Margaret Thatcher: Power and Personality (63 page)

Self promoting his skills as a wheeler-dealer of influence in the Arab world, Mark had caused earlier embarrassment to his mother by inserting himself as a consultant in a construction contract in Oman won by the British company Cementation Ltd. Critical newspaper coverage resulted making unfounded suggestions of impropriety. The reporting may have been unfair but the last thing the
Al Yamamah
deal needed was similar bad headlines. Yet there was a real danger of this because Mark Thatcher the entrepreneur, having got wind of the magnitude of the contract under negotiation, was offering his services to some of the key players. What could he provide? Access and influence in theory, but in practice this was unnecessary as the Prime Minister was already totally committed to
Al Yamamah
for national interest reasons. For the same reasons Denis was already providing ample access for Dick Evans of British Aerospace and facilitating Prince Bandar’s backchannel messages. As Dick Evans put it, ‘Mark was a complete distraction. He brought nothing that could be helpful or useful. He simply wasn’t needed. But his efforts to be involved really worried Denis who was fiercely protective of Margaret.’
¹¹

Denis needed an ally in his strategy to keep Mark away from making commission deals with British companies in
Al Yamamah
. Dick Evans became that ally.

It was hard work. Denis was exceedingly bloody angry that Mark was trying to become involved. He kept asking me to keep him out. I said at one stage, ‘If you his father and the Prime Minister his mother can’t contain him what can I do?’ But between us we
did. I remember one moment of madness in the flat at No. 10. I was there with Denis when Mark rang me up and said he was in a hotel in Europe standing on the balcony and that he would jump off it if he wasn’t allowed in the deal. Denis just said, ‘Tell him to jump!’ It was the idiot son at his worst.
¹²

Suicide jumps aside, such episodes of Thatcher family dysfunctionality had long been a problem. Denis solved it this time around by making sure his own son was not engaged by British Aerospace and its subcontractors. If there were any issues the Prime Minister needed to know about, fast-track access to No. 10 was provided not by her commercially ambitious and highly visible son but by her invisible and loyal husband. This protective mechanism succeeded. Contrary to some press rumours, Mark Thatcher never came close to compromising his mother’s integrity. British Aerospace and is subcontractors did not make any commission or fee paying deals with him.

Away from the distractions of Mark, there were important strategic issues which needed the hands-on attention of the Prime Minister during the
Al Yamamah
negotiations. After the Saudi Defence Minister swung behind the king on the decision to buy British, the size of the deal increased dramatically. Prince Sultan now wanted to order seventy-two Tornado aircraft and thirty Hawks, insisting that half of them should be in service with the RSAF within a year. This could only be achieved by taking a number of Tornados out of the line of operational service with the RAF. The Chief of the Air Staff was summoned to No. 10 to be given this order. After he had reluctantly agreed, Air Chief Marshal Sir Keith Williamson complacently observed to the Prime Minister that the Tornado was ‘such a good aircraft that it sells itself’. She was having none of it. ‘I can tell you from experience, Air Chief Marshal, that nothing ever sells itself – do you hear me?’
¹³

The Tornados that were taken out of the RAF’s line could have presented a major obstacle to the deal. For these Interdiction Strike (IDS) version of the aircraft were designated to be the bombers that would be used to drop Britain’s nuclear deterrent on Moscow in the event of all-out war with the Soviet Union. In preparation for this Armageddon scenario, eighteen of the RAF’s Tornados had already been ‘nuclear wired’ meaning that they were installed with a top-secret integrated computer system for the carriage and release of nuclear bombs. It was these same Tornados which, on the orders of the Prime Minister,
were about to be temporarily transferred from the RAF for purchase by Saudi Arabia.

If the Israelis or indeed the British Foreign Office had ever discovered that the UK government was selling nuclear-capable aircraft to an Arab air force in the Middle East, all diplomatic hell would have broken loose. But Margaret Thatcher was playing her
Al Yamamah
cards extremely close to her 10 Downing Street chest. She showed none of them to her Foreign Secretary. Instead she used the ubiquitous Prince Bandar to explain the problem to King Fahd. He gave a categorical assurance that the nuclear-wired Tornados bought by Saudi Arabia would never be used to carry nuclear bombs. This was an entirely credible promise since Saudi Arabia had no nuclear bombs. But only a trustworthy king could have given the required assurance, only a trusting Prime Minister could have accepted it and only the two of them could have kept it secret.

