The Downing Street Years (76 page)

Whether we could have succeeded in pushing through this ambitious privatization programme in a more favourable political
climate must be a matter of speculation. But it could not have come at a worse time. To Paul Channon’s horror — and mine — at the start of February the weekend press was full of details of what was planned. BL had almost certainly leaked it when we were at our most vulnerable as a result of the Westland affair. On Monday 3 February Paul Channon had to confirm these contacts in an emergency statement to the House. All hope of confidential commercial discussion had been destroyed. Irrationality swept through the debate.

Paul had an almost impossible task, which, however, he undertook with great courage and skill. A kind of pseudo-patriotic hysteria swept politics and the media. Ted Heath talked of our responding to the efforts of workers and management at BL by saying, ‘now we will sell you out to the Americans.’ Not even the Cabinet was immune. Norman Fowler, whose constituency was affected by BL, let it be known that he was fighting the deal. When the Norman Fowlers of this world believe that they can afford to rebel, you know that things are bad.

I chaired an extremely difficult meeting of the Cabinet on Thursday 6 February in the course of which it became clear to me that there was no way in which the Ford deal could be put through. In these circumstances it was essential to limit the damage and try to press ahead with the negotiations with GM. Paul Channon told the House that afternoon that in order to end the uncertainty we would not pursue the possibility of the sale of Austin Rover to Ford. It was humiliating and did less than justice to Ford, which had provided so many jobs in Britain. But in politics you have to know when to cut your losses.

The question now was whether, having relieved the immediate pressure, we could still strike a satisfactory deal with GM. I saw Paul after his statement and said that we must push ahead as fast as possible with this and the sale of Unipart. Now the news was out, however, we were faced with a rash of alternative bids. Few of them were serious and all of them were an embarrassment rather than a help at this late stage. Most politically sensitive was the proposal for a management buy-out of Land Rover. GM remained — in our and BL’s view — by far the best option because that company was interested in all, not just some, divisions; because of its financial strength; and because of the access to its distribution network.

On Wednesday 19 February I set up a small ministerial group — what John Biffen would have called a ‘balanced ticket’ — to consider this increasingly complex and difficult matter. The main members were Willie Whitelaw, Nigel Lawson, Norman Tebbit, Peter Walker, John Biffen, Norman Fowler and of course Paul Channon. Paul
remained in charge of the detailed negotiations with GM. These carried on well into March. Sometimes it looked as if we could gain a sufficient undertaking from GM as regards control of Land Rover. We had had to harden our position considerably, insisting that GM could have no more than 49 per cent voting strength and that GM’s right to manage the business would be subject to the overriding control of the (British) board.

GM in the end were not prepared to wear this and I do not blame them. They were not willing to proceed with a deal for Leyland Trucks and Freight Rover which excluded Land Rover and so the talks ended. When this was announced by Paul to the House of Commons on Tuesday 25 March, one after another of our back-benchers stood up to say that a great opportunity had been lost and that the GM deal should have gone through. I did not disguise my irritation with them and told several later that they should have spoken up when the going was rough.

This whole sorry episode had harmed not just the Government but Britain. Time and again I had drawn attention to the benefits Britain received as a result of American investment. The idea that Ford was foreign and therefore bad was plainly absurd. Their European headquarters was located in Britain, as was their largest European Research and Development Centre. All of the trucks and most of the tractors that Ford sold in Europe were made in Britain. Ford’s exports from the UK were 40 per cent more by value than those of BL. Would Britain have really been better off if BL had taken over Ford? The notion is ridiculous. But it was not just a matter of Ford. Over half the investment coming into Britain from abroad was from the United States. Both Ford and GM were offended and annoyed by the campaign waged against them. Britain just could not afford to indulge in self-destructive anti-Americanism of this sort. Yet it would continue and was shortly to be raised to fever pitch — not just in the area of industrial policy but that of defence and foreign affairs, where passions ignite more easily.

I was at Chequers on Friday 27 December 1985 when I learnt that terrorists had opened fire on passengers waiting on the concourse at the Rome and Vienna Airports, killing seventeen people. It soon became clear that the gunmen were Palestinian terrorists from the
Abu Nidal group. They had apparently been trained in the Lebanon, but evidence soon emerged of a Libyan connection. Certainly, the Libyan Government did not stint in its praise for the attacks, describing them as ‘heroic actions’. We and the Americans already had a large amount of shared intelligence about Libya’s support for terrorism. The question was not whether Colonel Gaddafi headed a terrorist state but rather what to do about it. Britain had adopted a much tougher attitude towards Libya than other European countries ever since the murder of WPC Yvonne Fletcher in 1984. But the Americans wanted us and the rest of Europe to go further still by imposing economic sanctions, in particular ending purchases of Libyan oil, 75 per cent of which was bought by the Europeans.

On Tuesday 7 January the United States unilaterally imposed sanctions on Libya with little or no consultation and expected the rest of us to follow. I was not prepared to go along with this. I made it clear in public that I did not believe that economic sanctions against Libya would work. The US State Department was highly displeased and even suggested that Britain was the least helpful of their European allies — something which was quite unjust since we were already applying stiff measures against Libya as regards arms, credits and immigration and had closed down the Libyan ‘People’s Bureau’. One reason why the United States considered Britain particularly difficult was because of my un-European habit of straight talking when I disagreed. When I discussed how to deal with Libya with President Mitterrand in Lille in mid-January he sounded a good deal more hawkish than I was. No doubt the Americans were receiving a similar impression.

