Margaret Thatcher: The Autobiography (94 page)

It was, in fact, Sig. Craxi himself as President who suggested at the Council that we should have an IGC. I argued that the Community had demonstrated that it did have the capacity to take decisions under the present arrangements and that we should now at the Milan Council agree upon the measures needed to make progress on the completion of the Common Market internally and political co-operation externally. There would, I granted, be a need for improved methods of decision-taking if these ends were to be met. I proposed that we agree now to greater use of the existing majority voting articles of the Rome Treaty, while requiring any member state which asked for a vote to be deferred to justify its decision publicly. I called for a reduction in the size of the Commission to twelve members. I also circulated a paper suggesting some modest ways in which the European Assembly might be made more effective. I suggested that the Luxemburg European Council, due to meet in December,
should as necessary constitute itself as an IGC. There agreements could be signed and conclusions endorsed. But I did not see any case for a special IGC working away at treaty changes in the meantime.

But it was to no avail. I found myself being bulldozed by a majority which included a highly partisan chairman. I was not alone: Greece and Denmark joined me in opposing an IGC. Geoffrey Howe would have agreed to it. His willingness to compromise reflected partly his temperament, partly the Foreign Office’s
déformation professionelle.
But it may also have reflected the fact that Britain’s membership of the European Community gave the Foreign Office a voice in every aspect of policy that came under the Community. And the more the Community moved in a centralized direction the more influential the Foreign Office became in Whitehall. Inevitably, perhaps, Geoffrey had a slightly more accommodating view of federalism than I did.

To my astonishment and anger Sig. Craxi suddenly now called a vote and by a majority the Council resolved to establish an IGC. My time had been wasted. I would have to return to the House of Commons and explain why all of the high hopes which had been held of Milan had been dashed. And I had not even had an opportunity while there to go to the opera. Annoyed as I was with what had happened, I realized that we must make the best of it. I made it clear that we would take part in the IGC: I saw no merit in the alternative policy – practised for a time in earlier years by France – of the so-called ‘empty chair’.

I had one overriding positive goal. This was to create a single Common Market. The price which we would have to pay to achieve a Single Market, with all its economic benefits, though, was more majority voting in the Community. There was no escape from that, because otherwise particular countries would succumb to domestic pressures and prevent the opening up of their markets. It also required more power for the European Commission: but that power must be used in order to create and maintain a Single Market, rather than to advance other objectives.

I knew that I would have to fight a strong rear-guard action against attempts to weaken Britain’s own control over areas of vital national interest to us. I was not going to have majority voting applying, for example, to taxation which the Commission would have liked us to ‘harmonize’. Competition between tax regimes is far healthier than the imposition of a single system. It forces governments to hold down government spending and taxation, and to limit the burden of regulations; and when they fail to do these things, it allows companies and
taxpayers to move elsewhere. In any event, the ability to set one’s own levels of taxation is a crucial element of national sovereignty. I was not prepared to give up our powers to control immigration (from non-EC countries), to combat terrorism, crime, and drug trafficking and to take measures on human, animal and plant health, keeping out carriers of dangerous diseases – all of which required proper frontier controls. There was, I felt, a perfectly practical argument for this: as an island – and one quite unused to the more authoritarian continental systems of identity cards and policing – it was natural that we should apply the necessary controls at our ports and airports rather than internally. Again, this was an essential matter of national sovereignty. I was prepared to go along with some modest increase in the powers of the European Assembly, which would shortly and somewhat inaccurately be described as a Parliament: but the Council of Ministers, representing governments answerable to national Parliaments, must always have the final say. Finally, I was going to resist any attempt to make treaty changes which would allow the Commission – and by majority vote the Council – to pile extra burdens on British businesses.

Right up to the beginning of the Luxemburg Council I thought that we could rely on the Germans to support us in opposing any mention of the European Monetary System (EMS) and economic and monetary union in the revisions of the treaty. Then, as now, however, there was an inherent tension between, on the one hand, the German desire to retain control over their own monetary policy to keep down inflation and, on the other, to demonstrate their European credentials by pressing further towards economic and monetary union.

I arrived in Luxemburg at 10 o’clock on Monday morning, 2 December 1985. The first session of the Council began soon afterwards. The heads of government went through the draft treaty – what would become the Single European Act – which the presidency and the Commission had drawn up. The ability of those present to argue at great length and with much repetition about matters of little interest was, as ever, astonishing. It would have been far better to have agreed on the principles and then let others deal with the details, referring back to us.

I was also dismayed that the Germans shifted their ground and said that they were now prepared to include monetary matters in the treaty. I was, however, able in a side discussion with Chancellor Kohl to reduce the formula to what I considered insignificant proportions which merely
described the status quo, rather than set out new goals. This added to the phrase ‘Economic and Monetary Union’ the important gloss ‘co-operation in economic and monetary policy’. The former had been the official objective, unfortunately, since October 1972: the latter, I hoped, would signal the limits the act placed on it. But this formulation delayed M. Delors’s drive to monetary union only briefly.

Tuesday’s discussions, though long and intense, were far more productive. It was midnight when I gave my press conference on the conclusions of the Council. I was pleased with what had been achieved. We were on course for the Single Market by 1992. I had had to make relatively few compromises as regards wording; I had surrendered no important British interest; I had had to place a reservation on just one aspect of social policy in the treaty.
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Italy, which had insisted on the IGC in the first place, had not only applied the most reservations on it but also demanded that it must be agreed by the European Assembly.

