The Downing Street Years, 1979-1990

Political success is a good deal pleasanter than political failure, but it too brings its problems. Conventional wisdom, reinforced by classical mythology, has it that this is all a matter of hubris or at least of complacency. But it is not always so. Nor was it in fact during the somewhat troubled six months which followed the 1983 general election. On this occasion there were subtler problems. One was that the media, having felt obliged during the election campaign to cover real political arguments about practical choices, soon reverted to the more amusing sport of scoring points off the Government. And there was a second problem, which we encountered increasingly over the years, that the less the socialist threat seemed, the more people were inclined to jib at the inevitable difficulties and disappointments of running a free enterprise economy.

In 1983 we also had two other problems to face — one of our own making and one not. The first was that the 1983 manifesto did not inspire the Government with the sort of crusading spirit which would have got us off to a good start in the new Parliament. Some of the main pledges were popular enough, such as the abolition of the GLC and Metropolitan Counties and the introduction of rate-capping, but they ran into a difficulty with which any reforming administration must bear: that the generalized approval of the silent majority is no match for the chorus of disapproval from the organized minority. The left-wing municipal socialists and their subsidized front organizations were astute campaigners, trained and adept at exploiting every weakness of presentation of the Government’s case. Much of the manifesto promised ‘more of the same’ — not the most inspiring of cries, although there is no doubt that a lot more was needed. We had not yet cut taxes anything like as much as we wished. There was more work to be done on trade union law and the privatization programme — which would perhaps constitute the really big advance of this Parliament — was barely under way; the bill to privatize British Telecom, which had fallen with the election, had to be reintroduced.

The second problem was one for which we could not be blamed — that there was still too much socialism in Britain. The fortunes of socialism do not depend on those of the Labour Party: in fact, in the long run it would be truer to say that Labour’ fortunes depend on those of socialism. And socialism was still built into the institutions and mentality of Britain. We had sold thousands of council homes; but 29 per cent of the housing stock remained in the public sector. We had increased parent’ rights in the education system; but the ethos in classrooms and teacher’ training colleges remained stubbornly left wing. We had grappled with the problem of bringing more efficiency into local government; but the Left’ redoubts in the great cities still went virtually unchallenged. We had cut back trade union power; but still almost 50 per cent of the workforce in employment was unionized, far more than our main competitors, and of them around 4 million were working in a union closed shop. Moreover, as the miner’ strike would shortly demonstrate, the grip of the hard Left on union power was still unbroken. We had won a great victory in the Falklands War, reversing the years in which British influence seemed doomed to an inexorable retreat; but there was still a sour envy of American power and sometimes a deeper anti-Americanism, shared by too many across the political spectrum.

In all this, my problem was simple. There was a revolution still to be made, but too few revolutionaries. The appointment of the first Cabinet in the new Parliament, which took place incongruously to the background accompaniment of traditional military music and the Trooping of the Colour, seemed a chance to recruit some.

THE NEW GOVERNMENT

I began by dropping one would-be pilot, whose sense of direction had on several occasions proved faulty. In following Peter Carrington with Francis Pym as Foreign Secretary I had exchanged an amusing Whig for a gloomy one. Even the prospect of a landslide during the election made him utter dire warnings. Francis and I disagreed on the direction of policy, in our approach to government and indeed about life in general. But he was liked in the House of Commons which always warms to a minister who is believed to be out of step with the Government,something which is often mistaken for independence of mind. I hoped he would consent to become Speaker and I still believe that he would have done the job well. (In fact, I am not at all clear that we would have been able to ensure Francis got the job for it is, of course, a decision for the House itself.) But in any case he was having none of it. He preferred to go to the back-benches where he was a not very effective critic of the Government.

I also asked David Howell and Janet Young to leave the Cabinet. David Howell’ shortcomings as an administrator had been exposed when he was at Energy and nothing I saw of his performance at Transport suggested to me that my judgement of him was wrong. He had the detached critical faculty which is excellent in Opposition or in the Chairman of a Select Committee, but he lacked the mixture of creative political imagination and practical drive to be a first-class Cabinet minister. I asked Janet Young to make way for Willie Whitelaw as Leader of the Lords. She was very well liked by their lordships, but had turned out not to have the presence to lead the Lords effectively and she was perhaps too consistent an advocate of caution on all occasions. She stayed on in the Government outside the Cabinet as a Minister of State at the Foreign Office. I regretted the loss of both David and Janet on personal grounds, for they had been close to me in Opposition.

Willie Whitelaw clearly fitted the bill as Janet’ successor. Willie had become, quite simply, indispensable to me in Cabinet. When it really mattered I knew he would be by my side and because of his background, personality and position in the Party he could sometimes sway colleagues when I could not. Yet Willie had not had an easy time as Home Secretary. In part, this is because Home Secretaries never do have an easy time; it is sometimes said that they possess a unique combination of responsibility without power, taking the blame for matters ranging from breaches of royal security, to the misdemeanours of police officers, prison break-outs and the occasional riot, when their power to prevent them is indirect or nonexistent. But there was more to it than that. Willie and I knew that we did not share the same instincts on Home Office matters. I believe that capital punishment for the worst murders is morally right as retribution and practically necessary as a deterrent: Willie does not. My views on sentencing in general and on immigration are a good deal tougher than his. And, flatteringly but often awkwardly, the great majority of the Conservative Party and the British public agreed with me and showed it regularly at our Party Conferences.

I chose Leon Brittan to be Willie’ successor at the Home Office.I never appointed a Home Secretary who shared all my instincts on these matters, but I thought that at least Leon would bring a keen lawyer’ mind and intellectual rigour to the job. He would have no time for the false sentimentality which surrounds so much discussion of the causes of crime. From the Treasury he brought with him a well-deserved reputation as a good administrator who worked hard. Leon was the best Chief Secretary to the Treasury during my premiership. His was a powerful mind and I thought he should be given his chance.

With hindsight, I think that I should have promoted him to head another department first. He needed the experience of running his own ministry before moving to one of the three great offices of state. Too rapid promotion can jeopardize politician’ long-term future. It turns press and colleagues against them; they become touchy and uncertain about their standing; and all this makes them vulnerable. Leon suffered in this way, but he also had great strengths. For example, he proved extremely capable in devising the package of measures to tighten up the sentencing of violent criminals which we introduced after the rejection of capital punishment by the House of Commons on a free vote in July. He was to prove tough and competent during the miner’ strike in 1984–5. Yet there were also weaknesses, which had nothing to do with the circumstances of his appointment. Like other brilliant lawyers I have known, he was better at mastering and expounding a brief than in drawing up his own. Moreover, everybody complained about his manner on television, which seemed aloof and uncomfortable. Of course, there have been plenty of complaints over the years about my manner too, so I had a good deal of sympathy with him. But that did not change the situation, particularly since I was shortly to lose from my Cabinet a really gifted presenter of policy.

I made Nigel Lawson Chancellor of the Exchequer — an enormous and to most people unexpected promotion. Whatever quarrels we were to have later, if it comes to drawing up a list of Conservative — even Thatcherite — revolutionaries I would never deny Nigel a leading place on it. He has many qualities which I admire and some which I do not. He is imaginative, fearless and — on paper at least — eloquently persuasive. His mind is quick and, unlike Geoffrey Howe whom he succeeded as Chancellor, he makes decisions easily. His first budget speech shows what good reading economics can make. Nigel was, I knew, a genuinely creative economic thinker. Unlike creative accountancy, creative economics is a rare and valuable thing. I doubt whether any other Financial Secretary to the Treasury could have come up with the inspired clarity of the Medium Term Financial Strategy, which guided our economic policy until Nigel himself turned his back on it in later years. As Chancellor, Nigel’ tax reforms had the same quality about them — a simplicity which makes everyone ask why no one thought to do this before.

Nigel was well aware of his own virtues. In January 1981 when I had appointed Leon Brittan as Chief Secretary to the Treasury over Nigel’ head, at Geoffrey Howe’ request, Nigel came to see me to complain: he felt slighted and was evidently cross. But I told him that his time for promotion would come and I would see that it did. Later as Secretary of State for Energy he showed that among his other qualities he was a first-class administrator. So I had by now come to share Nigel’ high opinion of himself. And for most of the 1983 Parliament I had no cause to revise that judgement; on most issues I never revised it.

