three Parliaments to implement. So I chipped in and said I was uneasy
about this; we really couldn’t wait for twenty-five years. What we wanted
was a substantial and irreversible shift in the balance of power and wealth
in the next Labour Government and it wouldn’t necessarily cost money
if we were prepared to act swiftly. . . I would need an Industrial Powers
Act if I was going to carry through the sort of industrial policy a Labour
Government would need.
Benn praised himself for his toughness in taking this line,52 and later
professed himself to be honoured when compared with Sir Stafford Cripps of
the 1930s, a comparison that was made, despite the chasm between them in
natural ability, because Benn advocated the use of an all-embracing Enabling
Act to be implemented at the outset of the next Labour Government.53 When
Shirley Williams questioned whether there was sufficient electoral support for
more public ownership of the kind that Benn was advocating, Benn replied
that ‘the public doesn’t necessarily accept your attitude on race, but you go on
saying it, and quite rightly’.54 At the heart of the Alternative Economic Strat-
egy that Benn promoted were proposals for a National Enterprise Board to
take over 25 of the leading 100 companies, and subject other private-sector
companies to planning agreements. Edmund Dell, one of Benn’s Cabinet
colleagues, believed that ‘planning agreements were a farce. We hadn’t the
faintest idea what they meant.’55 Undeterred, Benn pressed ahead with advo-
cating ‘the real Labour policy of saving jobs, a vigorous micro-investment
programme, import control, control of the banks and insurance compa-
nies, control of export, of capital, higher taxation of the rich, and Britain
leaving the Common Market’.56 Logically enough, given the autarkic nature
of the Alternative Economic Strategy essential for the establishment of British
socialism, Benn had to find a means to get Britain out of the European Com-
munity, and he had led the way in committing the next Labour Government
to holding a national referendum about membership with the implication
that the electorate would come up with the result that the Left wanted. Benn
had identified an issue that was crucial – sovereignty – but, as he himself
persisted in referring to the Community as the Common Market, he could

hardly expect the electorate not to see it that way too. The defeat sustained
by the Left along with the other advocates of withdrawal in the 1975 Refer-
endum only strengthened the position of the Right and Centre of the Labour
Party temporarily because they still did not have a domestic economic strat-
egy of their own that would work. The IMF eventually insisted on them
having such a strategy, and Benn walked away from the Cabinet table on
2 December 1976 and told Judith Hart that the social democratic wing of
the Party had crumbled.57 ‘The trouble with fanatics – why one should never
underestimate them – is they’re so assiduous’, Crosland had already observed
of Benn, and when asked about the prospects of Benn becoming the Labour
Leader, Crosland’s reply was ‘over my dead body’.58 In a matter of weeks
after his defeat in the Cabinet over the IMF loan conditions, it was not just
Croslandism that was dead, but Crosland too.
‘There never was the slightest prospect of socialist revolution in Britain
between 1968 and 1979’, the most distinguished of the contemporary
political commentators – Peter Jenkins – observed many years later,59 while
recognizing that ‘the quadrupling of the price of oil in 1973’ had ‘produced
a crisis of capitalism of a sort’, and that ‘working class action by the miners
had brought the Heath Government down’. Jenkins recalled too that if in
1975 he had been asked to choose which politician had the better prospects,
he would have chosen Benn rather than Mrs Thatcher.60 In part, this choice
reflected the tendency of political analysts to see British politics in terms of
the Labour Party and Movement, which if won over to, say, Bennite social-
ism would carry the day, not least because of the need to find the most
effective appeasers of union power. The Right and Centre of the Labour Party
had such appeasing aspirations, and with the Callaghan Government having
been given an economic liberal strategy by the IMF that just might grant it
an electoral reprieve, there was the possibility of the Labour Government
muddling through, though, of course, only until the next crisis. Armed
with extra-Parliamentary power, and the revelation of the future given to
them by Marx, those on the Left believed that they would defeat the ‘mod-
erates’ in whatever form or combination they presented themselves. Such
was their confidence, the Left even welcomed the advent of Mrs Thatcher,
a definite opponent for a change, and the war of ideas with economic liber-
alism that would surely follow, and one which they would surely win. They
were wrong.
The challenge from the Right: Margaret Thatcher
‘I don’t believe a word of this’, Churchill was supposed to have said when
he first heard of the contents of the Industrial Charter that R.A. Butler had
devised as part of the New Conservatism in the aftermath of the Tory Party’s
heavy defeat in the 1945 Election. Nonetheless, when he faced the relevant
Party Conference in 1947, Churchill read out the approving draft set before
him.61 Much was made, not least by his official biographer, of Butler ‘[cutting]
the [Conservative] Party afloat from its 1930s unemployment moorings’, get-
ting it ‘to accept the concept of the Welfare State’, and making sure that ‘if
the voice of the Tory turtles was still heard in the land, they were henceforth
regarded as mere historical curiosities’.62 Given what the wartime Coalition
had committed itself to anyway, Butler’s rethinking of policy did not amount
to much more than the politics of reassurance. What the leadership group
at least in the Tory Party had been swift to realize was the political reality of
the Keynesian era, which was that the electoral market for the economics of
‘sound money’ was too small to sustain a governing party. This was the case
for thirty years after 1945, but, in terms of the politics of the Conservative
Party, the Election defeat of 1964 caused many Tories to question what had
become of Conservatism, and, as the Butler formula had ceased to work in
terms of retention of office, to think that it was time to turn once more to
economic liberalism. Forty years before, under the guidance of Baldwin, the
Conservatives were supposed to have established themselves as the Party of
Resistance with the Labour Party as the Party of Change,63 descriptions that
flattered both parties. If allegiance to ‘Europe’ was to be a test, then by the
latter 1960s, many on the Right and Centre of the Labour Party formed an
informal Party of Change with many High Tories: but, as far as the Keynesian
dispensation was concerned the same elements constituted an informal Party
of Resistance against the threats from the Right and the Left, who wanted a
different economic and social order, and in the case of the Left armed with
union power a means of using force to get it. In 1970, there was no hard
evidence that enough of the electorate had lost their belief in the Keynesian
dispensation built in the 1940s, even if many on the Right of the Conser-
vative Party thought that by now they should have done. The Conservative
Government of 1970–74 did secure the Treaty commitment to ‘Europe’, but,
otherwise, the contradictions inherent in the Quiet Revolution that Heath
promised soon made themselves apparent, and when he proceeded to act like
the conviction Keynesian that Powell and the economic liberals had always
suspected him to be and failed in that role too, there was nothing left beyond
electoral defeats to add to those suffered at the hands of the unions.64
One disquieting experience that almost every Conservative candidate in
the country shared during their personal canvassing during the October 1974
Election, according to the High Tory, Nigel Fisher, was that ‘on nearly every
doorstep, if a conversation developed, one’s constituent – whether man or
woman, Conservative, Liberal, or Labour – would say, “I’d vote for you except
for Heath’, or “You’ll never win with Heath’, or, quite simply, “I don’t like
Heath.”’65 Since even the admiring James Prior described Heath as ‘a very
private, rather shy and unapproachable man who can be given to rudeness
and show boredom quickly if he finds people uninteresting’,66 it was not
surprising that there were many in the Conservative Parliamentary Party who
had come to despise their Leader. Heath himself recognized that as
I had been Leader for nearly ten years. . . it was only natural that. . . there
would be a number of malcontents on the backbenches. Many felt bitter
at their lack of progress under my leadership – it is impossible to include
everybody in a Shadow Cabinet or Government. In addition, some MPs
would genuinely think that it was time for a change.67
It may well be that, given the lamentable domestic policy record of the Heath
Government and its humiliating dismissal from office earlier in the year,
the Conservatives did well to keep the Labour Government’s majority in
the October 1974 Election down to single figures. The Tory Party machine
in the country certainly did its job in retaining many more marginal seats
than the pundits had predicted. The Tories had fought ‘a good rearguard
action’, according to William Whitelaw, the Party Chairman, who congrat-
ulated himself on his own contribution, while confessing that, on his return
to the House of Commons, he underrated the depth of the antipathy towards
Heath in the Parliamentary Party, believing that the Executive of the 1922
Committee and its Chairman, Edward du Cann, in particular, were unrep-
resentative in their hostility.68 As it was, when Parliament met again after
the Election, Fisher thought uniquely, the Chairman, officers and Executive,
including himself, were all re-elected, in du Cann’s case unopposed, which
was evidence that the views of the Parliamentary Party had been fairly repre-
sented. The point was made in debating the matter that the Party Leadership
was a leasehold, not a freehold,69 but Heath was as determined to hang on
as his enemies were to bring him down. Memories of Heath supplanting
the then Sir Alec Douglas-Home as Tory Leader in 1965 were revived when
Heath asked Lord Home to chair a committee to examine the Party’s rules
for electing its Leader. The new rules stored up trouble for a future Leader,
who was made subject to annual re-election without sufficient safeguards
being put in place to ensure that challengers had wide support, but they
served their purpose in 1975, which was to make it very difficult for the
existing Leader to survive. This was because the 1965 rules were changed to
require that a successful candidate had to have a winning margin on the first
ballot not just of at least 15 per cent of the votes cast, but of those enti-
tled to vote. Although Home himself deprecated the use of the phrase, the
revised 15 per cent rule came to be known as ‘Alec’s revenge’.70 That Home
and then Heath had become Conservative Prime Ministers at all might well
be explained by what could be called ‘Harold’s stupidity’, given the dam-
age done to his wing of the Party by Macmillan in ensuring that Butler did
not become his successor in 1963. With Macleod dead and Maudling dis-
credited, that by 1975 Whitelaw seemed to be the best available successor
to Heath from that wing demonstrated its decline. Heath did not make way
for Whitelaw, believing, it seemed, that three defeats in four Elections as

Leader did not disqualify him from continuing. Heath seemed to think that
he had done well in the second 1974 Election to avoid repeating the earlier
defeat of 1966, and he may well have judged that, with Powell lost to the
Party, the Right would have problems finding a candidate who would be a
worthy adversary, possibly sharing Edward Boyle’s belief that Powell’s third
place and just 15 votes in the 1965 contest was no accident. Sure enough,
the Right had problems in finding a convincing candidate. Sir Keith Joseph,
believing himself to be a convert, attracted some support and a remark from
a Shadow Cabinet colleague that ‘if you chose Keith instead of Heath, it
would be like going straight from the fridge to the freezer’.71 Joseph made
a speech in Birmingham in October 1974 that an ally described as ‘a care-
fully planned disaster’, which caused prospective supporters to question his
political judgment,72 and Joseph eventually withdrew from the fray, to take
up the role of economic liberal campaigner at the Centre of Policy Studies,
while du Cann’s controversial business connections ruled him out too.73
So, by serendipity, the candidate for the Right turned out to be Margaret
Thatcher. ‘You must be out of your mind’, her husband said of her candi-
dacy, adding that, ‘You haven’t got a hope.’74 That Mrs Thatcher was mad
proved to be a popular interpretation of her political behaviour for years to
come, and not surprisingly so, given that for a woman of her generation,
having married a rich man, far from putting her feet up as most in those
days seemed to do once they had won that prize, she then embarked on a
career in politics. Even the finest army the world has known, man for man –
the Wehrmacht – was defeated when it had to fight on two fronts, and, in the
days before measures were taken to try to adjust the labour market in their
favour, career women had to contend not only with overt male prejudice but
also with what only those who defer to feminism would deny to be as at least
as deadly at times, namely, antagonism on the part of other women. Thus,
there were few female Conservative MPs, though women were numerous in
the Tory Party with over a million of them forming the largest female orga-
nization in Britain in the 1980s, for example, representing three-quarters of
the then total Party membership.75 Mrs Thatcher herself also remarked on
the snobbery of the Conservative Party of the 1970s in its attitude towards a
grocer’s daughter.76 In the 1950s, attitudes would be unlikely to be different,
and, what with distrust of a mother of young twins trying to pursue a politi-
cal career, Mrs Thatcher was fortunate to secure the then safe seat of Finchley
in time for the 1959 Election.77 Mrs Thatcher had been no more than the
statutory woman in Heath’s Cabinet, being Secretary of State for Education
and Science. Prior recalled: ‘She had always been cold shouldered by Ted:
she sat in the Cabinet on his right side, carefully hidden by the Secretary of
the Cabinet, who was always leaning forward to take notes. It was the most
difficult place for anyone to catch the Prime Minister’s eye, and I am sure
that she was placed there quite deliberately.’78 Nonetheless, she impressed
Lord Home so much by her contribution to Cabinet discussions that he con-

cluded that ‘she’s got the brains of all of us put together, and so we’d better
look out’.79 Her Permanent Secretary remembered Mrs Thatcher saying that
her ultimate ambition was to be Chancellor of the Exchequer, but she did not
believe that the Tory Party would allow a woman to progress that far.80 In
1974, Mrs Thatcher had said, ‘It will be years before a woman either leads the
Party or becomes Prime Minister. I don’t see it happening in my lifetime.’81
If Mrs Thatcher was known at all to the general public, it was because, when
Education Secretary, she had abolished free school milk for children above
six, earning her the soubriquet ‘Margaret Thatcher, milk snatcher’, and the
description from the Sun as ‘The Most Unpopular Woman in Britain.’82 Heath
plainly did not think her to be a danger to his position; otherwise, he would
not have granted her prominent Shadow Cabinet responsibilities. Between
the two 1974 defeats, Mrs Thatcher shadowed the Department of the Envi-
ronment, cautiously taking up the idea that council tenants should have
‘the right to buy’ their homes at the lowest possible prices. Heath required
Mrs Thatcher to make a pledge to undertake a fundamental reform of the
rating system together with interim rate relief, and he intervened again to
ensure that the Conservatives promised a maximum house mortgage inter-
est rate set at 9.5 per cent. Mrs Thatcher herself remarked on the publicity
that she attracted,83 this time of a more favourable kind. After the October
1974 defeat, Heath appointed Mrs Thatcher to help Robert Carr in opposing
the Finance Bill, a role in which he had enhanced his leadership prospects
in 1965. Mrs Thatcher took her opportunity, and among those impressed
by her performance in this role was Airey Neave,84 one of the Tory back-
benchers determined to bring Heath down. With Joseph and du Cann out
of the running, Mrs Thatcher became the standard bearer of the Right, and
Neave led her campaign team. When informed that she would stand against
him in the leadership contest, according to Mrs Thatcher, Heath said, ‘If
you must’,85 or, according to another version, ‘You’ll lose.’86 Since most Tory
MPs wished Heath to lose, but not necessarily, it seemed, Mrs Thatcher to
win, and for there to be a second ballot, Neave’s reply to enquirers about
how well her campaign was going was ‘Margaret is doing very well, but not
quite well enough’87 proved nicely judged. On 4 February 1975, the result
of the first ballot was that Mrs Thatcher obtained 130 votes, Heath 119, and
the little-known Hugh Fraser 16. Prior, who had failed to vote himself, wit-
nessed Alan Clark, whom he gently called a maverick right-winger, rushing
out of Westminster Hall shouting, ‘She’s won, she’s won.’88 In fact, though
even Heath had felt the need to resign, there was still the second ballot to be
faced on 11 February 1975. Mrs Thatcher, who had risked her political career
to challenge Heath, proceeded to secure 146 votes in that ballot, trouncing
other candidates who had come late into the field like Whitelaw who got
79, with Prior and Sir Geoffrey Howe obtaining 19 each, and John Peyton
a mere 11.89
‘I think it was much more a peasants uprising than a religious war’,

Christopher Patten, Heath’s appointee as head of the Conservative Research
Department, later said of the 1975 leadership contest, ‘It was seen much more
as the overthrow of the tyrant king rather than as a great ideological shift.
There were ideological arguments about what happened from 1970–74, but
I think it was primarily a reaction of the Parliamentary Party against the fact
that they thought they had been taken for granted and that they’d lost too
many Elections.’90 Powell’s assessment was that Mrs Thatcher ‘didn’t rise to
power. She was opposite the spot on the roulette wheel at the right time,
and didn’t funk it.’91 That said though, before the contest Mrs Thatcher had
made her political position very clear:
To deny that we failed the people is futile, as well as arrogant. Successful

Governments win Elections. So do parties with broadly acceptable policies.
We lost. . . Indeed one of the reasons for our electoral failure is that people
believe that too many Conservatives have become socialists already. . . My
kind of Tory Party would make no secret of its belief in individual free-
dom and individual prosperity, in the maintenance of law and order, in
the wide distribution of private property, in rewards for energy, skill and
thrift, in diversity of choice, in the preservation of local rights in local
communities.92
What was for her and her followers happy accident certainly played its part
in Mrs Thatcher’s victory in the 1975 Tory leadership contest, not least
in the fact that so many in the Conservative Parliamentary Party wanted
Heath out at any price. That said, though, the contest was well-described
as both peasants’ uprising and religious war,93 because Mrs Thatcher was
clear that ‘I am standing against the present establishment because I think
that it has not been successful and has forgotten some of the principles on
which the Conservative Party is based.’94 It could only be the principles of
the Right that had been ‘forgotten’. The discredited Heath Government had
tried everything else, including socialism, as Benn had gleefully noted.95 ‘The
fundamental concern of Toryism is the preservation of the nation’s unity, of
the national institutions, of political and civil liberty, and not some ideolog-
ical victory’, Sir Ian Gilmour wrote, spelling out the High Tory creed, ‘Hence
the Tory objective is limited, and, like wars in the eighteenth century, rela-
tively civilized.’96 The hard facts were, though, that Baldwin had defeated the
General Strike of 1926 in a matter of days, and then crushed the miners over
seven months. In 1972, the miners had broken the Heath Government in just
seven weeks, and humiliated the same Government and its High Tories again
two winters later. Norman St John Stevas only spelt out the conventional wis-
dom when he wrote in the mid-1970s that ‘no Government in Britain can
hope to succeed today without the goodwill of the unions’,97 but this was
the same as saying that no government could succeed and that there could
be no sustained British economic recovery. Further, what Gilmour and many

who thought like him chose not to face was that Scargill and the Left did
not aim to fight a limited war. What they threatened was a civil war with all
that implied. So, to sustain the British political system and to promote the
country’s economic renaissance, the power of the unions and especially that
of their shock troops had to be broken. What Margaret Thatcher’s rise to the
Conservative leadership threatened was also a form of revolution, one from
the Right.
2
The Conservative Ascendancy: The
Pattern of British Politics, 1979–90
Three Tory General Election victories
After the excitements of the Winter of Discontent and the Labour Govern-
ment’s dramatic fall and Airey Neave’s murder by Irish terrorists at the outset
of the campaign, the General Election of 3 May 1979 proved to be an anti
climax, not least because some form of Conservative victory was always over-
whelmingly the most likely outcome. With the Tories having no particular
need to win the voters over, and, of course, no wish to alarm the electorate,
what was simply called The Conservative Manifesto 1979 was a cautious docu-
ment, which, indeed, stated that ‘those who look in these pages for lavish
promises or detailed commitments on every subject will look in vain’.1 Only
76 per cent of those entitled to vote in the 1979 Election did so. The Con-
servatives secured 43.9 per cent (13,697,923) of the votes cast, and 339 seats,
which meant that they had a majority of 43 in the House of Commons. The
Labour Party obtained 37 per cent (11,532,218) of the votes cast, and 269
seats. The Liberals attracted 13.8 per cent (4,313,204) of the votes cast, and
11 seats. The Scottish and Welsh Nationalists both won 2 seats, and 12 MPs
were also elected for other parties in Northern Ireland.2 ‘By any of the meas-
ures of swing, the Conservatives secured the biggest net movement between
the two largest parties at any Election since 1945,’ the relevant Nuffield
Study observed, ‘This substantial swing produced the decisive outcome of the
Election; it gave the Conservatives as large a plurality of votes (7 per cent) over
the next largest party as any party has enjoyed since Labour’s 1945 landslide –
larger, in fact, than the 1955 and 1959 Conservative victories which produced
bigger Parliamentary majorities.’3 In terms of postwar politics, then, the Con-
servative victory in 1979 was a remarkable achievement. ‘A dramatic day in
British politics’, Benn wrote, ‘The most right wing Conservative Government
and Leader for fifty years; the first woman Prime Minister. I cannot absorb it
all.’4 Benn was to be given plenty of time to do so.
‘The choice before the people was to take further strides in the direction
of the corporatist all powerful State or to restore the balance in favour of
19
the individual’, Mrs Thatcher declared in the Debate on the Address on 15

May 1979, ‘The Labour Party stood for the former. We offered the latter. The
difference is clear-cut, and we steadily put it across during the campaign.
It was indeed a watershed Election. The result was decisive, with a differ-
ence of about 2 million votes between the two major parties, which was the
largest difference since 1945.’5 On the basis that ‘when the Conservatives
returned to office in 1951 and 1970 there was similar speculation about a
Conservative counter revolution’, the authors of the Nuffield Study doubted
that ‘the 1979 Election [would] prove to be a watershed’. Indeed, ‘the resur-
rection of the theme in 1979 testifies to the continuities of post war British
politics’.6 The 1951 analogy was irrelevant because then the Tories secured
a Commons majority despite gaining a lower number of votes than Labour,
and they were only too glad to run an economic and social order that they
had been pledged in large part to establish themselves if they had not lost
in 1945. That the Keynesian order was malfunctioning by 1970 was obvi-
ous and Heath had promised a ‘quiet revolution’ to put things right, and
failed. James Prior recalled that ‘between 1970 and 1972’ the Heath Govern-
ment had been ‘stupidly right wing and doctrinaire about economic policy’.
Though he hoped that the Thatcher Government elected in 1979 would avoid
these ‘follies’, and, as it turned out like most commentators, Prior seemed
to be thinking of two years before – as in 1972 – ‘the facts of life’ were
accepted.7
There was a tendency among political analysts to underrate the perform-
ance of the Conservatives in the 1979 Election, and to attribute even the fact
of victory solely to the ‘special circumstances’ of the Winter of Discontent.
Even if this was the case, these ‘circumstances’ had occurred, and a comfort-
able Conservative working majority had been obtained, which was likely to
be supplemented in the near future by the findings of the Boundary Com-
missioners. The Thatcher Government also had the benefit of the proceeds of
North Sea oil, which were not a secret. Trapped in their Keynesian ‘realism’,
most commentators regarded the Thatcher Government with its overt eco-
nomic liberalism, then called Monetarism, as facing certain future electoral
defeat, unless, as Prior anticipated, a re-run of events after 1970 occurred
and the 1979 Government executed an explicit ‘U-turn’ in economic policy,
commonly predicted for 1981. When this did not happen, thus supposedly
ruling out an economic recovery, because, after all, almost every university
economist of Keynesian persuasion had said so in a famous letter to The
Times,8 most observers, consistently enough, wrote off the Tories. This was
despite the current state of the Labour Party, which was in the grip of the Left,
and which had been weakened by the formation of the Social Democratic
Party by defectors from its Right and Centre. The Social Democratic Party
(SDP) soon combined with the Liberals to form the Alliance. Though the
Alliance did not have an institutional base, many commentators convinced
themselves that it would carry all before it. The autumn of 1981 was not
The Conservative Ascendancy 21
only ‘the halfway stage of the natural span of the Parliament elected in May
1979’, but ‘it also turned out to [be] the low water mark in the Government’s
fortunes’, the Thatcherite, Jock Bruce-Gardyne, later wrote, though he con-
ceded that ‘brave hearts were needed to see it that way at the time’. This was
because
an Administration which had set out to release the national spirit of

enterprise by cutting public spending and taxation had so far achieved
a substantial rise in both. Inflation had been pulled back to where it
started, but was now forecast to rise again. The private sector appeared to
be flat on its back. The flow of funds to the public corporations continued
on a massive scale. Monetary policy, presented as the cornerstone of the
Government’s counter inflation strategy, was threatening to escape con-
trol yet again. Interest rates across the world were rising steeply, promising
to set off a secondary recession on top of the one of unprecedented post-
war severity which had already occurred. Unemployment had passed
the three million mark, and showed little sign of abating. According to
the opinion polls, popular support for the Government, and the Prime
Minister in particular, was lower than hitherto recorded since the statistics
had been first compiled.9
At the time of the Conservatives’ Blackpool Conference in 1981, Bruce-

Gardyne gleefully recalled, ‘majority opinion among the commentators was
that the Party was heading for a defeat of 1945 proportions, or worse’.10 As
the performance of the Labour Party in by-elections had been unimpressive
since the Southend East by-election of 26 June 1980, which, even then, it
failed to win,11 the Alliance was supposed to be the author of the down-
fall of the Thatcher Government. ‘Everything is dreadfully depressing’, the
Tory backbencher, Alan Clark, recorded in his diary for 26 November 1981,
‘Clearly the SDP is going to win [the] Crosby [by-election]. How fickle and
spastic the electorate are. How gullible, to be duped by somebody as scatty
and shallow as Shirley Williams.’12 One extrapolation of the result of the
Crosby by-election suggested that the Conservatives could expect to win a
single seat if that voting pattern was repeated at the next General Election.13
The ‘impossible’ economic recovery, though, was soon difficult to deny, and
by the early spring of 1982, with evidence that the Alliance threat was fad-
ing and Labour was continuing to make no progress,14 and with two years
left before a General Election needed to be called, the Conservatives were
reasonably placed for victory. Then, Argentina attacked a British colony,
the Falkland Islands. ‘We’ve lost the Falklands’, Clark informed his wife
on 2 April 1982, ‘It’s all over. We’re a Third World country, no good for
anything.’15 Britain was still good at winning wars, and led by Mrs Thatcher
did so again. What became known as the Falklands factor served not to
rescue the Tories,16 but the numerous commentators who had dismissed the
Conservative Government as electorally doomed. They now had a means

of not only explaining away why things had turned out otherwise, but also
for continuing to produce much the same sort of analysis as before on the
grounds that, once the effects of the factor had worn off, things would return
to ‘normal’ and the reckoning would come.
The Falklands factor may well have explained the scale of the Conserva-
tives’ General Election victory on 9 June 1983, but not necessarily the fact
of it. ‘In the last four years, Britain has recovered her confidence and self
respect’, Mrs Thatcher declared in the foreword to The Conservative Manifesto
1983,17 which document stated that
When we came to office . . . our country was suffering both from an

economic crisis and a crisis of morale. British industry was uncompeti-
tive, over-taxed, over-regulated and over-manned. The British economy
was plagued by inflation. . . The country was drifting further and further
behind its neighbours. Defeatism was in the air. We did not disguise the
fact that putting Britain right would be an extremely difficult task.
The second sharp oil price increase and the deepest world recession since
the 1930s have made these difficulties worse. At the same time, the West-
ern world is passing through another transformation from the age of the
smokestack to the era of the microchip. Traditional industries are being
transformed by the new technologies. These changes have led to a rapid
rise in unemployment in almost every Western country.18
Mrs Thatcher made clear her belief that ‘the answer is not bogus Social Con-
tracts and government overspending. Both, in the end, destroy jobs. The
only way to a lasting reduction in unemployment is to make the right prod-
ucts at the right prices, supported by good services. The Government’s role
is to keep inflation down and offer real incentives for enterprise. As we win
back customers, so we win back jobs.’19 As in 1979,20 trade union reforms
were promised,21 and this time there was greater emphasis on ‘reform of the
nationalized industries’ than before, notably the pledge to ‘transfer more
state owned businesses to independent ownership’.22 What was called ‘a
property owning democracy’ in the 1979 manifesto23 was called ‘a home
owning democracy’ in that of 198324 but the Tories had no need to take risks.
‘It looks as if we are heading for a substantial victory’ and ‘a new Conservative
Government’, Alan Clark wrote in his diary before the event, adding: ‘The
House [of Commons] won’t be much fun with nigh on 400 estate agents, mer-
chant bankers and brief less barristers.’25 Only 72.7 per cent of these entitled
to vote in the 1983 Election did so, a decline of 3.3 per cent compared with
1979. The Conservatives secured 42.4 per cent (13,012,315) of the votes cast
and won 397 seats. Thus, the Tories obtained 58 more seats than in 1979, but
their share of the vote declined by 1.5 per cent, and 685,608 fewer voted for
them compared with four years before. Nonetheless, the Conservatives now
had a majority of 144 in the House of Commons. The Labour Party obtained
27.6 per cent (8,456,934) of the votes cast, and 209 seats. The Alliance secured
25.4 per cent (7,780,949) of the votes cast, and 23 seats. The Welsh and
Scottish Nationalists obtained 2 seats each, and 17 MPs were also elected for
other parties in Northern Ireland.26 If the Conservative candidate concerned
had not been found to have a National Front background, the Tories would
have almost certainly avoided their narrow defeat at Stockton South,27 and
thus matched Labour’s majority in 1945, though, of course, in a larger House
of Commons. As for the electorate, the Conservatives won 60.6 per cent of
the votes cast for the two major parties. Only in 1931 had the winning party
been so far ahead of its principal rival.28 The Nuffield Study found that there
had been a long term movement towards Labour in the North, in Scotland
and in the most urban areas and towards the Tories in the rest of England
and in rural areas, and that this pattern persisted in 1983, sharpening even
further the socio-geographical cleavage between the two major parties.29 Out
of the 186 seats in the southernmost regions outside Greater London, Labour
won only Bristol South, Ipswich and Thurrock. So, there was a Tory Britain
and a Labour Britain,30 and, though the national net swing from Labour to
the Conservatives was about 6 per cent, what had once been the traditional
pattern of a largely uniform swing with variations evenly spread about the
average did not apply in 1983.31 That said, though, the Study observed that
since mass suffrage came in, the Conservative lead of 14.8 per cent over the
second party obtained in 1983 had been matched only in 1924, 1931 and
1935.32 While recognizing the contribution made to the success of the Con-
servatives in the 1983 Election by the demoralized and divided Opposition
that the Tories faced,33 Bruce-Gardyne, recalling that ‘the mixture of distrust,
dismay and even contempt with which [Mrs Thatcher] was regarded in the
salons had hardly been diminished by four years’ experience’, gloried in the
‘victory of the backwoods over the bien pensants’.34
The one thing that could not be said about British politics during the
1983–87 Parliament was that it was uneventful. The IRA came close to mur-
dering Mrs Thatcher at the time of the Party Conference in 1984. ‘Jane told
me that there had been a huge bomb at Brighton, the hotel had been all but
demolished’, Clark wrote in his diary for 12 October 1984,
They had ‘got’ [Norman] Tebbit, [John] Wakeham, Tony Berry, various dig-
nitaries. Amazing TV coverage. The whole façade of the hotel blown away.
Keith Joseph (indestructible), wandering around in a burgundy coloured
dressing gown, bleating. The whole scene was one of total confusion,
people scurrying hither and thither, barely a police ‘officer’ to be seen.
Mrs T had been saved by good fortune (von Stauffenburg’s suitcase!). Had
she been in the bedroom she would be dead. But what a coup for the
Paddys. The whole thing has a smell of the Tet Offensive. If they had
just had the wit to press their advantage, a couple of chaps with guns in
the crowd, they could have got the whole Government as they blearily
emerged – and the assassins could in all probability have made their
getaway unpunished.35
So, Mrs Thatcher lived on to defeat the year-long strike in the coal-mining
industry that the National Union of Mineworkers had launched in March
1984. ‘Undoubtedly it was her leadership which saw to it that in the con-
frontation with the miners during 1984–85 it was not the Government which
fell, as it had done ten years before’, James Prior wrote, while feeling the need
to add that ‘I only wish that she had brought the same resolution and man-
agement skills to reduce the worst unemployment of the century.’36 Though
Prior had departed by then, divisions within the Cabinet persisted, and what
came to be called the Westland Affair caused Mrs Thatcher difficulties, this
time mainly emanating from Michael Heseltine, who eventually resigned.
‘Michael has always had this slightly scatty side’, Clark wrote, ‘It is the only
half endearing trait that he possesses. He is the man who pushed further out
the definition of folie de grandeur than it has ever been hitherto.’37 The West-
land Affair excited the political class and one prominent observer convinced
himself that it was nothing less than ‘an unexploded bomb’ which continued
to lie in wait to destroy the Conservative Government.38 Quite why anybody
should believe that, in a General Election to be held many months later, a
‘scandal’ with no sex, spies or financial corruption should undermine the
Tories remained an unsolved mystery.
The outcome of the 1983 Election had meant that the Labour Party needed
a 12 per cent net swing in its favour to obtain an independent majority
at the next Election, which meant that it had to emulate its feat of 1945,
but without two Parliaments’ worth of swing and a World War to help it.
Most commentators, though, carried on much as before, treating the Con-
servative Ascendancy as if it was solely the consequence of a succession of
‘accidents’. The Tory majority was supposed to be ‘fool’s gold’, especially as
Mrs Thatcher, once said to be ‘unelectable’, was now defined as not being
‘re-electable’, except, of course, without, as might be guessed, the explicit
‘U-turn’ in economic policy, and change in personal demeanour, which
would be the necessary ‘confession’ of the political error of her ways. The
Alliance was widely believed to be the means of bringing the Conservative
Government down, despite the grave handicaps it faced under the existing
electoral system. It most certainly could be said of a period as late before
the 1987 Election as the summer of 1986 that ‘anybody who wrote then
that the Conservatives still had a credible chance of winning the Election
tended to be seen as eccentric. It was the conventional view that the Govern-
ment was all but finished.’ So wrote the prominent political commentator,
Hugo Young. Plainly bemused by what seemed to be happening, not least
to several years of mistaken political analysis on his part, Young writing this
weeks later, added that ‘the collective wisdom now says the opposite and it
is just as unreliable. One should take seriously Ministers’ belief that they will
win but more seriously their admission that they cannot understand why.’39
Ministers, though, could not be expected to do the political analysts’ work
for them. Few academics fared better than the political journalists. As late
as March 1987, one of them wrote that the Conservatives were ‘boxed into
a rather uncomfortable corner’. To gamble on Mrs Thatcher winning three
Elections in a row for the Tories was ‘betting against hundreds of years of
history’, not least because of ‘an iron law of British politics that the Liber-
als/Alliance always gain ground when running against a Tory Government’
which meant that ‘it would be fairly remarkable if the Alliance does not make
a further advance this time – and it is difficult to see how this could hap-
pen without it either overtaking Labour. . . or stealing enough votes from the
Tories to make Labour the biggest party.’40 That amounted to two forecasts
instead of one, and, unfortunately, both of them were wrong. Even closer to
the 1987 Election, a distinguished political biographer predicted a June 1970
upset as being on the cards. All that was needed was for the Labour Party to
display ‘a Heath like obstinacy’ in presenting ‘its overwhelmingly good case
on jobs and unemployment’, thus exploiting ‘the most important domestic
issue of all, and the Conservatives Achilles’ heel’.41
When it came, the 1987 Election proved to have much the same outcome as
those who had studied the 1983 results dispassionately would have expected,
always provided that the NUM was crushed in the long anticipated coal strike:
a reduction in the Tory majority in the House of Commons from the ori-
ginal 144 to about 100, which estimate allowed for a minor Labour revival
and for the Alliance to stay much the same. ‘Although our analysis pointed
to a majority of 98 I told the others that my central forecast was for one of
50 to 60’, Norman Tebbit, the Party Chairman recalled, ‘The overall arith-
metic had always been pretty clear. If we could achieve 40 per cent or more
of the votes and lead Labour by 3 per cent then we would achieve another
victory. If our share fell below 38 per cent then at best it would be a hung
Parliament’.42 The Conservative manifesto had a title this time: The Next
Moves Forward. ‘Together we are building One Nation of free, prosperous
and responsible families and people’, Mrs Thatcher declared,43 possibly, for
once, with a touch of humour. ‘Our goal is a capital owning democracy of
people’ in which ‘ownership and independence cease to be the privileges of
a few and become the birthright of all’, the manifesto stated, ‘In this way
One Nation is finally reached not by a single people being conscripted into
an organized socialist programme but by millions of people building their
own lives in their own way.’ Of course, home ownership was ‘the founda-
tion stone of a capital owning democracy’.44 The manifesto asserted that ‘no
previous Government with eight years of office to its credit has ever pre-
sented the electorate with such a full programme of radical reform’,45 but
The Next Moves Forward also warned about going back to the disorder of the
last Labour Government and the Winter of Discontent which the benefits
of Conservative rule were supposed to have made seem like ‘the history of
another country’.46 Though the man had never fought a contested election,
Tebbit appointed Lord Young as Director of Communications to deal with the
newspapers and to supervise the Prime Minister’s itinerary. Political friends
told Tebbit that he was mad to give any colleague positions of such influence,
but Tebbit intended to leave the Cabinet anyway. As it happened, the press
corps got the impression of a campaign going badly wrong, but the informa-
tion reaching Conservative Central Office said otherwise.47 With one week
to go, on 4 June 1987, what Young had learnt from Alistair McAlpine was
always going to be ‘Wobbly Thursday’ arrived: ‘You see, they’ll be above us
on that day – they were in ’79, they moved to half a point above us, and
in ’83 that was the day when the campaign was going wrong and we met
and thrashed it out and changed this and changed that – it will all work
out all right, just you wait and see.’48 According to his own account, Young
panicked: ‘I got [Tebbit] by the shoulders and said “Norman, listen to me,
we’re about to lose this . . . Election! You’re going to go, I’m going to go, the
whole thing is going to go. The entire Election depends on [Mrs Thatcher]
doing fine performances for the next five days”.’ Later that day, Young was
handed opinion poll findings which showed ‘44 Conservative, 34 Labour, 20
Alliance! Obviously, yesterday’s poll had been a rogue. Immediately, I knew
we had the Election won and everything was going to be all right.’49
The Election was held on 11 June 1987, and of those registered to vote
only 75.3 per cent did so, though this was typical of British turnouts over
the previous quarter of a century, and an improvement of 2.6 per cent on the
1983 figure,50 while still 0.7 per cent down on that of 1979. The Conservatives
obtained 42.3 per cent (13,763,066) of the votes cast and won 376 seats. The
Labour Party secured 30.8 per cent (10,029,778) of the votes cast and won 229
seats. The Alliance attracted 22.6 per cent (7,341,290) of the votes cast and
won 22 seats.51 The Welsh and Scottish Nationalists obtained 3 seats each,52
and 17 MPs were elected for other parties in Northern Ireland.53 ‘As I drove
back to Central Office, it was clear to me that we had won a great victory’,
Tebbit later wrote,
The BBC was still deluding itself into believing what it wanted to believe,
that we were sliding to defeat, only conceding our victory as its best polit-
ical journalists telephoned their editors, telling them the unwelcome truth
and imploring the Corporation to stop making a fool of itself. . . Friday
passed in something of a haze, but at least it was clear that we had won
a third victory on a magnificent scale. . . we had held our overall share of
votes to within a fraction of one per cent of the 1983 result.54
The Nuffield Study pointed out that ‘although the Conservatives had lost a
net 20 seats compared to 1983, their final majority of 102 over all other parties
was the second largest since 1945’.55 During the campaign, Mrs Thatcher
overheard a remark, almost inevitably from a BBC source and on the basis of
an opinion poll, ‘that’s it: she’s downhill all the way now’.56 As a prediction of
the 1987 Election result, which was what was intended, this was nonsense,
and Mrs Thatcher naturally rejected suggestions that her conduct of what
was ‘not. . . a happy campaign’ merited ‘being carried off to one of new NHS
hospitals by the men in white coats’.57 That said, though, the Conservatives
were in the position that they could only throw away victory and all that
was in doubt was the scale of it, and there was nothing to be gained from
worrying about opinion polls which had shown only too often their failings
as predictive devices, and not surprisingly so, given that they were at best
imperfect messages from a largely uninterested electorate to the politically
obsessed with neither side of the equation having much in common. Even the
loyal Tebbit wrote of ‘reports on public opinion [that] did not tally with ours
[that] undermined the Prime Minister’s confidence’, and about her needless
‘unease’ and ‘anxiety’ about such findings.58 Mrs Thatcher made much of
her understanding of what people wanted, especially her people, but her
conduct at the time of the 1987 betrayed an excessive nervousness about
the behaviour of the electorate. With Mrs Thatcher acting like this in the
face of what she should have known was a certain victory, Whitelaw could
be forgiven for concluding, ‘That is a woman who will never fight another
Election.’59 She was not to be given the choice.
A one major party electoral model, 1979–90
‘Until recently it was a commonplace of political commentary that Britain

had a two-party political system’, a political analyst wrote in 1979, adding
that ‘this belief can no longer be maintained. Britain no longer has a simple
two-party political system. The old concept must be replaced.’ Of course,
this was ‘tilting at a straw man’,60 that familiar tactic of the revisionist writer,
because models of British political party activity were bound to differ in valid-
ity at different times. There were two major political parties in Victorian
Britain in the form of the Liberals and the Conservatives, though they were
subject to divisions in their ranks, and the Irish Nationalists and then the
Labour Party eventually intruded upon this arrangement. Though, accord-
ing to George Dangerfield’s famous thesis expounded in The Strange Death of
Liberal England, the years 1910–14 witnessed the demise of the Liberals as a
governing party, it was the Conservative Party that was not only excluded
from office at that time, but which seemed blocked off from it for the foresee-
able future by an informal alliance between the Liberals, Labour and the Irish
Nationalists. ‘The [First World] War hastened everything – in politics, in eco-
nomics, in behaviour – but it started nothing’, wrote Dangerfield,61 before
taking out intellectual life assurance by subscribing to ‘the forward march
of Labour’ interpretation of British politics. Thus, among other factors, the
bitter split between Lloyd George and the Asquithians from 1916 onwards
was supposed to matter less than the advent of the Labour Party because
its rise meant that the Liberals were ‘no longer the Left’.62 Three-party pol-
itics characterized the 1920s, with the Liberals condemned to third place
and, at best, to holding the balance in the House of Commons, in which
Chamber only the Tories could expect to have an independent majority. The
events of 1931 ensured that British politics in the 1930s had the character
of a one major party system, with that party being the Conservatives, who,
of course, attracted allies. That dominance did not survive the Second World
War, which was followed between 1945 and 1974 by Britain having a two
major party system – Labour and the Conservatives being well matched –
though this arrangement was subject to increasing incursions by the Liberals,
the Scottish and Welsh Nationalists, and then the Ulster Unionists and their
Irish adversaries. The notion of multi-party Britain was a creature of the 1974
political crisis, as well as of the reality that several parties now had MPs on
a regular basis, and of the electoral plight of the contemporary Labour Party
and its Government. The conventional wisdom was that no single party was
supposed to be able to command sufficient electoral support to override the
minor parties’ block of seats and govern effectively. That what was designed
to be a majoritarian electoral system was deemed unlikely to yield a House
of Commons majority led to a lot of talk about the need for proportional
representation. Once rid of Heath, however, the Conservative Party was soon
back in serious contention for office, and from the 1979 Election onwards
they were the dominant element in a one major party political system. The
Tories in the 1980s did not have the authority to command the system as
they had done in the 1930s, though they still had too much strength for
their opponents as late as 1992.
That said, though, the Conservatives could no longer boast that they were
the only party with Parliamentary representation in all four countries of the
United Kingdom, which made them the only national party. That boast
tended anyway to have a hollow ring to it in relation to Wales, in which
country the Tories failed to win more seats than Labour even in 1931, and
what was well-described as the English Nationalist Party had traditionally
obtained its votes under the Unionist label in Scotland and Northern Ireland.
Heath’s suspension of the Stormont Parliament severed the link with the
Ulster Unionists, and alienated the Protestant vote in Scotland too. The Con-
servatives had been the only party since the Second World War to obtain a
majority of votes and seats in Scotland, which feat they achieved in 1955,
after which a decline had set in which meant that the Tories secured only
31.4 per cent of the Scottish vote in 1979, 28.4 per cent in 1983, and 24 per
cent in 1987.63 There were many and various explanations of this decline,
with Mrs Thatcher herself finding that ‘the old Glaswegian Orange founda-
tions of Unionist support which had in earlier decades been so important
had irreparably crumbled’.64 Commonly thought to be important too was
that the end of the British Empire had undermined one of the more telling
advantages of the Union between England and the other countries of the
United Kingdom, namely economic self interest and the economic advan-
tages of world status.65 Then again, the discovery of North Sea oil opened up
the possibility of independent Scottish prosperity, given that, even though
under international law it was mainly ‘England’s oil’ following the line of the
border through the oilfield, the oil was landed in Scotland. Scottish nation-
alism flourished as never before, though the Scottish National Party empha-
sized its character when it combined its commitment to independence with
one to ‘Europe’, not being willing, of course, to turn away from a source
of prospective subsidies. Scotland had come to be largely administered by
the Scottish Office and its fellow departments in Edinburgh anyway, and
Mrs Thatcher complained about the scale of public expenditure this caused,
though the Governments she led did not get rid of the Barnett formula inher-
ited from Labour that was designed to ensure higher levels of such spending
on Scotland. This did not save the Prime Minister from having to endure
Scottish Office Ministers portraying themselves as ‘standing up for Scot-
land against me and the parsimony of Whitehall’, when there should have
been ‘the same drive to implement [her] programme north as south of the
border’.66 The reality was, though, that, in her own words, Mrs Thatcher was
seen in Scotland as ‘a quintessential English figure’ and that this was a source
of unpopularity as was the perceived Englishness of the Conservative Party.
She protested that ‘the Tory Party [was] not, of course, an English party, but
a Unionist one’,67 but she took no steps to give the Scottish Conservatives
back their old Unionist name, which had been dropped without advantage in
1965.68 So, despite having been ‘the home of the very same Scottish Enlight-
enment which produced Adam Smith’, Mrs Thatcher recognized that ‘there
was no Tartan Thatcherite revolution’ in Scotland’, despite the fact that ‘pri-
vate enterprise had developed a prosperous and thriving oil industry’ there,
and that also in the 1980s ‘foreign – often high technology – companies
[were attracted] to Scotland and Edinburgh became a prosperous financial
centre. . . Even then, jobs in uncompetitive industry continued to be shed
and unemployment remained higher than in England.’69 Though it could be
argued that a social democratic culture was not dominant in Scotland before
the mid-1970s,70 Mrs Thatcher saw herself as being confronted by a ‘Scottish
Left Wing Establishment’ which, naturally enough, did not share her belief
that ‘more public spending in a dependency culture’ had exacerbated Scot-
land’s problems. The Conservatives were not helped by the fact that ‘about
half Scotland’s population were living in highly subsidized local authority
housing compared with about a quarter in England’.71
So, there really was a Tory Britain and a Labour Britain, and, though the
thesis of books like The Break Up of Britain in the wake of the break up of
the British Empire had yet to be translated into political fact, even in 1979 the
Conservative position in the major Northern cities was poor. The Tories had
just two seats out of eight in Liverpool, one seat out of eight in Manchester,
two seats out of six in Leeds, one seat out of six in Sheffield, and one seat
out of four in Newcastle.72 Following the 1987 Election, of those cities, only
Leeds and Sheffield still had Tory representation.73 ‘If a small State, low taxes,
less intervention, and more choice were right then we should argue for them
and do so without apology’, Mrs Thatcher declared,74 but this was an appeal
to the winners and those who expected to join their ranks, and there were
plenty of actual or prospective losers who wanted something different.
Socialist nightmare: the Labour Opposition, 1979–90
‘The Forward March of Labour Halted?’ proved to be an arresting title for a

tract for the times published by a Marxist historian, Eric Hobsbawm, in 1978.
This ‘forward march’ had begun to falter in 1948. Since then, he argued, there
had been a decline in ‘manual workers in the literal sense of the word’ as a
proportion of the working population, in trade-union membership and in
active membership of socialist societies, and in the Labour vote which he
stated had risen in number and percentage without interruption, aside from
1931, between 1900 and 1951. This ‘halting’ of the ‘forward march’ was
‘ironic’ because the ‘crisis’ even ‘breakdown’ of ‘British capitalist society’ was
at hand.75 If there had been a ‘crisis’ of British capitalism then 1931 had
surely been it, and that a substantial majority of the electorate had voted
for a National Government formed to sustain the private ownership system
was more than an aberration. The Labour vote was actually lower in 1935
than it had been in 1929. The political experience of the Second World War
transformed the Labour Party into a formidable electoral force, which it had
shown little sign of becoming earlier, and the more that its 1945 triumph
receded into the distance, Labour faded, though by no means uniformly and
far from swiftly, and at Elections between the 1945 and 1979 the Party always
polled well over eleven million votes.76 A ‘Forward March’ that did not really
get under way until 1941 and then supposedly ended in 1948 was more of a
historical stroll, and the Parliamentary socialism of the type associated with
Bevan had long since given way to a taste for a more direct route. Marxism
never was much more than powerful criticism of mid-Victorian capitalism. It
was obvious that when it came to prediction, ‘[Alfred] Marshall was right and
[Karl] Marx wrong about the progressive evolution of capitalism.’77 Keynes,
though, had put Marshall’s economic theories to death. Now Keynesianism
was dead. That Marxism was still alive was remarkable. As long before as
1909, from within the Marxist ranks, a personal friend of Engels,78 Edward
Bernstein, a German socialist, had shown that a range of State activity was
ameliorating the lot of the working classes.79 There was no need for ‘a sud-
den catastrophe’, meaning revolution.80 Amelioration took the form of the
conservative Bismarck’s social security reforms, and their British imitations
and development into Welfare State legislation. The Marxists were dismissive
about State social provision, much as they were about working-class self-help
activity within moderate trade unions and co-operative societies, the sup-
posed sin of Labourism. For them, it remained essential to seize power by
revolutionary means. Seizing control of the Labour Party was the first step,
which was not by 1979 a difficult one, because the Right and Centre had
been discredited by the record of the Wilson and Callaghan Governments.
The collapse of Keynesianism, though, undermined the Labour Movement
more generally. For, union power did not just depend on legal immunities,
although these were important and about to be attacked. Union power had
become a creature of the Keynesian order. The unions needed full employ-
ment and, especially in relation to the public sector, they needed the public
expenditure taps turned full on. The politicians of the Keynesian era acted as
if they had little choice, whether from necessity or conviction. Mrs Thatcher
could afford to take a different line. This was not thought to matter early
on. The Conservative victory in 1979 was underrated. Mrs Thatcher was seen
either as a temporary Prime Minister soon to be replaced by ‘the men in
grey suits’ or one forced to change her economic policy, or both. Even if
she persisted with her chosen course, Thatcherism was supposed to be so
demonstrably evil that the voters would have no choice but to turn to the
Labour Party, which could thus go to the Left without paying an electoral
price, with the Left believing, of course, that the majority of the electors
were prospective socialists anyway but had been prevented from recognizing
this by socialization, a pervasive process that only those on the Left had risen
above because they had the true faith. Those without this supposed advan-
tage, though, might well see Thatcherism as being a lesser evil than socialism,
which had the Russian example to live down and one that Mrs Thatcher and
her allies did not hesitate to cite. Further, that the Wilson and Callaghan
Governments had failed to meet socialist criteria was always unlikely to have
been the main reason for electoral rejection in 1979. It did not follow that
imposing a programme from the Left was likely to pay electoral dividends,
not least because this would exacerbate divisions within the Labour Party.
These divisions were already of an order of seriousness that it was reasonable
to assume that a major factor in keeping some on the Right and the Centre
within the Labour Party was knowledge of the fate that of those who broke
with the Party in 1931 to become National Labour.
So, the Labour Party in Opposition was bitterly divided from the outset.
‘The New Left went straight for the jugular’, Austin Mitchell, one of those on
the receiving end, wrote:
Power was to be transformed by transferring it down to the activists. Policy

would be formulated through the wishes of the activists coming up in reso-
lutions passed by Conference, then wielded into a manifesto, not by the
Parliamentary Party which had abused its independence, but by a National
Executive dependent on the Party activists. That manifesto would then
become a binding mandate as the Party was carried to power on it. It would
be forced through by the votes of MPs, disciplined by reselection making

them dependent on the constituency activists rather than on the patron-
age of leaders. With such a discipline there would be no more betrayals,
no more cuts, no more refusal to implement a manifesto. . . To stop [the]
Ramsay Macdonald syndrome assumed to be latent in all leaders. . . the
leader was to be elected not by the Parliamentary Party, which had always
chosen him in the past, but by the outside Party.81
There was little scope for the Baldwinian political style of Callaghan in this
political atmosphere, especially as Leader of the Opposition, but he seemed
to think that only he had the authority with which to deal with the Hard
Left and Militant. Callaghan told Healey that he would stay on ‘to take the
shine off the ball for me’. By the time that the promised eighteen months had
elapsed, Healey found that ‘the leather’ on ‘the ball’ had been ‘ripped away’ as
well.82 Callaghan had long since got to a stage where he could not do a thing
right, and when, in October 1979, the National Executive Committee (NEC)
set up a Committee of Inquiry into inner Party democracy, he was helpless
to prevent a situation in which, as Benn recorded, ‘the Left–Right balance
[was] potentially 10–4 in our favour – a great victory’.83 At a meeting held
at Bishop’s Stortford in June 1980, Callaghan agreed to the compulsory re-
selection of MPs, and to a compromise that eventually meant that the Party
Leader would in future be selected by an electoral college comprising 40 per
cent for the unions, 30 per cent for the constituencies, and merely 30 per cent
for the Parliamentary Labour Party (PLP).84 ‘Jim was not entitled on behalf
of the Shadow Cabinet to make the deal that he did at Bishop’s Stortford’,
David Owen commented, ‘He felt guilty about it and it was a great mistake’.
Like others, Owen recognized that once the electoral college was in place
‘you would close down any possibility of the PLP asserting its sovereignty
over the rest of the Party on some crucial issues of policy. So effectively you
will be saddled with. . . coming out of the European Community. . . unilateral
disarmament, and all the rag tag and bobtail of nonsense’.85 Such ‘nonsense’
was what the activists at least of the Left called socialism, and, for the present,
the issue of the distribution of power in the Labour Party had been settled
in the Left’s favour. The 1980 Party Conference witnessed Benn at the height
of his personal influence as the leading light of the Left. Benn promised
the Conference that there would be ‘three major pieces of legislation within
the first month of another Labour Government’. First, there would be ‘an
Industry Bill which would give us powers to extend common ownership. . .
to control capital movements. . . to provide for industrial democracy.’ This
was to done ‘within a matter of days’. Secondly, a further Bill ‘must transfer
all the powers back from the Common Market Commission to the House
of Commons, also within a matter of weeks’. Then, Benn added, ‘our third
immediate Bill is to do what the Movement has wanted to do for a hun-
dred years, to get rid of the House of Lords and. . . we shall have to do it by
creating a thousand peers and then abolishing the peerage as well’.86 Benn
recorded:
By 5 million to 2 million, we voted to withdraw from the Common Market.

That is sensational, a fantastic victory. In the afternoon we had three great
debates on the constitutional changes [in the Labour Party]. . . it was the
best speech I have ever made in my life. . . there was absolute uproar when
the Conference voted. . . to support the principle of an electoral college. . .
It was a most thrilling day.87
Later, Benn ‘talked to a couple of ASLEF drivers who were full of anti-working
class stories about scroungers on the Welfare State, Pakistanis queuing up for
supplementary benefit, etc. The Press do a brilliant job.’ It did not seem to
occur to Benn that these ‘two old trade unionists’88 were expressing their
own opinions.
Callaghan resigned as Leader in October 1980 to ensure that the contest for
his successor took place under the old rules, and before those on the Right and
Centre who could no longer tolerate what was happening to the Labour Party
took the opportunity to defect, as several were soon to do when forming the
SDP. Once Benn stepped aside to give Michael Foot a clear run on the Left, it
was always likely that Healey would be defeated. Callaghan’s biographer, and
possibly Callaghan himself, found this outcome to be surprising,89 though
the biographer himself remarked on Healey’s rudeness even to likely allies.90
Healey admitted ‘my own insensitivity towards my own supporters’, adding
that ‘though I believe most of the MPs who ultimately joined the SDP voted
for me in the Leadership election, I am certain that several voted for Michael
Foot in order to be able to justify their later defection; their few votes alone
were sufficient to explain my defeat’, and Healey did not hesitate to accuse
some of those who voted against him of cowardice. It was the Wembley
Special Conference in February 1981 that finally decided the composition
of the electoral college in relation to future leadership elections, undermining
the position of the PLP. Healey described the Conference as a shambles, and
the formation of the breakaway SDP followed soon after.91 Healey and Roy
Hattersley and most others on the Right and Centre of the Party resolved to
stay and fight their corner. Though Benn had become ‘absolutely persuaded
that [the Labour Party] was not a Party I would ever be invited to lead, and nor
could I lead it’,92 this did not stop him from engaging in a bitter contest with
Healey for the Deputy Leadership of the Labour Party, which was not settled
until late September 1981. Healey won, obtaining 50.426 per cent of the votes
cast, whereas Benn secured 49.574 per cent.93 That was ‘an absolute whisker’s
difference’, as Benn wrote, attributing the narrowness of the outcome to the
fact that ‘the T and G had decided to vote for me on the second ballot’.94
Though he made much of the need for greater democracy in the Labour Party,
Benn did not add that the union delegation concerned had no authority to
vote for him.95
‘Never underestimate the passion for unity in the Labour Party’, Foot had
said when becoming its Leader,96 quoting Bevan, but the veteran Bevanite’s
brand of Parliamentary socialism was outflanked on the Left on which there
were supposed to be very few enemies. Those who had always wanted the
activists who turned up to Party Conferences to actually make its policy got as
near to that state of affairs as they could have dreamed, with economists from
Cambridge providing them with an economic strategy of a kind. ‘Unemploy-
ment will lose the next Election for the Tories, but to win it for Labour. . . it has
to be with the Alternative Economic Strategy, which is the bricks and mor-
tar of our policy’, Moss Evans of the Transport and General Workers Union
(TGWU) told the 1982 Conference, and this meant
a commitment to the achievement of full employment. . . a sustained refla-

tion of the economy with increased public spending and job creation. . .
the reconstruction of British industry, led by the public sector and
supported by controls on capital and planning agreements. . . overseas
investment control. . . union and government action to shorten the work-
ing week and the working year. . . control of rents, prices and public
transport fares. . . increase in wage levels, pensions and social security and
elimination of low pay. . . a redistribution of wealth and power to working
people.
Not surprisingly, there were to be ‘selective import controls’97 and, in

fact, what was being proposed was an autarkic solution to Britain’s eco-
nomic problems, and by that time a familiar one. Labour’s 1983 Election
manifesto followed suit, promising that a ‘British withdrawal from the
[European] Community [would] be completed well within the lifetime of
the Parliament.’98 Labour promised ‘to act on imports directly’, not least ‘to
safeguard key industries. . . and to prevent excessive import penetration’, so as
not to disrupt ‘our plan for expansion’.99 There was to be a national economic
assessment and a five-year National Plan, involving consultation with both
sides of industry,100 who would be represented on ‘a new tripartite National
Planning Council’, and there was also to be ‘a powerful new Department of
Economic and Industrial Planning’.101 There would be a Price Commission
designed to control inflation,102 though there would ‘not [be a] return to
the old policies of. . . wage restraint’.103 Conservative legislation relating to
industrial relations was to be repealed,104 and there would be ‘a return
to public ownership [of] the public assets and rights hived off by the Tories’
together with public investment in selected industries’.105 Labour’s central
aim was ‘to reduce unemployment to below a million within five years of
taking office’.106 Labour made a plethora of pledges for increased expenditure
on State social provision, and, among those relating to housing, there was a
promise to end tenants having the right to buy council houses, and to give
councils the power to repurchase them.107 It was recognized that ‘our pro-
posals add up to a considerable increase in public spending’,108 but the cost
was not going to be met by increased taxation in the first instance.109 The
House of Lords was to be abolished, and in the sphere of defence policy the
promise was to ‘cancel the Trident programme, refuse to deploy Cruise mis-
siles and begin discussions for the removal on nuclear bases from Britain,
which is to be completed within the lifetime of the Labour Government.’110
Gerald Kaufman described the manifesto as ‘the longest suicide note in
history’,111 and the Labour Party was badly beaten in the 1983 Election,
having to be grateful to keep second place. ‘The full scale of the losses is enor-
mous’, Benn wrote,112 and he was defeated himself, having had the courage
to stay and contest Bristol South East instead of finding a safer seat. Benn, at
least, did not ‘overlook the fact that the inward looking nature of the Party
had done us down’.113
The then rank and file of the Labour Party had got the programme that they
wanted to fight the Election on, and the predictable humiliation that resulted
left the successor to Foot with an unenviable task in restoring the Party’s
fortunes. This proved to be Neil Kinnock, who defeated Hattersley easily in
the Leadership contest,114 with the latter becoming Deputy Leader.115 If Foot
had been the worst Labour Leader since Lansbury, Kinnock, also of the Soft
Left, proved to be the second worst, never able to shed the image of a student
politician, and, of course, an ageing one. As for Hattersley, that he was there
to represent the Right and Centre served as a reminder of the losses that
side of the Party had suffered. As Benn wryly noted, the Kinnock–Hattersley
combination was presented as Labour’s ‘dream ticket’,116 and accepted as
such by many commentators, but the electorate was less impressed. Kinnock
was later to say that ‘I presumed when I was elected in 1983 that I had to play
what I called a “two innings match” to have a hope of gaining victory for the
Labour Party. Frankly, I had hoped our first innings score would be better.’117
After the 1987 Election, the Tory majority was one of three figures again, even
if, as Kinnock noted, it also witnessed ‘a small rise in Labour’s vote [3 per cent],
a 20 seat gain, and the achievement of second place above the. . . Alliance’.118
This was a poor return for a lot of hard work by Kinnock and his allies. In terms
of strategy, Kinnock thought that the policies that clearly had to be altered
in order to broaden and deepen the appeal of the Labour Party fell into three
categories. Firstly, ‘those that could, with decent organization, be changed
without great resistance – for example, the policy on council house sales and
the policy of hostility towards the European Community.’ Secondly, ‘there
were policies that could be changed with greater effort and with the right
timing – for example, the antagonism towards trade union ballots and the
general policy on nationalization.’ Thirdly, ‘and most challenging, there were
policies with particularly deep roots that were, in themselves, benchmarks
of political disposition within the Labour Party. Chief among those policies
was, of course, the whole issue of defence and nuclear weapons.’ Kinnock
acknowledged that on nuclear arms ‘my alignment was. . . plain, public and,
in general political terms, damaging too’.119 Kinnock characterized the pol-
icies and attitudes that the Labour Party had come to be associated with down
to 1983 as ‘impossiblism’.120 Similar sentiments were evident afterwards in
the activities of the Militant organization, and the Hard Left more generally,
in what Tory newspapers predictably called the ‘loony Left’ Labour controlled
local councils. Worst of all, there was the NUM strike of 1984–85, ‘the lost
year’ as Kinnock called it.121 Kinnock could do little for a long time, and much
was made of it when he turned on the Hard Left at the 1985 Conference. First,
he denounced Derek Hatton and the Militant leadership on Liverpool City
Council:
I’ll tell you what happens with impossible promises. You start with far
fetched resolutions. They are then pickled into a rigid dogma, a code, and
you go through the years sticking to that, out-dated, misplaced, irrelevant
to the real needs, and you end up with the grotesque chaos of a Labour
council hiring taxis to scuttle round a city handing out redundancy notices
to its own workers. [Applause]. I am telling you, no matter how entertain-
ing, how fulfilling to short term egos – [continuing Applause] – you can’t
play politics with people’s jobs and people’s services or with their homes.
[Applause with some boos]122
Kinnock later turned on Scargill, the NUM leader, in similar style.123

‘The bravest and most important speech by a Labour Leader in over a gen-
eration’, enthused The Guardian over Kinnock’s attack on Hatton,124 but it
was Mrs Thatcher who really knocked out Hatton and Scargill and the Hard
Left, even if the temptation to compare their fate with that of, say, Marciano’s
opponents would have to be resisted because to do so would suggest that Kin-
nock was a heavyweight by any definition. For all Kinnock’s tactical bobbing
and weaving, more than any other factor it was Mrs Thatcher’s swingeing
Election victories that drove a reluctant and resentful Labour Party to reform
itself. ‘In certain areas [of policy] – defence, economic policy and the Euro-
pean Community – Labour has completely reversed its position since 1983’,
one sympathetic commentator observed in 1992:
For instance, economic policy is now based on fundamentally different

principles. . . the policy in the 1982–3 period was intended to initiate the
transition to socialism. With the Policy Review, the Labour leadership. . .
made a clean break. . . Labour’s goal [was] no longer a publicly owned and
controlled economy. Rather its aim [was] to use the market economy, with
State assistance and intervention where necessary, to provide economic
growth, increasing wealth for all and a just society.125
The continuities were more evident in policies relating to the Welfare State.126
Labour’s volte-face on ‘Europe’ owed something to the belated recognition
that the European Commission could well exercise a form of socialist veto
on a British Conservative Government. It was only after the Commission’s
President, Jacques Delors spelt this out at the TUC Conference in 1988127 that
this was widely grasped in Labour ranks. Labour’s new ‘Europeanism’ may
well have mattered less than Tory protest voting and abstention in the Euro-
pean Parliamentary Election of 1989, but Labour had at last won a national
election of a kind, and the pundits seemed to think that the next British Gen-
eral Election would see the Party returned to office, but they were defeated
once more.
‘A better yesterday’: the Liberals and their allies, 1979–90
‘In his company it was possible to feel that the melancholy decline of British
political life had been momentarily reversed, that Asquith and Balfour were
in the next room, that the world had suddenly again become one of civilized
conversation, remembered history and good food and wine.’ So wrote an
admiring official about Roy Jenkins in the late 1970s,128 and six months into
what ‘liberals’ were not alone in perceiving as the Thatcher Terror, and while
he was still President of the European Commission, Jenkins was given the
opportunity by the BBC to deliver a televised lecture called ‘Home Thoughts
From Abroad’. In this lecture, Jenkins contended that an ‘ossified’ polit-
ical system was largely to blame for Britain’s economic ills. The lecture was
‘an unashamed plea for the strengthening of the political Centre’. Jenkins
believed that ‘the case for proportional representation was overwhelming’.
He was unconcerned that this would lead to Coalition Governments: ‘Do
we really believe that the last Labour Government was not a coalition, in
fact if not in name, and a pretty incompatible one at that? I served in it for
half its life, and you could not convince me of anything else.’129 Jenkins’s
new-found enthusiasm for electoral ‘reform’ and, before or after its introduc-
tion, for the realignment of the political parties, followed from his wish not
merely to have written about Asquith and Balfour but to emulate them and
become the British Prime Minister. This ambition was a legitimate one, but
Jenkins’s analysis that Britain’s relative economic decline was largely institu-
tional in origin and related to the party system was unconvincing. Further,
that governments of ‘the political Centre’, including at various times Jenkins
himself, had presided over this continued decline since 1945 was not much of
an argument for ‘strengthening that ‘Centre’. For the present, Jenkins could
do no more than wait upon events, meaning a split in the Labour Party, and
what was to happen in relation to the Liberal Party.
The Strange Death of Liberal England may well have been the most arresting
title of a book about British politics or its history, but the hard fact was that,
though by the end of the First World War for various reasons the Liberals had
been killed off as a party of government for the rest of the twentieth century,
the Liberal Party itself survived. When a book called The English Ideology was
published in the 1970s, few readers could have been surprised to learn that
the ideology was none other than Liberalism. That the Liberal Party did not
prosper as a result had many explanations, but one of them was that there
were too many Liberals in other parties. Some had defected to the Tories or
to Labour, or not joined in the first place like Jenkins, being well-aware of the
Liberal Party’s electoral prospects. The allegiance of academics proved more
durable, and it was probably not until 1945 that most universities became
the domain of the Labour Party. Keynes and Beveridge were Liberals, and the
Liberals could plausibly present themselves as a Party of ideas down to 1956,
for instance taking some interest in ‘Europe’, and because Clement Davies,
the Leader since 1945, retained a commitment to both sides of Liberalism,
meaning not only individual liberty but also economic liberalism. Davies’s
successor was Jo Grimond, who was Leader between 1956 and 1967. Grimond
gained a reputation as a man of ideas, and the Mont Pelerin Society took him
seriously. The evidence present in his writings bore out Nigel Birch’s remark
to Lord Boyle that Grimond was ‘a silly, lazy Tory’, but Grimond devised a
political strategy for the Liberals, and though he got the timing wrong and
as a result became weary of waiting for it to come off, it was one which
had a future of a kind. Grimond believed the Conservatives to be the domi-
nant party within the system. So, the Liberal ambition became to replace the
Labour Party as the main opponents of the Tories, with disillusioned Social
Democrats coming to see the logic of making common cause with the Lib-
erals. Individual liberty was still in favour as a Liberal theme, but economic
liberalism was effectively abandoned, not least because it was antipathetic
to the subsidy game, leaving the ideological field clear for Powell and later
Mrs Thatcher. To individual liberty was added ‘Europe’ as well as instrumen-
talism, which boiled down to whatever was in ‘liberal’ fashion at the time,
and parochialism, which was the exploitation of local grievances and also,
of course, Celtic ones with subsidies the common cure. In this way, the Lib-
eral Party was translated into a particular form of party of protest, given
especially to protesting about the electoral system and advocating propor-
tional representation in its place, ideally to guarantee it in office as a pivotal
party. The existing electoral system was a formidable barrier for the Liber-
als to surmount, but so was the Party’s lack of an institutional base which
mattered greatly even when the long-awaited allies arrived to complement
it. An important reason why the Conservatives survived the trauma of 1940
as a prospective peacetime party of government when their Prime Minister
was supplanted by another Cabinet Minister and the Liberals did not after
the events of 1916 was that the Tories had an institutional base to sustain
them, having by 1940 long since displaced the Liberals as the party of the
private ownership system. It was in terms of political principle that Keynes
famously described Lloyd George as ‘rooted in nothing’130 but his neglect
of the institutional dimension of politics invited that description too, and it

was not surprising that his proposed Centre Party came to nothing.
‘There has been a lot of talk about the formation of a new Centre Party
[and] some have even been kind enough to suggest I might lead it’, Jenkins
had stated in 1973, ‘I find this idea profoundly unattractive. I do not believe
that such a group would have any coherent philosophical base.’131 This was
true of the Labour Party too, of course, as it had both a socialist tradition and
a social democratic one. ‘The trouble with the social democratic idea is that it
does not stock and does not sell any of the exciting ideological commodities
which various totalitarian movements – Communists, Fascists, or Leftists –
offer dream hungry youth’, Leszek Kolakowski had observed:
It is no ultimate solution for all human misery and misfortunes. It has

no prescription for the total salvation of mankind. It cannot promise the
firework of the last revolution to settle definitely all conflicts and strug-
gles. It invented no miraculous devices to bring about the perfect unity of
man and universal brotherhood. It believes in no final victory over evil.
It requires, in addition to commitment to a number of basic values, hard
knowledge and rational calculation, since we need to be aware of and to
investigate as exactly as possible, the historical and economic conditions
in which these values are to be implemented. It is an obstinate will to erode
by inches the conditions which produce avoidable suffering, oppression,
hunger, wars, racial and national hatred, insatiable greed and vindictive
envy.
According to David Owen, this was ‘the best working definition of social
democracy’,132 and Healey had cited it too,133 and one could see that it was
not necessarily ‘a soft, middle of the road, flabby’ creed,134 or even, as was so
often claimed in its defence and advocacy, a moderate one, as Crosland, no
less, demonstrated both in his behaviour as a Minister, and in the resound-
ing titles selected for books, notably, The Conservative Enemy and Socialism
Now. Though Crosland had no taste for it, the strategy of ‘gradualness’ had
the advantage that the electorate might be fooled over the destination, and,
along with some others, Crosland had fooled himself in the 1950s into believ-
ing that he had thought through the social democratic position in The Future
of Socialism. Twenty years later, with few now believing that the Swedish
Middle Way was the model to follow, and with the Keynesianism on which
Crosland had staked everything discredited, the stage was set for the intel-
lectual aridity that social democrats were to display in the 1980s. When the
social democrats allied with the Liberals, Shirley Williams plaintively asked:
‘Does this mean I’ll have to support proportional representation?’135 As such
support was what was most distinctive about the Liberals, it did, and the
social democrats were too closely associated with the failures in office in the
Keynesian era to make any serious contribution to public policy themselves.
All the social democrats could offer – as Ralf Dahrendorf ruthlessly pointed
out – was ‘a better yesterday’.136
The idea of a Social Democratic Party per se had its origins in discussions
between Jenkins and David Steel, the Liberal Leader, in 1979. Steel later
recorded: ‘Roy and I agreed that some new organization founded mainly
from the Labour Party but linking up in alliance with us would stand the
best chance of “breaking the mould” of British politics. The adhesion of two
or three figures to the Liberal Party, while welcome, would have nothing like
the same cataclysmic effect.’137 The chapter headings of Owen’s memoirs
provided a shorthand version of the various stages in the development of the
SDP – ‘The Gang of Three’, ‘The Limehouse Declaration’, ‘The Launch of the
SDP’, ‘The Alliance’. The Gang of Three had been Owen, Shirley Williams and
William Rodgers and the issue that had brought them together in the first
instance was ‘Europe’. The Gang of Four comprised the same people plus
Jenkins. That these people seemed almost to welcome being tagged as the
Gang of Four was strange, given that the Right and Centre was traditionally
mainstream Labour, and it was the Left that was tearing the Labour Party
apart. This, though, pointed to staying with the Labour Party, and combat-
ing the Left, but, of course, it was one thing to dish out party discipline
when the Right and Centre were running the Party, using at times ‘undemo-
cratic’ union block votes to do this, and another to have to take it. As it was,
there was hesitation about leaving the Party on the part of Mrs Williams and
Rodgers, who had a lot to lose, unlike Jenkins, who had everything to gain.
Owen was unenthusiastic about Jenkins being on board at all, and initially
talked a great deal about the SDP needing to be ‘socialist’. As Jenkins wryly
observed, Owen published two editions of his book Face The Future in 1981,
the second of which excised all mentions of ‘socialism’. Jenkins’s attitude
all along was that the SDP ‘should be radical’, and that there was no need
to ‘cling to the imprecise and misty “socialist” label’.138 The term ‘radical’
lacked precision too. ‘Roy used the SDP’, Owen later wrote, ‘It would have
been more honourable [for him] to have joined the Liberals in 1981.’139 In
return, it seems that Jenkins once remarked that Owen was like the fabu-
lous Upas tree, which destroyed all life for miles around it.140 For all the
contempt and distrust that Jenkins attracted, it was he who braved certain
defeat at the hands of Labour in the Warrington by-election in July 1981,
coming a good second as an SDP candidate with Liberal support Five months
later, Mrs Williams won the safe Tory seat of Crosby, a feat that Jenkins emu-
lated in March 1982 when he won at Glasgow Hillhead. Meanwhile, the SDP,
and the Liberals too, basked in the approval measured by the opinion polls.
‘Go back to your constituencies and prepare for government’, Steel had told
the Liberal Party Conference in 1981,141 and Owen commented that ‘the
Llandudno air was so intoxicating that not even the hardened pressmen at
the Conference laughed’.142 The SDP had four former Cabinet Ministers in
its ranks, which helped it to seem serious, but only one Tory, Christopher
Brocklebank-Fowler joined its ranks in the House of Commons, sent on his

way with the observation that he was ‘not merely Wet, he [was] dripping, you
could shoot snipe off him’.143 At first, only 14 from the Right and Centre of
the Labour Party defected, a figure that later rose to 26. There were those
who thought that the Falklands factor killed off the SDP–Liberal Alliance’s
chances of at least holding the balance of power in the House of Commons
in 1983 or 1984, but Healey’s narrow victory in the Labour Party’s Deputy
Leadership contest probably prevented further defections from its Right and
Centre, and the character of the British electoral system also worked against
the Alliance. Of the outcome of the 1983 Election, in which the Alliance
secured 186 fewer seats than the Labour Party while obtaining only 2.2
per cent fewer votes, Steel commented that ‘this revealed the injustice –
fraud would be a better word – of our electoral system more than ever
before’.144 The Alliance knew all along that the 1983 Election would be fought
under the existing arrangements and not under some form of Proportional
Representation followed by political fraud practised in ‘smoke filled rooms’,
and its boast had been that it would succeed under those arrangements.
So, there were disappointed expectations, and such were the tensions in
the Alliance during that Election, Jenkins, the supposed ‘Prime Minister-
in-waiting’, had to try to assert his authority at the Ettrick Bridge Summit.
Jenkins resigned from the SDP leadership after the Tory victory.145 The
Alliance’s task had never been anything more than finishing at least sec-
ond in terms of votes cast, and, crucially, it had just failed to do this in 1983.
Its overriding task at the next Election of 1987 or 1988 was to do better than
the Labour Party in relation to the popular vote. The leadership of the SDP
passed to Owen, and Jenkins observed that
he became more privately divisive. . . he did not find it easy to work on a

basis of equality or semi-equality. It was not only the obvious strains with
David Steel and with me. Relations with Rodgers, perhaps never close, were
sundered in 1986 [over defence policy], and the saga of Shirley Williams’s
reluctant alienation from Owen, both personally and politically, was a
running feature of the 1983–7 Parliament and the middle years of the
SDP.146
Jenkins also wrote that ‘by the General Election of 1987 there was a
widespread fear that his leadership was taking the SDP and the Alliance not
into the Centre but to the Right of British politics’,147 and he even tried half-
heartedly to blame Owen’s supposed Thatcherism for his loss of the Hillhead
seat at the 1987 Election before conceding the scale of the swing to the Labour
Party in central Scotland and his own failings.148
The critical body blow that sank the Alliance was not delivered by Owen,
but by the Liberal Party Conference in September 1986, when it voted by
a margin of just 27 votes in favour of a non-nuclear defence policy, thus
publicly humiliating Steel.149 At the 1987 Election, the Alliance lost the bat-
tle for second place to the Labour Party, finishing 8.2 per cent behind it in
terms of the popular vote. After this outcome, Steel moved swiftly to obtain
a merger between the SDP and the Liberals. Etterick Bridge was once more
the scene of activity.150 The memberships of the two parties later voted for
a merger, in the Liberal Conference’s case by six to one.151 So it was that
in 1988 the old Liberal Party died, and in its place the following year there
emerged the Liberal Democrats. Owen ploughed on alone with a separate
SDP. At the Bootle by-election in May 1990, the SDP candidate polled fewer
votes than the Monster Raving Loony Party candidate.152 The SDP was fin-
ished; the commentators who had hailed it were nowhere to be seen. More
remarkably, it seemed that Healey got things at least partly right for once,
when, remembering the political effects of earlier splits in the Italian and
French Socialist Parties, he had tried to persuade the Gang of Four to stay in
the Labour Party, later writing of the SDP: ‘I was not surprised by the conse-
quences of that unhappy experiment; right-wing breakaways from left-wing
parties have never come to anything. Their only important effect is to weaken
the influence of common sense in the party they have deserted, and to keep
Conservative Governments in power.’153
3
The Thatcher Cabinets and
Governments, Her Court, and ‘an Old
Whore’ of a Party
‘Where there is error may we bring truth’
When Mrs Thatcher entered 10 Downing Street for the first time on the after-
noon of 4 May 1979, she chose to make a declaration of intent, using words
that she had been led to believe were those of St Francis of Assisi,1 but which
had in fact been the anonymous composition of someone in the twentieth
century:2
Where there is discord may we bring harmony;

Where there is error may we bring truth;
Where there is doubt may we bring faith;
Where there is despair may we bring hope.3
Prior was aghast: ‘Margaret’s choice of words on her arrival in Downing

