The Downing Street Years (15 page)

Many reacted to my decision in luxemburg with disbelief: in some circles the very last thing expected of a British prime minister was that he or she should quite so unashamedly defend British interests. But there was, I noted, a contrast between the reaction in some of the press which was extremely hostile and the reaction in the House of Commons and the country, which was thoroughly supportive.

In fact, we were a good deal closer to a settlement than was widely recognized. Great progress had already been made in winning agreement to substantial reductions in our contribution. What remained was to secure these reductions for the first two years with a reliable undertaking for the third. We had a number of powerful levers by which we could apply pressure to this end. The French were increasingly desperate to achieve their aims in the Agriculture Council. There was even talk of overriding the British veto by abrogating the so-called Luxemburg compromise of 1966, established to accommodate de Gaulle. (This was an understanding rather than a formal agreement with the force of law, which enabled any one country to block a majority decision when its vital national interests were at stake.) In fact, precisely this did happen at the Agriculture Council in May 1982 — and this during the Falklands War. However, at this particular time it would have been a dangerous move, particularly since the French had already been found in breach of Community law over lamb imports. The Germans, too, were keen to see higher agricultural prices. Most important of all, the Community would, we thought, probably reach the limit of its financial resources in 1982. Its persistent overspending was catching up with it, and greater resources could only be made available with British agreement. Ultimately our negotiating position was a strong one.

It soon became clear that Luxemburg, following the clashes in Dublin, had had the desired effect. In spite of talk of the Luxemburg offer having now been ‘withdrawn’, there was evidence of a general desire to solve the budget issue before the next full European Council at Venice in June. The easiest way to achieve this appeared to be a meeting of the Community Foreign ministers.

Peter Carrington, having received his mandate from me, flew to
Brussels on Thursday 29 May with Ian Gilmour. After a marathon eighteen-hour session they came back with what they considered an acceptable agreement, arriving at lunch time on Friday to brief me at Chequers.

My immediate reaction was far from favourable. The deal involved a net budget contribution in 1980 higher than envisaged at Luxemburg. It appeared from Peter’s figures that we would pay rather less under the new package in 1981, though to some extent this was sleight of hand, reflecting different assumptions about the size of that year’s total budget. But the Brussels proposal had one great advantage: it now offered us a three-year solution. We were promised a major review of the budget problem by mid-1981 and if this had not been achieved (as proved to be the case) the Commission would make proposals along the lines of the formula for 1980–81 and the Council would act accordingly. The other elements of the Brussels package relating to agriculture, lamb and fisheries, were more or less acceptable. We had to agree a 5 per cent rise in farm prices. Overall, the deal marked a refund of two-thirds of our net contribution and it marked huge progress from the position the Government had inherited. I therefore decided to accept the offer.

Wider international affairs had not stood still while we were engaged in bringing Rhodesia to legal independence and negotiating a reduction in our Community Budget contribution. In November 1979, forty-nine American diplomatic personnel had been taken hostage in Iran, a source of deep and growing humiliation to the greatest western power. In December at the invitation of President Carter I made a short visit to the United States — the first of many as Prime Minister. In a short speech at my reception on the White House Lawn I went out of my way to reaffirm my support for American leadership of the West. Then in a speech the next day in New York I warned of the dangers of Soviet ambitions and urged the need for strong western defence:

I also undertook to support the United States in the UN Security Council in seeking international economic sanctions against Iran under
Chapter 7
of the UN Charter. The President and I discussed defence and the situation in Ulster. I took the opportunity to thank him for all he had been doing behind the scenes in the final stages of the negotiations on Rhodesia.

Then, at the end of 1979, the world reached one of those genuine watersheds which are so often predicted, which so rarely occur — and which take almost everyone by surprise when they do: the Soviet invasion of Afghanistan. In April 1978, the Government of Afghanistan had been overthrown in a communist-inspired coup; a pro-Soviet government was established, which, however, was met by widespread opposition and eventual rebellion. In September 1979 the new President, Taraki, was himself overthrown and killed by his deputy, Hafizullah Amin. On 27 December, Amin in turn was overthrown and killed, to be replaced by Babrak Karmal, whose regime was supported by thousands of Soviet troops.

The Soviets had long considered Afghanistan to have a special strategic significance and sought to exercise influence there through so-called ‘Treaties of Friendship’. It was said that they were probably concerned, in the light of events in Iran, at the possibility of anarchy in Afghanistan leading to a second fundamentalist Muslim state on their borders, which might destabilize their own subject Muslim population. The West had for some time been anxious that the Soviets would make a drive for the oil in the Gulf. And the energy crisis gave them a still stronger reason to do so.

Perhaps I was less shocked than some by the invasion of Afghanistan. I had long understood that
détente
had been ruthlessly used by the Soviets to exploit western weakness and disarray. I knew the beast.

What had happened in Afghanistan was only part of a wider pattern. The Soviets had instigated Cubans and East Germans to advance their aims and ambitions in Africa. They had been working to further communist subversion throughout the Third World, and for all the talk of international peace and friendship, they had built up armed forces far beyond their defensive needs. Whatever their precise motives now in Afghanistan, they must have known that they had threatened the stability of Pakistan and Iran — the latter unstable enough already under the Ayatollah — and were within 300 miles of the Straits of Hormuz. Moreover, bad as the situation was in itself, it could be worse
as a precedent. There were other areas of the world in which the Soviets might prefer aggression to diplomacy, if they now prevailed: for example, Marshal Tito was evidently approaching the end of his life in Yugoslavia and there could be opportunities for Soviet intervention there. They clearly had to be punished for their aggression and taught, albeit belatedly, that the West would not only talk about freedom but was prepared to make sacrifices to defend it.