But what to do with Geoffrey Howe? The time had come to move Geoffrey on. Four gruelling years in the Treasury was enough and it seems a kind of psychological law that Chancellors naturally incline towards the Foreign Office. Partly this is simply because that is the next logical step. But it is also because international finance is nowadays so important that Chancellors have to take a keen interest in the IMF, the G7 and the European Community and so the longing to tread the world stage naturally takes hold of them. I wanted to promote Geoffrey as a reward for all he had done. But I had doubts about his suitability for the Foreign Office. And, in retrospect, I was right. Geoffrey was, indeed, very good at the business of negotiation of a text line by line, for which his training as a lawyer and his experience at the Treasury fitted him. He was a perfect right-hand man for the European Councils I attended. But he fell under the spell of the Foreign Office where compromise and negotiation were ends in themselves. This magnified his faults and smothered his virtues. In his new department he fell into the habits which the Foreign Office seems to cultivate — a reluctance to subordinate diplomatic tactics to the national interest and an insatiable appetite for nuances and conditions which can blur the clearest vision. In the end Geoffrey’ vision became finding a form of words. To the extent that Geoffrey did have a cause to guide him in foreign affairs it was one on which the two of us were far apart, though I did not give this much thought at the time. For Geoffrey harboured an almost romantic longing for Britain to become part of some grandiose European consensus. I never heard him define this misty Europeanism, even in the last turbulent days of my Premiership, but it was for him a touchstone (along with liberal views on Home Office matters) of highmindedness and civilized values. It was to bring us all no end of trouble.

My first choice for the job of Foreign Secretary had been Cecil Parkinson. He and I agreed on economic and domestic policy. Neither of us had the slightest doubt that Britain’ interests must come first in foreign policy. He had served in the Falklands War Cabinet. He had just masterminded the most technically proficient general election campaign I have known. He seemed to me right for this most senior job.

However, my hopes were disappointed. In the early evening on election day after I had returned from my own constituency Cecil visited me in Downing Street and told me that he had been having an affair with his former secretary, Sara Keays. This gave me pause. But I did not immediately decide that it was an insuperable obstacle to his becoming Foreign Secretary. I was still thinking about the election. Indeed, I marvelled that with all this on his mind he had run such a magnificent campaign. I was even relieved that he had spared me the concern and distraction that it would cause at such a time. But the following day, shortly before Cecil was due for lunch at No. 10, I received a personal letter from Sara Keays’ father. It revealed that she was pregnant with Cecil’ child. When Cecil arrived I showed him the letter. It must have been one of the worst moments of his life.

It was immediately obvious that I could not send Cecil to the Foreign Office with such a cloud hanging over him. I urged him to discuss the personal questions with his family. Meanwhile I decided to make him Secretary of State for the newly combined Departments of Trade and Industry. It was a job I knew he would do well — and it was a less senior and less sensitive post than Foreign Secretary would have been.

In September I appointed John Gummer to succeed Cecil as Party Chairman (I would have appointed a new Chairman sooner or later in any case). John had been a Vice-Chairman of the Party under Ted Heath and so knew Central Office well. He is also a gifted speaker and writer. Nor was there any need for a leading minister, let alone a politician of Cecil’ stature, to be Chairman immediately after an election. Unfortunately, John Gummer was not a born administrator and when we ran into political trouble he did not carry the weight to help us get out of it.

An appointment that strengthened the Party, however, was that of John Wakeham who became Chief Whip. John would probably not dissent from his reputation as a ‘fixer’. He was on the right of the Party, a highly competent accountant, who had tried to make sense for me of British Leyland’ elliptical accounts. He had a manner which exuded self-confidence, a good deal of which was deserved. These talents made him a highly effective party manager.

Within months I had to make further important changes. At the beginning of October Cecil Parkinson, with the agreement of Sara Keays, issued a statement to the press revealing their affair and the fact that she was pregnant. I wanted if possible to keep Cecil — a political ally, an able minister and a friend. At first, it seemed that I might succeed. There was no great pressure from within the Party for him to go: on the whole his colleagues in government and on the back-benches were supportive. The Party Conference took place the week after Cecil’ statement and his ministerial speech was well received. However, very late on Thursday evening, as I was completing my own speech for the following day, the Press Office at No. 10 rang my hotel suite. They told my private secretary that Sara Keays had given an interview to The Times and that the story dominated Friday’ front page. I called a meeting immediately, with Willie Whitelaw, John Gummer and Cecil himself. It was clear that the story was not going to die down and, though I asked Cecil to hold back from resigning that evening, we all knew that he would have to go.

Early next morning Cecil came in to see me and said that he and Ann had decided that he should resign. There was only one problem. He had a public engagement to open the new Blackpool Heliport and to unveil a commemorative plaque. Clearly, it was impossible for him to go ahead with this. Denis stepped into the breach and unveiled the plaque, which poignantly had Cecil’ name on it.

Thankfully, this did not mean the end of Cecil’ political career. But he had to endure four years in the political wilderness and lost whatever chance he might have had of climbing to the very top of the political ladder.

In everything but the short term, Cecil’ resignation weakened the Government. He had proved an effective minister and, though he was only at the DTI a short time, had made a big impact, particularly on the City of London. It was Cecil who took the difficult but correct decision to introduce legislation to exclude the Stock Exchange from the operation of the Restrictive Trade Practices Act and so to terminate the court case which had been brought against it by the Director-General of Fair Trading. In return the Stock Exchange made a commitment to dismantle long-standing restrictions on trading and the process was begun that led to the Financial Services Act (1986) and the ‘Big Bang’ in October of that year. These reforms allowed the City to adapt to the highly competitive international markets in which it now operates and have been crucial to its continued success.

I asked Norman Tebbit to move from Employment to take over the DTI and shifted Tom King from Transport as Norman’ replacement. This enabled me to bring Nick Ridley into the Cabinet, as Transport Secretary. Nick’ arrival in Cabinet was a silver lining to the cloud that hung over us following Cecil’ departure. Like Keith Joseph, Nick was someone who wanted office in order to do what he believed was right. Although in my experience there are few politicians for whom doing the right thing is of no importance, there are fewer still for whom it is the only consideration. Nick and Keith were among them. Nick provided the Government (and me in particular) not only with a clear vision but also with technical solutions to policy problems. At Transport he pressed ahead with privatization and deregulation. And in the later years of the Government he was someone I could rely upon for complete loyalty and honest dealing. Indeed, it was an excess of honesty that ultimately brought him down. (The American journalist, Michael Kinsley, has defined a ‘gaffe’ as telling an inconvenient truth. I have to say that my own experience bears out the accuracy of his definition.)

Such was the team on which the success of the Government’ second term depended. I hoped that they would share the zeal and enthusiasm of their captain.

THE STUTTGART EUROPEAN COUNCIL

At the end of the week in which I formed the new Government I flew to Stuttgart for the postponed European Council, which was chaired by Chancellor Kohl. We had not ourselves asked for the postponement of the Council, which had originally been planned for 6–7 June, but once the proposal was made we welcomed it since it allowed more time to campaign. Probably our European partners thought that they might extract a few more concessions from a newly re-elected government than from one under the domestic pressures that elections pose.

The main issue at Stuttgart would, as usual, be money — ‘our money’ in particular — though I was discreet enough on this occasion not to use the phrase. I had to ensure a satisfactory refund for Britain in 1983 and to make as much progress as possible towards a long-term solution that would continue to cut our net contributions to the Community. This involved achieving long-term reform of the Community’ finances.

Had I had to argue my case on grounds of equity alone I would have been far from sanguine about the likely outcome. But by now the Community was on the edge of bankruptcy: the exhaustion of its ‘own resources’ was only months away and it was possible to increase them only by agreement of all the member states to raise the 1 per cent VAT ‘ceiling’. This had the effect attributed by Dr Johnson to the imminent prospect of the gallows: the minds of our European partners were beginning to concentrate wonderfully. The requirement of unanimity gave me a strong hand and they knew that I was not the person to underplay it. Of course, it would have been perfectly possible for the Community to live within the discipline imposed by the 1 per cent ceiling, if it had had the will to cut out the waste, inefficiency and plain corruption in its own programmes: after all, VAT revenues are remarkably buoyant. But I knew full well that the will was lacking and that profligacy and that particular degree of irresponsibility which is bred by unaccountable bureaucracy would continue for as long as difficult decisions could be postponed.