Street. . . could hardly have been less apt and from her lips were the most
awful humbug: it was so totally at odds with Margaret’s belief in convic-
tion politics and the need to abandon the consensus style of government,
which she blamed for Britain’s relative economic decline over the past two
decades.’4 Mrs Thatcher herself noted that her declaration attracted sarcasm,
but attributed this to the critics only reading the first line of what she said,
arguing that ‘the forces of error, doubt and despair were so firmly entrenched
in British society, as the Winter of Discontent had just powerfully illus-
trated, that overcoming them would not be possible without some measure
of discord’.5 The unifying theme would have been better expressed in terms
of economic liberalism, given that Mrs Thatcher and her allies had ‘faith’
that the greater application of market forces to the British economy would
reverse its decline, and the belief that, once this ‘truth’ had been revealed,
there would be ‘hope’ in place of ‘despair’ about the country’s future. ‘Dis-
cord’ had been present in the Winter of Discontent anyway, and evident
for years before that as the Keynesian economic order had been discredited,
not least by the behaviour of elements within the wider Labour Movement
who were determined to ensure a socialist succession. The ‘harmony’ brought
43
about by market forces would no doubt come at a considerable social cost and
‘despair’ for many and for them not necessarily just in the short run, but the
Keynesian consensus such as it was had been broken and those who thought
like Prior that it could be pieced together again were deluding themselves.
Listening to ‘voices’: the Prime Minister’s court,

her favourites, and her advisers
As she was without the institutional support that a Prime Minister’s Depart-
ment or similar body would have provided, Mrs Thatcher could never have
practised the Prime Ministerial Government that she was accused of, and,
far from creating such an organization, she seemed to glory in the frugality
of the administrative arrangements at 10 Downing Street with ‘its relatively
slender resources and modest surroundings’ as contrasted with ‘the White
House with its 400 staff, or the German Chancellery with 500’.6 Sir Robert
Armstrong served as Secretary to the Cabinet from 1979 to 1988, later tak-
ing on the position of Head of the Home Civil Service, with his successor in
both roles being Sir Robin Butler. Armstrong and Butler were both career civil
servants, as was Mrs Thatcher’s Private Secretary from 1984 to 1990, Charles
Powell, who was a member of the Diplomatic Service, as was Sir Anthony
Parsons and then Sir Percy Cradock, who successively acted as Special Adviser
to the Prime Minister on foreign policy. Cradock, who also became Chairman
of the Joint Intelligence Committee from 1985, wrote that what his appoint-
ment as Foreign Policy Adviser ensured was that there was ‘a second opinion,
and a check for the Prime Minister that the official advice she was receiving
was the best calculated to promote our interests’. Cradock, like Parsons, a
former insider, had no difficulties in dealing with the Foreign and Common-
wealth Office (FCO), in some contrast with another insider, Roger Jacklin,
whom Mrs Thatcher transferred from the Ministry of Defence to act as her
Defence Adviser. Michael Heseltine, as Secretary of State for Defence, effect-
ively prevented Jacklin from doing his job, and the arrangement soon ended,
with Cradock adding defence issues to his brief.7 This episode emphasized the
paucity of resources available to Mrs Thatcher as well as her remarkable level
of tolerance of Heseltine’s behaviour, presumably explained by reasons of
party management. David Wolfson was brought in from the private sector
to act as the Prime Minister’s Chief of Staff between 1979 and 1985, drawing
no salary, and his role was described by Norman Strauss of the Policy Unit as
one of ‘strategic leadership’, concentrating on ‘the big issues. . . that matter’
and ensuring action resulted.8 Sir Derek Rayner was also recruited from the
private sector to be the Prime Minister’s Adviser on Efficiency in Government
between 1979 and 1983, with Sir Robin Ibbs being his successor. Alan Walters
was brought in from academic life to be the Prime Minister’s Economic Policy
Adviser from the beginning of 1981 until after the 1983 Election, returning
The Thatcher Cabinets and Governments 45
later. Mrs Thatcher emphasized how important she found Walters’s advice to
be.9 Like several of the irregulars attracted to Mrs Thatcher’s banner, Walters
was an unusual character, having working–class origins, a Communist father,
and having himself been a Private in the Army.10 Of the other irregulars who
stayed outside the machinery of government, Geoffrey Howe recalled that
Margaret would quite often – more frequently as the years went by – cite
advice she had received from ‘one of my people’ or ‘my people’. It some-
times seemed as though she was Joan of Arc invoking the authority of
her ‘voices’. The Prime Minister was understandably reluctant to reveal
the balance of her telephonic kitchen cabinet. Quite often, I suspect, the
voice was that of Woodrow Wyatt – which she may have thought sufficient
reason for cloaking it in anonymity.11
Wyatt was later described by Mrs Thatcher as ‘a former Labour MP turned

entrepreneur, author, sympathizer, and friend’,12 and Wyatt admitted that
he was ‘platonically’ a bit in love with her,13 writing that ‘the public has not
the slightest idea of what a vulnerable, human woman she is, all motherly
instincts and feminine instincts and charm as well. And wonderful looks
and liveliness’.14 Wyatt recalled that he had ‘gone to Flood Street to talk
to her just after she had become Leader of the Tory Party. I had told her I
would support her because what she was going to do reminded me of Hugh
Gaitskell’.15 This analogy was nonsense. That Wyatt resorted to it seemed to
follow from his belief that the Labour Party was ‘like a Church in which faith
and hope and an irrational belief in the willingness of human beings to be
good are the ingredients of the Gospel’.16 So, for Wyatt, to go on as he did and
urge people to vote Conservative17 and produce an ‘anti-Labour majority. . . of
1931 proportions’,18 because without at least two terms of Tory Government
‘our democracy will be unlikely to survive’,19 was a serious matter. As late
as 1989, Wyatt was still protesting that ‘I am not a Tory’,20 sitting on the
cross benches of the House of Lords, as if this fooled anybody into thinking
that Wyatt was some sort of independent. Wyatt’s fellow peer and another
recruit from the Labour Party, John Vaizey took the Conservative Whip, and
placed on record what his defection cost in terms of personal friendships as
he strove both publicly and privately to sustain Mrs Thatcher in office during
the early years.21 Inevitably, Mrs Thatcher’s band of irregulars were a mixed
bunch, and, for instance, that at one stage Professor Max Beloff, who had
a legion of detractors in his chosen profession, ranked among a self-styled
‘First Eleven’ among her favoured supporters22 could only have pleased the
Prime Minister’s political foes. Nonetheless, among others who rallied to her
cause, in terms of intellect nobody with much sense would write off Hugh
Thomas, Paul Johnson, Kingsley Amis23 or Robert Conquest. Mrs Thatcher
had little admiration at the time for the Angry Young men of the 1950s,24 but,
a couple of decades later, for those whose hallmark was irreverence for estab-
lished opinion, she offered a cause. Introduced to Mrs Thatcher by Conquest,
and in the company of Julius Gould, apparently ‘the only right wing sociol-
ogist in captivity’, Amis seems to have fallen politically in love.25 That Amis
had been a member of the Communist Party from 1941 to 195626 tended
to be glossed over, not least by himself,27 and Mrs Thatcher recorded her
gratitude for Amis’s ‘support in the culture wars of her Administration’.28
Of the defectors to the Tories, the departure of Hugh Thomas was the one
that caused most dismay among those left behind. Thomas had become a
member of the Conservative Philosophy Group, which had also included
Anthony Quinton, John Casey and Roger Scruton, and, to the bemusement
of one embittered biographer, Mrs Thatcher even attended meetings to plun-
der their ideas, leading him to conclude that as a user of intellectuals she
was unequalled.29 Those who gave Mrs Thatcher advice especially in the
defence and foreign policy field, besides Thomas and Conquest, included
George Urban, Michael Howard, Leonard Schapiro, Hugh Seton-Watson,
Brian Crozier, Gordon Craig, Fritz Stern, Norman Stone and Timothy Garton
Ash.30 Urban observed that
Margaret Thatcher’s requests for advice or speech writing assistance were

striking by their informality. A broadly shared political platform and the
right personal chemistry were enough to induce her to entrust her unceas-
ing search for fresh thought to a small number of private sympathizers.
The more detached these were from Whitehall, and the more unversed in
the ways of the Conservative Party, the more she seemed to value their
judgement.31
Urban admired ‘her willingness – indeed her compulsive desire – to be among

intellectually sharp people, whether of agreeable or contrary opinions, in bad
times as well as good ones. I don’t think Baldwin, or Macmillan, or Wilson, or
Callaghan, or Douglas-Home or even Heath held seminars to broaden their
minds and take advice from unorthodox quarters. They were too grand or
too complacent and frequently both.’32 In office, and especially at first, Mrs
Thatcher still got some intellectual support from the Centre for Policy Studies,
primarily through its Chairman, Hugh Thomas, and, though Alfred Sherman
was eased out in 1983, Mrs Thatcher had previously tolerated Sherman pro-
viding her with confidential memoranda as well as acting as a severe public
critic of the Government’s performance. She was said to enjoy his scathing
attacks on her colleagues and Party officials.33
Once the Tories were in office, Sir John Hoskyns and Norman Strauss had
left the Centre and moved directly into Whitehall, with Hoskyns heading the
Prime Minister’s Policy Unit between 1979 and 1982, eventually to be suc-
ceeded in that role by Ferdinand Mount, John Redwood, and Brian Griffiths.
Hoskyns defined the role of the Policy Unit in his time as being ‘the unending
task of clarifying, again and again, as precisely as possible and with small
shifts of perception and insight, what it was that the Government was try-
ing to accomplish in its critical first term, and then checking whether the
necessary actions looked likely to work in practice’.34 In 1979, the Policy
Unit ‘initially consisted of Norman Strauss and myself’, Hoskyns recalled,
‘We were extremely sharply focused and we did not really need six people to
help the Prime Minister screw it up, if two people could prevent her doing
so.’ That said, though, Hoskyns soon added Andrew Duguid, a high flyer
from the Civil Service, to the Unit,35 and he turned out to be ‘as impatient
with Whitehall’s defeatism’ as Hoskyns himself,36 and, as he was eventually
to leave the Service, presumably other behaviour too, such as when on a
visit to a major department he was asked: ‘This fellow Hoskyns, do we tell
him what we tell everybody else, or do we tell him the truth?’37 Hoskyns and
Strauss thought that ‘stabilization of the government finances (not of the real
economy, that would come later) was all that we should be trying to achieve
in the first four or five years’. This meant dealing with ‘the linked prob-
lems [of] inflation; inflationary expectations; nationalized industries, which
were . . . putting prices up all the time and at the same time turning to the
Government for massive subventions; trade union expectations in the face
of inflation, which gave them a completely new role, a completely destabiliz-
ing role; public sector pay generally; funny money budgeting.’38 The presence
of Hoskyns and Strauss in the Policy Unit ensured no more than what they
deemed to be the best of business thinking as well as that of the Centre for
Policy Studies was brought to the attention of Mrs Thatcher and her allies in
the early, much troubled years of the Government. Both were gone by 1982.
‘I left . . . because I really felt that we had done everything we could in the
first term’, Hoskyns wrote, ‘The second term would require a bigger Policy
Unit and a complete rethink. I thought that it would really be about two
things: privatisation. . . and the Welfare State.’ To judge from the tone of his
memoirs, and despite his admiration for and good working relations with
the Prime Minister herself, Hoskyns may simply have tired in his dealings
with the other Ministers of being regularly reminded that ‘words are deeds
for politicians’.39 There was some talk of Hoskyns being made head of the
Central Policy Review Staff (CPRS), a body that reported to the Cabinet, but
this came to nothing,40 and Mrs Thatcher got rid of that body after the 1983
Election. Some months before, a document drawn up by that Staff proposing
what Nicholas Ridley called ‘extravagantly savage cuts in public spending for
the future, based on imperfectly worked up plans to transfer burdens from
public to private spending in health, education and the social services’ had
been leaked by a Cabinet Minister.41 ‘We were to be plagued by talk of secret
proposals and hidden manifestos up to polling day’, Mrs Thatcher recalled,
and, as she thought that the CPRS had become no more than a freelance
‘Ministry of Bright Ideas’, she abolished it, believing that ‘a Government
with a clear sense of direction does not need advice from first principles’.42
Mrs Thatcher then doubled the number of staff in her Policy Unit, and its
then Head, Ferdinand Mount, later wrote that ‘her fellow Ministers shed
few tears’ about the demise of the CPRS, with the relevant point being that
‘the Cabinet did not feel itself equipped to discuss difficult, long-term pol-
icy options; the fear of political embarrassment was too overwhelming to
run the risk of being seen to examine such bleeding raw material. Implicitly,
while continuing jealously to think of itself as the supreme executive body,
Cabinet recognizes that it is equipped only to approve dishes that are at least
three quarters cooked; it is not itself the cook, and the Cabinet Room is not
the kitchen.’43
Believing that politics was about more than presentation except in the very
short term, Ridley was one who thought Mrs Thatcher placed too high a value
on presentational skills when making promotions to the Cabinet, observing
that ‘those who got a consistently good Press, or who excelled on television,
found their futures assured, no matter that sometimes the Press praised them
for apparently having different views from her’s’.44 According to Bernard Ing-
ham, a civil servant who acted as her Chief Press Secretary for eleven years
and one month from October 1979 onwards, wrote that ‘what mattered to
Mrs Thatcher was policy. If she could get the policy right she believed that pre-
sentation would more or less take care of itself’.45 Nonetheless, Mrs Thatcher
felt that she needed ‘this tough, blunt, humorous Yorkshireman’ who ‘never
let me down’,46 and Ingham – ‘Yorkshire Rasputin’47 – did well to choose the
title Kill The Messenger for his memoirs, there being no shortage of would
be assassins, mostly among those journalists who worked for the BBC and
the ‘quality’ newspapers. Conservatives at this time routinely referred to the
B.B.C. as the Bolshevik Broadcasting Corporation, and it would be naïve to
believe that an organization of that importance and size would be free of
Soviet agents and fellow travellers. That said though, the dominant tone of
the BBC’s political coverage would be best described as liberal and radical
but not socialist, which was thought by his biographer to be the outlook of
Hugh Carleton Greene,48 whose behaviour as Director General in the 1960s
undermined what remained of the BBC’s reputation for impartiality. As one
of its better journalists later wrote, ‘the BBC’s assumptions are more pro-
gressive, or trendier, or mildly more radical, than. . . [the] more conservative
country. . . it serves’, though it must have been with tongue in cheek that he
maintained that ‘the bias is mostly unconscious’.49 Ingham’s own line was
that the BBC was simply anti-Government, whoever was in office. Ingham
found that the makers of supposedly serious television programmes ‘went
on a lot about their responsibilities to society, the nation, the viewers, the
truth’, but it was really about fat salaries and ratings, and producing material
‘which challenged authority because agreeing with it makes for boring televi-
sion’. Then again, Ingham agreed with the view that current affairs television
and, to some extent, the ‘quality’ newspapers had attracted a generation of
journalists who had ‘Watergate on the brain, and think they could be the
next Carl Bernstein, if only they were encouraged to betray every confidence,
violate everybody’s privacy and read every top secret document’.50 Socialist
journalists working for Conservative newspaper owners had been one expl-
anation of the bitter tone of British journalism in the past, but Ingham had
only praise for the tabloid journalists he had to deal with because they had no
wish to change the world, only to get a good story. As Ingham himself recog-
nized, only The Daily Mirror of the tabloids could be counted as an opponent
of Mrs Thatcher.51
‘Where there is discord’: the early Thatcher Cabinets
‘When the time comes to form a real Cabinet, I do think I’ve got to have a Cab-
inet with equal unity of purpose and a sense of dedication to it’, Mrs Thatcher
had stated shortly before becoming Prime Minister, ‘It must be a Cabinet that
works on something much more than pragmatism or consensus. It must be a
“conviction” Government . . . We’ve got to go in an agreed and clear direction.
As Prime Minister, I couldn’t waste time having any internal arguments.’52
Mrs Thatcher also stated at the beginning of the first Government she led,
‘give me six strong men and true, and I will get through’, and she added: ‘Very
rarely did I have as many as six.’53 To some extent, this was her own fault,
since when it came to choosing Cabinet colleagues she made some strange
selections, not least Lord Young, whom, she believed, ‘understood how to
make things happen’,54 and of whom she was reported to have said that
‘others bring me problems, David brings me solutions’.55 Nicholas Ridley, a
loyalist, correctly thought that Mrs Thatcher showed ‘an uncertain touch in
selecting, promoting and dispensing with people at the highest level. This
was her chief weakness. She hated sacking people, and seemed to take too lit-
tle care in selecting them’.56 Thus, ‘she failed to promote early enough many
of the bright young Members who would have supported her; she instead pro-
moted many who were antipathetic to her views’.57 Of course, Mrs Thatcher
could not just promote economic liberals because she had to sustain the Con-
servative coalition, and, early on, in particular, there were only too many
prominent High Tories that she had to find places for in the Government.
That said, though, the composition of the Cabinets she led bore out Ridley’s
analysis rather than the application of a ‘one of us’ test, and the number of
leaks of confidential information from the Cabinet was evidence of disloyalty
on the part of several Ministers. ‘Every Prime Minister needs a Willie’, Mrs
Thatcher memorably said of Whitelaw,58 who was Deputy Prime Minister to
her all the way down to early 1988 when illness forced his resignation. The
general opinion was that Mrs Thatcher then lost a valued counsellor,59 and
she remarked herself on his loyalty.60 Ridley thought that ‘Whitelaw’s sup-
port for Margaret Thatcher in the early period of her Premiership was vital
to her survival. Later his influence was crucial in some of the most difficult
moments, such as the Westland crisis and the Libyan bombing decision.’61
Nigel Lawson said of Whitelaw that ‘certainly the fact that there was some-
body of his stature who discussed things with her did help matters; I think
that the process of government definitely deteriorated in the third Thatcher
Government after Willie Whitelaw had departed’. Lawson came to believe
that ‘an institutionalised Willie’ was what was needed,62 which was why he
advocated ‘the creation of a genuine Inner Cabinet’.63 Much of this praise for
Whitelaw was no more than confirmation that, to be successful, every Prime
Minister needs an able number two in his or her Cabinet.
‘In many respects, it was Willie Whitelaw’s Cabinet that [Mrs Thatcher] first
appointed’ in May 1979, according to Ridley,64 who observed: ‘To me, and to
my friends, it was always inexplicable why she appointed to her first Cabinet
so many people who didn’t share her ambitions or believe in her analysis
of the nature of the cancer eating into the heart of Britain. . . the Cabinet
was packed with supporters of the old consensus, Heathite policies.’65 Heath
himself was said to have had hopes of being made Foreign Secretary, but
the most he got was the offer of being Ambassador in Washington, which,
remembering Churchill’s treatment of Halifax in 1940, Heath took to be ‘a
clear indication that [Mrs Thatcher] wanted me out of the way’, and refused
the post.66 Even without Heath’s presence, Prior certainly thought that ‘the
balance of the Cabinet looked better for our wing of the Party than I had
dreamt possible’. Prior noted that
the composition of the economic team at the Treasury and the other eco-
nomic departments obviously showed that she was going to have her own
way as far as she possibly could. Margaret’s main supporters at the out-
set in Cabinet [included] Geoffrey Howe, her Chancellor, Keith Joseph
at Industry, John Nott at Trade. . . and John Biffen as Chief Secretary to
the Treasury – not a very impressive bunch. . . The dissenters in the Cab-
inet included [Lord] Carrington at the Foreign Office, [Prior himself] at
Employment, Peter Walker at Agriculture. . . Michael Heseltine at Environ-
ment, Norman St John Stevas as Leader of the House [of Commons], and
[Sir Ian] Gilmour as Lord Privy Seal.67
This was ‘a Cabinet of Conflict’ as one of her supporters called it,68 though
Mrs Thatcher’s willingness to have a Cabinet that was ‘a broader church’
than Heath had tolerated,69 did not mean that she always consulted it. Peter
Walker, who served for eleven years in Mrs Thatcher’s Cabinet, observed:
She did develop a system of taking decisions by groups of Ministers rather

than the full Cabinet. I do not think she did it to exclude those Minis-
ters who had different views, though some believe this is precisely what
she did on economic issues. This was a false accusation. She frequently
put me in groups when she must have suspected that I would challenge
the prevailing line. She did it to get the Ministers who were affected by
an issue to come to a conclusion quickly. A failing in the system was
that if you read of a decision in which you had taken no part, you had
no sense of the Cabinet’s collective responsibility. . . Ted Heath’s method
of having every Cabinet committee report to Cabinet meant that every-
thing came to Cabinet. . . Under Margaret, that process had gone. There
were some occasions when issues went to Cabinet committee and then
to Cabinet, but not the majority. It was an important constitutional
change.
Walker recalled that Heseltine and himself had only learnt from journalists
about the Government’s abandonment of exchange controls in November
1979.70 When Secretary of State for Trade, Nott’s recollection was that he
spent more time on the Economic and Overseas and Defence Committees
of the Cabinet than he did in his department, or, for that matter, the full
Cabinet, where ‘virtually no decisions’ were taken about economic policy,
only ‘perfunctory exchanges of view’. Instead, ‘much of [the Cabinet’s] time
was. . . taken up with hearing from the Foreign Secretary about various irrele-
vant happenings around the world and in deciding the following week’s
Parliamentary business’.71
‘Margaret Thatcher couldn’t trust her Cabinet to keep matters to them-
selves’, Ridley wrote in defence of her manner of proceeding,
No wonder things could not be discussed there: too often what was dis-
cussed appeared accurately in the newspapers next day. It was the members
of her own Cabinet who reduced their influence and importance by sim-
ply not being sufficiently trustworthy for her to have confidence in them.
Can it be any wonder she preferred small groups from which the leakers
could be successfully excluded? This continual problem was one of the
reasons for her style of government. Towards the end, she was reduced
to announcing all important decisions on Thursdays. She would clear the
decisions through Cabinet at the weekly morning meetings, and have
them announced that afternoon in the House. That way the leaks pre-
empted little or nothing becoming less worthwhile and therefore less
frequent. The irony [was] that some of those who complained about her
style of government were almost certainly among the leakers.72
Another Thatcher loyalist, Nott saw things rather differently. ‘It seemed as
if we lived in a world in which collective responsibility lay with us, but not
with her’, Nott wrote:
Throughout the first Thatcher Government the internal atmosphere

was poor. This was caused not only by genuine disagreement over
philosophy and policy, mainly in the economic domain, but also by indis-
cretion and background press briefing. Both sides were responsible for
[this] but the principal responsibility for the bad blood created by leaks
and gossip undoubtedly lay with No.10 Downing Street. Politics being the
life blood of Margaret Thatcher, she had an insatiable urge to gossip among
her immediate circle about her Ministers – their attitudes, their failings,
and what she could do about them. It was extraordinary how so many dis-
agreements about policy were personalized and found themselves into the
pages of the press. . . This practice was a major stain on the first Thatcher
Administration. . . If one compares the unending flow of press tittle tattle
and malice flowing from inside the Thatcher Government with the Heath
and Major Administrations, it is clear where the responsibility lies.73
Of Mrs Thatcher’s first Cabinet, Walker wrote that ‘we were particularly
divided over the 1981 Budget’, he was describing a situation in which ‘an
important proportion’ of its members ‘felt the Budget was too deflation-
ary with a recession setting in’. Walker, Prior and Gilmour contemplated
resignation, but thought better of it.74 The balance of opinion within the
Cabinet had been slightly changed in January 1981 when St John Stevas
was dismissed, and Leon Brittan, an economic liberal, was brought in as
Chief Secretary to the Treasury, his firstover- promotion. September 1981 wit-
nessed a critical recasting of the Cabinet. In came ‘the formidable Norman
Tebbit’, as Mrs Thatcher called him, in place of Prior at Employment,
who was despatched to run Northern Ireland. The Prime Minister pro-
moted ‘the immensely talented Nigel Lawson’ to become ‘a highly successful
Secretary of State for Energy’. This promotion gave Mrs Thatcher ‘great plea-
sure’, although probably less than the opportunity to dismiss Ministers like
Gilmour, who displayed resentment at the decision. Of another Ministerial
casualty, Mrs Thatcher wrote: ‘Christopher Soames was equally angry – but
in a grander way. I got the distinct impression that he felt that the nat-
ural order of things was being violated and that he was, in effect, being
dismissed by his housemaid.’ Sir Keith Joseph was moved to Education. After
the new Cabinet’s first meeting, Mrs Thatcher remarked to her aides, ‘what
a difference it made to have most of the people in it on my side’.75 Francis
Pym, who remained in the Cabinet, later complained of Mrs Thatcher ask-
ing the question, ‘Are you one of us?’, by which he said she meant ‘Are
you completely free of doubt as to the utter rightness of everything we are
doing?’ Pym needlessly added that ‘I am not one of us.’76 The compos-
ition of Mrs Thatcher’s various Cabinets did not reflect the application of
a ‘one of us’ test of this kind, not least because, as Ridley observed, ‘there
[was] a feeling in the Tory Party that each strand of opinion. . . should be
represented in the Cabinet’, with these representatives, as ‘leaders of some
important group or faction’, seeing themselves as having ‘a political position
of their own’. Ridley thought that such people greatly overestimated their
power, but that Mrs Thatcher was always concerned about their influence in
the Party,77 and during her time as Prime Minister more of them attained
and retained Cabinet rank than their abilities justified, and Pym was one
of them.
The Falklands War Cabinet and its immediate successors
When the news came through on Friday, 2 April 1982 that Argentina had
invaded the British colony of the Falkland Islands, it was obvious that the
Thatcher Government had been caught unprepared. ‘I am so depressed by
what I have heard today – the shuffling and fudging, the overpowering
impression of timidity and incompetence’, Alan Clark wrote in his diary:
Can it have felt like this in the Thirties, from time to time, on those fine
weekends when the dictators, Hitler and Musso, decided to help them-
selves to something – Durazzo, Memel, Prague – and all we could do was
wring our hands and talk about ‘bad faith’? I have a terrible feeling that
this is a step change, down, for England. Humiliation, for sure, and, not
impossible, military defeat.78
Indeed, as the Secretary for Defence, John Nott, recalled, ‘there was an
attempt on the Wednesday, and even on the Thursday, to respond to [the
crisis] diplomatically’, though, ‘by the Wednesday evening. . . we were also
in the process of preparing for war’. Nott stressed the importance of the role
of Sir Henry Leach, the First Sea Lord, who, ‘rightly fearing that some feeble
compromise would be sought’, went in uniform to see Mrs Thatcher. Accord-
ing to Nott, the Admiral impressed her by his appearance,79 and, it seemed,
by his argument, which essentially was ‘what the hell is the point in having a
Navy if you don’t use it for this sort of thing in these sort of circumstances’.80
Nott remembered ‘Friday 2 April [as] a day of some confusion. The Cabi-
net met in the morning [and] it parted in some gloom’,81 and ‘at 7.30 on
Friday evening the Cabinet met again and gave its backing for the despatch
of the Task Force. Only John Biffen expressed some doubts, but without in
any way opposing the move outright.’82 Cecil Parkinson wrote that Biffen
‘bravely argued we should try to negotiate our way round this difficulty’,83
and Nott described the line that Biffen took as ‘courageous’.84 Courage and
bravery were what was demanded from the members of the Armed Forces
sent to the Falklands. Biffen’s behaviour was unimpressive. It still remained
for the Government, which Parkinson thought, looked ‘incompetent and
ill-informed’,85 to face the House of Commons, and, as Nott wrote,
the Saturday emergency debate [on 3 April 1982] (the first since the Suez
Crisis) has gone down as a famous event in Parliamentary history. The
House was full, worried and concerned; but there was an underlying ugly
mood – a developing desire to find scapegoats for the national humiliation

that had occurred. . . The most unpleasant contributions came from a pre-
dictable direction, namely from the Tory benches. Edward du Cann and
Patrick Cormack both made contemptible speeches, dressing up naked self
advertisement in patriotic clothes.86
As for Nott himself, Clark gleefully recorded:
Poor old Notters was a disaster. He stammered and stuttered and gabbled.
He faltered and flustered and fumbled. He refused to give way; he gave
way; he changed his mind; he stood up again; he sat down again. All this
against a constant roaring of disapproval and contempt. I have seen the
House do this so often in the past. Like the pack that they are they always
smell the blood of the a wounded animal and turn on it.87
Afterwards, there was a meeting of the Conservative 1922 Committee,

attended by as many as 200 backbenchers, that lasted for two and a half
hours, at which Lord Carrington became the main target, taking the blame
for policy in Northern Ireland and at the MOD in the past, and for that in
Rhodesia as well as in the Falklands, and ‘the whole fury against the Foreign
Office came out. . . against him’.88 Clark recorded that
thirty-three Members asked questions and, with the exception of

three heavyweight duds ([Christopher] Patten, [Anthony] Kershaw and
[William] van Straubenzee), every single person was critical. I asked a long
sneering question about the failure of our intelligence. I made a point of
addressing it to Peter Carrington whom, with my very long memory, I had
not forgiven for snubbing me at a meeting on Afghanistan in December
1980 in the Grand Committee Room. As my irony developed, people in
the Committee Room started sniggering, but poor Notters was still so rat-
tled and blubbery that he leant across and answered it, while Carrington
sat staring at me in haughty silence.89
Carrington recalled that ‘with John Nott, I had attended a fairly disagreeable
meeting of the 1922 Committee and although nobody shouted for my res-
ignation I knew that within the Conservative Party itself my remaining in
office was not going to help the Prime Minister with her own supporters’.
Correctly as it turned out, Carrington assumed that ‘my departure would put
a stop to the search for scapegoats. . . serve the cause of unity and help turn
the eyes of all from the past to the immediate future’.90 That Mrs Thatcher
saw the force of Carrington’s argument did not stop her from unsuccessfully
trying to persuade him to stay. Nott tried to resign too, and this was made
public, but ‘I told him straight that when the Fleet had put to sea he had a
bounden duty to stay and see the whole thing through’.91
To prosecute the Falklands War of 1982, Mrs Thatcher decided that a War
Cabinet was essential. Besides herself, it consisted of Pym, who had replaced
Carrington as Foreign Secretary, Nott as Secretary of State for Defence,
Whitelaw who was Deputy Prime Minister as well as Home Secretary, and
Cecil Parkinson, who became Chancellor of the Duchy of Lancaster, as well as
being the Conservative Party Chairman. Sir Terence Lewin, Chief of Defence
Staff, always attended. So did Michael Havers, the Attorney General, as the
Government’s legal adviser. The War Cabinet met every day, sometimes twice
a day. Mrs Thatcher took advice from Harold Macmillan about the compos-
ition of the War Cabinet, and, though this displeased Howe, she followed the
former Prime Minister’s ‘main recommendation. . . to keep the Treasury. . . off
the main committee in charge of the campaign, the diplomacy and the after-
math’. Thus, ‘everything we did was governed by military necessity’, and ‘we
were never tempted to compromise the security of our forces for financial
reasons’.92 Nott considered that ‘the key person on the War Cabinet, apart
from obviously the Prime Minister, was the Chief of Defence Staff’, believ-
ing that the ‘extremely determined’ Lewin was ‘an exceptional man and did
an exceptional job’. Nott thought that Lewin ‘handled the Prime Minister
absolutely brilliantly’. The War Cabinet or OD(SA) was formally called the
South Atlantic Sub-Committee of the Overseas and Defence Committee of
the Cabinet, and it first met on 7 April 1982. It had been Nott who had sug-
gested to the Prime Minister that Parkinson should be included in the War
Cabinet, having feared that with just four politicians the arrangement would
not work. Mrs Thatcher wanted Parkinson there because he could handle the
media work, much of it done, as Parkinson said, ‘when my more important
colleagues were trying to get some sleep prior to another big decision making
day’. Nott was glad to have someone of his own generation like Parkinson
in the War Cabinet because he expected that Pym and Whitelaw would be
natural allies, being of the same generation and similar political outlook,
with service in the Second World War, and both having been Chief Whips.
‘In retrospect, I need not have worried about the political balance because
Whitelaw – who always supported Margaret Thatcher anyhow, whatever the
merits of the issue – became with Margaret herself the most hawkish political
voice in the War Cabinet’, Nott recalled, ‘And Michael Havers. . . proved to be
more of a pragmatic former Fleet Air Arm officer than a typical pernickety,
nitpicking wordsmith of a lawyer.’ With Havers proving to be a hawk, Nott
observed, ‘poor old Francis Pym was a bit isolated’.93
‘One of the features of the [Falklands] Campaign was that the Prime Min-
ister at all times set out to make sure the Cabinet was fully informed and
totally behind the Forces, and also Parliament and the Opposition’, Parkin-
son later wrote, adding that ‘we were very lucky that we had Michael Foot
leading the Labour Party [who] hated fascists and hated [the leader of the
Argentine Junta] as a result and was amazingly staunch’.94 There were three
weeks to negotiate before the Task Force reached the Falklands, and though
Clark found the overall mood of the House of Commons to be ‘very deter-
mined’, even as early as the first Monday he detected ‘the first odours of
appeasement [beginning] to waft round the Chamber’ with ‘Members on
both sides. . . muttering and shuffling’. Though ‘feeling in the Party is still
very strong’, Clark witnessed ‘that sanctimonious creep, van Straubenzee’
actually wringing his hands as he regretted ‘a certain jingoistic tendency’,
and, by the Wednesday, Clark found that ‘people who should know better
are striding up and down the Smoking Room Corridor telling anyone whom
they can apprehend that the Invincible is sailing without her radar operative;
that many of her weapons systems have been removed; that the Sea Harrier
cannot land on deck in a rough sea; that many of the ships in the Task Force
have defective power trains, etc. etc.’ Clark thought that it was ‘monstrous
that senior Tories should be behaving in this way’, adding:
It is only on occasions such as this that the implacable hatred in which

certain established figures hold the Prime Minister can be detected. They
oppose Government policy whatever it is. . . They are within an ace, they
think, of bringing her Government down. If by some miracle the exped-
ition succeeds they know, and dread, that she will be established for ever
as a national hero. So, regardless of the country’s interest they are deter-
mined that the expedition will not succeed. The greater the humiliation
of its failure, the more certain will be the downfall of The Lady’s Govern-
ment, the greater the likelihood of a lash-up coalition, without a General
Election, to fudge things through for the last eighteen months of this
Parliament.
Clark had seemed to think that the departure of the ‘grossly appeasing’
Carrington had meant that ‘the collusive element in the Foreign Office [had]
been decapitated’,95 but soon the behaviour of Pym was worrying hawks like
Clark, who recorded that ‘the whole Party is very prickly and unsure of itself.
I dread a sell out. I am sure that we are being slowly set up for one.’96
‘Francis [Pym] is in many ways the quintessential old style Tory: a country
gentleman and a soldier, a good tactician, but no strategist’, Mrs Thatcher
later wrote, ‘He is a proud pragmatist and an enemy of ideology; the sort of
man of whom people used to say that he would be “just right in a crisis”. I
was to have reason to question that judgement.’97 Mrs Thatcher had ‘made
up her mind from the outset that the only way we could regain our national
honour and prestige was by inflicting a military defeat on Argentina’, Nott
recalled, unconvincingly adding in view of his later account of her behaviour
that ‘she was sufficiently pragmatic to understand that if the negotiations
could bring about a total withdrawal of the Argentines and the restoration of
some kind of British administration, then the Cabinet would accept it’. Pym
seemed to be among those who doubted that the Task Force was capable of
recapturing the Falkland Islands anyway, and so, Nott believed, he ‘wanted
to do a deal and was flexible in his approach to achieving this objective’,
adding the observation that Pym, who had combat experience, wanted ‘to
avoid an ugly and dangerous battle at all costs; I think he was genuinely
upset at putting all these young soldiers and sailors – at very great risk –
into an opposed amphibious landing without air superiority’.98 Parkinson
thought that ‘privately [the Prime Minister and Pym] found each other a
trial, and were mutually suspicious of each other’, and Pym going to the FCO
‘meant they would inevitably be working closely together’,99 and so it was
not surprising that ‘there was a frequent clash of wills’.100 Parkinson later
wrote that the
meetings of OD(SA) divided neatly into two distinct phases. The first, the
diplomatic offensive and the search for a negotiated settlement, often gave
rise to heated discussion. For, although we were all committed to achiev-
ing a diplomatic solution, the Prime Minister was determined to avoid
what she called a sell out. The second part passed off more smoothly, as
we discussed the arrangements for the military campaign and received
reports on the progress of the Fleet and the activities of the Argentine
Command. As the Task Force neared the Falklands and the diplomatic ini-
tiatives faltered, the agenda for OD(SA) was switched so that we discussed
the military campaign before we turned to discuss the fading diplomatic
offensive.101
Towards the end of April, as the then British Ambassador to Washington,

Sir Nicholas Henderson, recalled, the American Secretary of State, Alexander
Haig
produced what he regarded as reasonable terms for a settlement. . . It

was from the British point of view. . . a very reasonable proposal, which
safeguarded our immediate sovereignty, but left open the possibility of
negotiating at some stage. This came to the British Cabinet and it produced
a terrific problem for them. Were they to say no to this? The Secretary of
[State for] Defence said “I have got an idea. Let’s keep quiet and wait and
see what the Argentines do” and the Argentines. . . rejected it. We then
never had to reply to this proposal, but Haig took it as a rejection by the
Argentines and that led immediately to [the Americans] coming down on
our side.
If the Argentines had accepted the Haig proposal, Nott thought that ‘we
would have been in a terrible jam, because. . . the majority of the Cabinet
would have felt like accepting and Margaret Thatcher would have been deter-
mined that it shouldn’t be accepted. But in my view the House of Commons
would have accepted it. So it was a problem, but in the end we decided not
to have a view and fortunately the Argentines then said they didn’t like it,
so that solved it.’ Parkinson confirmed that ‘it was a relief that we didn’t
have to take a decision, because I think that it would have split the Cabinet,
actually I don’t think Margaret would have been alone in finding it difficult
to accept these terms’.102 With the Argentines ruling out the settlement that
Mrs Thatcher plainly did not want, the Falklands War resulted, and, following
Britain’s military victory, it was the Argentine Junta that fell, and not her.
‘That’s a hell of a tough lady’ was Haig’s verdict on Mrs Thatcher,103
and there was no doubt that after the Falklands victory her authority was
enhanced. Nonetheless, Nott, while observing that ‘she was not good at
conciliation with her colleagues’, and that ‘she preferred the bludgeon to
the rapier’,104 still refused to subscribe to the ‘myth’ about Mrs Thatcher
that ‘in some way her word was law. It was never the case in my day;
she was very well aware that she had to keep her Cabinet, her Parliamen-
tary supporters, and the Party in the country with her’.105 Nott had always
intended to leave politics at the end of what proved to be the 1979–83
Parliament, and, indeed, chose to leave the Cabinet at the end of 1982
on his own initiative, and taking the opportunity in his resignation let-
ter to protest about the ‘utterly divisive and destructive behaviour’ of those
advisers who worked most closely with Mrs Thatcher, received no reply.106
Mrs Thatcher was well aware that she might not have survived as Prime
Minister even if the Falklands War had ended in some form of draw, as
Pym seemed to want. The defeat of Argentina played a part in the Thatcher
Government’s victory in the 1983 Election. In remarks beforehand about
the undesirability of large Parliamentary majorities, Pym seemed to be seek-
ing a draw once more. Not surprisingly, afterwards Mrs Thatcher told Pym:
‘Francis, I want a new Foreign Secretary.’107 Pym’s replacement at the For-
eign Office was Geoffrey Howe, who, Mrs Thatcher felt, soon fell under the
spell of that institution. Nigel Lawson became Chancellor of the Exchequer.
‘Nigel was well aware of his own virtues’, Mrs Thatcher observed. Whitelaw
became Leader of the House of Lords. Leon Brittan became Home Secre-
tary, with Mrs Thatcher recognizing, again too late, that this was ‘too rapid
promotion’. Mrs Thatcher’s wish to have Cecil Parkinson in a major Cab-
inet role was soon frustrated when events in his personal life forced him
to resign. This ‘cloud’ had ‘a silver lining’, in the Prime Minister’s opinion,
with the arrival in the Cabinet of Nicholas Ridley as Secretary of State for
Transport.108
The Westland Affair of 1985–86
One Cabinet Minister whom Mrs Thatcher could always count as an oppon-
ent was Michael Heseltine, who led the way in making trouble for her in
the Westland Affair. After simmering for several weeks, the Affair came to a
head in January 1986, amounting to a crisis that excited the political class
as well as what Ingham called ‘the Watergate generation of journalists’,109
and it was one that just might have brought the Prime Minister down. The
Affair arose from a dispute between Heseltine, who was by this time Secre-
tary of State for Defence, and Leon Brittan, who, having failed at the Home
Office, had become Secretary of State for Trade and Industry. Mrs Thatcher
did not disguise her later opinion that Brittan would have had his difficulties
in this role too. As far as the Westland Affair was concerned, ‘demoralized’
by his demotion, Brittan was poorly placed to deal with ‘a ruthless oppon-
ent’ like Heseltine.110 The Affair was formally about the future of a small
helicopter company in the West of England. Heseltine wanted a European
consortium to take it over; Brittan wanted an American company to become
the new owners. The leaking and counter-leaking of confidential material
by both Cabinet Ministers and their advisers eventually dragged in the Law
Officers and the Prime Minister. The Head of Information at the Depart-
ment of Trade and Industry (DTI) had been given permission by Brittan to
leak a letter from the Solicitor General to Heseltine expressing the view that
there were ‘material inaccuracies’ in material that he had presented. Ingham
recalled:
Colette Bowe made it clear to me that the DTI hoped that Number 10 –
namely myself – would do the leaking. I refused to do so point blank. I had
no authority to disclose the Solicitor General’s letter. I told [her] that I had
to keep the Prime Minister above that sort of thing. At no time was I asked
to approve of the disclosure. I could not have done so without seeking
Mrs Thatcher’s specific permission, and I would not have been prepared
to put such an idea to her.111
The Attorney General, Michael Havers, was to melodramatically threaten

Downing Street with a police inquiry, and Ingham would have welcomed
one, believing that his reputation had been damaged by the Affair and that
the facts were on his side.112 It was, of course, Mrs Thatcher’s reputation that
her foes wished to undermine, though Ingham’s scalp would have been wel-
come too. At the Cabinet meeting on 9 January 1986, Heseltine resigned.
He tried to go with a flourish, stating ‘Then I must leave this Cabinet’, but
admitted that ‘not everybody left behind was sure that I had resigned’,113
including the Prime Minister, who was said to have thought that he had
gone to the lavatory.114 ‘Michael appears to have done it semi-spastically,
not the grand geste’, Clark learnt from David Young, ‘When he slammed his
brief shut and walked out a lot of people just thought that he’d been a bit
rude, and then gone out to the loo. But the photographers were all wait-
ing in Downing Street, so he must have tipped them off.’115 Heseltine later
wrote that ‘there was no calculation of advancement’ in his resignation,116
but, if he stayed at the Ministry of Defence, he had already exhausted the
opportunities for administrative reorganization that so appealed to him, and

what remained of the 1983 Parliament looked unpromising from the point
of view of defence expenditure. There was also the consideration that the
Ministry of Defence was probably as far as he could go in a Thatcher Govern-
ment. As a corporatist, he was going to be denied the DTI. The Treasury and
the Home Office and the FCO were also likely to be placed out of his reach.
Since the source of the story was Critchley, we can believe Heseltine when he
wrote that he had ‘absolutely no memory’ of having ‘mapped out my future
career on the back of an envelope’ when at Oxford ‘with the date “1990s” and
the words “10 Downing Street” alongside it’.117 That said, though, it proved
a struggle for Heseltine to dress up his resignation as a matter of principle,
and, however much connoisseurs of his behaviour over his career appreci-
ated the effort involved, few doubted that Heseltine had left office because
he believed that this action would further his Prime Ministerial ambitions in
the event of a Tory defeat at the next Election, or, at best, a narrow victory,
which conventional wisdom currently anticipated.
The Westland Affair was ‘a crisis created from a small issue by a giant ego’,
Mrs Thatcher later observed,118 but, even if it was such, and not more the
result of her own failure to be ruthless enough with Heseltine at the outset,
she still had to negotiate the Parliamentary hurdles that remained. Of her
statement on 23 January 1986, Clark wrote:
How can she say these things without faltering? But she did. Kept her
nerve beautifully. I was sitting close by, and I could see her riffling her
notes, and turning the pages of the speech. Her hand did not shake at all.
It was almost as if the House, half horrified, half dumb with admiration,
was cowed. . . at its end she swept from the Chamber, and a little later came
to a meeting of the ’22. The mood was wholly supportive of her, and the
Scapegoat was duly tarred. This morning came the news. Leon Brittan has
resigned.119
Nonetheless, Clark believed, ‘The Lady is still terribly beleaguered. There is to

be an emergency debate on Monday. Is this the end of an era? Uneasily, I feel
it may be. Perhaps they’re actually going to get her, the same way the weevils
got de Gaulle’.120 Ingham recalled Mrs Thatcher jokingly saying, while she
was writing her speech for the debate on 27 January 1986, that she might be
out of office by 6 p.m. that evening.121 That afternoon, Clark found ‘every
seat in the House had been booked with a prayer card, and they were all up the
gangways. For a few seconds [Neil] Kinnock [the Leader of the Opposition]
had her cornered, and you could see fear in those blue eyes. But then he had
an attack of wind, gave her time to recover. A brilliant performance, shame-
less and brave. We are out of the wood.’122 Mrs Thatcher later wrote that
she did not observe ‘the traditional formal way of chairing meetings’ – her
practice was to ‘chair from the front’,123 but the behaviour made public by
the Westland Affair did not fit in with this preferred image. This was lost on
The Economist, which still managed to write of Mrs Thatcher in terms of ‘the
style has been uncompromising: those who disagreed with her could take it
or leave it’, and of ‘the noise of breaking glass and splintering glass in Down-
ing Street’, and ‘the regular Ministerial ejections from the front door’.124
Naturally, Heseltine geared his parting statement to the image of a dom-
ineering Mrs Thatcher riding roughshod over the opinions of her colleagues,
and so engaging in behaviour that amounted to ‘the complete breakdown of
Cabinet Government’.125 If this meant, as Heseltine was supposed to have
also said, ‘a breakdown of collective responsibility’,126 that constitutional
convention did indeed justify his resignation as a matter of principle, but
solely in the sense that he was the only Minister in the Cabinet who was
not prepared to accept the agreed policy of his colleagues and, as a conse-
quence, there was no honourable course but to resign. That was not how
Heseltine presented his conduct, and few should have been under any illus-
ions that, if roles had been reversed, Heseltine, politically nicknamed Tarzan,
would have denied Mrs Thatcher and doubtless others even the privileges
of Jane.
An explanation of Mrs Thatcher’s behaviour in relation to Heseltine was
advanced by Mount, now returned to the world of political commentary,
who observed that
ex-Prime Ministers like to say ‘of course, I’d have had him out of
my Cabinet in five minutes’ – but in practice they did not do it like
that. . . Propriety these days demands a period of reflection and a show
of reluctance from the Prime Minister before disposing of a Minister who
has sinned or blundered. Thus, she would not have found it easy either to
sack Mr Heseltine as soon as he began to breach collective responsibility
or to sack Mr Brittan until the Press and Tory MPs had demanded it.127
Mrs Thatcher had not shown much sign of ‘reluctance’ in the case of the
September 1981 cull of the Cabinet, but only lesser Ministers had been dis-
missed, and losing Brittan over Westland would not have mattered if he
had been the sole departure from the Cabinet. Losing two Cabinet Min-
isters in the same month did matter, and The Economist thought that the
departure of Heseltine mattered a lot. ‘Mr Heseltine now sits precisely where
Mrs Thatcher did not want him, on back benches crowded with those whom
she has worsted or ignored’, that journal commented, ‘She may continue
to dominate her Government, but the party in Parliament is her electoral
college. . . She won its support in 1975 as a result of a backbench coup against
the aloof and frigid style of her predecessor, Mr Edward Heath. She is risking
many of his faults, while supplying her critics with a succession of embit-
tered spokesmen.’128 Since there were bound to be plenty of disaffected MPs
on the back benches by the time of Mrs Thatcher’s seventh year as Prime
Minister, obviously she had to cultivate support from sufficient of her fellow
Tories to keep the numbers of the alienated down, and Mrs Thatcher recorded
her later efforts to do this.129 Her Parliamentary Private Secretary between
1979 and 1983, Ian Gow had ‘enormous influence’ with the Prime Minister
at that time, and, according to Parkinson, ‘they continued to meet regu-
larly and he continued to influence her thinking’ afterwards.130 It did seem,
though, that Mrs Thatcher’s links with her own backbenchers were never as
effective once Gow resigned from the Government in 1985 in protest at the
Anglo-Irish Agreement. Gow was later to be murdered by IRA terrorists in
1990, and Clark wrote:
I thought particularly of the Lady. She wept at the first casualties in

the Falklands. I wonder if she did today? Because Ian loved her, actu-
ally loved, I mean, in every sense but the physical. And in the end, as
lovers do (particularly that kind), he got on her nerves, and she was
off hand with him. He played his last beseeching card: ‘I will have to
resign’. ‘Go ahead, then.’ (I foreshorten the exchange, of course) – and that
was it.
Gow’s dislike of what then happened to ‘the Court’ and that ‘Charles Powell
had got the whole thing in his grip’,131 may well have owed something to
jealousy, but Powell was an official not a Conservative politician, and Gow
was never properly replaced. One piece of advice Gow among others among
her allies should have given Mrs Thatcher immediately after her 1979 Elec-
tion victory and certainly after that of 1983 at the latest was that, given
the unreliable character of the electoral college, she needed to safeguard
her position by changing the Conservative leadership rules to make a chal-
lenge to her far more difficult. As for the Westland Affair itself, Ridley was
right when he wrote that Mrs Thatcher ‘mishandled’ it, and that ‘if she had
asserted her authority on the issue of collective ministerial responsibility and
dismissed Michael Heseltine when his behaviour had become insupportable,
the whole Affair would have been avoided’.132 Instead, Mrs Thatcher pre-
ferred the course of ‘reacting to events’, later unconvincingly maintaining
that ‘Michael. . . did himself great damage by storming out as he did: if he had
not gone voluntarily he might have been still more troublesome on the back
benches.’133 In the immediate aftermath of the Westland Affair, Mrs Thatcher
sensed that her Government was vulnerable, and, in a slighting reference to
the Secretary of State for Health and Social Security, she observed that ‘when
the Norman Fowlers of this world believe that they can afford to rebel, you
know that things are bad’.134 Things, and Fowler, soon returned to normal.
‘Outstaying her welcome’: the decline and fall

of Mrs Thatcher
Mrs Thatcher’s domineering ways continued to be a familiar feature of polit-

ical commentary, though Douglas Hurd, in her Government from the outset
and in her Cabinet from 1984 onwards wrote of her behaviour more subtly.
‘When dealing privately with an individual, particularly someone in dif-
ficulty, Margaret Thatcher could be exceptionally perceptive and helpful’,
Hurd observed:
But in official meetings of all kinds with her colleagues she was usually
authoritative to the point of abruptness. When crossed in argument she
would dart off into a thick smokescreen of irrelevancies or even resort
to personal rudeness, including to subordinates who had no means of
defending themselves. There was no deliberate desire to hurt, simply a
determination by hook or by crook to get her own way.
Hurd recorded colleagues exploding with exasperation against her perfor-

mance at Cabinet meetings, and ‘gossip writers who heard indirectly of such
explosions suspected, then and later, rebellion and treachery. That is to
misunderstand the political process. The use of the safety valve does not pre-
vent Ministers working loyally and effectively under leadership which they
sometimes find maddening.’135 Nigel Lawson, in the Government from 1979
and in the Cabinet from 1981 for eight years, later speculated on why col-
leagues allowed her to govern in the way that she did. ‘While spinelessness
or careerism may be adequate explanation in the case of some, it will not do
for all’, Lawson wrote:
And belief in her infallibility was even more narrowly shared. Of

course. . . she was a particularly formidable Prime Minister. . . But beyond
this, her method of Cabinet Government was accepted because in many
ways it was highly convenient to her colleagues. Most Cabinet Ministers,
particularly after a longish period in government, tend to be preoccupied
with fighting their own battles and pursuing the issues that matter within
their own bailiwick, and lose interest in the wider picture. Most of the time
it is comforting for them to feel that all they need to do is strike a deal
with the Prime Minister, and not have to bother overmuch about persuad-
ing their other colleagues. . . It was noticeable that, towards the end, those
colleagues who most bemoaned the lack of collective discussion of issues
outside their own departmental field were busy making private bilateral
deals with Margaret over issues within their own departmental responsi-
bility. Finally, if less important, was the fact that she was in practice at
her best in bilaterals and other small gatherings. The larger the numbers,
the greater her tendency to play to the gallery, either showing off her own
knowledge on the subject or rounding, in a profoundly embarrassing way,

on some hapless colleague whom she felt either bullyable by nature or
objectively in a weak position at a particular time. Geoffrey Howe was a
favourite victim.136
Howe himself wrote that ‘Margaret’s most important weakness – the flipside
of her strength – was the extent to which her partners were driven in the end
to choose between submission or defection. Perhaps inevitably, the closer the
original bonding, the longer the life of the partnership, the more dramatic
the final rupture. “I must prevail” was the phrase that finally broke Nigel
Lawson’s bond of loyalty and affection.’137 Of his own relationship with the
Prime Minister, Howe wrote that ‘during my four years at the Treasury the
Thatcher–Howe partnership had something of [a] sibling quality’, and,
though there was ‘some friction. . . on most big issues (the 1981 Budget) or
tactical questions (the timing of interest rate changes) differences were gen-
erally ironed out either by fuller debate or by the passage of time’. Howe
found, however, that ‘it became very different during my six years at the
Foreign Office, not, I think – at least initially – for personal reasons, but
largely because of Margaret’s profound antipathy towards the Office’.138
Mrs Thatcher came to have a ‘profound antipathy’ towards Howe as well,
being on one account, given to bullying the man, eventually moving him
from the FCO to become Lord President of the Council, Leader of the
House of Commons, and Deputy Prime Minister in July 1989. According
to one Minister present, at the last Cabinet meeting Howe attended before
he resigned in November 1990, the Prime Minister ‘treated him with scorn
and derision. . . She treated him so badly that that was finally it’.139 In fact,
according to his own account, Howe had already decided to resign, and that
‘this final tantrum’ only served to confirm his decision.140
‘In retrospect, it may be said that she made the traditional mistake of out-
staying her welcome’, Ridley, her ally, was to write of Mrs Thatcher, adding
that, ‘I am convinced she intended to win a fourth General Election victory
and then retire gracefully from the scene.’141 Mrs Thatcher’s herself thought
that ‘two years into the next Parliament would be the right time to leave’.
She recorded that Lord Carrington argued to her in April 1990 that ‘the Party
wanted me to leave office both with dignity and at a time of my own choos-
ing. I took this to be a coded message: dignity might suggest a rather earlier
departure than I would otherwise choose. Peter was. . . speaking on behalf of
at least a section of the Tory Establishment.’ Mrs Thatcher was not much
interested in ‘dignity’, and, with good cause to believe that what she called
‘the Great and Good of the Tory Party’ would have stopped her from becom-
ing Leader and then Prime Minister if they could have done, she resolved to
continue because of ‘the scale of the challenges’ that the Government faced
and her ‘uncertainty over the succession’. So, though Mrs Thatcher denied
that she ever intended to go ‘on and on’,142 that was not how it must have
seemed to the patient Howe, ruled out of the succession on the grounds
that ‘something had happened to Geoffrey. His enormous capacity for work
remained, but his clarity of purpose and analysis had dimmed’.143 There was
no convincing evidence of fading powers on Howe’s part, and no shortage
of ‘clarity of purpose’ in relation to policy on ‘Europe’. That, after much
provocation, Howe eventually turned against her would not have made the
difference if Mrs Thatcher’s position had not been seriously weakened before
this. Mrs Thatcher had not only led the Conservatives to victory in British
General Elections in 1979, 1983 and 1987. She had also led them to vic-
tory in direct elections to the European Parliament in 1979 and 1984. In the
direct elections to the European Parliament held in June 1989, the Tories
were defeated by the Labour Party in terms of votes and seats, thus failing
for the first time to win a nationally based election under Mrs Thatcher’s
leadership. The turnout was a pitiful 36.8 per cent of the electorate, but the
aura of electoral invincibility had been dented for those looking for signs of
a weakening of the Prime Minister’s position. Later in 1989, an obscure back-
bencher and enthusiastic ‘European’, Sir Anthony Meyer, took advantage of
the failure of Mrs Thatcher and her allies to change the rules by which a chal-
lenge to her position as Leader from within the Parliamentary Party could be
only too easily made. ‘The [December] 1989 leadership contest was a serious
challenge by a frivolous candidate standing as a representative of those who
had been dismissed, disappointed or disenchanted by Thatcher’, Kenneth
Baker wrote of a contest of which the outcome was Thatcher 314, Meyer
33, abstentions 24, and 3 non-voting. Baker recorded that George Younger,
who had run her campaign team, told the Prime Minister that ‘the figure of
discontent was greater than 57 and closer to 100. Loyalty had secured the
lower figure. George also told her that she should move Bernard Ingham and
Charles Powell out of Number 10, as their combined influence was resented
by many Tory MPs.’144 The loyal Ridley thought that Mrs Thatcher was ‘a lit-
tle more disconcerted by [this] result than was generally realized. She always
wanted to feel that she had a really strong and solid base of support in the
Parliamentary Party’.145
‘The first three months of 1990 were an almost unmitigated disaster for the
Government’, when ‘just about anything that could go wrong did go wrong’,
Baker, the then Party Chairman recalled,146 with ‘the issue which dominated
the whole of the political debate’ being ‘the new Community Charge’.147
Ironically, though it was widely believed that the Poll Tax or Community
Charge was an example of Mrs Thatcher driving through a preferred policy
against the wishes of her Cabinet colleagues, Lawson, one of those opposed
to the Poll Tax, observed that
[the Community Charge] went rigorously through all the procedures the
textbook said it should do and, indeed, more. . . there was all manner
of public consultation, Green Papers, White Papers, the lot, quite apart
from a Cabinet Committee which sat for a year: nothing could have
been done with greater punctiliousness. Yet at the end of the day, we
got this appalling decision. The explanation of why this happened [was]
the Prime Minister getting out of touch with her own Ministers, and Min-
isters themselves acting as merely departmental heads, and, even though
they were members of the Committee, concentrating on the issues that
directly concerned them departmentally.
Lawson believed that ‘the introduction of the Poll Tax . . . was the most dis-
astrous single decision which the Thatcher Government took’.148 Joining
the European Exchange Rate Mechanism (ERM) proved to have worse long-
term consequences for the Conservative Party, and, as Chancellor of the
Exchequer, Lawson had been ‘very anxious’ that Britain should join. He
recalled that the Prime Minister ‘tried every means she could to avoid’ this
happening. ‘Because the Prime Minister controls the Cabinet agenda’, it took
an enormous amount of work. . . to get any collective process instituted at

all. After going through various hoops, I did secure a meeting of senior
Ministers, but it was not a meeting of a Cabinet Committee. It was not
therefore a meeting that had any clear constitutional significance. So, even
though an overwhelming majority came out in favour of joining the ERM
at that time in November 1985, no decision to do so was taken. It was
a case of using Prime Ministerial power to bypass or to avoid the normal
procedure of Cabinet Government.149
Clark was told in the summer of 1988 that ‘confrontation’ in the Cabinet
was inevitable, in which ‘the Prime Minister will find herself isolated by her
three “heavies” – Howe, Hurd and Lawson’. Clark thought that ‘Europe’ was
a ‘great bore’, but recognized that for both Europhiles and their opponents
‘the subject becomes obsessive and towers above all others’.150 The so-called
Madrid ‘ambush’ actually took place in June 1989 when Howe and Lawson
together tried to force the Prime Minister into setting a date for Britain join-
ing the ERM, threatening to resign if this was not done. ‘Whether I could
have withstood the loss of both my Foreign Secretary and my Chancellor at
the same time I am not sure’, Mrs Thatcher later wrote, ‘but I was not pre-
pared to be blackmailed’.151 Howe was moved from the FCO the following
month, but Mrs Thatcher once more less ruthless than she was commonly
portrayed as being, because, as we have noted, she retained Howe in the
Cabinet instead of dismissing him. Lawson resigned as Chancellor of the
Exchequer in October 1989 after public wrangling with Alan Walters over
the ERM and economic policy generally.152 Though he had only served for
a matter of weeks as Foreign Secretary as the replacement for Howe, John
Major then became Lawson’s replacement as Chancellor of the Exchequer,
and he managed to persuade Mrs Thatcher that Britain should join the ERM
in October 1990. The Prime Minister only did so because she had ‘too few
allies to continue to resist and win the day’, recognizing that ‘there are lim-
its to the ability of even the most determined democratic leader to stand
out’.153 In the following month, Mrs Thatcher was to find that her base of
support in the Conservative Parliamentary Party and within the Cabinet itself
was insufficient for her to continue as Prime Minister.
‘As far as I can make out practically every member of the Cabinet is qui-
etly and unattributably briefing editors or members of the Lobby about
how awful [Mrs Thatcher] is’, Alan Clark wrote gloomily in his diary on
28 March 1990:
There is even talk of a coup in July. Heseltine is quite openly spoken

about as the heir-presumptive, and preens himself in public. How has
all this been allowed to come about? The Community Charge has got on
everyone’s nerves of course, and generated the most oppressive volume
of correspondence. Persistent deficits in the polls of a nearly insuperable
order rattle people. But I am inclined to think that the Party in the House
has just got sick of her. She hasn’t promoted her ‘own’ people much. Her
‘constituency’ in this place depends solely on her proven ability to win
General Elections. But now this is in jeopardy she has no Praetorian Guard
to fall back on. There’s been a lot of talk about ‘one of us’ . . . but most of
them are still left to moulder at the ’92 dinner table. When’s the Revolu-
tion? In the meantime, all the Wets and Blue Chips and general Heathite
wankers, who seem ineradicable in this bloody Party, stew around and
pine for her to drop dead.154
Things did not come to a head until 1 November 1990 with the resigna-
tion of Howe, the last survivor of Mrs Thatcher’s original Cabinet. Howe’s
resignation letter was largely about ‘Europe’,155 and, on 13 November 1990,
Clark noted in his diary that ‘Geoffrey will make his resignation speech this
afternoon . . . received wisdom is that this will finally tear the whole thing
wide open.’156 According to Clark, ‘the House was very full indeed, with
much chattering and giggling from recusants. The loyalists are glum, and
apprehensive. From the moment he rose to his feet Geoffrey got into it. He
was personally wounding – to a far greater extent than mere policy differences
would justify. Elspeth’s hand in every line.’157 Charles Irving, whom Baker
described as a waspish and witty Tory MP, observed that ‘it took Elspeth [Lady
Howe] ten minutes to write that speech and Geoffrey ten years to make it’.158
Baker himself recalled the contrast with the speech that Howe had made at
a dinner in 10 Downing Street to mark Mrs Thatcher’s tenth year of office
in 1989, which had been ‘a paean of praise and seen as a preliminary to
sanctification. On this occasion his speech was coolly dismissive and seen
as a preliminary to assassination.’159 When Mrs Thatcher said that ‘I didn’t
think he would do something like that’,160 she demonstrated that she had
misjudged him on two counts. As late as 30 October 1990, in a Commons

interchange, Mrs Thatcher had described Howe as ‘too big a man’ to need
a helping hand from ‘a little man like [the Leader of the Opposition]’,161
which was a compliment of a kind. Some time before, though Mrs Thatcher
had decided that Howe was not a big enough man to succeed her as Prime
Minister, but there was no compulsion upon Howe to share this assessment of
his talents, and if his hopes of the succession, probably still alive in 1989, had
died eighteen months later, one consolation was to bring down that polit-
ician who had stood in his way until it was too late for him. Mrs Thatcher
should surely have recognized frustrated ambition on the grand scale in a
senior politician, especially one who had been an advocate of economic lib-
eralism long before her. Unaccountably too, since there had been no shortage
of devoted ‘Europeans’ in her generation, her Cabinets, her Governments,
and, at that time, in the Tory Party, Mrs Thatcher misjudged the depth of
commitment of true believers like Howe. ‘Europe’ first was always difficult
to portray as patriotism, though Howe had a try, along with arguing that his
behaviour served the best interests of the Conservative Party, before conclud-
ing that ‘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’.162 Baker observed that
it was a pity that Geoffrey’s invective had never been used so sharply upon
the Opposition. Quite apart from its effect upon the Prime Minister, Geof-
frey’s speech was reckless and irresponsible because it sought to impale the
Party on the single issue of Europe. He had become so preoccupied with
this that he overlooked the fact that there were deep divisions within the
Party on that subject. He was being just as divisive as Margaret in the line
he was taking. The Conservative Party has to be kept together on Europe
by a judicious balance.163
‘No one seems to have given a thought to the constitutional implications, let
alone the international’, Clark wrote in his diary, ‘How can a narrow caucus in
a singular political party unseat a Prime Minister just because it calculates that
it may improve its election prospects thereby?’164 Using the same Tory Party
leadership election procedure as had been devised to unseat Heath was the
answer, with Mrs Thatcher needing a majority of at least 15 per cent of those
entitled to vote. After the 1989 leadership contest, Gow had told Clark that
‘he had a hard time persuading many colleagues to vote for the PM’, even hav-
ing to resort to telling them that ‘you will have another chance next year’,165
and, by the time that the next contest took place, Gow was dead. Wyatt was
worried enough by Lord Home’s observation that he did not think that Mrs
Thatcher would last as Prime Minister until the next Election166 to sound
out Whitelaw in May 1990 about Mrs Thatcher’s prospects, and received
the reply that ‘when people went mad it was very difficult to do anything
about them’, which Wyatt preferred to treat as a reference to the state of

the Conservative Parliamentary Party and not that of the Prime Minister.167
Later, one of her Cabinet Ministers, Christopher Patten, said of his support
for Heseltine, ‘Well, he’s not mad, is he?’168 After what Wyatt called Howe’s
‘vile, disloyal speech’,169 Heseltine took the opportunity to mount a formal
leadership challenge. Nothing went right for the Thatcher campaign from the
beginning, not least the Prime Minister’s choice of 20 November 1990 for the
contest, with the Chairman of the 1922 Committee pointing out to her in
vain that she was going to be abroad for much of the campaign, not least for
two days in Paris to sign the treaties marking the end of the Cold War. ‘Peter
Morrison soon had my own leadership team up and running’, Mrs Thatcher
wrote, wryly adding that ‘some people subsequently suggested that this was
too energetic a metaphor’.170 To the extent that Mrs Thatcher herself directly
intervened in the campaign, she did her best to portray the contest with Hes-
eltine to MPs as being between two philosophies of government, though it
became clear to her that Tory MPs ‘did not want to think anything was at
stake apart from their seats,’ thus emphasizing ‘the funk and frivolity of the
whole exercise’.171 A former Minister for Higher Education, George Walden
may have captured the mood of the 1990 leadership contest best:
Somehow the fact that she had ‘lost it’ communicated itself to the Party
at large. The exact way that she went – the Heseltine challenge and the
subsequent vote – was of limited importance. . . The idea that she was top-
pled by a Parliamentary cabal against the general sentiment in the Party
is a fantasy of the Right. MPs voted against her not just because she was
endangering their chances of re-election, though that was an understand-
able motive. They threw her out because the constituency parties were
losing faith in her too. On the surface all the talk was of loyalty to the
Leader, yet I was not the only MP who knew the reality was different.’172
In the event, Mrs Thatcher obtained 204 votes, Heseltine secured 154, and 16
abstained. ‘Four votes, that was all there was in it’, Clark bemoaned the nar-
row margin by which the Prime Minister had failed to prevent a second ballot,
‘I get so cross when I remember Peter Morrison asleep in his office. For want
of a nail a kingdom was lost.’173 At first, from Paris, Mrs Thatcher breathed
defiance, but, when she returned to Downing Street, she chose to consult her
Cabinet Ministers one by one about whether or not to proceed to a second
ballot. Mrs Thatcher had good cause to later write that she had ‘never kept
talented people out of my Cabinets just because they were not of my way
of thinking’,174 but she had taken this policy to excess. So, the outcome of
any canvass of the Cabinet was bound to be unfavourable, even though what
Mrs Thatcher found hardest to bear was ‘the desertion of those I had always
considered friends and allies and the weasel words whereby they had trans-
muted their betrayal into frank advice and concern for my fate’.175 There was
much ignoble behaviour, but, if Mrs Thatcher proceeded to the second ballot,
there was a danger that Heseltine would win a second ballot outright, and
she herself had said that ‘it’d be so terrible if Michael won’ because ‘he would
undo everything I have fought for’.176 So, having ‘lost the Cabinet’s support’
and unable to ‘even muster a credible campaign team’, Mrs Thatcher con-
cluded: ‘It was the end.’177 Mrs Thatcher’s prospective resignation as Prime
Minister opened up the contest for the Tory leadership to other candidates
than Heseltine, and Douglas Hurd and John Major joined the contest. Major’s
‘tendency to accept the conventional wisdom’ had previously been one of
Mrs Thatcher’s reservations about him as a potential Leader,178 and, given
his background and such natural ability as he had, identifying and deferring
to such wisdom, a talent for being or seeming likeable, together with luck,
largely explained how Major had progressed so far and so fast in his political
career. ‘He was the best of a very poor bunch’ was how Mrs Thatcher later
and tactlessly justified her support for Major to Hurd a dozen years later,179
but at the time her support for Major was made on the basis that ‘I wanted –
perhaps I needed – to believe that [Major] was the man to safeguard my legacy
and to take our policies forward.’180 Quite how Mrs Thatcher came to think
this mystified Hurd, but he thought that ‘out of a mixture of guilt and affec-
tion among MPs her advice in favour of Major had an effect on the outcome
of the contest’,181 which was that Major came so close to outright victory
in the first ballot that both Heseltine and Hurd felt unable to continue. In
successfully persuading his predecessor as Prime Minister in favour of British
entry into the ERM, Major had already made the crucial mistake that was
eventually to sentence his Government to a living death, and severely dam-
age the Conservative Party’s reputation for economic competence. One right
wing economist misread the politics of the matter and Major too when he
observed shortly after entry that ‘no one but a madman would have gone
into the ERM’.182 It had been the supposedly sane in the Establishment who
had been of one mind on the policy. In the short run, though, the Tory
Party, which Clark described as ‘an old whore that has been around for 400
years’,183 seemed to have taken out insurance against electoral defeat in the
form of Major the Unknown and his form of lower order Baldwinism. One of
Mrs Thatcher’s journalist allies, Bernard Levin, lamented: ‘The pygmies have
got Gulliver, and I hope it chokes them.’184 It did. ‘I detect a distinct touch
of Elba’, Clark observed when he visited the exiled Mrs Thatcher, ‘Her sense
of betrayal is absolute, overrides everything.’185 Wyatt remained among the
loyalists, proud that ‘she created a revolution which can never be reversed’.186
It is to that revolution, and, thus, to the record of the Thatcher Governments,
that we now turn.
4
The Economic Liberal Crusades I:
The Quest for an Economic
Renaissance
‘A Holy War of the Just against the Unjust’
My Government will give priority in economic policy making to control-

ling inflation through the pursuit of firm monetary and fiscal policies. By
reducing the burden of direct taxation and restricting the claims of the
public sector on the nation’s resources they will start to restore incentives,
encourage efficiency and create a climate in which commerce and industry
can flourish. In this way they will lay a secure basis for investment, pro-
ductivity and increased employment in all parts of the United Kingdom.
Thus, in these sentences of the Queen’s Speech delivered on 15 May 1979,

the Thatcher Government set out its statement of intent about the future
management of the economy,1 and there were those who noted that similar
sentiments had been present in the Queen’s Speech of 2 July 1970 delivered
shortly after the Heath Government had taken office.2 Of course, there were
only so many things that Conservatives could say, and the conventional wis-
dom was that the Heath Government’s experience would be replicated, mean-
ing that anything resembling an economic liberal strategy could not survive
more than about two years. Though the Heathites got more than their fair
share of Cabinet appointments overall in 1979, Mrs Thatcher made sure that
‘true believers in our economic strategy’ controlled the Treasury and most of
the main economic departments. Thus, Geoffrey Howe became Chancellor
of the Exchequer, in which post ‘some of the toughest decisions were to fall to
him’ and ‘he never flinched’. Another economic liberal, John Biffen was made
Chief Secretary of the Treasury, where ‘he proved rather less effective’ than
Mrs Thatcher hoped ‘in the gruelling task of trying to control public expend-
iture’. Sir Keith Joseph ‘took over at Industry, where he did the vital job that
no one else could have done of altering the whole philosophy which had pre-
viously dominated the department’.3 Sir Keith issued his leading officials with
a reading list that included, of course, Adam Smith’s Wealth of Nations as well
as his Theory of Moral Sentiments and standard works by Joseph Schumpeter,
71
Frank Knight and Alexis de Tocqueville, together with more ephemeral mater-
ial in the form of Institute of Economic Affairs (IEA) and Centre for Policy
Studies (CPS) publications. If one added in Hayek and Friedman, both inter-
estingly absent, the list would more or less embrace what had come to be
called New Right philosophy.4 Another ally, John Nott became Secretary of
State for Trade,5 though, more surprisingly, a critic of Mrs Thatcher’s preferred
economic strategy, Peter Walker, became Minister of Agriculture since ‘he was
both tough and persuasive, priceless assets in dealing with the plain absurd-
ities of the. . . Common Agricultural Policy’. Another critic, James Prior was
made Secretary of State for Employment despite the differences between him
and Mrs Thatcher over economic strategy and, more specifically, trade-union
reform. She thought that ‘Jim was the badge of our reasonableness’.6 Such
‘reasonableness’ on the part of the Prime Minister was to be well-hidden. For
her, as Nott observed, ‘everything had to be either a victory or a defeat’ in
what was to become ‘a Holy War of the just against the unjust’.7
The Prime Minister and her economic liberal allies in the Conservative
Government were more than willing to continue to practise the Monetarist
policies that the IMF had imposed on the preceding Labour Government
in 1976. Monetarism had become the economic fashion of the day, even if
those who had actually faced reading A Monetary History of the United States
1867–1960 and the other major works written by Milton Friedman could be
forgiven if they thought that monetarism was little more than the quantity
theory of money dressed up in modern clothes. ‘Monetarism is a compre-
hensive theory which you can go around applying [because] you can insert
it as a key into a succession of locks’, Powell observed, who had not felt the
need for Hayek and Friedman to show him the way. Powell added, though,
that ‘comprehensive theories are antipathetic to the Conservative mentality
which doesn’t regard – and rightly so – human society as theoretical. It is
suspicious of theory’.8 So, scepticism about Monetarism was rife in the Tory
Government and Party that Mrs Thatcher led, although it was one thing to
say that it would not work, and another to come up with an alternative now
that easy answers in the tradition of Galbraith were discredited. Of course,
there was much more to economic liberal ideology than Monetarism, but,
for the present, what was on offer from Friedman and those who chose to
follow him was policy analysis and prescriptions that could be presented as
a coherent programme for remedying some of the worst of the current ills of
the British economy. ‘Inflation over any substantial period of time is always
and everywhere a monetary phenomenon, arising from a more rapid growth
in the quantity of money than in output’, Friedman was to tell a House of
Commons committee:
Few economic propositions are more firmly grounded in experience –

extending over thousands of years and the face of the globe. But the
proposition is the beginning of an understanding of the cause and cure
The Quest for an Economic Renaissance 73
of inflation, not the end. The hard questions are why the quantity of
money expands more rapidly than output and how the difference can be
eliminated.
For Friedman, why was explained by Big Government with higher State
spending provoking taxpayer resistance which encouraged governments to
finance spending by monetary creation, thereby increasing monetary growth
and hence inflation, which, as a by-product welcome to legislators, raised
effective tax rates without legislation. According to Friedman, government
spending together with State intervention reduced output growth, thereby
further raising inflation for any given rate of monetary growth. Slower growth
also increased the burden on the community of any given level of govern-
ment spending, exacerbating the resistance to explicit taxation. Inflation,
especially highly variable inflation, interfered with growth by (a) introducing
static into the messages introduced by the price system, increasing uncer-
tainty facing individuals and business enterprises, which encouraged them
to divert attention from productive to protective activities, and (b) inducing
governments to adopt counterproductive and false cures as price controls
and incomes policies. A monetary strategy was how to deal with the situ-
ation, with monetary growth as the major intermediate target, stating in
advance targets for a number of years ahead, setting targets that required
a steady and gradual reduction in monetary growth, and emphasizing the
government’s intention of strictly adhering to those targets. Friedman wrote
that ‘restraint in the rate of monetary growth’ was ‘both a necessary and a
sufficient condition for controlling inflation’, which ‘in turn was a neces-
sary but not sufficient condition for improving Britain’s productivity, which
was the fundamental requirement for a healthy economy, and that required
‘measures on a broader scale to restore and improve incentives, promote
productive investment, and give a greater scope for private enterprise and
initiative’. Friedman recognized the effects of the contemporary energy crisis
on inflation, while pointing out that for Britain, thanks to North Sea oil,
that crisis had been a boon as well as a burden,9 but the behaviour of the
trade unions did not rate a mention because he believed, as his intellectual
ally Powell put it succinctly, ‘inflation, with all its attendant consequences,
comes about for one reason only. The Government causes it.’10 Why did
‘the Government cause it’ was the question that was begged, and an answer
was appeasement of a modern electorate previously led to believe that there
was always a comfortable way out of economic difficulties, and appeasement
too of the trade union movement specifically organized to protect the self-
interest of groups and deemed too powerful to confront. Though the unions
were not solely to blame for Britain’s lamentable productivity record, any
theory that absolved them from any responsibility was flawed.
When published in 1977, the Tory Party document called The Right
Approach to the Economy did not contain an economic strategy, being no
more than ‘a common ground statement’ according to Howe11 and, as John

Hoskyns observed, ‘its real purpose seemed to be to unite opposing factions
in the Shadow Cabinet’.12 Naturally enough, Hoskyns preferred the Stepping
Stones strategy document that he and Norman Strauss had prepared for the
Conservative Opposition. Nott thought that Hoskyns and Strauss and Alfred
Sherman had ‘considerable political influence on Mrs Thatcher’, but ‘less
influence on the overall direction of policy in the first Thatcher Government
than is often suggested – a fact partly attributable to their expressed con-
tempt for politicians, the Civil Service, and the political process’.13 Such
contempt was understandable given the time wasted by the Tory Oppos-
ition in a doomed attempt to marry the Stepping Stones approach with that
of Patten and the Conservative Research Department. Howe’s Economic
Reconstruction Group was also active, and Howe thought that in relation
to Stepping Stones Mrs Thatcher ‘as on other occasions had proved reluctant
to commit herself and her team to a measured strategy. But events [in the
form of the Winter of Discontent] had happily conspired to enable heart
and head to come together.’14 The disunity present among the Conserva-
tives in Opposition was bound to have affected their performance in the
field of policy preparation, but Alan Walters was one irregular who thought
that the Tories had still managed to construct in broad terms an economic
reform programme that would take eight to ten years to complete. ‘The most
urgent business of the early years was to secure financial stability, particularly
the reduction of inflation to low and stable levels’, Walters wrote, because
‘without financial stability, little could be achieved’ and with its attainment
‘many other reforms were at least feasible’. Then, ‘the second area of urgent
reform was the deregulation or freeing of the economy from the complex
and confusing network of controls. The objective was to get a market econ-
omy functioning efficiently without suffocating government intervention’
so that ‘the market and not the bureaucracy determines the price and alloca-
tion of resources’. Further, ‘the third field of reform was the privatisation of
state owned industries’ because the nationalized industries were ‘over mighty
and. . . used by powerful unions and other special interests for extortion and
political purposes.’ Further still,
the fourth package of reforms applied to the trade unions. The basic thrust
was to try and reduce the overweening powers of the unions, as exercised
through their leaders and shop stewards, by abolishing or modifying the
legal immunities conferred on them eighty years ago. In addition, the
policy envisaged that unions would evolve from their feudal form and
would become increasingly democratic and responsive to the wishes of
their members.
As for external economic relations, the Government was committed to the

membership of the European Community and ‘free trade remained the
central aim of policy’. What the Government aimed for was an economic
renaissance, with the belief being that inflation and over regulation and the
lethargy and waste of the nationalized industries and the restrictive practices
of the trade unions had retarded Britain’s economic growth. Walters con-
ceded that even allowing for its time horizon the reform programme was
ambitious, and noted that at the outset ‘many cognoscenti opined that the
Government’s will would wilt or that the people would protest the pain of
such a metamorphosis and throw the Government out’.15
That such people subscribed to this form of analysis was mainly explained
by the high level of unemployment that characterized the Thatcher era, and
became associated with the economic policies favoured by the Prime Minister
and her allies. ‘We must now harden our hearts to the consequent misery
and distress [and] we must ruefully recognize how much of it is humanly
inevitable’, the economic liberal, Colin Welch wrote as the unemployment
figures stayed obstinately high:
In normal times unemployment is part of the ineluctable and salutary

process of economic adaptation. Each unemployed person is normally
on a journey, which may be long, painful and even unsuccessful, from
a job or service which is no longer needed to a new and tenable one.
The present pathological level of unemployment differs from the norm
in degree but not in kind. It is the bitter fruit of innumerable adaptations
postponed or avoided for as long as possible, and which now burst upon
us all together. What should have been a slow and tolerable process of
continual adjustment comes upon us like a tidal wave.16
Besides inheriting various special employment measures from the previous

