Deutschmark as a substitute for membership certainly contributed to – though it did not wholly cause – the resurgence of inflation after 1987. But it might have been a different story if she had listened to Lawson in 1985.
The decision finally to join the ERM led on to a euphoric party conference in Bournemouth. ‘It’s full steam ahead for the fourth term’, she announced confidently, and her troops responded ecstatically – as Ronnie Millar ironically recalled:
On the platform, surrounded by her applauding and apparently adoring Cabinet, the star ackowledges the rapturous acclaim of her public, both arms held aloft as they have been every year since 1975… ‘TEN MORE YEARS!’ roar the faithful five thousand, stamping their feet in time with the words… ‘TEN MORE YEARS!! TEN MORE YEARS!!’ they cry fortissimo. The floor trembles. The rafters shake. It is as though by the sheer force of their utterance and its constant repetition they feel they can compel the future. Even by the Leader’s standards it is a salute to end all salutes. As it turns out to be…44
Just over a month later she resigned.
26
The Defenestration of Downing Street
The sheep that turned
MRS Thatcher’s downfall was a drama which unfolded with shocking suddenness. For political journalists those three weeks in November 1990 were a once-in-a-lifetime story of rumour and intrigue, calculation and backstabbing, all conducted in the bars and tearooms, clubs and private houses of the Westminster village. For the general public – angry, exultant or simply bewildered by the speed of events – it was a Shakespearean soap opera played out nightly in their living rooms. Though all the elements of a climactic bust-up had been coming together over a long period, with persistent talk of another leadership challenge, speculation about Michael Heseltine’s intentions and questions about how long she could go on, few at Westminster or in the media really believed that she could be toppled as swiftly or abruptly as she was. The conventional wisdom of political scientists held that a Prime Minister in good health and in possession of a secure majority was invulnerable between elections. She might be given a warning shot but she could not be defeated. When suddenly she was gone, Tory MPs were amazed at what they had done. One recent textbook calls it ‘the most ruthless act of political ingratitude in the history of modern Britain’.1 Nicholas Ridley wrote of ‘mediaeval savagery’,2 others of treachery, betrayal, assassination, defenestration, even ritual sacrifice. Matthew Parris wrote in anthropological terms of the Tory ‘tribe’ having to kill and eat its mother figure.3 For the next decade the party was riven by the consequences of its act of regicide, and well into the new century the trauma shows little sign of healing. Yet like most great events, the drama of November 1990 was a sequence of accidents with only in retrospect an underlying inevitability. John Biffen came up with the best metaphor for what happened. ‘You know those maps on the Paris Metro that light up when you press a button to go from A to B?’ he told Alan Watkins. ‘Well, it was like that. Someone pressed a button and all the connections lit up.’4
Of all her colleagues Geoffrey Howe was perhaps the least likely political assassin.Yet there was poetic justice in the fact that it was he who pressed the button. Several of those closest to the Prime Minister had feared that the contemptuous way she treated Howe might in the end rebound on her. Though nominally deputy Prime Minister he was so comprehensively frozen out of policy towards Europe that he only learned that Britain was finally joining the ERM when the Queen asked him what he thought of the news. Mrs Thatcher believed that Howe was still deeply ambitious and scheming to replace her. ‘You know what he’s like and what he’s up to now,’ she complained to Wyatt in February.5 Yet at the same time she did not really believe he would ever strike at her: she did not think he had the guts. When Howe finally cracked, George Walden wrote, it was ‘like seeing a battered wife finally turning on a violent husband’.6
What caused him to crack was her intemperate reaction to the European Council held in Rome the last weekend in October 1990. In truth even Howe admitted that she had some ground to be upset. The next stage of EMU was due to be discussed at the intergovernmental conference fixed – over her objections – for December. But then the Italians called an extra Council in October and used it to try to pre-empt the wider discussions at the IGC by setting a timetable for the second and third stages of the Delors plan immediately. Contrary to prior assurances, Kohl and Mitterrand went along with this, and Mrs Thatcher found herself at Rome suddenly confronted by the other eleven ready to commit themselves to start stage 2 in 1994 and complete the single currency in 2000. Hurd was as shocked as Mrs Thatcher by the Italian ambush; once again Britain was cast as the lone obstructive voice. She objected that it was absurd to set a timetable before it was even agreed what form stages 2 and 3 should take. But her objections were heard ‘in stony silence’.7
Back in Britain she reported to the House of Commons on Tuesday 30 October. At Prime Minister’s Questions Kinnock seized on the more positive tone Howe had taken with with Brian Walden and tried to get her to endorse her deputy: this she pointedly declined to do, merely asserting that Howe was ‘too big a man to need a little man like the right hon. Gentleman to stand up for him’. What Howe had actually said was that Britain’s alternative proposal for a common currency – the so-called ‘hard ecu’ – might in time grow into a single currency. This was no more than Major had also said, and was in fact the Government’s policy. In her written statement Mrs Thatcher duly toed this line – the first time, Howe believed, that she had done so:
The hard ecu would be a parallel currency, not a single currency. If, as time went by, peoples and Governments chose to use it widely, it could evolve towards a single currency. But our national currency would remain unless a decision to abolish it were freely taken by future generations of Parliament and people. A single currency is not the policy of this Government.
So far, so moderate. But then Kinnock riled her with the usual charge that her performance in Rome had damaged Britain’s interest and she was away.
The President of the Commission, M. Delors, said at a press conference the other day that he wanted the European Parliament to be the democratic body of the Community, he wanted the Commission to be the Executive and he wanted the Council of Ministers to be the Senate. No. No. No.8
Once again it was her tone – defiant, intransigent and glorying in her intransigence – more than her actual words which horrified her colleagues. ‘It was already clear,’ David Owen wrote, ‘that she was on an emotional high and the adrenalin was pumping round her system as she handbagged every federalist proposal’.9 In particular – answering a question from a Labour Eurosceptic – she departed from her carefully phrased backing of the hard ecu:
The hard ecu… could be used if people chose to do so. In my view, it would not become widely used throughout the Community… I am pretty sure that most people in this country would prefer to continue to use sterling.10
‘I nearly fell off the bench,’ Major wrote. ‘With this single sentence she wrecked months of work and preparation. Europe had been suspicious that the hard ecu was simply a tactic to head off a single currency, and now the Prime Minister, in a matter of a few words, convinced them it was.’ He had no doubt about the likely effect of her ‘unscripted outburst’. ‘I heard our colleagues cheer, but knew there was trouble