It was clear that West Germany’ attitude would be crucial. The Germans were the Community’ largest net contributors. Admittedly, West German farmers enjoyed the benefits of the extravagant Common Agricultural Policy, but at a certain point the interests of the West German taxpayer would become paramount. The Germans followed our lead in opposing an increase in ‘own resources’ until the Community’ finances had been put on a sounder footing. But we had some suspicions that they would waver when the pressure mounted. They also resented — and I do not blame them — having to contribute towards the funding of the British rebate which I had won. But my answer to that, of course, was to urge them to exercise leadership to sort out the fundamental imbalance of the Community’ finances once and for all. Chancellor Kohl was not usually the most energetic of Council participants unless some German domestic issue was directly involved, but I knew that he would want to make a success of the Stuttgart Council to crown his first European presidency. I hoped that this and the other circumstances I have described would work in favour of an outcome I could accept.

The Council decided to leave negotiations on the future financing of the Community to the Foreign and Finance ministers, initially at least; they would report to the next full Council in December. The Commission had already produced its own proposals, some of which we favoured and others we did not. A refund was agreed for Britain to cover the year 1983. But the real decisions were postponed for another six months — six months nearer the time when the Community would find itself broke.

I was not disappointed with this outcome and I subsequently took every opportunity to praise Chancellor Kohl’ handling of the Council. The results were rather better for Britain than they first appeared. The 1983 refund was less than we might have hoped. But when you took the four years to 1983 together we had obtained a refund of about two-thirds of our unadjusted net contribution, which was the goal we had publicly set ourselves. Considering the strong opposition we met from France, I felt that was a useful achievement. There was some speculation in the British newspapers that I had weakened the British position as regards the increase in the VAT ‘ceiling’, but this was only a negotiating ploy and a close reading of the communiqué — as well as any reading of my own mind — would demonstrate that I had done no such thing. (This was, indeed, to become very publicly apparent before the end of the year.)

There was one other aspect of the Stuttgart Council. The Council issued what was called — in the grandiloquent language which had been used about this subject since before we joined — a ‘Solemn Declaration on European Union’. I took the view that I could not quarrel with everything, and the document had no legal force. So I went along with it.

When I was questioned later about the declaration in the House of Commons, I replied: ‘I must make it quite clear that I do not in any way believe in a federated Europe. Nor does that document. ‘Certainly it did not transfer powers to a centralized Europe in the way that the Maastricht Treaty was to do. But the high-flown language of the declaration has become familiar from later developments: the linguistic skeleton on which so much institutional flesh would grow was already visible.

THE ECONOMY

It sometimes happens in politics that relatively small matters, with no obvious connection between them, combine to create a political atmosphere in which the Government seems to do nothing right. I have suggested earlier some underlying reasons why such an atmosphere developed at the start of our second term. But there were other problems. There continued to be misunderstanding and resentment of the new system by which the retirement pension was uprated in line with inflation. Many of our best supporters were angry that proposals to reintroduce capital punishment were thrown out on a free vote by a Conservative-dominated House of Commons, some of whose members had undoubtedly dissembled their views (or worse) to those who had selected them. Also, shortly afterwards Members of Parliament decided to vote themselves a pay rise considerably greater than the Government had recommended, at a time when unemployment was rising and many people could expect little or no increase.

But this malaise would have had little importance had it not been for the economy. The underlying economy was sound: indeed, as we pressed ahead with further structural changes, especially privatization, it would steadily become sounder still. When I spoke in the House of Commons on 22 June 1983, introducing the Queen’ Speech, I could point to the lowest rate of inflation since 1968, to higher output and to record levels of productivity. But part of the trouble was that after an election a government’ past achievements are immediately discounted. As one of my advisers put it, paraphrasing La Rochefoucauld: ‘the only gratitude in politics is for favours still to be received.’ And we had been so lucky in choosing the date of the election (though it was not all luck) that expectations about the rate of future progress had risen too high. Inflation started to move up from the low point of 3.7 per cent in May and June to reach 5.3 per cent in December, though it would stay at that level or lower for the next twelve months. Unemployment also began to rise again, remaining above three million, and it seemed very difficult to predict when the higher economic growth which was now apparent would begin to bring the total down. Although the interest rate actually fell, mortgage rates rose to meet the extra demand for mortgages — in itself a sign of the progress we were making towards a property-owning democracy, but naturally unpopular with borrowers. All this led to accusations that the Government had ‘cooked the books’ on the economy before the election.

It was public spending which became the focus of this attack. Indeed, there had been tell-tale signs of trouble in the weeks before the election. In April, the first month of the new financial year, the PSBR was well above target and it soon became clear that the provisional outturn for the PSBR for 1982–3 — a figure we regularly published — would be £9.2 billion, £1.7 billion higher than the budget estimate. It was possible that lower than expected revenues were part of the problem. But there had been an earlier misjudgement about the extent to which cash limits would be underspent, and much of the problem arose from the action we took to correct this. The previous winter we had had such strong evidence that capital programmes were being underspent that we had taken positive action to encourage spending up to target. (In principle, it is right to spend up to planned levels, otherwise you pile up spending for future years, damage the construction industry and increase unemployment.)

I had discussed the problem with the then Chancellor, Geoffrey Howe, on Thursday 21 April. As so often, it seemed that the Ministry of Defence had been the main villain. The last instruction from the Treasury to the MoD before the budget had been to minimize their underspending. The MoD had complied with unwonted energy. Having been predicting a substantial underspend, they turned out to be overspending with a vengeance. Geoffrey and I were appalled and decided to give the MoD a much-needed rebuke. But the damage had been done.

After the election the new Chancellor had another look at the borrowing figures. Nigel Lawson found himself in an unenviable position. The Treasury’ summer forecast had just been completed and it suggested that the PSBR for the current financial year would be overrun by &3 billion. Inevitably there was a large margin of error in these figures — as always with the PSBR which is constituted by the difference between two enormous sums of money, public sector income and expenditure. But the signs were bad. To add to the problem, the money supply figures for May were poor and we knew that sterling, though high at the time, might soon come under pressure if American interest rates kept on rising. In any case, if we were really on course for a huge overshoot in the PSBR, something had to be done.

When on Wednesday 29 June I received a note from Nigel setting out how he wished to act I too became distinctly worried and emerged no less so from the discussion I had with him the following evening. It is never an easy matter to rein back public spending part way through a fiscal year, but the argument for early action was overwhelming. The earlier you make a cut the less drastic it has to be and the more chance you have of sustaining your credibility with the markets, which is a useful bonus. The obverse of this, however, was that to announce further public expenditure cuts just weeks into a new Parliament would be extremely unpopular and politically embarrassing. The public would think that we had deceived them at the election and spending ministers would feel bounced. Nigel fully understood this and it was a mark of his courage that he recommended immediate action.

He made three proposals. The first was to raise more money for the Government by selling an extra tranche of BP shares. But while this might help fund the PSBR it did not allow escape from the need for real cuts in spending. It was not possible to take action on the non-cash-limited programmes in mid-year, so that we had to concentrate on cash-limited spending. But should the cash squeeze apply to all of this spending or just some of it? Nigel’ initial view was that it should only apply to the non-pay element of central government spending because pay was extremely difficult to hold down successfully. My advisers and I queried this and after Nigel and I talked the matter through at Chequers the following Saturday we settled on a package that included the pay bill within the squeeze. Alan Walters shared Nigel’ view that immediate action had to be taken and urged a 3 per cent reduction in cash limits, greater than Nigel originally proposed. In fact, we settled on a 1 per cent reduction in the pay bill and a 2 per cent reduction in other cash limits.