Government, the Thatcher Government itself engaged in job-creation activ-
ities to try to keep the numbers of unemployed down, and, believing that as
its Chairman he had revolutionized the working of the Manpower Services
Commission, Mrs Thatcher brought David Young into her Cabinet in the
Department of Employment in 1985 with a brief to get the unemployed back
to work, in which role he demonstrated energy and some success.17 For the
United Kingdom in each May of the Thatcher era, the seasonally adjusted
figure for unemployment in the United Kingdom was 1,087,000 (4.1 per
cent) in 1979, 1,223,000 (4.6 per cent) in 1980; 2,129,000 (8 per cent) in 1981;
2,490,900 (9.3 per cent) in 1982; 2,783,000 (10.5 per cent) in 1983; 2,891,900
(10.5 per cent) in 1984; 3,032,000 (10.9 per cent) in 1985; 3,116,600 (11.2 per
cent) in 1986; 2,874,000 (10.3 per cent) in 1987; 2,343,300 (8.3 per cent) in
1988; 1,819,000 (6.4 per cent) in 1989; and 1,610,900 (5.7 per cent) in 1990.
With Mrs Thatcher about to leave office, the unemployed figure for October
1990 was 1,702,000 or 6 per cent of the workforce. From early 1980 to the
autumn of 1986 the official statistics for unemployment showed no sign of a
sustained decline, and that decline was from nothing less than 3,120,000 or
11.2 per cent of the workforce, which were the figures for August 1986.18
In 1986 too, Nigel Lawson was able to state in his Budget the following
year the rate of inflation at 3.5 per cent represented the lowest figure for
almost twenty years,19 and later to add that ‘the six years to 1987 had been
the longest period of steady [economic] growth, at a rate averaging 3 per
cent a year, for half a century’.20 Lawson was also able to rightly state in his
1989 Budget Speech that ‘in Britain today we have more people in work than
ever before in our history’.21 Most commentators and rival politicians had
believed that the headline rate of unemployment would bring the Thatcher
Government down long before its economic liberalism paid off, if it ever
would or could, and that headline rate was easy to portray as a damning
indictment of the supposed Thatcher experiment. Why this did not make
the political difference that commentators expected was a complex matter,
but Lawson thought that enough of the electorate ‘at least half believed the
official Conservative line. . . that the UK recession was essentially part of a
world recession’,22 and as The Economist remarked with the 1983 Election
just over the horizon, ‘six-sevenths of Britons are better off than they have
ever been before, while the other one-seventh are unemployed or fear they
or their teenage children might become so’.23
Grand strategy: the restoration of the market economy
‘The 1979 Government contained quite a number of people who had a clear
commitment to the concept of controlled public spending, reform in tax-
ation, a greater role for the private sector, and borrowing restrained in such a
way as to minimize the likelihood of inflation’, Biffen recalled, ‘ [That gave]
a cohesion which quite often Governments don’t possess, being drawn from
large political parties that are themselves a coalition of interests’.24 Early on
especially, there was a Thursday Breakfast Group on the day of the weekly
Cabinet meeting that was held at 10 Downing Street, and, besides the Prime
Minister, the Cabinet Ministers attending always included Joseph, Nott, Bif-
fen and Howe. The Chancellor thought that ‘the breakfasts had some value
in maintaining the collective morale of those who participated [and] they
fortified the Prime Minister’s self confidence and helped. . . to overcome her
recurrent sense of isolation in her own Cabinet. By the same token, they
fostered the sense of conspiratorial disunity within the Government.’25 St
John Stevas ‘realized very soon. . . that although the people supporting the
traditionalist view [on economic policy] were in fact the majority, the weight
of the Cabinet was not with them’.26 As if after years of economic misman-
agement, the Government’s inheritance was not daunting enough in the
wake of the Winter of Discontent in terms of wage inflation, there was a
massive increase in world oil prices following the fall of the Shah of Iran.
The Energy Secretary, David Howell, found it ‘difficult to get through to
other people, in Parliament and in the Government, the enormity of what
was happening’. Howell remembered what he called ‘the Government’s eco-

nomic theoreticians’ arguing that ‘well, if the price of oil goes up, the price
of something else will come down and we must just hang on to our tar-
gets’. Howell thought that ‘this was for an ideal world; in the real world
it was hopelessly unrealistic because the price of oil was very important to
the price of a vast range of goods and rapidly began to push up the RPI’.27
Worse, in the 1979 Election campaign, under pressure, the Tories had agreed
to accept whatever comparability awards the Clegg Commission set up by
the Callaghan Government might give to public-sector workers in terms of
pay increases.28 Ministers seem to have been divided about whether to hon-
our the pledge, given that, in Parkinson’s words, ‘that commitment. . . turned
out to be a very, very expensive one’, but the view that prevailed was that
of Biffen, which was that it would have been ‘unthinkable. . . to cast aside. . .
that which you had underwritten for the purpose of winning votes’.29 Howe
and his economic liberal allies in the Cabinet decided to press ahead regard-
less of the grave economic situation in which the Conservative Government
found itself placed, though, as will be seen, and as Mrs Thatcher saw it, Nott
and Biffen did not prove to be beyond questioning Howe’s grand strategy in
economic policy. That said, though, despite the harsh political reality that –
in Nott’s words – ‘all the economic indicators moved in the wrong direction
between 1979 and 1981’, the economic liberal agenda that he and others
had long believed in had won through in the end. In observations that paid
too little attention to the contribution made to the development of public
policy represented by Howe’s Budgetary strategy, Nott wrote that measures
such as ‘the abolition of statutory price, dividend and wage controls’ though
they caused ‘considerable pain’ at the time ‘laid the foundations for the pros-
perity for the prosperity and economic freedom of the later Thatcher years’,
with the ‘bold and controversial step’ of ‘the abolition of exchange controls’
ensuring that Britain became ‘an open world economy’.30
In his first Budget Speech on 12 June 1979, Howe remarked that ‘in five
years of office [Healey as Labour’s Chancellor] introduced no fewer than 15
Budgets and economic packages’, and the results encouraged the conclu-
sion that ‘the notions of demand management, expanding public spending
and “fine tuning” the economy have now been tested almost to destruc-
tion’. Howe maintained that his predecessor’s behaviour indicated that he
had recognized this, and
he rightly began the practice of setting money supply targets, and he

claimed to make his public spending plans accordingly. This means that
I am able to approach my task. . . on one crucially important piece of
common ground: that the poor performance of the British economy in
recent years has been due to a shortage of demand. We are suffering from
a growing series of failures on the supply side of the economy. It is our
belief that many of these failures are themselves the result of actions and
interventions by the Government themselves – laws that stand in the way

of change and stifle enterprise: and, as important as anything, a structure
of taxation that might have been designed to discourage innovation and
punish success. Of course, there are many other causes of our decline. That
is not in dispute. But we believe that it is more sensible for the Government
to make those beneficent changes that are undoubtedly within their power
than to preach the need for changes that lie well beyond their authority. . .
Our strategy to check Britain’s long term economic decline, which has
gathered pace in the last five years, is based on four principles.
Firstly, ‘we need to strengthen incentives, by allowing people to keep more of

what they earn, so that hard work, talent and ability are properly rewarded’.
Secondly, ‘we need to enlarge freedom of choice for the individual by redu-
cing the role of the State’. Thirdly, ‘we need to reduce the burden of the
public sector, so as to leave room for commerce and industry to prosper’.
Fourthly, ‘we need to ensure. . . that those who take part in collective bar-
gaining understand the consequences of their actions’. Howe emphasized
that ‘these changes will not be enough unless we also squeeze inflation out of
the system. It is crucially important to re-establish sound money. We intend
to achieve this through firm monetary discipline and fiscal policies consist-
ent with that, including strict control over public expenditure.’31 So, Howe
tightened up on the targets for the money supply that he had inherited from
Healey, raised the Minimum Lending Rate from 12 to 14 per cent, and made
cuts in proposed public spending that were supposed to mean that the Public
Sector Borrowing Requirement would fall from 4.5 per cent to 3.75 per cent
of GDP.32 Howe then acted to implement the manifesto pledge ‘to switch
some of the tax burden from taxes on earnings to taxes on spending’.33 In
relation to income tax, Howe believed that ‘the present top rate of 83 per cent
is an absurdity’ and ‘the rate of 98 per cent on investment income is even
worse’, not least because ‘such rates bring in very little revenue’ and ‘they kill
incentive and are patently unjust’. So, ‘the top rate on earned income’ was
to be ‘cut from 83 per cent to 60 per cent’, which was the Western European
average, and it applied to taxable income over £25,000, which was a lower
income level than was common elsewhere’, and this was ‘a matter to which
we may need to return on a future occasion’. Between £10,000 and £25,000
of taxable income, Howe introduced ‘a new scale of rates less steeply progres-
sive than the old scale’. As for the basic rate of income tax, Howe cut it from
33 per cent to 30 per cent and made a reduction to 25 per cent the eventual
aim.34 To offset these changes, Howe proposed that Value Added Tax (VAT)
should be charged at a new unified rate of 15 per cent.35 Howe later recorded
that how difficult it had been to persuade the Prime Minister of the need for
this VAT increase despite her having long accepted and, indeed, proclaimed
‘our central tax theme: the switch from income to expenditure taxes’. What
worried Mrs Thatcher, of course, was the immediate effect on the Retail Price
Index, and Howe thought that her behaviour illustrated ‘the ambivalence
which Margaret often showed when the time came to move from the level
of high principle and evangelism to practical politics’. Biffen helped Howe
to persuade her that it was now or never for raising VAT in this way, and
a compromise followed in which ‘we refrained from any increase in excise
duties on tobacco and alcohol’. Howe wrote that
critics have subsequently argued that we were reckless to contemplate

any of these changes at a time when inflation was already accelerating
as a result of earlier Labour policies. . . I have never been remotely per-
suaded that our ultimate success in the battle against inflation was severely
affected by the scale of our VAT switch. In July the following year, 1980,
when the VAT increase dropped out of the index, the annual inflation rate
fell to 16.9 per cent. By April 1983 it was down to 4 per cent, the lowest
figure since 1968. And we secured a hugely important and lasting change
in the tax structure.36
More immediately, The Economist credited the Prime Minister and Howe with
having
established the base camp from which they mean to assault their Mount
Everest: to alter the course of British economic policy. . . Sir Geoffrey’s route
is simple and ambitious. And horribly hard. It involves the abandonment
of the public sector as the prime engine of Britain’s economic growth and
its replacement by private initiative, achieved through a progressive reduc-
tion in personal (and ultimately capital) taxation. Sir Geoffrey’s Budget is a
brave attempt, at the foot of Everest’s North Face, to spit into an economic
blizzard.37
There was to be more ‘spitting’ in the autumn of 1979 when Howe followed
up the relaxing of exchange controls in the Budget38 by announcing their
abolition on 23 October 1979.39 ‘The Government has made a noble bon-
fire of all the fencing that has surrounded Britain’s external capital account
since 1939’, The Economist declared, under the dramatic headline ‘Sterling
Unchained’.40 For Healey, ‘to change in a moment an environment in which
industry and finance have lived for 40 years’ was a ‘reckless, precipitate
and doctrinaire action’ on Howe’s part, which would lead to further de-
industrialization at home as rich men and financial institutions sought better
returns abroad.41 The Economist was nearer the mark when it stated that the
abolition of exchange controls offered
one of the few remaining hopes of preventing North Sea oil from pricing
the rest of British industry out of existence. Treasury Ministers argue that,
while North Sea oil production is at its height, British capital should be able
to roam the world for the most profitable opportunities to earn dividends
which will flow back when the oil is drying up. Absolutely right. . . but less
than half the picture. . .
because that neglected ‘the uncomfortable truth that what industry was ask-
ing for was not an actual fall in the exchange rate but something less than the
headlong rise generated by oil’. The Government had been inhibited from
explaining this by the old fear of ‘knocking the exchange rate’.42 Howe had
to be concerned about the current state of the British economy, scarred as
it was by growing unemployment, and short term considerations did influ-
ence the decision to abolish exchange controls, but ideology played its part,
and it was no surprise that Lawson and Nott were Howe’s main allies in pur-
suing this policy or that Mrs Thatcher needed a great deal of persuading of
its merits. ‘On your own head be it, Geoffrey, if anything goes wrong’, the
Prime Minister said, with Howe believing her to be joking. The Cabinet was
told of the decision only a few hours before the announcement was made,
with only Heseltine objecting both on the merits and because the Cabinet
had not been consulted. Howe and the Prime Minister explained that ‘such
an acutely market sensitive decision simply had to be taken that way’, and
the Chancellor recalled that the abolition of exchange controls was ‘the only
economic decision of my life that caused me to lose a night’s sleep. But it
was right’.43 Howe believed that by abolishing exchange controls he and his
colleagues had ‘sent out a message to the world about our commitment to
liberal economics as the means of reviving Britain’,44 Nott’s recollection was
that ‘the sudden revelation. . . that we were about to abolish all exchange
controls was taken by a sullen majority of the Cabinet as another sign that
the Government was in the hands of a crazy cabal’.45
‘Dog Days Budget’ was how The Economist chose to describe the Budget
Statement that Howe delivered on 25 March 1980, which implicitly accepted
that
there will be a 2.5 per cent decline in real national income this year, high
and rising unemployment, rapidly falling investment, inflation topping
out at over 20 per cent in mid-1980, and another £2.5 billion overseas
deficit on current account. This lays it open to some criticism. But the main
criticisms being heard are that it is hard hearted, Monetarist, an axeman’s
assault on public expenditure, and a giveaway to Tory businessmen, which
are unfortunately what they are not.46
Howe was placed in an unenviable position in many respects, not least that
despite ‘the strength of sterling. . . the price of oil and other inputs to manu-
facturing industry [had] risen by 41 per cent since the beginning of 1979’.47
Since, the Government regarded ‘the fight against inflation as the first pri-
ority’, and monetary policy had an essential role in the defeat of inflation,
Howe set out what became known as the Medium Term Financial Strategy
(MTFS) which set out ‘a four year path for monetary growth, public spending
and tax policies. . . By 1983–84, the last year covered by our spending plans,
the target rate of growth of money supply will be reduced to around 6 per
cent – just half the rate of growth over the past year.’48 Lawson was the chief
draughtsman of the MTFS,49 the purpose of which, according to its author,
was ‘to confirm and consolidate the complete change of direction on which
we had embarked’, signalling ‘a shift from a real to a nominal framework for
macro economic policy’, and being ‘confined to charting a course for those
variables – notably the quantity of money – which are within the power of
Governments to control’.50 Lawson was later to concede that
the MTFS was not fulfilled in any literal sense, at least not on the mon-
etary side. The liberalization of financial markets which we had ourselves
launched changed the meaning of the monetary aggregates and made
them much more difficult to predict and control. The original 1980–81
monetary target was heavily overshot. So, less heavily, was that for 1981–
82; and the objectives for the subsequent two years were met only after
the targets had been raised, and then by. . . artificial means. The target
definitions of money were also changed in subsequent years.
Lawson thought that ‘the fiscal side of the MFTS wore better than the mon-
etary side. Until the late 1980s, the Government came as close to fulfilling
its forward objectives for the PSBR [Public sector Borrowing Requirement] as
can be expected in an uncertain world. After that, the departures from target
were initially in the favourable direction of Budget surplus and debt repay-
ment.’ So, Lawson believed that, in terms of its fundamental aims, the MTFS
succeeded, and recalled, shortly before the 1980 Budget, at a time when infla-
tion was about 20 per cent, informing senior Treasury officials, who seemed
to think that he had gone mad, that inflation would be 5 per cent in 1983–84,
and it was slightly below this.51 Aside from setting up the MTFS, the most
interesting feature of the 1980 Budget was one of Howe’s own ideas that he
well-described as ‘an imaginative experiment’, which was to establish, in the
first instance, about half a dozen enterprise zones in the older urban areas
‘with the intention that each of them should be developed with as much free-
dom as possible for those who work there to make profits and to create jobs’,
and he indicated a range of tax concessions and incentives to encourage the
development of such zones.52
‘The Government’s swashbuckling capitalist intentions’ as displayed in
this initiative impressed The Economist, and that journal looked forward
to ‘the whole country’ becoming ‘an enterprise zone’.53 The more imme-
diate prospect was the collapse of British manufacturing industry. ‘There is
much talk about industry rising like a phoenix from the ashes’, one West
Midlands industrialist observed, ‘But what if we are just left with the ashes?’54
In the short run, it was bound to be the private sector that bore the brunt
of the harsh readjustment that Britain’s economic plight made essential if a
sustained recovery was to be brought about. Security of tenure was a charac-
teristic of much of the employment in the public sector, and the most that
could be done at first about public expenditure was to try to call a halt to
its rate of growth. So, for the true believer in economic liberalism, the first
couple of years of the Thatcher Government were bound to be traumatic, and
Sir Keith Joseph was or had become such a believer. Mrs Thatcher thought
that Joseph’s ‘combination of personal qualities’ made him unsuitable for ‘the
cruel hurly burly of political life which Chancellors above all must endure’,
and so she appointed him as Secretary of State for Industry, where he did ‘the
vital job that no one else could have done of altering the whole philosophy
which had previously dominated the department’. It may well have been
the case that Joseph ‘cared about those who were affected’ by the bankrupt-
cies and unemployment ‘far more than did our professionally compassionate
critics’,55 but his personality disqualified him from running any of the main
economic departments. Whether or not Joseph soon became ‘totally bonkers
and a liability’, in the words of one Tory,56 his torment was made worse by the
situation and problems that he inherited at Industry largely denying him the
opportunity to practise the economic liberalism that he had so eloquently
preached, thus making him an easy political target. The Economist dubbed
him ‘the Minister for Misery’, and the journal reported that with ‘his alpha
mind’ soon bored by businessmen who had come to see him complaining
about the effects of Government policy, Joseph had disconcerted such visitors
by picking up his private letters and once even his own income tax form.57
One Confederation of British Industry official remarked about Joseph that
‘he didn’t believe that anything the Government would do would help.
Handing out government money was anathema to him. At our first meet-
ing he asked why we even needed a Department of Industry.’58 In important
respects, British Leyland (BL) encapsulated Joseph’s predicament. When the
head of the National Enterprise Board asked the Chief Executive at BL which
types of car made profits and which did not, he received the reply that
‘the accounting system is such as not to produce an answer’.59 The Labour
Government had installed Sir Michael Edwardes as Chairman to sort out the
management of BL. According to the tenets of economic liberalism, much
of BL should have been closed down, but the suppliers would have died too,
and the Conservatives had emphasized in their manifesto their commitment
to small businesses.60 Such was the state of BL that, towards the end of 1980,
Edwardes was forced to approach the Government for a huge subvention to
keep the company going, and such was the sum the Prime Minister became
involved, holding what became known as ‘the BL dinner’, which experi-
ence she resolved never to repeat.61 Joseph had produced a bizarre Cabinet
paper arguing for the closure of BL while setting out the dire consequences
of doing so, thus inviting its rejection.62 Joseph was in obvious difficulties
when he had to inform the House of Commons that BL was to continue on its
highly subsidized way,63 drawing mock sympathy from the Labour benches
for ‘the agony’ he was suffering,64 and from the ubiquitous Alan Clark criti-
cism that Joseph ‘of all people [should] talk of such enormous sums with such
insouciance’.65 According to one Ministerial colleague, ‘There’s a job waiting
for Joseph in Oxford Street. He’s been practising the role of Father Christmas
for the past twenty months.’ The Economist reported that ‘the former (very
free) Trade Secretary’, John Nott, ‘wanted to start breaking up BL there and
then’,66 and, plainly, the preferred long-term goal was privatization of such
of its operations that seemed likely to be commercially viable.67 What Joseph
was condemned to was a very uncomfortable short term holding role. During
the brief time he was at the Department of Trade, Nott was able to take several
economic liberal initiatives, notably the abolition of the Price Commission,
and the announcement to privatize British Airways, though an anti-trust
suit in the USA delayed the implementation of this measure, and he played a
part in persuading Mrs Thatcher to appoint John King as the Chairman. Since
Nott knew from personal experience that the City of London was rife with
restrictive practices, he refused the request of the Stock Exchange to exempt it
from being subject to the Restrictive Practices Court on the basis that he could
not see how the Government could apply one law to capital and another to
labour, given that it was about to launch an attack on the restrictive practices
of the trade unions.68 Nott’s eventual Ministerial successor, Parkinson saw
things differently, and wanted the Stock Exchange to be granted exemption
in exchange for reforms,69 which approach, as Chancellor, Nigel Lawson took
up, leading eventually to the ‘Big Bang’ of October 1986, and the regulatory
framework for the savings and investment industry in the form of the Finan-
cial Services Act of that year.70 The Thatcher Government’s early relationship
with the private sector proved to be less than harmonious, though the Insti-
tute of Directors provided consistent support. This was not the case with the
Confederation of British Industry (CBI), at whose conference in November
1980, for instance, Michael Edwardes declared that ‘the pound was overval-
ued, interest rates were penurious, and the whole issue was being aggravated
by North Sea oil’, adding that ‘if the Cabinet does not have the wit and imag-
ination to reconcile our industrial needs with the fact of North Sea oil, they
would do better to leave the stuff in the ground’.71 The Director General of
the CBI, Sir Terence Beckett, chose to follow this by saying ‘we have got to get
the gloves off and have a bare knuckle fight’ with the Government,72 though
divisions in the ranks and defections from them soon forced him to climb
down and describe Mrs Thatcher as nothing less than ‘magnificent’.73 Nott
recalled that, when he was at the Department of Trade,
we were besieged by demands to restrict imports of cars, textiles, and

electronics. . . the situation was most acute in the textile industry. As the
money squeeze tightened, and sterling rose, textile imports flooded into
the country. Delegation after delegation came to see me as unemployment

in the North and Midlands rose dramatically. In 1979 the textile industry
employed nearly 1.5 million workers, by 1982 the numbers had virtually
halved – at least another half a million were added to the dole queues.
I felt devastated for these people. Eventually, I surrendered to the pressure
and persuaded the European Commission to impose anti-dumping duties
against cheap textile imports. It was a foolish mistake. I had imagined that
meeting the urgent request of the textile lobby would bring them some
relief, but the opposite was the case. An equally large section of the textile
industry was dependent on these cheap imports, which were then recy-
cled into exports of finished goods. I learned a solid lesson: Governments
tamper with free trade at their peril.74
‘With the gap between rhetoric and practice becoming apparent by early
1981, a major shift was taking place in our economic policy’, Prior later wrote,
‘The folly of high interest and exchange rates was now obvious. We began
to hear very much less from the Treasury about their money supply target
[and more about] the need to reduce the PSBR [meaning] the Government’s
own overall borrowing in order to keep interest rates down.’75 So, the stage
was supposedly set for what the pundits and the unbelievers and the cynics
and the massed ranks of Mrs Thatcher’s enemies both within the Tory Party
and Government and on the Opposition benches had predicted would come
after about two years in office. This was, of course, an explicit U-Turn in eco-
nomic policy, the public confession that the Government had got it wrong
all along. Still, it seems, in a state of shock years later, Prior recalled that ‘at a
time of rapidly rising unemployment, the Government. . . sought to pursue
a deflationary policy in the 1981 Budget. There were no apologies for this:
quite the reverse.’76 Lawson’s recollection was that ‘the Government did not
set out with the deliberate intent of making a dramatic doctrinal challenge
to economic orthodoxy or to the political faint-hearts in our own ranks. The
1981 Budget was essentially a response to the fiscal difficulties which had
emerged in the financial year 1980–81.’77 This situation was brought about
by several factors but a prominent one was the Cabinet’s unwillingness to
make the cuts in public expenditure that the Chancellor wanted, and it was
not surprising that when presenting his Budget on 10 March 1981 Howe
emphasized that ‘the overriding need is for more effective restraint of public
spending’ from which ‘further progress towards lower inflation and lower
interest rates’ would follow. Howe announced a cut in ‘the minimum lend-
ing rate by two percentage points’,78 and that he had ‘decided to make a
major shift in the planning and control of [public] spending from volume to
cash,’ which meant getting rid both of the Plowden ‘funny money’ arrange-
ments that had been employed since 1961 and ‘the automatic assumption
that what was once planned can always be afforded’.79 Despite the context of
a recession and high and rising unemployment, Howe then proceeded to plan
a reduced PSBR to bring it into line with the Medium-Term Financial Strategy
(MTFS), and observed that tax increases had been made necessary by the high
level of public spending.80 Though rates of income tax were not increased,
personal allowances were frozen, and among the measures taken to raise extra
revenue indirect taxes were double indexed.81 ‘That ass [Nicholas] Winterton
shouted “you must be joking” when the Chancellor announced an extra 20p
on petrol’, Alan Clark recorded, who, though no admirer of Howe, thought
the Chancellor and his Budget to be ‘quite uncompromisingly “firm”. His
figures were pretty horrific where they related to the old targets which, of
course, had been wildly overshot, but as soon as he said that tax allowances
were not being raised I realized that it was all hard line.’82 So, as Walters
recalled, ‘in spite of rapidly increasing unemployment and falling output’,
the Thatcher Government had introduced what he called ‘the toughest peace-
time Budget in living memory’.83 Most university economists were horrified,
and it was then that 364 of them together placed on record their opinion
that the Budget had made an economic recovery impossible. ‘Their timing
was exquisite’, Lawson gloated:
The economy embarked on a prolonged phase of vigorous growth almost

from the moment the letter was published. So far from launching the
economy on a self-perpetuating downward spiral, the Budget was a prel-
ude to eight years of uninterrupted growth and left our economic critics
bewildered and discredited. . . In the course of time the 1981 Budget came
to be seen almost as a political equivalent of the Battle of Britain: the
Thatcher Government’s finest hour; its most widely acknowledged success
and a turning point in its political fortunes. Hence the myth making and
attempts to take the credit.84
Howe dismissed the ‘myth’ that the 1981 Budget had been ‘made in Num-
ber 10’ because the key judgements were made by himself and his fellow
Treasury Ministers and their advisers,85 and Lawson endorsed that version of
events.86 A definitive account seems unlikely to ever emerge, but, as the Prime
Minister recalled, Hoskyns and Walters and also the monetarist economist
Jurg Niehans were among those who advised her87 and Hoskyns kept a diary.
Hoskyns did not share the interpretation later advanced in The Times that
the Prime Minister was the real author of the Budget, and that Howe was
only obeying orders, but he did not agree with the Howe version either,
and pointed out that Lawson was not present at two of the most important
preparatory meetings anyway, meaning those held on 10 February and 13
February 1981. Mrs Thatcher’s memoirs made no mention of another import-
ant meeting, which was that held at Chequers on 17 January 1981, but in
other respects her version of events was closer to that of Hoskyns than the
Howe–Lawson account. Hoskyns observed that ‘the common thread’ of that
account was that ‘the Treasury got the Budget right. Perhaps they did, and we
were unaware of other discussions that were going on behind the scenes. But
my strong impression remains, from my own records, that the top Treasury
officials were totally opposed to what [Hoskyns and his fellow irregulars] were
suggesting, and that the younger officials feared a disaster in consequence.’
Hoskyns suspected that ‘over the next ten years’ Howe ‘unconsciously intern-
alised the Treasury’s subsequent account’, which was to rewrite history in
its favour once it seemed that the Budget was working.88 Hoskyns thought
that
the Budget was the product of outside views that had influenced the Down-
ing Street irregulars. . . It was Gordon Pepper and Christopher Hawkins in
the summer of 1979 who warned that the monetary contraction was too
severe. It was Terry Price – as early as February 1980 – who wrote to me
with his penetrating analysis of the ‘positive feedback’ consequences of
that error. Like Terry, David Wolfson and I became increasingly certain that
the chosen monetary measure, sterling M3, because it included interest
bearing deposits, would, therefore – perversely – grow as a result of the very
measures (high interest rates) which were designed to make it shrink. . . It
was Alfred Sherman who, in late 1980, asked the question ‘Why is sterling
so high?’ and Jurg Niehans who gave us the answer in a study conducted
outside Whitehall and financed with private sector money. It was Alan
Walters who had warned Mrs Thatcher and Keith Joseph in August 1980
that he saw all the signs of an excessive monetary squeeze. Geoffrey made
no Budget proposals at the Chequers meeting. The shape of the Budget first
emerged at an advisers’ meeting in my office on 21 January. It was fiercely
resisted on 13 February by both the Prime Minister and the Chancellor –
and who could blame them? Douglas Wass, the head of the Treasury, sup-
ported their position, not ours. But in the end, Margaret and Geoffrey
took the outsiders’ advice rather than Whitehall’s. Or so it appeared to me
at the time.89
‘A Budget With Few Friends’ was the verdict of The Economist,90 but one
of them was the irrepressible Ferdinand Mount in The Spectator, inspired
it seemed by Mrs Thatcher having praised Hayek in the Commons that
very day,91 leading him to speculate: ‘Has the woman no sense of self
preservation?’ Mount went on:
If this Government goes down – as half the Tory Backbenchers seemed to

think it would when the shocks first hit them – then it will go down firmly
stuck to guns and with colours nailed to masts. It will, in short, be unlike
other British Governments. Professor J.K. Galbraith can rest easy. This is
as fair a test of Monetarism as we are likely to find in an imperfect world.
Mrs Thatcher may fumble. She may acquiesce in the odd medium sized
surrender. But in any large ample sense of the verb, she does not turn.92
There then occurred what Mrs Thatcher in her memoirs called The Urban
Riots of 1981, referring to those which took place in the Brixton district of
London, at Moss Side in Manchester, and in the Toxteth area of Liverpool.
Though she took the racial overtones in these outbursts as meriting serious
response, Mrs Thatcher did not concede that ‘our economic policy was caus-
ing social breakdown and violence’ because ‘riots, football hooliganism and
crime generally had been on the increase since the 1960s, most of that time
under the very economic policies that our critics were urging us to adopt’.93
On his way to what he called ‘the historic Cabinet meeting of 23 July 1981’,
Nott recalled that ‘I may have been influenced – it would have been hard
not to have been – by the fact that riots were breaking out in several cities.
Indeed, the night before had seen renewed violence in the Toxteth district of
Liverpool. I therefore arrived at the meeting in a state of some uncertainty.’
What he was certain about was that the Treasury paper proposing to cut £5
billion more out of public spending than had been previously planned was
so poorly argued that the Treasury must have simply assumed that ‘because
it would have the support of the Prime Minister and her economic cabal, its
advice would go through anyway’.94 At this meeting, there then ensued what
Mrs Thatcher called
one of the bitterest arguments on the economy, or any subject, that I can
ever recall taking place at Cabinet during my Premiership. . . Even those
like John Nott, who had been known for their views on sound finance,
attacked Geoffrey Howe’s proposals as unnecessarily harsh. All at once
the whole strategy was at issue. It was as if tempers suddenly broke. I too
became extremely angry. I thought that we could rely on these people
when the crunch came. I just was not interested in this kind of creative
accounting that enabled fair weather Monetarists to justify an about turn.
Others, though, were as loyal as ever, notably Willie, Keith and, of course,
Geoffrey himself, who was a tower of strength at this time. And indeed it
was their loyalty that saw us through.
Mrs Thatcher concluded that ‘it would be difficult for this group of Ministers
to act as a team again’, and with even the previously reliable Party Chair-
man, Thorneycroft, confessing to ‘rising damp’ when it came to advocacy
of an economic policy that would combat increasing unemployment, the
Prime Minister decided to replace him and to recast her Cabinet in Septem-
ber 1981.95 The dismissed Gilmour commented that ‘it does no harm to
throw the occasional man overboard, but it does not do much good if
you are steering full speed for the rocks. And that is what the Govern-
ment is now doing.’96 In fact, the Government was heading for re-election,
and on what could be presented as being on Mrs Thatcher’s terms, and in
at least one important respect the 1981 Budget and the strategy that fol-
lowed from it was largely presentational. For, as the then Cabinet Minister,
David Howell, later wrote, the 1981 Budget was ‘not some sort of Stalin-
grad, the moment when the dark forces of ever rising public expenditure
were finally and heroically turned’,97 not least because such spending car-
ried on rising. What was important about that Budget was the political
symbolism of the primacy that the Conservative Government gave to con-
quering high levels of inflation. It was to serve as a major test of competence
in much the same way as the target of building 300,000 houses had been
after 1951.
After the 1981 Budget, it was by no means plain sailing for the Thatcher
Government, but the Conservatives could not be seriously believed to
be heading for the political rocks once an economic recovery of a sort
could be detected. The Guardian and those who thought like it became
very excited about something called the Mitterrand experiment in France
that was going to show that the Thatcher experiment was not necessary.
Since France was less reliant on foreign trade, in principle an experiment
there could be persisted with for longer than in Britain, but what those
who trusted in Mitterrand forgot was that the French President was much
more an opportunist than any kind of socialist, and so in practice he
soon abandoned the experiment and those foolish enough to believe in
it as an economic cure. ‘To hearken to the voices that urge us only to
“borrow, borrow, borrow” would perform no service to British industry or
to the unemployed’, Howe declared in his 1982 Budget Speech, ‘On the
contrary, it would lead only to the dead end of a plummeting exchange
rate or a rocketing rate of interest – more probably to both’.98 So, if we
believed one economist, ‘Howe’s latest Budget continues his prescription for
[Britain’s] economic ills by a diet of thin gruel and the intermittent applica-
tion of leeches. This year there is a little more gruel and fewer leeches but
the strategy remains the same.’99 According to The Economist, this was ‘a
Budget which was a little Wet round the edges’,100 and the observant Mount
noted that
The Chancellor was forty minutes into the Speech before we heard that
first full throated roar from the Tory backbenches – last heard three years
ago – which always mark the announcement of an appropriately hand-
some bribe to the electors, in this case, the raising of old age pensions
by two per cent more than the rate of inflation. . . Sir Geoffrey was able
to reduce taxation a little only because he raised taxation last year and
reduced the Government’s spending plans (even if government expend-
iture actually went on rising merrily) – thus steadying interest rates and
bringing inflation more or less under control. To the true believer, last
year’s Budget was the one that mattered, the test of nerve; and if there
are any rewards in this year’s, they are Sir Geoffrey’s reward for having
refused to use a horrible slump as an excuse for further inflating an already
appalling rate of inflation.101
Howe’s Budget also included what he called ‘a major reform of the capital
tax system’, notably the adjustment of capital gains tax for inflation,102 and
at the other end of the scale added to ‘the ragbag of schemes to provide
work for the unemployed, mainly on useful community projects, such as
helping the sick and elderly as well as useless ones, like counting lamp posts
in Manchester’.103 Howe’s message was blunt enough:
the truth is that ‘reflation’ does not create jobs that last. In the longer run
it helps to destroy them. If more public spending was the proper engine
for growth and jobs, Britain should now lead the world in both. Yet in
fact unemployment today is almost eight times higher than it was twenty
years ago. . . [There were] two figures that virtually tell it all. Since 1960
the real purchasing power of the average citizen in Britain has risen by
almost two-thirds, but the real rate of return on the capital employed in
British industry has fallen by five-sixths. In other words, our present living
standards have for years been plundered from the store of investment for
the future.104
After Howe delivered his fifth and last Budget on 15 March 1983, The
Economist granted him
one main hurrah for the last three of his four years’ stewardship of Britain’s
Exchequer. He has brought inflation down to 5 per cent from the 1980
peak of 22 per cent which he half inherited from Denis Healey and the
Ayatollah Khomeini, but also self-created by the Clegg and tax-switching
mistakes of his own first year in power. If inflation had continued to accel-
erate, it would have ended in a crash. Sir Geoffrey has averted the crash
by being a stern fiscal taskmaster but rather a loose Monetarist one: a 7–11
per cent annual increase in money supply to be permitted even now, but
a Budget deficit doggedly halved right through the recession, from 5.5 per
cent of Britain’s GDP in 1979–80 to an intended 2.75 per cent in the next
fiscal year.105
Howe himself chose to emphasize that ‘it was the firmness of the 1981 Bud-
get which paved the way towards the lower inflation and lower interest rates
which today offer the prospect of lasting economic recovery’.106 Howe ‘reck-
ons constancy is not only the best policy; it is also the best politics’, The
Spectator believed, arguing that ‘he and Mrs Thatcher are at one on this’,
before using a naval analogy sadly worthy of Callaghan that ‘the order from
the bridge is steady as she goes. The message to the faithful is steady and she
stays’.107
If Howe had ‘a lawyerly scepticism of economic theorists’108 while remain-
ing firmly in their intellectual grip, his successor as Chancellor in 1983, Nigel
Lawson made much of being the first professional economist to hold that
office since Gaitskell. ‘So [Lawson] knows what his officials are telling him –
and vice versa, which is sometimes more important’, The Economist enthused
in 1988:
He dominates Cabinet discussions on economic issues not simply because

of his position but because of his grasp: one reason that the Tory Party is as
united on economic policy as it is ever likely to be. And Lawson can hold
his own with Mrs Thatcher. . . Lawson can also boast of an economy that
his predecessors merely dreamed of. In his almost-five years as Chancellor,
real GDP growth has averaged 3.5 per cent a year, the fastest in Europe’s big
economies. Unemployment is falling faster than at any time since records
began. Inflation, already much shrunken at 3.7 per cent when he took
over, is 3.3 per cent now. All this has been achieved with a fiscal prudence
that has owed nothing to orders from the IMF.
The journal believed that ‘if Mr Lawson wants to be remembered as Britain’s

greatest Chancellor, he still has two things to do. One is to restructure the
tax system. . . The other is to put in place a durable, coherent framework
for macro policy instead of his trust-me discretion: rule by laws, not by
Lawson.’109 The Medium Term Financial Strategy (MTFS) had served this pur-
pose at one time, and Lawson referred to it in the 1984 Budget110 and that of
1985,111 and that of 1986,112 as well as that of 1987,113 1988114 and 1989115
In the 1987 Budget Speech, though Lawson set a target for narrow money,
he stated that ‘for broad money. . . as the Governor of the Bank of England
cogently argued in his Loughborough lecture last October, it is probably wiser
in current circumstances to eschew an explicit target altogether’.116 With the
1984 Budget, Lawson had started off with nothing less than ‘A Star is Born’
treatment from one ally in The Spectator,117 and The Economist reported that
following his Speech ‘Mr Lawson sat down amid a sea of waving order papers’
from his fellow Tories. That journal shrewdly analysed the situation that the
Chancellor had faced as follows:
One alternative before Mr Lawson. . . was to continue with Sir Geoffrey’s

policy of pushing Budget deficits steadily lower, and to hope against
experience that a second term Conservative Government would be
regarded as maintaining a political dynamic if it kept on annually squeez-
ing harder so as to attempt to get inflation down to virtually nil. The other
alternative was to stop reducing Budget deficits after a slightly sleight-of-
hand showpiece this year, to accept an annual 3–5 per cent as the target
inflation rate for the rest of this Parliament, and to use the small resultant
leeway to introduce a Budget aimed at securing the maximum possible
reduction in unemployment. Mr Lawson opted for the second alterna-
tive, although many. . . of his backbenchers. . . want to believe that he
did not.118
Lawson maintained that the 1984 Budget was ‘broadly revenue neutral’ with
‘business taking the lion’s share’ of such tax reductions as were made.119 The
unforgiving Sherman recalled that
during the 1984 Party Conference at Brighton. . . Lawson was given a rough
time from the floor for his consistent refusal to undertake monetary relax-
ation. This was not the first call for a loosening of monetary restraint. But
the weight of criticism fell on Lawson rather than on [Mrs Thatcher], as
it had done in 1979-81. The incident was overlooked at the time because
of the bomb in Brighton’s Grand Hotel, which almost killed the Prime
Minister on the following morning. But Lawson drew his own conclusions
and began to relax monetary controls. . .
and these ‘loose monetary policies. . . sowed the seeds of inflation and a new
cycle of “stop-go” ’.120 When it came to 1985, The Spectator reported that
the Chancellor introduced a short Budget, without any of the radical meas-
ures which had been feared by his own Party. The scope of VAT was not
extended, tax privileges associated with pensions were not attacked. The
payroll tax known as National Insurance contributions were reformed;
the upper limit was abolished and lower rates were introduced for small
incomes. Great comfort was given to the self-employed, their NI contribu-
tions were lowered, while the price of whisky went up by only ten pence.
The pound rose smartly to almost $1.17.121
‘Penned in now, penned in later’ was how The Economist perceived how Law-
son was placed in 1985,122 but the Chancellor’s Budgets of 1985123 and of
1986124 were essentially holding operations, with Lawson maintaining that
he was still adhering to the strategy set out in 1979. ‘Economic arguments
are seldom concluded, one way or another’, Lawson observed in his 1987
Budget Speech, adding:
This is chiefly because it is unusual for economic policies to be held in place

long enough to provide sufficient evidence. But the 1980s have been differ-
ent; and, as a result, one critically important economic argument has now
been concluded, finally and decisively. Throughout our period of office,
our critics have consistently maintained not only that a fiscal stimulus
would produce real economic growth but that without an expansionary
fiscal policy sustained economic growth was impossible. They were wrong,
and have been proved wrong. The British economy is now embarking on
its seventh successive year of steady growth, at an average rate of getting
on for 3 per cent a year. And during that time the PSBR, even if privatisa-
tion proceeds are added back, has been deliberately and steadily reduced
from a shade under 6 per cent of GDP to a little over 2 per cent. Indeed,
had I or my predecessor at any time heeded the advice of our so-called

expansionist critics, the British economy would never have been in the. . .
favourable position it is today.125
In his 1986 Budget, Lawson had reduced the basic rate of income tax from
30 per cent to 29 per cent,126 and in that of 1987 he reduced that basic rate
to 27 per cent.127
‘With a pre-Election Budget that gave away only half of what it conceivably
could, Mr Lawson has interrupted a pantomime that has run [since 1955]’,
The Economist observed admiringly after the 1987 Budget, betting that there
would be no need to go in for the familiar and early remedial measures that so
many of his predecessors had been forced to take subsequently.128 Forgotten
was the same journal’s analysis of the Government’s public expenditure plans
published earlier that correctly deduced that ‘virtue can wait until after the
Election’.129 Using the analogy of Tenniel’s cartoon of Dropping the Pilot,
Mount in The Spectator had pictured Lawson ridding himself of two Professors
called Monetarism and Expenditure Control, and believed that
Lawson’s Autumn Statement will. . . be seen as one of the turning points in

this Administration. At its worst, it might mark a resumption of national
decline. . . just suppose Mr Lawson had not added £4.5 billion on to the
£144 billion he plans to spend next year and had also eschewed the £3
billion tax cuts which he seems to have in mind. What an intoxicating
prospect would have opened up, assuming that the revenue continued to
flow in as strongly as it has of late. Not £7 billion Government borrow-
ing, but nil borrowing. The Government would have balanced its books. . .
Interest rates could have been cut to German-Swiss levels. Inflation ditto,
with growth humming along nicely at three per cent or thereabouts.
Unemployment coming down too as the demographic curve flattened out.
The path of virtue would have brought its own reward.130
The Economist saw things differently:
A main purpose of electing a Conservative Government in 1979 was

that Whitehall and town hall would no longer spend so near to half of
the British people’s money for them. Less public spending would mean
lower taxes, so more of Britain’s decisions about how much gets spent by
whom and on what would be taken in markets instead of by bureaucrats.
Economic growth would benefit thereby. Throughout, Mrs Thatcher’s
achievement has fallen far short of her rhetoric: this year, barring over-
shoots, public spending will be 16.9 per cent higher in real terms than it
was in the year before she came to power. . . The Thatcher Government
can hardly be accused of a pre-Election U-turn. It is, alas, still doing most
of the things it has done throughout its seven years of office: spend too
much, give too little heed to markets, and, one way or another, pretend to
stick to the macroeconomic guidelines. The reward for such consistency
may be a third wasted term.131
The Wall Street Crash that took place on Black Monday 19 October 1987
led the same journal to fear ‘the slump of 1988’ and to declare that ‘the
immediate task is a Keynesian one: to support demand at a time when the
Stock Market Crash threatens to shrink it’.132 Lawson was not short of foolish
advice of this kind as the London Stock Exchange was affected, and the talk
was of another 1929, which did not come to pass. When it came to the next
Budget and the first of the third term, Lawson remembered the lesson of the
previous Parliament and went for the radical change of establishing ‘one of
the simplest systems of income tax in the world, consisting of a basic rate of
25 per cent and a single higher rate of 40 per cent’, and stated that ‘our aim
should now be to get it down to. . . a rate of 20 pence in the pound – as soon
as we prudently and sensibly can’.133
By the time of the 1989 Budget, which proved to be the last one that Lawson
presented, the economic situation was looking grim once more, which, of
course, did not surprise those who had Monetarist opinions in the slightest.
‘Taking the seven major industrial nations as a whole, inflation is now at its
highest level for three and a half years’. Lawson said:
In the United Kingdom, as in a number of other countries, it became

clear that it was necessary to tighten monetary policy sharply. That meant
raising short term interest rates, which I duly did, starting last June. . . The
outlook for 1989 is for inflation to rise a little further over the next few
months, from 7.5 per cent including mortgage interest payments to about
8 per cent, before falling back in the second half of the year to 5.5 per
cent. . . Some slowdown in real growth is inevitable is inevitable as we get
inflation back on to a downward path.
Lawson was ‘keenly conscious of the difficulties many borrowers, particularly

home owners are now facing’ as the result of high interest rates, and with
‘the housing boom that played such a large part in the events of last year
[having] subsided’.134 So, the Lawson Boom was over. ‘With inflation at 7.5
per cent and set to go higher, the pound in a Briton’s pocket is now halving in
value every ten years’, The Economist observed, ‘For any Government, that is
a warning; for a Thatcher Government, it is an indictment. Hammering infla-
tion was what this Budget had to do. Mr Lawson rightly said that “interest
rates will stay as high as is needed for as long as is needed” to do the job. He
stressed that sterling would not be allowed to fall, which was also right (and
gives global investors a one-way bet on a sterling bank deposit).’135 Policy
differences between the Prime Minister and her Chancellor had affected eco-
nomic policy, with Howe intervening as these differences had a ‘European’
dimension to them. ‘The only effective way to control inflation is by using

interest rates to control the money supply’, Mrs Thatcher believed, ‘If, on
the contrary, you set interest rates in order to stick at a particular exchange
rate you are steering by a different and potentially more wayward star. As
we have seen twice – once when, during my time, Nigel shadowed the
Deutschmark outside the ERM and interest rates stayed too low; once when,
under John Major, we tried to hold to an unrealistic parity inside the ERM
and interest rates stayed too high – the result of plotting a course by this
particular star is that you steer straight on to the reefs.’136 Mrs Thatcher
believed that Lawson ‘undermined confidence in my Government’ by ‘his
pursuit of a policy that allowed British inflation to rise, which itself almost
certainly flowed from his passionate wish to take sterling into the ERM’.137
Citing too much interference from Mrs Thatcher’s adviser, Walters, Lawson
resigned in October 1989, to be succeeded at the Treasury by what one pundit
called ‘the curiously anonymous John Major’ on the basis that ‘take away the
trapeze artist father and what’s left?’ The pundit also observed that Chancel-
lors rarely go on to become Prime Minister.138 Major was to do so, but not
before persuading Mrs Thatcher as one of her last acts as Prime Minister to
take Britain into the ERM at what was bound to be too high a rate for sterling
in the longer run. That being so, membership of the ERM could be no more
than a short run, pragmatic means of getting domestic inflation down, in
which role it made a contribution. So, aside from those weighed down by
belief, the problem always was to know when the national interest was best
served by jumping ship, and the Major Government was to get the timing
wrong. The wreckage did not mean the undoing of the Thatcher Govern-
ments’ reconstruction of the economy, which was extensive as the following
examination of their trade union reforms and their privatization programme
demonstrates.
The privatization of public enterprise
‘Privatization means almost the same thing as denationalisation’, Nigel

Lawson, one of the architects of the privatization programme later wrote,
but only
almost because industries such as the telephone service, which had never
been in the State sector, and thus had never been through a process of
nationalization in the first place, were transferred to the private sector.
Partly for this reason and partly because most of us felt denationalisation
did not sound positive enough, the process came to be officially described
as ‘privatization’. The word was, to the best of my recollection, David
Howell’s invention. It is an ugly word – and Margaret disliked it so much
that for some time she refused to use it. But none of us could come up
with anything better.139
Lawson added that
the limited and low key reference to denationalisation in the 1979 man-
ifesto has led many commentators. . . to suppose that privatization was
not part of our original programme and emerged as an unexpected devel-
opment into which we stumbled by happy accident. They could not
have been more mistaken. The exiguous references in the 1979 Conserva-
tive manifesto reflected partly the fact that little detailed work had been
done in Opposition; partly that the enthusiasts for privatization were Keith
Joseph, Geoffrey Howe, John Nott, David Howell and me, rather than Mar-
garet herself; and, perhaps chiefly, Margaret’s understandable fear of the
floating voter. But privatization was a central plank of our policy right
from the start.140
Even within the Conservative Party itself in 1979, though, Ridley later wrote,
when it came to privatization of public enterprise, ‘most people believed, like
me, that the Government wouldn’t actually do it, just as Ted Heath had not
done it earlier’. Like Heath before her, Mrs Thatcher had asked Ridley to chair
a policy group to make proposals about denationalization, and he recalled
that
much of my report was concerned with tighter disciplines for running

the nationalized industries – which would be needed for a while before
privatization took place – and for the utilities, which I put bottom of the
list as candidates for privatizing. I also suggested breaking up many of
the industries into smaller units before selling them. In the event, all the
candidates I identified were in fact privatized, and so were gas, electricity
and the water authorities, which I believed then were too difficult. In
addition, of course, numerous minor concerns, which had seemed too
small to identify at the time, left the public sector during the 1980s.141
Ridley’s report was scarcely a blueprint, and its main interest at the time was
that it anticipated a long term strategy for dealing with ‘the full force of Com-
munist disrupters’ in the public-sector unions, while arguing that in the short
run in nationalized industries that had ‘the nation by the jugular vein the
only feasible option is to pay up’.142 Denying those unions privileged access
to the public purse was an obvious attraction of privatization, but another
proved to be largely accidental. For the Tories learnt the lesson of Healey’s
behaviour as Chancellor in the Labour Government in June 1977 when,
under pressure from the IMF, he sold off part of the State’s holding in British
Petroleum to raise revenue, and thus did so without increasing taxation or
resorting to borrowing.143 That said, though, all that the Conservatives com-
mitted themselves to in their 1979 manifesto was ‘to sell back to private
ownership the recently nationalized aerospace and shipbuilding concerns,
giving their employees the opportunity to purchase shares’, and also ‘to sell
shares in the National Freight Corporation to the general public’.144 Howe
described the sale of public assets as ‘an essential part of the long term pro-
gramme for promoting the widest possible participation by the people in
the ownership of British industry’, and, more immediately, as a short term
means of helping to reduce the PSBR. He set a target of £1 billion for the year
1979–80. In June 1979, a sub committee of the Cabinet’s main Economic
Committee was set up under Howe’s Chairmanship. It was called the E(DL)
Committee. DL was short for disposal. It was Lawson’s job to identify and
bring forward assets for disposal.145 Noting that Biffen as Chief Secretary as
well as himself as Financial Secretary were on the E(DL) Committee together
with Howe, Lawson observed that ‘it was unique for a Cabinet Committee
to have no fewer than three Treasury Ministers [serving on] it, and [this] no
doubt reflected Margaret’s lack of confidence in most of the rest of her first
Cabinet’.146 Howe recalled that
we started (in 1979) with a £290M tranche of BP shares (Margaret was

initially nervous of this, in an oil sensitive world). The process gathered
speed with a list of enterprises whose commercial role made them most
obviously inappropriate for public ownership. Those that were privatized
in 1981 included British Aerospace, Ferranti, Cable and Wireless, British
Transport Docks, and British Rail Hotels. By 1982 we were ready to legislate
for the introduction of private capital into [the] B[ritish] N[ational] O[il]
C[orporation]’s oil producing business. Widespread employee share own-
ership in British Aerospace and an imaginative and highly successful staff
buy out at [the] National Freight [Consortium] added to the popularity of
the process.147
Lawson had no such sense of the popularity of privatization. ‘In advance of

every significant privatization, public opinion was invariably hostile to the
idea, and there was no way it could be won round except by the Government
going ahead and doing it’, Lawson wrote, ‘Then, when the scare stories which
had been so luridly peddled by the Opposition about the consequences of a
particular privatization in prospect were proved to be unfounded, the private
sector status of the industry concerned became accepted as a fact of life.’148
Though a Treasury Minister, Lawson was ‘always on the side of introducing
competition and a tough regulatory regime where no competition was prac-
ticable, despite the fact that either would reduce proceeds’, and he was also a
believer in ‘selling the shares rather than in literally giving them away. . . In
fact no-one was keener than I to achieve the widest possible distribution of
shares in the privatized businesses both to small shareholders in general and
to their employees in particular, who in most cases were able to acquire shares
on favourable terms.’ Employee shares were a major feature of privatizations
with on average 90 per cent of the eligible workforce taking up the shares,
with the figure being 96 per cent in the case of British Telecom. Lawson
pointed out that the proportion of the adult population owning shares rose
from 7 per cent in 1979 to 25 per cent ten years later, though he conceded
that ‘this was not enough to reverse the long term decline in the proportion
of shares held by private individuals rather than institutions – a worldwide
trend’. Lawson emphasized that ‘there was also a clear political motive behind
promoting the wider share ownership of the privatized companies. For the
more widely the shares were spread, the more people who had a personal
stake in privatization, and were thus unlikely to support a Labour Party com-
mitted to renationalization, so much the better. For our objective was. . . to
make the transfer of these businesses to the private sector irreversible.’149
As, successively, Financial Secretary to the Treasury, Secretary of State for
Energy, and then Chancellor of the Exchequer, Lawson was at the centre
of the Thatcher Governments’ privatization programme. As Energy Secre-
tary, Lawson pushed through the privatization of Britoil – the former British
National Oil Corporation (BNOC) – ‘at the time (1982) the largest privatiza-
tion the world had ever known’.150 Lawson ‘became increasingly convinced
of the merits of taking privatizations beyond the competitive sector into the
realm of the giant monopoly public utilities. . . this meant the privatization
of British Gas and the entire electricity supply industry’.151 The big break-
through, though, had been the privatization of British Telecom. In 1979, Sir
Keith Joseph, as Secretary of State for Industry, had begun the erosion of the
BT monopoly by encouraging the setting up of a partial competitor, Mer-
cury Communications, owned principally by the newly privatized Cable and
Wireless. In 1982, Joseph’s successor, Patrick Jenkin, announced that BT was
to be privatized, and, though this was to be delayed by the 1983 Election, the
following year witnessed its achievement. The ubiquitous Lawson recognized
that ‘the sale of even 51 per cent of BT as a single entity meant a flotation far
larger than any that had previously been contemplated’, and there were those
who said that ‘the capital market simply was not large enough to absorb it’.
The likes of Lawson and Jenkin’s successor, Norman Tebbit, took no notice,
of course, and BT was privatized by means of a fixed price offer for sale in
November 1984. ‘BT was the first more or less monopoly public utility to be
privatized, and such animals cannot be permitted to exploit that position’,
Lawson wrote, recognizing the need for a novel form of regulatory regime:
An independent State owned agency, the Office of Telecommunications

(Oftel) was set up to oversee the industry; and the key element in the
regime was the rule that the company could increase its charges each year
by no more than RPI−x, representing the rate of inflation for the pre-
vious year less a percentage designed to reflect the industry’s scope for
increasing efficiency. This formula, which had been devised by Professor
Stephen Littlechild, was originally envisaged as a rough and ready short
term solution to the problem; but, in practice, it has endured and [it was]
used as the basis of the regulatory regimes for all the privatized public
utilities.
Lawson gloated: ‘Altogether some two million people, or 5 per cent of the
adult population of the UK, bought shares in BT.’ thus ‘almost doubling the
number of Britons who owned shares overnight’.152
Lawson’s successor as Energy Secretary, Peter Walker was given the task of
privatizing British Gas, which was achieved in 1986. Lawson recorded: ‘My
strong preference was to break up the corporation both regionally and into
separate gas and appliance businesses before privatizing it. [This] would have
reduced the proceeds of the sale, but I judged competition [to be] a more
important consideration than maximizing government revenue. Peter was
opposed to anything of the kind.’153 Walker recalled:
The central figures running British Gas realized that I had decided [that]
the breaking up of the corporation was lunacy and that I wanted a powerful
British company which could compete round the world. Here was the
biggest gas utility in the world, and it was not allowed to operate outside
the UK. With that size and those skills it should be able to compete abroad.
Nor could the corporation pay proper salaries. The Government [had]
imposed salary levels. . . Sir Denis Rooke [the Chairman] realized that. . .
privatization would mean an end to interference [from the Treasury in
particular] and the long meetings in Whitehall. He was going to be able to
make his own decisions and fix his own capital investment programme.
Walker thought that ‘Rooke was the best nationalized industry Chairman
I met. . . When he went into the private sector, it was easy for him to adapt.
He could devote all his time to running the business.’154 Against the wishes of
Lawson and, as it turned out, the Prime Minister,155 Rooke had been handed
a private monopoly, if one subject to a regulatory regime, run by Ofgas in this
instance. Walker recorded that the sale of British Gas ‘produced the biggest
application for shares in the history of mankind’.156
The eventual roll call of privatizations by share offer under the Thatcher
Governments illustrated the scale of activity: British Aerospace (1981), Cable
and Wireless (1981), Amersham International (1982), Associated British Ports
(1983), Enterprise Oil (1984), Jaguar (1984), British Telecom (1984), British
Gas (1986), British Airways (1987), Rolls-Royce (1987), the British Airports
Authority (1987), British Steel (1988), and the regional water companies
(1989). The share issues relating to the privatization of the electricity sup-
ply industry took place under the Major Government,157 though the plans
had been made and the legislation passed during Mrs Thatcher’s period of
office. She thought that particular privatization was ‘the most technically
and politically difficult’,158 though water privatization proved controver-
sial too. With the relevant Secretary of State, Nicholas Ridley, under fire
in 1989 the relentless Lawson favoured him with a statement of his phil-
osophy on the matter. First, ‘all experience shows that businesses are more
efficient and successful in the private than in the public sector’. Second, ‘the
water and sewerage industry is a business like any other’. Third, ‘a quarter of
the industry is already in the private sector’. Fourth, ‘of course, it will need
regulation. . . but it is far better for the State’s responsibility to be clearly con-
fined to that of regulator rather than to have the existing conflict of interest
when it is both regulator and producer’. Fifth, ‘even though water is a nat-
ural monopoly, the privatized water industry will still face (a) competition
for capital in the private sector and (b) a published share price – a comment
on performance and a powerful spur to management’. Sixth, ‘privatization
not only widens share ownership (desirable in itself) but increases employee
share ownership, which previous privatizations show tends to lead to further
improved performance’.159 This note from one true believer to another need
not convince anybody else of the superiority of private ownership, and it
did not mention one important advantage of the privatization programme.
It denied the direct access to public expenditure that the unions had previ-
ously enjoyed under nationalization in the industries and services concerned,
and it was a desire to bring to an end State subvented syndicalism that was
an important motive behind the Thatcher Governments’ determination to
break the power of the union movement.
The attack on trade-union power
‘The Acts of 1871, 1875 and 1906’ put the trade unions ‘in a position that
in many ways placed them beyond the rule of law’, a prominent group of
Conservative lawyers had stated in 1958, declaring that the time had come
for the unions to be brought within the law.160 Their pamphlet was called A
Giant’s Strength, and in the twenty years following its publication the strength
of the trade unions had been demonstrated again and again. Since, as Dou-
glas Hurd wrote, ‘the brutal exercise of trade union power’ had undermined
the Heath Government,161 this raised the obvious question of how the next
Conservative Government could avoid being destroyed too. So, Mrs Thatcher
gave a group led by Nicholas Ridley the task of working out a strategy to deal
with the public sector unions in particular. The Ridley Group warned Mrs
Thatcher that there would be a major challenge to the next Tory Government
in its first or second year from the union movement, and the Group feared
that it would occur in a ‘vulnerable industry’ such as coal, electricity, or the
docks with the support of ‘the full force of Communist disrupters’. The Group
argued that ‘the eventual battle should be on ground chosen by the Tories in
a field they think could be won (railways, British Leyland, Civil Service, or
steel)’. The Report wanted every precaution to be taken against a challenge in
electricity or gas, but the Group believed that ‘the most likely battleground
will be the coal industry’. So, they wanted a Thatcher Government to ‘build
up maximum coal stocks particularly at power stations: make contingency
plans for the import of coal; encourage the recruitment of non-union lorry
drivers by haulage companies to help move coal where necessary; and to
introduce dual coal/oil firing at all power stations as soon as possible’. The
Group believed that ‘the greatest deterrent to any strike would be to cut off
the money supply to the strikers, and make the unions finance them, though
strikers in the nationalized industries should not be treated differently from
strikers in other industries’. The Group recommended that ‘there should be
a large, mobile squad of police equipped and prepared to uphold the law
against violent picketing’.162
‘The task of the next Tory Government – national recovery – will be of
a different order from that facing any other post war Government’ because
‘recovery requires a sea change in Britain’s political economy’. So stated the
opening words of the Stepping Stones report, adding: ‘There is one major
obstacle – the negative role of the trade unions. Unless a satisfying and
creative [union] role can be developed, national recovery will be virtually
impossible’.163 Support for the thesis of John Hoskyns and Norman Strauss
came from Whitelaw, who believed that ‘there was no option but to tackle
the union issue head on’. Whitelaw thought that the Tories might well win
the next Election, even without facing the union issue, but he agreed that fail-
ure in office would follow and defeat at the subsequent Election would then
be inevitable. Whitelaw warned Hoskyns that big business would be totally
opposed because ‘they prefer the quiet life and will take the short view’.164
Hoskyns and Strauss seemed to think the same of several of the leading
Conservatives, but the unions’ role in bringing down the Callaghan Govern-
ment undermined those opposed to the Stepping Stones approach, though the
manifesto commitments made were limited to moderate sounding measures
to deal with picketing, the closed shop, and to encourage wider participa-
tion by members in union affairs.165 James Prior had been surprised to be
made Secretary of State for Employment in May 1979,166 and so the only
member of Mrs Thatcher’s economic team ‘who was not of the Monetarist
Right’.167 However, Prior recognized that there were ‘advantages in me being
seen to hold back the baying hordes of the Party’s right wing. It was an
uncomfortable stance, but it made me look the reasonable man and there-
fore difficult for the TUC to attack.’168 Prior was determined to avoid the
‘wholesale approach’ of the Industrial Relations Act of 1971,169 and adopted
a ‘step by step’ approach.170 Prior’s Employment Act of 1980 had five main
provisions. Firstly, the Act restricted lawful picketing to the pickets’ place of
work and outlawed secondary picketing. Secondly, the Act restricted immu-
nity for secondary action only to those with a direct interest in the original
dispute. Thirdly, the Act made the closed shop conditional upon approval
by 80 per cent of the workers covered by it. Fourthly, the Act banned the
dismissal of a worker who conscientiously objected to union membership or
a closed shop, and provided for compensation. Fifthly, the Act made pub-
lic funds available for the conduct of union ballots.171 The Prime Minister
found Prior’s approach frustrating as she showed in February 1980 when
she announced, on her own initiative, that in future strikers claiming social
security benefits would be deemed to be receiving strike pay with the level
of benefits being reduced accordingly, and the change was made in the 1980
Budget.172
When Prior was removed from the Department of Employment in
September 1981, the Prime Minister replaced him by Norman Tebbit. It was
Tebbit’s opinion that ‘too few reformers had faced the fact that the power
of the trade unions is based on the privilege of immunity from liability in
tort. Broadly that means unions have licence to commit unlawful acts with-
out those who suffer loss as a result being able to sue for damages or seek an
injunction requiring the mischief to be ended’.173 Tebbit drew up a package
of reforms that was ‘carefully designed and did not of itself compel the unions
to do anything. . . nor did it create a complex new legal structure – it simply
tilted the balance of power away from the unions by chipping away the priv-
ileges and immunities which gave them their ability to ride roughshod over
the legitimate rights of the general public.’174 The Employment Act of 1982
had five main provisions. Firstly, it made the trade unions liable to injunc-
tions and damages if its officials called for an unlawful industrial action.
Secondly, it permitted employers to dismiss strikers even if the dispute was a
legal one. Thirdly, it made occupations and ‘sit-ins’ illegal. Fourthly, it out-
lawed ‘union labour only’ contracts. Fifthly, it increased compensation for
those dismissed for not being a union member, and tightened the proce-
dures for approving a closed shop.175 Tebbit’s successor at the Department
of Employment, Tom King, was responsible for the Trade Union Act 1984,
which had five main provisions. Firstly, it broadened the categories of those
entitled to sue a union for damages. Secondly, it ensured that legal industrial
action should be preceded by a ballot. Thirdly, it required that all members of
a union executive should be elected by secret ballot, at least every five years.
Fourthly, it provided that all union political funds should be confirmed by
ballot, the process being repeated at intervals of not more than ten years.
Fifthly, it tightened the regulations covering the use of union political funds
in pressure group and electoral activity.176
While it was changing the legal framework that regulated industrial rela-
tions, the Thatcher Governments had to confront a series of strikes, mostly in
the public sector, where the unions and their members felt less intimidated
by rising unemployment. In January 1980, the workers in the public sector of
the steel industry went on strike for the first time since 1926, and, when what
was then the longest national strike since 1945 ended three months later, the
Iron and Steel Trades Federation had been defeated by the Government.177
The strike in the Civil Service lasted from January to July 1981, with Prior
incredulous about the lengths to which the Prime Minister was prepared to go
in order to win.178 The Government defeated the railway unions as well as a

National Health Service strike that lasted for eight months in 1982,179 though
The Economist was less than impressed by the settlement that brought to an
end a dispute in the water industry in 1983, and under the heading ‘Burst
Main’ called for ‘job shedding’ among the water workers of the kind that
British Steel had come to engage in.180 To the extent that she had a choice,
Mrs Thatcher actually selected her opponents well, and she knew when to buy
off the National Union of Mineworkers (NUM) when there was a threatened
strike over coal mine closures in February 1981.181 When meeting the Prime
Minister after taking over as Chairman of the National Coal Board in 1983,
Sir Ian MacGregor asked her if there were substantial coal stocks in reserve
compared with two years before, and almost six months’ supply had been
accumulated. ‘It was the only prudent thing to do – especially since Arthur
Scargill took over as the miners’ leader,’ Mrs Thatcher replied, ‘The threat of
confrontation is now far greater. But it would be tragic for this country, just as
it is beginning to see some progress towards economic recovery, to be brought
to a standstill by a man like Scargill, who is, after all, a Marxist revolution-
ary – going under the guise of a normal trade union official.’ MacGregor knew
about Scargill’s declared ambition to use extra-Parliamentary means against
the Conservative Government, and to oppose the further rationalization of
the coal mining industry, and that, therefore, the NUM President was wait-
ing for his opportunity to call a strike.182 What astonished MacGregor was
the timing of the strike for March 1984 with coal stocks still high at the pits
and at the power stations,183 and then, unsure that the rank and file would
support an all out strike, Scargill did not call a national strike ballot as stipu-
lated in the union’s rule book. The strategy was to force the less militant areas
out on strike by the use of flying mass pickets and appeals to solidarity. The
Nottinghamshire miners decided to hold a ballot of their own, and, as 70
per cent voted against the strike, they carried on working with police pro-
tection from picketing.184 The police were better organized than in the NUM
strikes in the 1970s, with a National Reporting Centre at Scotland Yard to
co-ordinate action, and with a system of Police Support Units.185 When,
at the Orgreave coking plant near Rotherham in June 1984, Scargill tried
to emulate the symbolic victory by mass picketing at Saltley in 1972, he
chose a location that the police described as ‘almost ideal for us’, and
defeat ensued.186 When the ineptly led NUM finally capitulated after twelve
months, Benn wrote in March 1985 that ‘the strike has been a monumen-
tal and titanic struggle. . . [the] use by the Government of the apparatus of
the State to crush the miners has been on an unprecedented scale’.187 The
NUM was soon in financial difficulties and forced to seek a merger with the
Tronsport and General Workers’ Union (TGWU).188 There were other impor-
tant industrial disputes such as that between the printing unions and News
International at Wapping, which ended in the unions’ defeat in February
1987; but the crushing of the NUM – ‘the Praetorian Guard of the Labour
Movement’189 – was the critical victory for the Government. Further legisla-
tion such as the Employment Acts of 1988, 1989 and 1990 only confirmed
this victory.
The Thatcher Governments had needed to crush union power not just for
party political reasons and to safeguard the political system, but because the
Prime Minister and those who shared her economic philosophy believed that
solving the union problem was the key to the recovery of the British economy.
There was soon a heated debate among economists and writers on industrial
relations about whether or not a productivity miracle had taken place, or
even an economic miracle, or a supply-side revolution, or all of them, and
there was also a debate about whether or not management prerogatives had
been restored or needed to be, and about whether or not means of pay deter-
mination and workplace relations had changed.190 Workplace relations were
the subject of officially commissioned studies, with surveys conducted in
1980,191 1984,192 1990 and 1998. Not all the findings were what the Con-
servative Government wanted to hear, given that a companion volume to
the 1984 survey about technical change ‘found no evidence that the rate or
form of change was inhibited by trade union organization’, though ‘it did
appear that systems of management or the nature of management structures
were associated with the propensity of workplaces to innovate’.193 Neverthe-
less, the general trend in workplace industrial relations was in the direction
that the Thatcher Government wanted. ‘The fact that fewer workplaces had
recognized unions in 1990 than in 1980 was our strongest evidence of the
decline in collective bargaining as an institution’, the third survey reported,
‘The fall was stark, substantial and incontrovertible’.194 Those who conducted
the 1998 survey recalled that
the Conservative Government that came to office in 1979 confronted a

system of collective employment relations that was dominant though
not universal. It pervaded the whole of the public sector, including the
then extensive nationalized industries, and it covered large parts of the
private sector, especially manufacturing industry and large employers gen-
erally. That system of collective relations, based on shared values of the
legitimacy of representation by independent trade unions and of joint
regulation, crumbled in the intervening eighteen years to such an extent
that it no longer represents the dominant model. True, the substantially
reduced public sector still operates that model to a large degree. But in the
far larger private sector of the economy, joint regulation is very much a
minority activity.
The change was almost wholly in the direction that the Conservatives had
wanted public policy to go, which was to ‘curb the power of the unions’,
and the 1998 survey found that in comparison with 1980 union influ-
ence had diminished. On such matters as the closed shop and industrial
action, the direct impact of legislation was evident; but the Government
had only indirect influence compared with economic pressures in the case
of the decentralization of bargaining structures in the private sector, and the
increasing recognition of workplace and organizational performance in deter-
mining levels of pay. The structures and conduct of British industrial relations
had been transformed since 1979, mainly as a result of legislation, with union
power diminished in the workplace,195 and as a force to be reckoned with in
the wider conduct of British politics.
5
The Economic Liberal Crusades II:
The Recasting of the Welfare State
Only one ‘social revolution’
‘It is a familiar truism to say that the Conservative Party has been in exis-
tence much longer than the Labour Party [but] it is a less familiar proposition
that Conservative concern for and involvement in what we nowadays call
welfare politics has been much more marked, and much more effective,
than that of any rival party’, Mrs Thatcher wrote in 1977, adding: ‘Prac-
tically every measure of social amelioration passed through Parliament in
the nineteenth century was passed by Conservatives. . . The greatest social
reformer of the period was the Tory, Lord Shaftesbury. . . it was the Tories
who. . . sought to mitigate the rigours and the consequences of the Industrial
Revolution.’ Mrs Thatcher denounced ‘the uncaring dogmas of socialism’
and declared: ‘Once everything is provided and controlled by the State, the
voice of the individual is silenced, the ability to choose eliminated. . . I believe
that only the Conservative principles of thrift and industry will provide that
stability of provision which alone can provide shelter for the vulnerable.
And I believe that only a free society can hope to be a truly compassionate
one.’1
Nobody with much sense doubted that the Conservative tradition involved
a commitment to State social provision, or that the Tories had displayed this
in opposing the nineteenth-century Liberals as well as by promoting various
pieces of legislation of their own. The point was, though, that, in embracing
economic liberalism, Mrs Thatcher often sounded like a nineteenth-century
Liberal. Further, the very notion of the word ‘thrift’ was a reminder that
the Keynesian era was over. There could be few illusions about the relation-
ship between ‘sound money’ and, say, social security provision. After all,
in the 1920s, Neville Chamberlain had drawn up plans for what was called
‘All-in Insurance’ that were never full implemented. There was the Widows,
Orphans and Old Age Contributory Pensions Act of 1925,2 of course, com-
monly described as the halfway house between the Liberal reforms after
1906 and the Beveridge Report. Why, though, stop halfway? The answer
105
was ‘sound money’, in other words the cost, which was not to be such a
consideration under the Keynesian dispensation with its relatively indul-
gent attitude towards public expenditure. With Keynesianism dead, if not its
spirit, the Welfare State seemed vulnerable by 1979, with full employment
gone, and, importantly, the conventional family structure in difficulties. Mrs
Thatcher knew where the blame lay: ‘welfare benefits, distributed with lit-
tle or no consideration of their effects on behaviour, encouraged illegitimacy,
facilitated the breakdown of families, and replaced incentives favouring work
and self reliance with perverse encouragement for idleness and cheating.’
Not surprisingly, Mrs Thatcher believed that ‘to cure the British disease with
socialism was like trying to cure leukaemia with leeches’,3 but, as she showed
herself to be aware, State social provision was part of the Conservative tradi-
tion too. She herself referred to the Balfour Education Act of 1902,4 which had
benefited her own educational advancement, and acknowledged too the But-
ler Act of 1944,5 which benefited others. The Family Allowances Act of 1945
had been close to Tory sentiment at that time, but the Thatcher Governments
allowed child benefit to ‘wither on the vine’, as well as Budgetary policies of
fiscal neutrality which treated marriage as not mattering, whereas the costs
of the undermining of the institution were among the obvious reasons why
social security spending was to outstrip even the growth of expenditure on
the National Health Service. One poverty trap that the Thatcher Govern-
ments did manage to avoid was that of defining poverty in relative terms,6
but this did not mean that there was anything resembling a relentless attack
on social security in the Thatcher years. Indeed, fatalism characterized much
of the Government’s behaviour. ‘What I wanted to do was to ensure that the
social security budget was being spent to best effect’, recalled Norman Fowler,
the Secretary of State responsible for a supposedly radical review, ‘It was easy
to become mesmerized by the size of the budget, but when you looked at it in
detail you found that almost half of it went on pensions and other payments
to the elderly; that 20 per cent went to families with children; 17 per cent
went to the unemployed; and that 13 per cent went to the sick and disabled.
The spending may have been great but it was not being devoted to thousand
upon thousands of undeserving and feckless claimants.’7 There was no sign
here of what Titmuss had called the Residual Welfare (or Public Assistance)
Model, ‘based on the premise that there are two ‘natural’ (or socially given)
channels through which an individual’s needs are properly met; the private
market and the family. Only when these break down should social welfare
institutions come into play and then only temporarily [since for economic
liberals] ‘the true object of the Welfare State is to teach people how to do with-
out it’. The theoretical basis of this model can be traced back to the. . . English
Poor Law, and finds support [from] sociologists like [Herbert] Spencer. . . and
economists like Friedman, Hayek and the founders and followers of
the IEA.’8
The Recasting of the Welfare State 107
In the autumn of 1987, in an interview, Mrs Thatcher made her most

famous statement about society, declaring:
I think we have gone through a period when too many. . . people have
been given to understand ‘I have a problem, it is the Government’s job to
cope with it!’. . . So they are casting their problems on society and who is
society? There is no such thing! There are individual men and women and
there are families and no Government can do anything except through
people and people look to themselves first. It is our duty to look after
ourselves and then also to look after our neighbour.
Then again:
There is no such thing as society. There is [a] living tapestry of men and
women and people and the beauty of that tapestry and the quality of our
lives will depend upon how much each of us is prepared to take responsi-
bility for ourselves and each of us is prepared to turn around and help by
our own efforts those who are unfortunate.9
Mrs Thatcher’s critics thought nothing of leaving out such material in this
instance which did not suit their case against her, and not surprisingly so
since her remarks considered more fully displayed idealism. A believer herself,
Mrs Thatcher was not averse to confronting her Christian critics, as in the
Sermon on the Mound, the nickname given to her address to the Church
of Scotland on 31 May 1988. Earlier, the Church of England had not been
able to hide its antipathy towards the Government, though it was his views
on theology that ensured that when the chief troublemaker Professor David
Jenkins was consecrated as Bishop of Durham in July 1984 the ceremony was
disrupted by protests. The Spectator recorded that ‘four days later the roof of
the south transept of York Minster was consumed by a fire apparently started
by lightning’.10 Like some others, the journal seemed to want to connect the
events, not least because the Bishop was said to have ‘[theological] views the
Church would until recently have condemned as heretical’.11 The Bishop’s
political views proved to be of the ‘print money’ to ‘cure’ unemployment
type combined with a vision of the future comprising ‘a labour intensive
caring society’.12 A Church of England document, Faith in the City, published
in late 1985, advanced the familiar thesis that ‘the State should be throwing
more money’ at ‘poor inner city areas’, in response to which the Government
was well described by The Economist as seeming ‘torn between thinking (a)
that it should be doing no such thing and (b) that it [was] doing exactly
that already’.13 It was as early as January 1980 that Mrs Thatcher had argued
that ‘no-one would remember the Good Samaritan if he’d only had good
intentions; he had money as well’.14 Those who passed by may well have
had money too, but the Good Samaritan gave his time and made an effort,
which entailed risk to himself, as well as providing money. The behaviour of
the Anglicans was such that they effectively thought that the message of the
parable in Luke Chapter 10 verses 26–37 had too few takers in the modern
world for private philanthropy to compensate more than marginally for ‘cuts’
in public expenditure, and so they looked to the State.15 Mrs Thatcher was
predicating that there would be sufficient Good Samaritans to go around
whereas her opponents had admitted defeat.
‘By the time I left office my advisers and I were assembling a package of
measures to strengthen the traditional family whose disintegration was the
common source of so much suffering’, Mrs Thatcher wrote, and while she
recognized that ‘we had not the slightest illusion that the effects of what
could be done would be more than marginal’,16 the aim was to reduce crime
and curb welfare dependency.17 If the boundaries of State activity in terms
of social provision were to be rolled back, then it was obvious that the inter-
ests of the traditional family as an institution had to be promoted, and
the time to devise such a policy was in Opposition, and not almost as an
afterthought, and including at the outset – as Mrs Thatcher herself would
have preferred – returning to a system including child tax allowances. It
seemed that ‘fiscal purists in the Treasury’ obstructed her in that instance,18
though opposition was overridden in the case of what became the Child
Support Act of 1991. ‘I was. . . appalled by the way in which men fathered a
child and then absconded, leaving the single mother – and the taxpayer – to
foot the bill for their irresponsibility and condemning the child to a lower
standard of living’, Mrs Thatcher recalled, ‘I thought it scandalous that only
one in three children entitled to receive maintenance actually benefited from
regular payments. So – against considerable opposition from Tony Newton,
the Social Security Secretary, and from the Lord Chancellor’s Department –
I insisted that a new Child Support Agency would be set up, and mainte-
nance be based not just on the cost of bringing up a child but on that child’s
right to share in its parents’ rising living standards.’19 What Mrs Thatcher’s
behaviour showed was that, despite all the fuss about her supposedly hum-
ble origins, she knew less than she thought about male behaviour at the
lower end of society. The Child Support Agency might well catch up with
responsible males and do all sorts of things to them like renegotiate divorce
settlements, but the irresponsible would be on their way and out of reach.
Similarly, when it came to the broader issue of means testing, one Tory
MP pointed out in relation to Fowler’s review of social security that it was
‘entirely opposed to. . . Conservative philosophy that those people who man-
age to save a little day by day are worse off when it comes to a whole
range of benefits than those who have been unable or have not cared to do
so.’ Fowler responded by saying that ‘these are principles. . . which we want
to strengthen’,20 but such initiatives as were engaged in did not radically
change the balance of advantage against those shrewd enough to work the
system.
The then Prime Minister may well have deserved high marks for refusing
to indulge in the cosmetic changes in the machinery of central government
that had disfigured the Wilson and Heath years, but the bureaucratic empire
that was well worth breaking up long before it was done in 1988 was the
Department of Health and Social Security. ‘I was now in charge of the biggest
spender and largest employer in Whitehall’, Norman Fowler reflected on his
appointment as Secretary of State for Social Services in 1981, ‘Created in 1968
to give Dick Crossman a new and senior job, the DHSS was responsible for
over 40 per cent of all public spending. It employed almost 100,000 people
directly, mainly in our social security offices, and was responsible for the
National Health Service – which, with almost a million staff was the largest
employer in Europe.’21 Plainly, far from relentlessly pursuing a New Right
agenda, in relation to the NHS, and, as it turned out, social security too, Mrs
Thatcher and her Governments were too aware of electoral realities to act
in a radical manner. In the sphere of education, the same caution was in
evidence, since in relation to schooling, for example, it was no secret what
many Tories believed needed to be done, even if Mrs Thatcher herself had
other ideas. ‘Some years earlier the Labour Party’s strategists had correctly
identified the grammar schools as the most important escape route from
the socio-economic prison in which able children of working class parents
are held’, Norman Tebbit wrote, ‘Then with the connivance of upper-class
socialists within the Conservative Party, most notably Edward Boyle. . . they
set about their destruction.’22 The Thatcher Governments did not restore the
grammar schools, and neither did they introduce arrangements that linked
schooling with paying for it, without which, some on the Radical Right would
say, it would not be valued. That said, though, the Thatcher Governments
were very active in relation to education, with much of that activity causing
considerable resentment, notably in the case of the universities. Housing
was to be the area of social policy in which the Thatcher Governments
made what their supporters at least defined as the greatest advances. The
sale of council houses came to be popularly seen as a trademark Thatcher
policy, but there were other authors. The Housing Act of 1980 laid ‘the basis
for perhaps as profound a social revolution as any in our history’, Michael
Heseltine claimed, ‘Certainly, no single piece of legislation has enabled the
transfer of so much capital wealth from the State to the people.’23 What
the Conservative Government was doing was ‘designed to turn Britain into
two housing nations’, Roy Hattersley argued from the Opposition benches,24
but, in terms of house ownership and rental it was at least that already. The
winners in most cases were the owner occupiers, and the Thatcher Govern-
ments pursued the classic Tory aim of a ‘property owning democracy’ with
relish.
Housing: the jewel in the crown
‘I cannot in this matter claim to be introducing any new principle’, Harold