In late January, February and March tension between the United States and Libya rose as US naval forces started manoeuvres in an area of the Gulf of Sirte which Libya, in violation of international law and opinion, claimed as its own territorial waters. On Monday 24 March US aircraft were attacked by Libyan missiles fired from the shore. US forces struck back at the Libyan missile sites and sank a Libyan fast patrol boat.

I had to consider what our reaction would be. I was conscious that we had 5,000 British subjects in Libya, while the United States had only 1,000. I was also aware of the possibility of Libyan action against our base in Cyprus. But I told Cabinet that in spite of this we must endorse the right of the United States to maintain freedom of movement in international waters and air space and its right to self-defence under the UN Charter.

Meanwhile, the Americans may have started to see who their true friends were. I learned that the French were expressing reservations
about any policy of confrontation with Colonel Gaddafi, arguing that any US military action would win Libya Arab support and urging the need to avoid ‘provocation’.

Then in the early hours of Saturday 5 April a bomb exploded in a discothèque frequented by US servicemen in West Berlin. Two people — one a US soldier — were killed and some 200 others — including 60 Americans — were injured. US intelligence, confirmed by ours, pointed to a Libyan involvement. For the Americans this was the final straw.

Just before 11 p.m. on the night of Tuesday 8 April I received a message from President Reagan. He requested our support for the use of the American F1–11s and support aircraft based in Britain in strikes against Libya, and he asked for an answer by noon the following day. At this stage there was nothing to indicate the precise nature of US objectives and targets. I immediately called in Geoffrey Howe and George Younger to discuss what should be done. At 1 a.m. I sent an interim reply to the President. Its main purpose was to ask him to think further. I emphasized that my basic instinct was to support the United States but I also expressed very considerable anxiety about what was proposed. I wanted more information on the targets in Libya. I was worried that US action might begin a cycle of revenge. I was concerned that there must be the right public justification for the action which was taken, otherwise we might just strengthen Gaddafi’s standing. I was also worried about the implications for British hostages in the Lebanon — and, as events were to turn out, rightly so.

Looking back, I think that this initial response was probably too negative. Certainly the Americans thought so. But it had the practical benefit of making them think through precisely what their objectives were and how they were to justify them, which is certainly one service to be expected of a friend. Two other considerations influenced me. First, I felt that there was an inclination to precipitate action in the United States, which was doubtless mirrored there by a perception of lethargy in Europe. Second, even at this stage I knew that the political cost to me of giving permission for the use of US bases by the United States in their strikes against Libya would be high. The Government’s fortunes were just recovering from the low point of Westland and BL: but that recovery was fragile. I could not take this decision lightly.

Geoffrey, George, officials and I met the following morning at 7.45 at No. 10. A message had been received from the White House saying that the final reply to the original request was not now required by noon. I decided to use the time available by having lists of possible Libyan targets drawn up which would be as narrow as possible. More
in hope than anticipation, a list of non-military actions which the US might take was also drawn up. I held a further meeting in the early afternoon, but there was little we could usefully do until I received the President’s reply to my message. I waited with some anxiety throughout the afternoon and evening.

Some time after midnight President Reagan’s response came through on the hot-line. It was a powerful, detailed and not uncritical answer to the points I had raised. President Reagan stressed that the action he planned would not set off a new cycle of revenge: for the cycle of violence began a long time ago, as the story of Gaddafi’s terrorist actions demonstrated. He drew attention to what we knew from intelligence about Libyan direction of terrorist violence. He argued that it was the lack of a firm western response which had encouraged this. He felt that the legal justification for such action was clear. The President emphasized that the US action would be aimed at Gaddafi’s primary headquarters and immediate security forces, rather than the Libyan people or even troop concentrations of the regular armed forces. The strikes would be at limited targets. I was particularly impressed by the President’s sober assessment of the likely effect of what was planned. He wrote:

I read and reread the President’s message. He was clearly determined to go ahead.

The more I considered the matter the clearer the justification for America’s approach to Libya seemed. The phenomenon of the terrorist state which projects violence against its enemies across the globe, using surrogates wherever possible, is one which earlier generations never confronted. The means required to crush this kind of threat to world order and peace are bound to be different too. There was no doubt of Gaddafi’s culpability. Nor when the most powerful country in the free world decided to act against him must there be any doubt where Britain stood. Whatever the cost to me, I knew that the cost to Britain of not backing American action was unthinkable. If the United States
was abandoned by its closest ally the American people and their Government would feel bitterly betrayed — and reasonably so. From this point on, my efforts were directed not at trying to hold America back but to giving her Britain’s full support, both as regards use of bases and in justifying its action against what I knew would be a storm of opposition in Britain and Europe. This did not mean, however, that I would go along with every American suggestion. It remained vital that the air strikes be limited to clearly defined targets and that the action as a whole could be justified on grounds of self-defence.

The first task next day was to convince my colleagues of what needed to be done. Geoffrey Howe was against the American action, but once the decision had been made to support it he defended the line staunchly in public. George Younger supported it from the first.

That afternoon I sent a further message to President Reagan. I pledged ‘our unqualified support for action directed against specific Libyan targets demonstrably involved in the conduct and support of terrorist activities’. I pledged support for the use of US aircraft from their bases in the UK, as long as that criterion was met. But I questioned some of the proposed targets and warned that if there ensued more wide-ranging action the Americans should recognize that even those most keen to give them all possible support would then find themselves in a difficult position.