Nigel had one further ingenious proposal, originally suggested by Leon Brittan earlier in the year: the introduction of ‘end-year flexibility’. By Treasury convention, departments which failed to spend up to their allocation during the financial year were not allowed to carry over the unspent sum into the following year; they lost the money, in effect. The result, of course, was that departments which found themselves underspending as the end of the financial year approached tended to put on a spurt to use up their allocation and public spending would surge. ‘End-year flexibility ‘sought to diminish this effect by permitting them to carry over a proportion of that underspending into the next year.

Altogether these proposals for asset sales, public spending cuts and an improvement in the technique of public expenditure control would, we believed, reduce that year’ public expenditure by more than &1 billion.

Nigel and I expected trouble at Cabinet. It would have been helpful if we could have briefed ministers in advance, but we knew that if papers were circulated the proposals would probably leak. In the end some ministers were briefed individually, as were the Permanent Secretaries of their Departments, but despite our precautions when Cabinet met on Thursday 7 July to discuss the proposals, they had already appeared in print, splashed across the front pages that morning. This did not make the meeting any easier. But Cabinet faced up to what had to be done and Nigel was able to announce the decisions to the House of Commons that afternoon. We emphasized that these were not cuts in planned public spending but rather a package of savings necessary to remain within it. It was perhaps too much to hope that this distinction would be widely grasped.

DIPLOMACY: VISITS TO THE NETHERLANDS, WEST GERMANY, CANADA AND THE UNITED STATES

I spent most of August on holiday in Switzerland, getting over an awkward and painful eye operation that I had had at the beginning of the month. On Friday 29 July I had been at the passing out parade at the RAF College at Cranwell. When the parade and the fly-past were over I turned and walked up some steps into the College for lunch. All of a sudden something happened to my right eye: black spots floated across the field of vision. I rubbed, but they wouldn’t go away. Later when I was back at Chequers I bathed the eye. But it did not improve.

On Sunday I rang my doctor. I went over to his house, not far from Chequers, and he examined the eye — having heard my description of what had happened he already had an eye specialist there. He told me that he thought I had a torn and detached retina and suggested laser treatment, followed by two days lying down until we could be sure that it had worked. Lying still for very long was something I found difficult, but I filled part of the time enjoyably enough listening to novels on tape. On Wednesday I went to his surgery to receive the verdict. I had packed an overnight case, as an insurance policy, half-thinking that I would not need it. But the news was bad. He examined me again and said that there had been no improvement at all; if anything, my eye was worse. As a precaution he had already booked an operating theatre for later that day and I went straight to hospital where the operation was successfully performed.

By the time I returned to England from my Swiss holiday I felt fully recovered, which was all to the good since I had to make several important foreign visits in September.

The first of these was to the Netherlands and West Germany. The two issues which dominated my talks in both countries were the deployment of Cruise and Pershing missiles and the approaching European Council in Athens, which was due to be held in December. On Monday 19 September I arrived in the Netherlands to be met by the Dutch Prime Minister, Ruud Lubbers. I liked Mr Lubbers, a young practical businessman who now applied his talents to good effect in Dutch politics. Although his instincts were federalist, like the leaders of other small countries in the European Community, in day-to-day Community business we often found ourselves on the same side. This was very much a short working visit with no formal speeches. Over lunch, I discussed the general political scene with Mr Lubbers and his Foreign minister, Hans Van Den Broek — another Dutchman whose company and conversation I enjoyed, even when I did not agree with him. The Dutch Government, being a coalition, was in its usual somewhat fragile condition, with problems over its budget and in the background the question of nuclear arms exercising a general destabilizing influence.

The summit’ plenary session in the afternoon was entirely devoted to European Community matters. There was a large measure of agreement between us on the fundamental practical questions, but the Dutch urged compromise in the run-up to Athens and I was not going to give the impression that our stance was weakening. We seemed to be getting nowhere in our campaign for a tough guideline on future CAP expenditure. Moreover, I was concerned that the Community should not drift further into protectionism. As regards the future financing of the Community, there was no question of my agreeing at Athens to an increase in the Community’ ‘own resources’ in isolation from the other essential conditions we had laid down. I also sought to draw Dutch attention to something which is still not properly grasped: if the Community expected the Germans to go on paying an open-ended share of its costs this would store up political trouble for the future. He who paid the piper would eventually wish to call the tune.

From the Netherlands I flew on to West Germany, where I visited British forces. On Wednesday afternoon (21 September) I arrived in Bonn for talks and dinner with Chancellor Kohl. He and I discussed the approach to the Athens summit. I told him that it would be deplorable if the impetus he had given to reform at Stuttgart were now lost. So I was relieved when Herr Kohl said that sorting out the CAP and the system of financing the Community must take priority over new policies. He also told me that the European Community was ‘politically essential to Germany’ but it was ‘no good having the Community as a roof over Germany if the roof was leaking’ — an interesting metaphor, I thought; and anyone dealing with the European Community should pay careful attention to metaphors. We in Britain were inclined to minimize their significance — whether about ‘roofs’ or ‘trains’ — and to concentrate on the practicalities — mending the leaking roof, in Chancellor Kohl’ phrase. We had to learn the hard way that by agreement to what were apparently empty generalizations or vague aspirations we were later held to have committed ourselves to political structures which were contrary to our interests. But this is to anticipate a little.

However, I was already beginning to feel — I did so increasingly as the years went by — that there was an imbalance in western diplomacy. European Community heads of government and ministers met regularly, drawn together initially by Community problems, but at the same time discussing wider international issues. By contrast, there was not enough contact and understanding between the European countries and our transatlantic allies in NATO — the United States and Canada. I hoped that my visit to Canada and the United States at the end of September would do something to put this right.

The Canadian visit was, in fact, made on their initiative. The sensitive question of the patriation of the Canadian Constitution from the Westminster Parliament was now behind us.[42] My visit was an opportunity to emphasize the value of trade and investment links and, still more important, to try to persuade Canadians to take a larger and more vigorous part in the western alliance than they had under their present Prime Minister, Pierre Trudeau. It was common knowledge that Pierre Trudeau and his Liberal Government — who sometimes seemed more interested in the politics of the Third World than in the great East-West issues — were extremely unpopular. But I would also be meeting the Conservative prime ministers of the provinces of Ontario and Alberta, as well as the new Conservative leader at federal level, Brian Mulroney, who had just been elected to the Canadian Parliament and who was firm favourite to replace Pierre Trudeau as Prime Minister at the next election.

I flew into Ottawa on the evening of Sunday 25 September and had supper at the High Commission, one of the great historic buildings in Ottawa. Two of the paragraphs of the speech I was to deliver the following day to the Canadian House of Commons were in French and a French teacher had been specially laid on when I arrived so that I could get my pronunciation just right and avoid international incidents.

The following morning I had talks with Pierre Trudeau and his Cabinet. East-West issues provided the main point of contention, as I had thought they would. Mr Trudeau’ line was that technicians had taken over arms control negotiations from the politicians, and that this was why they were getting nowhere. I did not agree. After all, disarmament talks were bound to be highly technical: if we got the technicalities wrong we would be in trouble. However, Mr Trudeau developed his theme, arguing that the shooting down of the South Korean Airliner by the Soviets — with the loss of Canadian lives — on 1 September also demonstrated the dangers when politicians were not in command. He understood that the aircraft had been shot down on the orders of a local military commander without reference to Moscow. I replied that what this really showed was that the Soviet command structure and rules of engagement were unsound, because these should not have allowed an aircraft to be shot down without political direction. What liberal leftists like him seemed unable to grasp was that such acts of brutality as the shooting down of a civilian aircraft were by no means uncharacteristic of the communist system itself.

Later that morning I had a private meeting with Mr Trudeau. We discussed international affairs — Hong Kong, China, Belize — but most interesting for me was his impression of Mikhail Gorbachev, of whom I had heard but whom I did not yet know. Mr Gorbachev had visited Canada earlier in the year, under the pretext of examining Canada’ agricultural achievements but really with a view to discussing long term security questions. Pierre Trudeau had found him sticking to the conventional line as regards the INF negotiations, but without the blinkered hostility which characterized the other Soviet leaders. Mr Gorbachev had apparently been prepared to argue and make at least verbal concessions. I did not at this time foresee the importance of Mr Gorbachev for the future. The conversation served mainly to confirm my view that we must persuade the new Soviet leader, Yuri Andropov, to visit the West. How were we to make a proper assessment of the Soviet leaders if we did not have personal contact with them? Still more important, how were we to persuade them to see further than their own propaganda if we never showed them what the West was really like?