Macmillan said to the House of Commons in relation to provisions in what
became the Housing Act of 1952 relating to the disposal of council houses,
‘For the local authorities have always had, under the existing law, the power
to dispose of their houses with the consent of the Minister. . . [and] if there
was any new principle [it was that] introduced by [the Attlee Governments]
when they announced that as a matter of policy that they would not give con-
sent to any such houses being sold or leased. . . we disagree with this view.’25
What Macmillan was doing was to ‘withdraw the general prohibition’,26 and
selling off council houses was only to be a small part of what became his
famous housing drive, which was often characterized by the creation of huge
council estates that proved to be Labour citadels. By the 1960s, though, the
Tory council in Birmingham led by Sir Frank Griffin was promoting the sale
of council houses, and the Conservative Party Conference took up the issue
and Labour obstruction of the policy was denounced, and there was evi-
dence that the policy was popular.27 Among Harold Wilson’s advisers in the
1970s, there was work done on a scheme to promote council house sales, but
it did not attract the support of Crosland, the relevant Labour Minister at
the relevant time. The Left was hostile, leading one of the scheme’s authors
to comment that ‘although they themselves personally often enjoyed the
pleasures and benefits of living in their own Hampstead homes, they were
dogmatically committed to denying these pleasures and benefits to council
tenants’.28 So, the field was left to the Conservatives and, more specifically,
Peter Walker. Promises had been made in the February and October 1974
Tory manifestos to press ahead with these sales,29 but the main credit for the
programme designed to bring about what he once called ‘the Liberation of
the Permanent Tenantry’30 belonged to Walker. He recalled that
in office [in the Heath Government] I had decided we would give council
house tenants a 20 per cent discount if they wanted to buy the homes in
which some had been living for fifty years or more. . . but we. . . sold only a
small proportion of all council homes in Britain. The best council houses
had gone to the wealthiest tenants. Administration and repair of council
houses cost a fortune, [indeed] the cost was greater than the rents. My pro-
posal was that we should tell council tenants they could become owners
of their council houses straight away. If they had been tenants for a long
period they would get the house for nothing. That was a small proportion,
however. Everyone in the Press described it as a give away. It never was
that. If tenants had been in council housing less than thirty years, their
rent would be treated as a mortgage repayment for the balance of the thirty
years. The scheme took into account how long a family had been tenants
and made sure their payment would never be more than the old rent, but
tenants did have to do the repairs. I thought most council house owners
would be able to organize repairs with the help of relatives and neigh-
bours. It might be part of the black economy but it would happen. You
would have dismantled this costly bureaucracy and an inefficient repair
service. Everybody, from day one, would become an owner-occupier. The
whole scene would be transformed.
That said, though, when in Opposition, Walker was cross-examined about

his plans by a committee chaired by Hugh Rossi,
it was clear that Margaret was against it because she felt it would upset ‘our
people’ who had struggled to pay their mortgages. Suddenly, these other
people would be getting their homes much cheaper. But all you had to
say to ‘our’ people was that ‘these’ people would have the responsibility
for repairing and maintaining their houses and that this would save hun-
dreds of millions of pounds in public expenditure. ‘Our’ people would
be delighted. Margaret’s political judgement on this point was wrong.
I knew I was right and eventually I persuaded her to adopt a very similar
scheme.31
‘Many families who live on council estates and in new towns would like to
buy their own homes but either cannot afford to or are prevented by the
local authority or the Labour Government. The time has come to end these
restrictions’, the Conservatives declared in their manifesto in 1979:
In the first session of the next Parliament we shall therefore give council
and new town tenants the legal right to buy their homes, while recog-
nizing the special circumstances of rural areas and sheltered housing for
the elderly. Subject to safeguards over resale, the terms we propose would
allow a discount on market values reflecting the fact that council tenants
effectively have security of tenure. Our discounts will range from 33 per
cent after three years, rising with length of tenancy to a maximum of 50
per cent after twenty years. We shall also ensure that 100 per cent mort-
gages are available for the purchase of council and new town houses. We
shall introduce a right for these tenants to obtain limited term options
on their homes so that they know in advance the price at which they can
buy, while they save the money to do so. As far as possible, we will extend
these rights to housing association tenants. At the very least, we shall give
these associations the power to sell to their tenants. Those council house
tenants who do not wish to buy their homes will be given new rights and
responsibilities under our Tenants’ Charter.32
Since ‘the Right to Buy was by far the most radical pledge and, as one of the
core promises of the Election campaign, the legislation to allow the sale of
council houses. . . would inevitably command centre stage’, Michael Hesel-

tine, the then Secretary of State for the Environment, was later to write, ‘But
John Stanley [the Minister of Housing] and I had a wider agenda. We set out to
address the problems of the nation’s housing across both public and private
sectors.’33 The Tory Government was soon accused of ‘promising something
for everyone’ when it came to housing, according to The Economist, ‘Land-
lords will be able to recover their property from tenants quicker; owner
occupiers will find it easier to get grants for roof and brickwork. Council
tenants will be given the right to buy their homes and even if they do not,
the right to paint their front doors purple.’34 Heseltine was well-aware that
‘the political spotlight was sharply focused on Right to Buy’, and
as a belt-and-braces approach, I asked officials to find the sharpest barrister

they could and brief him as though he had been retained by an extreme
left-wing council with infinite resources and with an absolute determina-
tion to break our proposed legislation. His job was to tell us if and how
he would do it. These rather over-dramatized instructions would in all
substance be precisely how Labour councils would so instruct their legal
advisers. We got there before them. Before long, we received word that
our in extremis lawyer had, indeed, bust our proposed legislation. But, for
the same fee, he had also shown us how to close the loophole.
As expected, local councils did try to obstruct the relevant provisions of the
Housing Act of 1980, and, when it came to the use of default powers, Hesel-
tine and Stanley waited ‘until Michael Havers [the Attorney General] advised
us that he thought the evidence against one particular authority, Norwich,
gave us an overwhelming chance of success. We had been right to wait. When
we finally went to court, we won hands down, although we had to fight the
matter through to the High Court.’ Heseltine believed that
the political consequences that flowed from the success of this policy were
epoch making. Giving tenants the right to buy their houses and flats
was an exercise in mass compulsory conveyancing that had never been
attempted anywhere else in the world before. For the vast majority of
tenants who purchased, it was the deal of a lifetime [and what had been
achieved] was a quiet revolution within the ranks of Britain’s property
owning classes. . . We had begun to break up the monolithic local authority
estates and to create a less polarized society.35
The sale of council houses and flats proved to be the most successful privatiza-
tion of the period of the Thatcher Governments, with receipts amounting to
more than the sale of British Telecom and the gas and the electricity indus-
tries combined. By 1990, almost 1.5 million council houses and flats had
been sold off.36
Before 1914, the private rented sector accounted for about 90 per cent of
the housing stock in Britain, and even in 1950 it was still the most common
form of housing tenure, but by the end of the Thatcher era the propor-
tion was down to about 10 per cent of the housing stock in England and
6 per cent in Scotland.37 Rent control was first introduced by the Increase
of Rent and Mortgage Interest (War Restrictions) Act of 1915 following an
outcry against rising rents in Glasgow,38 One explanation of the subsequent
fate of the private rented sector was that it became a victim of the tran-
sition from local capitalism to a more national and international phase of
capitalism,39 and other important factors were that rising incomes eventually
encouraged people to think in terms of owner-occupation, not least because
of fiscal incentives, together with the development of council housing, while
important too was slum clearance because most slum housing was privately
rented.40 Most important of all, though, was the political reality that land-
lords were far less numerous than tenants, and the latter had other uses for
their money than paying anything resembling an economic rent for some-
body else’s property. In such circumstances, the Rent Act of 1957 had been an
isolated economic liberal venture, and the situation that the Conservatives
inherited in 1979 was one in which ‘there are now hundreds of thousands
of empty properties. . . which are not let because the owners are deterred by
legislation. We intend to introduce a new system of shorthold tenure which
will allow short fixed term lettings of these properties free of the most dis-
couraging conditions of the present law. This provision will not, of course,
affect the position of existing tenants.’41 According to Heseltine,
behind the rather dry rhetoric, what we were promising was the most
ambitious reversal of the private rented sector since the introduction
of rent control. . . Our first change was to introduce ‘controlled’ rents,
whereby the minuscule rents dating back to the First World War rent con-
trols which had done so much to create the urban slums were replaced
by more realistic rents under the guidance of the local authority. Next we
brought in our promised shortholds. . . We wanted landlords to be able to
let their properties at market rents for a fixed term under a shorthold lease.
At the expiry of that term and with appropriate notice, the landlord would
become entitled to vacant possession.
The Tory Government made various concessions to the Labour Party, but it
only dropped its opposition after its defeat in the 1983 Election. ‘The mar-
ket that emerged heralded the beginnings of a new, healthy, private rented
sector [in Britain] for the first time since the First World War’, Heseltine
believed, especially when added to it arrangements, derived in part from
how own experience as a landlord, for what was called an ‘assured tenancy’
which offered tenants ‘fixed term leases. . . in newly built property at market
rates’.42
Further, and with Heseltine having moved on, the Housing and Planning
Act of 1986 gave local authorities powers to get rid of blocks or whole estates
to private developers. The Act made provision for authorities to remove ten-
ants against their will if necessary in order to sell off these blocks and estates
with vacant possession, although such tenants had to be given suitable alter-
native accommodation.43 Entire blocks of high-rise flats were sold off, with,
for example, the Moravian Tower in Kensington and Chelsea being refur-
bished to provide exclusive housing for the expanding professional classes,
with one feature in that development being hanging gardens planted on
every third floor set behind a glazed atrium.44 Similarly, in Wandsworth,
blocks were renovated and provided with gyms, six-foot fences around the
buildings, lifts and video security, and it seemed that ‘no one quite seemed to
know where those who had lived there before had gone’.45 Of Birmingham,
it could be said that ‘in certain areas, and particularly in the outer wards with
attractive wards with gardens, council estates have changed significantly and
have become mixed tenure estates. . . But in other areas, and particularly inner
city estates with high numbers of flats and maisonettes, the picture is very
different. They remain largely one tenure estates. Those on the social and
economic margins such as the homeless and unemployed have been increas-
ingly funnelled into these estates.’46 Of course, homelessness was not a new
issue, given that Cathy Come Home the famous television programme on the
subject was first shown in 1966, and the classic study of Homelessness in
London was published five years later.47 Overall, by the late 1980s, the statis-
tics suggested that it was less difficult for people to get housed than in the
early 1970s, and yet also by the late 1980s the number of households accepted
by local authorities in England for rehousing because they were homeless
doubled compared with ten years before, with the major rise being after 1982.
The statistics reflected a change in the means by which people gained access
to council housing as much as representing an index of the failure of sup-
ply in relation to demand. There were no reliable statistics for the literally
roofless, and in 1989 a Salvation Army study estimated that on one night in
London there were 75,000 ‘overtly homeless’ people in London.48 ‘There was
a persistent tendency in polite circles to consider all the “roofless” as victims
of middle class society’, Mrs Thatcher noted, while declaring that ‘crowds
of drunken, dirty, often abusive and sometimes violent men must not be
allowed to turn central areas of the capital into no-go zones for ordinary
citizens’.49 Commentators tended to portray the problem of homelessness,
however defined, as a recent invention, with the sale of council housing and
the decline in house building for the public sector tending to be blamed,50
rather than obvious factors such as high levels of unemployment and the
effects of the policies of family breakdown pioneered in the 1960s.
In the immediate aftermath of the Thatcher era, it was evident that the
percentage of home owners had risen from 57 per cent to 68 per cent in
terms of housing tenure, with the rest of the market being accounted for by
local authorities, down from 30 per cent to 22 per cent, housing associations,
up from 2 per cent to 3 per cent, and the private rented sector down from
11 per cent to 7 per cent, which meant that in the short run at least the
attempt to revive it had failed badly. The rapid growth of home ownership
in the 1980s was largely accounted for by provision for the Right to Buy.
‘Many councils in the south of England lost close to half their stock’, one
commentator reported, ‘The average net reduction in council stock in the
south east excluding London was 28 per cent, compared to only 18 per cent
in Scotland. The second greatest reduction of 25 per cent was in Wales, while
the contraction in London was only slightly greater than for Scotland.’51 The
most important policy differences between the period before and after 1979
were well-described in terms of the shift from general subsidies for public
housing towards higher rents and more spending on housing benefit and
the Right to Buy, with not only the local authorities’ share of the housing
stock but also net public expenditure on housing also declining markedly
after that date. Even though the cash limit on mortgages eligible for tax relief
threatened the future arrangements, the Thatcher era was characterized by
tax concessions to owner-occupiers, which in real terms more than doubled
in value compared with the days of Heath.52 Though this meant only too
often that to those who already had a great deal even more would be given,
and high interest rates were to emphasize that there was a price to pay, for a
fortunate minority the Thatcher Governments did live up to Heseltine’s boast
made in mockery of the authors of the 1974 Labour manifesto that council
house sales would mean ‘an irreversible shift of wealth in favour of working
people and away from the State’.53
‘Saving’ the National Health Service
The Merrison Royal Commission on the NHS, set up by the Labour Govern-
ment, and reporting in July1979, observed that such were the demands for
more spending on the NHS made in evidence to it that ‘we had no difficulty
in believing the proposition put to us by one medical witness that “we can
easily spend the whole of the Gross National Product”’.54 When, in Opposi-
tion, a group led by Lawson drew up proposals for the reform of the NHS. As
he recorded:
understandably, Margaret would not touch them with a bargepole. The

provision of health care is an issue where the intractability of the prob-
lems is matched only by the acute political sensitivity of the issue. The
intractability stems chiefly from the fact that the demand for health care,
particularly if it is to embrace caring as well as curing, is infinite. . . There is
no limit to the demand for health care; and as medical science progresses,
and new treatments are discovered, the demand grows still more and the
cost of meeting it rises even faster.
Lawson recalled how often, despite the actual facts of extra expenditure on
the NHS in real terms and how many more doctors and nurses there were
compared with when the Tories had taken office, ‘at Prime Minister’s Ques-
tions every Tuesday and Thursday afternoon, Margaret had thrown at her case
after case of ward closures, interminably postponed operations, and allegedly
avoidable infant deaths, all of them attributed to Government parsimony.’
Then, there was the sheer size of the NHS, with Lawson believing it to be
the third biggest employer and bureaucracy in the world, after the Indian
railway system and the former Red Army. . . [Further] the NHS is the closest
thing the English have to a religion, with those who practice in it regarding
themselves as a priesthood. This made it quite extraordinarily difficult to
reform. For a bunch of laymen, who called themselves the Government,
to presume to tell the priesthood that they must change their ways in any
respect whatever was clearly intolerable. And faced with a dispute between
their priests and Ministers, the public would have no hesitation in taking
the part of the priesthood.55
Those employed in the NHS were heavily unionized, and much of the debate
about it was really concerned with self-interest, and this was the case with
not just ancillary workers and the numerous officials, but also the doctors,
nurses and the other professionals. It was a familiar pretence that ‘cuts’ had
been made in the NHS, whereas, as Fowler observed, in reality the argument
was about whether the Government had increased the budget enough. The
NHS strike of 1982 was about employees seeking more pay for themselves,
and about 70 per cent of the costs of the NHS were staff costs. It was not pos-
sible to run the NHS on the basis that ‘it costs what it costs’ but the unions
thought otherwise. ‘Arrayed against me I had both the TUC-affiliated unions
and the Royal College of Nursing, the professional organization representing
the nurses’, Fowler recalled. At his side, as a fellow Minister, he had Kenneth
Clarke. Fowler believed that they worked well together: ‘An aggressive visit-
ing delegation would be dusted down by Ken in his best James Cagney style,
leaving me looking untypically reasonable and friendly in bringing the meet-
ing to a conclusion.’56 There were demonstrations and strikes in a dispute that
lasted for several months, and there seemed to be no limit to the bitterness.
‘An editorial [in The Lancet] alleged that the Government would welcome
headlines saying that a patient had died because it would swing public opin-
ion against the unions’, Fowler observed, ‘It is a curiosity of medical politics
that any charge, however gross, can be made against you. Unfortunately, not
all health professionals take the objective standards of their medical train-
ing into their public and political comment.’57 Eventually, victory went to
the Conservative Government, but not until December 1982. In November,
the Royal College of Nursing had recommended their members to accept a
proposed pay deal designed to drive a wedge between the nurses and the
other health unions, the Confederation of Health Service Employees and the
National Union of Public Employees,58 and this strategy worked, despite the
national executive of the former union recommending an all-out strike to
their members without accident or hospital emergency cover, meaning that
patients should be allowed to die. The delegates overwhelmingly rejected
this, and the strike collapsed. ‘This surrender, after eight months of inflicting
misery on hospital patients without getting much extra for their members
[was] a crushing defeat for the trade unions’, The Economist declared, believ-
ing that ‘this could prove a historic British victory against wage inflation’,59
though the NUM strike was still to come.
That still left the problem of what to do about the NHS, if anything.
Fowler’s predecessor as Secretary of State, Patrick Jenkin, had asked the DHSS
to examine the different ways in which Western European countries financed
their health care. Fowler found that the results were predictable in that they
showed that every country was facing an explosion in demand for health care
and that each one was also spending substantial resources on health, and the
review’s conclusion was that Britain’s centrally run, centrally financed sys-
tem was the most effective in controlling costs.60 So, Fowler declared in July
1982 that ‘the Government have no plans to change the present system of
financing the NHS largely from taxation, and will continue to review the
scope for introducing more cost consciousness and consumer choice and for
increasing private provision which is already expanding.’61 Nonetheless, on
7 September 1982, together with the other Cabinet papers a paper prepared
by the CPRS was circulated, and made available to a wider public than the
Ministers concerned by being leaked to The Economist, which then reported
that
the paper suggests replacing the NHS with private health insurance: this
could save £3 billion–£4 billion a year from a 1982–3 health budget of
£10 billion. The problem is that the less well off would underinsure, so
the paper suggests that there might have to be a compulsory minimum of
private insurance for everyone. In the meantime savings could be made
by charging for visits to the doctor and more for drugs.62
Mrs Thatcher later wrote that ‘I was horrified by this paper’, though The
Economist, whom she credited with publishing ‘a blow by blow account of
discussions at Cabinet’,63 believed that in reality the Prime Minister had
‘shelved [the] report because she had met a Cabinet brick wall’. If that jour-
nal’s ‘insider’ account was to be believed there were plotters everywhere in
the Cabinet.64 Howe thought that he as Chancellor and Brittan as Chief
Secretary had to take a large share of the blame for how the exercise was han-
dled, while believing that the ‘sacred cow’ status of the NHS had prevented
serious discussion of its funding in relation to a prospectively slow-growing
economy, with this assumption being ‘simplistically’ dismissed by Cabinet
colleagues as ‘typically negative Treasury thinking’.65 This assumption surely

also implied that the overall economic strategy that Howe and the Govern-
ment were pursuing would not work. Though what took place, according to
Lawson, was ‘the nearest thing to a Cabinet riot in the history of the Thatcher
Administration’,66 Fowler was to write that there was Cabinet unanimity in
rejecting the CPRS’s proposals, and cited Mrs Thatcher’s subsequent assur-
ance that ‘the NHS is safe with us’, with the issue never being raised again
during his remaining five years at the DHSS.67
‘Little John Moore is in trouble’, Alan Clark noted in January 1988, of
the Cabinet Minister who had replaced Fowler a mere seven months before,
‘It’s the NHS debate today and the whole House will turn out, hoping for
blood. The poor fellow has been. . . “on the sick list”, i.e. not around. . . Why
is everybody so beastly? John was literally golden. Although in his forties
he has kiss curls like a baby food ad.’ It seemed that ‘people were gloating,
his own colleagues particularly’,68 at the prospect of Moore being ‘totally
destroyed, finished.’69 Moore was ‘mildly of the Right’ and had ‘attached
himself to Her’,70 and
during the high months of his status as her chosen successor he framed
the Health Service reforms exactly on the basis of what he thought she
wanted. But she kept changing her mind. One minute she wanted to go
further, the next she got an attack of the doubts, wanted to trim a bit. Each
time the unfortunate John agreed, made the adjustments, came back for
approval. The result was a total hotchpotch, and she ended up thinking
he was a wanker, and got rid of him.71
Not surprisingly, Mrs Thatcher phrased things differently, praising Moore for
‘characteristic gallantry’ in returning to work ‘too soon’ after his illness,72
and recording that ‘the idea of money following the patient, the distinction
between buyers and providers and the concept of self governing hospitals all
emerged during his time as Secretary of State’.73 That said, though, Moore
had failed as far as ‘the roughest game, at the biggest table’,74 was concerned,
and there was no need to be a purist to wonder quite how public policy
worthy of the name was going to made in that sort of political environment.
The thinking in this case emanated from the USA, and specifically from Alain
Enthoven, and shorn of the usual references in such studies of how they do
things in Multnomia County, Oregon,75 what was proposed with enviable
clarity was an internal market model for the NHS. ‘Such a scheme would
still meet all the social objectives of the NHS, in particular free comprehen-
sive care for all UK residents’, Enthoven wrote, and it would have five main
characteristics. Firstly,
Each District would receive a. . . per capita revenue and capital allowance.
Each District would continue to provide and pay for comprehensive care
for its own resident population, but not for other people without compen-
sation. It would be paid for emergency services to outsiders at a standard
cost. It would be paid for non-emergency services to outsiders at negoti-
ated prices. It would control referrals to providers outside the District and
it would pay for them at negotiated prices.
Secondly, ideally, ‘wages and working conditions would be negotiated

locally’. Thirdly,
consultants would contract with Districts, and Districts would be free

to enter into all sorts of contractual arrangements including short-term
contracts and contracts with incentive payments for increased productiv-
ity. Family practitioners would also contract with Districts. Districts could
require them to contract out sources of care. And Districts could experi-
ment with such ideas as contracts with incentives to improve the economy
of prescribing practices.
Fourthly, ‘Each District would have a balance sheet and an income state-
ment. It would be free to borrow at government long term interest rates
up to some prudent limit on debt. A District owning valuable property could
sell it, keep the proceeds and add the interest receipts to its revenues.’ Fifthly,
‘Each District could buy and/or sell services and assets from other Districts or
the private sector.’ Enthoven thought that
from an economic point of view, the main defect of this model is that
it lacks powerful incentives for District Managers to make their decisions
in the best interests of patients in the face of political pressures to do
otherwise [meaning] pressures to favour inside suppliers in the interest
of keeping peace in the family, pressures for the District to use its own
personnel rather than declare them redundant and spend the money else-
where, pressures from consultants to develop a full range of services in the
District for the sake of autonomy, control and prestige, etc. This is perhaps
the central problem of the NHS today.76
The NHS had a host of problems which seemed to defy solution, not least
to judge from their behaviour the belief of the majority of the electorate
together with most of the Service’s employees, and especially its unions, that
the money to fund it should simply ‘arrive’, in some way not having to be
paid for. Then again, the original idea that those who were in greatest need
should come first was never easy to put into practice, but harder to do so when
consumerism in other spheres had come to dominate. Bevan’s ambition had
been ‘to achieve as nearly as possible a uniform standard of service for all’,77
and the formula worked out by the Resource Allocation Working Party in
the 1970s, and retained by the Conservatives until 1989, was successful in
redistributing resources between regions, though there remained inequalities

within regions, and there was also no improvement in regional inequalities
in access to care, as measured by access to general practitioners.78 That the
distribution of resources thus made did not benefit the London regions79
with their leading teaching hospitals and a metropolitan elite seemingly
given to self-pity in matters of health made for political agitation. Enthoven
believed that the problems of the NHS were largely those one would get
with ‘any monopoly of services’, and that ‘there is nothing like a competi-
tive market to motivate quality and economy of service’,80 but, in line with
contemporary political realities, his model had modest ambitions. A tier of
NHS administration had been removed in 1982, and the Griffiths Report of
1983 had increased the role of professional management. Further develop-
ments included the raising of prescription, dental and ophthalmic charges,
and there was contracting-out of catering and cleaning services, and some
measures to encourage the private medical sector, involving more American
companies which led to the Chief Executive of BUPA to observe that ‘pri-
vate medicine is threatened by commercialism’.81 In July 1988, the DHSS
was at last broken up, and Kenneth Clarke became Secretary of State at
what was now the Department of Health. ‘As he was to demonstrate during
the short period in which he was my Secretary of Education (when he pub-
licly discounted my advocacy of education vouchers), Ken Clarke was a firm
believer in State provision’, Mrs Thatcher wrote, ‘But whatever the philo-
sophical difference between us, Ken’s appointment was a useful one. . . He
was an extremely effective Health Minister – tough in dealing with vested
interests and trade unions, direct and persuasive in his exposition of govern-
ment policy.’82 As early as 31 January 1989, the NHS reform programme was
complete, and Clarke sailed up from Westminster to the Limehouse Studios
in London’s Docklands to launch the White Paper, Working for Patients. This
was ‘a hunk of Hollywood’, according to the Health Service Journal, who,
surely, could not have had Clarke in mind, but what was described as the
first attempt at a controlled mass-communications exercise throughout the
NHS.83 There were seven key changes that were proposed. Firstly, ‘to make
[the NHS] more responsive to the needs of patients, as much power and
responsibility as possible will be delegated to local level’. Secondly, ‘to stimu-
late a better service to the patient, hospitals will be able to apply for a new
self governing status as NHS Hospital Trusts’, which would enable them to
‘earn revenue from the services they provide’, giving them ‘an incentive to
attract patients’, and they would be able ‘to set the rates of pay of their own
staff and, within annual financial limits, to borrow money to help them
respond to patient demand’. Thirdly, ‘to enable hospitals which best meet the
needs and wishes of patients to get the money to do so, the money required
to treat patients will be able to cross administrative boundaries’. Fourthly,
‘to reduce waiting times [and] to help give individual patients appointment
times they can rely on. . . 100 new consultant posts will be created over the
next three years’. Fifthly, ‘to help the family doctor improve his service to
patients, large GP practices will be able to apply for their own budgets to
obtain a defined range of services direct from hospitals’. Sixthly, ‘to improve
the effectiveness of NHS management, regional, district and family practi-
tioner management bodies will be reduced in size and reformed on business
lines, with executive and non-executive directors. . . The confusion of roles
will be replaced by a clear remit and accountability.’ Seventhly, ‘to ensure
that all concerned with delivering services to the patient make the best use of
the resources available to them, quality of service and value for money will be
more rigorously audited. . . The Audit Commission will assume responsibility
for auditing the accounts of health authorities and other NHS bodies, and will
undertake wide ranging value for money studies.’84 There was the assurance
that ‘the NHS will continue to be funded by the Government mainly from tax
revenues’.85
The aim of the Government was ‘to transform the NHS into a consumer
rather than a professionally driven organization, and move from an “admin-
istered” to a managed service’, a leading manager wrote, ‘It had to break
the professional hold on the NHS and indeed the shift in the balance of
power was a natural progression of the direction in which the NHS had been
moving in the 1980s. What is more the Government possessed the political,
the managerial, and the monetary clout to drive through its programme.’86
That said, though, the British Medical Association (BMA) had some initial
success with a characteristic campaign of the ‘what do you call a man who
ignores medical advice? Answer: Mr Clarke’ type, and there were polls report-
ing that 70 per cent of the public thought that the NHS was unsafe in Tory
hands, and there was a long strike by ambulance workers. By the autumn
of 1989, though, that strike had collapsed, and the doctors were in retreat,
and the way was clear for what became the NHS and Community Care Act
of 1990 to bring in the new arrangements.87 Enthoven‘s ‘overall assessment
[was] that the reforms starting with Working for Patients made a useful and
lasting contribution to the evolution of the NHS’. That said, though, he
considered that
the Conservative Government did not come close to creating and unleash-
ing market forces to the extent that might have been possible in the NHS.
If one were to rank the degree of achievement of free market forces on a
scale of zero to ten, with zero representing complete central planning and
top down control and ten representing the regulated but relatively free
American commercial economy, I would say that the internal market in
the NHS got to somewhere in the range of 2 to 3 for a year or two, that
is very limited market forces, and then fell back to more central control.
All the forces of politics and culture were arrayed against it. The desired
long run benefit to patients was too remote and diffused to be an effective
force for change.88
Enthoven thought that the manner in which the internal market had been
introduced had been ‘government by blitzkrieg’,89 but the main author of
the reforms was thinking in terms of the wrong World War. The entrenched
interests were too well dug to permit more than a war of attrition, with the
NHS reforms representing the ‘big push’ that tried to bring about a ‘break-
through’, but the scale and nature of the opposition ruled that out. The NHS
reforms were more than ‘muddling through’, and whatever direction the
internal market was pointing in terms of eventual outcome nobody believed
it was ‘back to 1948’ even if the time had not yet come for the slaughter of a
sacred cow most still thought well-worth worshipping, given the likely alter-
natives. In the meantime, though much was made of the fact that the growth
in resources assigned to the NHS did not match that of needs and demand,
following the restoration of a form of financial order brought about by the
IMF crisis of 1976, the scale of resources assigned to the NHS by the Gov-
ernments of Mrs Thatcher and their Labour predecessor were similar.90 Over
the whole period 1979–80 to 1989–90, total current spending on hospital
and community health services grew by 7.5 per cent in real terms, mea-
sured against changes in NHS pay and price inflation, representing an average
annual increase of 0.7 per cent.91
‘Tinkering’ with social security
‘Taken together, the various reviews and studies I have set in hand constitute
the most substantial examination of the social security system since the Bev-
eridge Report forty years ago’, Norman Fowler told the House of Commons
on 2 April 1984,92 leading The Economist to conclude that
after two years of false starts by the Think Tank, highly politicised leaks,
and Downing Street hysteria, the show is finally on the road. It might
not have happened: bruised by the row over Health Service finances, the
Cabinet was wary of laying hands on further sacred cows. But Mr Fowler
and the Treasury won their way. . . Will Mr Fowler’s clutch of reviews mean
thorough and effective reform or just another round of tinkering?93
The smart money was on ‘tinkering’. As Fowler himself observed, ‘there had
been a great deal of tinkering’ in the past, and it was the case that ‘since the
War, Governments had by and large ducked the issue’. Further,
the Beveridge proposals had not been implemented. Beveridge wanted a

system based on insurance, with the public making insurance contribu-
tions to finance benefits like the State pension. But Beveridge was not
a member of the post-War Labour Government. No one was content to
wait for insurance. Instead, the new system was introduced on the pay-
as-you-go basis which has bedevilled social security finance ever since
[because] there [was] no invested fund, only promises of how much future
contributors [would] be prepared to pay.
Fowler believed that ‘I had one advantage that was denied to Beveridge. I was
not only able to review social security, I had the opportunity as a politician
of implementing the changes.’ Fowler, though, had to operate ‘in a cold
public spending climate’,94 whereas Beveridge, though relatively conserva-
tive in his social security proposals, worked in a political climate in which it
was believed that the money would always be there, and, indeed, consumed
with personal ambition, he went on to further promote this form of climate
change.95 So, not surprisingly, Fowler found that ‘right from the start, there
were tensions with Nigel Lawson’s Treasury team’.96
‘To be blunt, the British social security system has lost its way’, the Green
Paper of 1985 declared:
There is no question that it has helped to raise the living standards of the
poorest people; that it has provided a safety net against urgent need; and
that it has improved the position of some of the most vulnerable groups in
society like the retired, poor families with children, and sick and disabled
people. Yet those achievements have to be weighed against a number of
other facts. The cost of social security will this year be over $40 billion.
Since the Second World War, it has grown five times faster than prices,
twice as fast as the economy as a whole; and it is set to rise steeply for
the next forty years. Despite mounting costs, resources have not always
been directed to those most in need and under present plans will not do so
in the future. The piecemeal development of the system has resulted in a
multitude of benefits with overlapping purposes and differing entitlement
conditions. The complexity in benefit rules has meant that social security
is difficult to administer and at times impossible for the public to under-
stand. While the overlap between social security and income tax means
that significant numbers of people are paying income tax and receiving
means tested benefits at the same time.
The Government believed that three main objects should underlie the reform
programme. First, ‘the social security system must be capable of meeting
genuine need’. Second, that system ‘must be consistent with the Govern-
ment’s overall objectives for the economy’, which followed from the reality
that social security was ‘by far the largest government programme – more
than twice defence spending and larger than health, social services, edu-
cation and housing put together. It is responsible for a major share of the
current tax burden on individuals.’ The Green Paper optimistically assumed
that people understood that ‘in the longer term, the scope for sustaining and
improving social security provision depends on the performance of the econ-
omy’, while noting that ‘while it is one of the functions of the social security
system to help those who are unemployed, it is self defeating if it creates barri-
ers to the creation of jobs, to job mobility, or to people returning to the labour
force. Clearly, such obstacles exist if people believe themselves better off out
of work than in work. . . Equally, restrictions in areas like pensions can dis-
courage people from changing jobs.’ Thirdly, ‘the social security system must
be simpler to understand and easier to administer’. The rules of entitlement
to supplementary benefit were ‘so complex that the manual for guidance
to staff [ran] to two volumes and 16,000 paragraphs’. Nor was it only the
rules which caused confusion, since ‘all the main income related benefits –
supplementary benefit, housing benefit, and family income supplement –
use different measures of income and capital’. The Green Paper’s suggestion
that the situation would be even partially remedied in the near future by the
wider application of ‘modern computer science’ as opposed to ‘the staff hunt
for files in a Dickensian paper chase’97 was, surely, meant to amuse, given
the appalling record of government departments in the computer field, and
there was more of the same in an accompanying document.98
‘The need is not for trimming but for proper reform’, a White Paper this
time declared later in 1985,99 with Fowler believing that ‘we should assess
the future cost of the whole social security system, and make any necessary
changes now’, though his ‘immediate aim. . . was a cost neutral reform – and
that was going to be difficult enough. For, if priorities are reordered without
extra resources then inevitably there are losers as well as gainers [and] the
conventional political wisdom [was] that you hear from the losers, not the
gainers.’ Then again, ‘the Treasury was going to take some convincing that
major savings in public spending were impossible’.100 Lawson as Chancellor
recalled that
there was one fundamental issue where, to his chagrin, I felt obliged to
baulk Norman right from the start. He announced that he wished to look
not only into the social security system, but into the tax system as well,
in so far as it affected the clients of the DHSS. I refused, holding fast to the
hallowed Treasury doctrine that taxation is a matter for the Chancellor
and must not be put into commission. Towards the end of April 1985,
he came back to me again, and suggested that we announced the setting
up of a joint Treasury–DHSS study group on the links between the tax
and the social security systems. Again, I refused. There was thus no dis-
cussion of either a tax credit scheme of the kind advocated by the Heath
Government. . . or of any of the so called ‘basic income’ schemes that had
more recently advocated.
In taking this attitude, Lawson maintained that he was motivated by more

than defending ‘my own turf’, as he was to demonstrate in a later Green
Paper, The Reform of Personal Taxation. ‘The key point is that the tax and
social security systems are not simply mirror images of each other, with social
security payments a form of negative taxation’, Lawson observed, ‘Whereas

liability for tax is measured over a period of twelve months, which makes life
simpler for the taxpayer and Inland Revenue alike, income related benefits
have to be assessed on a weekly basis to ensure that poor families can always
meet their basic needs.’101 Lawson revealed that
both Margaret and I were also interested in developing a fully fledged

‘workfare’ scheme in which the unemployed would be required to work
rather than do nothing, by the simple device of making the payment of
benefit conditional on participation in a ‘workfare’ scheme. . . A number of
meetings were held, under Margaret’s Chairmanship, but unfortunately an
alliance on the issue between Norman Fowler, as Social Security Secretary,
and David Young, as Employment Secretary, produced so many alleged
practical difficulties that the idea was dropped.102
Young plainly preferred the scheme eventually called Restart,103 which Law-
son conceded had a ‘marked effect on the unemployment figures’ because
it ‘not only helped those who were genuinely seeking work but weeded out
those who were not – either because they had decided to take early retirement,
or because they were already hard at work in the black economy’. Lawson
emphasized that
Geoffrey Howe early on made unemployment benefit taxable – a brave

step politically, but essential if the ‘why work?’ problem was to be solved –
while the National Insurance reforms in my Budgets of 1985 and 1989
made it more worthwhile both for people with a low earnings capacity to
take a job and for employers to employ them. . . Norman Fowler’s social
security reforms shifted the basis of means tested benefits from pre-tax to
post-tax incomes. This meant that, although the combined marginal rate
of tax, National Insurance and benefit withdrawal could be very high (a
necessary evil if benefits are to be concentrated on those whose need is
greatest), at least it could not reach (and, indeed, exceed) 100 per cent
as it could before. Another way in which the Social Security Act of 1985
helped was that early leavers from occupational pension schemes were
entitled to take their pension rights with them. This eliminated a major
discouragement to job mobility.104
Fowler was never going to be a radical New Right reformer of social security,
though his reputation might well have been different if his Cabinet colleagues
had agreed to the replacement of the State Earnings Related Pension Scheme
(SERPS) as a second pension by individual pension provision with a min-
imum compulsory requirement. ‘This took the issue a giant step forward’,
Fowler believed, ‘During the review I had been to Switzerland where I had
seen a compulsory occupational scheme successfully in operation.’105 Fowler
had the zeal of the convert, and the Swiss example impressed Mrs Thatcher
too, which drew from Lawson the response that ‘Prime Minister, it is well
known that in Switzerland everything that is not forbidden is compulsory’, a
‘pardonable exaggeration’ that ensured that Lawson ‘never had Switzerland
thrown at me again’, even though Mrs Thatcher had not changed her mind.
‘She had got the politics all wrong’, Lawson believed, ‘The burdens imposed
by a compulsory private sector scheme would make far more political dif-
ficulty than the simple abolition of SERPS.’ This was because the real costs
of pay-as-you-go SERPS were in the distant future, and those of compulsory
private pensions were immediate in the form of tax relief. ‘It would be more
than a banana skin: it would be evidence of an electoral death wish’, Lawson
told his Cabinet colleagues, eventually coming up with the idea that ‘it would
be better not to abolish SERPS at all, but to modify it to make it affordable’,
which turned out to mean ‘a reduction in the level of pension from 25 per
cent of the best twenty years’ earnings to 20 per cent of a person’s lifetime
earnings, with half the pension and not the whole pension passing to the
widow or widower’.106 Fowler was angered by Lawson’s behaviour, but rec-
ognizing that, together with opposition from employers’ organizations, ‘the
pensions industry. . . regarded compulsory occupational pensions as several
bridges too far’, he chose to pursue what ‘I could guarantee to deliver’.107
The White Paper duly announced the phasing in of the changes that Law-
son had effectively insisted on,108 together with a minor concession in the
rate of national insurance contributions to encourage occupational and per-
sonal pensions.109 Fowler believed that this initiative regarding pensions was
a ‘spectacular success’ because in a short time ‘over four million people [had]
taken out personal pensions’, and ‘over 800,000 people [came to be] covered
by new occupational pension schemes’.110 There were existing tax incentives
to encourage such provision, but cynicism was bound to be justified about
the likely behaviour of some of the companies involved and their methods,
and only a fool could have been surprised by the mis-selling scandal that
followed.
‘Social security expenditure increased in absolute terms, real terms, and for
most of the [period of the Thatcher Governments] as a proportion of GNP’,
according to one socialist commentator,111 and the best that the critic could
come up with was that
arguably social security expenditure would have been very much higher
than it was without Thatcherite policies. The principal saving came from
the decision, made early in office, to break the link between the uprat-
ing of benefits and earnings [which meant that] by 1985 over £6 billion
[had been saved]. Other smaller savings [came] from the failure to uprate
benefits fully in line with prices, the abolition of earning related unem-
ployment and sickness benefit, continuous increases in the tapers and
other cuts in housing benefit, the freezing of child benefit and the
abolition of the maternity and death grants. Other notable changes that
led to savings in public expenditure were the replacement of single pay-
ments in supplementary benefit [by] the Social Fund which succeeded
in putting a cap on discretionary payments at the margin of income sup-
port. This is the first time that cash limits have been introduced into social
security.112
Fowler stressed how smoothly the Social Fund had been introduced, con-
founding the critics,113 but that in the last financial year of the Thatcher
Governments the Social Fund only accounted for just 0.36 per cent of the
social security budget114 illustrated how little the established arrangements
were changed.
Confronting the educational establishment
‘You have an awful department.’ So said Mrs Thatcher to Sir Keith Joseph
about the Department of Education and Science where he had replaced the
ineffectual Mark Carlisle as Secretary of State in 1981, recalling her own
unhappy time there in that role in the Heath Government.115 ‘While a few
able officials no doubt lurked there, in general the calibre of its key personnel
was poor’, Nigel Lawson asserted, adding that ‘its ethos was wholly opposed
to that of the Government: collectivist and steeped in the once trendy nos-
trums of progressive education that have so much to answer for. Keith was
aware of this up to a point, but he was far too nice a man to realize fully what
he was up against, or to do anything about it.’116 Joseph’s successor, Kenneth
Baker did seem to recognize what he was up against, and he made a contri-
bution of a kind. ‘The authors of the Black Papers on education had, to their
credit, started to spell out a radically different approach, based on discipline,
choice and standards (including the retention of existing grammar schools
with high standards)’, Mrs Thatcher wrote, ‘Their case was strongly founded
in well informed criticisms of the present system.’ As Secretary of State,
Mrs Thatcher was ‘very conscious that in any struggle with the Civil Service
I might not be able to count on the support of all my Cabinet colleagues’.117
The Secretaries of State for Education in the Thatcher Governments at least
had the consolation that the Prime Minister was an enemy of progressive
thinking, and in confronting the interests ranged against them those Min-
isters very much needed that support, given the dominance of the belief in
and around political life that education was ‘a good thing’ in the 1066 And
All That sense, despite there not being a scrap of evidence that increased
educational provision promoted greater economic growth, on which basis
Governments had justified its expansion.118
The fate that awaited the universities under the Thatcher Governments
should not have been that unexpected. As Max Beloff had pointed out for
years, the universities had placed themselves in a position of such financial
dependence on the State, that sooner or later the Government would want
to call the tune and academic freedom would suffer. Consistent with his
beliefs, Beloff eventually left Oxford to run the privately funded University of
Buckingham, but this venture impressed few people because it was unclear
how a university system on the Robbins scale could be financially sustained
in this way. Like the Ministry of Education before it, the Department of
Education and Science (DES) had largely left the University Grants Commit-
tee to take the responsibility for the universities, and, as was said so often, its
role was to act as a buffer between the Government and the universities. The
universities resembled publicly funded private clubs even after the Robbins
expansion of the 1960s increased expenditure dramatically. The number of
university students had been greatly expanded, despite there being no means
of ensuring that the gifted among the less socially privileged would take up
the extra places. It was not the case as some maintained that just about every
young person of middle-class origins who could read and write then became
a university student, but it was not too difficult to believe that this was so,
and as the expansion was justified in terms of economic necessity inevitably
there were students who took the line that you need us so listen to what we
have to say. In comparison with the young people of even the recent past
who had left school for the world of work in their early teens or who had
done time in the Services or both, these students, subsidized by grants paid
for by the taxes of others, had very little of any value to say. This did not stop
a vocal minority of them, of course, from being very boring and saying it,
and, following Orwell’s analysis, given their middle class origins what they
advocated was a socialist Britain or often a socialist world, magically to be run
without the Gulag and the rest of the apparatus that characterized ‘the Rus-
sian experiment’ and that also with people then being conducted in Mao’s
China. Mrs Thatcher remembered the treatment dealt out to her when Edu-
cation Secretary by such students,119 as did others too who seemed to forget
that those students in the medical schools and the faculties of law and of pure
and applied science as well as the majority of those reading for degrees in arts
subjects and the social sciences were not involved. As for the academics, the
campus novels from Lucky Jim onwards had done them no favours in por-
traying them in terms of a lazy man’s profession who treated university life as
the last refuge of the gentleman, and as being, at best, eccentrics. The spirit
of Cardinal Newman’s The Idea of a University did survive the Robbins expan-
sion at least in the sense that, though degree classification was bound to be a
matter of rough justice, it was still the case that good degrees tended not to be
simply given away. Indeed, one reason why the graduates of the time did not
later rally round the universities against the Thatcher Government was that
the mediocre especially seemed to feel that they had deserved a better label in
the honours finals. Worse, though many academics tended to see themselves
in terms of the lovable, eccentric, liberal image of the novel, Changing Places,
the less flattering, indeed morally corrupt, view of university life portrayed
in The History Man only too often seemed closer to the reality. Those who
thought like Lawson came to be against academics having security of tenure,
which he described as ‘the system under which a university post was a job for
life, irrespective of the quality of the incumbent’s performance’.120 For the
1960s and 1970s and for some universities, The History Man was more like
a documentary than a novel, but one warning it had was of the conformity
of academic life, which meant that ‘the quality of the incumbent’s perform-
ance’ made no difference if he or she did not say the right things. Modern
McCarthyism in the form of political correctness soon to be imposed more
widely in society came early to the universities, and in the subjects that came
most easily to the notice of Mrs Thatcher and Lawson, tenure was essential to
protect what few political friends they had in that world, though they chose
not to see this.
The pledge originally made by Mark Carlisle that there would be level fund-
ing for the universities was always unlikely to survive even the early attempts
of the Thatcher Government to bring order to the public finances, and in
July 1981 it fell to Carlisle to announce economies. These were drawn up by
the University Grant Committee (UGC), and they meant ‘the overall loss of
recurrent resources between 1979–80 and 1983–84 [would] probably lie in the
range 11 per cent. . . and 15 per cent. . . the reduction in student numbers by
1983–84 is expected to be in the range 3 to 5 per cent’.121 Carlisle was able to
point out in a debate made easier for him by the ineptitude of the Opposition
that ‘over the period covering the years 1960, 1970 and 1980, the university
student population has risen from 96,000 to 203,000 to 265,000. The full
population in higher education has gone up from 179,000 to 466,000’. Since
‘from the middle of the 1980s to the middle of the 1990s the number of
18 year olds will fall by 30 per cent. . . even without the problem of finan-
cial restraint. . . this sort of expansion cannot continue. Some reduction and
rationalization is essential to meet the substantial drop in those of that age
group who apply.’122 That said, though, the number of 18-year-olds was going
to continue to rise until the end of 1982, and the obvious question was what
was going to happen to the 20,000 teenagers denied university places. ‘The
answer is that many of them will go to polytechnics and colleges outside
the university system and run by local authorities’, The Economist observed,
‘There are some 200,000 places at these institutions, pale imitations of uni-
versities in everything except cost. Indirectly, they are largely financed by
[central] government through grants to local authorities. Yet, the Govern-
ment at present effectively exercises no control over them.’ In this way, ‘the
absurdity of trying to reform one part of higher education in isolation’ was
illustrated, and the journal argued that ‘it may be right to cut Keele to save
Cambridge but there is no justification for cutting Keele while preserving
North Staffordshire Polytechnic’. Warming to its theme, and noting that
‘technological universities such as Aston [and] Salford topped the UGC’s hit
list’, The Economist pointed out that those universities did best at producing
graduates who got jobs in industry and commerce, and that in this respect
somewhere like Salford was ‘better than almost any polytechnic’.123 Quite
what useful purpose the polytechnics served was an obvious question that
Carlisle’s successor, Sir Keith Joseph did not address, only in part because he
had more than enough problems to deal with in other areas of education
policy. Joseph made work for himself in trying to get rid of the Social Science
Research Council. That body had made itself the object of derision in the past
by awarding grants for such subjects as lesbianism in Lesotho, and its elab-
orate evaluation procedures seemed to many to serve only a presentational
purpose because the lion’s share of the awards would go to academics working
in the golden triangle formed by Oxbridge and London anyway. There were
several courses of action available to Joseph, but he chose the self-defeating
one of a review by Lord Rothschild, and there were no prizes for guessing
that the institution would survive, in this case with a new name – the Eco-
nomic and Social Research Council. Then again, when it came to the 3,000
academics to be made redundant, the coward’s way out of doing it by age was
taken, and, for all the moaning about the universities being singled out for
harsh treatment, the conditions were so generous that, over time, it was hard
to see what economies were actually made in terms of public expenditure,
and the individuals concerned would have had to been as mad as they were
widely perceived as being if they turned the deal down. Joseph took care to
ensure that some ‘new blood’ appointments of younger people were made
at the same time. As for the main body of the academics who had survived
the cull, a shock was in store, not least for those over-promoted, sometimes
grotesquely, in the boom. Research was the distinctive role of academics,
and what they actually did in this respect increasingly became the subject of
review, eventually in the form of the Research Assessment Exercise. The days
of the publicly funded private clubs were over, and appointments procedures
and promotion arrangements tended to be made less arbitrary because of
the need to get what were deemed to be results. The ‘characters’ were driven
to the sidelines and sometimes out, protesting to the last as if Casaubon in
Middlemarch that long promised great work would be forthcoming on their
favourite subject if only they were given still more time. Those who benefited
most of all from the change were the people who treated academic life as a
professional job, though they were still reminded on a monthly basis that
the salary levels seemed to assume a private income. The Oxford dons tried
to take revenge on the Prime Minister by denying her an honorary degree,
but it proved impossible to portray this action as other than petty.
When Joseph at last got around properly to the matter of student grants in
late 1984, he ran into a political storm when, in order to offer the Treasury a
financial concession partly to safeguard funds for scientific research, he came
up with the idea that the minimum student grant awarded to those from the
families with higher incomes should be abolished, meaning a higher parental
contribution. By behaving like this Joseph was ‘the Hammer of the Middle
Class’ and a madman, according to Auberon Waugh,124 and if Joseph felt

that he could win over such people, the Tory backbenchers did not agree,
and gave Joseph the most torrid time any Cabinet Minister had experienced
since the fall of Carrington. Joseph was forced to climb down,125 and his
biographers could not resist citing the comments of The Observer: ‘Watch-
ing him at the despatch box. . . withdrawing the proposal to charge parents
for university tuition fees, it was hard not to feel sorry for him. His head was
bowed, and his hoarse voice held a familiar note of plangent regret, like a toff
down on his luck asking the Bench for one last chance.’126 This did not stop
critics from asking quite why students, above the age of majority anyway,
should not be treated as adults in financial terms, given that they were keen
to assert their independence in other respects.127 Bizarrely, some students also
had rights to social security payments, though this arrangement was soon to
cease. When, with the support of Lawson, Joseph subsequently raised the
matter of student loans in the Cabinet, he was opposed by Mrs Thatcher and
Cecil Parkinson, who argued that he would not have gone to university if
there had been a loan scheme. ‘We were the only developed country in the
world that did not have some form of student loans, but it had been a taboo
subject for too long’, Kenneth Baker, who succeeded Joseph as Secretary of
State in 1986, wrote, ‘We had developed a system of funding higher educa-
tion to suit a small and exclusive minority. I wanted to expand the numbers
without reducing standards.’128 Of course, though few felt free to say so, only
‘a small and exclusive minority’ were suited to the world of scholarship any-
way or interested in it. Already, satirists of the Peter Simple kind were finding
it hard work to make fun of a university system in which only too many Vice-
Chancellors had taken to communicating in barely understood management
jargon. Baker wanted a target of one in three going into higher education
by the end of the century, and, of course, this was to be led by student
demand,129 which Baker could not or chose not to see would be for the easier
degrees and for lower standards in awarding them. At last, the Amis predic-
tion of ‘more will mean worse’130 was going to come true. If there had to be an
expansion in higher education, and Baker produced no hard evidence of any
need for it, then, as had happened recently, in principle, the polytechnics on
the other side of the binary divide were the best place for it. The polytechnics,
though, had tended to prefer the role of ‘pale imitations of universities’ to
the ‘real world’ one that Crosland had sketched out for them, which meant,
of course, that the ambition was to get rid of the divide and for ‘levelling
down the pyramid’.131 If university expansion was insisted upon, then the
Open University would have been the best mechanism as it was based on
part time study paid for those studying, and it had pioneered programmed
teaching which seemed the most practical way of dealing with large numbers,
but the route of the universities as an extension of social life was preferred.
Meanwhile, Baker pressed on with the introduction of student loans, arguing
in 1988 that they represented ‘an important step away from the dependency
culture’,132 though, of course, only into debt culture for those whose families
could not or would not pay for the loans. Baker’s Education Reform Act of
1988 got rid of tenure for university academics, and Baker made much of
getting rid of standardized salaries too and going American by doing so,133
while not emphasizing that American universities still had arrangements for
tenure as well as higher salaries. ‘It made me concerned that many distin-
guished academics thought that Thatcherism in [higher] education meant a
philistine subordination to the immediate requirements of vocational train-
ing’, Mrs Thatcher later wrote, denying this and recording that ‘before I left
office Brian Griffiths, with my encouragement, had started working on a
scheme to give the leading universities much more independence. The idea
was to allow them to opt out of Treasury financial rules and raise and keep
capital, owning their assets as a trust. It would have represented a radical
decentralization of the whole system.’134 It would have represented privat-
ization, of course, and, once those institutions were supposedly set free, they
would have had the opportunity to find out, possibly the hard way in many
cases, whether or not it was true, as one slogan asserted, that ‘Britain needs
its universities’, or, at least, so many of them.
Sir Keith Joseph once confided that he was haunted by ‘a terrible vision of
the teachers marching round and round’ Elizabeth House, in which the DES
was housed,135 but even the sheer awfulness of that classic 1960s building
and the inevitable conflicts with the teachers’ unions were dwarfed by the
desperate situation that had enveloped the schools system, certainly in Eng-
land, long before he took office. There were many reasons for this, but, to
the extent that politicians were to blame, Crosland merited most of it even
though Shirley Williams came to be the favourite target for the failure of
the comprehensive experiment. Crosland had led the way in abolishing the
11-plus examination and getting rid of the grammar schools in the name of
egalitarianism, while at the same time effectively leaving the private sector,
including the most prestigious Public Schools, alone. Thus, a ladder for the
gifted but financially disadvantaged was destroyed in most parts of the coun-
try, while leaving those with money not only unaffected but granted in most
areas an effective monopoly of education beyond secondary modern level.
This outcome was predictable, but Crosland, educated at Winchester himself,
asserted otherwise, though he was not responsible for the later collapse of the
disciplinary system which was both bound to be undermining of the learn-
ing process as well as making the work of teachers needlessly arduous. That
the teaching profession included some of the most talented people in the
community, and that G.B. Shaw had been made a fool of by Stalin, did not
prevent Shaw’s gibe that those who can do and that those who can’t teach
continuing to be damaging to teachers, and the union activists in particular
often had about them the air of bitterness that follows from being widely
portrayed as supposedly worthless. So, Joseph inherited an appalling situ-
ation that Mrs Thatcher had been able to do little to change when she was at
the DES. ‘Many of our own local councils are running with the comprehen-
sive tide,’ she had reported to Heath, ‘The question is what sort of balance
should be struck between defending existing grammar schools and leaving
local education authorities free to make their own decisions.’136 Mrs Thatcher
was well-aware that the 11-plus was widely unpopular,137 as, indeed, was to
be expected, given that most people failed the examination, with the par-
ents of the middle class failures seeming to be the most aggrieved. For those
who had always viewed intelligence testing with scepticism, there was the
good news that Cyril Burt the psychologist had fabricated some of his evi-
dence, though, of course, it did not necessarily follow that intelligence was
other than largely inherited as he had maintained. Those who wanted edu-
cation to be organized on the basis that everybody would have prizes badly
needed intelligence to be environmentally determined and came up with an
unconvincing theory of their own called genetic equalitarianism.138
Mrs Thatcher never lived down failing to stop the comprehensive band-
wagon in its tracks, but her position on the matter of secondary education
turned out to be complex. ‘In defending grammar schools, Conservatives
were rightly defending an existing institution that provided a fine education
for children of all backgrounds’, she wrote:
But we were also defending a principle – namely, that the State should
select children by the single criterion of ability and direct them to one
of only two sorts of school – that is far more consistent with social-
ism and collectivism than with the spontaneous social order associated
with liberalism and conservatism. State selection by ability is, after all,
a form of manpower planning. And variety and excellence in education
are far more securely founded, and far more politically defensible, when
parental choice rather than State selection of children by ability is their
justification.
In other words, ‘the argument for education vouchers becomes stronger

every day’.139
‘When I went to the Department of Education as Secretary of State I con-
tinued my modest practice of giving a short reading list to the officials’, Lord
Joseph later recalled, ‘I gave only one book, called Lessons From Europe [by Max
Wilkinson] from the Centre for Policy Studies [which] argued, with detailed
analysis that in our neighbours of North West Europe, the standards of edu-
cation, particularly for the non-academic child, are a great deal better than in
this country. I gave it to the senior officials in my department and they [said]
that it was rather more interesting than they had thought. However. . . they
never produced any ideas for action.’ Joseph added that delegations of Her
Majesty’s Inspectors ‘came back with their eyes wide open and stated that it
was true that non-academic children do better in Germany and France’ and
Joseph did not doubt that this was the case with the other countries too.140
At his first meeting with his senior officials, Joseph had made the observation
that the nation compelled its children to spend eleven years of their life in
school, and yet fifty per cent of them left school as soon as the law allowed
them to leave with virtually no benefit to them in terms of character, or in
preparation for work, adult life, or citizenship. ‘Oh, don’t say fifty per cent,
Secretary of State’, said one official, ‘say forty per cent’. In this way, ‘the
bottom forty per cent’ became a slogan of the DES in Joseph’s time, though
Joseph himself still privately stuck to his guess that the system failed fifty per
cent of pupils.141 Joseph would venture forth to visit local schools, not, it
seemed, to escape from the absurd Elizabeth House, but to find out for him-
self what State schooling was like on the ground, and few on the receiving
end appeared to doubt his sincerity,142 and, since 94 per cent of children went
to State schools,143 the time this took seemed well-spent. ‘Whether I should
be proud or sorry to have introduced the General Certificate of Secondary
Education, only the historians will be able to judge’, Joseph said,144 but get-
ting rid of GCE Ordinary Level examinations from 1988 onwards,145 however
neatly it got rid of a legacy of the grammar schools, could only have deleteri-
ous effects on standards. With school rolls falling, expenditure per child was
still increasing in real terms, but the teachers’ unions still wanted more, and
his biographer recorded that Joseph was outraged that the unions had found
methods of disruption short of complete strikes that meant that the teach-
ers still drew their salaries. The same writer thought that Joseph’s problems
in large part followed from his unwillingness to ‘play the Whitehall game’
when it came to money, and recorded that several times when Joseph was at
the DES Treasury officials were astonished when he accepted a rejection of
financial proposals which other Ministers would have regarded only as a first
stage in a negotiating process.146 For all Joseph’s earnest efforts, it was not
surprising that the first minute that Kenneth Baker, on succeeding him, sent
to the Prime Minister started with the sentence, ‘I find that large parts of the
education system are demoralized’, adding that ‘the main reason for this was
that teachers were taking industrial action because of low pay and children
were being sent home as their teachers walked out of the classrooms’.147 By
doing this, ‘teachers were setting an appalling example to the very children
who should be looking up to them’, Baker wrote, believing it to be behaviour
unworthy of ‘people who consider themselves professionals’.148 Lawson said
of Baker that ‘his instinctive answer to any problem is to throw glossy PR
and large quantities of money at it, and his favoured brand of politics is
the instant response to the cry of the moment’. That said though, Baker
was a much more difficult opponent than Joseph for the teachers’ unions
to deal with, and the Burnham Committee system for determining teachers’
pay was soon got rid of, being replaced by an Interim Advisory Committee,
with Lawson denying Baker his wish far ‘a full blooded pay review body’.
According to Lawson, ‘the whole point was to reverse the Burnhamite egali-
tarianism that had wreaked such havoc, and to ensure that those teachers
carrying special responsibilities, or of special merit, or in subjects where there

was a serious shortage of teachers, were adequately rewarded’.149 Though the
Chancellor did not say so, Baker’s task was made easier by a report on the
pay of Scottish teachers produced by one of Lawson’s friends, Alan Main,
which recommended increases that dwarfed those that Joseph had in mind
for their English counterparts. It seems that at a MISC meeting in October
1986, it was agreed that it would be impossible to settle for anything less
than the Main recommendations. While still having to face down opposi-
tion from the unions, Baker ended up ‘imposing a 25 per cent salary increase
on teachers over an eighteen-month period, and a contract which included
‘Baker days’ for further training.150
Since ‘it was hard to imagine that we would get from [Baker] the funda-
mental thinking about education reform that [Lawson] was sure was needed’,
the Chancellor resolved to do it himself. ‘The wresting of the schools from
the so-called local education authorities would provide the essential basis for
educational reform’, Lawson believed:
The State would be able to lay down, and enforce, both a core curriculum
and the standards of attainment required. . . The practice in France was
highly relevant here. . . spending per pupil [was] the same in France as in
the UK, yet the average standard of education was considerably higher.
Then, with nationally determined standards, the actual running of the
schools could and should be devolved to the schools themselves – which
would still be subject. . . to an improved National Schools Inspectorate – a
devolution which. . . would never occur on any significant scale so long as
long as responsibility for schools lay with local government. Within that
context, each school would be given its own budget to use as it thought
best; each school would have the right to hire and fire teachers; and with
each school’s income based largely on the number of pupils it attracted, a
system of open enrolment could be introduced, enabling State schools to
accept pupils in much the same way as the private sector does.
Lawson sent the relevant paper to the Prime Minister in July 1986, but she
thought its proposals to be too radical, though she did decide to set up a Cab-
inet Sub-Committee on Education Reform, which involved Lawson among
others including the Number 10 Policy Unit, and, of course, Baker. ‘Margaret
would sum up and give Kenneth his marching orders. He would then return
to the next meeting with a worked out proposal which bore little resemblance
to what everyone else recalled as having been agreed at the previous meeting,
and owed rather more to his officials at the DES’, Lawson remembered:
After receiving a metaphorical handbagging for his pains, [Baker] would

come back with something that corresponded more closely to her ideas,
but as often as not without any attempt by his Department to work them
out properly. . . This procedure was repeated on most of the aspects of

the reform. . . The substitute Margaret came up with for my proposal to
remove all schools from local authority control was the ‘opt out’ system,
under which individual schools could escape from local authority control
provided a majority of parents voted to do so.151
Not surprisingly, Baker was the hero of his own account of the genesis of the
Gerbil as the Great Education Reform Bill became known as it was translated
into the Education Reform Act of 1988.152
‘The Government have introduced local management of schools, parental
participation, changes in the curriculum, the GCSE, and the City Technical
Colleges, which are intended to radiate higher standards by competition in
neighbouring schools’, Joseph observed, ‘All of those are stimulating efforts
to raise standards.’153 This was not the case, and, as he had himself remarked,
Joseph had ‘led a division of the House [of Lords] against the national cur-
riculum, while supporting the core curriculum’.154 As a perpetually smiling
political operator, Baker achieved more than most expected at the DES, and
Joseph did not disappoint those who anticipated that he would achieve less
than he promised there. What one critic called The Riddle of the Voucher illus-
trated this. ‘One is always as a Minister looking for a single lever that would
transform attitudes’, Joseph recalled:
But problems in education are nearly all intangibles – motivation by the

pupil, support from the parents, and that magic ingredient of infectious
teaching skill from the teacher. There was no single lever. . . I was obviously
a believer in the philosophy of vouchers. But believing in the philosophy
is not the same as judging the consequences of the philosophy. I came
to realize in connection with vouchers that there was at the heart of the
voucher option a dilemma whether to go for vouchers on a pilot scheme
basis, or whether to seek to impose freedom by imposing vouchers. As
a preliminary to either, there would have been hugely controversial and
complex legislation, splitting the Conservative Party, as well as creating
a tumultuous split between parties, alienating most teacher unions, most
local authorities, perhaps the Churches, and leading if we went for a pilot
scheme possibly to a mouse at the end. And if we went for an imposed
scheme, it would have called for more moral courage than I had.155
6
The Economic Liberal Crusades III:
The Reconstruction of the
Civil Service
‘Terrified’ of ‘the Lady’?
‘The sheer professionalism of the British Civil Service, which allows Gov-
ernments to come and go with a minimum of dislocation and a maximum
of efficiency, is something other countries with different systems have every
cause to envy.’ At least in writing those words, Mrs Thatcher1 spared her read-
ers, and for that matter the officials themselves, the platitude that Britain had
the best Civil Service in the world. In terms of career Civil Services, Britain
had one of the two most impressive such Services in the world, the other
being that of France, and, since the governance of ‘Europe’ tended to be con-
ducted in accord with French administrative culture as well as that country’s
interests, the British Higher Civil Service had an unenviable task in conduct-
ing the relevant negotiations. When it came to running Britain itself, as one
of their number, Sir Roy Denman, recorded with regret, the days when, at
least he believed, higher civil servants were ‘the real, albeit shadowy, rulers of
the land’ did not survive Mrs Thatcher becoming Prime Minister. She under-
mined ‘the bowler hated barons of Whitehall who had discreetly run the
country’s affairs’, with it supposedly being the case that though
she was on good terms with a few civil servants, mostly those who became
her acolytes. . . for the most part she despised them. Her heroes were those
who earned huge salaries in the City; those who worked for the State were
by definition second-raters. . . The Civil Service found itself openly and
publicly despised by its political masters and told that the role of the most
senior was that of courtier. . . The quality of their advice suffered. So did
the quality of the Service.
Denman described Mrs Thatcher as a dictator,2 but, if his portrayal of the rela-
tionship between Ministers and higher civil servants was at all accurate what
Mrs Thatcher was doing was to reassert the supremacy of the elected Govern-
ment over the bureaucracy, which meant that she was actually respecting,
indeed restoring, the traditional British constitutional arrangements.
137
The then Head of the Home Civil Service, Sir Ian Bancroft, maintained that
the Service had at first welcomed the Thatcher Government ‘with a mandate,
firm policies, and with a defined profile to it’, but relations between Minis-
ters and higher civil servants did become ‘rather cooler, rather more formal’
than had previously been customary.3 That recent Governments had seemed
to have a different attitude towards the Higher Civil Service owed something
to Prime Ministers like Wilson, Heath and Callaghan having been civil ser-
vants, an experience that tends to engender respect for it as an institution,
and not least for the rationality of its arrangements. Mrs Thatcher had no
such experience, and she had not enjoyed working with the Higher Civil
Service when a Cabinet Minister. That said though, the reality was that the
self-interest of the career Civil Service had become bound up with the Key-
nesian order and with shoring it up, and Mrs Thatcher and her allies had
radically different ambitions. Under the Keynesian dispensation, according
to Mrs Thatcher, the ruling ethos was that set out by Douglas Jay – ‘the Gen-
tleman in Whitehall really does know better what is good for the people than
the people themselves’ – from which outlook it followed that ‘a disinterested
Civil Service, with access to the best and latest information, was better able to
foresee economic eventualities and to propose responses to them than were
the blind forces of the so-called “free market” ’. The scale of State interven-
tion was such that, ‘as Arthur Shenfield put it, the difference between the
public and private sectors was that the private sector was controlled by the
government, and the public sector wasn’t controlled by anyone’.4
The Civil Service per se only accounted for about 10 per cent of the numbers
employed in the public sector at the time of the first Thatcher Govern-
ment, which inherited a situation in which the overall number of civil
servants was marginally less than it had been in 1955, when the Priestley
Royal Commission had reported on the Service. Further investigation
revealed other characteristics of and facts about the Civil Service. Firstly,
the numbers employed in ordnance factories, dockyards, and workshops
had declined by 44 per cent in the intervening period, and the numbers
of non-industrial civil servants had increased by 38 per cent since then. This
meant that in April 1979, there were about 732,000 civil servants overall, with
566,000 of them classified as non-industrial. Secondly, though the majority
of non-industrial staff were employed in administrative and clerical posts,
additionally in its ranks there were members of a wide range of professional
and highly specialized occupations, including scientists drawn from nearly
40 distinct disciplines. Thirdly, the middle-aged, male, Whitehall image that
the Service as a whole still had was misleading, given that about one-third
of the non-industrial Home Civil Service was under 30, and about 45 per
cent of those employed were women. Fourthly, the 566,000 non-industrial
civil servants employed in 1979 were dispersed among about 60 govern-
ment departments, almost all departments employing small numbers of
them, not least the Treasury, commonly considered to be the most important
The Reconstruction of the Civil Service 139
of them. About 80 per cent of non-industrial civil servants were concen-

trated in seven departments or closely related groups of departments – the
Ministry of Defence, the Department of Health and Social Security, the Board
of Inland Revenue, the Department of Employment group, the Department
of the Environment, the Home Office, and the Board of Customs and Excise.
Fifthly, far from being located in and around Whitehall, such civil servants
were employed all over Britain, working in over 7,000 buildings and sites.
Some of these accommodated only half a dozen staff or fewer. At the other
extreme, the central office of the DHSS employed 10,000 staff at Longben-
ton, near Newcastle-on-Tyne, on a 60-acre site that might well have been the
largest single office complex outside the USA, and which housed the largest
computer installation in Europe. No less than four out of every nine non-
industrial civil servants worked in local offices that had some direct contact
with the public, being engaged in local casework – computing income tax,
placing people in employment, or administering social security benefits. The
character of the Service had been considerably changed by the expansion of
local and regional office schemes resulting not least from the expansion of
State social provision together with the effects of past policies of office dis-
persal away from London. So, the Civil Service had become increasingly a
regional and local service, and many of the staff in the lower grades never
moved away from the area where they were recruited, and they did not nat-
urally associate themselves with the business of government in London. For
them, a Civil Service job was just like any other job, which made it only a
short step from behaving like other employees when it came to the conduct
of industrial relations, an attitude likely to be promoted by the dispersal of
the Service into areas of traditional union militancy.5
The Civil Service staff associations had once worked comfortably within
the Whitley system of joint consultation, but when W.L. Kendall, the then
General Secretary of the largest such association, chose to mark the fiftieth
anniversary of Whitleyism in 1969 with a root-and-branch condemnation of
its operations6 this proved to be a signal that Staff Relations in the Civil Service
– to follow the title of the relevant official handbook – were going to be
translated into industrial relations of a more conflictual kind. The first Civil
Service strike followed in 1973, and there was another in 1979. ‘Ten years ago
direct action by civil servants was virtually unheard of – now it is a common
feature, and not merely on pay issues’, the Whitley Bulletin observed, ‘Civil
servants have readily embraced a militancy in their attitudes towards employ-
ment issues that was unthinkable ten years ago.’7 When, however, Kendall
declared in 1980 that ‘I am in the middle of a war with the Government’8
over pay and conditions and proposed cuts in Civil Service numbers, he had
plainly been talking too much to his activists in the Civil and Public Services
Association. The Economist detected several Communists on that Associa-
tion’s Executive, and noted too that Leslie and Campbell Christie, who were
leading lights in the Society of Civil and Public Servants, had ‘extreme left
wing sympathies’. For that journal, the increasingly militant Civil Service
unions were nothing less than prospective Trojan horses poised to undermine
the elected Government,9 and there were those in the movement who had
such ambitions, but the unions had no shortage of moderates either among
their officials or their memberships whose inclination would be to pull their
punches, not least, to their credit, in the name of public service. Of course,
pay was a concern to all of them, and under threat from the Thatcher Gov-
ernment was the Priestley formula under which, in principle, Civil Service
salary levels were decided on the basis of ‘fair comparisons’ with outside
pay. In practice, incomes policies had intervened to prevent the formula
being implemented, but, in any case, the sheer scale of the sums involved
in anything resembling regular implementation was daunting. The Thatcher
Government decided to get rid of the Priestley formula. Thus, expectations
were wrecked, and the stage was set for conflict between the Government
and the Civil Service unions. Alan Clark believed that the higher civil ser-
vants were ‘completely terrified’ of ‘the Lady’ and ‘with good reason’,10 but
not all of them showed fear or had cause to, and there were those in the
unions who were spoiling for a fight from the outset. So, it seemed, was
Mrs Thatcher.
The Higher Civil Service as an adversary
‘I was not among friends’ was how Mrs Thatcher remembered her time as
Secretary of State for Education and Science in the Heath Government.11
One of the favourite tales of her biographers was about her attempt to get rid
of Sir William Pile, her Permanent Secretary at the DES, on the grounds that
he was a prospective Soviet agent. As would be expected, Heath accepted the
advice of the Head of the Civil Service, and Pile stayed on.12 Mildly in the cir-
cumstances, Pile detected a dislike of higher civil servants on Mrs Thatcher’s
part,13 though one of their number, Sir Frank Cooper, thought that this was
not more than a dislike of ‘anybody who is not helping in the wealth creat-
ing process’.14 In an attempt to improve relations, Sir Ian Bancroft persuaded
Mrs Thatcher to attend a dinner with all 23 of her Permanent Secretaries,
including Cooper, on 6 May 1980. ‘This was one of the most dismal evenings
of my entire time in government’, she recalled. What she got from many of
those present was ‘a menu of complaints and negative attitudes’, and what
lay behind this, she believed was ‘a desire for no change. But the idea that
the Civil Service could be insulated from a reforming zeal that would trans-
form Britain’s public and private institutions over the next decade was a pipe
dream.’15 A quarter of a century before, when the then Head of the Civil
Service, Sir Edward Bridges, had praised leading officials for being slightly
detached and withdrawn in conducting their work, rather like Professors in
disguise,16 such sentiments had reflected the contemporary Keynesian com-
placency. In the years since then, Sir John Hoskyns believed, ‘senior civil
servants [had] been engaged in a twenty five year campaign with scarcely
one significant victory to punctuate steady retreat. For many of them, it
must have been rather like joining Napoleon’s Army just in time for the
retreat from Moscow.’17 So, when in 1979 a senior Treasury official suggested
that the politically neutral role of the higher civil servant required him or her
‘to withhold. . . the last ounce of commitment’ to the policies of the current
Government of whatever complexion, not least for the sake of the continuity
of the Civil Service as an institution,18 he struck the wrong note. The situ-
ation that the Thatcher Government had inherited was sufficiently desperate
that, as Hoskyns remarked, only total commitment was good enough.19 If
this form of almost aristocratic detachment was deemed redundant, so was
what passed for the pragmatic political position of the Higher Civil Service.
‘The Civil Service always hopes that it’s influencing Ministers towards the
common ground’, Sir Anthony Part observed in 1980, ‘Now that’s not to say
influencing them towards some piece of ground which the Civil Service has
itself constructed; it is the Civil Service trying to have a sense of what can
succeed for Britain, and trying to exercise its influence on Ministers to try to
see that they do capture the common ground with their ideas, from whatever
origin they start.’ This ‘common ground’ was not ‘the centre’ because that
was ‘literally half way between the two poles, while the common ground on
which or to which the majority of people can be persuaded to move. You
have to remember that in recent times neither of the main political parties
has been elected by a majority of the electorate.’20
Unlike the Higher Civil Service, though, these political parties had pre-
sented themselves to the electorate, and, under the electoral system, the
party which won the most seats could expect to have the authority to form
the Government, and to have the opportunity to implement its programme.
That the Higher Civil Service had the right to guide Governments towards
‘the common ground’ was questionable, especially as that Service’s affec-
tion for the Keynesian order – ‘the common ground’ in disguise – was not
necessarily disinterested. The scale of machinery needed to sustain that order
provided higher civil servants with generous opportunities for advancement
and for interesting work, ‘fine tuning’ the economy and so forth, and cut-
ting back on the role of the State threatened those arrangements. Hoskyns
argued that the Higher Civil Service did not have a legitimate part to play
as constitutional ballast, and that as polarization was a fact of contempor-
ary political life then seeking ‘the common ground’ was not an a politically
neutral position.21 In any case, for those with a taste for it, there was some sur-
vey evidence that, in general, Conservative policy attitudes commanded wide
support outside the ranks of Tory voters in 1979,22 which meant that, if there
was a ‘common ground,’ the Conservative Government elected then seemed
to be occupying most of it. Hoskyns’s reaction was to advocate the employ-
ment of many more politically appointed outsiders into Whitehall from the
private sector, and at one stage he envisaged the mass pensioning off of the
much of the Higher Civil Service to change its defeatist culture.23 Hoskyns
poured scorn on those who questioned where exactly the gifted outsiders
were to come from,24 and some Ministers in the Conservative Government
had told higher civil servants that there were those in the private sector ‘who
could do the job in a morning with one hand tied behind their back’.25 Since
the record of British private sector management in international competition
had been unimpressive for several decades, the notion that there was talent
to spare from that source was unconvincing. Aside from bringing in a small
number of political advisers, the Thatcher Governments tended not to recruit
outsiders to what were regarded as Higher Civil Service posts. One exception
to this behaviour occurred in 1984 when the then Secretary of State, Michael
Heseltine, appointed an industrialist, Peter Levene, to be Chief of Defence
Procurement in the Ministry of Defence. That Levene was to be paid more
than twice the Permanent Secretary salary that a career civil servant would
receive in the same post was not lost on the union concerned, the First Divi-
sion Association, as was the fact that Levene had not been subject to open
competition, given that the post had not been advertised. The Government
was accused of taking ‘a cavalier attitude towards appointments to the Civil
Service’, not least because the Civil Service Commissioners were given less
than 24 hours notice of Levene’s appointment. The Council of Civil Ser-
vice Unions protested to the Head of the Home Civil Service, and the Prime
Minister eventually admitted that the original terms of the appointment were
illegal in the sense that they did not strictly comply with the Civil Service
Order in Council 1982.26 In their next annual report, the Civil Service Com-
missioners asserted the importance of their role in ensuring open competitive
recruitment free of the taint of patronage.27 The Levene appointment illus-
trated an obvious difficulty in recruiting gifted outsiders, which was not just
that of observing particular procedures, but of salary expectations. As for
patronage, outsider political advisers were more of a problem for the career
Service, with Denman observing that such advisers not only ‘want to make
sure that the old fossils of Whitehall do not dilute programmes [but] they
want to have the fun of dealing with Ministers on major issues of policy
without the tiresome necessity of passing a stiff competitive examination
and serving a long apprenticeship’, and Ministers might well prefer such
‘uncritical support’ for their ideas rather than ‘face a sober appraisal of their
workability by an experienced official’. Since Denman had doubted whether
the Higher Civil Service really needed the galaxy of talent that it recruited
any more,28 or that it had ever had needed it,29 his defence of the traditional
arrangements was a curious one, but the reality was that, as far as the Higher
Civil Service was concerned, the Thatcher Governments largely worked with
those arrangements.
Even at the wretched Bancroft dinner, Mrs Thatcher had believed that some
Permanent Secretaries had agreed with her, and she was optimistic about
the ablest of the younger generation of officials too.30 ‘I was enormously
impressed by the ability and energy of the members of my Private Office at

No. 10’, she wrote,
I usually held personal interviews with the candidates for Private Secretary
for my own Office. Those who came were some of the very brightest young
men and women in the Civil Service, ambitious and excited to be at the
heart of decision making in government. I wanted to see people of the
same calibre, with lively minds and a commitment to good administra-
tion, promoted to hold the senior posts in the departments. Indeed, during
my time in government, many of my former Private Secretaries went on
to head departments. In all these decisions, however, ability, drive and
enthusiasm were what mattered, political allegiance was not something I
took into account.31
Nevertheless, the promotion of Sir Clive Whitmore, the Prime Minister’s