On Friday 28 December President Carter rang me at Chequers and we discussed at length what the Soviets were doing in Afghanistan and what our reaction should be. What had happened was a bitter blow to him. Britain had not felt able to comply with all that the Americans had wanted of us in response to the hostage crisis: in particular, we were not willing (or indeed legally able) to freeze Iranian financial assets, which would have had a devastating effect on international confidence in the City of London as a world financial centre. However, I was determined that we should follow America’s lead now in taking action against the USSR and its puppet regime in Kabul. We therefore decided on a range of measures, including the curtailment of visits and contacts, non-renewal of the Anglo-Soviet credit agreement and a tightening of the rules on technology transfer. I also sought to mobilize the governments of the European Community to support the Americans. But, like President Carter, I was sure that the most effective thing we could do would be to prevent their using the forthcoming Moscow Olympics for propaganda purposes. Unfortunately, most of the British Olympic team decided to attend the Games, though we tried to persuade them otherwise: of course, unlike their equivalents in the Soviet Union, our athletes were left free to make up their own minds. At the UN our ambassador, Tony Parsons, helped to rally the ‘non-aligned’ countries to condemn the Soviet Union’s aggression. In London, on 3 January, I saw the Soviet Ambassador to enlarge in vigorous terms on the contents of my exchanges by telegram with President Brezhnev.

From now on, the whole tone of international affairs began to change, and for the better. Hard-headed realism and strong defence became the order of the day. The Soviets had made a fatal miscalculation: they had prepared the way for the renaissance of America under Ronald Reagan.

But this was the future. America had still to go through the humiliating agony of the failed attempt to rescue the Iranian hostages. As I watched President Carter’s television broadcast explaining what had happened, I felt America’s wound as if it were Britain’s own; and in a sense it was, for anyone who exposed American weakness increased
ours. I was soon, though, in a position to demonstrate that there would be no flinching when it came to dealing with our own brand of Middle East terrorism.

I first learned of the terrorist attack on the Iranian Embassy at Prince’s Gate in Knightsbridge on Wednesday 30 April during a visit I was making to the BBC. The early reports were, in fact, misleadingly anodyne. It soon became known, however, that several gunmen had forced their way into the Iranian Embassy and were holding twenty hostages — most of them Iranian staff, but also including a policeman who had been on duty outside and two BBC journalists who had been applying for visas. The gunmen were threatening to blow up both the embassy and the hostages if their demands were not met. The terrorists belonged to an organization calling itself ‘the Group of the Martyr’; they were Iranian Arabs from Arabistan, Iraqi-trained and bitterly opposed to the prevailing regime in Iran. They demanded that a list of 91 prisoners be set free by the Iranian Government, that the rights of Iranian dissidents should be recognized and a special aeroplane provided to take them and the hostages out of Britain. The Iranian Government had no intention of conceding these demands; and we, for our part, had no intention of allowing terrorists to succeed in their hostage taking. I was conscious that, though the group involved was a different one, this was no less an attempt to exploit perceived western weakness than was the hostage taking of the American embassy personnel in Tehran. My policy would be to do everything possible to resolve the crisis peacefully, without unnecessarily risking the lives of the hostages, but above all to ensure that terrorism should be — and be seen to be — defeated.

Willie Whitelaw, as Home Secretary, took immediate charge of operations from the special emergency unit in the Cabinet Office. The unit is immediately activated when a security crisis occurs. On it representatives of the Cabinet Office, Home Office, Foreign Office, military, police and intelligence services advise a minister in the chair — usually, as on this occasion, the Home Secretary; I only once and briefly took this role at the time of the hijack of an aircraft from Tanzania to Stansted. Hour by hour information is gathered, sifted and analysed so that every circumstance and option can be properly evaluated. Throughout the crisis, Willie kept in regular contact with me. In turn the Metropolitan Police kept in touch with the terrorists by a specially laid telephone line. We also made contact with those who might be able to exert some influence over the gunmen. The latter wished to have an Arab country’s ambassador act as intermediary. But we were extremely doubtful about this: there was a risk that the
objectives of such an intermediary would be different from our own. Moreover, the Jordanians, whom we
were
prepared to trust, refused to become involved. A Muslim imam did talk to the terrorists, but without result. It was a stalemate.

Willie and I were completely agreed as to the strategy. We would try patient negotiation; but if any hostages were wounded we would consider an attack on the embassy; and if a hostage were killed we would definitely send in the Special Air Service (SAS). There had to be some flexibility. But what was ruled out from the start was to let the terrorists leave, with or without the hostages.

The position began to deteriorate on Sunday afternoon. I was called back early from Chequers and we were driving back to London when a further message came over the car-phone. There was too much interference on the line to be able to talk easily so I had my driver pull into a lay-by. Apparently, the information was that the hostages’ lives were now at risk. Willie wanted my permission to send in the SAS. ‘Yes, go in’: I said. The car pulled back out onto the road, while I tried to visualize what was happening and waited for the outcome. Executed with the superb courage and professionalism the world now expects of the SAS, the assault took place in the full glare of the television cameras. Of the 19 hostages known to be alive at the time of the assault all were rescued. Four gunmen were killed; one was captured; none escaped. I breathed a sigh of relief when I learned that there were no police or SAS casualties. Later I went to the Regent’s Park Barracks to congratulate our men. I was met by Peter de la Billière, the SAS commander, and then watched what had happened on television news, with a running commentary, punctuated by relieved laughter, from those involved in the assault. One of them turned to me and said, ‘we never thought you’d let us do it.’ Wherever I went over the next few days, I sensed a great wave of pride at the outcome; telegrams of congratulation poured in from abroad: we had sent a signal to terrorists everywhere that they could expect no deals and would extort no favours from Britain.