After lunch I had my first meeting with Brian Mulroney. Mr Mulroney was undergoing that most misleading of experiences — a political honeymoon. He was charming and charismatic but he lacked any real political experience. It was to his credit that he fully realized this and at his request I spent most of our time talking about my own experience of Opposition and government. Brian Mulroney and I were to become good friends, though we were very different sorts of politician and were to have some serious disagreements. As Leader of the Progressive Conservatives I thought he put too much stress on the adjective as opposed to the noun.

The speech I delivered to the Canadian Parliament that afternoon went very well. It was a more powerful defence of values and principles than they were used to hearing from their own Government and was interrupted by frequent applause. Apart from one or two MPs, I received a standing ovation which included members of the Diplomatic Corps. This itself provided an interesting vignette of attitudes behind the Iron Curtain: the Soviet, Czech and Bulgarian Ambassadors remained rooted to their seats, while the Hungarian and the Pole rose enthusiastically to join the applause.

That evening a dinner was given for me by Mr Trudeau in Toronto. A problem I was to find throughout this visit first surfaced acutely on this occasion. The dinner was preceded by a walkabout through a large crowd of Liberal Party supporters and the guests at the dinner itself seemed similarly partisan, though very welcoming. Although it was polite and friendly, Mr Trudeau’ speech emphasized the political differences between us. As he spoke, I took notes and used these as the basis of my off-the-cuff reply which took the form of a forthright defence of free enterprise. This brought cheers from the back of the hall though, as one of my party remarked, whether these came from Conservatives who had infiltrated the gathering or from Liberals who had been converted was unclear.

From Canada I flew to Washington for a meeting with President Reagan. Overall, the President’ domestic political position was strong. In spite of the difficulties which the US budget deficit was causing, the American economy was in remarkably good shape. It was growing faster with markedly less inflation than when he came into office and there was widespread appreciation of this. As he himself used to say: ‘now that it is working, how come they don’t call it Reaganomics any more?’ The President had also set his imprint on East-West relations. The Soviets were now definitely on the defensive in international relations. They were the ones who would have to decide how to react to the forthcoming deployment by NATO of intermediate-range nuclear weapons. And they were in the dock as a result of the shooting down of the Korean Airliner. In Central America the Government of El Salvador which the United States had been backing against communist insurgency was looking stronger. Perhaps only in the Middle East had the Administration’ policy not proved even a qualified success. Arab-Israeli peace talks were unlikely to be resumed and there was a growing danger of the US and its allies becoming irrevocably sucked into the turbulent politics of the Lebanon. The President had yet to announce whether he would stand for a second term, but I thought and hoped that he would and it looked as if he would win.

Our discussion that morning and over the lunch which followed covered a wide canvas. The President was optimistic about events in Central America. As he put it, El Salvador had not been in the news for a long time — because the Government there was winning and so the American media were deprived of their nightly stories told from the viewpoint of the guerillas. I raised the question of the US resuming the supply of arms to Argentina, telling him that a decision to do this would simply not be understood in Britain. The President said that he was aware of that, but there would be great pressure for the resumption of arms supplies if a civilian regime were established in Buenos Aires.

I also took the opportunity to explain our opposition, which hitherto the Americans had always supported, to the inclusion of the British and French independent nuclear deterrents in the arms talks between the United States and the Soviet Union. The Soviet insistence on the inclusion of our deterrents was simply a device to divert attention from the American proposal for deep reductions in strategic nuclear weapons. From the point of view of Britain, our deterrent constituted an irreducible minimum, but it was only 2.5 per cent of the Soviet strategic arsenal. I repeated what I had told the Senate Foreign Relations Committee that morning: the inclusion of the British deterrent would logically mean that the United States could not have parity with the Soviet Union. Would that really be acceptable to the United States? Or if, say, the French decided to increase their nuclear weapons, would the United States really be prepared to cut its by an equivalent amount? The President seemed to take my point, which I found reassuring. I for my part was able to reassure him as regards the timetable for deployment of Cruise and Pershing missiles in Europe. He had been concerned to learn that the crucial debate on this matter in the Bundestag had been delayed. He had no doubt about the firmness of Chancellor Kohl but he was not so sure about some of those around him. He was convinced that the whole Soviet strategy was still aimed at preventing deployment. I said that he should be in no doubt that Britain would deploy the intermediate-range nuclear missiles as planned, and I believed that West Germany would do the same.

However, our discussion turned on the strategy we should pursue towards the Soviet Union generally over the years ahead. I had been giving a good deal of thought to this matter and had discussed it with the experts at a Chequers seminar.[43] I began by saying that we had to make the most accurate assessment of the Soviet system and the Soviet leadership — there was plenty of evidence available about both subjects — so as to establish a realistic relationship: whatever we thought of them, we all had to live on the same planet. I congratulated the President on his speech to the UN General Assembly after the shooting down of the Korean Airliner and said how right he was to insist that despite this outrage the arms control negotiations in Geneva should continue. The President agreed that now was not the time to isolate ourselves from the Soviet Union. When the USSR failed to prevent NATO’ INF deployment they might start to negotiate seriously. Like me, he had clearly been considering the way in which we should deal with the Soviets once that happened.

The President argued that there were two points on which we had to form a judgement. First, the Russians seemed paranoid about their own security: did they really feel threatened by the West or were they merely trying to keep the offensive edge? The second question related to the control of Soviet power itself. He had always assumed that in the Soviet Union the Politburo controlled the military. But did the fact that the first public comments on the Korean Airliner incident had come from the military indicate that the Politburo was now dominated by the generals? As regards negotiation with the Soviets, we should never forget that the main reason why they were at the negotiating table in Geneva at all was the build-up of American defences. They would never be influenced by sweet reason. However, if they saw that the United States had the will and the determination to build up its defences as far as necessary, the Soviet attitude might change because they knew they could not keep up the pace. He believed that the Russians were now close to the limit in their expenditure on defence: their internal economic difficulties were such that they could not substantially increase the proportion of their resources devoted to the military. The United States, on the other hand, had the capacity to double its military output. The task was to convince Moscow that the only way it could remain equal was by negotiations because they could not afford to compete in weaponry for very much longer. The President recalled a cartoon which had Mr Brezhnev saying to a Russian general, ‘I liked the arms race better when we were the only ones in it.’

Now that the Soviet system has crumbled along the lines he envisaged, his words seem prophetic. It may be that one reason why President Reagan and I made such a good team was that, although we shared the same analysis of the way the world worked, we were very different people. He had an accurate grasp of the strategic picture but left the tactical detail to others. I was conscious that we must manage our relations with the communists on a day-to-day basis in such a way that events never got out of control. This was why throughout my discussion with the President I kept on coming back to the need to consider precisely how we should deal with the Soviets when they faced up to reality and returned to the negotiating table in a more reasonable frame of mind.

That evening I made a speech at a dinner held by the Winston Churchill Foundation of the United States in which I set out my views on these questions:

I also had a slightly different message which I wanted those who did not share all of President Reagan’ and my analysis to heed:

The speech was widely reported and generally well received in the United States. But I was soon to feel, in the light of America’ response to a political crisis in a small island in the Caribbean, that at least part of the message had not been understood.

PROBLEMS IN THE TRANSATLANTIC RELATIONSHIP: LEBANON AND GRENADA

Unexpectedly, the autumn of 1983 turned out to be a testing time for Anglo-US relations. This was because we adopted different attitudes towards crises in the Lebanon and in Grenada.

These events took place against the background of great strategic decisions for the West. November 1983 was the time we had agreed for the deployment of intermediate-range missiles in Britain and West Germany: I had to ensure that nothing interfered with it. Doing so depended to a large degree on demonstrating that the United States could indeed be relied upon as a trustworthy ally.

I had wider objectives as well. I needed to ensure that whatever short-term difficulties we had with the United States, the long-term relationship between our two countries, on which I knew Britain’ security and the free West’ interests depended, would not be damaged. I was equally determined that international law should be respected and that relations between states should not be allowed to degenerate into a game of realpolitik played out between contesting power blocs. Britain had fought the Falklands War in defence of a principle of international law — as well as to defend our people.