Principal Private Secretary, to become Permanent Secretary at the Ministry
of Defence in 1982 proved controversial, even though Whitmore had spent
almost the whole of his previous career in that Ministry. Controversial too
was the promotion of Sir Peter Middleton to Permanent Secretary of the Treas-
ury in 1983 over the heads of older men. ‘Anecdotal evidence suggests it is
style rather than belief which tends to be considered important’ in mak-
ing the most senior appointments, the FDA (Association of First Division
Civil Servants), representing higher civil servants, observed, ‘The style which
appeals to the Prime Minister is the “can do” approach, best characterized
by decisiveness and an ability to get things done, rather than the more trad-
itional approach which lays greater emphasis on analysis of options with
recommendations for action based on that analysis.’ There was no evidence
of politicization. Moreover, the powers that the Prime Minister used dated
from 1920.32
‘Advisers advise and Ministers decide’, Mrs Thatcher declared in 198933 ,
and one of her Ministers, Norman Fowler, later wrote of the phrase that
‘it is not a bad commentary on the Thatcher years. It was Ministers, not
advisers, who drove through the distinctive policies like privatisation and
industrial relations reform’.34 Mrs Thatcher certainly relied on the advice
of her Court, but if Fowler was able to write in retrospect as if higher civil
servants knew their place in the case of some of them this seemed to be
because they had been put back into it. The economic liberals applauded
this. As one wrote: ‘From the inception of the first Thatcher Administra-
tion in 1979, the Civil Service was “taken on”; a body of men and women
which had grown ever larger since the War was cut back to the point where
it became the smallest Civil Service since the War. The number of peerages
and knighthoods given to senior civil servants markedly declined; relations
between Ministers and their officials were – to quote one senior official off
the record – “absolutely awful”.’35 One incident that mattered took place
during one of Mrs Thatcher’s early visits to departments. At Employment,

she got involved in an argument over the legal position on secondary indus-
trial action with an official called Donald Derx, who responded by saying:
‘Prime Minister, do you really want to know the facts?’ Prior, who believed
Derx to be ‘one of the best and most dedicated civil servants I have ever met’,
thought that after this meeting ‘Donald had a black mark against his name
and appeared to be passed over for promotion. It was a pity that she was not
able to accept that by standing up to her, he was displaying qualities which
a civil servant must have if he is to serve his Minister properly, and which
she of all people used generally to accept.’36 Since even the hostile Denman
could only find two examples of senior civil servants of undoubted ability
whose careers were ruined by arguing with her,37 it would seem that Mrs
Thatcher ‘used generally to accept’ such behaviour. If she acted differently
in the case of ‘the wretched Donald Derx’ as Clark called him,38 this may
have reflected the importance that she gave to the Government’s industrial
relations legislative programme and it was in that context that she had her
doubts, well-founded or not, about Derx’s suitability as Permanent Secretary
at Employment. On the other hand, she may have acted as she did on the
principle of pour encourager les autres. The Government was asking two things
of the Higher Civil Service. The first was that it should be leaner and more
‘efficient’ and that it should shed some of its ‘privileges’. The second was that
it should play or, rather, revert to playing that role in governing the country
that constitutional theory had assigned it. The realization of both aspirations
required higher civil servants to give up what to many must have seemed a lot
in terms of rewards, promotion prospects, and. in the case of some of them,
influence, without compensating benefits from being offered. It was in this
atmosphere that the Wardale inquiry was conducted into whether or not the
Under Secretary grade should be abolished. That the then Chairman of the
Board of Inland Revenue had told the Fulton Committee in the 1960s that
the grade was ‘superfluous’39 meant that there was a case to be examined.
The Under Secretary grade survived the review in 1981,40 but, of course, in
the meantime the prospect of serious damage to the career ladder kept the
Service on the defensive. Later in 1981, the Thatcher Government took the
unprecedented step of requiring Sir Ian Bancroft, the Head of the Home Civil
Service to take early retirement.41
Resentment about the manner that the Higher Civil Service, and indeed
the career Civil Service as a whole, was being treated seemed to be a motive
in the succession of ‘leaks’ of confidential material from government depart-
ments which characterized the Thatcher years, and which would seem to
have been aimed at making life difficult for the Conservative Government.
Clive Ponting, an Assistant Secretary in the MOD, who leaked confidential
material about the sinking of the General Belgrano in the Falklands War, was to
write that he objected to the ‘politicization’ of the Service under the Thatcher
Government.42 Since Bancroft was replaced as Head of the Home Civil Service
in the first instance by two career civil servants in Sir Douglas Wass and
Sir Robert Armstrong jointly taking that role, and then by Armstrong alone,
the Government’s behaviour in that case did not qualify, and no evidence was
produced that the relatively few Conservatives of economic liberal outlook
in the Higher Civil Service were the subject of favouritism. In fact, though his
own allegiance to the SDP was known, Ponting’s own career had prospered
through his involvement in exercises designed to promote greater efficiency
in the Service. ‘Ponting’s notion of his own duty can appear extremely high
because he has no qualms about making it up as he goes along’, The Spectator
savagely commented:
So, for instance, Mr Ponting first sent the documents under plain cover,
and, when inquiries were made, scarcely owned up with the readiness
which schoolboy, let alone adult, honour demands. He had entered the
exciting world of leaks, but he did not believe that this should disqual-
ify him from personal advancement. He did not announce his intention
to Mr Heseltine [the Secretary of State], then calmly walk up Whitehall
and present the documents to the Chairman of the Select Committee. He
ran them off on the departmental photocopier. . . and slipped them off to
Mr Tam Dalyell [a Labour MP and opponent of the Falklands War].
If Ponting had not displayed ‘a classic case of Civil Service meanness’ and
‘he had paid for an outside photocopier, he would not have been detected. . .
Only when he is caught does Mr Ponting start to have inflexible conscience
and an unswerving moral duty. . . Mr Ponting is not a bona fide conscientious
objector.’43 Whether Ponting was a ‘liberal’ hero or not, what was evident
was that he had broken a trust, it seemed in the hope of getting away with it,
and, unlike most others, he got caught. So, the question was should Ponting
simply be allowed to resign, or, as happened, should he be prosecuted under
Section 2 of the Official Secrets Act? When the latter course was pursued, to
the surprise of most observers, on 11 February 1985, Ponting was acquitted,
with the jury unanimously ignoring the arguments of Mr Justice McCowan.
It then seemed to be widely believed that the British Constitution and the
positions of the Thatcher Government and of Heseltine, who was said to have
pressed for Ponting’s prosecution, would never be the same again. Exactly a
week later, though, Heseltine did not hesitate to ruthlessly strike again at
Ponting in the relevant House of Commons debate, sinking Ponting and
with him the supposed Belgrano Affair as effectively as the cruiser herself had
been sunk three years before.44
‘I am content, as I have always have been, to leave the conduct of polit-
ical matters to duly elected politicians’, Ponting stated after Heseltine had
attacked him,45 but this was exactly what the former civil servant had not
been prepared to do. Shortly afterwards, Sir Robert Armstrong issued a code
of conduct for civil servants under the title of The Duties and Responsibilities of
Civil Servants in Relation to Ministers. Note by the Head of the Home Civil Service.
‘Civil servants are servants of the Crown’, Armstrong wrote:
For all practical purposes the Crown in this context means and is
represented by the Government of the day. . . in general the executive
powers of the Crown are exercised by and on the advice of Her Majesty’s
Ministers, who are in turn answerable to Parliament. The Civil Service as
such has no constitutional personality or responsibility separate from the
duly elected Government of the day.46
The Armstrong Memorandum set out the duties of civil servants in relation
to the constitutional conventions of ministerial responsibility and collective
responsibility, and it was difficult to see how formally those duties could be
set down differently in terms of principle. It could be objected that what was
being advanced was more like constitutional theory than practice, though
Sir Douglas Wass at least thought that ‘the theorist who argues that the offi-
cial is the creature and servant of the Minister [was] by far the closer to the
truth’ than ‘the cynic who argues that Whitehall manoeuvres the politicians’,
though, again, the reality was complex.47 What was clear was that officials
did not have an independent role, and, as Wass added: ‘The Civil Service can-
not be thought of as an in-built safeguard against what some people might
well call the excesses of a radical or reforming Government. The only effective
safeguards, if it is safeguards we are seeking, have to be found in the political
and judicial processes, or in the force of circumstances.’48 That the Higher
Civil Service could not expect a quiet life in the near future was emphasized
once more when in 1986, and then into 1987, the Government chose to pur-
sue a former British spy called Peter Wright in the New South Wales Supreme
Court for breaking the Official Secrets Act even though and obviously its
writ did not run in Australia. Wright had written a book called Spycatcher
to make money, with his motivation being that he did not think that his
Civil Service pension was good enough. Wright had to be the main source
for the material in Chapman Pincher’s book Their Trade is Treachery, pub-
lished in 1981, about the revelations in which the Government either felt it
could do nothing or chose not to do. Though at one time there seemed to
have been no shortage of Soviet agents to hunt, it was the case that Wright
had not caught any of them, and Spycatcher added little to what was known
from the earlier book. However, once more on the principle of pour encour-
ager les autres, the Thatcher Government decided that Wright was not going
to directly profit from having been Assistant Director of MI5, and Sir Robert
Armstrong was sent to Australia to argue the case against Wright. Outside of
the British political and administrative culture he knew so well, Armstrong
fared badly in court, stating in response to one question that he had not lied
but that he had been ‘economical with the truth’.49 The British Government
lost the case, and Spycatcher was a best-seller.50 Heath condemned the Prime
Minister’s humiliating and ‘improper’ use of Armstrong in despatching him

to Australia,51 and Mrs Thatcher had shown once more that she did not share
his deferential attitude towards the Higher Civil Service and its interests, and
the pattern of her behaviour suggested that she shared the opinion of her
adviser, Lord Rayner, that such officials were ‘a mixture of superb talent on
the one hand and of an able coterie of cynics on the other’.52
Seeking a management revolution in the Civil Service
Since it was obvious that the self-interest of the career Civil Service was best
served either by conservative Governments which, by and large left it to its
own devices, or by those governments set on its expansion which profited
it as a pay and promotion system, the advent of the Thatcher Governments,
and especially the economic liberalism they professed and, on occasion, prac-
tised, was bound to induce dread in its ranks. The career Civil Service could
run the gauntlet of Fabian criticism with equanimity. The Fabians wanted a
better Civil Service, and their criticisms of the current Service tended to have
the familiarity of an old song, and so did the programme of reforms, in both
cases largely because the Service tended to do as little as possible in response.
This did not necessarily mean that the criticisms lacked substance. The
Administrative–Executive–Clerical structure of what most people thought of
as being the Civil Service sufficiently reflected the social class system to irri-
tate the Fabians, calmly neglecting their own social elitism in that respect,
and also the extent of promotion from below. Of course, those promoted
in the case of the Service and the Fabians would be only too likely to be
conformists, otherwise they would be discarded. That said though, a Fabian
exercise like the Fulton Committee of the 1960s would be bound to regard the
main body of the Service favourably, and those with specialist qualifications
could expect the same treatment too, because their fire was directed against
the Administrative Class with its Oxbridge direct entrants and its generalist
ethos. That such criticism was intemperate in tone did not disguise the real-
ity that the Fulton Report left the Service largely unscathed, and, indeed, the
resulting establishment of a Civil Service Department instead of the Treasury
as the central body responsible for the Service was a recognition of it as an
organization in its own right. Little followed from the recommendations of
the management consultancy group that the Committee employed, which
intelligently tried to reconcile the organization and methods of the career Ser-
vice with the best of private management practice.53 At first sight, the group’s
report bridged the gap between the Fabian reformers and the economic lib-
erals, and the Fulton programme continued to surface later, and confusingly
so in proposals for unified grading. The career Civil Service could live with
the gentle reformism of, say, a Fabian pamphlet called The Administrators, but
when one of its own members published a book called Your Disobedient Servant
starting off with six chapters under the heading of ‘The Wasting Sickness’
about waste and extravagance in government departments54 ammunition

had been presented to those with real radical intent.
‘In 1961 the numbers in the Civil Service had reached a post war low of
640,000; by 1979 they had grown to 732,000’, Mrs Thatcher wrote:
This trend had to be reversed. Within days of taking office. . . we imposed

a freeze in recruitment to help reduce the Government pay bill by some
3 per cent. Departments came up with a range of ingenious reasons why
this principle should not apply to them. But one by one they were over-
ruled. By 12 May 1980 I was able to lay before the House our long-term
targets for reducing Civil Service numbers. The total had already fallen
to 705,000. We should seek to reduce it to around 630,000 over the next
four years. Since some 80,000 left the Civil Service by retirement or res-
ignation every year, it seemed likely that our target could be achieved
without compulsory redundancies. We were, in fact, able to do it.55
The Thatcher Government had inherited a heavily unionized Civil Service,

which had the Civil Service Department as its central personnel department
presiding over arrangements whereby civil servants, while normally enjoy-
ing security of tenure, in principle had their salary scales primarily based
on ‘fair comparisons’ with outside pay, together with index-linked pensions.
With inflation rampant, and with unemployment rising too, and in a polit-
ical context in which ‘where will the money come from?’ was once again a
pertinent question to ask, what were seen as the Service’s cosy pay and pro-
motion system and privileges were bound to be targets for an ‘economizing’
Government. The Scott Inquiry into the value of pensions failed to supply
the Conservative Government with the condemnation of index-linked pen-
sions that it must have hoped for, and, indeed, comically suggested that
everybody should have such pensions without bothering to suggest how
they would be paid for.56 This was, though, one of the few setbacks that
the Thatcher Government experienced in a campaign which witnessed the
end of the ‘fair comparisons’ salary system, the effective defeat of the Civil
Service Strike, the demise of the Civil Service Department, and all to the
accompaniment of cuts in Civil Service numbers. Following the Priestley
Report of 1955, special pay machinery was set up for the Higher Civil Ser-
vice, which from 1971 became part of the Review Body on Top Salaries, and
the Civil Service Pay Research Unit was established for the main body of
the Service. This Unit assembled the data and excluded Ministers from what
eventually became an annual pay cycle until near the end when they were
presented with the prospective salary bill. Eventually, as the economy deteri-
orated, incomes policies postponed the payments, a practice that according
to the Civil Service union leader, W.L. Kendall, constituted the ‘brutal rob-
bery’ of his members.57 Incomes policies did not affect the entitlement to
‘fair’ salaries. The Thatcher Government was more concerned with the plight
of taxpayers and of its own need to find the money; and in October 1980,
by declining to implement some expensive pay research findings, and thus
unilaterally tore up the Civil Service pay agreement, the Government actu-
ally dispensed with the Priestley pay system. This behaviour led directly to
the Civil Service strike, which began with a 24-hour stoppage on 9 March
1981, and lasted for 21 weeks until 30 July, when the unions were forced
to concede defeat. Aside from a further one-day stoppage on 1 April, and
a half-day stoppage on 14 April – both less well observed than that of 9
March – the strike was pursued by selective action. The unions seemed to
have been anticipating a fight with the Thatcher Government from the out-
set. The establishment of the Council of Civil Service Unions in May 1980
in place of the National Staff Side appeared to be at least partly motivated
by a recognition of the need for a stronger central organization should a
confrontation occur. When the strike came, the CCSU strategy was to empha-
size interference with revenue collection and the gathering of statistics and
the disruption of defence establishments. When asked about the danger to
Britain’s nuclear deterrent, Kendall replied: ‘I’ll be on the end of a phone if
anybody wants to ring me up about some great invasion.’ This was widely said
to be a sophisticated strategy, and it certainly seemed well-planned. Neverthe-
less, there were also obvious reasons why, despite the Kendall-style rhetoric,
it was the only one available to the CCSU: namely, the lack of support for
more sustained, extensive, incisive action from the public, the TUC, and, it
was feared, most union members. At a time of rising unemployment, out-
side sympathy for civil servants, who had job security, and who many might
well have regarded as striking for still better pay deals was bound to be min-
imal. The CCSU strikes did interfere with the issue of passports and, for a
time, they disrupted airports. Generally, though, the CCSU’s approach was
aimed at not antagonizing the public, which would certainly have occurred if
the unions had gone beyond halting computer operations and had stopped
social security payments. Moreover, the TUC ruled out action that would
hurt the old, the sick and the unemployed and, where appropriate, emer-
gency procedures ensured that the payments were made. In return for this
restraint, all that the TUC leadership did was to express general support,
and make gestures such as declining to cross a picket line to go to a NEDC
(National Economic Development Council) meeting, and referring the dis-
pute to the International Labour Organization. So, when Kendall said that
the CCSU was going to ‘put the boot in’ that was exactly what the unions did
not dare to do. In late May 1981, the CCSU dropped its 15 per cent claim,
with one union leader, B.A. Gillman, fearing that ‘we have a Government
which believes that it can beat down the Civil Service and make us crawl back
to work’.58
‘The Government has the Civil Service unions in an arm-lock’, The
Economist gloated in early 1981, believing that ‘even [Mrs Thatcher’s] Wetter
Cabinet colleagues see that the political cost of even a small concession above
7 per cent to the unfortunate union leaders would now be too high’.59 Prior’s
account was different:
The strong advice of Christopher [Soames] and myself was to settle. But
when the matter came to the full Cabinet, it was clear that Margaret had
lobbied intensively. Willie Whitelaw said afterwards she had told him she
would resign if she didn’t get her way – as if a Prime Minister would go
on such an issue, though enough believed her. The debate was one of the
most acrimonious I have ever experienced. The Cabinet was completely
split down the middle. In the end, the Prime Minister got her way and the
dispute dragged on. The Treasury became even more worried . . . Geoffrey
Howe gradually changed his stance. Eventually, after nineteen weeks, the
strike was settled at 7.5 per cent within the 5 per cent cash limit. We
could have had the deal after six weeks. Instead we lost a further $250M
in revenue and finance charges, which we would never recoup.60
Howe’s recollection was that the Treasury had been in the front line ‘since
the organizers of the Civil Service strike made their principal onslaught on
our Inland Revenue and Customs and Excise offices, in the hope that they
could destroy our cash flow’. Of the final settlement and the setting up
of the Megaw Committee to examine Civil Service pay, Howe wrote that
‘it could not be seen as a famous victory, though it fell well short of a
disaster’.61 Hoskyns agreed with this verdict, arguing though that the Civil
Service and its unions had come out of it less well than the Government,
whose authority had not been affected by ‘the whole depressing business’.62
Of Soames, Hoskyns wrote, ‘after the Paris Embassy and Rhodesia it must
have all seemed pretty footling stuff to him, and yet this was the sort of stuff
we had to get right, again and again, if the whole country was not to footle
its way to economic collapse’.63 As the CCSU’s declared intention was ‘to
blow the Government’s economic strategy right off course’,64 Mrs Thatcher
and her colleagues had little choice about resisting the strike, even if some of
those colleagues wanted that strategy to fail, as Hoskyns believed Prior did.65
Despite the characteristic British attempt to pretend that the outcome of the
strike was some sort of draw, the facts were, as Kendall commented, the CCSU
had been forced to accept a ‘thoroughly unsatisfactory pay settlement,’ and
when Peter Jones of the CCSU thought that ‘the Civil Service trade union
movement [had] come of age’ through its ‘first foray into the field of direct
action’,66 this invited the observation that in the Thatcher era it was also its
last. In the manner of the legendary W.J.Brown, the union leadership had
resorted describing the confrontation in military terms at one stage,67 and
if such analogies must be used then the Battle of Jutland would seem the
best one. The outcome was said to be inconclusive, and there may have been
‘something wrong’ with the Royal Navy’s ships, but the hard fact was that
the German High Sea Fleet never ventured forth again. Similarly, the Civil
service unions never came back for more, though the Thatcher Government
did when it removed the unions from the Government Communications
Headquarters in 1984, despite an offer from them of a no strike agreement.
Much was made of Mrs Thatcher relegating the Civil Service Strike to a foot-
note in her memoirs,68 as if she wished to forget the episode, and one of
her advisers, Strauss maintained that she displayed spite in later dismissing
Soames from the Cabinet for having been right all along about what form of
pay deal would settle the strike.69 What mattered above all, though, was not
the Civil Service strike but the prospective coal strike. The NUM had been
bought off in 1981, but they would be back and in any confrontation they
would have to be beaten. People like Soames and Prior with their perpetual
quest for a socially acceptable deal were not going to be of much use in that
sort of political battle. Getting rid of the Civil Service Department (CSD) and
Bancroft along with it in November 1981 was similarly deemed unreasonable,
but Mrs Thatcher was, for once, not being controversial when she wrote of
the CSD that it had ‘always lacked credibility and power in Whitehall’,70
making it of limited use to her in promoting a more efficient Service, and so
she transferred its functions to the Treasury and the Cabinet Office. Though
the CSD had not been worth setting up in the first place,71 there was no sim-
ilar straightforward answer to the problem of Civil Service pay, and there was
always the fear that the Megaw Committee would prove to be as inept as that
of Scott. The Megaw Report of 1982 came up with majority recommendations
that resembled the Tomlin formula that had governed Civil Service pay in
the inter-war years, a period when economic liberal values had ruled, and
which meant a compromise with the market, which was the most that could
be expected in relation to a career Service. From the Thatcher Government’s
point of view, what the Megaw majority endorsed was the dismantling of the
Priestley system under which, in effect the Pay Research Unit, a body inde-
pendent of the elected Government, had decided the size of a substantial
block of public expenditure.72
With the unions driven on to the defensive, and so less able to obstruct
‘new and more efficient working practices’, as Mrs Thatcher saw things,73
there was now scope for the Conservative Government to put into effect its
grand strategy for the Civil Service. No such strategy existed, though one
eventually evolved as the Government cast around for ways of changing the
Service, which, given the outlook of the Prime Minister and her allies, had to
mean trying to breaking it up as well as the introduction of ‘business methods’
into the work of departments. That said, though, in 1986, the Government
introduced unified grading down to and including the rank of Principal and
corresponding Professional and Scientific grades. The Open Structure at the
top of the Service introduced in 1972 had only gone as far down as Under Sec-
retary level, and its advantage was supposed to be that such a Structure was
to give better opportunities to those in the specialist grades to get to the very
top of the Service. One could see that taking that Structure down to Principal
level got rid of about 160 different grades, but this form of rationalizing salary
scales added an element of uniformity that contrasted with the differentia-
tion that the introduction of performance pay was supposed to promote.74
Mrs Thatcher later wrote that ‘the difficulties of introducing pay rates related
to merit proved immense; we made progress, but it took several years and a
great deal of pushing and shoving’.75 The Government proved to be in no
hurry to negotiate long-term pay agreements with the Civil Service unions,
whose objective, of course, was to obtain ‘a settled, orderly and fair national
pay system for all non-industrial civil servants’,76 and from the mid-1980s
it was evident that the unions intended to pursue separate deals rather than
central settlements.77 The Government’s suspicions that, for all the protes-
tations of devotion to public service, the career Civil Service was not much
more than a self interested pay and promotion system seemed borne out
when in 1985 by classifying the relevant documents in a way to ensure that
the Prime Minister’s Policy Unit did not see them officials ensured that the
Cabinet simply nodded through increases in Higher Civil Service salaries.78
The Thatcher Government should have earlier got rid of the Heathite appara-
tus that made the recommendations. Then again, to win the staff concerned
over to the acceptance of changed working methods an old fashioned across
the board deal was done at what would have been called in former times the
Executive and Clerical level, including the shortening of salary scales. What
gains in efficiency followed from renaming the Clerical Officer grade as that
of Administrative Officer remained unclear.79 Of course, the much criticized
Administrative Class had not survived the immediate post-Fulton era, with
the higher grades disappearing into the Open Structure, and the remainder
into an Administration Group. Nobody with much sense had been fooled
by this formal change, and there was still the fast stream entry and a career
pattern of the kind that the Treasury of Sir Warren Fisher had patented in
the inter-war years. The Fabians of the Fulton Committee had disliked the
generalists that tended to get to the top of the Service, and Mrs Thatcher
criticized them for thinking themselves as policy advisers and for paying too
little attention to management.80 Since the Fisher model sacrificed special-
ized knowledge for versatility, only formalized post-entry training of the kind
that leading French administrators endure could make much difference in the
long run, and then only if the career pattern changed too. The Thatcher Gov-
ernment evaded the issue by eventually opting for an organizational structure
that separated out policy work from that of management.
The attempts to foster accountable management in government depart-
ments in the aftermath of the Fulton Report had been dismissed as ‘a charade’
and ‘playing at shops’ by Bancroft,81 but Mrs Thatcher and her allies in the
Tory Government believed in the superiority of business methods, and so,
importantly, did Michael Heseltine. One of the first things that Mrs Thatcher
did as Prime Minister was to appoint Sir Derek (later Lord) Rayner of Marks
and Spencer, which seemed to be her favourite ‘shop’, to advise her on the
promotion of efficiency and the elimination of waste in government depart-

ments. Rayner distributed copies of Your Disobedient Servant to those involved
in his team, and the efficiency reviews that Chapman had conducted in
the former Ministry of Public Buildings and Works were an example that
the Rayner scrutinies followed. What Rayner found out was that nobody in
Whitehall knew what it cost to run government departments, despite the fact
that considerable sums of public money were involved, for example amount-
ing to 3.4 per cent of GDP in the financial year 1985–86. Given that, in
broad terms, every £1billion extra on the Civil Service pay bill at that time
added another penny to the basic rate of income tax, the Thatcher Govern-
ment’s objective of a smaller Service and its attempts to limit salary increases
were understandable, given its commitment to reducing direct taxation. The
Rayner exercises directly brought about only minor changes, but they did
provide information that supported the belief of the Prime Minister and her
economic liberal allies that there was scope for economies in the running
costs of departments. In other words, Chapman had been right. A less likely
ally proved to be Michael Heseltine, when Secretary of State at the Depart-
ment of the Environment (DOE). According to his many critics, Heseltine’s
inability to make any serious contribution to matters of policy explained the
emphasis that he placed on management issues, but there was no doubting
his effectiveness in dealing with those issues. Heseltine had been placed in
charge of the fourth largest government department, which had a structure
that, for instance, included at one stage no less than 48 Under Secretaries, and
he introduced there a Management Information System for Ministers, under
the aegis of which the numbers employed in the DOE were cut by a quarter.
A complementary Rayner scrutiny conducted by a official called Christopher
Joubert resulted in the DOE being divided up into 120 cost centres, which, in
addition to the personnel information already supplied by MINIS, provided
data on the actual expenditure incurred by each unit and related it to the
unit’s budget.82 ‘What came to obsess Michael was introducing new man-
agement systems into government’, Mrs Thatcher wrote of Heseltine, ‘This
seemed to me a most commendable interest and I encouraged him, arranging
[in February 1982] a seminar with other Ministers to discuss it.’83 Heseltine
found that his fellow Ministers and their leading officials were uninterested
in his management thinking,84 but this made no difference because the Prime
Minister was interested.
So, in May 1982, the Government launched the Financial Management
Initiative (FMI), the aim of which was
to promote in each department an organization and system in which man-

agers at all levels have (a) a clear view of their objectives and means to
assess and, whenever possible, measure outputs or performances in rela-
tion to those objectives; (b) well defined responsibility for making the
best of their resources including a critical scrutiny of output and value for
money; and (c) the information (particularly about costs), the training and
the access to expert advice that they need to exercise their responsibilities
effectively.85
The FMI represented the universalization of the MINIS and Joubert systems,
and there was some evidence that improvements in productivity that com-
pared well with those made in the more relevant parts of the private sector. A
policy of running costs controls introduced by the Treasury in 1986 cohered
with the delegated responsibility for budgeting and for management that
the FMI promoted. By the end of the 1980s, the Thatcher Governments
had devised a coherent pay system for the Civil Service that had replaced
the Priestley arrangements, though, of course, the differentiation between
staff represented by the introduction of performance pay and more empha-
sis on regional variations in salary levels. That said though, to a substantial
extent pay and conditions of service remained standardized in the Service
as a whole, which set obvious limits on the effectiveness of the FMI. Using
Private Enterprise in Government was not only the title of a Treasury multi-
departmental review published in 1986, but also what many took to be a
shorthand description of the approach that the first two Thatcher Govern-
ments took towards the Civil Service. The initiatives already cited largely
had private sector examples in mind, and, obviously, so did the introduction
of competitive tendering and contracting out of ancillary services, but the
reality still was that the core activities of the Civil Service remained largely
intact, and the Prime Minister then had to consider whether to go farther
and radically change the familiar structure of government departments and
the career Civil Service with it.86
‘Radical reforms’ and the Next Steps programme
‘It was only towards the end of my time in government that we embarked
upon the radical reforms of the Civil Service which were contained in the
Next Steps programme’, Mrs Thatcher wrote, ‘Under this programme much
of the administrative – as opposed to policy making – work of government
departments is being transferred to agencies, staffed by civil servants and
headed by Chief Executives appointed by open competition. The agencies
operate within frameworks set by the departments, but are free of detailed
government control. The quality of management within the Public Service
promises to be significantly improved.’87 In this manner, the Prime Minister
hailed the Next Steps Report of 1988, as well as writing off the previous efforts
of the Governments she led to reshape the Civil Service, which must have
seemed radical enough to many in that Service, certainly by the standards of
former Governments. Thus, in 1985, Anne Mueller, a Second Permanent
Secretary in the Cabinet Office, had written that ‘a management revolu-
tion is already underway in the Civil Service which will greatly increase its
effectiveness’.88 The ‘revolution’, though, had not gone far enough for the
Prime Minister, and in 1987 there was a Mueller Report produced by a team
led by the same official called Working Patterns, which proposed a two-tier
Civil Service, with a core Civil Service that would enjoy job security and career
prospects, and a peripheral Civil Service that would be employed on a wide
range of conditions of employment. Though the Report did not say so, the
career Civil service with its implication of permanency effectively meant that
staff costs were treated as if they were fixed costs, whereas the thinking behind
the FMI was to treat them as running costs. The career Civil Service’s range of
employment rights severely limited the scope for managerial initiative, and
the logic of the Conservative Government’s position was to change the con-
ditions of service so that the FMI really did prevail.89 Quite how arrangements
of the kind advocated in Working Patterns could be implemented except over
the long term was hard to see, with the commitments made on provision
of pensions presenting just one obvious difficulty. Meanwhile, though, the
proposals made in Working Patterns came to be overshadowed by those made
in pursuit of the Next Steps programme.
This programme followed from a report called Improving Management in
Government: The Next Steps published in February 1988. This was the work of
the man who had succeeded Rayner as the Prime Minister’s Adviser on Effi-
ciency, Sir Robin Ibbs and the Unit he led. The proposed structure resembled
those that characterized Swedish central government, which had interested
reformers for 30 years in part because of Sweden’s political reputation at one
time for having established a successful social democracy. That reputation
had not survived, and anyway quite why a British Government of the kind
led by Mrs Thatcher should look to Sweden seemed strange at first sight, and
after further consideration too, given that the Swedish system did not have a
convention of Ministerial responsibility. The Efficiency Unit and the Govern-
ment seemed undeterred. ‘Although, at the most senior levels, civil servants
are responsible for both policy and service delivery, they give a greater prior-
ity to policy, not only because it demands immediate attention but because
that is the area in which they are on familiar ground and where their skills lie,
and where Ministerial attention is focused’, the Unit observed, concluding
that, ‘A proper balance between policy and delivery is hard to achieve within
the present framework.’90 The Unit believed that
the aim should be to establish a quite different way of conducting the busi-
ness of government. The central Civil Service should consist of a relatively
small core engaged in the function of servicing Ministers and managing
departments, who will be the ‘sponsors’ of particular government policies
and services. Responding to these departments will be a range of agencies
employing their own staff, who may or may not have the status of Crown
servants, and concentrating on the delivery of their particular service,
with clearly defined responsibilities between the Secretary of State and
the Permanent Secretary on the one hand, and the Chairmen or Chief
Executives of the agencies on the other. Both departments and agencies

should have a more open and simplified structure.91
The policy was to be that ‘within two years at the most, departments should
have completed identification of areas where agencies are the most effective
way of managing and should have changed their own internal structures to
implement this change’.92
Out of a total of approximately 600,000 civil servants, the immediate
implementation of the Next Steps Report only involved about 70,000, many
of them involved in marginal activities, though half were located in the
Employment Services part of the Department of Employment that included
job centres and unemployment benefit administration, and so could not
be written off as unimportant.93 Within the Government itself, Lawson as
Chancellor of the Exchequer proved to be a sceptic about the virtue of hiv-
ing off executive functions into separate agencies, pointing out that the head
of the autonomous executive agency was effectively accountable to nobody.
Further, the original proposals made no provision for securing effective con-
trol of the expenditure of the agencies. After a long battle, the Treasury and
the Cabinet Office agreed a concordat whereby the agencies were to be set
financial targets by the Treasury, which would then monitor performance.
Lawson approved of Peter Kemp being promoted to Second Permanent Secre-
tary in the Cabinet Office and placed in charge of the Next Steps programme
as Project Manager. This was because Kemp had joined the Treasury from
the private sector, and so was not a conventional civil servant, and Lawson
credited Kemp with having played a major part in ensuring that by the late
1980s every Civil Service union was negotiating pay agreements that made
reference to market considerations. Lawson’s own contribution to the Next
Steps programme was to volunteer the Stationery Office, the Royal Mint, and
the Central Office of Information, but he objected when Kemp proposed to
convert the Boards of Inland Revenue and of Customs and Excise into agen-
cies as this would turn them into tax collecting bodies only. The Treasury
would be expected to take on their policy role, but without practical expe-
rience on the ground.94 This was a convincing argument, but, nonetheless,
these two bodies were added to the list of future agencies, and, even before
their translation into agencies, by the time Mrs Thatcher left office there
were 34 Next Steps agencies, and by the following summer that total was
planned to be 50 agencies, employing about 200,000 civil servants.95 Law-
son recognized that Kemp had done a remarkable job in bringing one-third
of the entire Civil Service within executive agencies in such a short time, and
while he disapproved of arrangements under which the agencies remained
free of the ultimate sanction of financial failure, and his preferred solution
was to take privatization deep, instead of marginally, into the areas of activity
conventionally assigned to government departments, and Lawson came to
see that the establishment of the agencies made future privatization less
difficult.96 The status of the Next Steps agencies resembled that of the public
corporations that had run the nationalized industries, and it was not sur-
prising that Mrs Thatcher emphasized that ‘I cannot rule out. . . that after a
period of years, agencies, like other government activities, may be suitable
for privatization.’97
There were those in heavily unionized career Civil Service who seemed to
think that the Thatcher Governments gave it a torrid time, and even that
the Service had even been singled out for especially unfavourable treatment,
which, given the high levels of unemployment in the private sector in the
1980s, failed to convince. Of course, and obviously, if a quiet life was what
was wanted, proximity to the Prime Minister was not advisable, and the
leading civil servants in particular were too close for comfort, but such offi-
cials could not complain as of so many recent Governments that those of
Mrs Thatcher lacked direction. The note of certainty that the Prime Minister
in particular struck did not always conform with the facts, and when she
stated in 1985 that ‘our Civil Service is now smaller than at any time since
the War’, The Economist commented that the cuts in numbers had mainly
come in the industrial Civil Service, nearly all of whom worked in dockyards
and Royal Ordnance Factories. ‘Turn to real civil servants and Mrs Thatcher’s
claim is wide of the mark’, the journal observed, ‘There were 499,000 in 1945,
with departments on a full war footing. Mrs Thatcher this year apparently
needs more than Churchill did to win the War; she has 504,000.’98 More
relevantly, the total of ‘real civil servants’ had been 566,000 in 1979 and
that for 1990 was to be 495,000, and the overall total was by then 170,000
lower than it had been eleven years before.99 So, there was not a dramatic
reduction in the numbers of civil servants during the period of the Thatcher
Governments. Those Governments took unified grading farther down the
Service than before, an act of standardization that cohered uneasily with the
ambitions of the FMI. The notion that the Thatcher Governments under-
mined the unity of the Service as such neglected the reality that the Service it
inherited was characterized by 90 per cent of direct entry recruitment being
done by the employing departments, which also provided 76 per cent of
post-entry training together with 20 per cent purchased externally and just
4 per cent provided centrally.100 The Thatcher Governments did not change
these arrangements, and, indeed tended to work with the Higher Civil Service
that they had inherited, though it was put firmly in its constitutional place.
‘The Service belongs neither to politicians nor to officials but to the Crown
and to the nation’, Bancroft had declared,101 thus echoing Fisher’s senti-
ments of half a century before. That said though, the role of leading civil
servants as permanent politicians supposedly able as Fisher decreed to move
between unrelated posts as Ministers did and for similar career reasons worked
best when the conventional wisdom was much the same on both sides of
the constitutional divide, but where the outlooks were radically different as
was obvious the arrangements did not work, as, ironically, Fisher found out
himself when he had ideas on defence and foreign policy that the National
Government did not share. The National Government tolerated Fisher, but,
as we have seen, Mrs Thatcher chose to get rid of Bancroft and the Civil Ser-
vice Department along with him. She wanted a different sort of Civil Service,
but there was certainly no master plan at the outset, and nothing that could
be said to be comprehensive until the Next Steps Report of 1988, and even
then the outlines of Fisher’s Administrative Class could still be detected in the
policy Ministries, and certainly nothing too technocratic seemed in prospect.
As for the broad mass of civil servants they were destined for employment in
a range of agencies, and the door had been opened to greater private sector
involvement in the provision of public services in the name of efficiency. ‘We
tried before but without the clout’ was one official’s verdict on past efforts to
bring about radical change in the modern Civil Service,102 and Mrs Thatcher
provided this, and, though World Wars and Warren Fisher shaped that Ser-
vice more than any politician, it may well be that one contemporary historian
got it right when he wrote that Mrs Thatcher had more impact on the Civil
Service than any peacetime Prime Minister since Gladstone.103
7
The Economic Liberal Crusades IV:
The Confrontation with Local
Government
Less than ‘brutishly Napoleonic’
In a country like England, where business is in the air, where we can organ-
ize a vigilance committee on every abuse and an executive committee for
every remedy. . . we need not care how much power is delegated to outly-
ing bodies, and how much is kept for the central body. We have been. . .
through all that. Now we are quite grown up, and can put away childish
things.
So wrote Bagehot in The English Constitution, stressing the contrast with

‘France, where there is scarcely any power of self- organization in the people,
where the prefet must be asked upon every subject, and take the initiative in
every movement’.1 It was Napoleon who ‘settled the administration of France
upon an effective, consistent and enduring system’, Bagehot observed, and
‘the succeeding governments have but worked the mechanism they inherited
from him’.2 In the case of Britain, Ferdinand Mount thought that ‘administra-
tive centralization of a sort which, when encountered elsewhere, we disdain
as brutishly Napoleonic’ was unlikely to be deemed tolerable for long ‘in
the absence of an external foe’,3 though recent history had witnessed ‘the
destruction of the stability and authority of local government’ in Britain,
and Mrs Thatcher’s former adviser noted that it was fashionable to blame
her Governments and the Prime Minister for this.4 Thus, according to two
academic authorities,
the cumulative impact of the actions of the Thatcher Administration in

relation to local government. . . has been to transform the relationship
between the two levels of democratically elected government in Great
Britain. The ‘unwritten constitution’ which has governed the relation-
ship between central and local government over the last century has been
ignored and in effect radically (and unilaterally) changed. . . The world
of local government has become destabilized by the sheer volume of
159
legislation directed at it, the perceived irrationality of much of its content,

the fundamental challenge to many of its taken-for-granted assumptions
and domains of responsibility, and the intensifying uncertainty about the
scope of its responsibilities and indeed its future role.
To deplore ‘the attack on local government’5 became a familiar feature of a

certain kind of contemporary political writing, with its most gifted exponent
arguing that
Margaret Thatcher detested local government as much as she detested the

trade unions and the Labour Party. There is no reference in her memoirs
that is not pejorative. Her colleagues were frequently shocked by her vehe-
mence on the subject. She saw local councils as irresponsible, left wing
and profligate. Government departments and nationalized industries she
thought she could control. ‘Local government as usual is overspending’ is
the comment that litters her memoirs, whether or not it was true. Local
councils were holes not just in the public spending bucket but in the
whole Thatcherite political economy. Worse, they imposed a tax that was
to Thatcher a fixation, a tax on property known as a rate.6
Since the Attlee Governments’ nationalization programme of the 1940s ‘rep-

resented the most important reduction in local government functions in
history and an unparalleled centralization of governmental power’, the same
commentator recognized that the Thatcher Governments only came second
when it came to attacking ‘local democracy’.7 That in post-1945 British pol-
itics the only Labour and Tory Governments that anybody would be seriously
tempted to regard as distinguished both displayed little faith in the capacity of
local authorities to run essential services efficiently seems worth noting, espe-
cially as in the case of the Governments led by Attlee the last great political
figure who made a reputation worth having in local government was one of
their supposed Big Five. This was Herbert Morrison, of course, who had been
Leader of the London County Council between 1934 and 1940, and who had
led that Council in its defiance of the National Government in pressing ahead
with a new Waterloo Bridge, with the Council initially finding the relevant
money itself. That he wanted the new structure to be called Morrison Bridge.8
was a reminder that Morrison was not without his problems, but in so far as
these related to politics the most important of these was that he was an advo-
cate of both local government and of nationalization. Indeed, Morrison was
what passed for Labour’s leading thinker about public ownership before guid-
ing much of the nationalization programme through the 1945 Parliament.
This programme took away from the local authorities their gas and electric-
ity undertakings. In the relevant Cabinet meeting on 20 December 1945,
Morrison objected to the proposed structure of the NHS, arguing that local
authorities should be made responsible for both voluntary and municipal
The Confrontation with Local Government 161
hospitals, but he was unsuccessful in opposing this form of nationalization,9

and not surprisingly so given his advocacy of other acts of nationalization
which removed local government functions. Further, Morrison never seemed
to understand the trade unions, though in his beloved local government the
contribution of NALGO (National and Local Government Officers’ Associ-
ation) to the establishment of a general pattern of employment applicable
to the greater part of the local public services10 must have been known to
him. Of course, the unions tended to be led by right-wingers in Morrison’s
day, and his biographers described him as being unlike many socialists in
recognizing that the public purse was not bottomless.11 Notions of financial
responsibility of this kind were to some extent a hangover from the eco-
nomic liberal past, and as late as 1958 the Local Government Act of that
year had in important respects the character of a gentleman’s agreement.
That said, though, local government finance remained a political problem,
not least because of the increasing dependence that local authorities came
to have on the Treasury for money, and, not surprisingly, though it came to
be widely believed in public discourse that ‘something must be done’ about
local government, politicians found it safer to do ‘something’ about its struc-
ture. Morrison had never actually said or written that ‘we’ll build the Tories
out of London’,12 but the Conservatives had not obtained a majority on the
London County Council (LCC) since 1934, and it was not surprising that
by the early 1960s they came to favour a structure which, in Morrison’s
words, would give them ‘a reasonable chance of electing and preserving
a Tory majority’. Morrison described this as ‘gerrymandering’,13 but argu-
ments that were not partisan could be advanced for replacing the LCC by
a Greater London Council more or less covering the London area outside
the City of London and within the green belt, though ‘planning, traffic
and main roads’ seemed a thin list of functions. The original intention had
been to divide responsibilities for education between the GLC and 32 new,
enlarged Greater London Boroughs, but education came to be ‘wholly in the
hands of the Borough Councils’ with the exception of ‘a central area’ where
there would be ‘one education authority’.14 This latter arrangement seemed
designed to preserve at least in part the former LCC education service, which
had a good reputation. Morrison chose to describe the changed structure
as ‘insane’,15 which, ironically, eventually came to be a widely held opin-
ion about the policies pursued by what became the Inner London Education
Authority.
‘Only once in each century will there be a politician fool enough to embark
upon the reform of local government. I have decided to volunteer myself for
that sacrifice this century.’ So said Peter Walker in 1970 as the relevant Min-
ister in the Heath Government.16 Like the London Government Act of 1963,
a two-tier structure was used for the wider reform of local government in
England and Wales. Under the Local Government Act of 1972, county bor-
oughs were abolished in those countries and the number of counties was
reduced to 47 incorporating 333 non-metropolitan districts. In the English

conurbations apart from London, 6 metropolitan counties were established,
together with 36 metropolitan districts. In Scotland, separate legislation
reduced the number of local authorities from over 400 to 65.17 ‘Local gov-
ernment reform has been hung around my neck like a millstone’, Walker was
to complain, though, in retrospect, he
would make only a few changes. It was a mistake to give responsibility

for planning to both counties and districts. . . The job should have gone
to the counties. . . One fundamental mistake that I made was in setting up
the metropolitan county councils. I specified what they could do, but not
what they could not do. I did not, for example, say that they should not
go in for economic development. What happened was that the councils
took on a whole range of new spending functions. It would have been
wiser to have excluded these other activities.18
The Heath–Walker reforms avoided the tank-trap of local government

finance, but the October 1974 Manifesto made the commitment that ‘within
the normal lifetime of a Parliament we shall abolish the domestic rating sys-
tem and replace it by taxes more broadly based and related to people’s ability
to pay. Local authorities must continue to have some independent source
of finance.’19 There were no such commitments in 1979 and 1983, but by
1987 such reform was back on the agenda. The local government world of
Morrison had been gone for some time by that stage, and Mount observed:
What in most places had been the a relatively peaceful business of drains
and libraries took a sourer turn in the 1960s and 1970s when [the local]
Labour caucuses lost the mass support that they had enjoyed in the late
1940s (the peak of party allegiance and membership in both the Labour
and Conservative Parties) and became an easy target for the ‘bedsit mili-
tants’, the ‘loony Left’ or the ‘incomers’. . . In the boroughs which they
captured, the level of domestic rates soared to unprecedented and often
unaffordable levels. . . The Government felt compelled to take action,20
or, at least, the Prime Minister eventually did. In broad terms, national polit-
ical trends had seemed to largely determine the outcome of local government
elections, sharing with by elections the opportunity to express discontent,
especially with turnouts reflecting widespread apathy and with the outcomes
often seeming to bear little relation to the manner in which the individ-
ual councils or councillors had performed their duties. In particular areas,
though, the position of the Left was far from ‘loony’ in the sense that the
logic of their position was to break the system, with excessive public expend-
iture being one means of doing so, and there were various interests notably
local government employees who had every reason to appreciate extra
spending on public services, as indeed did much of the local government

electorate since they did not have to pay the rates in full. That somebody
else had to pay for the excesses of, say, the Socialist or People’s Republic of
South Yorkshire may well not have concerned enough electors of the area
concerned to make the difference, but Mrs Thatcher seemed determined
not to tolerate such socialist experimentation, especially as must be the case
others had to pay for it, though what she could not seem to see was that there
was a much wider unwillingness to pay for local government at all, which
interpretation included the optimistic assumption that many, perhaps most,
electors could distinguish between what were local government functions
and what were those of central government.
That the Thatcher Governments were behaving unconstitutionally in its
treatment of local government was a familiar theme in contemporary journal-
ism and academic discourse, but few of these observers grasped the nature of
what the constitutional arrangements actually were with the clarity expressed
by Nigel Lawson in evidence to a House of Commons committee in 1985. ‘We
suffer from an unfortunate constitutional set up in this country as a result of
our consistent pursuit. . . of the middle way’, Lawson said:
There are countries like West Germany and the United States which have
a genuine federal constitution and where local authorities, whether they
are states, as in the case of the United States, or Länder, as in the case of
Germany, are genuinely held to account. They are independent authorities
and the electorate understands the responsibilities that these authorities
have for managing their own affairs. That does not work too badly. You
also have the opposite. The French, very logically, have a unitary consti-
tution and carry it to the extreme where nearly every decision is dictated
from the centre – Paris – and the head of the Departement, the prefet, is
appointed from the centre. That works out not too badly. We have a
curious mixture because our constitution is mid-way between the two we
have a unitary constitution but nevertheless the local authorities have
considerable autonomy.21
Lawson was antagonized by how ‘the Militant Tendency group which for
some years controlled Liverpool’ and others ‘whose ambition was to estab-
lish a high spending socialist republic’ in other local authorities used such
autonomy,22 and so were Mrs Thatcher’s other allies. Burke had deemed it
wise ‘to love the little platoon we belong to in society’,23 and under an eco-
nomic liberal order if there had to be State activity it was best done at local
level. The financial disciplines of the rate paying democracy of J.S. Mill were
no longer there, of course, and what Mrs Thatcher eventually set out to do
was to restore the disciplines without the rates and with a universal Com-
munity Charge in their place, and her determined attempt to reform local
government finance was to help to bring her down.
‘The battle with local government’
‘The battle with local government was not an easy struggle. It was a bat-
tle of attrition. We had few weapons and a resourceful opponent’, Michael
Heseltine, the Secretary of State for the Environment in the first Thatcher
Government, recalled.24 In their 1979 manifesto, the Conservatives had
stated that ‘cutting income tax must take priority for the time being over abo-
lition of the domestic rating system’,25 which Heseltine translated as meaning
that ‘we had no idea how to replace the rates’. That said, though,
the tax cuts had to be paid for and, among other economies, the Cabinet
wanted a 3 per cent reduction in local government expenditure [mean-
ing in the] current 1979–80 budgets [of local authorities]. We wanted cuts
in actual spending levels, something few councils had any experience of
delivering. Effective management, private sector competition, delivering
the same – even better – services with less expenditure all belonged to
an unimaginable world. Their officials, every local and national pressure
group, and much of the media, shouted ‘amen’ to their complaints.
Heseltine recalled that ‘seeking cuts in local government was far from the
concerted strategy it seemed’, even after ‘the Treasury had won the battle for
global cuts’, because ‘the Department of Education, the Home Office, the
Ministry of Transport and other spending departments used every wile to
ensure that their local programmes remained intact’. Heseltine described the
DOE as ‘the jam in the sandwich’. None the less
we persevered. The battles were fought trench by trench. By 1983 we had

exerted such pressure over local authorities that the numbers employed –
which had been rising for decades – had fallen back to levels last seen in
1974. To this must be added Geoffrey Howe’s success in reducing inflation
from a rising 10 per cent in 1979 to 3.7 per cent in May and June 1983, the
lowest rate since 1968. The annual rates bills were no longer the centre of
attention.26
‘There were, and remain, many – including councillors – who believed in or

exploited the myth that pre-1979 local government enjoyed an exhilarating
freedom to do its own thing’, Heseltine also wrote:
The more we explored the workings of Whitehall and its relations with
local authorities, the more fanciful the notion became. Detailed con-
trol over local government was in practice widespread. I once instructed
officials to pin up on my wall all the forms required by the depart-
ment’s housing division before a local housing authority could lay a single
brick. Houses not only had to conform to Parker Morris standards, eighty
questions had to be answered in meticulous detail before the Department

would authorize any building. The size of the room, the pitch of the roof,
the colour of the slate, the texture of the brick, all were under White-
hall control, underpinning the reality of centralization in a way quite
unappreciated by councillors or Ministers. The same pattern existed across
Whitehall. . . It was this culture that [Heseltine and his fellow DOE Min-
isters] set out to challenge and reverse. Much of the suffocating detail. . .
was scrapped. The Parker Morris housing controls went. . . Our Urban Pro-
gramme came increasingly to rely on local initiative and public–private
partnerships. . . With increased freedom we demanded increased account-
ability. Authorities now had to publish much fuller information about the
costs and quality of their services. Their Direct Labour Organizations were
to keep proper accounts and to be opened up to competition from the pri-
vate sector. Their land, classified as unused or derelict, had to be placed on
a register so that the private sector and councillors were made aware of the
hidden resources tucked away, unused and unexploited. We were accused
of excessive centralism. We were simply ensuring that local people were
properly informed about the councils they elected.27
The Thatcher Governments ‘passed roughly fifty Acts affecting local

government. . . almost all of them designed to restrain council spending’,
Lawson recalled, with ‘every measure [being] easily caricatured as an affront
to local democracy’. What the Thatcher Governments eventually managed
to achieve was ‘the gradual decline in the share of local government spend-
ing financed by central government grants from 57 per cent in 1979–80 to
48 per cent in 1989–90. Had the overspending been validated by the Govern-
ment maintaining the share unchanged, public expenditure control would
have disappeared out of the window altogether.’28 Unlike, say, Peter Walker or
Kenneth Baker, Lawson considered that Heseltine had ‘never been an indis-
criminate big spender’,29 and Heseltine was of the opinion that ‘by 1979 local
government had become a barely controllable free wheeling employment
machine which for year after year had been run largely for the benefit of the
machine minders’,30 and this mattered not least because ‘the cost of wages
and salaries [accounted for] two-thirds of all current expenditure’. Heseltine
stated that
there was no wish to interfere in the priority of expenditure decisions of

particular councils, and no attempt at first was made; but as time passed
we were forced to involve ourselves more and more. In my first year I
made a mistake. The local authorities, both Tory and Labour controlled,
all assured me that local government had always complied with the over-
all expenditure guidelines set by central government. ‘You won’t need
controls’, they said, ‘We always stick to the guidelines’. They were telling
me the truth, and I do not think that most of them realized any more
than I how comparatively easy it had been for them to contain expen-
diture within. . . guidelines that had risen every year. Now the guidelines
were going to be lowered, and the change in 1979–80 from Labour’s pro-
posed increase of 6 per cent to a decrease of 1.4 per cent – a reduction of
3 per cent after the financial year had begun – broke the habit of a lifetime
in local government.31
What had been needed from the outset was a body like the eventually
established Audit Commission for Local Authorities in England and Wales.
Heseltine’s previous Ministerial experience at the DOE under the Heath Gov-
ernment had led him to believe that the relationship between the councils
and the District Audit Service had ‘become too comfortable after years of
friendly familiarity’, and that it would be advantageous to introduce ‘some
of the rigours of private sector accountability into local government’ with the
Commission concerned being given a remit ‘to actively promote efficiency
and value for money’. Heseltine recalled that ‘the Treasury raised objections
and delayed for two years the establishment of the Audit Commission. At the
root of their arguments was their instinctive hostility to anything which they
cannot control or at least interfere in. . . After a renewed campaign [the Com-
mission] found a place in the Local Government Finance Act of 1982. The
upshot was that it was April 1983 before the Audit Commission could start
its vital work.’32 Heseltine believed that the establishment of the Audit Com-
mission was an ‘ambitious innovation’ since ‘authority by authority, service
by service, for the first time it was possible to compare individual councils
and their performance’. Heseltine was able to appoint John Banham, a part-
ner at McKinsey, to be the first Controller of Audit at the Commission,33
and Banham and the Commission soon demonstrated their independence
when criticizing the block grant arrangements in the 1980 Act. ‘The block
grant system. . . is being used to try to secure at least four different objectives
which are not mutually compatible: to distribute grant in a way some of
which reflects local needs and resources, to control aggregate local govern-
ment expenditure, to ensure that individual authorities do not exceed their
spending targets, and to limit rate increases from year to year for individual
ratepayers.’34 The Commission concluded that major changes needed to be
made in the arrangements for distributing the block grant, namely: ‘less sys-
tem induced uncertainty, more financial stability, more delegation, stronger
local accountability, less second guessing from the centre, more consistency,
less complexity, more local flexibility. . . The existing shortcomings in infor-
mation on needs and local property values need to be corrected – distributing
£8.6 billion in part on the basis of poor information is a false economy.’35
The Commission noted that ‘a succession of targets and penalties was over-
laid on to the block grant system which has generally made it more expensive
from year to year for authorities to spend above the expenditure targets set
by the Government. Normally the effect has been to withdraw block grant
progressively as an authority’s expenditure exceeds the target.’ The 1980 Act
had also introduced ‘a new system of controlling local authorities’ capital
expenditure. . . which replaced the old system of controlling the borrowing
to finance capital schemes with a series of capital expenditure allocations
for individual authorities’. In addition, the power of local authorities to
levy a supplementary rate and precepts had been withdrawn by the Local
Government Act of 1982.36
‘We’ve got this problem’, Heseltine supposed to have said to the Prime
Minister in 1979 about the question of the need for a rating revaluation for
England and Wales, given that there had not been one since 1973. ‘There’s
no problem’, Mrs Thatcher was reported to have replied, ‘We’re not doing
it.’ Heseltine was ‘much relieved’, while noting that ‘my colleague in the
Scottish Office, George Younger, took powers to delay the mandatory review
in Scotland for two years’, and looked at the rating system and possible
alternatives. ‘A local income tax – arguably the most coherent of options –
would simply mean that, as we lowered income tax nationally, local Labour
authorities would push up tax locally’, Heseltine observed,
Local sales taxes made little sense in the tight geography of this coun-
try, where local boundaries are not readily identifiable and where, in any
case, the worst effects would be felt by local businesses, already indig-
nant about the burden of the business rates. A poll tax had attractions
in that would ensure that voters identified much more clearly the con-
sequences of voting for high spending – invariably Labour – authorities,
and it would also reflect the number of occupants enjoying local services
in a given property. But it would be difficult to collect and quite impos-
sible to persuade a fair minded electorate that the richest and poorest alike
should pay the same towards what was effectively a local tax system. Each
alternative we examined had its merits and demerits. Every conceivable
idea was explored, including the option of transferring the cost of a major
service, education, to the national taxpayer, which would have seriously
lowered the bills but would also have reduced the responsibilities of local
authorities.37
Heseltine’s Green Paper concluded that ‘probably none of the possible new
sources of local revenue. . . could be used as a replacement for domestic rates.
A local sales tax or local income tax combined with either a poll tax or
domestic rates retained at a lower level of yield could replace the present
system, but would entail correspondingly higher administrative and com-
pliance costs.’38 With Tom King, a fellow Minister, Heseltine saw almost
every Tory MP and found there to be ‘a blocking minority against each
option’.39
‘My personal instinct was. . . to grant local government considerable free-

dom to initiate policies and experiment between different ways of delivering
services’, Heseltine wrote:
I like the idea of enabling authorities. Their responsibility should be

to make sure that services of quality are delivered, rather than provid-
ing them themselves. They will usually be well advised to buy in these
services, their quality defined contractually, from outside providers after
competitive tendering. It is a question of political philosophy. Is local gov-
ernment to be more an agent than an initiator, carrying out the wishes
of an all powerful central government? Or should it be seen as relatively
free to pursue a local agenda, devised by local councillors responsible to a
local electorate? I believe we are an over centralized society with decision
making too tightly controlled by Whitehall.40
Yet, the Local Government, Planning and Land Act of 1980 made provision
for the establishment of Urban Development Corporations. ‘I wanted them
to have the same powers as the New Towns Corporations which, though
successes in their own right, had drained away so much of the life of the old
cities’, Heseltine recalled:
The London Docklands Development Corporation was to encompass

6,000 acres of land on both banks of the lower Thames; while [the]
Merseyside Docklands Corporation took in nearly 900 acres of polluted
wasteland in the heart of [Liverpool]. We also included two smaller sites in
Birkenhead and Bootle. They were to have the powers, with the resources
provided to central government, to own and acquire land, build factories,
and invest in both infrastructure and environment so as to attract industry
and commercial and residential development. They were to exercise plan-
ning powers. In all practical senses they were to be New Town Corporations
in old cities. The wheel had turned full circle.41
What was envisaged, as Mrs Thatcher remarked about Howe’s plans for Enter-
prise Zones, was ‘regional policy by another name’, but much as Howe was
eventually allowed to proceed,42 Heseltine got his way, choosing to argue
that left wing councils, Communist it seemed, had to be swept aside.43 Of
the local authorities, Heseltine said, ‘We took their powers away from them
because they were making a mess of it. They are the people who have got it all
wrong. They had advisory committees, inter-relating committees, and even
discussion committees – but nothing happened! [Whereas] UDCs do things.
More to the point they can be seen to do things and they are free from the
inevitable delays of the democratic process.’44 Heseltine was to intervene as
an unofficial ‘Minister for Merseyside’ following the uprising in the Toxteth
area of Liverpool in the summer of 1981 that seemed more serious than the
other riots of that time, which were all in areas of urban deprivation with high
unemployment. It Took A Riot was the dramatic title of the 21-page minute
that Heseltine circulated to the Cabinet,45 but his own initiative relating to
the Liverpool area had been taken earlier. Without doubting the remarkable
level of energy that Heseltine subsequently put into trying to revive that area,
he could not have been surprised either by the dismissive ‘give us jobs not
trees’ reaction to his Garden Festival ideas,46 or that the political culture that
had come to dominate Liverpool meant anything other than further trouble
for the Government.
What also became evident was that the refashioning of the structure of
local government that the Conservatives had undertaken in London in that
decade followed by the Heath–Walker reforms had not served the Tory inter-
est in the manner intended. The GLC run by Horace Cutler was one thing,
but when Ken Livingstone at the head of the Labour Left took charge of
County Hall in 1981 the Thatcher Government found that while it merely
faced an inept Labour Opposition in Parliament, across the river Thames it
had an adversary with a gift for publicity. Though portrayed as a Marxist,
Livingstone was, knowingly or not, a disciple of Marcuse, effectively writing
off the old working class as a revolutionary instrument, and concentrating on
ethnic minorities and their organizations and women’s groups,47 not seem-
ingly minding that the latter were largely middle class in composition and
interests. Indeed, Livingstone seemed to see London as having become like
Paris, being ‘composed of skilled middle class people that basically admin-
ister society, the poor and the single parents, the immigrant families, and
the unskilled working class labour force’. As Livingstone saw it, ‘the influx of
people that have given the GLC this great reputation in the gutter press for
being the end of civilization as we know it, is the fact that it is the post-1968
generation in politics’.48 Livingstone believed that
the way that housing, transport or education are funded by local govern-
ment does directly challenge capital. The rating mechanism is the best
method of redistributing wealth that the Labour Movement has ever laid
its hands on. It beats the hell out of any policy which government has for
financing central programmes. To be able to spread the burden of finan-
cing services in such a way that the greater part is paid by industry and
commerce is incredibly advantageous to the Labour Movement. That’s
why the Tories have woken up to the importance of centralizing the State.
If you have radical socialist administrations prepared actually to fund ser-
vices, you are redistributing wealth in a big way, as, for example, with
fares policies. If you look at it, a third of all we spend is financed by the
City of London and Westminster, which means mainly the office blocks
in those two areas. Out of a current rate product of £19M per penny rate,
£3M comes from Westminster and £2.7M from the City of London. That’s
fantastic redistribution of wealth, it makes the GLC the best redistributor
of wealth we’ve ever been able to get control of, much better than any
other council in the country.49
In the case of Sheffield, which was a metropolitan district within the South
Yorkshire County, there was no comparable wealth to redistribute. This did
not stop the Council led by David Blunkett from trying to demonstrate that
‘local government can be a tool for achieving socialist change’,50 even though
‘at first our achievements can only be beacons’,51 providing ‘hope for people
who are struggling and [indicating] to central government that if they want
a fight they’ve got one’.52 Policies such as heavily subsidized bus fares and no
redundancies among council staff, though, had to be paid for in some way,
and for example, the rates went up by 40 per cent in 1980–81, and by 37 per
cent in 1981–82.53 There were many reasons why Leeds rather than Sheffield
was to become well-before the end of the century second only to London as
the most fashionable city in England despite being farther away from the cap-
ital, but the Blunkett regime in Sheffield was one of them. No sensible private-
sector organization would want to invest in Sheffield while it was run in that
manner, though, of course, this did not trouble the advocates of local social-
ism since, for them, the State was to be the universal provider, and, indeed,
consciously or not, they were gambling that the Thatcher Government would
in the end have to bale out councils who did not play its game.
‘We have checked the relentless growth of local government spending,
and manpower is now back to the level of 1974’, the Tories stated in their
1983 Election manifesto, ‘The achievement of many Conservative authorities
in saving ratepayers’ money by putting services like refuse collection out
to tender has played a major part in getting better value for money and
significantly reducing the level of rate increases. We shall encourage every
possible saving by this policy.’ However, ‘there are. . . a number of grossly
extravagant Labour authorities whose exorbitant rate demands have caused
great distress both to businesses and domestic ratepayers. We shall legislate
to curb excessive and irresponsible rate increases by high spending councils,
and to provide a general scheme for limitation of rate increases for all local
authorities to be used as necessary.’ Further, the manifesto pledged to abolish
the GLC and what it should have described as the metropolitan counties.54
A White Paper called Streamlining the Cities followed declaring the GLC and
the Councils for Greater Manchester, Merseyside, South Yorkshire, Tyne and
Wear, the West Midlands, and West Yorkshire to be redundant. The White
Paper argued that these councils had ‘found it difficult to establish a role for
themselves’, which generated ‘a natural search for a “strategic” role which
may have little basis in real needs’, and described the GLC in particular as
a heavy spending authority.55 ‘From its beginning, the GLC was flawed’,
Livingstone himself argued retrospectively:
It was caught between being a strategic authority without the powers to

perform that function and a body which overlapped and conflicted with
the boroughs in the provision of personal services. It was a recipe for con-
flict. The personal [social] services should have been the responsibilities of
the boroughs. It was nonsense to create such an authority that had such a
vast housing stock. But the Government of the day did not want to create
a proper strategic body, because it would have meant surrendering some
of the powers of central government to people elected by Londoners, who
might take a different view from that of the Administration of the day. . .
Between 1981 and 1985. . . we did our best with a flawed structure.56
If that was the case, it was not surprising that, even before the arrival of the
Livingstone regime at County Hall, the Thatcher Government established a
body like the London Docklands Development Corporation, which largely
bypassed the GLC and other local politicians. The Livingstone regime’s ‘Fares
Fair’ scheme was one factor leading the Government to transfer control of the
London Transport Executive from the GLC eventually to a holding company
called London Regional Transport.57 Some of the functions of the GLC were
transferred to the boroughs, notably its housing estates, but otherwise the
responsibilities were granted to numerous joint boards, notably the London
Fire and Civil Defence Authority and the London Waste Regulation Author-
ity, with a body called the London Residuary Board taking up what was
left over.58 That the Inner London Education Authority was not sentenced
to death until 1988 served to emphasize that the Thatcher Government’s
reconstruction of the government of London had resulted in a mess. The
Economist, at least, thought that there were advantages in ‘London’s frag-
mentation’ which meant that since 1986 ‘London has been run by a babble
of individual local authorities (32, plus the City Corporation). Even the Lord
Mayor does Dick Whittington’s old job only in the square mile of London’s
financial district.’ The journal recognized that ‘many Londoners feel uncom-
fortable with this lack of a single symbolic figure to speak for the whole city’,
but ‘give London a single voice and it would become a powerful lobby for
more national taxpayers’ cash’. Being without ‘a single City Hall’ was sup-
posed to have promoted the ‘urban economy’ of London in which it was an
advantage to be ‘small scale and nimble footed’.59 Whether or not Londoners
were better informed than the journal about the plethora of unelected bod-
ies that had taken on many of the GLC’s former duties, such attitudes as the
electorate had about the abolition of that council and the similar fate of the
metropolitan counties displayed remarkable ignorance of what the functions
of local government actually were.60
‘The Government have concluded that rates should remain for the foresee-
able future the main source of local revenue for local government’, a White
Paper declared in July 1983,61 while announcing at the same time that it
would ‘seek powers to limit the rate levels of authorities whose high spending
imposes an excessive burden on householders and business. The purpose will
be to restrain both the expenditure and the rates of these authorities.’62 Com-
mentators described this behaviour as being counter to the spirit and letter of
the Constitution,63 representing, as it did, an unprecedented centralization

of political power.64 Mrs Thatcher was accused of taking ‘a sledgehammer to
crush a few left wing nuts’ by The Economist, which suggested that she
should have the courage of her convictions and either kill or cure. . . she
could choose to follow the logic of her present centralism and go for out-
right financial annexation. This would involve treating local rates as part
of central taxes, fixed overall by the Treasury and for each council by the
[DOE]. It would turn local authorities into a cross between a parish council
and an existing health authority with delegated powers from Whitehall.
Members might continue to be elected if they wished, but their budgets
would be cash limited by law.
As such a course would be ‘a recipe for gigantism and bureaucracy’,65

Mrs Thatcher eventually chose to seek a ‘cure’, and what became the Rates
Act of 1984 was no more than a holding measure. Several Labour councils
contested the application of rate capping, with Liverpool leading the way.
Though the Liverpool Council had not been Labour controlled before 1955,66
by the time of the May 1983 local elections Liverpool was in the grip not
only of the Labour Party, but of the Militant Tendency within that Party.
‘Unlike the Labour Party in many other areas, in Liverpool the party was
overwhelmingly working class’, the Militant leaders pointed out,67 believing
that ‘the capitalists and those who support their system within the Labour
Movement were mortally afraid that the example of Liverpool would prove
contagious in the explosive social situation that had opened up in Britain in
the 1980s’.68 Liverpool. A City That Dared To Fight was how the leaders of Mili-
tant were to portray the story of what then happened, notably ‘The Battle
Against Ratecapping’,69 and ‘Moving Into Illegality’,70 and, following defeat,
‘Bring Me The Heads Of Hatton and Mulhearn’.71 If what might be called
the High Tory tendency had been running the Conservative Government
fear and appeasement might have been the response, and Derek Hatton and
Tony Mulhearn might have tasted victory. ‘The posture of Mr Hatton and his
supporters continues to be that of a beggar who threatens that if we do not
give him large sums of money he will start to mutilate himself, and will go
on mutilating himself until he has no limbs left and is probably dead’, wrote
Auberon Waugh, and the court jester of Low Toryism concluded that ‘all that
is required for the triumph of common sense is that good men should do
nothing’.72 The Government did not ‘do nothing’ and it did insist on the
law being upheld, and there was what The Economist called ‘a last minute
expedient [that] saved the [Liverpool] City Council from going bust’, which
still left the problem of what to do about local government finance and its
financing, with the journal wondering if the Government was looking to the
example of France, which was ‘largely still run from the centre’, and arguing
that ‘one is a Jacobin or one is not. British Tories should not be.’73
‘There is little doubt in my mind that local government is at a turning

point’, Howard Davies, the Controller of Audit at the Audit Commission,
wrote in 1988:
This has, of course, been said before. And it has not been true. In 1979
people talked darkly of the Thatcher threat to local authorities. Yet, to
take but one indicator, local government manpower has stayed almost
precisely constant over the last eight years. This time, however, I suspect
it is ‘for real’. Indeed, to say that local government is under siege is the
most neutral and least emotive phrase I can think of which would be
appropriate to its predicament.74
‘Local government under siege’ was also how leading academics retrospec-
tively portrayed its then recent history,75 but, as Davies hinted, there had
been many instances of crying wolf earlier on, and, from close quarters,
Davies was able to identify at the time of the third Thatcher Government
six major areas in which the traditional structures of local government were
‘under threat’ involving privatization and contracting-out; functions like
education; housing; inner-city development; and social services, and the
rating system. In the Queen’s Speech in 1987, the Government had listed six
new areas in which councils will be required to put services out to tender:
refuse collection, street cleaning, ground maintenance, building cleaning,
vehicle repair and maintenance, and catering including school meals. Davies
conceded that little had come out of the previous initiatives, with the total
amount of business given to private contractors accounting for £120M of
business out of expenditure of £34 billion. ‘The Government has. . . learnt
from its earlier mistakes and councils will be obliged to put a far greater
proportion of their business out to competitive tender’, Davies believed,
observing that ‘no matter how efficient an individual department may be,
it will find the greatest difficulty in winning the business if it must carry an
undigested lump of central overhead costs into battle’. In the case of hous-
ing, ‘the Government had made no secret of its desire to operate around local
authorities if necessary’ to bring about ‘the long awaited Thatcher revolu-
tion’, but Davies thought that it was in the sphere of education that the most
dramatic changes were envisaged. The local authorities were going to lose
their responsibilities for polytechnics and eventually for further-education
colleges, but Davies anticipated that the most important changes related
to schools, notably allowing schools to recruit to capacity, financial dele-
gation to schools, and provision for opting out of local authority control.
As for the Government’s proposals in relation to the supplanting of the rat-
ing system, Davies correctly predicted that ‘the managerial challenge will be
immense’,76 but this was to be dwarfed by the political storm that engulfed
the Government.
The saga of the Community Charge
‘We will reform local government finance to strengthen local democracy and
accountability’, the Conservative manifesto for the 1987 Election declared:
Local electors must be able to decide the level of service they want and
how much they are prepared to pay for it. We will legislate in the first
Session of the new Parliament to abolish the unfair domestic rating system
and replace rates with a fairer Community Charge. This will be a fixed
rate charge for local services paid by those over the age of 18, except the
mentally ill and elderly people living in homes and hospitals. The less well
off will not have to pay the full charge but everyone will be aware of the
costs as well as the benefits of local services. This should encourage people
to take a greater interest in the policies of their local council and in getting
value for money. Business ratepayers will pay a Unified Business Rate at a
standard rate pegged to inflation.77
That the Poll Tax of 1381 had been one cause of the Peasants’ Revolt and an
object lesson in how not to tax was naturally cited by those with a know-
ledge of English history, and there were seventeenth-century examples too,
notably the Poll Tax tried in 1641, and experience of them was that either
such taxes were flat rate and led to riot and rebellion or else they were gradu-
ated and the yield was poor.78 Even if the advocates of the Poll Tax chose
to be as dismissive of history repeating itself as Marx had been in relation
to Hegel’s thinking, there was no excuse for ignoring Adam Smith’s famous
and well known exposition of the principles of taxation. ‘The subjects of
every State ought to contribute towards the support of the Government as
nearly as possible in proportion to their respective abilities’, wrote Smith,
whose first principle of taxation was, therefore equality, in the sense of the
capacity to pay. The second principle was that ‘the tax which each indi-
vidual is bound to pay ought to be certain and not arbitrary. The time of
payment, the manner of payment, the quantity to be paid, ought to be clear
and plain to the contributor.’ The third principle was that ‘every tax should
be levied at the time, or in the manner, in which it is most likely to be con-
venient for the contributor to pay it’. The fourth principle was economy of
collection.79 What Lawson called ‘the dreadful Poll Tax’80 failed the test of
equality and, obviously, that of ease of collection, since, to put the matter
mildly, property moved much less often than people. ‘The battle for con-
trol of local government spending. . . became one of the perennial themes of
the Thatcher years’, Lawson recalled, with ‘the Poll Tax [becoming] the last,
and most disastrous, attempt at a permanent solution’. If, though, as Law-
son suggested, one way out was to ‘require councils to fund all of their local
services from local taxation’,81 there had to be a practical means of bringing
this about, and in the meantime what Lawson called the ‘muddled system
of local government finance’ persisted. Lawson remarked on Mrs Thatcher’s

ambivalent behaviour: ‘Her low regard for local government, particularly that
large part of it under Labour control, made her unsympathetic to the [DOE’s]
case for generosity; while her fixation with the evil nature of the rates made
her reluctant to endorse the Treasury’s case for parsimony. In the event, the
Government did take a tough line over central government grants to local
government, but probably not tough enough’, though the result still was
that the relationship between the two ‘degenerated into something close to
open warfare’.82
‘Margaret had set up in October 1984 a separate Cabinet Committee, under
her Chairmanship, called E(LF) – the Local Finance Sub Committee of the
Economic Affairs Committee’, Kenneth Baker later wrote, ‘This Committee
was to consider “future policy relating to local government finance” and
most senior Cabinet Ministers were members. . . On 31 March 1985, Patrick
Jenkin [the Secretary of State for the Environment], [and his junior Minis-
ters] William Waldegrave and [Baker] presented [their] preliminary thoughts
[on reforming local government finance] to a Sunday meeting of Ministers
at Chequers.’ Lawson chose to be absent, though his opposition to the Com-
munity Charge was made known. Baker noted that ‘Nick Edwards on behalf
of the Welsh Office supported our proposals’ as did the Secretary of State
for Scotland, George Younger, who said, ‘All my political life I have been
waiting for this.’ On 20 May 1985, Baker recalled, ‘William and I presented
our proposals to the E(LF) Committee, consisting of ten Cabinet Ministers.
The key proposal was for a flat rate residents charge which “would have to
operate with a rebate” for the less well off. . . The reaction of colleagues to our
proposals was overwhelmingly favourable.’ Younger argued that ‘we must do
something because of the political pressure in Scotland and [he] was adamant
that ‘we must abandon the present rating system’. The main opponent was
Lawson, present this time, who submitted a paper recommending that the
central government should
take over complete responsibility for the financing and some aspects of
the management of education. . . The Treasury maintained that if educa-
tion came off the rates then councils could raise the revenue for all the
rest of their services from a property tax. This would be kept up to date
with an annual programme of rolling revaluation. The Treasury did recog-
nize that better accountability requires a highly perceptible and therefore
unpopular tax. So the choice was between a high and painful property tax
and the Community Charge.
The Treasury went on to condemn the idea of a flat rate charge as ‘unwork-
able and politically catastrophic’. This made no difference, and on 9 January
1986, Baker presented proposals for reforming local government finance to
the Cabinet, which included the phasing in of the Community Charge, and
then presented them to the House of Commons on 31 January 1986, with

Lawson saying to him of the Prime Minister that the Poll Tax would be ‘her
King Charles’s head’.83 The relevant Green Paper was called Paying for Local
Government and it set out ‘proposals for the most radical reform of local
government finance in Great Britain this century’. The system of central
government grants was to be ‘radically simplified’, and there were two other
important proposed changes. Firstly, ‘non-domestic rates should in future be
set by central government as a uniform rate in the £. The proceeds would be
pooled and redistributed to all authorities as a common amount per adult.
The introduction of such a scheme would be accompanied by a revaluation
of non domestic properties.’ Secondly, ‘domestic rates should be phased out
over a period up to ten years and replaced by a flat rate Community Charge,
payable by all adults.’ The Green Paper stated that
these proposals lie at the heart of the Government’s reforms. They would
widen the tax base so that virtually all adults would have a financial stake
in the affairs of their local authority; they would ensure that the full costs
or benefits of any changes in a local authority’s expenditure would fall on
its domestic taxpayers alone; and, while non-domestic ratepayers would
still make a significant contribution to local government expenditure
overall, authorities would no longer be able to finance extra expenditure
by taxing them at their own discretion. Together these reforms would
ensure that the accountability of local authorities to local electors would
be greatly enhanced.84
‘I supported the Government on the introduction of the Community Charge

and I still support the principle’, Rhodes Boyson declared from the Tory
backbenches in 1990, having previously been Waldegrave’s replacement as
Minister of State at the DOE, ‘Past revolutions were based on the words “No
taxation without representation.” The rates position is “representation with-
out taxation:” only one in two, one in three or, as in Brent, one in four of
those who vote pay rates. Some people vote to spend other people’s money.
That is political immorality. I support the community charge principle on the
basis of accountability.’ What Boyson described as ‘the beginning of my road
to Damascus’ came when Northern MPs showed him ‘what the Community
Charge on low rated properties would mean’ in areas like their own where
in some cases 80 per cent of their constituents would be worse off. Not sur-
prisingly, Boyson concluded that this was ‘politically disastrous’, and he also
noted that ‘it was said that the Community Charge would come in over ten
to twelve years, that inflation would ease it, that one-tenth or one-twelfth
of rates would be taken up by the Community Charge each year so that it
would be eased in gradually.’ That had changed, and safety-net arrangements
had been made which ‘went against the basis of accountability’ and benefited
‘spendthrift Labour areas’. So, Boyson concluded, ‘the Government started
out with good intentions. Ministers have passed through and civil servants
have passed through, so no one guides the legislation through from begin-
ning to end. Eventually, as the saying goes, a camel is a horse invented by
a committee.’85 One could understand why Douglas Mason and the Adam
Smith Institute favoured the Community Charge, especially as that Institute’s
policy preferences rarely seemed to reflect Smith’s thinking or sophistication,
and, given that he was an economic liberal of a kind, Boyson’s initial interest
was also easy to understand. Quite why Tories of the Baker and Waldegrave
kind largely independently came up with the Poll Tax remained a mystery,
and that the Community Charge came into being when all the constitutional
conventions were observed and there were plenty of opportunities to stop a
political disaster from happening has to be mysterious too. The depiction of
Mrs Thatcher in The Madness of King George terms naturally found favour as an
explanation with some observers, and not only with her detractors, and they
could point to her behaviour in eventually taking up the Community Charge
as if she had patented it. Some commentators thought that Lawson as Chan-
cellor might have stopped the Community Charge in its tracks if he had made
it a resigning issue, and they recorded that Lawson came up with a proposal
for a banded property tax much like the later Council Tax in a memorandum
opposing the Poll Tax.86 Whether at the DOE or as a member of the E(LF)
Committee when at Education, Baker kept trying to find ways of modifying
the impact of the Poll Tax once it was introduced, but the detailed implemen-
tation of the Community Charge had become the responsibility of Nicholas
Ridley as Environment Secretary, and Malcolm Rifkind, Younger’s replace-
ment at the Scottish Office.87 ‘The whole purpose of the operation. . . was to
end an unpopular and unfair property tax – the rates’, Ridley later recalled:
It is easy now to forget the antagonism was that the rates which grew
throughout the 1960s and 1970s; and also to forget the experience of the
Scottish revaluation [of 1984–85]. The need to have an English revalu-
ation was the clinching argument. . . If revaluations are held only at long
intervals, all hell breaks out when they do take place, as Scotland showed.
Annual valuation of every property every year would be a mammoth task,
which would turn us into a nation of valuers. . . So I came to the conclusion
in 1986 that the Community Charge was the right way forward. But I
believed that it would be right only if it were not at a level too high for
anyone to pay. The principle that everyone should pay something was
paramount at the time, after our experience of only 20 per cent of the
electorate paying rates in some local authority areas. Equally, I was sure it
should be properly rebated for those on low incomes, to make sure it was
within their ability to pay at all levels of income.88
Baker thought that the crucial mistake that was made was the removal of the
transitional period and of dual running, and Ridley was soon recommending
that the transitional period should come down from ten to four years, and,
though Baker and the Chief Secretary, John Major, were opposed to this, the
E(LF) Committee agreed to this change. ‘By now, both the Scottish and Welsh
Secretaries wanted to do away with the transitional period’, Baker recalled:
This was not surprising, as the level of rates was much lower in Wales and
Scotland, cushioned by the high amount of grant they received. Some
English MPs had also come to believe that dual running was a bad thing,
for it meant two taxes instead of one. . . At the 1987 Party Conference,
in the debate on the Community Charge, several speakers argued for its
immediate introduction and the abandonment of dual running. In partic-
ular Gerry Malone, who had just lost his seat in Aberdeen South and knew
little about the English rating system, said to loud cheers, ‘scrap dual run-
ning’ . . . [Ridley] strenuously denied that he had arranged this interven-
tion. However, Nigel Lawson was in on doubt whatsoever, and he believes
that the Conference debate was rigged. After the debate, Margaret. . . said
to Nick, ‘We’ll have to look at this again’. It was a fatal mistake, because
introducing the Community Charge in one swoop meant that chargepay-
ers, many of whom had never paid any rates, would now have to bear the
full weight of local authority excess spending in the first year.89
It had been Lawson who had urged that the Poll Tax should be introduced in
Scotland a year earlier than in England and Wales, and Rifkind proved eager
to press ahead. There had to be separate Scottish legislation anyway, and this
was passed before the 1987 Election. ‘As I saw it, the Scottish tail had been
wagging the English dog for far too long; and there was an outside chance
that, if implementation of the Poll Tax in Scotland demonstrated its horrors,
there might still be time for the Government to have second thoughts about
its introduction in England and Wales’, Lawson later wrote, ‘In the event. . .
despite all manner of trouble when the Poll Tax was introduced in Scotland
in April 1989, Margaret was by that time far too committed to the Tax. . . to
contemplate drawing back.’ Soon, ‘Chris Patten, who had succeeded Nick
Ridley at Environment in July 1989, characteristically sought far larger injec-
tions of public money than Nick had ever done’, Lawson recalled, observing
that ‘it was. . . a rich irony that [the Poll Tax] a measure designed to curb local
government spending led directly to [its] biggest increase in. . . the entire
Thatcher period’.90 The introduction of the Community Charge into Eng-
land and Wales in April 1990 was anticipated by the Trafalgar Square Riot
of 31 March 1990. ‘Violent confrontation is nothing new in Britain: during
Margaret Thatcher’s three terms of office since 1979, riots scarred the inner
cities and the conduct of the Miners’ Strike and the printers’ campaign against
Rupert Murdoch’, The Economist observed,
But there was a strong undercurrent of sympathy for Mrs Thatcher’s Gov-
ernment whenever it tackled an entrenched vested interest that was ready
to defend itself with violence. The public might have had little stomach
for the fight, but knew deep down that the Government was right to
fight it. This time the mood is different; the way that venom towards the
British Prime Minister has brought disparate protesters together cannot be
ignored. And this time the Government itself is scrambling for ways out
of its Poll Tax crisis in ways which undermine the convictions on which
the whole well intentioned but ill thought out exercise is based. How can
a tax promote local political responsibility if its tough simplicity is blurred
with tinkering and capping from Whitehall?91
Mrs Thatcher was to concede that ‘many of the bills for the Community
Charge which people are now receiving are far too high. I share the out-
rage they feel. But let’s be clear: it’s not the way the money is raised, it’s the
amount of money that local government is spending. That’s the real problem.
No scheme, no matter how ingenious, could pay for high spending with low
charges.’92 Mrs Thatcher believed that ‘the defects in our system of local gov-
ernment finance were largely remedied by the [Community] Charge’, though
‘it would have taken time before the disciplines of the new system began to
affect the behaviour of the worst overspenders’.93 If, though, to borrow her
words, those protesting against the Poll Tax included ‘the very same law abid-
ing, decent people. . . on whom we depended to defeat the mob’,94 then what
the saga of the Community Charge revealed was a deeper crisis in relation to
local government than those determined to portray what happened in terms
of a morality play seemed to grasp. Even if one made the heroic assumption
that most people actually knew what functions local government performed,
what the Poll Tax experience demonstrated was the popular unwillingness
to pay for them. The failings of the Community Charge were obvious, but
then so were those of the alternative forms of local taxation, and if in Mrs
Thatcher’s long battle against the culture of ‘something for nothing’ she expe-
rienced predictable defeat when she tackled local government, one of her
many mistakes may have been to believe that local democracy in Britain was
capable of being rescued.
8
The Governments of the ‘Iron Lady’
and the Defence of the National
Interest
Farewell to the ‘Suez Syndrome’
Though she was out of office by then, on 23 September 1991, in Washington,

Lady Thatcher was the guest of honour at the Heritage Foundation’s Clare
Booth Luce Award Dinner. A specially composed Thatcher Freedom March
was played. ‘I was stunned. . . by the realization that America was conferring
on MT the sort of honorary imperial Presidency she had vainly sought at
home’, wrote George Urban:
The glory was hers, even though the power was borrowed. Inward look-
ing Britain in her shrunken state, one among several in a squabbling and
for her psychologically alien Europe, is small beer for her. But here in
Washington, seat of the only remaining superpower, with the symbols,
and the reality, of the might of America so theatrically displayed, she
could, for a brief hour or two, savour the rewards of history she felt were
her due.
Though ‘praised by her hosts to the point of embarrassment’, Urban noted

that when, in her speech, Lady Thatcher denounced ‘the concept of a United
Europe’ and she coupled it with ‘an initiative. . . for an Atlantic Economic
Community’, this ‘seemed to make no impression on the Americans at my
table’.1
It would have been surprising if it had done so, given that a continuing
objective of American foreign policy since the Second World War had been
to promote the unity of Western Europe, an objective pursued with a ten-
acity and intensity that had been matched by the American determination
to hurry along the fall of the British Empire. In much the same manner as
Americans at the time ignored Churchill’s vision in the Fulton Speech of 1946
of a political arrangement involving the USA and Britain and her Common-
wealth, Margaret Thatcher’s call for merely an economic arrangement fell
on deaf ears. That the two twentieth-century British political leaders most
commonly associated with patriotism behaved in this way suggested that
180
The ‘Iron Lady’ and Defence of the National Interest 181
the ‘special relationship’ between Britain and the USA only too often had
the character of a one-sided love affair with the lover who believed himself
or herself to need the ‘relationship’ most being driven into the position of
supplicant. Yet, as happens in many relationships, the dominant partner
does not always get what he or she wants, and, though the Americans would
have preferred otherwise, Britain not only retained her nuclear deterrent, but
contrived to have the latest weaponry, whether Polaris or Trident, with the
Americans bearing the development costs. Of course, the Americans were
granted military bases in Britain, and the ability to deploy Cruise missiles in
the country, but then it was Britain that they were defending and at their
cost. The Americans looked to its allies in Western Europe to make more
provision for their own defence, and, without good cause, they seemed to
think that further political integration would promote this. As it was, the
American contribution dominated NATO, and, in 1977, it was an achieve-
ment to get all the members of that alliance to agree that from 1979 to 1984
they would aim at an annual increase in defence expenditure in the region
of 3 per cent.2 Of course, without the necessary political will, the scale of
defence spending made little difference, and, for instance, in 1976, the then
Labour Government had emphasized that it ‘support[ed] NATO as an instru-
ment of détente, no less than of defence’.3 At that time, such attitudes reflected
those of the Americans, who, Mrs Thatcher believed, were suffering from a
‘Vietnam syndrome’ following military defeat there, which had allowed
the Soviet Union and its surrogates [to] expand their power and influence
in Afghanistan, southern Africa, and Central America by subversion and
outright military invasion. In Europe, an increasingly self confident Soviet
Union was planting offensive missiles in its eastern satellites, building its
conventional forces to levels far in excess of NATO equivalents. It was also
constructing a navy that would give it global reach.4
The American President in the latter 1970s was Jimmy Carter, of whom it was
well said that ‘his election [in 1976] was a product of the time; he happened
to fit the circumstances rather than the office’.5 Mrs Thatcher thought that
‘in foreign affairs, [Carter] was over-influenced by the doctrines then gain-
ing ground in the Democratic Party that the threat from Communism had
been exaggerated and the US intervention in support of right-wing dictators
was almost as culpable. Hence he found himself surprised and embarrassed
by such events as the Soviet invasion of Afghanistan and Iran’s seizure of
American diplomats as hostages.’6 So, Mrs Thatcher welcomed the Republi-
can Presidential election victory of Ronald Reagan, which made ‘1981 the last
year of the West’s retreat before the axis of convenience between the Soviet
Union and the Third World’.7
As for Britain’s role in the world as she found it on coming to office, Mrs
Thatcher believed that the country was still suffering from a ‘Suez syndrome’
dating back to 1956, when political and economic weakness had enabled
the Americans to force Britain to abandon a war with Egypt. Mrs Thatcher
thought that ‘having [before the Suez Affair] exaggerated our power, we now
exaggerated our impotence’. As she saw things, ‘Britain was a middle ranking
power, given unusual influence by virtue of its historical distinction, skilled
diplomacy and versatile military forces, but greatly weakened by economic
decline.’8 Though she was often later to be compared with Elizabeth I of
England, Mrs Thatcher never had any need to insist, as that monarch had
done at Tilbury in 1588, that ‘I know I have the body of a weak and feeble
woman, but I have the heart and stomach of a king, and a King of England
too, and think foul scorn that Parma or Spain, or any Prince of Europe should
dare to invade the borders of my realm.’9 In her dealings with ‘Europe,’
Mrs Thatcher was to display similar levels of belligerence at times, not least
in campaigning to reduce the high level of British financial contributions to
the Community. Even before she became Prime Minister, though, she already
had the best image that a woman of that time could aspire to for the conduct
of international politics. For, in 1976, the Red Army newspaper had called
Mrs Thatcher ‘the Iron Lady’ in the belief that she was the Soviet Union’s
most formidable political opponent in Western Europe, and she was under-
standably grateful for the soubriquet.10 So, from the outset, Mrs Thatcher had
the image of the Cold Warrior and no guilt even by association with the ‘weak
and feeble’ policy of détente or, to give this its proper name, Appeasement
of the Soviet Union. Of Churchill’s famous three interlocking circles of the
Atlantic Alliance, ‘Europe’, and the Commonwealth within which Britain’s
world role was supposed to be played out, only Atlanticism had much appeal
for her. Nonetheless, though Sir Nicholas Henderson, the British Ambas-
sador in Washington between 1979 and 1982, recorded President Carter and
Mrs Thatcher ‘hitting it off well together’ when they eventually met,11 the
Prime Minister’s early attitude was ‘what was there to discuss with Carter?’
According to the seemingly bemused Henderson, Mrs Thatcher declared that
You could only tackle a limited number of things at a time. . . Rhodesia

and Europe come first. . . She spoke of the terrible amount of money we
were giving to Europe. ‘I have the money and they won’t get their hands
on it’, she insisted with some animation. I interjected that the Europeans
have difficulty in seeing us as a poor country when we had the oil. She
rejoined that figures of GDP per head spoke for themselves.12
What Henderson called ‘the very downrightness of her views and her cat-
egorical way of expressing them’13 should not have disguised the pragmatism
that Mrs Thatcher often displayed in her political conduct, or that she had
to work with Cabinets and Foreign Secretaries who did not necessarily share
her outlook. Mrs Thatcher was well-aware too that her attitudes as well as her
priorities were not always those preferred by the Foreign and Commonwealth
Office (FCO), which she believed to be an institution in which ‘compromise

and negotiation were ends in themselves’, together with ‘a reluctance to sub-
ordinate diplomatic tactics to the national interest’.14 Henderson wrote that,
‘Mrs Thatcher’s attitude to the Foreign Office was the opposite of her attitude
to the Church of England: with the latter she liked the institution but she
was not particularly drawn to the people at the top; as regards the Foreign
Office she distrusted the place but liked the people, as shown by her employ-
ment of Tony Parsons, Percy Cradock, and Charles Powell.’15 So, while less
than admiring of the FCO, Mrs Thatcher did not share Enoch Powell’s view
of that institution as being ‘that nursery of traitors and nest of vipers’.16 That
said though, when one traitor from the related part of the intelligence com-
munity, Anthony Blunt, was shown to have worked for the Soviet Union in
the past in a book called The Climate of Treason and libel proceedings were in
prospect, unlike her immediate predecessors as Prime Minister, Mrs Thatcher
declined to respect a deal done with Blunt fifteen years earlier protecting him
in exchange for what seemed to be limited co-operation with the authorities.
Blunt was unmasked in dramatic style in the House of Commons in Novem-
ber 1979.17 Mrs Thatcher also felt dissatisfied with the work of the present-day
intelligence community in relation to the period before the Falklands War,
and in 1983, following the related Franks Report, she removed the Chairman-
ship of the Joint Intelligence Committee from the FCO, giving the role in the
first instance to Sir Anthony Duff, the Cabinet Office’s Co-ordinator of Secu-
rity and Intelligence, who reported directly to her,18 as did Cradock as her
Foreign Policy Adviser, when he became Chairman on the Joint Intelligence
Committee from 1985.19 Changes were also made in what Mrs Thatcher
thought of as the ‘traditional federal structure’ of the Ministry of Defence,20
though it only dated from 1964, when the separate Service Ministries and the
original Ministry had been amalgamated. The Service Ministries had been the
ones with tradition on their side, and, as far as Ministerial responsibility was
concerned, an obvious solution was that employed by the Wilson Govern-
ments then of divorcing Ministers from the individual Services.21 This was
done in 1981, following upon the dismissal of the Minister for the Navy, Keith
Speed, for speaking out against cuts in the Royal Navy.22 The then Secretary
of State for Defence, John Nott, recalled that ‘the First Sea Lord organized for
the Naval Staff, some in uniform, to line the corridor as Keith departed the
building, and they piped him down the steps of the Ministry of Defence in a
public gesture of support for him and of defiance of me.’23 Nott’s successor
as Secretary of State, Heseltine took integration further in the White Paper
called The Central Organization of Defence, issued in July 1984. The crucial
explicit change was to make the Chief of Defence Staff the dominant source
of professional military advice to the Secretary of State, thus subtly dimin-
ishing the roles of the Chief of Naval Staff, the Chief of the General Staff,
and the Chief of the Air Staff to that of advisers.24 In the relevant House of
Lords debate, Max Beloff expressed diffidence about even commenting on
the matter in view of his own ‘inglorious military career’,25 but the similarly
undistinguished Heseltine showed no such inhibitions, and, with the sup-
port of the Prime Minister, outdid the Chiefs of Staff and got what he wanted.
Heseltine observed that ‘British forces have been on active service on several
occasions since those reforms were introduced. The Gulf War [of 1990–91]
was probably as close to “war conditions” as any and the reaction there to
the new system was very positive.’26
However forcefully Britain was led, and however well-organized the coun-
try was to defend her national interests, such was the imbalance of power
between Britain and the USA that success or failure was bound to largely
depend on the quality of leadership forthcoming from the dominant partner
in the Atlantic Alliance. ‘The election of Ronald Reagan as President of the
United States in November 1980 was as much of a watershed in American
affairs as my own election victory in May 1979 was in the United Kingdom,
and, of course, a greater one in world politics’, Mrs Thatcher later wrote,
adding that, ‘from the first I regarded it as my duty to do everything I could
to reinforce and further President Reagan’s bold strategy to win the Cold War
which the West had been slowly but surely losing’.27 As for Reagan himself,
he observed:
Throughout the eight years of my Presidency [1981–89], no alliance

we had was stronger than the one between the United States and the
United Kingdom. Not only did Margaret Thatcher and I become personal
friends and share a similar philosophy about government; the alliance was
strengthened by the long special relationship between our countries born
of shared democratic values, common Anglo-Saxon roots, a common lan-
guage, and a friendship deepened and mellowed by fighting two world
wars side by side. The depth of this special relationship made it impos-
sible for us to remain neutral during Britain’s war with Argentina over the
Falkland Islands in 1982, though it was a conflict in which I had to walk
a fine line.28
Few Presidents were more skilled at doing this. ‘Previous Administrations

have tried to impose their political wills on the news media, dissembling
and lying when necessary to protect foreign policy misadventures [but] the
Reagan White House appears to be the first to have institutionalized the pro-
cess’, two appalled commentators observed in relation to the Iran Contra
Affair, ‘Employing the scientific methods of modern public relations and
the war tested techniques of psychological operations, the Administration
built up an unprecedented bureaucracy in the N[ational] S[ecurity] C[ouncil]
and the State Department designed to keep the news media in line and to
restrict conflicting information from reaching the American public.’ Though,
it seems, approximately 60 per cent of that public were opposed to the pol-
icy concerned in so far as they knew much about it, such opposition was
defined as ‘inside the Beltway’, and opponents within Congress were treated
with remarkable ruthlessness.29
‘When people say that the present US Administration is the most right
wing of this century they mean that it is influenced by Reagan’s particular
prejudices, the fruit, not, I think, of careful thought or discussion, but of his
own experiences and whims’, the ubiquitous Henderson wrote in 1982:
He is like Mrs T in having no sentimental or guilty feelings about

underdogs. They came from more or less similar backgrounds which
are very different from the aristocratic surroundings that inspired the
philanthropic do-gooding of Wilberforce or Shaftesbury. . . theirs was an
upbringing encouraging one later to think that others can look after them-
selves too, and that if they get into difficulties or remain underlings the
fault lies in themselves, not in their stars, and that the more fortunate
should not have any sense of guilt or responsibility to help others.30
Nobody with much sense would deny that ‘luck – merit, certainly, but a great
deal of luck – plays a large part in determining who, in life, succeeds’, as Lord
Carrington, the Foreign Secretary in Mrs Thatcher’s first Government, was to
write, having in mind the talented people in the other ranks of the British
Army with whom he had served as an officer during the Second World War.31
That said though, ‘Nicko’ Henderson went too far in implying that attitudes
sympathetic to the fate of those farther down the social scale were widespread
among the socially privileged in Britain. This was not to say that Conservative
Paternalism was unimportant or unprincipled when practised, but, to take
the examples of such Paternalism most relevant to Henderson’s observations,
the Balfour and Butler Education Acts were bound to promote social mobility
but, according to Henderson, and those who thought like him, those who
advanced were supposed to model themselves on those already there, and
behave accordingly. When the model was Churchill as a wartime leader, few
would dissent, but mystification sets in when, say, Henderson’s valedictory
despatch on leaving Paris as Ambassador was leaked to The Economist in June
1979,32 and attracted heavy praise, despite being no more than a familiar
‘European’ thesis about the reasons for Britain’s post-war decline. Even Mrs
Thatcher chose to describe the despatch as ‘very, very interesting’.33 It was
not in relation to ‘Europe’, though, that, at first, Mrs Thatcher made her mark
as a Prime Minister, but in relation to the legacies of Empire, one of which
was to involve Britain in the Falklands conflict.
Dealing with the Legacies of Empire
The Rhodesian Settlement, 1979–80

