The Downing Street Years (53 page)

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.

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.