This is not the place to describe the full tragedy of the Lebanon. That formerly prosperous and democratic state has been shattered by civil war since the early 1970s and made to serve as the battleground for the competing ambitions of Syrians, Palestinians, Islamic fundamentalists, Israelis and local warlords.

Shortly before the end of the Falklands War Israel had launched a full-scale invasion of Lebanon, which led in August 1982 to the deployment of a mainly American Multi-National Force (MNF) in Beirut. The MNF was withdrawn after a brief period but returned in September following the massacres that took place in the Palestinian refugee camps in the suburbs of Beirut which shocked the world. At this point it consisted of American, French and Italian forces. The Lebanese Government asked Britain to make a contribution too. I was reluctant, and explained that in my view we were overextended as it was. But they sent a special envoy to see me who told me that Britain held a unique position and that it was vital that it be represented in the Force. So I agreed, with the support of Michael Heseltine and Geoffrey Howe, that about 100 of our men currently stationed in Cyprus with the UN should join the MNF. In practice, the British contingent had a slightly different role from the others, manning no substantial fixed positions. The mandate of the MNF was to assist the Lebanese Government and the Lebanese Armed Forces to restore their authority over the Beirut area and so help to ensure the safety of the population there.

I am always uneasy about any commitment of British forces if it is made without very clear objectives. The original limited mandate of the MNF was indeed clear, at least on paper. But later in September we came under strong pressure from the Americans and the Italians to increase our commitment and to extend the mandate. The doubt in everyone’ mind was whether the current force would be sufficient to allow the Lebanese Government and Army to restore their authority. But if it was not sufficient, that fact was, of course, as much an argument for withdrawing the MNF as for expanding it. I held a meeting to discuss these matters with ministers and advisers at Chequers on Friday 9 September. I was alarmed by reports that the US seemed determined to take a much tougher line with the Syrians than seemed sensible. Although Syria was certainly an obstacle to progress, its support for any solution to the Lebanese crisis would be essential.

The military and political situation in the Lebanon was deteriorating. In the Chouf mountains south of Beirut, the forces of the Druze minority, historically friendly to Britain, were locked in a conflict with the Lebanese Army which neither side seemed able to win: it looked like a military stalemate. The Druze were under pressure from their Syrian backers to secure wider objectives than they themselves probably wanted. Certainly, they had no quarrel of their own with the British and sought to avoid firing on our position. On one occasion during a small lunch party at Downing Street I was told that a Druze shell had fallen close to our troops. Michael Heseltine was at the lunch, so I asked him to telephone the Druze leader, Walid Jumblatt, to have the shelling stopped — and it was. Our force was small, exposed and isolated, and I was becoming increasingly concerned about what might happen.

For their part, the Lebanese Government and the Christian President Amin Gemayel were unable to free themselves from their identification with the old Phalange movement and so could not draw on wider Lebanese support. As a result they had to lean increasingly on the Americans. Three-quarters of the Lebanon was now occupied by the Syrians or the Israelis and the prospects for peace and stability for the remainder seemed bleak.

Then on Sunday 23 October a suicide bomber drove a lorry laden with explosives into the basement of the US Marine headquarters in Beirut. The building was totally destroyed. A second bomb shortly afterwards did the same to the headquarters of the French Paratroopers. Altogether 242 American and 58 French troops were killed — in total more than Britain had lost in the Falklands War. Responsibility was claimed by two militant Shia Muslim groups. My immediate reaction was one of shock at the carnage and disgust at the fanatics who had caused it. But I was also conscious of the impact it would have on the position and morale of the MNF. On the one hand, it would be wrong to give the terrorists the satisfaction of seeing the international force driven out. On the other, what had happened highlighted the enormous dangers of our continued presence and the question arose about whether we were justified in continuing to risk the lives of our troops for what was increasingly no clear purpose.

At this point my attention was abruptly diverted by events on the other side of the world. The humiliation inflicted on the United States by the Beirut bombing undoubtedly influenced its reaction to the events which were taking place on the island of Grenada in the eastern Caribbean.

On Wednesday 19 October 1983 a pro-Soviet military coup had overthrown the Government of Grenada. The new regime were certainly a vicious and unstable bunch. With the exception of General Austin, who led the coup, they were all in their twenties and a number of them had a record of violence and torture. Maurice Bishop, the overthrown Prime Minister, and five of his close supporters were shot dead. There was outrage at what had happened among most of the other Caribbean countries. Jamaica and Barbados wanted military intervention in which they would have liked the Americans and us to take part. My immediate reaction was that it would be most unwise of the Americans, let alone us, to accede to this suggestion. I was afraid that it would put foreign communities in Grenada at severe risk. There were some 200 British civilians there and many more Americans. The main organization of Caribbean States, CARICOM, was not prepared to agree to military intervention in Grenada. However, the Organization of Eastern Caribbean States, the OECS, decided unanimously to put together a force and called on other governments to help in restoring peace and order in the island. Clearly, the American reaction would be crucial.

It was easy to see why the United States might be tempted to go in and deal with the thugs who had taken over in Grenada. But as I always pointed out to the Americans afterwards, though apparently to little effect, Grenada was not transformed from a democratic island paradise into a Soviet surrogate overnight in October 1983. The Marxist Maurice Bishop had already come to power there through an earlier coup in March 1979: he had suspended the Constitution and put many of his opponents in gaol. He was, indeed, a personal friend of Fidel Castro. The Americans had had hostile relations with his Government for years. Bishop was, admittedly, something of a pragmatist and had even made a visit to the United States at the end of May 1983. It seems that it was, in part, a dispute about the Grenada Government’ attitude to private enterprise which brought about the clash with his colleagues in the Marxist ‘New Jewel Movement’ that ultimately led to his fall.

The new ‘hemispheric’ strategy which President Reagan’ Administration was pursuing, combined with experience of living beside the Soviet satellite of Cuba, in our view led the United States to exaggerate the threat which a Marxist Grenada posed. Our intelligence suggested that the Soviets had only a peripheral interest in the island. By contrast, the Government of Cuba certainly was deeply involved. A new airfield was being constructed as an extension to the existing airport. It was due to open in March 1984, though aircraft would be able to land there from about January. The Americans saw this as having a military purpose. It did indeed seem likely that the Cubans, who were providing the workforce for the project — and an uncertain number of Cuban military personnel also — regarded it in this light. For them, it would be a way of managing more easily the traffic of their thousands of troops in Angola and Ethiopia back and forth to Cuba. It would also be useful if the Cubans wished to intervene closer to home. But our view remained that the Grenada Government’ main purpose was, as they claimed, a commercial one, planning to cater for the undoubtedly exaggerated projections of their currently minimal tourist industry. So the position on the eve of the overthrow of Maurice Bishop was that Grenada had an unsavoury and undemocratic regime with close and friendly relations with Cuba. On such an analysis, the coup of 19 October 1983, morally objectionable as it was, was a change in degree rather than in kind.

On Saturday 22 October — the day before the Beirut bomb outrages — I received a report of the conclusions of the United States National Security Council meeting about Grenada. I was told that it had been decided that the Administration would proceed very cautiously. An American carrier group based on the USS Independence, which had been heading for the Mediterranean, had been diverted south to the Caribbean; it was now east of the southern tip of Florida and due north of Puerto Rico. An amphibious group with 1900 marines and two landing craft was 200 miles further east. The Independence would reach the area the following day but would remain well to the east of Dominica and well to the north of Grenada. The amphibious group would reach the same area later on the following day. The existence of this force would give the Americans the option to react if the situation warranted it. It was emphasized, however, that they had made no decision going beyond these contingency deployments. They had received a firm request from the east Caribbean heads of government to help them restore peace and order in Grenada. Jamaica and Barbados were supporting the request. If the Americans took action to evacuate US citizens they promised to evacuate British citizens as well. We were also assured that there would be consultation if they decided to take any further steps.