Since it was ‘the job I had wanted all my life. . . I was. . . delighted when
invited to be Foreign and Commonwealth Secretary’, Lord Carrington later
wrote about his appointment to that role in 1979.34 Opinions differed about
Carrington’s abilities, but what was evident about him was that political
accidents tended to take place when he was around as a Minister. Thus,
the Crichel Down Affair took place during his time at the Ministry of
Agriculture,35 and when the Portland and Vassall Spy Cases occurred it was
his misfortune to be the First Lord of the Admiralty.36 Though Carrington
survived those episodes, those who had studied his career had cause to
expect political drama to follow him at the FCO. Carrington himself only
expected to last ‘about six months’, about which he was wrong, as, indeed,
he was about the cause of him leaving, which he expected would be ‘over
Rhodesia [because] my views by no means coincided with those of an influ-
ential wing of the Conservative Party’. What was needed was ‘some sort of
breakthrough’,37 and this was achieved.
From what the ‘liberal’ Judith Todd called An Act of Treason: Rhodesia 1965 –
the Unilateral Declaration of Independence – to what Ian Smith called The
Great Betrayal – the legitimate granting of independence to Rhodesia – took
a decade and a half. ‘For you and me to come to an agreement is no prob-
lem’, the then British Prime Minister, Harold Wilson had told Smith, the
leader of what was called the white Rhodesian rebel regime, in the 1960s,
‘What we have to do is produce an agreement which I can sell to the rest
of the world, and in particular to the Organization of African Unity.’ When
Smith protested that the Organization of Africa Unity (OAU) was ‘a bunch of
Communist dictators’, Wilson did not dissent but observed that ‘you cannot
divorce yourself from the world we live in’.38 Of course, Smith continued
to try to do this, but the Rhodesian regime that he led lost an important
ally when the Portuguese colony of Mozambique became independent in
1974, leaving Rhodesia entirely dependent on support from the South African
Government, whom Smith found to be increasingly unreliable in the face
of international pressure, mostly exerted by Britain and the USA.39 Eventu-
ally, as Smith put it, the South African Government ‘blackmailed us’ into
arranging an ‘internal settlement’ under which, in 1979, a black majority
Government with Bishop Abel Muzorewa as Prime Minister was elected in
Rhodesia with, as Smith recorded at the time, ‘a 63 per cent turnout of voters
for the election, in spite of the fact that terrorists had attempted to intimi-
date people into abstaining’.40 Predictably, the ‘terrorists’ concerned, in the
form of the Patriotic Front factions and their leaders – Robert Mugabe and
Joshua Nkomo – refused to recognize the ‘internal settlement’, and, with the
guerrilla war destined to continue, and with no prospect of international
acceptance of Rhodesia in its existing form, the incoming Thatcher Govern-
ment was faced with an unenviable inheritance. Carrington found that the
Prime Minister had not given much thought to African matters, and that she
was inclined to go along with the ‘internal settlement’, sharing the outlook
of the Right of the Tory Party, and taking a ‘why not stick out our jaws and
get on with it, damning much of the world for its ignorant prejudice and its
double standards?’ line. Carrington recalled:
I had some spirited discussions with her. In the end we came to see it in
the same way. It was one of those occasions. . . when her heart and basic
instincts (which I don’t think changed) were subordinated by her to what
her intellect came to decide made political sense; and I much respected
the process. When convinced of something like this she was, of course,
a most able and indefatigable exponent of the line adopted. And it was
no doubt reassuring to me, in a way, that we started our internal debate
from opposite corners: it gave me a sense that the question had really
been thrashed out, that some synthesis had been achieved. Meanwhile,
we had to agree our practical policy and tackle the next and vital step: the
Commonwealth Conference to be held very shortly at Lusaka.41
‘At Lusaka [in August 1979] Britain was in a strong position they never had
before, with the support of our own allies [the front line states], and that
was the predicament we found ourselves in’, Mugabe later recalled. As host
to Mugabe and his guerrillas in Mozambique, President Samora Machel was
well-described as being in a special position to compel Mugabe to attend the
forthcoming Conference at Lancaster House, and to stay there. In the opin-
ion of a friendly observer, Machel and the other Presidents of the front-line
states – Julius Nyerere of Tanzania, and Kenneth Kaunda of Zambia – had
reached the point where they welcomed the prospect of a constitutional set-
tlement, fearing that Mrs Thatcher would recognize the ‘internal settlement’
of Smith and Muzorewa, and, even more importantly, because their support
of the guerrilla armies had become an unsustainable burden for them.42 It
could be added that the Rhodesian regime was also in serious difficulties. So,
the Commonwealth leaders present at Lusaka approved the British Govern-
ment’s proposal to call a constitutional conference.43 The Lancaster House
Conference lasted for weeks into December 1979, but, at last, an agreement
was made under which a new election would be held in Rhodesia with the
Patriotic Front taking part this time. Carrington recalled:
I was dreading the moment when I would have to announce that the first
step would have to be the return of a British Governor, for although it was
an inevitable consequence of our proposals for return to legality I knew
nobody expected it and nobody would like it. The whites thought that
they’d declared for independence as irrevocably as the American colonists
in 1776, and the blacks thought they’d been fighting for years for freedom
‘from colonial rule’. Now, I was telling them that the next thing they’d see
was a British Governor. I made the announcement at a plenary session.
There was a dead silence. It lasted a long time. It was broken by Joshua
Nkomo. He looked at me enquiringly. ‘Really? Will he have plumes and a

horse?’ The whole Conference dissolved into laughter. The day was saved.
The Lord President of the Council, Lord Soames, agreed to act as Governor.44
That the British Government was reputed to have an ‘Anyone But Mugabe’
policy was later confessed by Soames to Mugabe himself, and Carrington
admitted that what was expected to emerge after the promised election
was a Muzorewa–Smith Coalition Government possibly including Nkomo
too, though the welcome from ‘enormous crowds’ accorded to the Patriotic
Front leaders when they returned to Salisbury indicated another outcome.45
Though there were other candidates for the political leadership of the largest
language group in Rhodesia, the Shona-speaking people or nation, Mugabe
had the highest profile among them, and he also had the most effective armed
forces at his disposal for the purposes of intimidation. So, a Mugabe victory
was always the most likely outcome, even if its scale was unexpected,46 given
that Mugabe and ZANU obtained 57 seats, compared with 20 for the fol-
lowers of Nkomo, and 3 for Muzorewa’s party. When Carrington announced
these figures in March 1980,47 Lord Home talked of ‘an exemplary exercise
in democratic procedures’,48 despite Carrington having previously admitted
that there had been ‘large scale intimidation of the rural population. In cer-
tain parts of the country it has been made impossible for even Mr Nkomo
or Bishop Muzorewa to hold meetings. People have been told that if they
do not vote for the wishes of a party, the war will continue or they will be
killed.’49 Smith complained to Soames about this well documented behaviour
to receive familiar worldly advice in return, as well as learning of Carrington’s
refusal to do anything about it.50 As might be expected, ZANU was not alone
in practising intimidation, though possibly better at it than those adversaries,
who, for instance, failed in attempts to assassinate Mugabe.51 Mugabe could
‘easily lead Zimbabwe-Rhodesia into dereliction’ since ‘its economy could
as readily collapse as prosper’, The Spectator observed with some prescience,
pointing out that Mrs Thatcher’s diplomatic ‘triumph’ at Lusaka and Carring-
ton’s own ‘triumph’ at Lancaster House could not surely have been intended
to result in ‘the democratic election of a Marxist whose power hitherto was. . .
based upon arms supplied by Moscow and by guerrilla troops trained and
based in Mozambique’. In this way, ‘Mugabe’s triumph’ was ‘Carrington’s
defeat’, but the journal recognized that from the British point of view ‘we look
like getting ourselves off the Rhodesian hook at last, and pretty painlessly
at that’.52 This proved to be the case. General Peter Walls could not have
been alone among the Rhodesian whites in hoping to the last that The Lady
would save them,53 but, outnumbered as they were by 24 to one,54 their
prayers were not answered. The Conservative Right had paraded with ‘Hang
Carrington’ banners at one stage,55 but Mrs Thatcher’s presence as Prime
Minister acted as an assurance both to them and to the Rhodesian whites
that there was no politically viable alternative to the policy undertaken, and
her authority made possible a settlement of the Rhodesian problem for the
then foreseeable future. That still left, of course, the political problems rep-
resented by the remainder of Southern Africa. There are good circumstantial
grounds for believing that the Thatcher Governments played an active role
there, for which they got little credit, in two respects: in promoting a solution
to the Namibia question 1989–90, and helping to persuade the de Klerk Gov-
ernment to undertake a political reform process in South Africa leading to a
political settlement and the end of a three hundred year old racial order.56
The Falklands War, 1982

‘Is the Prime Minister aware that the Government’s decisions to withdraw
and pay off HMS Endurance when she returns from the South Atlantic is an
error that could have serious consequences? Is she further aware that this stale
old proposition was put to me on more than one occasion when I was Prime
Minister and after considering it I turned it down flat? Will she please do
the same?’ In this manner, on 9 February 1982, James Callaghan addressed
a Parliamentary question to Mrs Thatcher about the future defence of the
Falkland Islands. In her reply, the Prime Minister of course supported the
decision of the Defence Secretary, John Nott, in relation to the Endurance,
observing that ‘the defence capability of that ship is extremely limited’.57
The ‘serious consequences’ that Callaghan had in mind was that Argentina
would use force to assert her territorial claims to the Falklands. In 1977,
when there was the threat of an invasion, the then Labour Government
had ensured that what the official historian called a covert task force was in
place, including a nuclear submarine, as a precaution. Callaghan as Prime
Minister told Maurice Oldfield, the Head of the Secret Intelligence Service, of
these developments expecting him to inform the Americans and that they
would tell Argentina.58 With a political reputation to rescue, and seemingly
unable to resist playing the old sea dog, Callaghan made much of facing
down Argentina both in his memoirs and in the House of Commons, even
arguing that the Falklands conflict of 1982 was ‘an unnecessary war’ because
a Labour Government would have prevented it by acting as it did five years
before.59 The official historian of that conflict, though, was less admiring,
choosing the heading of ‘Undetected Deterrence’ for that part of his account
because of a lack of evidence that Argentina knew about this British activity
designed to deter her from invading the Falklands. He added that, while the
covert task force itself was a unique deployment, it was fully in keeping with
the pattern of crisis management of the Labour Government. As awkward
moments approached, Foreign Office Ministers were given to seeking the
comfort of some extra Royal Navy deployment, and he noted that after the
1977 deployment, the then Foreign and Commonwealth Secretary, David
Owen, looked – unsuccessfully – for the despatch of another task force in
February 1978 and a frigate the following October.60
The future of the Falkland Islands was even more complex matter than it
came to be commonly portrayed. As the dispute deepened, the inhabitants
or Kelpers tended to be accorded sturdy and independent qualities, though
the suggestion that the Islands were economically self sufficient did not sur-
vive counting in defence costs,61 and the importance of economic links with
Argentina tended to be played down, not least that of an air service. So did the
determination of many young people to emigrate, with ‘a vision of romantic
solitude’ contrasting with the reality of ‘an unending diet of mutton, beer
and rum, with entertainment largely restricted to drunkenness and adultery,
spiced with occasional incest’.62 A Colonel from Military Intelligence wrote
of the Islanders as relying on the generous teat of British tax money and the
almost feudal suzerainty of the Falkland Islands Company for their economic
survival.63 The Company owned about half the Islands and produced about
half the annual wool crop,64 and so many of the Kelpers were actually tenant
farmers. The official historian found that in the past
the issue of an outright Argentine purchase of the Islands or of the hold-

ing of the Falkland Islands Company was often raised, even at times by
Islanders (who could see the advantages of being bought off), but it was
never pursued. In narrow terms moving the community to, for example,
a comparable island off the Scottish coast would have been relatively
cheap, especially if Argentina picked up the bill. Perhaps the idea of selling
sovereign territory was too awkward to broach. To the Islanders it appeared
largely as a fallback option, to be pursued only in the event of a betrayal,
and was raised largely to expose the logic of British indifference. The
Falklands was their home and that is where they wanted to stay under the
Union flag. . . Although Argentina presented the Falklands as an example
of colonialism, the Islands remained British because of the principle that
had animated the anti–colonial movement. . . self-determination.65
The official historian recorded that it was later the view of many of the
Islanders that if Argentina had done nothing at all, the steady outflow of
population would have eventually have caused the fragile economic and
social structure to collapse, and he added that the fate of the Falklands might
well have been eventually decided by what the Governor in 1976 had called
‘euthanasia by generous compensation’.66
For the Thatcher Government, the radical solution to the political prob-
lem of the Falklands would have been to sell off the Islands after buying
out the Company and such Islanders as agreed the terms, leaving the others
to their fate. The hostility with which even leaseback proposals attracted in
Parliament suggested that a more radical approach would have fared even
worse, but without such an approach and with the Islanders having been
accorded the right to block any alternative, unless the Argentines desisted in
pressing their claim to what they called Islas Malvinas, which was unlikely,
then the scene was set for war and provision had to be made for this. ‘There
have been several occasions in the past when an invasion has been threat-
ened’, Mrs Thatcher was to observe on 3 April 1982, ‘The only way of being
certain to prevent an invasion would have been to keep a very large fleet very
close to the Falklands, when we are some 8,000 miles from base. No Govern-
ment have ever been able to do that, and the cost would be enormous.’67
The Foreign and Commonwealth Secretary, Carrington wrote that ‘it was
alleged much later that [the Thatcher Government] took little notice of the
Falklands situation until it was on a disaster course, and that earlier atten-
tion might have averted trouble had we not been, or supposed ourselves to
be, too busy with other things. That is nonsense.’ Indeed, Carrington sent
one of his Ministers of State, Nicholas Ridley, out to the Falklands to assess
the situation within weeks of the Tory Government taking office. On the
Falklands issue, as early as the autumn of 1979, Carrington found that not
only did Mrs Thatcher suspect a defeatist Foreign Office of finding ways to
appease Argentina, but also that his Cabinet colleagues could not be per-
suaded to support his preferred alternative policy or, for that matter, any
other such policy. Carrington thought that ‘Fortress Falklands’ was ruled out
on grounds of cost and diversion of resources from Britain’s overriding com-
mitment to NATO. Then again, though it might be possible to negotiate
further about, say, economic co-operation while declining to consider any
concessions over sovereignty, since Argentina was unlikely to tolerate for
ever the status quo, and she had the capacity to invade, and so there would
be a confrontation sooner rather than later. Carrington’s preferred policy
was ‘some sort of leaseback arrangement [by which] Argentina would obtain
formal sovereignty over the Islands while simultaneously agreeing to lease
them to Britain for a long period of time, perhaps a hundred years’, though,
of course, as with all arrangements made, ‘the Islanders’ agreement to any
change must be a paramount condition’. Eventually, in the summer of 1980
he persuaded the Cabinet that Ridley should be sent to the Falkland Islands
once more to persuade the inhabitants to agree to this policy.68 Ridley secretly
obtained the agreement to the leaseback in principle to such a policy from
the Junta headed by General Viola then ruling Argentina.69 However, as
Ridley later pointed out with his usual tact, the Falkland Islanders were very
generously subsidized under the existing arrangements.70 So, they had little
incentive to agree to the leaseback policy especially when it became clear that
not all of the 1,900 inhabitants would have the right to leave for Britain if
the changed arrangements were not to their liking, given the provisions of
the forthcoming Nationality Act of 1981.71
At a meeting at Port Stanley during his visit, Ridley was asked: ‘If the Argen-
tines invaded, what is Britain going to do about it?’ Ridley replied: ‘Kick
them out!’ This was greeted with laughter.72 The Kelpers plainly thought
that they were in no danger in exercising their veto against the leaseback
proposal, and, when Ridley presented this policy to the House of Commons,
he was attacked not only from his own side but also by the Labour Left,
who objected to what they deemed to be appeasement of an authoritarian
right wing Argentine regime.73 So, the Falkland Islanders not only had their
veto, but also good cause to believe that they retained support in political
London. The official historian told the story of what happened to Carring-
ton’s attempt to find a peaceful solution to the Falklands problem under
the headings of ‘Towards Lease Back’, ‘The Rise of Lease Back’, ‘The Fall of
Lease Back’, and, then, ‘Micawberism’. That the Argentine Armed Forces
would turn up to annex the Falkland Islands was made even more likely by
two developments. One was the proposed removal of the Endurance. The
Chiefs of Staff had stated before that though they were aware of the limits
of Endurance’s capability, even her ability to defend herself, she still repre-
sented an ‘intention to resist’.74 Since defence expenditure by the mid-1980s
looked like being no less than 21 per cent higher in real terms than it had
been when the Conservatives had returned to office in 1979,75 understand-
ably the Defence Secretary, John Nott was looking for economies, but the
political risk entailed in getting rid of the Endurance was not worth the min-
imal savings. Nott later remarked that he did not know where the Falklands
were,76 and also that the Royal Navy had themselves listed Endurance near
the top of their list for disposal at the outset of his Defence Review, and that
Carrington had pleaded for a reprieve for the vessel. Nott also pointed out
that the weakening of the British position went back as far as the Defence
Review of 1966 when the decisions were taken to withdraw the Commander
in Chief South Atlantic and the frigate on station in the area, and in 1974 to
terminate the Simonstown Agreements and the British naval base in South
Africa.77 By the early 1980s, the MOD itself took a pessimistic line about the
defence of the Falklands, and an optimistic one about future behaviour of
Argentina in the case of Defence Sales, which department was thinking in
terms of selling that country an aircraft carrier plus Harrier jump-jets.78 The
second development that made an invasion more likely was that, following a
coup in December 1981, the Viola Junta that had previously ruled Argentina
was replaced by another one headed by General Galtieri. The crucial support
of the Navy had been pledged to Galtieri by Admiral Jorge Anaya in return for
a commitment to invade the Malvinas, and plans were swiftly being made.
With the Argentine economy in a desperate state and with domestic discon-
tent rife, the distraction of an external adventure suited the interests of the
Galtieri Junta, and the projected withdrawal of the Endurance, and the treat-
ment of the Kelpers envisaged in what was then the Nationality Bill, and the
pragmatism that the Thatcher Government had shown in the Rhodesian Set-
tlement, as well as the willingness to give ground in the leaseback proposals,
all combined to suggest that the British Government would not respond to
an invasion with the use of force. As one critic wrote:
A proper analysis of their adversary would have told the Junta that the
odds were that the bellicose British in their pubs and bars would want
to fight, even if the more delicate souls of their Foreign Office did not;
and an elected leader who failed to reflect the popular mood and regain
national honour would soon find herself out of a job and disgraced. . . Their
intelligence services failed to brief them on either the British character or
the implications for Britain’s other colonial territories around the world –
Gibraltar and Belize among them – if an invasion of the Falklands went
unchecked. . . There were. . . solid reasons why it was highly likely that
Britain would meet force with force. . . Mrs Thatcher was not the only
leader let down badly by her intelligence services.79
In fact, Galtieri simply had to heed the advice of President Reagan: ‘Mrs
Thatcher, a friend of mine, is a very determined woman and she would have
no other alternative but to make a military response.’80 The Franks Report of
1983 was ‘satisfied that the Government did not have warning of the deci-
sion to invade. The evidence of the timing of the decision taken by the Junta
shows that the Government not only did not, but could not, have had earl-
ier warning. The invasion of the Falkland Islands on 2 April [1982] could
not have been foreseen.’81 The official historian broadly took the same line
about the intelligence available about actual timing of the invasion,82 but one
critic from within the intelligence community thought that the statement in
the Franks Report was ‘disingenuous nonsense’ because ‘the Argentine order
to sail may well have been given with only three days to go, but putting
together the capability, making the plan, assembling the ships, guns, stores,
aeroplanes, and men to invade the Falklands was the result of a decision
made. . . nearly four months before.’83 The Director of Service Intelligence,
Sir Michael Armitage commented that the British ‘had no indication at all
of [Argentine] intentions, although, of course, we had some idea of their
capabilities. . . In the Defence Intelligence Staff. . . we had one and a half desk
officers looking after the whole of Central and South America. And although
the South American Group of the JIC [met frequently] they were focussed
on the Guatamalan threat to Belize.’ In Argentina itself, resources were ‘thin
on the ground’, though he described the Military Attache as being ‘very
much on the ball’.84 Indeed, Colonel Stephen Love had sent what proved
to be an accurate report warning about Argentine planning and intentions,
which the FCO and MOD seemed to treat as unimportant,85 thus supposedly
displaying what one critic called cognitive dissonance in relation to the Falk-
lands question,86 especially as it seems British intelligence had been able to
read confidential Argentine material for years.87 The Argentines had made
warlike noises before, of course, and if there was going to be an invasion the
best bet may well have seemed to be January 1983, the one hundred and
fiftieth anniversary of Britain annexing the Falklands. The FCO had tried to
solve the Falklands problem, but it was now reduced to hoping that it would
in some way solve itself, much as that relating to Belize was later to do.
Those who had viewed the history of the Foreign Office with scepticism
were not to be disappointed in their expectation that the bi-centenary of
that institution would be marked by a foreign policy calamity, especially

with Carrington at its head. Sure enough, the celebrations coincided with
the Argentine invasion of the Falklands, and shortly after Carrington had
published a lecture entitled ‘My Job’88 he felt obliged to resign. When Mrs
Thatcher and her Ministers faced the House of Commons on what Callaghan
called ‘that famous Saturday’89 – 3 April 1982 – after the invasion had taken
place, the Government was vulnerable to the indictment that Anthony
Williams, the returning British Ambassador in Buenos Aires, set out in a tele-
gram at that time. ‘Knowing full well that current British policy with regard to
the Islands could not lead to any satisfaction of Argentine aspirations and that
the Argentines were becoming increasingly restive, we refused to face the fact
that our encouragement of total intransigence from the Islanders involved
a physical risk to them, to counter which no adequate provision had been
made or could have been made’, Williams wrote, adding: ‘Nor did we make
adequately clear to the Islanders the stark choice they faced. They were never
really brought face to face with the full realities of their position.’90 Nobody
took this line in the Commons debate. At the emergency Cabinet that was
called after news of the invasion reached London, William Whitelaw had
spelt out the reality that the Government could not survive unless it took
immediate steps to recapture the Falklands,91 and, in the Saturday debate,
the Prime Minister announced that ‘a large Task Force will sail as soon as
all preparations are complete’.92 With the British Armed Forces prospectively
going into action, those who did not take a bellicose line were in difficulties,
as one former diplomat found in the Saturday debate,93 and as those who
were essentially pacifists like the Labour MP, Tam Dalyell, found throughout
the conflict. As for the fate of the Task Force and, of course, Britain too, Alan
Clark found that in the House of Commons there were those
openly going round making the comparison with the Sicilian Expedition
that led to the downfall of the Athenian State. Sometimes, I must admit,
this analogy occurs to me also, although I keep my thoughts to myself. If
we are going to go, I feel, let us go in a blaze – then we can all sit back and
comfortably become a nation of pimps and ponces, a sort of Macao to the
European continent.94
The pessimists were always wrong about the Falklands Crisis in the sense that
if it turned into a war, given the country’s military record, the most likely
outcome was that Britain would win, even if, given the distance from home
involved, it was bound to be a close run thing. That said, though, the military
outcome of the Suez Crisis had not been in doubt if battle was joined. Suez
was a political defeat, not a military one, and one inflicted by the USA. One
lesson that was learnt from Suez was the need to act with speed, with the
Task Force being assembled in 48 hours, though Mrs Thatcher had to be told
that it would take three weeks and not, as she seemed to think, three days for
it to get to the Falklands.95 Washington must have been informed about the
sending of the Task Force, but not, it seemed, consulted about the desirability
of sending it, despite the implications for the Americans and for NATO of a
war in the South Atlantic.96 An important difference from the Suez situation
was that Eisenhower merely talked about rolling back the Soviet Empire, and
bringing Britain into line was a consolation prize for the impotence he dis-
played in relation to the Russian subjugation of the Hungarian Uprising of
1956. Reagan was determined to destroy the Soviet Union, and, if a quarter of
a century later that was a less daunting task than it had been for Eisenhower,
it was still a formidable challenge, and one in which he believed that he
needed the support of Mrs Thatcher, whom he wanted as an ally in his ide-
ological crusade. So, he could not afford for the British Prime Minister to be
brought down by the Falklands Crisis. Mrs Thatcher portrayed the Falklands
War in terms of Argentina having committed aggression and offended against
international law, and an unexpected diplomatic triumph was obtained by
Sir Anthony Parsons, Britain’s Ambassador to the United Nations, who, as
early as 3 April 1982, persuaded the Security Council to pass resolution 502,
which put the onus on Argentina to withdraw from the Falklands, and wide
support for Britain taking action under the provisions of Article 51 of the
Charter followed.97 To the Americans, though, the Falklands Crisis could not
be the straightforward matter that Mrs Thatcher believed it to be, which led
her to observe that, though the Americans provided ‘invaluable help. . . their
public pronouncements on occasion’ were ‘irritating and unpredictable’.98
The Americans were bound to play a double game in public, even after the
public ‘tilt’ in favour of Britain following a bitterly divided National Security
Council meeting on 30 April 1982.99 The American friendship with Britain
had to compete with the reality that the USA saw Central and South Amer-
ica as its sphere of influence. So, a body like the Organization of American
States and the politics connected with it was bound to be of importance to
the USA not only because of her informal economic empire in the area, but
also in a Cold War role against the spread of Communism, in which fight
Argentina was perceived as a prospective ally. The American Ambassador
to the UN, Jeane Kirkpatrick, worked to save the situation for Argentina
throughout the crisis, acting as if there was something coherent enough
to be called Latin American opinion that would be alienated if the Argen-
tines were beaten, whereas the reality was that not just Chile of Argentina’s
neighbours would not mind unduly if such a defeat occurred. As for Reagan,
the fall of the Junta would serve his purpose in one respect, since it would
be likely to bring to an end Argentina’s attempt to secure nuclear weapons,
which it did.100 Publicly, though, until the end of April, Reagan portrayed
American policy as being even-handed between Britain and Argentina, and,
as for Mrs Kirkpatrick, Reagan merely noted that she ‘disagreed with our
position’ and offered ‘some resistance’, but her behaviour did not deflect
nor, it seemed, much concern Reagan.101 The working relationship between
Mrs Kirkpatrick and Alexander Haig, Reagan’s Secretary of State, was one of
personal rivalry,102 and of marked differences of opinion when it came to the
Falklands crisis.103 Haig had been made Secretary of State because, for reasons
of sustaining the Republican Party as an electoral coalition, Reagan needed a
representative from its Kissinger wing, and Reagan would not tolerate Henry
Kissinger in the role, having publicly denounced him for his policy of détente
with the Soviet Union.104 Haig’s ‘as of now, I am in control here’ behaviour at
the time of the attempted assassination of Reagan in March 1981105 had sug-
gested greater ambitions than being Secretary of State, but even in conducting
that role Haig had already had to seek reassurance from Reagan, who con-
trived to say: ‘Damn it, Al, we have the same views, and I need you.’106 When
it came to the Falklands conflict, Haig engaged in ‘mediation’ and ‘shuttle
diplomacy’ that, on the face of it, impressed only those who wanted peace at
any price. Haig recounted that ‘I told the [Argentines] that they are a second
or third rate military power and they were contemplating a power which may
be 8,000 miles away, but which is of the highest technological and fighting
ability. You are committing suicide by doing it.’107 Henderson observed:
Haig did this shuttle between London and Argentina and Washington and
he really was always on our side. He kept saying to me. . . ‘We will never
do another Suez on you. . . but we have to show the American people and
the Congress that the Argentines are not prepared to have any negotiated
settlement that is reasonable. You, the British, have to show that you are
ready to have a settlement. If there is a settlement that is possible then we
shall go for it, but I don’t think there is – but my negotiations must show
that it is the Argentines who are making it impossible’. That was the point
of [Haig’s diplomatic activity and] it was an essential element in securing
American backing for us, politically and in materiel. And I don’t think it
did us any harm because. . . it was going to take three weeks for the Task
Force to get there.108
As for Haig, he had recognized that ‘the Falklands might be my Waterloo’,

and soon afterwards he was told by a former ally: ‘You’ve won a lot of battles
in this Administration, Al, but you’d better understand that from now on it’s
going to be the President’s foreign policy.’109 As he prepared to make way for
his successor as Secretary of State, George Shultz, Haig complained to Ambas-
sador Henderson about the baseless rumours about him that emanated from
the White House staff,110 and if Reagan found Haig to be ‘utterly paranoid
about the people he must work with’,111 he had good reasons.
‘We let the Junta know privately that, while we would provide military
help to neither adversary, our sympathies were on the British side’, Reagan
chose to write in his memoirs,112 as if, like, it seemed, the State Depart-
ment most of the time, he did not know about, or had not assented to, the
remarkable scale of aid that, from the outset, his Anglophile Defence Secre-
tary, Caspar Weinberger ensured that the Task Force received. Of Weinberger,
the British official historian wrote that ‘he feared Soviet influence in South
America, but. . . he saw Argentina as already in something of a Russian bear
hug, because of the grain agreement [between those countries]. There was
also some evidence that Moscow was providing intelligence on British fleet
movements to Buenos Aires.’113 Weinberger himself wrote that
nearly seven years later, at a dinner in 10 Downing Street, I described my

role as being that of Assistant Supply Sergeant, or an Assistant Quarter-
master. The major factor in our assistance was the speed with which we
fulfilled all British requests. . . Speed was what they most needed. Most of
their requests to me were approved and sent on their way in 24 hours.
One request, for radio receivers to talk to intelligence gathering sources,
took only six hours from their original request to delivery.114
For reasons, not least to do with the onset of winter, Admiral Woodward in
charge of the Task Force was instructed that ‘you have got to land between 16
and 25 May, and you have got to complete the ground war by mid-June’.115
Time was against the British in recapturing the Falklands, and, to judge from
what was done, and against much pessimistic military advice, Weinberger
and his President acted as if they were not prepared to take any risk that
their leading NATO ally would fail to win. ‘From the start, [Weinberger] real-
ized Britain’s logistics problems, as did the American Navy’, The Economist
later wrote:
The key would lie in the USAF’s Wideawake airbase on Britain’s Ascension
Island. The [British Government] had originally planned to send the Task
Force non-stop south from Gibraltar, but realism soon pointed to an air
bridge to Ascension. Although Britain reserved the right under lease to
use Wideawake in an emergency, more than just ‘use’ would be needed.
From day one of the Task Force, pleas for everything from missiles to
aviation fuel flooded the Pentagon from the British Military Mission on
Massachusetts Avenue. There were also many telephone calls from British
Fleet Headquarters in Northwood direct to friends in the US Navy. . . To
those intimately involved, it seemed at times as if the two navies were
working as one.
On Ascension Island itself, security was tight, and, along with the rest of the
world, the State Department was ignorant not only about extensive improve-
ments made in the supporting infrastructure, but also that ‘an astonishing
12.5M gallons of aviation fuel were diverted from American defence suppl-
iers for British use’, with the British even feeling able to ask for an American
tanker to be turned round in mid-Atlantic. The list of material supplied to
Britain was extensive,
with pride of place going to the new Sidewinder AIM-9L missile, the single
most decisive weapon of the campaign. It claimed as many Argentine
‘kills’ as all other weapon systems together, and the threat of it forced
Argentina’s aircraft to come in low and bomb low, thereby restricting their
range and tactics. Britain’s existing heat-seeking Sidewinders were effective
only from behind. For limited combat duration over the Falklands, the
super sensitive AIM-9Ls, which could be fired sideways on, or even from
ahead, were vital. These were made available from American front-line
stocks immediately, as were the adaptor plates to fit them to the GR3 RAF
Harriers.
Among the other American missiles sent were Shrike radar-seekers, which
came complete with intelligence on Argentine radar frequencies. In the later
stages of the war, Britain persuaded the Americans to move a military satel-
lite from its Soviet watching orbit over the northern hemisphere to cover the
Falklands area. The Pentagon allocated to the Task Force some of its mili-
tary satellite channels which ‘immensely eased confidential communication
between Admiral [Sandy] Woodward, Commander of the Task Force, and. . .
Northwood. . . The Cabinet decision to sink the Argentine cruiser Belgrano
was probably communicated to the British nuclear submarine HMS Con-
queror over an American military satellite link.’ Mrs Thatcher recalled that
‘Weinberger even proposed sending down the carrier USS Eisenhower to act
as a mobile runway for us in the South Atlantic – an offer that we found
more encouraging than practical.’ Another idea emanating from Weinberger
was that should anything happen to the aircraft carriers, the Hermes and the
Invincible, then the USS Guam would be handed over to the Royal Navy.116
The British carriers survived.
When asked by Mrs Thatcher whether the Falklands could be recaptured,
the Chief of the Naval Staff, Sir Henry Leach, said that this could be done,
though it would be ‘a high risk venture’, adding ‘and we should’. When asked
why, the First Sea Lord replied: ‘Because if we do not, if we muck around, if we
pussyfoot, if we don’t move very fast and are not entirely successful, in a very
few months’ time we shall be living in a different country whose word will
count for little.’ Mrs Thatcher’s reaction convinced him that ‘it was exactly. . .
what she wanted to hear’.117 The Falklands War was Out of Area as the termi-
nology of the strategists went, but what was the point of the scale of provision
made for waging the Cold War or, indeed, serious provision for defence at all,
if Britain could not defeat a country as militarily unimportant as Argentina?
Weinberger thought that ‘the decisive factor’ in Britain’s military success was
‘Mrs Thatcher’s firm and immediate decision to retake the Islands. . . Her deci-
sions and subsequent resoluteness in carrying them out were the essence of
leadership and demonstrated that. . . leadership can overcome not only heavy
odds, but many obstacles.’118 By contrast, the leader of the Argentine Junta,
Leopoldo Fortunato Galtieri was more impressively named than equipped to
be a General, not least because he was drunk most of the time.119 If Galtieri
and his colleagues had delayed their invasion for six months, Britain would
have been unable to send a Task Force because the aircraft carriers would have
been sold. Even in the face of the invasion that did take place, time was of the
essence and that was why the speed as well as the scale of the American aid
that was forthcoming was such an important contribution to the British vic-
tory. Of course, the British still had to do the fighting. ‘In the space of seven
weeks a Task Force of 28,000 men and over 100 ships had been assembled,
sailed 8,000 miles, effectively neutralized the Argentine Navy and fought off
persistent and courageous attacks from combat aircraft which outnumbered
its own by more than six to one’, an official review of the Falklands campaign
later observed, ‘This in itself was no mean feat, but the Task Force put ashore
10,000 men on a hostile coast while under threat of heavy air attack; fought
several pitched battles against an entrenched and well supplied enemy who
at all times outnumbered our forces; and brought them to surrender within
three and a half weeks.’120 The Argentine Armed Forces were by no means
inept, though their ground forces were outclassed by their British opponents.
Mrs Thatcher was warned by Admiral Sir John Fieldhouse that recapturing
the Falklands might cost anything up to 3,000 British casualties, but, in fact,
there were 253, together, of course, with the loss of naval vessels and air-
craft and other equipment.121 When HMS Sheffield was lost, Cecil Parkinson
recalled, Mrs Thatcher ‘didn’t waver at all’.122 This was just as well, given
that there were those in Britain who had either predicted that the Task Force
would fail, or needed it to do so. That Argentina’s only aircraft carrier, the
Veinticinco de Mayo was allowed to escape being sunk was an obvious question
to ask about the Royal Navy’s conduct of the Falklands War, but critics con-
centrated on the sinking of the cruiser, the Belgrano, on the grounds that this
was done to frustrate peace proposals which the Junta would have agreed to.
This interpretation of the event was later shown to be untrue.123 The Belgrano
had constituted a threat to the Task Force, which, except to those who wanted
Britain to fight the Falklands War with one hand tied behind its back or not at
all, was the justification for sinking it. This action had the effect of confining
the Argentine Navy to its ports, to the obvious advantage of the Task Force,
thus playing an important part in the British victory. That Britain would go
to such lengths to fight for what Reagan called a ‘little ice cold bunch of
land down there’124 was testimony to the country’s resolve and that of its
Prime Minister. ‘So ends the Falklands Affair – which began in such despair
and humiliation’, Alan Clark wrote, having himself melodramatically rushed
up to Mrs Thatcher and declared: ‘Prime Minister only you could have done
this; you did it alone, and your place in history is assured.’125 That was, of
course, what her enemies feared, as was illustrated in the manner in which
Robert Runcie, the Archbishop of Canterbury, chose to mark the British
victory in the sermon that he delivered at the Falklands Thanksgiving Ser-
vice. ‘The service could have been worse’ was the most that Clark could
muster for the modern Anglican Church, and as for ‘little Doctor Greer’ –
the Moderator of the Free Church Federal Council – ‘his prayers were not as
awful as one might have expected’. Clark added: ‘Afterwards, the crocodile
moved its way out very slowly down the aisle, starting from the top. I
was on the civilian side, passing row after row of next of kin. Anxiously,
I scanned their faces, but the only emotion I could see was anguish, sheer
anguish.’126
The Grenada Interlude, 1983

When the Americans successfully invaded Grenada in October 1983, Presi-
dent Reagan later wrote that they ‘captured secret papers. . . that documented
how the USSR and Cuba were acting in concert to make the Caribbean a Com-
munist lake’.127 Mrs Thatcher was not alone in finding it hard to believe that
the American invasion had no connection with that country’s humiliation
in the Lebanon,128 and, indeed, as Weinberger remarked in his memoirs, ‘our
rescue operations on Grenada took place’ two days after ‘the terrorist bomb-
ing of the Marine Barracks at Beirut Airport’.129 The US Marines had not
observed their motto ‘take the high ground’, and 241 Servicemen had been
killed.130 Though Reagan recognized that ‘post-Vietnam syndrome’ would
ensure Congressional opposition to ‘the use of military force abroad for any
reason’, he believed that ‘the United States couldn’t remain spooked for ever
by this experience’.131 So, when ‘the Organization of Eastern Caribbean States
(OECS) asked us to intervene militarily [in] Grenada’, Reagan recalled,132 ‘We
didn’t ask anybody, we just did it’,133 and the military victory secured ‘helped
all Americans to stand a little taller’.134 After the humiliations of Vietnam
and of the Carter years, Reagan acted as if he needed his equivalent of the
Falklands victory to satisfy the American public that the years of retreat were
over, and Grenada was a signal that this was so. Secretary of State George
Shultz wrote that ‘Grenada, like the Falklands, was a shot heard round the
world by usurpers and despots of every ideology.’135 Shultz was well-aware
of the ‘special relationship’ with Britain,136 and wary of Mrs Thatcher,137 but
in behaviour relating to the Grenada invasion the Reagan Administration
took scant regard of the fact that the island was a member of the Common-
wealth and that the Queen was the Head of State, or about prospective British
opposition to the venture, the knowledge of which indicated that the British
had not been kept in the dark about the invasion, aside from its timing
of the intervention which was only decided a matter of hours before the
event.138 The Governor General, Sir Paul Scoon was said to have asked the
Americans to intervene, and that he was ‘seeking assistance’ from them was
stated in a letter from Scoon to the Prime Minister of Barbados,139 though
one account suggested that Washington did not know of Scoon’s plea for
help until told of it by Mrs Eugenia Charles of the Organization of Eastern
Caribbean States (OECS) after the invasion.140 With Britain taking little inter-
est in the Caribbean area after the collapse of the West Indies Federation, it
would have been natural to turn to the USA.
Whether or not one of her biographers was justified in reporting that the
Queen was angered by American behaviour,141 one report suggested that
‘those present at Downing Street that night had seldom seen [Mrs Thatcher]
more furious’.142 When she got through to the President on the hot line, the
Prime Minister learnt that ‘we are already at zero’, and later wrote:
At best, the British Government had been made to look impotent; at worst
we looked deceitful. Only the previous afternoon Geoffrey [Howe] had
told the House of Commons that he had no knowledge of any American
intention to intervene in Grenada. Now he and I would have to explain
how it had happened that a member of the Commonwealth had been
invaded by our closest ally.
Further, she now had to face the argument in debate that ‘if the Americans
had not consulted us about Grenada, why should they do so as regards the
use of Cruise missiles?’143 That said, though, it was difficult to differ from
Shultz’s assessment:
The British position remained a puzzle. Whatever the reasons for Prime
Minister Thatcher’s opposition, she did not exhibit any particular con-
cern for ‘the special relationship’ between Britain and America. President
Reagan and I felt that she was just plain wrong. He had supported her in
the Falklands. He felt he was absolutely right about Grenada. She didn’t
share his judgement at all. He was deeply disappointed.
Shultz wondered if Mrs Thatcher’s reaction was the result of having been
‘needled hard two days earlier in the rough and tumble of Question Time
in the House of Commons about being Ronald Reagan’s poodle’.144 It seems
more likely that, despite Mrs Thatcher’s gift for thinking up principled objec-
tions to the Grenada venture, it was her public exclusion from being involved
that irritated her. Since Mrs Thatcher had gone ahead with war in the South
Atlantic without first consulting Reagan, she could hardly object to being
treated similarly over Grenada. The Economist concluded that American casu-
alness in dealing with Britain’s position meant that ‘superpowers did not
need allies, only cheerleaders’,145 and Howe as the British Foreign Secre-
tary, straining to give events a ‘European’ dimension, had ‘no doubt that we
should base our future strategic planning increasingly upon the premise that
Grenada, rather than the Falklands, offered the best evidence of American
instincts’.146 In some contrast with her recent conduct, Mrs Thatcher still
believed that ‘Britain’s friendship with the United States must on no account
be jeopardized’,147 and, though Shultz seemed to think that the President
had tired of her ‘imperious’ behaviour,148 Reagan took the trouble to mend
fences with the Prime Minister, and in their next conversation he disarmed
her by saying that ‘if he was in London and dropped in to see me he would
be careful to throw his hat through the door first’.149
The Hong Kong Agreement, 1984

‘It was not until 28 July 1982, two days after the Falklands Thanksgiving
Service at St Paul’s, that time could be found in Margaret’s programme for a
proper discussion of Hong Kong’, Geoffrey Howe recalled, ‘ Pressure of time
was not the only reason for delay. No one had been relishing the idea of
telling the Prime Minister, who had just triumphantly reasserted sovereignty
over the Falklands, that she must now consider relinquishing it over Hong
Kong.’150 Moreover, it was to a Communist tyranny – the Chinese People’s
Republic – that sovereignty would need to be ceded. It was later estimated
that well over 70 million people had perished in peacetime as the result of
the misrule of Mao Tse-Tung,151 and the main reason why he chose to leave
Hong Kong as a British colony was because it was useful to his regime being
China’s biggest source of hard currency.152 After his death in 1976, Mao’s suc-
cessors had continued to leave Hong Kong as it was for the same pragmatic
reasons, but the 99-year lease granted to Britain in relation to 92 per cent
of the territory of Hong Kong ran out in 1997, and it seemed best to
the Thatcher Government to find a settlement well before that date. The
colony was dependent on the Chinese mainland for food and water, and, as
Mao’s successor, Deng Xiaoping, pointed out to the visiting Mrs Thatcher in
September 1982, the military reality was ‘that the Chinese could walk in and
take Hong Kong later today if they wanted to’. She conceded that ‘I could not
stop them’, but pointed out that if the Chinese did this then Hong Kong’s
economic collapse would follow.153 Initially, as Howe put it, the Prime Min-
ister thought in terms of ‘leading Hong Kong Island and Kowloon towards
independence as a separate entity, but. . . her head recovered control of her
heart’.154 Percy Cradock, who was involved in the negotiations, wrote that
over Hong Kong, [Mrs Thatcher] was induced, after much effort, to aban-
don her initial embattled stance and accept that a solution could only be
negotiated within the tight framework imposed by the expiry of the lease
and Chinese determination to recover both sovereignty and administra-
tion. The result was a Treaty [in December 1984] ensuring the colony the
most complete protection possible in the real world for at least fifty years
after the hand over.155
There was little choice about accepting Deng’s formula of ‘one country,
two systems’ for Hong Kong,156 and it was obviously in China’s economic
interest, certainly in the short term, for Hong Kong to continue with its
entrepreneurial ways. The numbers of Hong Kong people involved seemed
to deter those who normally agitated in favour of mass immigration from sug-
gesting that they should have the right to come to Britain should they wish.
Though there was no practical alternative to the policy adopted over Hong
Kong, it was hard to believe that a Prime Minister without Mrs Thatcher’s
political credentials could have consigned five million people to Communist

rule without more domestic controversy.
The Anglo-Irish Agreement, 1985

‘Any Conservative should in his bones be a Unionist too’, Mrs Thatcher was
later to assert,157 but it had been the Heath Government that had suspended
the Stormont Parliament in 1972, thus severing the traditional alliance of
the Tories with the Ulster Unionists. Shortly before this, Douglas-Home had
written to Heath about the Northern Ireland situation that ‘the real British
interest would be served best by pushing them towards a United Ireland rather
than tying them closer to the United Kingdom’,158 and, despite assertions on
the part of successive British Governments to the contrary, the Protestant
majority in Northern Ireland increasingly felt that they had cause to believe
that they were going to be betrayed. As the Protestants saw things, they came
a poor fourth in the London Government’s priorities behind, in no particu-
lar order, the appeasement of the Catholic minority in Northern Ireland,
buying off the Catholic dominated Irish Republic that governed Southern
Ireland, and trying to placate the numerous American politicians who
believed that the predominantly Catholic Irish–American vote was worth
cultivating. Thus, as long before as 1943, with that vote in mind, Pres-
ident Roosevelt had raised the matter of unifying Ireland with Churchill,
and, to the alarm of his Cabinet colleagues, the then Prime Minister seemed
resolved to settle the Irish problem. Leopold Amery stated the obvious when
he observed that ‘Ulster will bitterly resent any idea of trying to persuade her
to come in under de Valera’, and took Churchill’s willingness to raise the mat-
ter to mean that his fears that ‘Winston might lose his balance’ had come to
pass. Cabinet opposition ensured that Churchill ‘with not too good a grace’
did not persist.159 Between the Treaty of 1921, which separated off Northern
Ireland from the remainder of the country that became in the first instance
the Irish Free State, and the resumption of the Troubles in 1968, British Gov-
ernments tended to be only too pleased to leave matters relating to Ireland
alone. Even when the Troubles were revived, primarily in the form of violence
conducted by Sinn Fein/Provisional Irish Republican Army (PIRA), initially
they mattered little in England, because, to borrow Churchill’s words from
1920, though ‘the Irish murders [were] getting very serious. . . they are con-
centrating their attention on one another. I should take a still graver view if
they started serving us out with any of it.’160 Of course, this was bound to
come, and, in the Thatcher era, the terrorists attempted to murder the Prime
Minister and the rest of the Cabinet at Brighton, and actually assassinated
Neave and later Gow. In the background, there was always the American
factor. To the extent that Ireland figured in political debate in the USA, the
British presence in Ireland tended to be portrayed in terms of imperialism
and commonly without recognition that Ulster either existed or that it had
a Protestant majority. So, Sinn Fein/PIRA attracted Irish-American financial
support, importantly through Noraid, and American Courts tended to protect

terrorists, a number of whom secured American passports. Such behaviour
did not stop President Reagan from urging Mrs Thatcher at their meeting in
late 1984 to take action about the situation in Northern Ireland.161
Mrs Thatcher had ‘no great enthusiasm’ for that subject, Douglas Hurd,
the Secretary of State for Northern Ireland at the time, observed:
In general she wanted to preserve the Union but had no particular regard
for Unionist politicians, with the exception of Enoch Powell. Her main
concerns were the danger to British troops and the cost of the Province to
the British taxpayer. She regarded the Irish in Dublin rather as she regarded
the British Foreign Office: she could be charmed by individuals but looked
on them collectively as too subtle and too soft. . . at the opening of each
meeting on Northern Ireland she tended to begin from square one and
to repeat ancient themes which had been discussed and dealt with long
before. I do not know how many times she began a conversation with me
by saying that the answer might be to redraw the border so as to be rid of
areas which were substantially nationalist and retain a loyal and impreg-
nable Unionist province. Repeatedly I had to tell her of the tribal map of
Belfast hanging in my office at Stormont. The map looked as if an artist
had flung pots of orange and green paint haphazardly at the canvas. There
was no tidy dividing line. The intertwining of the communities was hope-
lessly complex. The same was broadly true of Londonderry, and four of the
six counties of the Province. . . Moving on, the Prime Minister would then
excoriate Irish Ministers and the Irish police (the Garda) for their feeble-
ness in dealing with the IRA. Her main aim in negotiation was to shame
and galvanise Dublin into effective anti-terrorist action, making as few
concessions on points of interest as was compatible with that objective.162
For all the efforts of Hurd, and also Howe at the FCO, that an Anglo–Irish
Agreement eventually emerged in November 1985 owed much to the good
working relationship established between Mrs Thatcher and the Irish Prime
Minister, Garret FitzGerald. ‘Extra sensitivity was needed. . . after eight hun-
dred years of misunderstandings’, Mrs Thatcher was told by FitzGerald, and
she observed, it seemed wearily, that ‘I felt at the end that I had gained an
insight into every one of those eight hundred years.’163 Article 1 of the Agree-
ment stated that ‘the two Governments affirm that any change in the status
of Northern Ireland would only come about with the consent of a majority
of the people of Northern Ireland’. Article 2 ‘established. . . an Intergovern-
mental Conference. . . concerned with Northern Ireland and with relations
between the two parts of the island of Ireland to deal. . . on a regular basis
with (i) political matters; (ii) security and related matters; (iii) legal matters,
including the administration of justice; (iv) the promotion of cross-border
co-operation.’164 Hurd believed that Article 1 represented ‘the admission for
the first time by the Irish Government that consent was the key to the consti-
tutional position of the North’, which was important because ‘at that time the
case for Irish unity seemed so strong to the Irish political parties, to the Ameri-
cans, and to the British Labour Party that all these players were reluctant to
concede that the Unionist majority in the North had the right to block it.’165
In actual fact, under the Sunningdale Agreement of 1973, the statement was
made that ‘the Irish Government fully accepted and solemnly declared that
there could be no change in the status of Northern Ireland until a majority of
the people of Northern Ireland desired a change in that status.’166 Hurd dif-
fered from Howe about the importance of persuading the Irish to repeal Art-
icles 2 and 3 of their 1949 Constitution, arguing that ‘the Unionist suspicion
of the Republic would not be transformed by the alteration’.167 Nothing was
going to remove that suspicion, but the point was that Article 2 of that Con-
stitution stated that ‘the national territory consists of the whole island of Ire-
land, its islands and the territorial seas’, and its Article 3 stated that ‘pending
the re-integration of the national territory, and without prejudice to the right
of the Parliament and Government to exercise jurisdiction over the whole of
that territory, the laws enacted by that Parliament shall have the like area and
extent of application as the laws of [the Irish Free State] and the like extra-
territorial effect’.168 So, as the Irish Supreme Court made clear in response to
legal challenges to the Sunningdale and Anglo–Irish Agreements, in signing
them the Irish Government had not changed what it perceived as being the
de jure status of Northern Ireland. All the Irish Government had done was to
recognize the de facto situation there.169 While Articles 2 and 3 of the Irish
Constitution existed, the PIRA could maintain that they were pursuing the
legitimate aspirations of the Republic by direct means, and, though those
who enjoyed violence might well continue with such behaviour anyway, the
formal removal of the territorial claim would lay the motivation bare.
Article 2 of the Anglo–Irish Agreement was the more important one because
in return for what turned out to be repeating its acknowledgement of what
Hurd called ‘the principle of consent’ in relation to the future of Northern
Ireland, Hurd offered the Irish Government ‘not joint authority but a right to
be consulted and to give advice on certain key aspects of the governance of the
Province, including security. We would be giving them in theory what they
already had in practice.’170 The security aspect was prospectively important
because the Republic had been a safe haven for the terrorists. Gow was right
when he pointed out that ‘a foreign power’ had become involved with gov-
ernance in Northern Ireland, although Howe tried to maintain that, despite
that country’s behaviour in leaving the Commonwealth in 1949, Ireland did
not somehow count as a foreign country, and that, despite there not being
territorial claims any more in their case, the relationship that was envis-
aged resembled that between the now reconciled France and Germany.171 The
Spectator argued that ‘British. . . thinking on the matter [was] convoluted to
the point of lunacy’,172 and it was inevitable that Enoch Powell would accuse
Mrs Thatcher of ‘treachery’ in concluding the Agreement.173 ‘Mrs Thatcher

is not Bonar Law reborn’, a former adviser wrote in that sense correctly,
‘She is simply an Englishwoman, if a tough one; rock hard for the Union
but just as impatient with the Unionists as the rest of her tribe.’174 Another
former adviser, Percy Cradock from the FCO praised the Prime Minister’s
‘pragmatism’ in agreeing to ‘an implicit bargain, on the one hand a say for
the Dublin Government in the affairs of Ulster, on the other greater secur-
ity co-operation between the two Governments against the terrorists. . . it
demonstrated a readiness to think afresh and, if need be, compromise on
the most neuralgic of issues.’ That it ‘proved a disappointing bargain and the
Irish tragedy pursued its course’175 should have surprised nobody in the short
run, but, as The Spectator observed at the time, all the Agreement could be
was the first part of a ‘process’. Suspicious of ‘Sir Robert Armstrong and the
Foreign Office’, the journal thought that the Agreement was ‘intended as a
first step to a united Ireland’,176 and, unlike the negotiations at Sunningdale,
the Unionists had been excluded from those relating to the Agreement. Few
outside their ranks thought in terms of the cause of the Unionists prevail-
ing, and fewer still considered quite how they would fit into the political
arrangements of the Republic if in some way they were induced to take part.
For the present, though, the politics of Ulster continued to demonstrate that
moderation did not pay, and the Protestant majority in the Province turned
more and more to the Progressive Unionists to protect their position in a sep-
arate Northern Ireland. The Anglo–Irish Agreement was a modest measure
in itself, with the Irish Government having been drawn into having formal
responsibilities for security in Ulster, and so to experience failure to deal with
terrorism, and with war weariness on all sides at that stage representing such
hope as there was of an eventual form of settlement emerging.
Waging and winning the Cold War
The Cold War had been ‘a boon for us, a second Great Game, with its grand
strategies and nuclear weapons and spying dramas, all of which had kept
us in the forefront of world affairs’, George Walden, formerly of the FCO,
later wrote of Britain’s role in the world since 1945.177 The Soviet invasion of
Afghanistan in 1979 reminded those with the requisite historical knowledge
of the original Great Game, and Enoch Powell observed that ‘three times in
the last century [Britain] did what the Russians have done now – with ultim-
ate results which I suspect may be repeated on this occasion’. What Powell
emphasized was that it was no longer Britain’s concern ‘if Russia breaks [the]
Khyber bar’,178 leading him to be described by Sir Ian Gilmour as enunciat-
ing ‘the complete isolationist doctrine’,179 when what Powell was doing was
questioning the wisdom of Britain following the American line so closely in
reacting to the invasion of Afghanistan. Since Mrs Thatcher was commonly
portrayed in relation to defence and foreign policy matters as a British or,
at least, English Nationalist, her pursuit of the ‘second Great Game’ was
especially open to assessment from Powell’s perspective, with it being his
belief that this pursuit had turned Britain into ‘something horribly resem-
bling a satellite of the United States’.180 Powell’s argument was that Britain’s
defence interests were bound up with her own territory and with that ‘on
her doorstep’181 and, since he did not consider that nuclear weapons would
be used even in a situation comparable with 1940,182 Powell believed that
Soviet forces could have swept across Western Europe to the Channel ports
at any time in the preceding thirty years, and the real question was whether
it had ever been their intention to do so.183 Powell argued that ‘if Russia is
bent on world domination she has been remarkably slothful and remarkably
unsuccessful’ since ‘no Russian soldier stands today an inch beyond where
Russian soldiers stood in 1948’. According to Powell, the Soviet invasion of
Afghanistan was supposed to be the exception that proved the rule,184 but it
was undermining of any perception that the Soviet Union as a satiated power,
much as did the size of its Armed Forces and scale and menace of that coun-
try’s espionage activity. That activity had caused trouble for the Americans all
over the world, and not least ‘on her doorstep’, and, especially after Reagan
became President, making trouble for the Russians in Afghanistan and else-
where was a form of revenge. It cost Britain little to support the USA over
Afghanistan, and it was in her self-interest to do so as a senior partner in the
NATO Alliance, and as the Falklands episode was soon to demonstrate.
The Americans were portrayed by Powell as having a Manichaean view of
the world, dividing it ‘into two monoliths – the goodies and the baddies,
the East and the West, even the free and the enslaved. It is a nightmarish
distortion of reality.’185 There were all sorts of difficulties with the notion
of the Free World, not least having to keep the company of ‘Cold War bas-
tards’ among the ranks of the various ‘friendly’ dictatorships on the basis that
they were ‘our bastards’. This did not mean that, aside from those running
and exploiting the system, those entombed in the Soviet Empire were not
‘enslaved’. George Urban, one of Mrs Thatcher’s advisers, wrote that
our ideological contest with the Soviet system and Soviet power was about
moral values, or it was about nothing. Moral outrage was, as it had to
be, the mainspring of our opposition to totalitarianism. . . I rejoiced in
this primacy of moral concepts and did my best to reinforce Margaret
Thatcher’s identification with them. ‘Right’ and ‘wrong’ became useable
words again in public discourse – a welcome change after the grey and inef-
fectual relativism and utilitarianism of earlier British Governments and the
psycho-babble of the chattering classes.186
When Reagan made a speech to British Parliamentarians in June 1982, he

predicted the eventual downfall of the Soviet Union. ‘In an ironic sense Karl
Marx was right’, Reagan declared,
We are witnessing today a great revolutionary crisis, a crisis where the

demands of the economic order are competing directly with those of the
political order. But the crisis is not happening in the free non-Marxist West,
but in the home of Marxist-Leninism, the Soviet Union. It is the Soviet
Union that runs against the tide of history by denying human freedom
and human dignity to its citizens. It is also in deep economic difficulty.187
Of Reagan’s speech, which had lauded democracy as much as it had con-

demned Communism, that representative of the chattering classes, Roy
Jenkins, observed that ‘he did not think it had been very appropriate’.188
What was supposed to be ‘appropriate’ was the Helsinki Accords approach
to dealing with the Soviet Union, whereby the boundaries of the Russian
Empire in Central and Eastern Europe were acknowledged by the West as legit-
imate, especially those relating to the division of Germany, and, in return,
the Soviet authorities agreed a text on human rights. Walden and the other
Western negotiators thought it to be a bonus that the text actually became
important for dissidents in the Soviet Empire, with them running unofficial
Helsinki monitoring groups.189 Reagan had no sympathy with the Helsinki
approach to dealing with the Soviet Union, which was ‘putting our stamp of
approval on Russia’s enslavement of the captive nations. We gave away the
freedom of millions of people – freedom that was not ours to give.’ Reagan
was also uninterested in a policy of parity and sufficiency in arms competi-
tion with the Soviet regime, believing in the restoration of American ‘military
superiority’.190 Not surprisingly, when, early on in his Presidency, the situa-
tion in Poland made difficulties for the Soviet Government, not least because
of the intervention of Pope John Paul II, himself a Pole, Reagan was for mak-
ing more trouble and for working to overturn the Communist dictatorship
in the country. This alarmed politicians like the West German Chancellor,
Helmut Schmidt, who told Secretary of State Haig in early 1982 that it was
ridiculous for Reagan to think that he could ‘overthrow the post-World War II
division of Europe’, and that it was best to leave Poland, and its Solidarity
Movement, now subject to martial law, to its fate. Reagan took no notice, and,
besides imposing economic sanctions on the Russians in relation to Poland,
he obstructed the building of a natural gas pipeline from the Soviet Union to
Western Europe. ‘They can build their damn pipeline’, Reagan declared, ‘but
not with our technology.’ The Soviet Empire desperately needed such West-
ern technology and the hard currency cash flow that the pipeline represented,
and, risking relations with his country’s closest allies, Reagan’s combativeness
led to the project being halved in size and delayed by eighteen months.191
Though it was not until March 1983 that Reagan famously described the
Soviet Union as an ‘evil Empire’,192 what the Reagan Doctrine amounted to
seemed obvious, though Reagan’s deviousness made his individual actions
difficult to interpret. Though portrayed by his critics as stupid, what Reagan
looked for was simple solutions. Against much advice, he raised the stakes in
the Cold War. Though it was Nixon and not him that was the poker player,
Reagan played the political game in the spirit that when your opponent blinks
you raise the bid. The Strategic Defense Initiative (SDI) of March 1983 was a
spectacular means of raising the game. What was dubbed Star Wars envisaged
the use of space-based weapons, lasers, as well as ground-based defences to
render nuclear weapons ‘impotent and obsolete’. Star Wars was meant to be
destabilizing and undermining of the concept of Mutual Assured Destruc-
tion, and to massively complicate the deterrent calculations of the Soviet
leadership. As Edward Spiers observed, by taking the arms race into space,
with an emphasis on computer-based, futuristic technology, at huge costs,
and to insist that it was non-negotiable, Reagan posed a massive, potential
challenge to the fabric of Soviet security, while at the same time threatening
to impose horrendous costs upon the Soviet economy. The actual feasibility
of Star Wars was never the main issue, but whether the Soviet leaders felt able
to ignore it, and they did not.193 Secretary of State Shultz later wrote that ‘SDI
proved to be of deep concern to the Soviets. General Secretary Andropov’s
reaction had been immediate. The Soviets were genuinely alarmed by the
prospect of American science “turned on” and venturing into the realm of
space defences. The SDI. . . proved to be the ultimate bargaining chip. And
we played it for all it was worth.’194 KGB General Nikolai Leonov, the former
Chief of Intelligence for the Western Hemisphere, seemed representative of
the views of the Soviet leadership group when he said of the SDI that ‘this idea
played a very powerful psychological role. And of course it underlined still
more our technological backwardness.’195 With the USA devoting only 6.4 per
cent of its GNP to defence even in 1984 at the peak of the Reagan expenditure
programme compared with the Soviet Union’s 20 per cent or more of GNP,
and with the latter devoting some 70 per cent of its industrial productivity
directly to its military effort, the Russian regime was being broken by its need
to compete.196 Far from easing the way in negotiations, the Soviet Foreign
Minister, Eduard Shevardnadze, recalled that Reagan began his dozen meet-
ings with him with a ‘bill of indictment’ against the Soviet Union, and he saw
his country’s predicament by the mid-1980s in terms of ‘no matter where we
turned, we came up against the fact that we could achieve nothing without
normalization of Soviet-American relations. We did some hard thinking, at
times sinking into despair over the impasse.’197 Reagan was not interested
in ‘normalization’ but in the overthrow of the Soviet system. ‘It had been
the SDI that had brought the Soviet Union to Geneva [in November 1985]
and Reykjavik [in October 1986],’ Reagan later wrote of his summit meetings
with the Soviet General Secretary, Mikhail Gorbachev, but ‘I wasn’t going to
renege on my promises to the American people not to surrender the SDI’.198
Reagan recognized that Gorbachev was ‘different from the Communists who
had preceded him to the top of the Kremlin hierarchy. . . he was the first not
to push Soviet expansionism, the first to agree to destroy nuclear weapons,
the first to suggest a free market and to support open elections and freedom
of expression.’199 Shultz later wrote in terms of ‘What Really Happened at

Reykjavik’, and at one stage Reagan recalled ‘we were getting some amazing
agreements’ in terms of unprecedented cuts in provision for nuclear weapons
among other concessions. The obvious condition was that Reagan would
have to abandon Star Wars, and though Reagan later wrote that on hearing
this ‘I was very disappointed and very angry’,200 it was difficult to believe
that he was doing more than sounding the Russians out about how far they
would go. As Shultz remarked, ‘even though the Soviets withdrew these con-
cessions at the end, I knew that we could reel them in again subsequently’.201
The terms that the Soviet leadership chose to pay for the Intermediate Nuclear
Forces (INF) Treaty of 1987 were similar to those that the Andropov regime
had rejected with contempt only a few years before,202 and not least in this
sense Shultz observed that ‘the INF Treaty. . . was a watershed agreement’,
and that the Cold War was ‘all over bar the shouting’.203
‘British influence in Washington throughout this time was disproportion-
ate, exerted though a common view of the world, close intelligence and
defence ties, and sympathy between the leaders’, Percy Cradock later wrote
of the Thatcher era, especially during the Reagan Presidency:
It was always a delicate relationship to manage, for example during the

Contra scandal; American intentions were often uncertain and worrying;
and there were open disagreements, as over Grenada and the Siberian
pipeline, when the Prime Minister did not hesitate to take up an inde-
pendent position. But these episodes were set against a background of
natural understanding and collaboration; and as a whole the relationship
was managed skilfully, to Britain’s great advantage.204
When it came to policy relating to the deployment of Cruise missiles and

of Trident, Mrs Thatcher was not found wanting by the Americans, unlike
several of that country’s NATO allies. Those opposed to this policy chose to
ignore the classic text called Soviet Military Strategy, which stated that ‘from
the point of view of armed combat, a Third World War will be first of all a
nuclear rocket war’.205 The author, Marshal of the Soviet Union Sokolovskiy,
had written as early as 1962 that ‘it should be emphasized that, with inter-
national relations existing under present day conditions and the present level
of development of military equipment, any armed conflict inevitably will
escalate into a general nuclear war if the nuclear powers are drawn into the
conflict.’206 Sokolovskiy was clear that ‘mass nuclear strikes. . . will be the
main, decisive method of waging war’.207 America’s allies tended to display
weakness too when it came to supporting her retaliatory air strike against
Libya in 1986. Weinberger recalled that President Mitterrand of France gave
the Americans some gratuitous advice about the raid of the ‘don’t inflict a
mere pinprick’ variety, while refusing permission for the F-111s to fly over his
country’s airspace.208 Not surprisingly, Shultz found that ‘Margaret Thatcher
had come through in staunch support of our effort by allowing American

planes to take off from British bases’,209 and the American raid on Libya was
a success, and without the terrorist reprisals opponents of the policy feared.
Mrs Thatcher’s ‘special relationship’ with the Reagan Administration
was important for the conduct of relations with the Soviet Union. Of
Mrs Thatcher, Reagan recalled that ‘she told me that Gorbachev was dif-
ferent from any of the other Kremlin leaders. She believed that there was a
chance for a great opening. Of course, she was proven exactly right.’210 As for
Gorbachev himself, his official biographer shared his subject’s belief that Mrs
Thatcher’s personal and public support for the changes that he brought about
in Soviet domestic and foreign policy was especially important in relations
with the Reagan Administration, with the biographer finding it remarkable
that a politician of the Right should succeed in the role of honest broker when
more politically moderate British Prime Ministers such as Macmillan and
Wilson had failed before.211 It was, of course, the Right that had to be squared.
‘They look at us in the West and wait for us to drown’, Gorbachev told
the Politburo after Reykjavik,212 and the West did not have to wait for
long, though the Reagan Administration had been succeeded by that of
George Bush before the collapse of the Soviet Empire finally took place. Of
her relationship with the Bush Administration, Mrs Thatcher recognized that
‘Bush felt the need to distance himself from his predecessor: turning his back
fairly publicly on the special position I had enjoyed in the Reagan Adminis-
tration’s counsels and confidence was a way of doing that.’ Bush had ‘never
had to think through his beliefs and fight for them when they were hopelessly
unfashionable as Ronald Reagan and I had had to do’, Mrs Thatcher consid-
ered, though a better relationship between them eventually emerged when
she took to ‘eating a little humble pie’.213 Whether Bush was aware of this
differing approach seems not to be known, and there was much talk about
Mrs Thatcher’s forthrightness at her meeting with Bush at Aspen, Colorado,
the day after the Iraqi invasion of Kuwait in August 1990 caused a world
crisis. ‘It has been said that Mrs Thatcher had to put backbone into the Pres-
ident’, Charles Powell observed, ‘That is just wrong. They both arrived there
absolutely determined that this was something that could not be tolerated.
The genuine sense of outrage on the part of both of them is the thing that I
remember.’ It was three weeks later that Mrs Thatcher famously said ‘all right
George, all right, but this is no time to go wobbly’, but this was about seeking
United Nations authority for taking military action not about what to do,214
and Mrs Thatcher had left office before the Gulf War of 1990–91 resulted in
a form of victory.
Thatcher and ‘Europe’
‘Looking back, it is perhaps natural to assume that the Thatcher years were
a period of uninterrupted hostilities with Europe, a kind of Napoleonic War,
broken only by the occasional Peace of Amiens’, though, ‘in fact it was not
like that’, Sir Percy Cradock later wrote:
There were perhaps three stages. The first was dominated by the continu-
ing battles over the Community Budget, which had begun under her first
Government in 1979 and were not concluded until Fontainebleau in June
1984. The second, from 1984 to say 1987 was a much more positive period,
in which Britain pressed for the completion of the single market, and took
a leading part in drawing up the Single European Act. The third, and dark-
est, phase covered Mrs Thatcher’s last two years in power. It was marked
by disputes with Europe and divisions within the Government itself, and
its characteristic expressions were the Delors Report on monetary union
on the one side and the Bruges Speech of 1988 on the other.215
‘There is one thing you British do not understand, an idea. There is one thing
you do understand, a fact. We will form the Community without you and
then when we have shown you that it can work, you will join us.’ So said Jean
Monnet,216 who recognized that ‘Britain had not been conquered or invaded;
she felt no need to exorcise the past’,217 which in large part explained that
country’s reluctance to ‘join us’, since her history meant that the issue of
sovereignty or constitutional self containment was of a different order of
importance for her. Several factors explained why the British political class
eventually did turn to ‘Europe’, with one being that the Commonwealth was
at last recognized to be a burden and not an asset and most certainly not a
political surrogate for Empire; and another factor was American pressure fol-
lowing from an unjustified belief that a more politically integrated Western
Europe including Britain would contribute more to its own defence. That said,
though, the hard evidence that the British Keynesian Welfare State was not an
internationally competitive social and economic order was the main motive
behind Britain’s eventual attempts to join the Community, and the terms
secured by the Heath Conservative Government savoured of desperation.
The next Labour Government attempted a ‘renegotiation’ that Roy Jenkins
well described as producing ‘the minimum results with the maximum of
ill will’,218 and which may even have marginally worsened the terms that
Heath obtained.219 Since Britain had a form of representative government
and was well-described as a Parliamentary democracy, Heath may well have
been fortunate that neither the application made for membership nor the
poor terms obtained needed an immediate and explicit popular mandate of
the kind required in, say, Norway, where given the opportunity, the electorate
of Britain’s fellow applicant voted against. The ‘fact’ of British membership
having been obtained in 1973 made the reluctantly granted Referendum of
1975 a different form of contest, and the Establishment inevitably prevailed
in a grand manner not really seen since the Munich Agreement of 1938.
Then, too, only the mad and bad were supposed not to see the good sense
of the Agreement, and Churchill spoke against it in icy silence, and probably
at least two-thirds of the electorate and possibly more would have voted for
Appeasement if a referendum had been held before the Agreement was shown
to be worthless, and given that the alternative was total war with Nazi Ger-
many this might well have seemed the sane thing to do. The Hitler regime
provoked understandable terror, but the common later British reaction to
‘Europe’ was that it was numbingly boring. This did not make the difference
because, much like the League of Nations in the inter-war years, in which
organization nobody should have been surprised to learn Monnet was once
employed, the Community had come to attract an unthinking adherence on
the part of the British Establishment, characterized, as so often, by Carring-
ton, who was to write that ‘when I became Foreign Secretary I had no great
knowledge of the other European statesmen with whom I would be dealing,
no detailed knowledge of Europe or Community affairs. I had, however, con-
viction.’ Carrington thought of those opposed to British membership of the
Community as displaying ‘a sort of national death wish’.220 For those who
actually understood the Monnet Dream, the opposite would be the case,
since, in principle, Britain in a federal ‘Europe’ would have a status compara-
ble with a Canadian province or a West German land. When a leading FCO
official wrote in 1971 about the issue of sovereignty and the European Com-
munities, he seemed to think that it would take as long as thirty years for the
British electorate to fully recognize that ‘Europe’ had political ambitions, and
that by then it would be too late to do very much about it.221 Heath chose
to play down the political dimension anyway, leading to later allegations of
deceitful behaviour, and enabling those opposed to ‘Europe’ to argue that
the victory of the ‘Europeans’ in the Referendum had been rendered worth-
less because it had been obtained by a trick.222 At the time of Britain’s entry,
though, and for some years afterwards, the Monnet project seemed to have
stalled, and Gaullist obstruction in the form of the ‘empty chair’ and the
Luxembourg Compromise were fresh in the memory, and some took Ken-
neth Clarke’s line that the British had no need to fear European integration
because they had ‘a monopoly of common sense’ and so could always ‘bluff
our way through’. This form of ‘cavalier optimism’223 was not a character-
istic of most of the British political class in relation to ‘Europe’ since they
chose to treat the Monnet project as unimportant. When Roy Jenkins moved
from British domestic politics to head the European Commission between
1977 and 1981, the then Foreign Secretary, David Owen, soon sent a minute
around the FCO instructing his officials to desist from the growing practice
of referring to President Jenkins,224 but neither political ‘Europe’ nor the
Commission nor those who thought like Jenkins could be wished away.
‘Margaret Thatcher’s long and bitter struggle for a budgetary rebate from
the European Community was not about British overpayment at all’, Urban
believed, ‘Rather was it her way of expressing her growing hostility to a
supranational institution which Britain had failed to join at its inception
and was unable to influence in the way she would have liked. Foreigners
had made the rules – Britain had to live by them. Could there be a greater
indignity?’225 Cradock thought that Mrs Thatcher had a ‘private attitude to
Europe’ that ranged from ‘suspicion to undisguised hostility’ which made
‘Europe. . . pre-eminently an area of struggle, an arena’. So, Cradock believed
that Mrs Thatcher’s antagonism had deeper roots than ‘the patronage from
Giscard d’Estaing and Helmut Schmidt that she had to endure when a new
girl at the summits of the early 1980s.’ Further, ‘the arguments over money,
British money, her money, which were the theme of her first five years, lent
themselves easily to a confrontational approach and to her concept of for-
eign affairs as a series of battles from each of which she had to emerge as
the victor’.226 Jenkins himself conceded that the disproportionate size of
Britain’s net contribution to the Community budget was ‘a nettle that Mrs
Thatcher had to grasp’, though he thought ‘she caused a justified but limited
dispute. . . totally to dominate the Community for five years and run into
the sand any hopes of, and ambitions for, a British leadership role within
the Community’.227 If there was a time when Britain could have had such a
role it was in the mid-1950s at the latest, and the least surprising feature of
Jenkins’s inheritance when he became President was that ‘Europe’ was being
run by ‘the Franco-German axis’.228 As for the balance within this, Jenkins
himself had remarked on
the deep-seated reluctance of post-1945 Germany to play a strong political

hand. Much of the stage of modern Europe has been occupied with, on
the one side, the British and the French, each in their different way, trying
to exercise a power somewhat beyond their capacity, and, on the other,
the Germans trying to push it away like a magnet trying to reject metal.
There was also, Jenkins detected, on the part of the Germans ‘a certain distaste
for the complicated dance of international hauts fonctionnaires’. Of course,
this was ‘utterly unlike the French’,229 and the reality was that France was
politically the dominant country within ‘Europe’ which those hostile to the
Monnet project easily demonstrated was largely organized in her interest, and
not only in the case of the Common Agricultural Policy.230 Quite why British
‘Europeans’ thought such arrangements would promote a domestic economic
recovery or could be to their country’s political advantage remained a mys-
tery, but then being communautaire most commonly translated into doing
what the French and, to a much lesser extent, the West Germans wanted. So,
there was a marriage between French political power and West German eco-
nomic power and one which dominated the Community, and when in 1979
Jenkins suggested to Mrs Thatcher that ‘we should. . . endeavour to break up
the endless exhibition waltz between [Chancellor] Schmidt and [President]
Giscard [d’Estaing]’,231 it was difficult to see not only how this could be done
but also why the politicians concerned would wish to cease calling the tune,
and the same was bound to be true of their successors, Helmut Kohl and
Françcois Mitterrand.
Of Mrs Thatcher’s performance at the Dublin Summit in November 1979,
Jenkins recorded that ‘her constantly reiterated cry of “I want my money
back” strikes an insistently jarring note’, and that ‘she bored everybody end-
lessly by only understanding about four of the fourteen or so points on the
British side and repeating each of them twenty seven times’.232 Jenkins, of
course, thought that Mrs Thatcher should have been playing another kind of
game, and so she should have done soon afterwards when the obsession with
‘my money’ came to cause her to take insufficient notice of revived supra-
nationalist initiatives. ‘With British implacability by now well advertised’, as
Carrington put it, ‘the matter of the British contribution was. . . sent to the
Foreign Ministers to try to settle. We met in [May] 1980 [at Brussels] for an
unbroken twenty four hours and finally reached a three year agreement. . . I
doubt if Margaret was particularly pleased with this but half a loaf is better
than no bread.’233 According to her own account, Mrs Thatcher’s ‘immediate
reaction was far from favourable. . . but the Brussels proposal. . . offered us a
three year solution’, and ‘overall, the deal marked a refund of two-thirds of
our net contribution and it marked huge progress from the position the Gov-
ernment had inherited. I therefore decided to accept the offer.’234 Gilmour,
who had accompanied Carrington to Brussels, later wrote of their visit to
Chequers on their return in a manner that demonstrated the gulf of social
class between them and the Prime Minister. Mrs Thatcher treated Gilmour
and Carrington as if they were people who had come back from the sales with-
out a real bargain. ‘The Prime Minister was like a firework whose fuse had
already been lit; we could almost hear sizzling’, Gilmour recalled, ‘It was dif-
ficult to discern the exact structure of her argument, but it was tolerably clear
that she thought the agreement lousy.’ Gilmour thought that ‘her objection
was to the fact of the agreement, not to its terms. . . the grievance was more
valuable than its removal’. After their ordeal, during which they had been
denied food and drink for a long time, the two Ministers agreed that the best
way to present the agreement to the media was in terms of a triumph for the
Prime Minister, which ploy worked. So, ‘by Monday [2 June 1980] the battle
was virtually over’, Gilmour recalled, ‘At the meeting of the Cabinet that
morning. . . Mrs Thatcher had not changed her mind, but only one Cabinet
Minister followed her line. All the others who spoke were strongly in favour of
what we had agreed, and the Prime Minister had to acquiesce.’235 Carrington
believed that ‘we had taken an important step towards a durable resolution’
of the British contributions problem,236 but Mrs Thatcher’s attempts to find a
permanent solution stalled in the face of much activity and some opposition
from President Mitterand and threats of a ‘two-track’ Europe and a ‘special
status’, and, of course, a lesser one, for Britain. Such threats surfaced once
more at the Fontainebleau Summit in May 1984, an event that witnessed
Britain receiving a permanent annual rebate totalling two-thirds of its annual
net contribution.237 On the budgetary question, Cradock was probably right

when he observed that ‘there is little doubt that without intransigent and on
occasion. . . outrageous behaviour on the Prime Minister’s part, we would not
have succeeded’,238 but while Mrs Thatcher was conducting this campaign
neither she nor her allies nor her advisers seemed to recognize that those who
wanted a federal ‘Europe’ were advancing their plans.
‘With the Fontainebleau settlement behind it, the Government was able to
adopt a much more positive attitude in the Community’, Cradock recalled,
‘In fact the years from 1984 to 1987 could be regarded as our communautaire
period.’239 Charles Powell considered that ‘from 1984 to 1987 British diplo-
macy in Europe was very successful: we got the EC to focus on enlargement
and the Single Market’, and the blame for bringing this constructive period to
an end was accorded to Jacques Delors, the President of the EC Commission
between 1985 and 1994.240 ‘We’re not here just to make a single market –
that doesn’t interest me – but to make a political union’, Delors was later to
say, and, while Mrs Thatcher saw the Single Market as an end in itself, the
last paragraph of the relevant White Paper issued by the Commission stated
that ‘just as the Customs Union had to precede economic integration, so eco-
nomic integration had to precede European Union’.241 The White Paper was
mainly the work of Lord Cockfield, whom Mrs Thatcher had sent to Brus-
sels in 1985 to be Vice President of the European Commission, and she ‘paid
tribute to the contribution he made to the Single Market programme’.242
Howe went farther and wrote that ‘Cockfield had almost single handedly
imposed and carried well on the way to fulfilment the entire Single Market
programme.’243 Close to the action at the time, Sir Roy Denman, one ‘Euro-
pean’ who could be fairly described as a fanatic, was clear that ‘the Single
Market. . . would not have been achieved without the imagination, know-
ledge and tenacity of Arthur Cockfield’.244 According to Denman, ‘Cockfield
soon became a convert to the European cause’, and a tactless one too in
that when the Prime Minister insisted that the Treaty of Rome did not make
provision for the harmonization of indirect taxes, Cockfield made a point
of reading out the contents of Article 99. Thus, ‘he had contradicted and
found wrong the Great She-Elephant’.245 Mrs Thatcher observed that this
‘natural technocrat of great ability’ proved to be ‘the prisoner as well as the
master of his subject. It was all too easy for him, therefore, to go native and
to move from deregulating the market to re-regulating it under the rubric
of harmonization’.246 Howe agreed that Cockfield’s ‘campaign for tax har-
monization’ had been ‘a tiresome nuisance’, and, when he failed to save
him, he successfully recommended Leon Brittan as his successor.247 From
Mrs Thatcher’s point of view, Brittan’s appointment proved to be another
mistake. For Brittan went ‘native’ too, pouring scorn on those ‘whose vision
(if vision it can be called) of Europe is that of little more than a glorified
free trade area’.248 That was what the limit of what most British Govern-
ments had wanted, and, according to Denman, though they were made
aware not least by their officials that ‘Europe’ involved closer political inte-
gration, the country’s political leaders from Macmillan onwards judged that
it was inadvisable ‘to put such issues to the people’. Denman thought that
such behaviour was timorous, ‘but that is the democratic system’.249 Others
would call it a denial of democracy, but the deliberately encouraged igno-
rance of the mass of the electorate was less remarkable than the numbers
in the political class who failed to see there was more to ‘Europe’ than the
Common Market, or who chose to believe that this was so, or needed to.
‘The Single Market – which Britain pioneered – was intended to give real sub-
stance to the Treaty of Rome and to revive its liberal, Free Trade, deregulatory
purpose’, Mrs Thatcher believed, adding: ‘I realized how important it was
to lay the groundwork in advance for this new stage in the Community’s
development.’250 Others, though, had beaten her to it, for by the time that
Delors became President he inherited the product of four years of specific
preparatory work completed in and around the Commission.251 Afterwards,
Mrs Thatcher came to believe that
in negotiating the Single European Act we in Britain made two understand-

able but undeniable mistakes. The first was to assume that the increased
powers given to the Commission would cease to be used to any great extent
once the Single Market programme had been completed. After all, if one
accepted that the whole purpose of the changes made was to establish a
properly functioning market, there was no reason to imagine that the pro-
cess would be anything other than finite. True, one could not hand back
vetoes that had been removed as part of the Single European Act, because
Governments might subvert the progress that had been made. But there
was no reason to think the Commission would need to keep legislating at
the same rate, let alone spread its legislative tentacles much wider.252
This was classic bureaucratic behaviour of the kind that Mrs Thatcher had
striven to combat at home, and she was stating the obvious when she
observed that French political culture was ‘dirigiste by tradition’.253 The ideas
of Colbert and of practice of the Prussian State were traditions in Western
Europe that continued to ensure that the intellectual export market for the
thinking of the heirs of the British Classical Economists or, if one prefers, the
Manchester School were not going to go unchallenged, and made it unsur-
prising that – in Mrs Thatcher’s words – ‘the provisions of the Single European
Act were abused to push corporatist and collectivist social legislation by the
back door’. Mrs Thatcher thought that
the second error, which was closely linked to the first, was then and later to
take at face value the assurances we were given. I do not now believe that
the European Commission or the majority of European Governments were
ever much interested in economics. They viewed, and still view, policy
as equivalent to politics, and politics as about power – and only power.