Once the nuclear issue had been taken care of, the most pressing issue was working out how the
Al Yamamah
deal could be paid for. This was another huge problem. Although Saudi Arabia was an oil-rich country, its civil infrastructure modernisation programme had resulted in a substantial budget deficit. So the bills for
Al Yamamah
had to be met out of a separate off-budget account financed by a unique oil for aircraft agreement. This needed the approval of the king and prime minister.

The agreement details were fiendishly complicated since Britain could not be at risk from exchange-rate or oil-rich fluctuations. Yet all the difficulties were overcome. Margaret Thatcher had to cajole a consortium of oil majors – Shell, BP and Texaco – to accept liftings from the Aramco terminals in Saudi Arabia’s Eastern Province of between 200,000 and 600,000 barrels of oil per day. She also had to bang heads together at the Bank of England, the Treasury and the Ministry of Defence to set up the government to government account arrangements. It was difficult but with the Prime Minister in charge it got done.

The prices of the aircraft sold in the first tranche of
Al Yamamah
have never previously been published. They were £25.2 million for each of the seventy-two Tornados, £5.3 million for each of the thirty Hawks and £2.8 million for 30 PC9 Trainers which were added to the deal the night before the announcement. In addition to these hardware costs of just over £2 billion there were £3.2 billion worth of spares, training facilities and construction costs for new air bases.
¹⁴
Nothing like it in the history of British export deals had ever been seen before.

Astonishingly, this was only just the beginning. The Saudis made maximum use of their new off-budget finance arrangements using oil liftings. So
Al Yamamah
was renewed again and again and again. It became much more broadly based than an aircraft contract extending to naval ships and anti-terrorist facilities. Even so, only about 20 per cent of
Al Yamamah
covered military hardware. The other 80 per cent of the approximately £90 billion spent on the programme to date has gone on the construction of roads, schools, training institutes, housing, general services and infrastructure.

THE MOTIVATION OF THE PRIME MINISTER

Even Margaret Thatcher can never have foreseen, when she was politically wooing and winning King Fahd, the magnitude of what she was going to accomplish for Britain’s balance of payments and exports. But in her usual clear-headed way she saw the priorities for a prime minister. They were helping British companies to win business in new overseas markets, boosting Britain’s fragile aerospace industry and creating jobs in the manufacturing sector. There was also the vital interest of increasing British influence in the Middle East. She talked frankly to Dick Evans about these objectives during the saga of the
Al Yamamah
negotiations, adding one unexpected political priority – the winning of marginal seats in general elections.

In her interrogations of Evans about the industrial impact of the deal, the Prime Minister extracted from him the information that one new manufacturing job created by
Al Yamamah
at his company’s factories in places like Wharton, Brough, Salmesbury and Kingston created another twenty new jobs in the aerospace supply chain. These jobs were secured for subcontractors, principally in Lancashire and the wider North West of England, also stretching down into the West Midlands.

‘Do you realise how powerful your company is, Dick?’ Margaret Thatcher asked him. ‘No British political party can be elected to power unless they win the key marginals. You represent to me the largest number of critical seats in the key areas of the North West and the West Midlands.’ Ticking off a number of named constituencies on her fingers she asserted, ‘Jobs in towns and cities like these are absolutely vital to national prosperity and to our government’s electoral prospects’.
¹⁵

The concept of
Al Yamamah
as an engine for winning domestic elections may not have occurred to anyone else but Margaret Thatcher the perceptive and sometimes parochial politician. But she also kept her side of her strategic bargain with King Fahd as Margaret Thatcher the international statesman.

For when Saudi Arabia tottered and swayed at the prospect of being the next target for Saddam Hussein in the days after his 1990 invasion of Kuwait, Margaret Thatcher was the Kingdom’s earliest and most robust defender. She despatched some of the first British forces and aircraft to the Gulf – many of them landing at the new bases built under the
Al Yamamah
contract. She also most effectively exhorted the first Bush administration to put its military might behind Saudi Arabia, delivering the memorable line to the President, ‘George, this is no time to go wobbly’.
^*
As always, she was a loyal and far-sighted international ally.