That evening I spent a good deal of time talking it all over on the telephone from Chequers. I spoke with Richard Luce, now back in the Foreign Office as Minister of State (Geoffrey Howe was in Athens), Willie Whitelaw and Michael Heseltine. I approved the order that HMS Antrim should sail from Colombia to the area of Grenada, remaining beyond the horizon. In public it should be made clear that this was a precautionary move designed to help with the evacuation of British subjects from Grenada should this be required. In fact, it did not seem necessary. The Deputy High Commissioner in Bridgetown (Barbados) reported after a day’ visit to Grenada that British citizens were safe, that the new regime in Grenada was willing to allow arrangements to be made for them to leave if they wished and that Sir Paul Scoon, the Governor-General (the Queen’ representative on the island) was well and in reasonably good heart. He did not request our military intervention, either directly or indirectly.

Suddenly the whole position changed. What precisely happened in Washington I still do not know, but I find it hard to believe that outrage at the Beirut bombing had nothing to do with it. I am sure that this was not a matter of calculation, but rather of frustrated anger — yet that did not make it any easier for me defend, not least to a British House of Commons in which anti-American feeling on both right and left was increasing. The fact that Grenada was also a Commonwealth member, and that the Queen was Head of State, made it harder still.

At 7.15 in the evening of Monday 24 October I received a message from President Reagan while I was hosting a reception at Downing Street. The President wrote that he was giving serious consideration to the OECS request for military action. He asked for my thoughts and advice. I was strongly against intervention and asked that a draft reply be prepared at once on lines which I laid down. I then had to go to a farewell dinner given by Princess Alexandra and her husband, Angus Ogilvy, for the outgoing American Ambassador, J. J. Louis, Jnr. I said to him: ‘Do you know what is happening about Grenada? Something is going on.’He knew nothing about it.

I received a telephone call during the dinner to return immediately to No. 10 and arrived back at 11.30 p.m. By then a second message had arrived from the President. In this he stated that he had decided to respond positively to the request for military action. I immediately called a meeting with Geoffrey Howe, Michael Heseltine and the military and we prepared my reply to the President’ two messages, which was sent at 12.30 a.m. There was no difficulty in agreeing a common line. My message concluded:

I followed this up twenty minutes later by telephoning President Reagan on the hot-line. I told him that I did not wish to speak at any length over the telephone but I did want him to consider very carefully the reply which I had just sent. He undertook to do so but said, ‘we are already at zero.’

At 7.45 that morning a further message arrived, in which the President said that he had weighed very carefully the considerations that I had raised but believed them to be outweighed by other factors. In fact, the US military operation to invade Grenada began early that morning. After some fierce fighting the leaders of the regime were taken prisoner.

At the time I felt dismayed and let down by what had happened. At best, the British Government had been made to look impotent; at worst we looked deceitful. Only the previous afternoon Geoffrey 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, and more than that, whatever our private feelings, we would also have to defend the United States’ reputation in the face of widespread condemnation.

The international reaction to American intervention was in general strongly adverse. It certainly gave a propaganda boost to the Soviet Union. In its early reports, Soviet television news apparently thought that Grenada was a province of southern Spain. But soon their propaganda machine began firing on all cylinders. The Cubans were portrayed as having played an heroic role in resisting the invasion. When I went to the Commonwealth Heads of Government Meeting in New Delhi the following month it was still Grenada which was the most controversial topic of discussion. President Mugabe claimed that American action in Grenada would provide a precedent for South Africa in dealing with her neighbours. My own public criticism of American action and refusal to become involved in it also led to temporarily bad relations with some of Britain’ long-standing friends in the Caribbean. It was an unhappy time.

In Britain we had to face strong pressure, not least in the House of Commons, to renegotiate the arrangements for the deployment of Cruise missiles. The argument was that if the Americans had not consulted us about Grenada, why should they do so as regards the use of Cruise missiles. Similarly, the new leader of the SDP, David Owen, wrote in the Daily Mail on 28 October that ‘British public opinion will simply not accept any longer the Prime Minister’ refusal to insist on a dual mechanism to cover the launching procedures for any Cruise missiles that are deployed in Britain before the end of this year.’

So when President Reagan telephoned me on the evening of Wednesday 26 October during an emergency House of Commons debate on the American action I was not in the sunniest of moods. The President began by saying, in that disarming way of his, that if he was in London and dropped in to see me he would be careful to throw his hat through the door first. He said he very much regretted the embarrassment that had been caused and wanted to explain how it had all happened. It was the need to avoid leaks of what was intended which had been at the root of the problem. He had been woken at 3 o’clock in the morning with an urgent plea from the OECS. A group had then convened in Washington to study the matter and there was already fear of a leak. By the time he had received my message setting out my concerns the zero hour had passed and American forces were on their way. The military action had gone well and the aim was now to secure democracy.

There was not much I felt able to say and so I more or less held my peace, but I was glad to have received the telephone call. At that Thursday’ Cabinet there was a long discussion of what had happened. I told my colleagues that our advice against US intervention had, I believed, been sound. But the US, for its part, had taken a different view on an issue which directly touched its national interests. Britain’ friendship with the United States must on no account be jeopardized.

Just as events in the Lebanon had affected American action in Grenada, so what I had seen in the crisis over Grenada affected my attitude to the Lebanon. I was concerned that American lack of consultation and unpredictability might be repeated there with very damaging consequences.

Naturally, I understood that the United States wanted to strike back after the terrorist outrage against its servicemen in Beirut. But whatever military action now took place, I wanted it to be a lawful, measured and effective response. I sent a message to President Reagan on 4 November welcoming assurances which Geoffrey Howe had received from George Shultz that there would be no hasty reaction by the Americans in retaliation and urging that a more broadly based Lebanese Government be constructed. The President replied to me on 7 November, emphasizing that any action would be a matter of self-defence, not of revenge, but adding that those who committed the atrocity must not be allowed to strike again if it was possible to prevent them. A week later he sent me a further message saying that although he had not yet made a final decision he was inclined to take decisive but carefully limited military action. The US had reports of planning for other terrorist acts against the MNF and he intended to deter these. He added that, because of the need for absolute secrecy, knowledge of his current thinking was being severely limited within the US Government.

I quickly replied to the President. I said that I well understood all the pressures upon him to take action but I wanted to give him my frank views about the decision which only he could take. Any action must in my view be clearly limited to legitimate self-defence. It would be necessary to ensure the avoidance of civilian casualties and minimize the opportunities for hostile propaganda. Surprise was likely to be difficult because a range of possible targets had been publicly discussed by the media for days past. I was glad that he did not envisage involving Israel or targetting Syria or Iran, action against either of which would be very dangerous. I hoped that my message was as clear as it could be: I did not believe that retaliatory action was advisable. However, in the end France did launch air strikes — at American urging, as President Mitterrand told me later. And in response to attacks on its aircraft, the United States struck at Syrian positions in central Lebanon in December.

These retaliations in the Lebanon failed to have any effect. The position there continued to deteriorate. The real question was no longer whether there should be a withdrawal but how to effect one. In February 1984 the Lebanese Army lost control of West Beirut and the Lebanese Government collapsed. The time had clearly come to get out and a firm joint decision with the United States and other members of the MNF was accordingly made to do so and detailed plans for this tricky operation were drawn up. I left it to the British commander on the ground to make the final decision as to what time of the day to move. He decided that it should be done by night. But I suddenly learned that President Reagan would be making a broadcast that evening to tell the American people what would be happening and why. Obviously it became necessary to alert our men to be ready to move as soon as they could. Then, at the last minute, while I was at Buckingham Palace for an audience with the Queen, I received a message that the President was reconsidering the decision and would not after all broadcast. As it turned out — not greatly to my surprise — the postponement decision promptly leaked and the President had to make his broadcast in any case. Clearly, we could not carry on like this, putting the safety of British troops at risk: so I refused to countermand the planned withdrawal of our men to British naval vessels lying offshore, which was duly effected with the British Army’ usual professionalism. In fact, all the MNF forces were shortly withdrawn to ships away from the perils they would have faced on shore. Nothing could now be done to save the Lebanon; the reconstituted Lebanese Government increasingly fell under the control of a Syria whose hostility to the West was now reinforced; and in March the MNF force returned home.