The Single Market thus appealed to these forces. . . as a device for central-
izing more decision-making in the hands of Europe. And the idea that
these extra powers should be limited to the purpose for which they were
actually being given probably never seriously occurred to them. The Euro-
pean Commission and the European Court of Justice worked together to
explore, exploit, and widen every loophole. And as they did so they could
rely on the support of most of the member countries and the European
Parliament which both shared the federalist dream,
and in this way ‘the drive for a “Social Europe”, so beloved of Jacques Delors. . .
soon adopted at least as much importance as the “Economic Europe” which
the Single Market sought to create’.254
‘I’ve always believed in the European ideal, but today it’s no longer a ques-
tion of idealism, it’s a matter of necessity’, Delors had stated in 1983, ‘Our
only choice is between a united Europe and decline’,255 later declaring that
‘I reject a Europe that would be just a market, a free trade zone without
a soul, without a conscience, without a political will and without a social
dimension.’256 The degree of close control of public policy envisaged was
suggestive at times of a unitary State rather than a federal one, and ambi-
tions ran to a common defence policy and a common foreign policy. At the
London European Council of December 1986, at which Mrs Thatcher was
congratulating herself on the ‘adoption of or agreement to a record number
of measures to implement the Single Market’, she also noted the emergence
of ‘Delors as a new kind of European Commission President – a major player
in the game. . . a tough, talented European federalist, whose philosophy jus-
tified centralism.’257 Ironically, Mrs Thatcher had played a part in ensuring
that Delors had become President at the expense of Claude Cheysson, whose
past record indicated that under his leadership the Commission would have
been characterized by not much more than high minded generalizations.258
With little modesty, Delors was to say that ‘I became the symbol of an idea of
Europe’,259 but his ambitions both for himself and for ‘Europe’ would have
counted for little had not – as Mrs Thatcher noted – ‘a Franco-German bloc
with its own agenda. . . re-emerged to set the direction of the Community’.
Though Britain ‘could. . . look to the veto, to legal safeguards, and to declared
exemptions’, Mrs Thatcher found that ‘in the future. . . these would increas-
ingly be circumvented where they were not overthrown entirely’.260 Though
the Single European Act involved giving up national vetoes in the relevant
areas of public policy, Howe thought that the Luxembourg Compromise was
still ‘untouched and unaffected’ by it, and he assured the House of Commons
that this was so, and as the Compromise was a convention and not a crea-
ture of law in principle that might still be the case and, Howe later thought,
possibly still in practice. Howe, though, recorded that ‘we found ourselves
facing on some social and environmental matters a more extensive use of
Community powers than we had regarded as foreseeable or legitimate’.261

Cradock observed that
the shift from unanimity raised the issue of how far Britain would be
prepared to accept majority voting on proposed extensions of Commu-
nity law in, for example, matters of immigration, health, or conditions
of employment. Having unlocked the gates in the areas where we wanted
progress, we could not be surprised if others with differing ideas of the
Community’s ultimate form sought to exploit the new freedom for their
own purposes. . . The main debit entry. . . lay in the inclusion in the Single
European Act of references to economic and monetary union.262
Mrs Thatcher maintained that the Treaty’s words on the EMU did not mean
anything, and that if they had she would not have agreed to them. Delors,
though, said that the relevant short chapter in the Treaty was ‘like Tom
Thumb lost in the forest, who left white stones so he could be found. I put
in white stones so we would find monetary union again.’263
So, as Cradock, close to the action, observed, ‘there was a fundamen-
tal clash between the Prime Minister’s Gaullist conception of a Europe des
patries, members of a single market but independent and sovereign, and the
more dynamic, integrationist, political vision of her European colleagues’,
and ‘this external clash was complicated by growing divisions between the
Prime Minister and her Ministerial colleagues. . . on tactics. . . and the nature
of the ultimate relationship between Britain and Europe’. Thus, though, since
1979, Britain had been committed to join the Exchange Rate Mechanism of
the European Monetary System ‘when the time was ripe’, for several years
Mrs Thatcher resisted pressure from Howe and Lawson as Chancellor to go
ahead, only relenting shortly before she left office, and still ruling out a single
currency.264 Meanwhile, in July 1988, Delors told the European Parliament
that ‘we are not going to manage to take all the decisions needed. . . unless
we see the beginnings of European Government in one form or another’,
and predicted that within ten years the Community would be the source of
‘80 per cent of our economic legislation and perhaps even our fiscal and social
legislation as well’. In September 1988, Delors addressed the TUC and called
for measures to be taken on collective bargaining at the European level.265
Fired up, Mrs Thatcher delivered a speech at the College of Europe in Bruges
on 20 September 1988 that she recorded provoked ‘stunned outrage’ and
horror on the part of ‘the Euro – enthusiasts who believed that principled
opposition to federalism had been ridiculed or browbeaten into silence’.266
The content of what became known as the Bruges Speech did not live up to
its subsequent reputation. ‘It is ironic that just when those countries, such
as the Soviet Union, which have tried to run everything from the centre, are
learning that success depends on dispersing power and decisions away from
the centre, some in the Community seem to want to move in the opposite
direction’, Mrs Thatcher observed, adding: ‘We have not successfully rolled
back the frontiers of the State in Britain only to see them reinforced at a
European level, with a European Super State exercising a new dominance
from Brussels. . . Let Europe be a family of nations, understanding each other
better. . . but relishing our national identity no less than our common Euro-
pean endeavour.’ Mrs Thatcher did say that ‘willing and active co-operation
between independent sovereign states is the best way to build a successful
European Community’ and that ‘it would be folly to try to fit them into some
sort of identikit European personality’, and she did emphasize the importance
of NATO and warned against Franco–German initiatives suggesting that the
Western European Union could serve as an alternative.267 As regards its over-
all content, the Speech was well-described by The Economist as ‘a thoughtful,
elegant essay’.268 Pious conformity with the ‘European’ ideal, though, was
by now a requirement of being ‘respectable’ in the political class. Howe was
appalled, concluding that ‘for Margaret the Bruges Speech represented, sub-
consciously at least, her escape from the collective responsibility of her days
in the Heath Cabinet – when European policy had arrived, as it were, with
the rations’, and, as the Prime Minister had now revealed an antipathy to
‘Europe’ that he seemed not to have detected before, his position as Foreign
Secretary had become ‘a little like being married to a clergyman who had
suddenly proclaimed his disbelief in God’.269 A belief in ‘Europe’ was not
comparable with a religious faith that could not be questioned. Nonethe-
less, for true believers in the project that seemed to be their position, with
Mrs Thatcher deemed to be obstructing the path to some kind of earthly
paradise. The Prime Minister’s behaviour in the House of Commons on 30
October 1990 proved to be the last straw for Howe. The offending sentences
that Mrs Thatcher uttered ran as follows:
The President of the Commission, Mr Delors said at a press conference the

other day that he wanted the European Parliament to be the democratic
body of the Community, he wanted the Commission to be the Executive
and he wanted the Council of Ministers to be the Senate. No. No. No.270
If, as so often, Mrs Thatcher had made trouble for herself by taking Delors
too seriously, given that the likelihood of his preferred institutional struc-
ture emerging in the near future was slender, what, less understandably, she
underestimated was the depth of ‘European’ feeling among the political class
at that time, and not much more than three weeks afterwards Mrs Thatcher
had been deposed as Prime Minister.
The enthusiasm for ‘Europe’ that gripped the British political nation
in the latter 1980s played its part in sweeping Mrs Thatcher aside, but,
once the political dimension of the Community had been belatedly grasped
by the wider public, in part as a result of her efforts, the lack of popular
enthusiasm was a perennial embarrassment to the believers. By the early
1990s, Hurd, at least, thought that ‘the Monnet doctrine had just about
run its course’,271 and, if so, in terms of the rhetoric resorted to and the
bureaucratic imperialism involved there was no need to mourn its passing.
Beneath the ideological veneer, the Community was no more than an inter-
national organization involving sovereign states. The most serious aspect of
the project, and not only at first, had been concerned with what to do about
Germany, a country who had caused three major wars within three-quarters
of a century. The European State system had to be made to work better, and
Germany had to be allowed back into it, though subject to safeguards and
within structures that constrained her. When the Soviet Empire collapsed,
Mitterrand seemed to think that its East German colony would survive as
an independent entity, and appeared at first to side with Mrs Thatcher in
opposing any possibility of German reunification.272 Cradock’s advice to the
Prime Minister was that ‘unification was going to happen whether we liked
it or not’, but she took no notice and was as eloquent in public in her oppo-
sition as Mitterrand was in private.273 Mrs Thatcher later conceded that ‘my
policy on German reunification’ was the ‘one instance in which a foreign
policy I pursued met with unambiguous failure’.274 Meanwhile, Mitterrand
changed tack and maintained that he was not against reunification, hav-
ing somehow convinced Chancellor Kohl of his consistent support, while
adding, inevitably, that it should take place within a European framework.275
Germany had always been too big for Europe, and that was what Mrs Thatcher
feared, but one difference this time was that West Germany had to absorb
an East German economy that had been subject to Communism for nearly
half a century and, thus, ruined. The collapse of the Soviet Union also raised
the prospect of further enlargement of the Community, which might well
alter its character and make it more difficult for France and Germany to con-
trol. Britain had joined the Community too late for it to be shaped to suit
its interests, and the most that membership merited was pragmatism about
access to a large market and one in which the City of London could continue
to flourish, and which was also an arena in which the English language could
continue on its conquering way. As for the role in the world that those like
Delors sought for ‘Europe’ in terms of a common defence and foreign policy,
the Community was best seen as an expression in the international system of
what Francois Duchene called civilian power as opposed to traditional mili-
tary and political power, which recalled idealist or progressive approaches
to international relations in the 1920s.276 What did not follow was that the
rest of the world would co-operate. So, as Mrs Thatcher left the scene, it was
not surprising that the Gulf War left ‘Europe’ in disarray. ‘Europe’ was ‘rather
ineffectual’, Delors admitted,277 though Alan Clark caught the reality better
when he described many of Britain’s allies as ‘heading for their cellars’.278
9
The Unfinished Revolution
Thatcher: the ‘Outsider’ in 10 Downing Street?
‘Mrs Margaret Thatcher is the first outsider to reach 10 Downing Street since
Bonar Law’, Jock Bruce-Gardyne was later to observe admiringly:
Several others – Ramsay MacDonald, Ted Heath, Jim Callaghan – may have
started from the wrong side of the tracks. But long before they reached
the pinnacle of the political system all of them had been welcomed to the
Club. Not so Mrs Thatcher. . . No matter how long she remains at Downing
Street, she will never be absorbed by the Establishment.1
It does seem true to say of twentieth-century British Prime Ministers, only the
exotic Lloyd George, the short-lived Bonar Law, and Mrs Thatcher did not
become creatures of the Establishment. By this was meant the established
institutions of the British State and the social arrangements that surround
them – the Monarchy and the various estates of the Realm, the Church of
England, the learned professions, Oxford and Cambridge, the Public Schools,
the Foreign Office, the Higher Civil Service generally, and, in former days,
The Times newspaper. What Bruce-Gardyne’s analysis neglected was that
there was another Establishment, the Establishment of ideas, what it would
be reasonable to call the ‘liberal’ Establishment. These ideas had penetrated
the social Establishment, and had seemed even to overwhelm a once serious
institution like the BBC. Indeed, ‘liberal’ thinking had come to dominate
many areas of public policy, perhaps most, and in 1979 such ideas were only
in retreat in the area of economic policy. Mrs Thatcher was neither a mem-
ber of the social Establishment nor of the Establishment of ideas, nor did she
aspire to be. From the perspective of both Establishments, Mrs Thatcher was
a worrying figure, at times, for some, one that induced terror, and the ‘liberal’
intelligentsia did not disguise their loathing of her. Much of this, of course,
was bound up with her lower-middle-class origins. Of this class prejudice,
Kingsley Amis observed shrewdly, ‘It’s a hate that dare not speak its name.’2
222
The Unfinished Revolution 223
That the High Tories, too, despised Mrs Thatcher mattered less than most
commentators expected because for many years and for the first time since
Neville Chamberlain, the Conservative rank and file both in Parliament and
at the constituency grassroots had a leader who instinctively reflected their
prejudices. Bruce-Gardyne recognized this,3 but failed to emphasize another
aspect of the Thatcher political style which marked her off from her immedi-
ate predecessors. This was her apparent willingness to appeal to the electorate
directly and in terms of what she believed to be mass opinion. That she proved
to be misguided in her assumptions about popular attitudes in some import-
ant areas of public policy neither deterred her nor did it provide consolation
for members of the political class. What alarmed them was that the appeal
was made at all.
The thesis that Mrs Thatcher was supposedly advocating a form of ‘authori-
tarian populism’ was advanced on the Left, but, even if one adds in homespun
versions of economics in the vein of ‘private enterprise knows best’, and
a talent for annoying foreign political leaders, apart from Americans, such
populist credentials as Mrs Thatcher had largely depended on her association
with the advocacy of capital punishment for murder. Social attitude surveys
consistently showed that two thirds of those sampled supported capital pun-
ishment and some polls gave a figure of well over 80 per cent. That being so,
the abolition of the death penalty in the 1960s, which had the support of
that supposed populist Enoch Powell, and the continuance of that policy in
the face of popular opinion was testimony to the ‘liberal’ character of con-
temporary British representative government. Mrs Thatcher was to complain
about the behaviour of the Tory-dominated 1983 Parliament in rejecting the
restoration of the death penalty for murder, but what had become House of
Commons opinion on ‘moral’ questions was well known by that time, and
the obvious way to restore capital punishment was to restort to direct democ-
racy. Yet, in 1978, Mrs Thatcher had allowed Whitelaw to block a referendum
on capital punishment becoming Tory Party policy, and no such referendum
was ever held. For all the talk of being tough on crime and criminals, Hurd as
Home Secretary found Mrs Thatcher to be ‘alarmed by the public expenditure
side and the cost of more prisons’. As for the politics of race, Mrs Thatcher’s
only important personal intervention was the well known ‘swamping’ remark
made in 1978. However distasteful to the ‘enemy’, one of whose number
mentioned it no less than three times in a biography, nothing much resulted
from Mrs Thatcher’s supposed populism in relation to matters of race and
immigration once she became Prime Minister. Those who portrayed Mrs
Thatcher as a right wing ogre did not normally refer to her record in the
1960s when she supported the reform of the law relating to abortion and also
greater freedom for homosexuals. For all the later criticism of Mrs Thatcher
supposedly pandering to the prejudices of the masses of southern England,
her alleged rapport with ‘Essex Man’ was not obvious when it came to the Poll
Tax, and absent entirely in relation to football, the ‘opium’ of the British male
masses. The Football Spectators Act of 1989 was designed to impose a national
identity scheme upon such spectators, and it was described as evidence of the
‘fearsome force’ of Mrs Thatcher’s prejudices. If so, they were scarcely popu-
list prejudices. Most football supporters were against the scheme, seeing it
as being directed against the law-abiding majority, and refusing to be fooled
by the Prime Minister’s pretence that soccer hooliganism was not a law and
order issue. The scheme was only abandoned after the Hillsborough Stadium
disaster of 15 April 1989, with Lord Taylor’s inquiry report giving its author-
ity to well-known, indeed obvious, criticisms. With the Labour Party in the
grip of ‘liberal’ elitism, for those who feared populism a form of ‘Tory democ-
racy’ with teeth had to be the imagined danger, but, but when one takes into
account the full range of her views and her behaviour over her career, Mrs
Thatcher was more obviously a Parliamentarian than a populist.4
Thatcherism, Conservatism, and the real revolution
To be conservative. . . is to prefer the familiar to the unknown, to prefer the

tried to the untried, fact to mystery, the actual to the possible, the limited
to the unbounded, the near to the distant, the sufficient to the superabun-
dant, the convenient to the perfect, present laughter to utopian bliss.
So, famously, wrote Oakeshott,5 adding that, of course, though, ‘changes. . .

have to be suffered’,6 since ‘innovation entails certain loss and possible
gain. . . the onus of proof, to show that the proposed change may be expected
to be on the whole beneficial, rests with the would-be innovator’. It followed
that ‘the man of conservative temperament. . . is not in love with what is dan-
gerous and difficult; he is unadventurous; he has no impulse to sail uncharted
seas. . . If he is forced to navigate the unknown, he sees virtue in heaving the
lead every inch of the way.’7 For all its intellectual elegance, Oakeshott’s essay
called ‘On Being A Conservative’ did not closely relate to the actual political
conduct of the Conservative Party, which was not often well-described as con-
servative, though, of course, those who believed Mrs Thatcher not really to be
a Conservative would derive some satisfaction from the contrast between her
image and that of the creature of caution described by Oakeshott. A percep-
tive interpretation of Mrs Thatcher’s political behaviour was that ‘the daring
and the caution proceed on parallel lines: the dialectic between them is never
resolved into a simple issue of ends and means’. It followed that
Mrs Thatcher is an extraordinary mixture of recklessness and caution.

When she is in her reckless mood, she is in effect a permanent revolu-
tionary, deeply dissatisfied with the Government’s record, and convinced
that, but for her unceasing vigilance, the whole country would instantly
slide into sloth and chaos. In this mood, she is almost Maoist in her sus-
picion of established institutions, seeing them as mere encrustations of
temporising and vested interest, and, above all, as obstacles to change,

change, change. At such moments, Permanent Secretaries, Governors of
the BBC – and her Ministerial colleagues – are perhaps fortunate that the
British system denies her the power to send them off to work in the fields.
Yet, ‘throughout her years at no. 10 she has always used her most senior
colleagues as a handbrake on her own impetuosity, without acknowledging
the fact to herself. Her cautious side leads her to give way to them – but she
reserves, and exercises, the right to blame them for her having done so.’8
After the Thatcher years, few would deny the importance of personal-
ity in British politics, and many believed that there was something called
Thatcherism. ‘The essential features of Thatcherism are that it is a form of
practical politics devoted to achieving certain concrete results in Britain at
the end of the twentieth century’, Shirley Letwin wrote, ‘Its aim has been
to emphasize and promote the vigorous virtues in individuals, promote the
family as the organization in which those virtues in individuals are transmit-
ted and nurtured, and make Britain a flourishing island power through the
liberation of the vigorous virtues. And, unlike other modern political enter-
prises, it never expected positive action fully to achieve its aims.’9 On the
other hand, the Conservative philosopher, T.E. Utley, maintained that
there is no such thing as Thatcherism. The illusion that [it exists was]
in part a deliberate creation of Mrs Thatcher’s enemies. They have pro-
ceeded on the age old maxim that there is nothing. . . more likely to injure
the reputation of a British politician than the suggestion that he has an
inflexible devotion to principle. . . The illusion is in part also the creation
of a coterie of admiring friends by whom Mrs Thatcher has been sur-
rounded. Some of them, for cultural and sometimes ethnic reasons, have
little sympathy with the English political tradition, which they regard as a
fraud perpetrated on the people by an oppressive and incompetent polit-
ical Establishment. The illusion, however, could never have achieved its
present proportions without some assistance from its victim. Mrs Thatcher
is not by temperament averse to the Messianic role.
As for that element in Thatcherism which related to Britain’s place in the

world, Utley thought that ‘[Mrs Thatcher] belongs to that militant Whig
branch of English Conservatism which took over when Churchill became
Prime Minister in 1940’, and ‘in terms of theory. . . she has contributed
nothing new’. Utley also remarked that it was not Mrs Thatcher who had
‘discovered’ Hayek but Churchill in 1945 and this meant that ‘the advocacy
of a free and competitive economy’, which was the supposed ‘chief plank’
of Thatcherism, was better described as a ‘permanent ingredient in modern
Conservative philosophy’. Utley thought that the distinction between ‘the
politics of conviction’ and ‘the politics of consensus’ was ‘a silly dichotomy
invented by inferior journalists’, and, though he conceded that Mrs Thatcher

liked to see herself as an exponent of the former, he believed that ‘it is harder
to imagine anything farther from the truth’ than the implication that she
was ‘starting from scratch’ and was ‘in no sense a product of history’.10 It
was one thing to utter slogans or to express general sentiments and another
to take action however of necessity incomplete, and Utley seemed to have
forgotten that in 1949 he had written that
the present or some future Socialist Government may fail, but the social-
ist economic system which it has created will remain, and the public will
demand not a Government of Liberal revolutionaries to restore the eco-
nomic system of the nineteenth century, but a competent technocracy to
apply the ultra revolutionary and coercive measures necessary to rescue a
socialist economy from disaster.11
In 1970, the rescue of what it would be more accurate to describe as a semi-

socialist economy in the technocratic manner described had been at the heart
of the Heath experiment. Heath seemed to regard the Conservative Party as an
instrument for what passed for his ideas on public policy, which, aside from
political convenience, Lord Boyle, who worked closely with him on policy
preparation, was convinced were not those of economic liberalism; and in
relation to public administration Heath’s thinking was little different from
that of the Fabians in believing in its ability to work wonders. After the dismal
failure of the Heath experiment, all Heath and his followers had was ‘Europe’
to which, not surprisingly, along with other believers, they clung with a
fanatic zeal, though Mrs Thatcher proved unable to comprehend the depth
of their commitment to a politically integrated Community. Otherwise, those
dubious about Thatcherism and its intellectual content could do worse than
suggest that Mrs Thatcher’s political behaviour was often informed by doing
the opposite of what Heath did as Prime Minister from 1972 onwards.
Since Thatcherism was a noumenon in the Kantian sense, it existed at least
in political debate,12 and in the terms in which that debate was conducted
it tended to be seen as economic liberalism plus some populist sentiments.
As has been shown, the populism amounted to little, and her ally John Nott
considered that ‘Margaret Thatcher never believed in liberal economics – it
is a complete misreading of her beliefs to depict her as a nineteenth century
Liberal. Cecil Parkinson and I used to argue Free Trade with her, but emo-
tionally she was authoritarian and a Protectionist.’13 English Conservatism,
though, embraced Tory Paternalism or Statism on the one hand, and eco-
nomic liberalism on the other, and which side of the Conservative tradition
was in the ascendant at a particular time depended on the political situation
and how it was interpreted by the contemporary leading figures in the Tory
Party. Tory Paternalism was mainly concerned with State social provision, but
those who contrasted the One Nation approach with that of Mrs Thatcher
tended to forget that Disraeli was an economic liberal, and one historian of
the Tory Party by no means of the Right argued that the real divagation from
Conservative tradition occurred in the two decades after 1945,14 meaning
when the Party embraced the Keynesian Welfare State. Hoskyns learnt with
horror that Macmillan had written to Butler at the time of the Industrial
Charter that ‘there does not seem to be much harm’ in this form of ‘milk
and water socialism’,15 but electoral considerations not only dictated that
approach but also restricted what the coalitions of opinion to be found in
the One Nation Group and the Bow Group could propose, and with the
exception of Howe on the Welfare State the most that was risked most of
the time was ‘milk and water economic liberalism’. The economic liberal
order had been sufficiently durable for it to take the effects of two total wars
in a generation to replace it with Keynesian collectivism, but Protection in
the form of Empire Free Trade was in the Chamberlain tradition within the
Conservative Party as well as in the thinking of Baldwin, and the National
Governments of the 1930s not only introduced the Import Duties Act but
also other forms of State intervention. The National Governments had con-
tinued to practise economic liberalism when it came to public finance, but
that orthodoxy was supplanted by Keynesianism during the Second World
War. With the Keynesian dispensation palpably malfunctioning by the 1960s,
it was its defenders who were the conservatives in wishing to shore it up,
which meant that, when Heath and technocracy had failed to turn things
around, as Patten was belatedly later to recognize, there was not much left
of the case for continuity and consensus by 1979.16 Nonetheless, though all
consensus meant was agreement, and that had gone, almost all mainstream
politicians and commentators still believed that, despite its association with
relative national decline, respecting the Keynesian order was imperative for
electoral survival. There could be no going ‘back to 1914’. That had been
tried in the inter-war years, and the result was failure. There could be no
going back to the unemployment of the 1930s. The present-day electorate
would not stand for it. So, really, the argument ran, modern and mainstream
British politics began in 1945, which meant that the overwhelming major-
ity of voters not only knew nothing else but the Keynesian order and its
assumptions, meaning that they would have little sustained tolerance for an
economic liberal alternative programme. Further, there were only too many
people with a vested interest in the existing arrangements persisting unmol-
ested, not least in the public-sector electoral constituency that recent Labour
Governments had cultivated, and in any case trade-union power remained
there to frustrate any Government trying to establish the conditions for a
more competitive economy to flourish. So, what was being predicated by
those who subscribed to the conventional wisdom was that both the elect-
oral arithmetic and the balance of political power favoured the status quo or
at least the retention of as much of the post-1945 dispensation as could be
salvaged even if this meant continued decline in as much comfort as could
be obtained by economic management. So, it was confidently predicted that

within two years the Thatcher Government would be forced to undertake an
overt U-turn in economic policy.
Since few people go out of intellectual business as a result of underesti-
mating human nature, at first sight, the mainstream commentators and the
politicians who shared their outlook seemed to be on safe ground in being
pessimistic about the prospects for the Thatcher project, and not least about
its electoral appeal. Using the titles of two of J.S. Mill’s major works, one
would recognize that electorates had come to use the political benefits that
came to them from Representative Government to offset the workings of The
Principles of Political Economy. If economic liberalism was now to be brought
in from the cold, what was bound to survive the Thatcher era largely intact
would be the apparatus of State social provision derived originally from the
Bismarckian example. This was because, though they had rarely heard of Mill
and the Classical Economists or, for that matter, Hayek or Friedman, it did not
take much imagination on the part of electors to recognize what most intel-
lectuals had failed to do, which was that the market was the real revolution.
Once the market was let loose, nothing and nobody was safe. The weakest
went to the wall, and the strong prevailed, until, of course, others supplanted
them. As might be expected, and as Adam Smith had spelt out, the natural
inclination of the producers was to limit competition between themselves so
as to rig the market in their favour. By the time of the Thatcher era, the best
description of the most common of the market forms in the private sector
was that of monopolistic competition.17 However, to most of the electorate,
imperfect competition may well have seemed preferable to none at all as the
case with the public sector. This was, of course, when that electorate was
wearing its other face, that of consumerism. The Keynesian dispensation still
had its attractions and obvious ones for those employed in the public sec-
tor, but the Safe New World of the 1940s in which it had been originally
constructed had a different character from the British society that had later
emerged with wider home-ownership and the perennial quest for a higher
standard of living. Once consumerism was unleashed, the popular appetite
for it never did seem to abate, and with the ‘haves’ coming to outnumber the
‘have-nots’ the Thatcher Governments always had a prospective majority to
aim for, even though it was a formidable task for those Governments to keep
the affluent majority even mildly content with their lot, given the level of
their greed, their self indulgent view of what constituted hardship, and the
belief of many that increased wealth should simply arrive as in the form of
appreciating house prices. Those mainstream politicians and commentators
who thought that the high level of unemployment would bring down the
Thatcher Governments misread the nature of the contemporary electorate
because they were not pessimistic enough about its character.
‘What I am determined to do is to get the position turned’, Mrs Thatcher
declared in 1979, ‘That after all is why, I believe, we were elected at the
General Election.’18 The motives of those who had voted Conservative then
were many and various, and their numbers only constituted a plurality of
those concerned enough to turn up at the polling booths, with the others
seemingly given over to fatalism or to a belief in an easy way out or still
more appeasement of sectional interests and pursuing ‘reasonable’ policies,
and there were also those who still believed in socialism and those in the
trade-union movement who thought that they had the power to impose it.
Since few electors had any illusions about what ‘the Russian experiment’ had
led to, there were more votes for ‘the Thatcher experiment’ than for any-
thing that could be seriously described as socialism, and to Lenin’s famous
question What Is To Be Done? Mrs Thatcher and the economic liberals had
a set of answers that represented a programme of a kind and one that had
not failed recently, which was more than their democratically inclined rivals
could say. So, Mrs Thatcher could declare that There Is No Alternative, since
the Keynesian dispensation had led to a situation in which, as Patten later
recalled, there were even those of a ‘liberal’ outlook who feared that Britain in
1979 was facing the prospect not just of continued relative economic decline
but absolute decline,19 thus becoming the first developed country to become
an underdeveloped country. It may well be that only in such a desperate
situation that somebody like Mrs Thatcher could become Prime Minister
and not yet another version of Baldwin. What did not follow was that her
Governments would be successful, not least because, especially at first, and
together with those consumed by ambition, there were Conservatives in and
around those Governments who seemed ready for them to fail rather than
sacrifice a certain political and, above all, social style. At the heart of the
Thatcher project was the belief that if the conditions were made right, then
an entrepreneurial class would emerge to lead the way in bringing about a
British economic renaissance, although this did not mean that it would be
solely British in composition, and American business culture seemed to be
the ideal pursued. Mrs Thatcher soon found that
not every [British] capitalist had my confidence in capitalism. I remember

a meeting in Opposition with City experts who were clearly taken aback
at my desire to free their market. “Steady on!” I was told. Clearly, a world
without exchange controls in which markets rather than Governments
determined the movement of capital left them distinctly uneasy. They
might have to take risks.20
As the title of the best book about the effects of the Big Bang would sug-
gest, The Death of Gentlemanly Capitalism was the fate that awaited the City
of London when the Americans were allowed in with their working break-
fasts, their working lunches and their working dinners, consigning to history
the world in which weekends began on Thursday, and rendering irrelevant
the bitter divisions between the social elite and the rest that had previously
characterized the City.21 The Death of Gentlemanly Capitalism was the likely
fate of the rest of the private sector, too, once market philosophy was let
loose in the wider economy, and if those conscious of social distinctions
would protest that the supposed captains of industry and commerce were
not often well-described as gentlemen anyway despite only too often striv-
ing to appear to be, in terms of international competition the record showed
only too often that they were not fitted to be serious players. So, there was
a need for the import of foreign talent. In addition, the radical opening
up of markets was bound to also lead to a growth in foreign ownership of
British assets, and the eventual scale of this suggested that insufficient notice
had been taken of Adam Smith’s maxim that ‘defence. . . is more important
than opulence’.22 From the outset, the intentions behind the Government’s
overall strategy were clear. As Howe said in his first Budget Speech in 1979,
the Government would conduct itself on the basis that ‘finance must deter-
mine expenditure, not expenditure finance’,23 Of course, it was one thing
to announce the return of ‘sound finance’ and the Balanced Budget, ideally
balanced at the lowest attainable levels of public expenditure and taxation,
and another to practise it, not least because of the scale of the inherited com-
mitments and expectations, but at least the signal had gone out that the
days of the State promising to be the Universal Provider were over. Further,
in the hope of killing two birds with one stone, the public sector electoral
constituency was attacked, with the hiding places in the Civil Service and
the universities either closed off or made more uncomfortable to inhabit,
and previously safe havens in local government were denied peace and quiet
too. As for the nationalized industries, whereas previous Governments had
tinkered with reorganizing them and with unsuccessfully encouraging the
public corporations to imitate private sector practice in their operations, the
Thatcher Governments were to go the whole hog and privatize them. Since
the nationalized industries were the citadels of the trade unions, sooner rather
than later the Thatcher Government would have to defeat the wider Labour
Movement, and in the savage Coal Strike of 1984–85, the previously feared
NUM was broken. After that union was defeated at Orgreave, one of its offi-
cials stated that ‘1972 and Saltley was an age away. It was a Government of a
completely different order from [that of] Heath.’24 It was, indeed.
What did not follow was that Mrs Thatcher and her allies in the Conser-
vative Governments of 1979–90 were engaged in economic liberal crusades
bereft of political calculation or ‘statecraft’.25 In the first two years, the
Thatcher Government seemed more Monetarist than Friedman, who believed
that ‘controlling the money supply is not a mechanism for controlling the
economy. It is a means of providing a stable monetary framework for an
economy, including the control of inflation.’26 Ever since the Gold Standard
had been finally abandoned in 1931, British Governments had seemed
to look for some form of rule that had to be respected or, so the pub-
lic could be told, calamity would result. The sterling exchange rate had
served this purpose under the Bretton Woods system. Lawson designed the
Medium-Term Financial strategy (MTFS) as ‘a self-imposed constraint on eco-
nomic policy making, just as. . . the ERM came to be for most European
Community countries in the 1980s’.27 In this way it was supposed to be
spelt out that the Government was sticking to its guns, and nobly resist-
ing temptation. Those who had predicted that a U-turn would be necessary
after about two years of economic liberal medicine being applied because
political necessity and realism would dictate this looked well-placed by the
spring of 1981, not least given the level of unemployment. What was being
predicted was that an overt U-turn in economic policy was a political impera-
tive for the Government to survive and for the economy to revive, and a
generation or so of economists harmed their reputations by getting it wrong,
along with most politicians, including many Tories. Such was the spell of
Mrs Thatcher’s rhetoric and the solemnity of Howe’s pronouncements that
economic policy was modified, but the Government could present itself as
not having deviated in any way, and since the liberal economy commonly
turns up eventually anyway the Government would get the credit for this
and for supposedly displaying consistency all along. Mrs Thatcher and her
allies in her Governments did conduct economic liberal crusades, as many
in the public sector had cause to know, but in many areas of public policy
the rhetoric did not match the pragmatism displayed. Thus, in 1986, the
Prime Minister was denounced by The Economist as ‘the Tin Lady’ for her
Government’s behaviour in financially supporting Rio Tinto Zinc’s mining
operations in Cornwall in the face of familiar Liberal agitation favouring sub-
sidies. ‘Economically, it is nonsense’, the journal declared, ‘The sooner the
uneconomic Cornish tin mines follow uneconomic coal mines into closure,
the better for. . . the British taxpayer and the British economy.’28 Then again,
Peter Walker recalled:
Under any sort of free market force doctrine British Leyland would have
been allowed to disappear, and would have gone to the wall very quickly.
But [Mrs Thatcher] and the Cabinet were in total agreement that the disas-
trous effect of that on the economics of the Midlands, on unemployment,
on the balance of trade, was such that you had to go and pour vast sums of
public expenditure in to see that it is rescued and saved. And so I think the
purist doctrines that you can enjoy when you’re in Opposition, when you
don’t have the responsibilities of government, look different when you
have to take the practical decisions. I think perhaps one of the problems
is that the rhetoric is often different from the performance. And I’m glad
to say that quite often the performance is better than the rhetoric.’29
The Prime Minister’s former adviser, Ferdinand Mount recognized that
looking back the punctilious historian may be somewhat puzzled. He will

find Mrs Thatcher unremittingly abused by all Opposition MPs and many
of her own party for hostility to ‘the infrastructure’. Yet he will note that it
was while she was Prime Minister that the London orbital motorway was
completed, the East Coast line to Scotland electrified, Stansted chosen as
London’s third airport, the London and Mersey docklands rebuilt, includ-
ing the first new surface railway for years, and now the Channel Tunnel
begun.
As for the motivation in the case of the Channel Tunnel, Mount was clear: ‘If
unemployment stood at 1.9 million and falling, instead of three million plus
and more or less flat, would the Government really be considering a Tunnel
at all?’30 Before the end of 1986, Mount had more to concern himself about
when it came to containing the growth of public expenditure, and, though
Lawson as Chancellor had dismissed critics of his conduct of economic policy
as ‘teenage scribblers’, in the absence of Lawson and the Government sticking
to a broad money target, the Monetarist economist, Tim Congdon, got it
right when he predicted that ‘the Lawson boom’ would end with inflation
in double figures and a recession. By 1988, Congdon believed that in the
previous three years Lawson had ‘effectively destroyed all that he stood for,
in the structure of policy, in the previous five’.31
That the behaviour of the Thatcher Governments failed to match their
image or meet the tests of economic liberalism as a form of theology did not
mean that they lacked ‘la puissance d’une idée en marche’.32 Since 1945, only
the Attlee Government and then only down to 1948 had about it that sense
of strategy and purpose that Mrs Thatcher and the economic liberal allies
in her Governments possessed. Whether friend or foe, few could plead that
they did not know in which political direction Mrs Thatcher wanted pub-
lic policy to go, and across its range. In the conduct of such policy, Attlee
and his Ministers were in important respects following on from the Coali-
tion Government’s plans and thinking in completing the construction of
the Keynesian order. Running that order with varying degrees of efficiency
was the main domestic political business of the Governments that followed
1948, and if that of Heath had more ambition than most its sad reward was
failure on the grand scale. The way was not then opened for a fresh start,
because in the conduct of public policy there is rarely a clean sheet to work
with. The way was opened up for an economic liberal counter-revolution.
Not surprisingly, though they were effectively required by the IMF to make
a beginning with this task, the Labour Governments of the 1970s had little
enthusiasm for this, and Patten captured the then High Tory attitude when he
recalled:
I always thought it was both impossible and wrong to change what had
been conceived of as the middle ground intellectually and politically in
our political argument. If you look at the way we’ve managed the economy
previously – demand management, incomes policy and so on, I’d always
thought that you couldn’t shift polite opinion on those sort of issues. Well,
[Mrs Thatcher] shifted it.33
In fact, Mrs Thatcher as Prime Minister never won over ‘polite opinion’ on
any subject at all, and seemed to delight in trampling all over their beliefs.
In the case of the High Tories, by 1979 the policies that they favoured had
been already tried and had failed, which largely left them with no more than
presentational arguments about public policy, and the belief that the imple-
mentation of anything resembling a Radical Right programme was electoral
death, which belief seemed to survive a succession of victories. That such a
New Right programme was only imperfectly translated into public policy nat-
urally disappointed the ideologues and even tempted one study to conclude
that, as a result, ‘the Thatcherite revolution [was] more a product of rhetoric
than of the reality of policy impact’.34 That revolution was bound to be pri-
marily directed at the Keynesian inheritance rather than that of Beveridge,
not least because, though the many forms of State social provision involved
massive public expenditure and, thus, in principle, represented an inviting
target for being cut back, the Thatcher Governments could have no illusions
about the electoral popularity of the Welfare State. So, in practice, there were
few Radical Right inroads into that area, with such cuts as were made in
the relevant areas of public spending tending to be in its rate of growth.
The overriding task of the Thatcher Governments was to try to halt the
relative economic decline of the British economy that dated back to Vic-
torian times. There were many and various explanations of that decline,
some sophisticated and even convincing in terms of culture and the par-
ticular nature of the British social class system. Few doubted that ‘America’s
business was business’, but nobody would say the same of twentieth-century
Britain and though it might be melodramatic to describe what Mrs Thatcher
set out to do in terms of a kulturkampf, she did succeed in enhancing the
status of business as an activity in British life, with it becoming the first
destination for many of the most talented people, which had not been the
case for many decades. In the short run, the harsh reality remained that
British private enterprise was flattered by being so described, and contin-
ued to look vulnerable in the face of foreign competition. The record of the
Thatcher Governments in the sphere of economic policy naturally attracted
fierce debate among economists,35 but when The Economist asked in 1990
‘Whatever became of the Thatcher Miracle?’36 one obvious reply was that the
balance of evidence suggested that there had not been a British economic mir-
acle in the 1980s anyway. The most that could be said by a relatively friendly
economist was that in the aftermath of the Conservative Governments long-
term prospects for economic growth were better than had seemed possible in
1979, and that, combined with a slowdown in competitor countries, made
possible the reversal of Britain’s relative economic decline. The economist
who wrote this added that
while most of the Governments’ macro-economic gambles failed

miserably, micro-economic radicalism paid off handsomely through
privatisation, improved industrial relations, and de-coupling the UK from
the European tendency to excessive government budgets. Nevertheless,
opportunities to push through this agenda more fully were badly missed,
notably in the areas of welfare and tax reforms, and the Conservatives’
short-termism was frequently only too apparent.37
The same observer recognized that ‘as always, radicalism was tempered by the
need to get elected’, and thought that ‘short-term macro-economic manage-
ment remained problematic throughout’.38 No doubt, ideally, the Thatcher
Governments could and should have done better in their overall manage-
ment of the economy, and one could see that they offended against economic
liberal mores in many ways, not least in relation to inflation and the control
of public expenditure and lessening the tax burden. Ironically, the suppos-
edly unreasoning ideological commitment of Mrs Thatcher and her allies was
a charge commonly levelled at them by critics who were only too often advo-
cates of economic policies that had failed before, and these critics were by no
means confined to the ranks of their political opponents. In addition to run-
ning this gauntlet, a host of vested interests had to be contended with, most
obviously involving confrontation with the wider Labour Movement. Yet for
all the compromises and sins of omission and outright failures that charac-
terize all governments, the governments of Margaret Thatcher freed up the
capital markets, making a dramatic beginning by abolishing exchange con-
trols, and by breaking the negative power of the trade unions they freed up
the labour markets too, and, while this did not lead to a British economic
miracle, what was brought about was a British economic renaissance.
Few believed that such a renaissance would have taken place if Margaret
Thatcher had not become Prime Minister. Together with, most would say,
Attlee, she was a peacetime Prime Minister that ranked among the outstand-
ing political figures of British twentieth-century politics, with the other such
figures being Churchill, Lloyd George and, above all, Bevin. ‘She pulled
Britain up by its bootstraps, demonstrating that a determined individual can
make an enormous difference in a country’s attitudes’, the adoring Wyatt
observed,39 who said of Mrs Thatcher that ‘she is a revolutionary or she is
nothing’,40 which was, of course, the ‘she’s a Manchester Liberal’41 argument
once more. In what Wyatt called ‘her transformation from being an ordinary,
conventional Conservative into having her mission to save the country’42
there was only the economic liberal direction to go. Mrs Thatcher believed
that the ‘practical economics’ practised by her father in his Grantham gro-
cery store meant that ‘I had been equipped at an early age with the ideal
mental outlook and tools of analysis for reconstructing an economy ravaged
by State socialism’,43 but she never stopped learning and few could match
Mrs Thatcher’s talent for recruiting intellectuals to her side and using their
ideas. While, like all ideologies, economic liberalism had the advantage that
the true believer always has an answer, Mrs Thatcher was usually a shrewd
enough politician to identify the wrong answer. As was so often the case
with British politicians, her Achilles heel was social class. ‘Oh those poor
shopkeepers’ was her natural reaction to the Toxteth riots in 1981,44 and she
really did believe that her class was the most admirable in English society.
The Poll Tax was many things, but for Mrs Thatcher it was the fulfilment of a
lower-middle-class fantasy that the irresponsible could be made to pay their
share of local government expenditure and so ease the burden from those
currently keeping the show on the road. Amis had the social elitism of the
Tory Party in mind when he said that ‘it was pure snobbery which did her
down’, but if ‘they thought her so common’45 they were wrong in the sense
that plainly she was not ‘common’ enough, which was one reason why her
‘populism’ had so little substance. As for ‘Europe’, which also played its part
in bringing her down, Mrs Thatcher was an author of her own misfortunes.
Though she was a member of a British political class, that with few excep-
tions, was well-described as being determinedly ignorant of ‘Europe’, there
was no excuse for not taking the Community’s ambitions about closer polit-
ical integration more seriously, even if the workings of what passed for British
democracy meant that for fear of losing votes its political leaders tended to
judge it advisable to play this down. Nevertheless, for the true believer it was
no secret, as one official wrote, that the future of British politics was to be ‘the
local government of a State within a major one’,46 or, as he said privately,
‘Westminster’s going to be a parish council.’47 Mrs Thatcher could not be
expected to be aware of such private thoughts, but the nature of the Monnet
Dream and the ambitions of those who subscribed to it and of the Brussels
bureaucracy were surely obvious. Yet, Mrs Thatcher allowed herself to be out-
witted by Delors over the Single European Act, and then campaigned against
what she had done, as if somebody else was responsible for the mistake made.
The tidal wave of opinion in favour of ‘Europe’ that swept the British polit-
ical class from the latter 1980s onwards only to abate with the ERM debacle
of 1992 engulfed Mrs Thatcher. She must have hoped in the name of robust
patriotism to appeal over the heads of the political class to the voters, but
the grievances that had been accumulating elsewhere over the field of public
policy since 1979 proved too much at least for the Conservative Party, along
with the Poll Tax. Mrs Thatcher’s luck ran out at long last, and, though there
was much more to her past successes than luck, there was no doubt that she
had been fortunate in both her rivals and her formal opponents. She had
been lucky in 1975 when Heath had effectively robbed his allies of the suc-
cession and handed it to her. She had been lucky when those who led the
way with the Winter of Discontent kicked the corpse of the Keynesian order
to pieces. She was lucky that her Governments had the proceeds of North Sea
oil to sustain them, and that she survived the Brighton bomb. She was for-
tunate too that Callaghan effectively handed the Labour leadership to Foot
rather than to Healey, and that she was faced with a divided Opposition, and
that Kinnock eventually became the Leader of the Opposition. She had been
lucky too at the time of the Falklands War that the Galtieri Junta attacked
when it did and did not wait until Nott’s defence cuts had done their work,
and lucky also when the Junta turned down the Peruvian peace proposals
designed to save their face and to frustrate British ambitions. She was lucky
that the Anglophile Weinberger was the American Secretary of Defence at
the time of the Falklands War, and that Reagan was the American President
then and felt he needed her as a crucial ally in waging and winning the Cold
War, and her relationship with Reagan was obviously an important factor in
explaining the success that marked most of her interventions in international
politics, though it was not the only explanation. When it came to the cru-
cial domestic challenge facing her Governments, that from organized labour,
she was lucky to have Scargill as her opponent in the Coal Strike, effectively
offering up the NUM for destruction. Further, as Ridley observed,
the timing has to be right. . . Margaret Thatcher would never have suc-
ceeded in the 1950s or 1960s. . . we had to get to the degradation of the
1970s. . . the nation was oppressed by many dragons in 1979, and Margaret
Thatcher came forth to slay them. After she had slain them, the nation
no longer had need of her.48
For Mrs Thatcher, though, the revolution was always incomplete. She had
inherited a political crisis in which the Establishment view, as a Head of the
Civil Service had expressed it well, was that the best that could be hoped for
Britain was ‘the orderly management of decline’,49 and aware of Sir William
Armstrong’s remark,50 Mrs Thatcher was clear that she ‘preferred disorderly
resistance to decline rather than comfortable accommodation to it’,51 and
the Civil Service was to be a continuing target for radical change and local
government was to become composed of enabling authorities, and there was
scope for further privatization of nationalized industries, aside from the rail-
ways, apparently deemed to be beyond rescue. Mrs Thatcher’s chosen image
of economic liberal crusader did not always cohere with her behaviour or that
of her Governments or the facts, but it was plain to all that her overriding
‘flagship’ ambition was to bring about a British economic renaissance. For
Mrs Thatcher to accord comparable status to the Poll Tax only played into
the hands of those who believed her to be imprisoned by lower-middle-class
prejudices, those of ‘our people’, and even natural allies had cause to question
why a Conservative Government of this kind was levying a new tax when its
strategy was supposed to be to lessen the tax burden. By 1990, as one of Mrs
Thatcher’s advisers observed,
the new dragons [were] perceived to be of the Government’s own

making. . . the Community Charge, the trade gap, interest rates, the
mortgage rate, Tory splits, Europe. The result of this [was] that people
no longer knew what they needed Mrs T for.52
In the aftermath of Mrs Thatcher’s fall, Ridley wrote, ‘normal, humdrum

government has been resumed’,53 and remembering T.S. Eliot’s maxim that
‘human kind cannot bear very much reality’, no doubt many were relieved
to see Mrs Thatcher leave Downing Street, with her revolution incomplete.
The quest for a quiet life, though, was bound to end in disappointment,
because the market had been unleashed, and so its form of permanent rev-
olution would persist. It was not, of course, the revolution that many had
wanted, especially most intellectuals. What the Thatcher Governments had
done offended against the Idea of Progress. Trotsky had got it wrong. If any-
body was destined for ‘the dustbin of history’ it was the Left. ‘All political
lives, unless they are cut off in midstream at a happy juncture, end in failure,
because that is the nature of politics and of human affairs’, Powell wrote in a
study of Joseph Chamberlain,54 but this was not true of Margaret Thatcher.
She had much in common with ‘Radical Joe’ and with Powell too, and she
believed that she had been ‘cut off in midstream’ when forced from office,
but there would be few, especially among the defeated, who would fail to
recognize that Mrs Thatcher was a formidable Prime Minister, and if many
believed Britain to be ‘ungovernable’ in the 1970s there was no cause to think
this by 1990. ‘The Conservative Party have never put the clock back a single
second’, Evelyn Waugh famously complained,55 but Margaret Thatcher did
much more than that when seeking to shape the future of the British polit-
ical economy in accord with her own perception of Progress, an ambition
she pursued with panache and with considerable success.
Notes and References
1 What Kind of Revolution?

1. The Economist, 18.12.1976, p. 9.
2. III[B] Fry, 1979, p. 233.
3. I[D] Hollis, 1957, p. 313.
4. The Economist, 2.10.1976, p. 12.
5. III[B] Dell, 1991, p. 287.
6. I[C] Benn, 1990, p. 37.
7. I[C] Benn, 1990, p. 121.
8. I[D] Fry, 2005, pp. 199–201.
9. III[B] Dell, 1991, p. 287.
10. I[D] Fry, 2001, pp. 4–47.
11. I[C] Benn, 1990, p. 667.
12. I[D] Mackenzie and Mackenzie, IV, 1985, p. 79.
13. III[B] Symons, 1957, p. 17.
14. I[D] Feiling, 1946, pp. 79–80.
15. I[D] Blake, 1955, pp. 411–13.
16. I[D] Morgan, 1974, p. 139.
17. III[B] Symons, 1957, p. 5.
18. I[B] H.C. Deb., 1.7.1926, col. 1379.
19. I[D] Williamson, 1999, pp. 167–202; III[B] McDonald and Gospel, 1973, pp.
807–29.
20. I[D] Catterrall, 2004, p. 91.
21. I[D] St John-Stevas, V, 1974, p. 222.
22. I[D] Williamson, 1999, p. 322.
23. I[D] Laski, 1938, pp. 105–06.
24. I[D] Laski, 1938, p. 84.
25. I[D] Kramnick and Sheerman, 1993, p. 336.
26. III[B] Scargill, 1975, p. 19.
27. III[B] Scargill, 1975, p. 10.
28. III[B] Scargill, 1975, p. 19.
29. III[B] Scargill, 1975, pp. 23–24.
30. III[B] Scargill, 1975, pp. 30–31.
31. III[B] Scargill, 1975, p. 26.
32. III[B] Scargill, 1975, p. 23.
33. III[B] Scargill, 1975, p. 33.
34. I[D] Williams, 1983, pp. 26–55.
35. I[D] Minkin, 1978, p. 330.
36. I[B] LPACR 1970, p. 121.
37. I[C] Wilson, 1979, p. 43.
38. I[C] Barnett, 1982, p. 51.
39. I[C] Barnett, 1982, p. 49.
40. I[C] Barnett, 1982, p. 134.
41. I[B] LPACR 1973, p. 11.
42. I[D] Shaw, 1988, pp. 172–77.
238
43. I[D] Minkin, 1978, pp. 329, 403.

44. III[B] Scargill, 1975, p. 30.
45. I[C] Crosland, 1983, p. 210.
46. I[C] Crosland, 1983, p. 204.
47. I[C] Crosland, 1983, pp. 242–43.
48. I[C] Crosland, 1983, p. 210.
49. I[D] Fry, 2005, pp. 207–08.
50. I[C] Benn, 1988, p. 292.
51. I[C] Benn, 1988, p. 284.
52. I[C] Benn, 1990, p. 11.
53. I[C] Benn, 1990, pp. 36–37.
54. I[C] Benn, 1990, p. 33.
55. III[B] Wickham-Jones, 1996, p. 91.
56. I[C] Benn, 1990, p. 302.
57. I[C] Benn, 1990, p. 680.
58. I[C] Crosland, 1983, p. 216.
59. I[D] Jenkins, 1987, p. 72.
60. I[D] Jenkins, 1987, p. 58.
61. I[C] Maudling, 1978, pp. 45–46.
62. I[D] Howard, 1987, pp. 176–77.
63. I[D] Cowling, 1971, p. 2.
64. I[D] Fry, 2005, pp. 211–29.
65. I[D] Fisher, 1977, p. 147.
66. I[C] Prior, 1986, p. 101.
67. I[C] Heath, 1998, p. 528.
68. I[C] Whitelaw, 1989, pp. 178–84.
69. I[D] Fisher, 1977, p. 155.
70. I[D] Thorpe, 1996, pp. 446–47.
71. I[D] Fisher, 1977, p. 159.
72. I[C] Denham and Garnett, 2002, p. 271.
73. I[D] Fisher, 1977, pp. 159–63.
74. I[C] Thatcher, 1995, p. 266.
75. I[D] Kelly, 1989, pp. 119–20.
76. I[C] Thatcher, 1995, p. 268.
77. I[C] Campbell, 2000, pp. 109–21.
78. I[C] Prior, 1986, p. 117.
79. I[D] Young and Sloman, 1986, p. 23.
81. I[D] Whitehead, 1985, p. 327.
82. I[C] Thatcher, 1995, p. 181.
83. I[C] Thatcher, 1995, pp. 245–48.
84. I[D] Young and Sloman, 1986, pp. 31–32.
85. I[C] Thatcher, 1995, p. 267.
86. I[D] Whitehead, 1985, p. 327.
87. I[D] Fisher, 1977, p. 169.
88. I[C] Prior, 1986, p. 100.
89. I[D] Fisher, 1977, pp. 173–80; I[C] Whitelaw, 1989, pp. 184–85; I[C] Thatcher,
1995, pp. 277–81; I[C] Garnett and Aitken, 2003, pp. 201–11.
91. I[D] Whitehead, 1985, p. 330.
240 Notes and References
92. I[D] Whitehead, 1985, pp. 328–29.

93. I[D] Cowley and Bailey, 2000, pp. 599–629.
94. I[D] Wickham-Jones, 1997, pp. 85–86.
95. I[D] Fry, 2005, p. 225.
96. I[D] Gilmour, 1977, p. 143.
97. I[D] King, 1976, p. 59.
2 The Conservative Ascendancy

1. I[D] Dale, 2000, p. 266.
2. I[D] Butler and Kavanagh, 1980, pp. 353–54.
4. I[C] Benn, 1990, p. 494.
5. I[B] H.C. Deb., 15.5.1979, col. 76.
7. I[C] Prior, 1986, p. 115.
8. The Times, 31.3.1981.
9. I[D] Bruce-Gardyne, 1984, p. 105.
11. I[D] Butler and Kavanagh, 1984, p. 330.
12. I[D] Clark, 2000, p. 276.
15. I[D] Clark, 2000, p. 310.
16. For a debate about this see I[D] Sanders, Ward, and Marsh, 1987, pp. 281–313;
I[D] Clarke, Mishler, and Whiteley, 1990, pp. 63–81; I[D] Sanders, Ward and
Marsh, 1990, pp. 83–90.
17. I[D] Dale, 2000, p. 285.
18. I[D] Dale, 2000, p. 280.
19. I[D] Dale, 2000, p. 285.
20. I[D] Dale, 2000, pp. 268–70.
21. I[D] Dale, 2000, 288–90.
22. I[D] Dale, 2000, pp. 291–92; c.f. I[D] Dale 2000, p. 272.
23. I[D] Dale, 2000, p. 271.
24. I[D] Dale, 2000, pp. 296–97.
25. I[D] Clark, 1993, p. 7.
27. I[D] Butler and Kavanagh, 1984, pp. 306, 346.
35. I[C] Clark, 1993, p. 99.
36. I[C] Prior, 1986, p. 153.
37. I[C] Clark, 1993, p. 127.
38. The Listener, 31.7.1986, p. 6 [ J. Cole].
39. The Guardian, 13.11.1986.
40. The Times, 30.3.1987 [R.W. Johnson].

41. The Times, 19.5.1987 [B. Pimlott].
42. I[C] Tebbit, 1989, p. 313.
43. I[D] Dale, 2000, p. 313.
44. I[D] Dale, 2000, pp. 316–17.
45. I[D] Dale, 2000, p. 351.
46. I[D] Dale, 2000, p. 314.
47. I[C] Tebbit, 1989, pp. 332–33.
48. I[C] Young, 1990, p. 220.
49. I[C] Young, 1990, p. 222.
54. I[C] Tebbit, 1989, pp. 336–37.
56. I[C] Thatcher, 1993, p. 585.
57. I[C] Thatcher, 1993, p. 573.
58. I[C] Tebbit, 1989, p. 335.
59. I[C] Garnett and Aitken, 2003, p. 319.
60. I[D] Drucker, 1979, p. 1.
61. I[D] Dangerfield, 1935, p. 14.
62. I[D] Dangerfield, 1935, p. 22.
63. I[D] Seawright, 1999, p. 2.
64. I[C] Thatcher, 1993, p. 619.
65. I[D] Seawright, 1999, pp. 147–55; this interpretation was contested by I[D]
Devine, 2006, pp. 163–80.
66. I[C] Thatcher, 1993, pp. 619–20.
67. I[C] Thatcher, 1993, p. 624.
68. I[D] Seawright, 1999, pp. 127–45.
69. I[C] Thatcher, 1993, p. 618.
70. I[D] Seawright, 1999, p. 157.
71. I[C] Thatcher, 1993, pp. 619–20.
72. I[D] Butler and Kavanagh, 1980, pp. 366, 372, 377.
73. I[D] Butler and Kavanagh, 1988, pp. 295, 298, 301, 302, 304.
74. I[C] Thatcher, 1993, p. 620.
75. I[D] Hobsbawm, 1989, pp. 9–22.
77. II[B] Kerr, 1969, p. 66.
78. I[D] Bernstein, 1909, p. xvi.
79. I[D] Bernstein, 1909, xi–xii.
80. I[D] Bernstein, 1909, p. xiv.
81. I[D] Mitchell, 1983, pp. 37–38.
82. I[C] Healey, 1990, p. 466; I[C] Morgan, 1999, p. 703.
83. I[C] Benn, 1990, p. 551.
84. I[C] Benn, 1992, pp. 5–10; I[D] Mitchell, 1983, pp. 41–45.
85. I[D] Whitehead, 1986, p. 354.
86. I[B] LPACR 1980, pp. 31–32.
87. I[C] Benn, 1992, pp. 31–32.
88. I[C] Benn, 1992, p. 59.
89. I[C] Morgan, 1999, p. 719.

90. I[C] Morgan, 1999, p. 715.
91. I[C] Healey, 1990, pp. 477–79.
92. I[C] Benn 1992, p. 43.
93. I[B] LPACR 1981, p. 26.
94. I[C] Benn, 1992, p. 154.
95. I[D] Minkin, 1991, pp. 339–42.
96. I[C] Benn, 1992, p. 46.
97. I[A] LPACR 1982, pp. 184–85.
98. I[D] Dale, 2000, p. 280.
99. I[D] Dale, 2000, p. 250.
100. I[D] Dale, 2000, p. 245.
101. I[D] Dale, 2000, p. 251.
102. I[D] Dale, 2000, p. 250.
103. I[D] Dale, 2000, p. 248.
104. I[D] Dale, 2000, p. 249.
105. I[D] Dale, 2000, pp. 252–53.
106. I[D] Dale, 2000, p. 247.
107. I[D] Dale, 2000, pp. 257–68.
108. I[D] Dale, 2000, p. 246.
109. I[D] Dale, 2000, p. 247.
110. I[D] Dale, 2000, p. 246.
111. I[C] Healey, 1990, p. 500.
112. I[C] Benn, 1992, p. 295.
113. I[C] Benn, 1992, p. 298.
114. I[B] LPACR 1983, p. 15.
115. I[B] LPACR 1983, p. 29.
116. I[B] Benn, 1992, p. 319.
117. I[D] Kinnock, 1994, p. 543.
118. I[D] Kinnock, 1994, p. 543.
119. I[D] Kinnock, 1994, pp. 539–40.
120. I[D] Kinnock, 1994, p. 535.
121. I[D] Kinnock, 1994, p. 542.
122. I[B] LPACR 1985, p. 128.
123. I[B] LPACR 1985, p. 155.
124. The Guardian, 2.10.1985.
125. I[D] Smith and Spears, 1992, pp. 217–18.
126. I[D] Smith and Spears, 1992, p. 320.
127. I[B] TUCACR 1988, pp. 568–70.
128. II[B] Denman, 2002, p. 207.
129. The Listener, 29.11.1979, pp. 733–38.
130. III[B] Keynes, X, 1972, p. 24.
131. I[D] Jenkins, 1987, p. 135.
132. I[D] Owen, 1981, pp. 66–67.
133. I[D] Owen, 1981, p. 529.
134. I[D] Owen, 1981, p. 67.
135. I[C] Steel, 1989, p. 272.
136. I[D] Jenkins, 1987, p. 366.
137. I[C] Steel, 1989, p. 263; I[D] Crewe and King, 1995, pp. 3–127.
138. I[C] Jenkins, 1992, p. 532.
139. I[C] Owen, 1991, p. 519.

140. I[C] Healey, 1990, p. 480.
141. I[C] Steel, 1989, p. 274.
142. I[C] Owen, 1991, p. 526.
143. The Spectator, 21.3.1981, p. 5.
144. I[C] Steel, 1989, p. 299.
145. I[C] Jenkins, 1992, pp. 575–77; I[D] Crewe and King, 1995, pp. 203–10.
146. I[C] Jenkins, 1992, p. 533.
147. I[C] Jenkins, 1992, p. 532.
148. I[C] Jenkins, 1992, p. 593.
149. I[C] Steel, 1989, pp. 328–31; I[D] Crewe and King, 1995, pp. 350–53.
150. I[C] Steel, 1989, pp. 343–46.
151. I[C] Steel, 1989, p. 356.
153. I[C] Healey, 1990, p. 83.
3 The Thatcher Cabinets and Governments

1. I[C] Thatcher, 1993, p. 19.
2. III[B] Hastings, 2001, p. 699.
3. III[B] Hastings, 2001, p. 592.
4. I[C] Prior, 1986, p. 113.
5. I[C] Thatcher, 1993, p. 19.
6. I[C] Thatcher, 1993, pp. 19–20.
7. II[B] Cradock, 1997, pp. 9–10; I[C] Heseltine, 2001, p. 226.
8. I[D] Ranelagh, 1991, p. 239.
9. I[C] Thatcher, 1993, p. 126.
10. I[D] Ranelagh, 1991, p. 13.
11. I[C] Howe, 1994, p. 201.
12. I[C] Thatcher, 1995, p. 306.
13. I[D] Curtis, II, 1999, p. 117.
14. I[D] Curtis, II, 1999, pp. 299–300.
15. I[D] Curtis, II, 1999, p. 256.
16. I[D] Wyatt, 1977, p. 7.
17. I[D] Wyatt, 1977, p. 163.
18. I[D] Wyatt, 1977, p. 166.
19. I[D] Wyatt, 1977, p. 177.
20. I[D] Curtis, II, 1999, p. 117.
21. I[D] Cockett, 1995, pp. 228–30, 351–52.
22. I[D] Cockett, 1995, p. 294.
23. I[D] Cormack, 1978, pp. 50–59, 74–104.
24. I[C] Thatcher, 1995, p. 77.
25. I[D] Amis, 1991, pp. 315–19.
26. II[B] Amis, 2002, pp. 22, 272.
27. I[D] Amis, 1991, pp. 37, 45.
28. I[C] Thatcher, 1995, p. 78.
29. I[C] Young, 1991, pp. 406–07; I[D] Ranelagh, 1991, p. 187; I[D] Cockett, 1995,
p. 218.
30. I[D] Urban, 1996, p. 2.
31. I[D] Urban, 1996, p. 90.

32. I[D] Urban, 1996, pp. 172–73.
33. I[D] Cockett, 1994, pp. 316–18.
34. I[D] Hoskyns, 2000, p. 127.
35. I[D] Kandiah, 1996, p. 120.
36. I]D] Hoskyns, 2000, p. 120.
37. I[D] Kandiah, 1996, p. 123.
38. I[D] Kandiah, 1996, p. 121.
39. I[D] Kandiah, 1996, pp. 122–23.
40. I[D] Hoskyns, 2000, pp. 359, 362, 369, 375.
41. I[C] Ridley, 1991, p. 38.
42. I[C] Thatcher, 1993, p. 277.
43. I[D] Mount, 1993, p. 129.
44. I[C] Ridley, 1991, pp. 36–37.
45. I[D] Ingham, 1991, p. 169.
46. I[C] Thatcher, 1993, p. 20.
47. I[D] Harris, 1990, p. 83.
48. I[D] Tracey, 1983, p. 315.
49. I[D] Marr, 2004, p. 323.
50. I[D] Ingham, 1991, pp. 354–56.
51. I[D] Ingham, 1991, p. 357.
52. I[C] Ridley, 1991, p. 28.
53. I[C] Thatcher, 1993, p. 149.
54. I[C] Thatcher, 1993, p. 421.
55. I[C] Campbell, 2003, p. 220.
56. I[C] Ridley, 1991, pp. 40–41.
57. I[C] Ridley, 1991, p. 35.
58. I[D] Hennessy, 1994, p. 447.
59. I[D] Ranelagh, 1991, p. 14.
60. I[C] Thatcher, 1993, p. 27.
61. I[C] Ridley, 1991, p. 25.
62. I[D] Lawson and Armstrong, 1994, p. 447.
63. I[C] Lawson, 1992, p. 129.
64. I[C] Ridley, 1991, p. 26.
65. I[C} Ridley, 1991, p. 25.
66. I[C] Heath, 1998, p. 574; I[C] Campbell, 1993, pp. 714–15.
67. I[C] Prior, 1986, p. 115.
70. I[C] Walker, 1991, pp. 161–62.
71. I[C] Nott, 2002, p. 185.
72. I[C] Ridley, 1991, p. 37.
73. I[C] Nott, 2002, pp. 184–85.
74. I[C] Walker, 1991, pp. 159–60.
75. I[C] Thatcher, 1993, pp. 151–52.
76. I[C] Pym, 1984, p. 2.
77. I[C] Ridley, 1991, p. 31.
78. I[C] Clark, 2000, p. 311.
79. II[B] Dorman, Kandiah, and Staerck, 2002, pp. 14–15; I[C] Nott, 2002, p. 257.
80. II[B] Dorman, Kandiah, and Staerck, 2002, p. 16.
81. I[C] Nott, 2002, p. 261.

82. I[C] Nott, 2002, p. 264.
83. I[C] Parkinson, 1992, p. 190.
84. I[C] Nott, 2002, p. 264.
85. I[C] Parkinson, 1992, p. 190.
86. I[C] Nott, 2002, p. 265.
87. I[C] Clark, 2000, p. 313.
88. I[C] Nott, 2002, p. 268.
89. I[C] Clark, 2000, p. 313.
90. I[C] Carrington, 1988, p. 371.
91. I[C] Thatcher, 1993, pp. 185–86.
92. I[C] Thatcher, 1993, pp. 188–89.
93. I[C] Parkinson, 1992, pp. 192–95; I[C] Nott, 2002, p. 285: II[B] Dorman,
Kandiah, and Staerck, 2002, pp. 62–65.
95. I[C] Clark, 2000, pp. 315–18.
96. I[C] Clark, 2000, p. 323.
97. I[C] Thatcher, 1993, p. 187.
98. I[C] Nott, 2002, pp. 286–87.
99. I[C] Parkinson, 1992, p. 198.
100. I[C] Nott, 2002, p. 286.
101. I[C] Parkinson, 1992, p. 197.
102. II[B] Dorman, Kandiah, and Staerck, 2002, pp. 28–29.
103. I[C] Parkinson, 1992, p. 201.
104. I[C] Nott, 2002, p. 286.
105. I[C] Nott, 2002, p. 287.
106. I[C] Nott, 2002, pp. 320–21.
107. I[C] Pym, 1984, p. ix.
108. I[C] Thatcher, 1993, pp. 306–12.
109. I[D] Ingham, 1991, p. 334.
110. I[C] Thatcher, 1993, p. 419.
111. I[D] Ingham, 1991, p. 335.
112. I[D] Ingham, 1991, p. 336.
113. I[C] Heseltine, 2001, p. 310.
114. I[D] Ranelagh, 1991, p. 208.
115. I[C] Clark, 1993, p. 131.
116. I[C] Heseltine, 2001, p. 311.
117. I[C] Heseltine, 2001, p. 29.
118. I[C] Thatcher, 1993, p. 433.
119. I[C] Clark, 1993, pp. 133–34; I[A] H.C. Deb., 23.1.1986, cols. 449–61; I[D]
Woodhouse, 1994, pp. 115–20.
120. I[C] Clark, 1993, p. 134.
121. I[D] Ingham, 1991, p. 337.
122. I[C] Clark, 1993, p. 135; I[B] H.C. Deb., 27.1.1986, cols. 646–90.
123. I[C] Thatcher, 1993, p. 561.
124. The Economist, 18.1.1986, p. 13.
125. The Times, 10.1.1986.
126. I[C] Baker, 1993, p. 303.
127. The Spectator, 1.2.1986, p. 7.
128. The Economist, 18.1.1986, p. 14.
129. I[C] Thatcher, 1993, p. 832.

130. I[C] Parkinson, 1992, pp. 218–19.
131. I[C] Clark, 1993, p. 319.
132. I[C] Ridley, 1991, p. 52.
133. I[C] Thatcher, 1993, p. 436.
134. I[C] Thatcher, 1993, p. 440.
135. I[C] Hurd, pp. 258–59.
136. I[C] Lawson, 1992, p. 129.
137. I[C] Howe, 1994, p. 251.
138. I[C] Howe, 1994, pp. 393–94.
139. I[D] Ranelagh, 1991, pp. 284–85.
140. I[C] Howe, 1994, pp. 646–47.
141. I[C] Ridley, 1991, p. 39.
142. I[C] Thatcher, 1993, p. 832; c.f. I[C] Hurd, 2003, p. 399.
143. I[C] Thatcher, 1993, p. 756.
144. I[C] Baker, 1993, pp. 120–21.
145. I[C] Ridley, 1991, p. 236.
146. I[C] Baker, 1993, p. 329.
147. I[C] Baker, 1993, p. 331.
148. I[D] Hennessy, 1994, p. 445.
149. I[D] Lawson and Armstrong, 1994, pp. 444–45.
150. I[C] Clark, 1993, p. 223.
151. I[C] Thatcher, 1993, p. 712.
152. I[C] Lawson, 1992, pp. 960–68.
153. I[C] Thatcher, 1993, pp. 721–24.
154. I[C] Clark, 1993, p. 289.
155. I[C] Howe, 1994, pp. 648–50.
156. I[C] Clark, 1993, p. 345.
157. I[C] Clark, 1993, p. 347.
158. I[C] Baker, 1993, p. 386.
159. I[C] Baker, 1993, p. 384.
160. I[C] Baker, 1993, p. 386.
161. I[B] H.C. Deb., 30.10. 1990, col. 865.
162. I[B] H.C. Deb., 13 11.1990, col. 465.
163. I[C] Baker, 1993, p. 386.
164. I[C] Clark, 1993, p. 348.
165. I[C] Clark, 1993, pp. 180–81.
166. I[D] Curtis, II, 1999, p. 245.
167. I[D] Curtis, II, 1999, pp. 290–91.
168. I[C] Clark, 1993, p. 359.
169. I[D] Curtis, II, 1999, p. 399.
170. I[C] Thatcher, 1993, p. 840.
171. I[C] Thatcher, 1993, p. 841.
172. I[C] Walden, 1999, p. 302.
173. I[C] Clark, 1993, p. 358.
174. I[C] Thatcher, 1993, p. 835.
175. I[C] Thatcher, 1993, p. 855.
176. I[C] Clark, 1993, p. 366.
177. I[C] Thatcher, 1993, p. 855.
178. I[C] Thatcher, 1993, p. 832.
179. I[C] Hurd, 2003, p. 404.

180. I[C] Thatcher, 1993, p. 860.
181. I[C] Hurd, 2003, p. 404.
182. I[D] Curtis, II, 1999, p. 429 [Patrick Minford].
183. I[C] Clark, 1993, p. 360.
184. I[D] Curtis, II, 1999, p. 403.
185. I[C] Clark, 1993, pp. 383–84.
186. I[D] Curtis, III, 2000, p. 659.
4 The Economic Liberal Crusades I

1. I[B] H.C. Deb., 15.5.1979, col. 48.
2. I[B] H.C. Deb., 2.7.1970, col. 46.
3. I[C] Thatcher, 1993, p. 26.
4. III[B] Bosanquet, 1981, pp. 324–25.
5. I[C] Thatcher, 1993, p. 26.
6. I[C] Thatcher, 1993, pp. 27–28.
7. I[C] Nott, 2002, p. 198.
8. I[D] Ranelagh, 1991, p. 183.
9. III[A] H.C. 720, 1979–80, p. 56.
10. I[D] Heffer, 1998, p. 469.
11. I[C] Howe, 1994, p. 104.
12. III[B] Hoskyns, 2000, p. 75.
13. I[C] Nott, 2002, p. 172.
14. I[C] Howe, 1994, pp. 107–08.
15. II[B] Walters, 1986, pp. 4–5.
16. The Spectator, 19.3.1983, p. 4.
17. I[C] Thatcher, 1993, p. 421; I[C] Young, 1990, pp. 153–90; III[B] Gregg, 1990,
pp. 49–58.
18. III[A] Lawlor, 1990, pp. 601–08.
19. I[B] H.C. Deb., 17.3.1987, col. 815.
20. I[B] H.C. Deb., 15.3.1988, col. 993.
21. I[B] H.C. Deb., 14.3.1989, col. 294.
22. I[C] Lawson, 1992, p. 247.
23. The Economist, 19.3.1963, p. 11.
24. I[D] Whitehead, 1985, p. 367.
25. I[C] Howe, 1994, p. 147.
26. I[D] Whitehead, 1985, p. 367.
27. I[D] Whitehead, 1985, p. 369.
28. I[D] Butler and Kavanagh, 1980, pp. 162, 188.
29. I[D] Whitehead, 1985, p. 369.
30. I[C] Nott, 2002, p. 178.
31. I[B] H.C. Deb., 12.6.1979, cols. 239–41.
32. I[B] H.C. Deb., 12.6.1979, cols. 241–43.
33. I[B] H.C. Deb., 12.6.1979, cols. 449–250; c.f. I[D] Dale, 2000, p. 271.
34. I[B] H.C. Deb., 12.6.1979, cols. 258–61.
35. I[B] H.C. Deb., 12.6.1979, col. 250.
36. I[C] Howe, 1994, pp. 130–31.
37. The Economist, 16.6.1979, pp. 11–12.
38. I[B] H.C. Deb., 12.6.1979, cols. 244–45.

39. I[B] H.C. Deb., 23.10.1979, cols. 202–03.
40. The Economist, 27.10.1979, p. 69.
41. I[B] H.C. Deb., 23.10.1979, cols 203–04.
42. The Economist, 27.10. 1979, p. 69–70.
43. I[C] Howe, 1994, p. 142: I[C] Lawson, 1992, p. 40.
44. I[C] Howe, 1994, p. 143.
45. I[C] Nott, 2002, p. 191.
46. The Economist, 29.3.1980, p. 15.
47. I[B] H.C. Deb., 26.3.1980, col. 1441.
48. I[B] H.C. Deb., 26.3.1980, cols. 1443–44.
49. I[C] Howe, 1994, p. 155.
50. I[C] Lawson, 1992, p. 69.
51. I[C] Lawson, 1992, pp. 72–73.
52. I[B] H.C. Deb., 26.3.1980, cols. 1487–89.
53. The Economist, 29.3.1980, p. 33.
54. I[D] Whitehead, 1985, p. 376.
55. I[C] Thatcher, 1993, p. 26.
56. I[C] Clark, 2000, p. 207.
57. The Economist, 15.11.1980, p. 65.
58. I[D] Holmes, 1985, p. 155.
59. I[D] Whitehead, 1985, p. 264.
60. I[D] Dale, 2000, pp. 272–73.
61. III[B] Edwardes, 1983, pp. 224–31.
62. I[D] Hennessy, 1989, pp. 432–33.
63. I[B] H.C. Deb., 26.1.1981, cols. 639–40.
64. I[B] H.C. Deb., 26.1.1981, col. 641 [G. Robinson].
65. I[B] H.C. Deb., 26.1.1981, col. 643.
66. The Economist, 31.1.1981, p. 48.
67. III[B] Wilks, 1985, pp. 222–23.
68. I[C] Nott, 2002, pp. 180–83.
69. I[C] Parkinson, 1992, pp. 87, 242–49, 254.
70. I[C] Lawson, 1992, pp. 398–401.
71. III[B] Edwardes, 1983, pp. 273–74.
72. The Times, 12.11.1980.
73. The Economist, 22.11.1980, p. 83.
74. I[C] Nott, 2000, pp. 183–84.
75. I[C] Prior, 1986, p. 130.
76. I[C] Prior, 1986, p. 132.
77. I[C] Lawson, 1992, p. 88.
78. I[B] H.C. Deb., 10.3.1981, col. 766.
79. I[B] H.C. Deb., 10.3.1976, cols. 768–69.
80. I[B] H.C. Deb., 10.3.1981, col., 763–64.
81. I[B] H.C. Deb., 10.3.1981, cols. 773–75.
82. I[C] Clark, 2000, p. 211.
83. III[B] Walters, 1986, p. 15.
84. I[C] Lawson, 1992, p. 98.
85. I[C] Howe, 1994, pp. 203–04.
86. I[C] Lawson, 1992, p. 98.
87. I[C] Thatcher, 1993, p. 133.
88. III[B] Hoskyns, 2000, p. 283.