Margaret Thatcher pulled off large export deals for many British companies in many countries. She saw this as a vital part of her role as Prime Minister, often describing it as ‘Batting for Britain’. In Saudi Arabia she played her finest captain’s innings.

REFLECTION

Al Yamamah
was a triumph for Margaret Thatcher but it was not without subsequent controversy. Because of the jobs created there was always bi-partisan support for the contract in Parliament. But some MPs and journalists took a hostile stance, attacking the project on the political grounds that it was an unsavoury arms deal with a reactionary monarchy. There were also allegations of corruption linked to the deal, including unsubstantiated insinuations that Mark Thatcher had benefited from it.

Most of these claims, although published by some British newspapers, originally surfaced in underground Arab magazines such as
Sourakia
. The informants for these stories often had axes to grind that were linked to some score settling between factions within the Kingdom. So assessing the reliability of such reports was difficult.

Inevitably it was true that some individual Saudis and Saudi companies made fortunes from
Al Yamamah
. Commissions, consultancies and success fees are the way of life in the Middle East, par for the course on business deals great and small. Did Mark Thatcher benefit in this way? The allegation has always been denied and not an iota of proof has ever been produced to underline these denials. I believe them, first because it is so difficult to see what value he could possibly have added to any part of the project, and second because Denis worked so hard to keep his son out of the deal.

In 1992 I was appointed Minister of State for Defence by Prime Minister John Major and given responsibility for
Al Yamamah
which by then was in its seventh year of operation. I had long talks and negotiations with King Fahd and Prince Sultan which resulted in
Al Yamamah Two
, the first of several massive extensions of the contract which continues to this day. In that job
^†
I learned many
Al Yamamah
secrets, none of which yielded anything but credit to Margaret Thatcher. During my meetings in Riyadh I sometimes had the impression that King Fahd would much rather be negotiating with her than with me, so often did he refer to her personality and even her beauty in the warmest of terms!

The Public Accounts Committee (PAC) in the House of Commons, under the chairmanship of the former Labour Treasury minister Robert Sheldon, conducted its own report on
Al Yamamah
in 1992. It gave the financial aspects of the project handled by the British government a clean bill of health. But the PAC report was never published, not because of any financial irregularities but because the nuclear wiring of the Tornados sold to Saudi Arabia was then deemed to be far too sensitive a secret to be revealed.

Some of the key figures in the deal stayed close to Margaret Thatcher. King Fahd invited her to Riyadh soon after she ceased to be Prime Minister. He paid her the unprecedented compliment of meeting her at the front steps of her arriving aircraft accompanied by his entire cabinet.

Prince Bandar was a regular visitor to her in retirement. Wafic Saïd became a lifelong friend, often having her to stay at Tusmore, his Oxfordshire estate.
During her last years Margaret Thatcher enjoyed long breaks in the Clock House of Tusmore, accompanied by her carers.

Sir Richard Evans, as he became, remained a confidant of Denis Thatcher, often dining with him or
à trois
with Bill Deedes in the East India Club. ‘Denis was one of the heroes of
Al Yamamah
’, said Evans. ‘His only motives for being so incredibly helpful was that he loved his wife and he loved his country. He was the best British patriot I ever saw.’

Patriotism explains much about Margaret as well as Denis Thatcher over their roles in the
Al Yamamah
story. She took patriotic risks in her dealings with the Saudis but they paid off handsomely in terms of jobs, exports and a revived, indeed a saved, aerospace industry for Britain. Why did she omit any mention of this success story from her memoirs? Perhaps she felt vulnerable about Mark’s rumoured involvement. She need not have done. As usual she was in the dark about her son’s business activities. Had she been in the know, she would have been grateful that Denis protected her from filial embarrassment while playing his usual quiet but pivotal role as her loyal consort. In this instance both Thatchers deserve praise for steering the largest export contract of the twentieth century from France to Britain.