The American intervention in the Lebanon — well intentioned as it was — was clearly a failure. It seemed to me that what happened there contained important lessons which we should heed. First, it is unwise to intervene in such situations unless you have a clear, agreed objective and are prepared and able to commit the means to secure it. Second, there is no point in indulging in retaliatory action which changes nothing on the ground. Third, one must avoid taking on a major regional power, like Syria, unless one is prepared to face up to the full consequences of doing so.

By contrast, American intervention in Grenada was, in fact, a success. Democracy was restored, to the advantage not only of the islanders themselves but also of their neighbours who could look forward to a more secure and prosperous future. No one would weep any tears over the fate of the Marxist thugs whom the Americans had dislodged. Yet even governments acting on the best of motives are wise to respect legal forms. Above all, democracies have to show their superiority to totalitarian governments which know no law. Admittedly, the law on these matters is by no means clear, as was confirmed for me during a seminar I held after the Grenada affair to consider the legal basis for military intervention in another country. Indeed, to my surprise, I found that the lawyers at the seminar were more inclined to argue on grounds of realpolitik and the politicians were more concerned with the issue of legitimacy. My own instinct was — and is — always to found military action on the right of self-defence, which ultimately no outside body has the authority to question.

THE EUROPEAN COUNCIL AT ATHENS

Grenada was still very much on my mind when I went to Bonn for one of my regular Anglo-German summits with Chancellor Kohl on Tuesday 8 November. Like me, Chancellor Kohl was worried about the impact of the American action on European public opinion in the run-up to the deployment of Cruise and Pershing missiles later that month. The West German Government had originally been very critical of the Grenada operation but had since toned this down. Helmut Kohl was showing a good deal of courage as well as political cunning in handling West German public opinion at this crucial time, and I admired him for it.

The main purpose of my visit, however, was to seek German support for the line I would take at the European Council in Athens, now just a few weeks away. So Athens was the principal topic of my discussion with him, in which we were later joined by Geoffrey Howe and the German Foreign minister, Hans-Dietrich Genscher. I began by making what I hoped would be the welcome suggestion that the next President of the European Commission should come from Germany, if the German Government wished to put forward a candidate. As I had rather expected, it appeared that they did not. Chancellor Kohl said that he agreed with me that the Commission was too big and tended to create unnecessary work. Then a little more diplomacy: I said that our aim was to build on the excellent foundation laid under the German presidency. After this we got down to business. I stressed the need for firm control of spending on the CAP if there was to be anything left of the Community’ ‘own resources’ for other purposes, such as the development of the electronics industry, which the Germans wanted. I also warned against allowing growing protectionism to create another area of disagreement with the United States. The Germans were most interested in the future level of MC As,[44] which affected German farmers’ incomes, and the steel industry where they considered that they were receiving a raw deal and that the Italians were using subsidies to undercut German producers. I hoped that at the end of this discussion each side had understood the areas on which we would stand firm and those where compromise was possible. In particular, I hoped that the Germans realized how serious I was about achieving my objectives on the budget question at Athens.

As usual before European Councils I held a number of preparatory meetings with ministers and officials. This was partly to ensure that I was thoroughly briefed, but also to sort out with colleagues our precise objective on each issue. It was not enough to decide what was ideal for us: I had also to establish and fully master the least bad alternatives. All too often the ideal was not attainable.

In the meetings for Athens on the budget question both Nigel Lawson and I felt that we had to be really tough in pressing for the required package if there were to be any question of our agreeing to an increase in the Community’ ‘own resources’. We had to be satisfied with the way the burden on Britain was measured. The result must reflect our ability to pay. And whatever system was finally agreed must be able to be relied upon to work over time and without significant damage to the UK position. Above all, to take into account relative prosperity, we decided to press the view that if a member state’ GDP per head was 90 per cent or less of the Community average it should make no net contribution at all, with states above that threshold making progressively higher contributions the richer they were. (This scheme was known as ‘the safety net’ or ‘threshold’ system.)

I wanted to ensure that at Athens I was given a proper opportunity to have the budget discussed early on, because the talks would be long and hard. So I wrote to the Council President, the Greek Prime Minister Andreas Papandreou, asking that we start the Council by dealing with the budget imbalances and linked issues. My letter, however, crossed with one from him in which he said that he wanted to deal with agriculture first. It was not a good start.

Yet when I left for Athens there did seem grounds for reasonable optimism. The Germans appeared to understand our position and there had even been encouraging signs from the French. It was to be a somewhat longer summit than usual and I hoped the time would be used productively.

The Community heads of government met in the magnificent Zappeion Hall, a classical Greek building adapted to the needs of a modern conference centre. At the first session of the Council that afternoon I was sitting opposite President Mitterrand and Chancellor Kohl. I noticed that whereas my own table was covered with piles of heavily annotated briefing on different complex agricultural and financial issues, no such encumbrance appeared in front of my French and German counterparts. This doubtless made for an impression of appropriately Olympian detachment, but it also suggested that they had not mastered the detail. And this turned out to be the case. Throughout the meeting Chancellor Kohl seemed unwilling or unable to make much effective contribution. Worse, President Mitterrand appeared not only badly briefed on the issues but strangely — I think genuinely — misinformed about his own Government’ position, as it had previously been set out by French ministers and officials.

The Greek Presidency did not assist much either. Mr Papandreou always proved remarkably effective in gaining Community subsidies for Greece but he was less skilful in his present role as President of the European Council. As his earlier letter to me had proposed, he insisted on trying to reach agreement on agriculture before moving on to the question of finance and the British budget contribution. Obviously, it would have been made better sense to face the Community countries with the financial realities first and then deal with the agricultural issues, from which so much of the financial problem derived and on which different countries had sharply opposing national interests. And we never seemed to get by without a tear-jerking homily on the predicament of Ireland from the Irish Prime Minister, Dr Garret FitzGerald, who was determined if he could to exempt his country from the disciplines on agricultural spending. I made it clear that any preferential treatment for the Republic would have to be matched by similar treatment for Northern Ireland. The first day was more or less a write-off.

I was, therefore, already pessimistic by the time I returned that night to the British Ambassador’ Residence to discuss with my officials how we should conduct ourselves the following day (Monday). But it was only on the Monday that it became obvious that the summit would indeed fail. When the Council met, to my astonishment President Mitterrand made it clear that France’ position on the budget had completely changed. France was no longer prepared to support us in pressing for a long-term settlement of the British budget problem. In repeated interjections, I said that I would not agree to an increase in the Community’ ‘own resources’ unless spending on the CAP was contained and decreased as a share of the total budget and unless member states’ contributions were fair and in line with the ability to pay. The argument continued, but I was clearly getting nowhere.

On Tuesday I had a working breakfast with President Mitterrand. We were so far apart that there was no point in spending much time discussing Community issues at all and we largely concentrated instead on the Lebanon. The French President seemed blissfully unaware of the damage his own turnabout had done. He said jokingly that unless we demonstrated that discussions between Britain and France were continuing, the press would soon be talking about a return to the Hundred Years’ War. So in what I hoped was a suitably nonbelligerent way I told him how his attitude at the Council had taken me by surprise, given the fact that I was going along with the proposals on the budget which the French Finance minister, one M. Jacques Delors, had been advancing. The President asked me precisely what I meant and I explained. But I received no very satisfactory or clear response.

Where we did see eye to eye — at least in private — was about Germany. I said that even though the Germans were willing to be generous because they received other political benefits from the Community, a new generation of Germans might arise who would refuse to make such a large contribution. This would risk a revival of German neutralism — a temptation which, as President Mitterrand rightly said, was already present.

The meeting had been an amicable one and I tried to keep the atmosphere relatively friendly after the Council broke up, as in press interviews I avoided being too harsh about France’ performance. After all, M. Mitterrand was to be the next President of the Council and so it would fall to him to chair the crucial meetings as we at last approached the time when the Community’ money ran out. It did cross my mind that he might have wished to delay a settlement until he could take credit for it in his own presidency.

No communiqué was issued at the end of the Athens Council: we had had no time in plenary sessions to discuss any of the wider international issues and agree a line on them. The Council was widely and accurately described as a fiasco. But my frustration was diminished by the fact that I knew that time was on my side.