89. III[B] Hoskyns, 2000, pp. 284–85.
90. The Economist, 14.3.1981, p. 21.
91. I[B] H.C. Deb., 10.3.1981, col. 756.
92. The Spectator, 14.3. 1981, p. 4.
93. I[C] Thatcher, 1993, pp. 143–44.
94. I[C] Nott, 2002, pp. 196–97.
95. I[C] Thatcher, 1993, pp. 148–49.
96. III[B] Keegan, 1984, p. 173.
97. I[D] Howell, 1986, p. 150.
98. I[B] H.C. Deb., 9.3.1982, col. 757.
99. The Spectator, 13.3.1982, p. 5 [A. Rudd].
100. The Economist, 13.3.1982, p. 12.
101. The Spectator, 13.3.1982, p. 4.
102. I[B] H.C. Deb., 9.3.1982, cols. 754–56.
103. The Economist, 13.3.1982, p. 20.
104. I[B] H.C. Deb., 9.3.1982, col. 730.
105. The Economist, 19.3.1983, p. 11.
106. I[B] H.C. Deb., 15.3.1983, col. 156.
107. The Spectator, 19.3.1983, p. 3.
108. I[C] Howe, 1994, p. 157.
109. The Economist, 12.3.1988, p. 20.
110. I[B] H.C. Deb., 13.3.1984, col. 288.
111. I[B] H.C. Deb., 19.3.1985, cols. 784–85.
112. I[B] H.C. Deb., 18.3.1986, cols. 169–70.
113. I[B] H.C. Deb., 17.3.1987, col. 817–1988.
114. I[B] H.C. Deb., 15.3.1988, col. 995.
115. I[B] H.C. Deb., 14.3.1989, cols. 295–96.
116. I[B] H.C. Deb., 17.3.1987, col. 817.
117. The Spectator, 17.3.1984, p. 5 [ J. Bruce-Gardyne].
118. The Economist, 17.3.1984, p. 11.
119. I[B] H.C. Deb., 13.3.1984, col. 304.
120. I[D] Sherman, 2005, p. 141.
121. The Spectator, 23.3.1985, p. 3.
122. The Economist, 23.3.1985, p. 21.
123. I[B] H.C. Deb., 19.3.1985, cols. 783–800.
124. I[B] H.C. Deb., 18.3.1986, cols. 166–84.
125. I[B} H.C. Deb., 17.3.1987, col. 818.
126. I[B] H.C. Deb., 18.3.1986, col. 182.
127. I[B] H.C. Deb., 17.3.1987, col. 828.
128. The Economist, 21.3.1987, p. 25.
129. The Economist, 17.1.1987, p. 29.
130. The Spectator, 15.11.1986, p. 6.
131. The Economist, 15.11.1986, p. 19.
132. The Economist, 31.10.1987, p. 13.
133. I[B] H.C. Deb., 15.3.1988, col. 1013.
134. I[B] H.C. Deb., 14.3.1989, col. 295.
135. The Economist, 18.3.1989, p. 15.
136. I[C] Thatcher, 1993, p. 690.
137. I[C] Thatcher, 1993, p. 691.
138. The Spectator, 24.3.1990, p. 6 [A. Howard].

139. I[C] Lawson, 1992, p. 198; c.f. I[D] Howell, 1970, p. 8, where Howell actually
cited Peter Drucker as inventing the term ‘privatization’.
140. I[C] Lawson, 1992, p. 199.
141. I[C] Ridley, 1991, p. 16.
142. Thatcher Archive: THCR 2/6/1/37 and 2/6/1/63; The Economist, 27.5.1978, pp.
21–22.
143. I[B] H.C. Deb., 14.6.1977, Written Answers, cols. 141–42; The Economist,
18.6.1977, p. 126.
144. I[D] Dale, 2000, p. 272.
145. I[C] Howe, 1994, p. 254.
146. I[C] Lawson, 1992, p. 200.
147. I[C] Howe, 1994, p. 154.
148. I[C] Lawson, 1992, p. 201.
149. I[C] Lawson, 1992, pp. 207–08.
150. I[C] Lawson, 1992, p. 208.
151. I[C] Lawson, 1992, p. 209.
152. I[C] Lawson, 1992, pp. 222–24.
153. I[C] Lawson, 1992, p. 215.
154. I[C] Walker, 1991, pp. 190–92.
155. I[C] Lawson, 1992, p. 216.
156. I[C] Walker, 1991, p. 193.
157. I[C] Lawson, 1992, p. 241.
158. I[C] Thatcher, 1993, p. 682; I[C] Parkinson, 1992, pp. 119, 257–80.
159. I[C] Lawson, 1992, pp. 205–06.
160. III[B] Inns of Court Conservative and Unionist Society, 1958, p. 53.
161. I[C] Hurd, 1979, p. 150.
162. Thatcher Archive: THCR 2/6/1/37 and 2/6/1/63; The Economist, 27.5.1978, pp.
21–22.
163. III[B] Hoskyns, 2000, p. 45.
164. III[B] Hoskyns, 2000, p. 47.
165. I[D] Dale, 2000, pp. 268–69.
166. I[C] Prior, 1986, p. 115.
167. I[C] Prior, 1986, p. 119.
168. I[C] Prior, 1986, p. 155.
169. I[C] Prior, 1986, p. 162.
170. I[C] Prior, 1986, p. 156.
171. I[B] H.C. Deb., 17.12.1979, cols. 58–71; III[B] Taylor, 1994, p. 534.
172. I[B] H.C. Deb., 26.3.1980, cols. 1462–63; I[C] Prior, 1986, p. 165; I[C] Thatcher,
1993, p. 55; I[C] Howe, 1994, p. 166.
173. I[C] Tebbit, 1989, p. 233.
174. I[C] Tebbit, 1989, p. 235.
177. III[B] Geary, 1985, pp. 88–91; I[D] Holmes, 1985, pp. 139–40.
178. I[C] Prior, 1986, pp. 142–43; I[D] Holmes, 1985, p. 142.
179. I[D] Holmes, 1985, pp. 143–45.
180. The Economist, 26.2.1983, p. 16.
181. I[D] Holmes, 1985, pp. 140–42.
182. III[B] MacGregor, 1986, pp. 11–15.
183. III[B] MacGregor, 1986, pp. 146–49.

184. III[B] Taylor, 1993, pp. 293–94.
185. III[B] Adeney and Lloyd, 1986, pp. 100–03.
186. III[B] Adeney and Lloyd, 1986, p. 112.
187. I[C] Benn, 1992, p. 400.
188. III[B] Aston, Morris, and Willman, 1989, pp. 81–92.
189. III[B] Taylor, 1993, p. 297.
190. III[B] Brown and Wadhari, 1990, pp. 57–70; III[B] Brown and Walsh, 1991, pp.
44–59; III[B] Claydon, 1989, pp. 214–24; III[B] Lewis, 1991, pp. 60–75; III[B]
Minford, 1991; III[B] Metcalf, 1989, pp. 1–31; III[B] Metcalf, 1991, pp. 18–32;
III[B] Nolan, 1989, pp. 81–92; III[B] Purcell, 1991, pp. 33–43.
191. III[B] Daniel and Millward, 1983.
192. III[B] Millward and Stevens, 1986.
193. III[B] Daniel, 1987, p. 260.
194. III[B] Millward, Stevens, Smart, and Hawes, 1992, p. 352.
195. III[B] Millward, Bryson, and Forth, 2000, pp. 234–35.
5 The Economic Liberal Crusades II

1. III[B] Bellairs, 1977, pp. 7–8.
2. III[B] Walley, 1972, pp. 41, 48, 53, 58–60, 62.
3. I[C] Thatcher, 1993, p. 8.
4. I[C] Thatcher, 1993, p. 5.
5. I[C] Thatcher, 1995, p. 44.
6. III[B] Sen, 1983, pp. 153–69; III[B] Piachaud, 1987, pp. 147–64.
7. I[C] Fowler, 1991, pp. 208–09.
8. III[B] Titmuss, 1974, pp. 30–31, 122.
9. Woman’s Own. 31.10.1987.
10. The Spectator, 14.7.1984, p. 3.
11. The Spectator, 14.7.1984, p. 5.
12. The Spectator, 23.3.1985, p. 7.
13. The Economist, 7.12.1985, p. 30.
14. London Weekend Television Weekend World, 6.1.1980.
15. III[B] Pemberton, 1990, pp. 281–98; III[B] Anderson, 1990, pp. 553–55.
16. I[C] Thatcher, 1993, pp. 629–30.
17. I[C] Thatcher, 1995, pp. 538–64.
18. I[C] Thatcher, 1993, p. 631.
19. I[C] Thatcher, 1993, p. 630.
20. I[B] H.C. Deb., 2.4.1984, col. 658.
21. I[C] Fowler, 1991, pp. 154–55.
22. I[C] Tebbit, 1989, p. 125.
23. I[B] H.C. Deb., 15.1.1980, col. 1443.
24. I[B] H.C. Deb., 15.1.1980, col. 1470.
25. I[B] H.C. Deb., 22.4.1952, cols. 236–37.
26. I[B] H.C. Deb., 22.4.1952, col. 239.
27. III[B] Murie, 1980, pp. 292–94.
28. I[D] Donoughue, 2003, pp. 103–08; c.f. I[D] Haines, 1977, pp. 94–111.
29. I[D] Dale, 2000, pp. 214, 244.
30. I[D] Walker, 1977, pp. 163–72.
31. I[C] Walker, 1991, pp. 140–41.

32. I[D] Dale, 2000, p. 277.
33. I[C] Heseltine, 2000, p. 194.
34. The Economist, 4.8.1979, p. 16.
35. I[C] Heseltine, 2000, pp. 195–96; III[B] Smith, 1981, pp. 5–16.
36. III[B] Wilcox, 1994, p. 44; III[B] Timmins, 1995, pp. 380–81.
37. III[B] McCrone and Stephens, 1995, p. 151.
38. III[B] Bowley, 1945, pp. 3–5.
39. III[B] Donnison, 1967, p. 228.
40. III[B] McCrone and Stephens, 1995, p. 151.
41. I[D] Dale, 2000, pp. 277–78.
42. I[C] Heseltine, 2000, pp. 197–98; III[B] Smith, 1981, pp. 29–37.
43. III[B] Malpass, 1990, p. 16.
44. III[B] Forrest and Murie, 1991, p. 147.
45. III[B] Timmins, 1996, p. 381.
46. III[B] Forrest and Murie, 1991, p. 160.
47. III{B} Greve, Page, and Greve, 1971.
48. III[B] Hills, 1990, pp. 166–70.
49. I[C] Thatcher, 1993, pp. 603–04.
50. III[B] Johnson, 1990, p. 145.
51. III[B] Wilcox, 1993, pp. 47–49.
52. III[B] Hills, 1990, pp. 201–02.
53. III[B] Timmins, 1996, p. 380.
54. III[B] Cmnd. 7615, 1979, para. 21.5.
55. I[C] Lawson, 1992, pp. 612–13.
56. I[C] Fowler, 1991, pp. 167–69.
57. I[C] Fowler, 1991, p. 173.
58. The Economist, 13.11.1982, p. 49.
59. The Economist, 18.12.1982, pp. 29–30.
60. I[C] Fowler, 1991, p. 184.
61. I[B] H.C. Deb., 30.7.1982, Written Answers, col. 860.
62. The Economist, 18.9.1982, p. 25.
63. I[C] Thatcher, 1993, p. 277.
64. The Economist, 9.10.1982, p. 22.
65. I[C] Howe, 1993, pp. 258–59.
66. I[C] Lawson, 1992, p. 303.
67. I[C] Fowler, 1991, pp. 183–87.
68. I[C] Clark, 1993, p. 197.
69. I[C] Clark, 1993, p. 215.
70. I[C] Clark, 1993, p. 197.
71. I[C] Clark, 1993, pp. 275–76.
72. I[C] Thatcher, 1993, pp. 608–09.
73. I[C] Thatcher, 1993, p. 614.
74. I[C] Clark, 1993, p. 273.
75. III[B] Enthoven, 1985, p. 28.
76. III[B] Enthoven, 1985, pp. 38–41.
77. III[B] Enthoven, 1985, p. 34.
78. III[B] Hills, 1990, pp. 126–27.
79. III[B] Hills, 1990, p. 118.
80. III[B] Enthoven, 1985, pp. 41–42.
81. III[B] Hills, 1990, pp. 92–93; The Daily Telegraph, 8.1.1986.
82. I[C] Thatcher, 1993, p. 613.
83. III[B] Edwards, 1993, p. 146.
84. III[A] Cm. 555, 1989, pp. 4–6.
85. III[A] Cm. 555, 1989, p. 12.
86. III[B] Edwards, 1993, pp. 156–57.
87. The Economist, 28.10.1989, p. 20; III[B] Edwards, 1993, pp. 155–65.
88. III[B] Enthoven, 1999, p. 58.
89. III[B] Enthoven, 1999, p. 60.
90. III[B] Hills, 1990, p. 126.
91. I[D] Marsh and Rhodes, 1992, p. 111.
92. I[B] H.C. Deb., 2.4. 1984, col. 653.
93. The Economist, 7.4.1984, p. 19.
94. I[C] Fowler, 1991, p. 208.
95. I[D] Fry, 2005, pp. 21–22, 28–31.
96. I[C] Fowler, 1991, p. 208.
97. III[A] Cmnd. 9517, 1985, pp. 1–3.
98. III[A] Cmnd. 9518, 1985, pp. 59–62.
99. III[A] Cmnd. 9691, 1985, p. 1.
100. I[C] Fowler, 1991, p. 209.
101. I[C] Lawson, 1992, pp. 596–97.
102. I[C] Lawson, 1992, p. 434.
103. I[C] Young, 1990, p. 174.
104. I[C[ Lawson, 1992, pp. 433–34.
105. I[C] Fowler, 1991, p. 216.
106. I[C] Lawson, 1992, pp. 587–92.
107. I[C] Fowler, 1991, pp. 211–23.
108. III[A] Cmnd. 9691, 1985, pp. 12–14.
109. III[A] Cmnd. 9691, 1985, p. 15.
110. I[C] Fowler, 1991, p. 224.
113. I[C] Fowler, 1991, pp. 223–24; III[A] Cmnd. 9691, 1985, pp. 36–45.
115. I[C] Baker, 1993, p. 161.
116. I[C] Lawson, 1992, p. 600.
117. I[C] Thatcher, 1995, p. 167.
118. [IIIB] Wolf, 2001, p. 244.
119. I[C] Thatcher, 1995, pp. 186–87.
120. I[C] Lawson, 1992, p. 600.
122. I[B] H.C. Deb., 8.7.1981, cols. 467–68.
123. The Economist, 11.7.1981, p. 24.
124. The Spectator, 8.12.1984, p. 8.
125. I[B] H.C. Deb., 5.12.1984, cols. 360–61.
126. The Observer, 9.12.1984; I[C] Halcrow, 1989, p. 183; I[C] Denham and Garnett,
2001, p. 394).
127. The Spectator, 8.12.1984, p. 8 [C.Moore].
128. I[C] Baker, 1993, pp. 237–38.
129. I[C] Baker, 1993, pp. 234–35.
130. Encounter, July 1960, p. 9.

131. The Times Higher Education Supplement, 1.6.1973 [C. Price].
132. I[C] Baker, 1993, p. 239.
133. I[C] Baker, 1993, pp. 243–44.
134. I[C] Thatcher, 1993, p. 599.
135. I[C] Denham and Garnett, 2001, p. 367.
136. I[C] Thatcher, 1995, pp. 188–89.
137. I[C] Thatcher, 1995, p. 157.
138. III[B] Eysenck, 1973; III[B] Hearnshaw, 1979; III[B] Mackintosh, 1995,
pp. 130–48.
139. I[C] Thatcher, 1995, pp. 173–74.
140. I[B] HL Deb., 21.11.1990, cols. 705–06.
141. I[C] Halcrow, 1989, p. 172.
142. Private information; c.f. I[C] Halcrow, 1989, pp. 173–74.
143. III[A] Cmnd. 9469, 1985, p. 86.
144. I[B] HL Deb., 21.11.1990, col. 707.
145. III[A] Cmnd. 9469, 1985, p. 30.
146. I[C] Halcrow, 1989, pp. 174–75.
147. I[C] Baker, 1993, p. 172.
148. I[C] Baker, 1993, pp. 175–76.
149. I[C] Lawson, 1992, p. 606.
150. I[C] Baker, 1993, pp. 172–76.
151. I[C] Lawson, 1992, pp. 606–10.
152. I[C] Baker, 1993, pp. 160–231.
153. I[B] HL Deb. 21.11.1988, col. 708.
154. I[B] HL Deb., 21.11.1988, col. 707.
155. Contemporary Record, Spring 1987, pp. 30–31.
6 The Economic Liberal Crusades III

1. I[C] Thatcher, 1993, p. 18.
2. II[B] Denman, 2002, pp. 254–58.
3. I[D] Young and Sloman, 1986, pp. 48–49.
4. I[C] Thatcher, 1993, p. 6.
5. I[D] Fry, 1985, pp. 1–4; Civil Service Statistics 1994, p. 41.
6. Red Tape, December 1969, pp. 69–70.
7. Whitley Bulletin, December 1979, p. 165.
8. The Times, 12.8.1980.
9. The Economist, 26.7.1975, pp. 25–26.
10. I[C] Clark, 1993, p. 22.
11. I[C] Thatcher, 1995, p. 166.
12. I[C] Young, 1993, p. 72; I[C] Campbell, 2000, p. 216.
13. I[D] Hennessy, 1989, p. 626.
15. I[C] Thatcher, 1993, p. 48; c.f. I[D] Hennessy, 1989, p. 629.
16. I[D] Fry, 1995, pp. 39–40.
17. I[D] Hoskyns, 1983, p. 142.
18. I[D] Fry, 1995, p. 40 [R.Wilding].
19. I[D] Hoskyns, 1983, p. 142.
20. The Listener, 11.12.1980, p. 775.

21. David Dimbleby in Conversation with Sir John Hoskyns, BBC1, 7.12.1982.
22. I[D] Worcester and Harrop, 1982, p. 9; I[D] Sarlvik and Crewe, 1983, p. 119.
23. David Dimbleby in Conversation with Sir John Hoskyns, BBC1, 7.12.1982.
24. I[D] Hoskyns, 1984, p. 12.
25. I[D] Hennessy, 1989, p. 628.
26. FDA News, April 1985, pp. 1–2; I[B] H.C. Deb., 18.3.1985, Written Answers,
cols. 365–66.
27. Annual Report of the Civil Service Commissioners 1984, p. 7.
28. II[B] Denman, 2002, pp. 254–55.
29. II[B] Denman, 2002, p. 258.
30. I[C] Thatcher, 1993, p. 48.
31. I[C] Thatcher, 1993, p. 46.
32. I[D] Fry, 1995, pp. 42–43.
33. I[B] H.C. Deb., 26.10.1989, col. 1044.
34. I[C] Fowler, 1991, p. xi.
35. I[D] Letwin, 1992, p. 40.
36. I[C] Prior, 1986, p. 136.
37. II[B] Denman, 2002, p. 255.
38. I[C] Clark, 1993, p. 22.
39. I[A] PRO: BA1/3.
40. I[D] Fry, 1995, p. 74.
41. I[D] Fry, 1995, p. 40.
42. I[D] Ponting, 1985, pp. 7–8.
43. The Spectator, 16.2.1985, p. 4 [C. Moore].
44. I[B] H.C. Deb., 18.2.1985, cols. 733–50.
45. The Times, 19.2.1985.
46. I[B] H.C. Deb., 26.2.1986, Written Answers, cols. 128–30.
47. I[D] Wass, 1984, pp. 48–51.
48. I[D] Wass, 1984, p. 53.
49. I[D] Turnbull, 1988, p. 75.
50. I[D] Turnbull, 1988, p. 205.
51. I[C] Campbell, 1993, p. 760.
52. I[D] Rayner, 1984, p. 16.
53. I[D] Fry, 1993, pp. 57–71.
54. I[D] Chapman, 1978, pp. 9–55.
55. I[C] Thatcher, 1993, p. 46.
56. III[A] Cmnd. 8147, 1961, p. 20.
57. Red Tape, December 1969, p. 69.
58. I[D] Fry, 1985, pp. 139–40.
59. The Economist, 6.6.1981, p. 30.
60. I[C] Prior, 1986, p. 142; I[C] Gilmour, 1992, p. 42; I[C] Garnett and Aitken,
2003, p. 271.
61. I[C] Howe, 1994, p. 221.
62. III[B] Hoskyns, 2000, p. 324.
63. III[B] Hoskyns, 2000, p. 309.
64. The Guardian, 9.3.1981.
65. III[B] Hoskyns, 2000, p. 324.
66. CCSU Bulletin, September/October 1981, pp. 121–22.
67. I[D] Fry, 1985, p. 137.
68. I[C] Garnett and Aitken, 2002, p. 270; c.f. I[C] Thatcher, 1993, p. 139.
69. I[D] Ranelagh, pp. 17–18.
70. I[C] Thatcher, 1993, p. 48.
71. I[D] Fry, 1969, pp. 415–24.
72. III[B] Fry, 1983, pp. 90–96; III[A] Cmnd. 8590, 1982.
73. I[C] Thatcher, 1993, p. 47.
74. I[D] Fry, 1995, pp. 74–75: Civil Service Statistics 1984, p. 6: Civil Service Statistics
1986, p. 6.
75. I[C] Thatcher, 1993, p. 46.
76. CCSU Bulletin, May 1989, p. 69.
77. CCSU Bulletin, December 1984, p. 149.
78. I[D] Fry, 1995, p. 73.
79. I[D] Fry, 1995, p. 75.
80. I[C] Thatcher, p. 47.
81. Interview: Lord Bancroft.
82. I[D] Fry, 1985, pp. 147–49; I[D] Fry, 1995, pp. 63–65.
83. I[C] Thatcher, 1993, p. 424.
84. I[D] Heseltine, 1987, p. 22.
85. I[B] Cmnd. 8616, 1982, para. 13.
86. I[D] Fry, 1985, pp. 149–52; I[D] Fry, 1995, pp. 65–68.
87. I[C] Thatcher, 1993, p. 49.
88. I[D] Fry, 1995, p. 2.
89. I[D] Fry, 1995, pp. 100–102.
90. I[B] Efficiency Unit, 1988, para. 5.
91. I[B] Efficiency Unit, 1988, para, 44.
92. I[B] Efficiency Unit, 1988, para. 46.
93. I[D] Fry, 1995, pp. 105.
94. I[C] Lawson, 1992, pp. 390–93.
95. I[D] Fry, 1995, p. 112.
96. I[C] Lawson, 1992, pp. 390–93.
98. The Economist, 2.3.1985, p. 45.
99. Civil Service Statistics 1994, p. 41.
100. I[D] Fry, 1985, pp. 53, 63.
101. I[D] Hennessy, 1989, p. 346.
102. I[D] Fry, 1984, p. 150 [P. Nash].
103. I[D] Kavanagh and Seldon, 1989, p. 114 [P. Hennessy].
7 The Economic Liberal Crusades IV

1. I[D] Stevas, V, 1974, pp. 394–95.
2. I[D] Stevas, V, 1974, p. 339.
3. I[D] Mount, 1993, p. 264.
4. I[D] Mount, 1993, p. 251.
5. I[D] Graham and Prosser, 1988, p. 95 [S. Leach and G. Stoker].
6. I[D] Jenkins, 1996, p. 41.
7. I[D] Jenkins, 1996, p. 163.
8. I[D] Donoughue and Jones, 2001, pp. 125–27, 203–06.
9. I[A] PRO: CAB 128/1.
10. III[B] Spoor, 1967, pp. 436, 569–70.
11. I[D] Donoughue and Jones, 2001, p. 206.

12. I[D] Donoughue and Jones, 2001, p. xxxi.
13. I[A] HL Deb., 29.11.1961, col. 1148.
14. I[A] HL Deb., 29.11.1961, cols. 1146–47.
15. I[A] HL Deb., 14.3.1962, col. 188.
16. I[D] Walker, 1977, pp. 182–83.
17. I[D] Wilson and Game, 1994, p. 43.
18. I[C] Walker, 1991, pp. 79–80.
19. I[D] Dale, 2000, p. 242.
20. I[D] Mount, 1993, p. 252.
21. I[C] Lawson, 1992, pp. 562–63.
22. I[C] Lawson, 1992, p. 565.
23. I[D] Burke, II, 1790, p. 320.
24. I[C] Heseltine, 2001, p. 203.
25. I[D] Dale, 2000, p. 271.
26. I[C] Heseltine, 2001, pp. 201–03.
27. I[C] Heseltine, 2001, pp. 204–06.
28. I[C] Lawson, 1992, pp. 564–65.
29. I[C] Lawson, 1992, p. 312.
30. I[D] Heseltine, 1987, p. 43.
31. I[D] Heseltine, 1987, pp. 40–41.
32. I[D] Heseltine, 1987, pp. 36–38.
33. I[C] Heseltine, 2001, p. 206.
34. III[A] Audit Commission, 1984, pp. 1–2.
35. III[A] Audit Commission, 1984, p. 61.
36. III[A] Audit Commission, 1984, p. 5.
37. I[D] Butler, Adonis, Travers, 1994, p. 61; I[C] Heseltine, 2001, pp. 207–08.
38. III[A] Cmnd. 8449, 1981, p. 59.
39. I[C] Heseltine, 2001, p. 208.
40. I[C] Heseltine, 2001, p. 204.
41. I[D] Heseltine, 1987, pp. 134–36.
42. I[C] Howe, 1994, p. 110.
43. I[C] Heseltine, 2001, pp. 212–13.
44. III[B] Thornley, 1991, p. 181.
45. I[D] Hennessy, 1989, p. 699.
46. I[C] Heseltine, 2001, pp. 216–29.
47. I[D] Boddy and Fudge, 1984, p. 270.
48. Marxism Today, November 1981, pp. 17–18.
54. I[D] Dale, 2000, p. 304.
55. I[B] Cmnd. 9063, 1983, pp. 2–4.
56. I[B] H.C. Deb., 5.6.1991, cols. 298–99.
57. III[A] Cmnd. 9004, 1983, pp. 3, 6.
58. I[D] Hebbert and Travers, 1988, pp. 38–43, 56–88.
59. The Economist, 20.8.1994, p. 11.
60. I[D] Leach, Davis, Game, Skelcher, 1991, p. 185.
61. III[B] Cmnd. 9008, 1983, p. 14.

62. III[B] Cmnd. 9008, 1983, p. 15.
63. I[D] Loughlin, Gelfand and Young, 1985, p. xii.
64. I[D] Bogdanor, 2003, p. 542 [M. Loughlin]; I[D] Loughlin, Gelfand, and Young,
1985, p. 237.
65. The Economist, 6.8.1983, p. 12.
66. I[D] Taaffe and Mulhearn, 1988, p. 35.
69. I[D] Taaffe and Mulhearn, 1988, pp. 179–201.
72. The Spectator, 23.11.1985, p. 8.
73. The Economist, 30.11.1985, p. 20.
74. I[D] Davies, 1988, p. 91.
75. I[D] Pratchett and Wilson, 1996, pp. 1–19.
76. I[D] Davies, 1988, pp. 93–95.
77. I[D] Dale, 2000, p. 344.
78. I[D] Butler, Adonis, Travers, 1994, pp. 11–14.
79. III[B] Smith, 1776, pp. 310–11.
80. I[C] Lawson, 1992, p. 607.
81. I[C] Lawson, 1992, p. 104.
82. I[C] Lawson, 1992, p. 564.
83. I[C] Baker, 1993, pp. 122–26.
84. III[B] Cmnd. 9714, 1986, p. 76.
85. I[B] H.C. Deb., 18.1.1990, cols. 464–67.
86. I[D] Butler, Adonis and Travers, 1994, pp. 296–97.
87. I[C] Baker, 1993, p. 127.
88. I[C] Ridley, 1991, pp. 127–28.
89. I[C] Baker, 1993, pp. 128–29.
90. I[C] Lawson, 1992, pp. 580–81.
91. The Economist, 7.4.1990, p. 16.
92. I[C] Thatcher, 1993, p. 662.
93. I[C] Thatcher, 1993, p. 667.
94. I[C] Thatcher, 1993, p. 661.
8 The Governments of the ‘Iron Lady’ and the Defence

of the National Interest
1. II[B] Urban, 1996, pp. 177–78.
2. II[A] Cmnd. 7099, 1978, p. 10.
3. II[A] Cmnd. 6432, 1976, p. 1.
4. I[C] Thatcher, 1993, p. 9.
5. II[B] Henderson, 1994, p. 492; II[B] Hargrove, 1988, pp. 161–93.
6. I[C] Thatcher, 1993, pp. 68–69.
7. I[C] Thatcher, 1993, p. 156.
8. I[C] Thatcher, 1993, pp. 8–9.
9. I[D] Neale, 1934, p. 298.
10. I[C] Thatcher, 1995, p. 362.
11. II[B] Henderson, 1994, p. 315.

12. II[B] Henderson, 1994, pp. 286–87.
13. II[B] Henderson, 1994, p. 287.
14. I[C] Thatcher, 1993, p. 309.
15. II[B] Henderson, 1994, p. 5.
16. I[D] Collings, 1991, p. 596.
17. I[B] H.C. Deb., 21.11.1979, cols. 402–10; II[B] Boyle, 1980, pp. 485–511.
18. I[D] Hennessy, 1989, pp. 646–47.
19. II[B] Cradock, 1997, pp. 3, 7, 37.
20. I[C] Thatcher, 1993, p. 454.
21. I[D] Fry, 1981, pp. 120–25.
22. I[C] Thatcher, 1993, p. 250.
23. I[C] Nott, 2002, p. 233.
24. II[A] Cmnd. 9315, 1984, pp. 4–5.
25. I[B] HL Deb., 13.6.1984, col. 1169; c.f. I[D] Lyman, 1957, p. 106 for simi-
lar remarks made by the first ever Labour Secretary of State for War, Stephen
Walsh.
26. I[C] Heseltine, 2001, pp. 262–65; II[B] Hobkirk, 1985, pp. 45–50.
27. I[C] Thatcher, 1993, pp. 156–57.
28. II[B] Reagan, 1990, p. 357.
29. II[B] Parry and Kornbluh, 1988, pp. 3–30.
30. II[B] Henderson, 1994, p. 486.
31. I[C] Carrington, 1988, p. 48.
32. The Economist, 2.6.1979, pp. 29–40.
33. II[B] Henderson, 1994, p. 271.
34. I[C] Carrington, 1988, p. 280.
35. I[C] Carrington, 1988, pp. 90–92.
36. I[C] Carrington, 1988, pp. 169–76.
37. I[C] Carrington, 1988, p. 286.
38. II[B] Smith, 1997, p. 409.
39. II[B] Smith, 1997, pp. 159–222.
40. II[B] Smith, 1997, pp. 249–96.
41. I[C] Carrington, 1988, pp. 290–92.
42. II[B] de Waal, 1990, pp. 34–35.
43. II[A] Cmnd. 7712, 1979, p. 5.
44. I[C] Carrington, 1988, pp. 299–302.
45. II[B] de Waal, 1990, p. 39; II[B] Godwin and Hancock, 1993, p. 268.
46. The Spectator, 8.3.1980, p. 7 [Xan Smiley].
47. I[B] HL Deb., 4.3.1980, col. 143.
48. I[B] HL Deb., 4.3.1980, col. 147.
49. I[B] HL Deb., 6.2.1980, col. 1343.
50. II[B] Smith, 1997, pp. 409–10; II[B] Godwin and Hancock, 1993, p. 373.
51. II[B] Godwin and Hancock, 1993, p. 269.
52. The Spectator, 8.3.1980, p. 3.
53. II[B] Godwin and Hancock,1993, p. 275.
54. II[B] de Waal, 1990, p. 32.
55. I[C] Carrington, 1988, p. 298.
56. Lord Powell of Bayswater confirmed to me that these observations cohered with
his memory of events: c.f. I[C] Thatcher, 1993, pp. 528–35.
57. I[B] H.C. Deb., 9.2.1982, cols. 856–57.
58. II[A] Freeman, I, 2005, pp. 83–86.

59. I[C] Callaghan, 1988, pp. 370–78; I[B] H.C. Deb., 30.3.1982, col. 168; I[B] H.C.
Deb., 8.7.1982, cols. 479–82; c.f. I[C] Morgan, 1997, pp. 460–62, 594, 725.
60. II[A] Freedman, I, 2005, p. 86.
61. II[B] Freedman, I, 2005, pp. 48–49.
62. II[A] Freedman, I, 2005, pp. 46–47.
63. II[B] Hughes-Wilson, 2004, p. 264.
64. II[A] Freedman, I, 2005, p. 36.
65. II[A] Freedman, I, 2005, p. 18.
66. II[A] Freedman, I, 2005, p. 223.
67. I[B] H.C. Deb., 3.4.1982, col. 637.
68. I[C] Carrington, 1988, pp. 352–56.
69. II[A] Freedman, I, 2005, pp. 113–23.
70. I[B] H.C. Deb., 18.12.1980, col. 651.
71. II[A] Freedman, I. 2005, pp. 132–33.
72. II[A] Freedman, I, 2005, pp. 126–27.
73. I[B] H.C. Deb., 2.12.1980, cols. 128–34.
74. II[A] Freedman, I, 2005, p. 83.
75. II[B] Carver, 1992, p. 138.
77. I[C] Nott, 2002, pp. 254–55.
78. II[A] Freedman, I, 2005, p. 149.
79. II[B] Hughes-Wilson, 2004, pp. 304–05.
80. II[B] Freedman and Gamba-Stonehouse, 1989, p. 97.
81. II[A] Cmnd. 8787, 1983, p. 74.
82. II[A] Freedman, I, 2005, pp. 220–21.
84. II[B] Dorman, Kandiah, and Straerck, 2002, pp. 11–12.
85. II[B] Hughes-Wilson, 2004, pp. 280–83, 290.
87. I[B] H.C. Deb., 3.4.1982, col. 650 [E. Rowlands].
88. The Listener, 1.4.1982, pp. 2–4.
89. I[B] H.C. Deb., 8.7.1982, col. 481.
90. II[A] Freedman, I, 2005, p. 218.
91. I[C] Garnett and Aitken, 2003, p. 281.
92. I[B] H.C. Deb., 3.4.1982, col. 637.
93. I[B] H.C. Deb., 3.4.1982, cols. 653–55 [Ray Whitney].
94. I[C] Clark, 2000, p. 318.
96. The Economist, 3.3.1984, p. 25.
97. II[A] Freedman, II, 2005, pp. 39–48; II[B] Parsons, 1983, pp. 169–72.
98. I[C] Thatcher, 1993, p. 227.
99. The Economist, 3.3.1984, p. 23.
100. II[B] Thornton, 1998, pp. 19–20, 54–57, 242, 244.
101. II[B] Reagan, 1990, p. 358.
102. II[B] Wills, 1987, p. 248.
103. II[B] Haig, 1984, pp. 269–70.
104. II[B] Thornton, 1998, pp. 120–21.
105. II[B] Haig, 1984, p. 160.
106. II[B] Haig, 1984, p. 149.

109. II[B] Haig, 1984, p. 307.
110. II[B] Henderson, 1994, p. 481.
111. II[B] Reagan, 1990, p. 361.
112. II[B] Reagan, 1990, p. 358.
113. II[A] Freedman, II, 2005, p. 155.
114. II[B] Weinberger, 1990, p. 151.
116. The Economist, 3.3.1984, pp. 24–25; II[B] Wineberger, 1990, pp. 149–51;
I[C] Thatcher, 1993, pp. 226–27; II[B] Dorman, Kandiah, and Staerck, 2002,
pp. 26, 56–57; I[C] Nott, 2002, pp. 269–70; II[A] Freedman, II, 2005, pp. 62–67,
379–85.
117. II[B] Dorman, Kandiah, and Staerck, 2002, pp. 18–19.
118. II[B] Wineberger, 1990, p. 151.
120. II[A] Cmnd. 8758, 1982, p. 6.
121. II[B] Dorman, Kandiah, and Staerck, 2002, pp. 35–36; II[A] Freedman, 2005,
pp. 772–80.
123. II[A] Freedman, II, 2005, pp. 736–46.
124. The Economist, 3.3.1984, p. 23.
125. I[C] Clark, 2000, p. 333.
126. I[C] Clark, 2000, p. 348; c.f. I[C] Nott, 2002, p. 317.
127. II[B] Reagan, 1990, p. 473.
128. I[C] Thatcher, 1993, p. 330.
129. II[B] Weinberger, 1990, p. 15.
130. II[B] Weinberger, 1990, p. 113.
131. II[B] Reagan, 1990, p. 451.
132. II[B] Reagan, 1990, p. 449.
133. II[B] Reagan, 1990, p. 451.
134. II[B] Reagan, 1990, p. 458.
135. II[B] Schultz, 1993, p. 340.
136. II[B] Schultz, 1993, p. 151.
137. II[B] Schultz, 1993, p. 152.
138. II[B] Williams, 2001, pp. 208–30.
139. II[B] Weinberger, 1990, pp. 82, 92–93.
140. The Economist, 10.3.1984, p. 24.
141. I[D] Pimlott, 1996, pp. 497.
142. The Economist, 10.3.1984, p. 24.
143. I[C] Thatcher, 1993, pp. 331–32.
144. II[B] Schultz, 1993, p. 340.
145. The Economist, 10.3.1984, p. 24.
146. I[C] Howe, 1994, p. 337.
147. I[C] Thatcher, 1993, p. 333.
148. II[B] Schultz, 1993, p. 152.
149. I[C] Thatcher, 1993, p. 332.
150. I[C] Howe, 1994, p. 363.
151. II[B] Chang and Halliday, 2005, p. 651.
152. II[B] Chang and Halliday, 2005, p. 590.
153. I[C] Thatcher, 1993, p. 262.

154. I[C] Howe, 1994, p. 368.
155. II[B] Cradock, pp. 202–05.
156. I[C] Howe, 1994, p. 371.
157. I[C] Thatcher, 1993, p. 385.
158. I[A] PRO: PREM 15/1004.
159. I[D] Barnes and Nicholson, 1988, pp. 942–43.
160. I[D] Gilbert, IV, 1975, p. 449.
161. I[D] Loughlin, 2004, p. 123.
162. I[C] Hurd, 2003, pp. 302–03.
163. I[C] Thatcher, 1993, p. 400.
164. II[A] Cmnd. 9690, 1985, p. 3.
165. I[C] Hurd, 2003, p. 303.
166. II[B} Kelly, Hogan, and Whyte, 1994, p. 13.
167. I[C] Hurd, 2003, p. 303.
168. II[B] Kelly, Hogan, and Whyte, 1994, p. 10.
169. II[B] Kelly, Hogan, and Whyte, 1994, pp. 12–14.
170. I[C] Hurd, 2003, pp. 303–04.
171. I[C] Howe, 1994, p. 427.
172. The Spectator, 23.11.1985, p. 5.
173. I[B] H.C. Deb., 14.11.1985, col. 682.
174. The Spectator, 23.11.1985, p. 6 [F. Mount].
175. II[B] Cradock, 1997, p. 205.
176. The Spectator, 23.11.1985, p. 5.
177. I[C] Walden, p. 303.
178. I[B] H.C. Deb., 28.1.1980, cols. 972–73.
179. I[B] H.C. Deb., 28.1. 1980, col. 1082.
180. I[B] H.C. Deb., 26.10.1983, col. 309.
181. I[B] H.C. Deb., 28.1.1980, col. 974.
182. I[B] H.C. Deb., 28.6.1983, cols. 494–98; c.f. I[B] H.C. Deb., 7.4.1987, cols. 197–
201.
183. I[D] Heffer, 1998, p. 831.
184. I[D] Heffer, 1998, p. 879.
185. I[B] H.C. Deb., 3.3.1981, col. 157.
186. II[B] Urban, 1996, p. 3.
187. The New York Times, 9.6.1982; q.v. II[B] Spiers, 1995, p. 4.
188. II[B] Henderson, 1994, p. 473.
189. I[C] Walden, 1999, p. 150.
190. II[B] Schweizer, 2002, p. 90.
191. II[B] Schweizer, 2002, pp. 160–77.
192. II[B] Dallek, 1984, p. 192.
193. II[B] Spiers, 1995, pp. 12–13.
194. II[B] Schultz, 1993, p. 264.
195. II[B] Spiers, 1995, p. 14.
196. II[B] Spiers, 1995, p. 4.
197. II[B] Shevardnadze, 1991, p. 81.
198. II[B] Reagan, 1990, p. 677.
199. II[B] Reagan, 1990, p. 707.
200. II[B] Reagan, 1990, pp. 677–79; c.f. II[B] Brown, 1996, pp. 231–33.
201. II[B] Schultz, 1993, p. 779.
202. II[B] Spiers, 1995, p. 15; II[B] Reagan, 1990, pp. 696–99.
203. II[B] Schultz, 1993, pp. 1030–31.
204. II[B] Cradock, 1997, p. 201.
205. II[B] Sokolovskiy, 1975, p. 210.
208. II[B] Weinberger, 1990, p. 135.
209. II[B] Schultz, 1993, p. 687; c.f. I[C] Thatcher, 1993, pp. 443–49.
210. Newsweek, 3.12.1990, p. 37; q.v. II[B] Brown, 1996, p. 335.
211. II[B] Brown, 1996, p. 243.
212. II[B] Schweizer, 2002, p. 267.
213. I[C] Thatcher, 1993, pp. 782–83.
214. II[B] Mervin, 1998, pp. 181–82.
215. II[B] Cradock, 1997, pp. 124–25.
216. II[B] Lord, 1996, p. 117.
217. II[B] Monnet, 1976, p. 362; c.f. Thatcher’s opinion recorded in II[B] Urban,
1996, p. 194.
218. II[B] Jenkins, 1989, p. 37.
219. III[B] Swann, 1984, pp. 36–39.
220. I[C] Carrington, 1988, pp. 314–15.
221. I[A] PRO: FCO/30/1048.
222. II[B] Booker and North, 2005, pp. 167–95.
223. I[C] Walden, 1999, p. 364.
224. II[B] Jenkins, 1989, p. 372.
225. II[B] Urban, 1996, p. 75.
226. II[B] Cradock, 1997, p. 125.
227. II[B] Jenkins, 1989, pp. 374–75.
228. II[B] Jenkins, 1989, p. 22.
229. II[B] Jenkins, 1989, p. 11.
230. II[B] Booker and North, 2005, pp. 600–02.
231. II[B] Jenkins, 1989, pp. 479–80.
232. II[B] Jenkins, 1989, p. 529.
233. I[C] Carrington, 1988, p. 319.
234. I[C] Thatcher, 1993, p. 86.
235. I[D] Gilmour, 1992, pp. 238–41.
236. I[C] Carrington, 1988, p. 319.
237. II[B] Moravcsik, 1998, pp. 349–52.
238. II[B] Cradock, 1997, p. 126; c.f. I[C] Carrington, 1988, p. 319.
239. II[B] Cradock, 1997, p. 126.
240. II[B] Grant, 1994, p. 89.
241. II[B] Grant, 1994, p. 70.
242. I[C] Thatcher, 1993, p. 547.
243. I[C] Howe, 1994, p. 535.
244. II[B] Denman, 2002, p. 214.
245. II[B] Denman, 2002, p. 213.
246. I[C] Thatcher, 1993, p. 547.
247. I[C] Howe, 1994, p. 535.
248. II[B] Brittan, 2000, p. 31.
249. II[B] Denman, 2002, pp. 248–49.
250. I[C] Thatcher, 1993, p. 547.
251. II[B] Sbragia, 1992, p. 51.

252. I[D] Thatcher, 2002, p. 374.
253. I[C[Thatcher, 1993, p. 547.
254. I[D] Thatcher, 2002, p. 375.
255. II[B] Grant, 1994, p. 55.
256. II[B] Grant, 1994, p. 269.
257. I[C] Thatcher, 1993, pp. 558–59.
258. II[B] Ross,1995, p. 28.
259. II[B] Grant, 1994, p. 269.
260. I[C] Thatcher, 1993, pp. 558–59.
261. I[C] Howe, 1994, pp. 457–58; I[B] H.C. Deb., 23.4.1986, cols. 320–21; II[B]
Nicoll, 1984, pp. 35–43.
262. II[B] Cradock, 1997, pp. 127–28.
263. II[B] Grant, 1994, p. 74.
264. II[B] Cradock, 1997, pp. 128–33.
265. I[C] Thatcher, 1993, p. 742.
266. I[C] Thatcher, 1993, p. 746.
267. I[C] Thatcher, 1993, pp. 744–45.
268. The Economist, 24.9.1988, p. 16.
269. I[C] Howe, 1994, p. 538.
270. I[B] H.C. Deb., 30.10.1990, col. 873.
271. I[C] Hurd, 2003, p. 417.
272. II[B] Bell, 2005, p. 139.
273. II[B] Cradock, 1997, p. 111.
274. I[C] Thatcher, 1993, p. 813.
275. II[B] Bell, 2005, p. 139.
276. II[B] Bull, 1982–83, pp. 149–50.
277. II[B] Grant, 1994, p. 185.
278. I[C] Clark, 1993, p. 392.
9 The Unfinished Revolution

2. The Sunday Telegraph, 10.1.1988.
3. I[D] Bruce-Gardyne, 1984, pp. 4–5.
4. I[D] Hall and Jacques, 1983, p. 10; I[C] Young, 1993, pp. 111, 233, 238, 526–27;
I[C] Thatcher, 1993, pp. 150, 153; III[B] Davies, 2004, p. 78; III[A] Cm. 962,
1990, para. 424; I[C] Stuart, 1998, p. 188; I[C] Garnett and Aitken, 2003, p. 235.
I[D] Fry, 1998, pp. 138–47 gives chapter and verse on why Thatcher and Powell
could not be sensibly said to be populists.
5. I[D] Oakeshott, 1962, p. 169.
6. I[D] Oakeshott, 1962, p. 171.
7. I[D] Oakeshott, 1962, pp. 172–73.
8. The Spectator, 26.7.1986, p. 6 [B. Anderson].
9. I[D] Letwin, 1992, pp. 39–40.
10. The Spectator, 9.8.1986, pp. 12–13.
11. I[D] Letwin, 1992, p. 57.
12. I[D] Kant, 1787, pp. 294–315, 332, 342–43, 422, 447.
13. I[C] Nott, 2002, p. 183.
14. I[D] Blake, 1985, p. 367.

15. III[B] Hoskyns, 2000, p. 56.
16. I[C] Patten, 2006, p. 71.
17. III[B] Chamberlin, 1949, pp. 68–70.
18. II[B] Henderson, 1994, p. 271.
19. I[C] Patten, 2006, p. 71.
20. I[C] Thatcher, 1993, p. 44.
21. III[B] Augar, 2001, pp. xv, 4, 33–40, 109–10, 264–65, 308, 313.
22. III[B] Smith, 1776, I, p. 429.
23. I[B] H.C. Deb., 12.6.1979, col. 246.
24. III[B] Adeney and Lloyd, 1986, p. 113.
25. I[D] Bulpitt, 1986, pp. 19–39.
26. II[B] H.C. 720, 1979–80, p. 61.
27. I[C] Lawson, 1992, p. 67.
28. The Economist, 16.8.1986, p. 14.
30. The Spectator, 25.1.1986, p. 6 [F. Mount].
31. III[B] Congdon, 1992, p. 158.
32. As was suggested by The Economist, 23.3.1985, p. 16.
33. I[D] Young and Sloman, 1986, p. 75–76.
35. III[B] Allsop, Jenkinson, and Morris, 1991, pp. 68–80; III[B] Artis, 1991,
pp. 128–37; III[B] Buxton, Chapman, and Temple, 1994; III[B] Crafts, 1991, pp.
81–98; III[B] Healey, 1989–90, pp. 18–23; III[B] Healey, 1993; III[B] Johnson,
1990; III[B] Layard and Nickell, 1989–90, pp. 6–9; III[B] Mathews and Stoney,
1989–90, pp. 10–16; III[B] Michie, 1992; III[B] Minford, 1991; III[B] Muellbauer,
1991, pp. 99–117; III[B] Oulton, 1990, pp. 71–91; III[B] Smith, 1987; III[B] Vane,
1992, pp. 26–43; III[B] Wallis and Whitley, 1991, pp. 118–27.
36. The Economist, 23.6.1990, pp. 23–26.
37. III[B] Crafts, 1998, p. 35.
38. III[B] Crafts, 1998, p. 9.
39. I[D] Curtis, III, 2000, p. 659.
40. I[D] Curtis, II, 1999, p. 256.
41. I[D] Curtis, II, 1999, p. 117.
42. I[D] Curtis, III, 2000, p. 47.
43. I[C] Thatcher, 1993, p. 11.
45. I[D] Curtis, III, 2000, p. 47.
46. II[B] Denman, 2002, pp. 249, 268, 276.
47. The Independent, 11.4.2006.
48. I[C] Ridley, 1991, p. 267.
49. The Listener, 11.12.1980, p. 774.
50. I[C] Thatcher, 1993, p. 46.
51. I[C] Thatcher, 1993, p. 48.
52. I[D] Ranelagh, 1991, p. 306.
53. I[C] Ridley, 1991, p. 267.
54. I[D] Powell, 1977, p. 151.
55. I[D] Donaldson, 1967, p. 15.
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Pugliese, S. (ed.), The Political Legacy of Margaret Thatcher (London, Politico’s, 2003).
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1978).
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2002).
Ramsden, J., The Making of Conservative Party Policy. The Conservative Research Depart-
ment since 1929 (London, Longman, 1980).
Ranelagh, J., Thatcher’s People (London, HarperCollins, 1991).
Rayner, Lord, The Unfinished Agenda [The Stamp Memorial Lecture] (London,
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Seawright, D., ‘One Nation’, in Hickson, K. (ed.), The Political Thought of the Conservative
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Seldon, A. and Hickson, K. (eds), New Labour, Old Labour. The Wilson and Callaghan
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Seyd, P., The Rise and Fall of the Labour Left (Basingstoke, Macmillan, 1987).
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Thatcher, M., Statecraft. Strategies for a Changing World (London, HarperCollins, 2002).
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Watson, G., The English Ideology (London, Allen Lane, 1973).
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Wickham-Jones, M., ‘Right Turn: A Revisionist Account of the 1975 Conservative Party
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Williams, P., ‘The Labour Party: The Rise of the Left’, West European Politics, 6 (1983),
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Wilson, D. and Game, C. (eds), Local Government in the United Kingdom (Basingstoke,
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Worcester, R.M. and Harrop, M. (eds.), Political Communications. The General Election
Campaign of 1979 (London, Allen & Unwin, 1982).
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Wyatt, W., What’s Left of the Labour Party? (London, Sidgwick & Jackson, 1977).
Young, H. and Sloman, A., The Thatcher Phenomenon (London, BBC, 1986).
II Diplomatic and military history
[A] Government publications [London: HMSO]

Cmnd. 6432 [1976] Statement on the Defence Estimates 1976.
Cmnd. 7712 [1979] Commonwealth Heads of Government Meeting Lusaka 1 August–
7 August 1979. Communique.
Cmnd. 7826-I [1980] Defence in the 1980s. Statement on the Defence Estimates 1980.
Cmnd. 8212-I [1981] Statement on the Defence Estimates 1981.
Cmnd. 8288 [1981] The United Kingdom Defence Programme: The Way Forward.
Cmnd. 8758 [1982] The Falklands Campaign: The Lessons.
Cmnd. 8787 [1983] Falkland Islands Review [Franks Report].
Cmnd. 9315 [1984] The Central Organization for Defence.
Cmnd. 8758 [1986] Single European Act.
Cm. 101-I [1987] Statement on the Defence Estimates 1987.
Freedman, Sir L., The Official History of the Falklands Campaign. I. The Origins of the
Falklands War [2005].
Freedman, Sir L., The Official History of the Falklands Campaign. II. War and Diplomacy
[2005].
[B] Further sources

Aldrich, R.J., The Hidden Hand. Britain, America, and Cold War Secret Intelligence (London,
John Murray, 2001).
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Andrew, C. and Mitrokhin, V., The Mitrokhin Archive. The K.G.B. in Europe and The West
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Applebaum, A., Gulag. A History of the Soviet Camps (London, Penguin, 2003).
Barker, N., Beyond Endurance. An Epic of Whitehall and the South Atlantic Conflict
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Bell, D.S., François Mitterand. A Political Biography (Cambridge, Polity Press, 2005).
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Boyle, A., The Climate of Treason (London, Coronet, 1980).
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Brown, A.H., The Gorbachev Factor (Oxford, Oxford University Press, 1996).
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Byrd, P. (ed.), British Foreign Policy under Thatcher (Oxford, Philip Allan, 1988).
Carver, M., Tightrope Walking. British Defence Policy since 1945 (London, Hutchinson,
1992).
Chang, J. and Halliday, J., Mao. The Unknown Story (London, Cape, 2005).
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1992 (London, Hutchinson, 1990).
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Dallek, R., Ronald Reagan. The Politics of Symbolism (Cambridge, Mass., Harvard
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Hastings, M. and Jenkins, S., The Battle for the Falklands (London, Pan, 1997).
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Smith, I., The Great Betrayal (London, Blake, 1987).
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III Economic and social history
[A] Government publications [London: HMSO]

Cmnd. 6151 [1975] The Attack on Inflation.
Cmnd. 6440 [1976] Cash Limits on Government Expenditure.
Cmnd. 6453 [1976] Local Government Finance. Report of the [Layfield] Committee of
Inquiry.
Cmnd. 7293 [1978] Winning the Battle against Inflation.
HC 720 (1979–80) House of Commons Treasury and Civil Service Committee, Memo-
randa on Monetary Policy.
Cmnd. 8093 [1980] The Taxation of Husband and Wife.
Cmnd. 8147 [1981] Report of the [Scott] Inquiry into the Value of Pensions.
Cmnd. 8449 [1981] Alternatives to Domestic Rates.
Cmnd. 8590 [1982] Report of the [Megaw] Inquiry into Civil Service Pay.
Cmnd. 9008 [1983] Rates. Proposals for Rate Limitation and Reform of the Rating System.
Cmnd. 9108 [1983] Valuation and Rating in Scotland: Proposals for Reform.
Audit Commission, The Impact on Local Authorities’ Economy, Efficiency and Effectiveness
of the Block Grant Distribution System [1984].
Cmnd. 9125 [1984] [Gower] Review of Investment Protection.
Cmnd. 9189 [1984] The Next Ten Years: Public Expenditure and Taxation in the 1990s.
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Cmnd. 9517 [1985] Reform of Social Security.

Cmnd. 9518 [1985] Reform of Social Security. Programme for Change.
Cmnd. 9524 [1985] Higher Education in the 1990s.
Cmnd. 9550 [1985] Report of the [Leigh-Pemberton] Committee Set Up to Consider the
System of Banking Supervision.
Cmnd. 9691 [1985] Reform of Social Security. Programme for Action.
Cmnd. 9695 [1985] Banking Supervision.
Cmnd. 9710 [1986] Final Report of the [Popplewell] Committee of Inquiry into Crowd
Safety and Control at Sports Grounds.
Cmnd. 9714 [1986] Paying For Local Government.
Cmnd. 9756 [1986] The Reform of Personal Taxation.
Cm. 81 [1987] [Croham] Review of the University Grants Committee.
Cm. 555 [1989] Working for Patients.
Cm. 962 [1990] The Hillsborough Stadium Disaster. 15 April 1989. Inquiry by the Right
Hon Lord Justice Taylor. Final Report.
Lawlor, J., ‘Monthly Unemployment Statistics: Maintaining a Consistent Series’,
Department of Employment Gazette, December 1990, pp. 601–8.
Cromb, J., ‘Supply Side Performance in the 1980s’, Treasury Bulletin, Summer 1992,
pp. 23–36.
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Summer 1993, pp. 20–32.
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Allsop, C., Jenkins, T. and Morris, D, ‘The Assessment: Macro-Economic Policy’, Oxford
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Anderson, D., ‘Good Samaritanism versus Citizen’s Welfare Rights. A Rejoinder to
Pemberton’, Journal of Social Policy, 19 (1990), pp. 553–55.
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Allsop, C., Jenkinson, T. and Morris, D., ‘The Assessment: Macroeconomic Policy in
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Index
abolitionism 10 Black Papers on education 127

academics 128–9, 130, 132 block grant system 166–7
Adam Smith Institute 177 blocks of flats 114
advisers 44–9 Blunkett, D. 170
Afghanistan 206, 207 Blunt, A.D. 183
agencies, Next Steps 155–7 Bowe, C. 59
Alliance 20, 21, 24, 41 Boyson, R. 176–7
Alternative Economic Strategy 11, 34 Bridges, Sir E. 140
Amery, L. 203 Brighton bomb 23–4
Amis, K. 45, 46, 235 British Airways 83
Andropov, Y. 209 British Gas 98
Anglo-Irish Agreement (1985) 203–6 British Leyland (BL) 82–3, 231
Argentina 189–200 British Medical Association (BMA) 121
Armitage, Sir M. 193 British Petroleum 95
Armstrong, Sir R. 44, 145–6, 146–7 British Telecom (BT) 97–8
Armstrong, Sir W. 236 Britoil 97
Attlee, C. 5, 160, 232, 234 Brittan, L. 52, 58, 59, 61, 117, 216
Audit Commission 121, 166 Brocklebank-Fowler, C. 40–1
Brown, G. 9
Bruce-Gardyne, J. 21, 23, 222, 223
Bagehot, W.D. 5, 159
Bruges speech (1988) 219–20
Baker, K. 65, 67, 68
Budgets
Community Charge 175–6, 177, 178
1979 77–9
education 127, 131–2, 134–6
1980 80–1
Baldwin, S. 3–4, 4–5, 13, 17
1981 84–8
Bancroft, Sir I. 138, 140, 144, 151, 152,
1982 88–9
157, 158
1983 89
Banham, J. 166
1984 90–1
Barnett, J. 9
1985 91
Boyle, Lord 109, 226
1986 91, 92
BBC 48
1987 91–2
Beckett, Sir T. 83
1989 93
Belgrano, General 144–5, 198, 199
Burke, E. 163
Beloff, M. 45, 127–8, 183–4
Bush, G. 211
Benn, T. 2, 19, 35, 102
Butler, Sir R. 44
deputy leadership contest 33–4
Butler, R.A. 12–13, 14
European Community 11–12, 33
influence on the Left 10, 32–3
Bernstein, E. 30 Cabinets 49–62
Bevan, A. 119 after 1983 election 58
Beveridge, W. 38, 122–3 CPRS paper on private health
Bevin, E. 5, 234 insurance 117–18
Biffen, J. 53, 71, 76, 77, 79, 96 early Thatcher Cabinets 49–53
Birch, N. 38 Falklands War Cabinet 53–8
Black Monday (October 1987) 93 Westland Affair 58–62
285
286 Index
Callaghan, J. 2, 3, 32, 33, 189, 235 Clark, A. 16, 21, 22, 23–4, 53, 54, 56,
Campaign for Labour Party Democracy 59, 60, 62, 66, 67, 68, 69, 70, 83, 85,
10–11 118, 140, 194, 199–200, 221
capital punishment 10, 223 Clarke, K. 116, 120, 213
Carlisle, M. 129 Clegg Commission 77
Carr, R. 16 Coalition Government 2–3
Carrington, Lord 64, 185, 185–6 wartime 6
European Community 213, 215 code of conduct for Civil Service 145–6
Falklands War 191, 194; War Cabinet Cockfield, Lord 216
54, 56 Cold War 206–11
Commonwealth 212
Rhodesia 186–8
Community Charge (Poll Tax) 65–6,
Carter, J. 181, 182
167, 174–9, 235, 236
Central Office of Information 156
competitive tender 173
Central Policy Review Staff (CPRS)
comprehensive schools 132–3
47–8
Confederation of British Industry (CBI)
Centre Party (proposed) 39 83
Centre for Policy Studies 46, 47, 72 Confederation of Health Service
Chamberlain, J. 237 Employees 117
Chamberlain, N. 105 Congdon, T. 232
Channel Tunnel 232 Conquest, R. 45, 46
Chapman efficiency reviews 153 Conservatism, Thatcherism and
Charles, E. 200 224–37
Cheysson, C. 218 Conservative Party 12–18
Chief of Defence Staff 183 general election victories 19–27
Child Support Act 1991 108 Manifestos: 1974 162; 1979 19,
Child Support Agency 108 111; 1983 22, 170; 1987 The Next
China 202–3 Moves Forward 25–6, 174
Christie, C. 139–40 1922 Committee 54
Christie, L. 139–40 consumerism 228
Church of England 107–8, 183 Cooper, Sir F. 140
core curriculum 135–6
Churchill, W.S. 5, 12–13, 180, 203,
core and periphery 155
225, 234
Cornish tin mines 231
City of London 83, 229–30
Council of Civil Service Unions (CCSU)
Civil and Public Services Association
149–50
139
council estates 114
Civil Service 137–58, 230, 236
council housing, sale of 109, 110–12,
Higher Civil Service as adversary 115
140–7 court, Thatcher’s 44–9
management revolution 147–54 covert task force 189
numbers reduced 148, 157 Cradock, Sir P. 183, 202, 206, 210,
radical reforms and Next Steps 211–12, 214, 216, 219
programme 154–8 adviser on foreign policy 44
size and distribution 138–9 Cripps, Sir S. 11
Civil Service Commissioners 142 Crosby by-election 21
Civil Service Department (CSD) 147, Crosland, A. 10, 12, 39, 110, 132
148, 151 Crossman, R. 109
Civil Service Pay Research Unit 148 Customs and Excise 156
Clare Booth Luce Award Dinner 180 Cutler, H. 169
Index 287
Dangerfield, G. 27 electoral college 32, 33

Davies, C. 38 employee shares 96–7
Davies, H. 173 Employment Act 1980 100–1
Defence, Ministry of 183 Employment Act 1982 101
Dell, E. 2, 3, 11 Endurance, HMS 189, 192
Delors, J. 37, 216, 217, 220, 221 Enterprise Zones 168
Single European Act 218, 219, Enthoven, A. 118–19, 120, 121–2
235 Establishment 222
Deng Xiaoping 202 European Community 226
Denman, Sir R. 137, 142, 144, 216–17 Britain’s contribution to 213–16
Department of the Environment (DOE) elections to European Parliament 65
153 Labour Party and 11–12, 37
Department of Health and Social Thatcher and 182, 211–21, 235
Security (DHSS) 109, 139 Evans, M. 34
Derx, D. 144 exchange controls, abolition of 79–80
detachment 140–1 Exchange Rate Mechanism (ERM)
Douglas-Home, Sir A. (Lord Home) 14, 66–7, 70, 94, 219, 231, 235
15–16, 188, 203
Du Cann, E. 14, 15 Fabians 147
Duchene, F. 221 Faith in the City 107
Duff, Sir A. 183 Falkland Islands Company 190
Duguid, A. 47 Falklands War 21, 189–200, 236
War Cabinet 53–8
E (DL) Committee 96 family 108
E (LF) Committee 175, 178 Family Allowances Act 1945 106
economic decline, relative 233 Fieldhouse, Admiral Sir J. 199
economic and monetary union (EMU) Financial Management Initiative (FMI)
219 153–4
economic policy 71–104, 226–34 financial stability 74
attack on trade-union power 74, First Division Association (FDA) 142,
99–104, 230 143
economic strategy 71–6 Fisher, N. 13, 14
market economy 74, 76–94, 228–30 Fisher, Sir W. 152, 157–8
privatization 74, 94–9, 230 FitzGerald, G. 204
Economic Policy and the Standard of Living Foot, M. 33, 34, 35, 55, 235
8–9 Football Spectators Act 1989 224
Economic Reconstruction Group 74 Foreign and Commonwealth Office
Economic and Social Research Council (FCO) 182–3
130 foreign policy see national interest
Economist, The 2, 61–2, 78–9, 81, 82, Fowler, N. 62, 109, 143
88, 89, 90–1, 117, 122–3, 139–40, NHS 116, 117, 118
172, 178–9 social security 106, 108, 122–3, 124,
education 109, 127–36, 173 125–7
Education Act 1902 106, 185 France 88, 135, 137, 159, 163, 214–15
Education Act 1944 106, 185 Franks Report 193
Education Reform Act 1988 132, 136 Friedman, M. 72–3, 230
Edwardes, Sir M. 82, 83 Fulton Committee Report 147, 152
Edwards, N. 175
Efficiency Unit 155–6 Galtieri, General L.F. 192–3, 198
Eisenhower, D.D. 195 Gang of Four 40, 42
288 Index
gas pipeline, Siberian 208 Henderson, Sir N. 57, 182, 183, 185,
General Belgrano 144–5, 198, 199 196
General Certificate of Secondary Heseltine, M. 51, 109, 113
Education (GCSE) 134 abolition of exchange controls 80
general elections housing 111–12, 113, 115
1974 13–14 and Jacklin 44
1979 19–20 local government 164–5, 165–9
1983 21–3, 35, 41 and management 152, 153
1987 24–7, 35, 42 Ministry of Defence 142, 183–4
General Strike 3–5 1990 leadership contest 69, 70
Germany 214–15, 221 Ponting 145
reunification 221 Westland Affair 24, 58–62
West Germany 163 Higher Civil Service 137, 138, 157
Giant’s Strength, A 99 as adversary 140–7
Gillman, B.A. 149 Hillsborough Stadium disaster 224
Gilmour, Sir I. 17, 52, 87, 215 Hobsbawm, E. 30
Giscard d’Estaing, V. 214 homelessness 114
Gorbachev, M. 209–10, 211 Hong Kong 202–3
Gould, J. 46 Hoskyns, Sir J. 46–7, 74, 85–6, 100,
Government Communications 140–2, 150, 227
Headquarters (GCHQ) 151 housing 109, 110–15, 164–5, 173
Gow, I. 62, 68, 205 Housing Act 1980 109, 112
grammar schools 109, 132, 133 Housing and Planning Act 1986 114
Greater London Council (GLC) 161, Howe, G. 45, 74, 117, 150, 168, 202,
169–70, 170–1 205, 216, 220
Greene, H. Carleton 48 Chancellor 71; Budgets 77–81,
Grenada 200–1 84–6, 88–9, 230
Griffin, Sir F. 110 E (DL) Committee 96
Griffiths, B. 132 Foreign Secretary 58, 201
Grimond, J. 38 Luxembourg Compromise 218
Madrid ‘ambush’ 66
Haig, A. 57, 58, 196 relationship with Thatcher 64, 65
Hard Left 36 resignation 67–8
see also Militant Tendency Howell, D. 76–7, 88
Hattersley, R. 33, 35, 109 Hurd, D. 63, 70, 99, 204–5, 221, 223
Hatton, D. 36, 172
Havers, Sir M. 55, 59, 112 Ibbs, Sir R. 44, 155
Hayek, F.A. 72, 225 income tax 78
Hayward, R. 9 Industrial Charter 12–13
Healey, D. 32, 33, 39, 42, 77, 79, 95 inflation 72–3, 79, 89, 93–4
Heath, E. 1–2, 3, 13–14, 14–15, 17, Ingham, B. 48–9, 59, 60, 65
146–7, 203 Inland Revenue 156
approach to policy 226 Inner London Education Authority
European Community 212, 213 (ILEA) 161, 171
refusal of post as ambassador to US Institute of Directors 83
50 Institute of Economic Affairs (IEA) 72
Thatcher’s challenge for leadership interest rates 93–4
16 Intermediate Nuclear Forces (INF) Treaty
Helsinki Accords 208 210
Henderson, A. 5 internal market 118–22
Index 289
International Monetary Fund 12, 72, Law, A. Bonar 4, 222

232 Lawson, N. 50, 63–4, 80, 84, 85, 118
1976 crisis 1–6 Chancellor 58, 83, 89–90, 232;
IRA 23–4 Budgets 76, 90–2
Iran Contra Affair 184 education 127, 129, 134–6
Iraq 211 Energy Secretary 52
Ireland 204–6 local government 163, 165, 177; Poll
Irish Nationalists 27 Tax 65–6, 174–6, 178
Irving, C. 67 MTFS 81
Next Steps programme 156
Jacklin, R. 44 NHS 115–16
Jay, D. 138 privatization 94–5, 96–8, 99
Jenkin, P. 97, 117, 175 social security 123, 124–5, 126
Jenkins, D. 107 Leach, Sir H. 53, 198
Jenkins, P. 12 leadership contests
Jenkins, R. 37, 38, 39, 208, 212 Conservative 15, 65, 68; Thatcher’s
European Commission 213, 214–15 accession to leadership 15–18;
SDP 40, 41 Thatcher’s fall 69–70
Johnson, P. 45 Labour 33, 35
Jones, J. 7, 9 leaks 51–2, 59, 144–5
Jones, P. 150 leaseback policy 191–2
Joseph, Sir K. 15, 52, 71, 82–3, 97
Lebanon 200
education 127, 130–1, 132, 133–4,
Leeds 170
136
Leonov, N. 209
Joubert, C. 153
Letwin, S. 225
journalism 48–9
Levene, P. 142
Joynson-Hicks, Sir W. 4
Levin, B. 70
Lewin, Sir T. 55
Kaufman, G. 35
Lib–Lab Pact (1977–8) 2
Kaunda, K. 187
Liberal Democrats 42
Kemp, P. 156
Liberal Party 27–8
Kendall, W.L. 139, 148, 149, 150
Keynes, J.M. 38–9 and their allies 37–42
Keynesianism 6–7, 30, 31, 227 1983 Election Manifesto 34–5
King, J. 83 SDP–Liberal Alliance 20, 21, 24, 41
King, T. 101, 167 Libya 210–11
Kinnock, N. 35–6, 60, 236 Liverpool 168–9, 172
Kirkpatrick, J. 195–6 Livingstone, K. 169–70, 170–1
Kissinger, H. 196 Lloyd George, D. 4, 38, 222, 234
Knight, F. 72 local government 159–79, 230, 236
Kohl, H. 215, 221 battle with 164–73
Kolakowski, L. 39 Community Charge 65–6, 167,
Kuwait 211 174–9, 235, 236
expenditure 162–3, 164, 165–6
Labour Party 6–12, 27–8 Local Government Act 1972 161–2
high-spending local councils 162–3, local income tax 167
169–71 local sales taxes 167
Labour’s Programme 1973 11 London 171
Opposition 30–7 GLC 161, 169–70, 170–1
Laski, H. 6 London County Council 160, 161
290 Index
London Docklands Development Mulhearn, T. 172

Corporation 171 Munich Agreement (1938) 212–13
London Regional Transport 171 Muzorewa, A. 186, 187, 188
Love, S. 193
Lusaka Commonwealth Conference Namibia 189
187 Napoleon 159
Luxembourg Compromise 218 national curriculum 135, 136
National Governments (1930s) 3, 227
MacDonald, R. 3 National Health Service (NHS) 109,
MacGregor, Sir I. 102 115–22, 160–1
Machel, S. 187 national interest 180–221
Macmillan, H. 5, 55, 110, 227 Britain’s role in the world 181–2
Main, A. 135 Cold War 206–11
Major, J. 66–7, 70, 94, 178 European Community see European
management revolution 147–54 Community
Mao Tse-Tung 202 legacies of Empire 185–206;
market economy 74, 76–94, 228–30 Anglo-Irish Agreement 203–6;
Marshall, A. 30 Falklands War 189–200; Grenada
Marxism 30–1 200–1; Hong Kong 202–3;
Mason, D. 177 Rhodesia 185–9
McAlpine, A. 26 relationship with USA 180–1, 184–5
Medium Term Financial Strategy (MTFS) National and Local Government
81, 90, 231 Officers’ Association (NALGO) 161
Megaw Committee 150, 151 National Union of Mineworkers (NUM)
Mercury Communications 97 102–3, 230
Merrison Royal Commission on the NHS National Union of Public Employees
115 117
Meyer, Sir A. 65 nationalization 160–1
Middleton, Sir P. 143 NATO 181
Miliband, R. 6 Neave, A. 16, 19
Militant Tendency 36, 163, 172 newspapers 48–9
military satellites 198 Newton, T. 108
Miners’ Federation of Great Britain Next Steps programme 154–8
(MFGB) 4–5 NHS and Community Care Act 1990
miners’ strikes 7 121
1984–5 24, 36, 102–3, 230, 236 Niehans, J. 85, 86
missiles 197–8 Nkomo, J. 186, 187–8
Mitchell, A. 31–2 North Sea oil 79–80
Mitterrand, F. 88, 215, 221 Northern Ireland 28
Monetarism 72–3, 230–1 Anglo-Irish Agreement 203–6
money supply targets 77–8 Nott, J. 51–2, 74, 77, 80, 87, 183, 226
Monnet, J. 212, 213 Falklands War 53–4, 55, 56–7, 57–8,
Moore, J. 118 192
Morrison, H. 9, 160–1 Trade Secretary 72, 83–4
Morrison, P. 69 nuclear war 210
Mount, F. 48, 61, 86, 88, 92, 159, 162, Nyerere, J. 187
231–2
Mozambique 186 Oakeshott, M. 224
Mueller, A. 154–5 Office of Telecommunications (Oftel)
Mugabe, R. 186, 187, 188 97
Index 291
Official Secrets Act 145, 146 private sector 141–2

oil prices 76–7 privatization 74, 94–9, 230
Oldfield, M. 189 productivity 73
Open University 131 Provisional IRA (PIRA) 203–4, 205
Organization of African Unity (OAU) Public Sector Borrowing Requirement
186 (PSBR) 81, 84–5
Organization of Eastern Caribbean States Pym, F. 52, 53, 55, 56–7, 58
(OECS) 200
Owen, D. 32, 39, 40, 41, 42, 189, 213 rates 164, 167, 169–70, 173, 174, 177
capping 171–2
Parkinson, C. 53, 58, 83, 131, 199, 226 Rayner, Sir D. (later Lord) 44, 147,
Falklands War 55, 57, 58, 199 152–3
Parliamentary Labour Party (PLP) 32 Reagan, R. 181, 184–5, 196, 204, 236
Parsons, Sir A. 44, 195 Cold War 207–11
Parsons, T. 183 Falklands War 193, 195
Part, Sir A. 141 Grenada invasion 200, 201
party political system 27–30 redistribution of wealth 169–70
Paternalism 185, 226–7 Referendum on Europe 11–12, 212,
Patriotic Front (Rhodesia) 186, 187, 213
188 rent control 113
Patten, C. 17, 69, 178, 229, 232–3 Research Assessment Exercise 130
pay, Civil Service 148–9, 150, 151, 152, residual welfare model 106
154 Resource Allocation Working Party 119
Paying for Local Government 176 Restart scheme 125
pensions 125–6 Rhodesia 185–9
Phillips, M. 9 Ridley, N. 47, 48, 49, 50, 51, 52–3, 62,
Pile, Sir W. 140 64, 65, 236, 237
Pincher, C. 146 Community Charge 177–8
Poland 208 Falklands War 191–2
Poll Tax (Community Charge) 65–6, privatization 95, 98–9
167, 174–9, 235, 236 Transport Secretary 58
polytechnics 129–30, 131 Ridley Group 99–100
Ponting, C. 144–5 Rifkind, M. 177, 178
populism 223–4, 226 Right Approach to the Economy, The
Powell, C. 44, 62, 65, 72, 73, 183, 211, 73–4
216 ‘Right to Buy’ 109, 111–12, 115
Powell, E. 10, 15, 183, 205–6, 206–7, Rio Tinto Zinc 231
237 riots 87, 168–9, 178–9
Priestley pay system 140, 148–9, 151 Robbins expansion of universities 128
Prime Minister’s Policy Unit 46–7, 48 Rodgers, W. 40, 41
Prior, J. 13, 15, 16, 20, 24, 43, 84, 144, Rooke, Sir D. 98
151 Roosevelt, F.D. 203
Cabinet 50, 52; Civil Service strike Royal College of Nursing 116–17
150 Royal Mint 156
Employment Secretary 72, 100–1 Runcie, R. 199
reasonableness 72
private health insurance 117–18 Scanlon, H. 7, 8
Private Secretaries (10 Downing Street) Scargill, A. 7–8, 36, 102, 236
143 Schmidt, H. 208, 214
private rented housing 113, 115 schools 132–6, 173
292 Index
Schumpeter, J. 71 Stationery Office 156

Scoon, Sir P. 200 Steel, D. 40, 41, 42
Scotland 28–9, 178 Stepping Stones 74, 100
Scott Inquiry 148 Stock Exchange 83, 229
Scottish National Party 29 Strategic Defense Initiative (SDI or Star
Scottish Office 29 Wars) 209, 210
security of tenure, for academics 128–9 Strauss, N. 44, 46, 47, 74, 100, 151
Service Ministries 183 Streamlining the Cities 170
Sheffield 170 strikes 99–100, 101–3
Shenfield, A. 138 Civil Service 139, 149–51
Sherman, A. 46, 74 General Strike 3–5
Shevardnadze, E. 209 miners see miners’ strikes
shorthold tenure 113 student grants 130–1
Shultz, G. 196, 200, 201, 209, 210–11 student loans 131–2
Siberian gas pipeline 208 Suez Crisis 194, 195
Silverman, S. 10 ‘Suez syndrome’ 181–2
Single European Act 217–19, 235 Sunningdale Agreement (1973) 205
Single Market 216–18 Sweden 155
Sinn Fein/PIRA 203–4 Switzerland 125–6
Smith, A. 71, 174, 228
Smith, I. 186, 187, 188 taxation 78–9, 85
Soames, C. (later Lord) 52, 150, 151, Community Charge 65–6, 167,
188 174–9, 235, 236
social class 235 and social security system 124–5
Social Contract 8–9 teachers 132, 134–5
social democracy 39–40 Tebbit, N. 25, 26, 27, 52, 101, 109
Social Democratic Party (SDP) 20, 33, technological universities 129–30
40–1, 42 textile industry 83–4
SDP–Liberal Alliance 20, 21, 24, 41 Thatcher, M.H. 19–20, 26–7, 43–70
‘social Europe’ 217–18 accession to Party leadership 15–18
Social Fund 127 arrival in Downing Street 43
social policy see Welfare State attitude to the FCO 182–3
Social Science Research Council (SSRC) Bruges Speech 219–20
130 Cabinets see Cabinets
social security 106, 108–9, 122–7 Clare Booth Luce Award Dinner 180
socialism 6–12 court, favourites and advisers 44–9
Sokolovskiy, Marshal 210 decline and fall 63–70
Soskice, Sir F. 10 ‘Iron Lady’ 182
South Africa 186, 189 ‘outsider’ in 10 Downing Street
Soviet Union 195 222–4
Cold War 206–11 society 107
collapse of 221 Westland Affair 58–62
Spectator, The 91, 145, 206 Thatcherism 224–37
Speed, K. 183 Thomas, H. 45, 46
Spiers, E. 209 Thomas, J.H. 3
Spycatcher (Wright) 146–7 Thorneycroft, P. 87
St John Stevas, N. 17, 52, 76 Thursday Breakfast Group 76
Stanley, J. 112 Titmuss, R.M. 106
State Earnings Related Pension Scheme Tocqueville, A. de 72
(SERPS) 125–6 Todd, J. 186
Index 293
Trade Union Act 1984 101 Walls, P. 188

trade unions 2, 3–6, 7–9, 17–18, 73 Walters, A. 44–5, 66, 74–5, 85, 86, 94
attack on power of 74, 99–104, 230 War Cabinet (Falklands War) 53–8
Civil Service 139–40, 148–51 Wardale inquiry 144
local government 161 Wass, Sir D. 145, 146
NHS 116–17 water privatization 98–9
Social Contract 8–9 Waterloo Bridge 160
strikes see strikes Waugh, A. 172
teachers 134–5 Waugh, E. 237
Trades Union Congress (TUC) 149 Webb, B. 3
Trafalgar Square riot 1990 178–9 Weinberger, C. 196–7, 198, 200, 210,
Transport and General Workers’ Union 236
(TGWU) 102 Welch, C. 75
Triple Alliance 4 Welfare State 6–7, 105–36, 227, 233
education 109, 127–36, 173
unemployment 75–6 housing 109, 110–15, 164–5, 173
unified grading 151–2 NHS 109, 115–22, 160–1
United Nations Security Council 195 social revolution 105–9
United States (USA) 163, 182 social security 106, 108–9, 122–7
Cold War 206–11 Westland Affair 24, 58–62
and Falklands War 195–8; military Whitelaw, W. 14–15, 27, 58, 68–9, 100,
assistance 197–8, 199 223
invasion of Grenada 200–1 Thatcher Cabinets 49–50, 55, 194
relationship with UK 180–1, 184–5 Whitley system 139
University Grants Committee (UGC) Whitmore, Sir C. 143
128, 129 Widows, Orphans and Old Age
universities 127–32, 230 Contributory Pensions Act 1925
Urban, G. 46, 180, 207, 213–14 105
Urban Development Corporations Williams, A. 194
(UDCs) 168 Williams, S. 11, 39, 40, 41, 132
urban riots (1981) 87, 168–9 Wilson, H. 2–3, 186
Utley, T.E. 225–6 Winter of Discontent 20, 43, 235
Winterton, N. 85
Wolfson, D. 44
Vaizey, J. 45
Woodward, Admiral S. 197, 198
Value Added Tax (VAT) 78–9
workfare 125
Viola, General 191, 192
Working for Patients 120–1
voucher system 136
Working Patterns 155
Wright, P. 146–7
Waldegrave, W. 175
Wyatt, W. 45, 68–9, 70, 234
Walden, G. 69, 206, 208
Wales 28
Young, Lord 26, 49, 75, 125
Walker, P. 231
Young, H. 24–5
Cabinet 50–1, 52
Younger, G. 65, 167, 175
local government 161, 162
Minister of Agriculture 72
privatization 98 ZANU 188
sale of council housing 110–11

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The Politics of the

1 What Kind of Revolution? 1

2 The Conservative Ascendancy: The Pattern of British

3 The Thatcher Cabinets and Governments, Her Court, and

4 The Economic Liberal Crusades I: The Quest for an

5 The Economic Liberal Crusades II: The Recasting of the

6 The Economic Liberal Crusades III: The Reconstruction

7 The Economic Liberal Crusades IV: The Confrontation

8 The Governments of the ‘Iron Lady’ and the Defence of

9 The Unfinished Revolution 222

Notes and References 238

The IMF crisis of 1976: the centre cannot hold

Miners Federation of Great Britain by temporarily subsidizing the coal indus-

of public policy deemed by it to affect its interests had been treated as a

Apocalyse now: the challenge from the Left

afterwards had witnessed a social revolution of a kind, but, as both Keynes

investment in industry. Together with the repeal of the Conservatives’

persisted in referring to the Community as the Common Market, he could

The challenge from the Right: Margaret Thatcher

for Whitelaw, believing, it seemed, that three defeats in four Elections as

Lord Home so much by her contribution to Cabinet discussions that he con-

‘I think it was much more a peasants uprising than a religious war’,

To deny that we failed the people is futile, as well as arrogant. Successful

be no sustained British economic recovery. Further, what Gilmour and many

Three Tory General Election victories

the individual’, Mrs Thatcher declared in the Debate on the Address on 15

an Administration which had set out to release the national spirit of

At the time of the Conservatives’ Blackpool Conference in 1981, Bruce-

Conservative Government as electorally doomed. They now had a means

When we came to office . . . our country was suffering both from an

A one major party electoral model, 1979–90

‘Until recently it was a commonplace of political commentary that Britain

Socialist nightmare: the Labour Opposition, 1979–90

‘The Forward March of Labour Halted?’ proved to be an arresting title for a

Power was to be transformed by transferring it down to the activists. Policy

be forced through by the votes of MPs, disciplined by reselection making

By 5 million to 2 million, we voted to withdraw from the Common Market.

a commitment to the achievement of full employment. . . a sustained refla-

Not surprisingly, there were to be ‘selective import controls’97 and, in

Kinnock later turned on Scargill, the NUM leader, in similar style.123

For instance, economic policy is now based on fundamentally different

‘A better yesterday’: the Liberals and their allies, 1979–90

of the institutional dimension of politics invited that description too, and it

It is no ultimate solution for all human misery and misfortunes. It has

Brocklebank-Fowler joined its ranks in the House of Commons, sent on his

he became more privately divisive. . . he did not find it easy to work on a

‘Where there is error may we bring truth’

Where there is discord may we bring harmony;

Prior was aghast: ‘Margaret’s choice of words on her arrival in Downing

Listening to ‘voices’: the Prime Minister’s court,

Wyatt was later described by Mrs Thatcher as ‘a former Labour MP turned

Margaret Thatcher’s requests for advice or speech writing assistance were

Urban admired ‘her willingness – indeed her compulsive desire – to be among

‘Where there is discord’: the early Thatcher Cabinets

She did develop a system of taking decisions by groups of Ministers rather

Throughout the first Thatcher Government the internal atmosphere

The Falklands War Cabinet and its immediate successors

mood – a developing desire to find scapegoats for the national humiliation

As for Nott himself, Clark gleefully recorded:

Afterwards, there was a meeting of the Conservative 1922 Committee,

thirty-three Members asked questions and, with the exception of

It is only on occasions such as this that the implacable hatred in which

Towards the end of April, as the then British Ambassador to Washington,