Perhaps I derived most satisfaction from the inclusion in the official record of the conference of a ‘general statement’ recording that:

I had insisted on the insertion of this statement. I said that otherwise terrorists, drug dealers and criminals would exploit the provisions of the act to their own advantage and to the danger of the public. Without it I would not have agreed the Single European Act. In fact, neither the Commission, nor the Council nor the European Court would in the long run be prepared to uphold what had been agreed in this statement any more than they would honour the limits on majority voting set out in the treaty itself. But this is to anticipate.

The first fruits of what would be called the Single European Act were good for Britain. At last, I felt, we were going to get the Community back on course, concentrating on its role as a huge market, with all the opportunities that would bring to our industries. Advantages will indeed flow
from that achievement well into the future. The trouble was – and I must give full credit to those Tories who warned of this at the time – that the new powers the Commission received only seemed to whet its appetite.

European affairs took second place for me during the rest of this Parliament. The main decisions had been made and even the Commission’s search for new ‘initiatives’ had been slowed for the moment by the need to work out and implement the Single Market programme. The Community was overspending its resources, but had not yet reached the new limits of VAT revenue which had been set. Enlargement had to be carried out. There was plenty to be getting on with.

The preparations for and course of the 1987 general election campaign

A
LL ELECTION VICTORIES
look inevitable in retrospect; none in prospect. The wounds which Westland, BL and reaction to the US raid on Libya inflicted on the Government and the Conservative Party would take some time to heal. Economic recovery would in time provide an effective salve. But Labour had moderated their image and gained a lead in the opinion polls. It was important that I should unify the Party around my authority and vision of Conservatism. This would not be easy.

So I set in train a series of steps to make plain that the Government encompassed – and was receptive to – a wide range of views. My first concern was to deal with the impression that the Government was unaware of people’s worries. I could do this without diluting the Thatcherite philosophy because, whatever commentators imagined, the hopes and aspirations of the great majority were in tune with my beliefs.

A step towards getting the Government and Party off to a new start was provided by the reshuffle. Keith Joseph had decided that he now wished to leave the Cabinet. The departure of my oldest political friend and ally saddened me. But Keith’s departure gave rise to important changes. What I needed was ministers who could fight battles in the media as well as in Whitehall.

Any analysis of the opinion polls revealed that where we were strong was on economic management; where we were weak was on the so-called ‘caring issues’. In Health I felt that the best answer was to set out the record: but it was widely disbelieved. In Education, however, the Conservatives
were trusted because people rightly understood that we were interested in standards – academic and non-academic – parental choice and value for money; and they knew that Labour’s ‘loony Left’ had a hidden agenda of social engineering and sexual liberation. Ken Baker (successor to Patrick Jenkin) had won hands-down the propaganda battle against the Left in the local authorities and he and William Waldegrave, stimulated by the advice of Lord Rothschild, had set out what I had long been looking for – an alternative to the rates. But I felt that a first-class communicator like Ken Baker was now needed at Education.

John Moore, highly regarded by Nigel Lawson, now entered the Cabinet as Transport Secretary. I had high hopes of John. He was conscientious, charming, soft spoken and in some ways he had the strengths of Cecil Parkinson – that is, he was right-wing but not hard or aggressive. He came across very well on television. I had no doubt that John Moore would be an asset to the Government and a loyal supporter to me.

I moved Nick Ridley to the Department of the Environment. Nick could not match Ken or John in presentation. But we still needed to come up with some radical policies for our manifesto and the third term. No one was better suited to find the right answers to the complicated issues which faced us in Nick’s new field of responsibility. Housing was certainly one area which required the application of a penetrating intellect. The sale of council houses had led to a real revolution in ownership. But the vast, soulless high-rise council estates remained ghettos of deprivation, poor education and unemployment. The private rented sector had continued to shrink, holding back labour mobility. Housing benefit and housing finance generally was a jungle. The community charge had to be thought through in detail and implemented in England and Wales. And further ahead lay the vexed question of pollution of the environment.

On the evening of Thursday 24 July 1986 I spoke to the ′22 Committee to give the traditional ‘end of term’ address. My task was to ensure that the Parliamentary Party left in the past all the agonized debates about Westland, BL and Libya and came back in the autumn determined to demonstrate the unity and self-confidence required to fight and win the arguments – and then a general election. In an unvarnished speech I told them that they had had to take a lot of difficulties on the chin in the last year, but those difficulties had nothing to do with our fundamental approach, which was correct. They had resulted from throwing away the precious virtue of unity and also because, as over Libya, we had had to do genuinely difficult things which were right. I
was glad to get warm and noisy applause for this, because such a warm response to such a strong speech meant that the Party was recovering its nerve.

The summer of 1986 was important too in another regard. At Conservative Central Office Norman Tebbit, the Chairman of the Party, had been having a very hard time. A good deal of criticism of Norman found its way into the press and at one point he believed that it was coming from me or my staff. Norman arrived one day at Downing Street armed with a sheaf of critical press cuttings, asking where these rumours came from. I reassured Norman that they certainly did not come from me, or my staff, nor – I emphasized strongly – did they reflect my views. These tensions build up when people do not see one another frequently enough to give vent to tensions and clear up misunderstandings. Relations improved, I am glad to say, when Stephen Sherbourne, my political secretary, whose shrewdness never failed me, ensured that Norman and I had regular weekly meetings.