The Iron Lady

message. The public was reminded that unemployment was still intolerably high. The impact of ‘Labour Isn’t Working’ had exactly the desired effect of making Callaghan draw back from an early election. Instead he committed himself to trying to get through the winter, with a tough limit on pay increases of just 5 per cent. It was a fateful mistake.

At the beginning of December 1978 Callaghan came back from a European Council meeting in Brussels and announced that Britain, in common with Ireland and Italy, would not be joining the European Monetary System (EMS) – the latest venture in European integration originally foreshadowed by Heath, Georges Pompidou and Willy Brandt in 1972 and now brought to fruition by Valery Giscard d’Estaing, Helmut Schmidt and the first British President of the Commission, Roy Jenkins. Mrs Thatcher immediately condemned the Government’s decision. ‘This is a sad day for Europe,’ she declared in the Commons.²

In the light of her own adamant determination to stay out of the EMS over the next ten years her enthusiasm for joining in 1978 is remarkable. Yet her own attitude to Europe was always firmly Gaullist. She wanted Britain to lead in Europe, not because she had a vision of European integration but because her vision of Britain demanded nothing less. In this at least she was at one with Heath. ‘If we always go to the Community as a supplicant,’ she told Callaghan in December 1976, ‘either for subsidies or for loans, that prevents us carrying out the wider creative role which was very much expected of us when we joined the Community.’³ She hated seeing Britain stay out of the EMS, not because she believed in the system for itself but because exclusion cast Britain ‘in the second division economically of European countries, and since Britain was the victor in Europe, this comes very hard to the British people’.⁴ Her view of Britain’s proper relationship to the Continent continued to be shaped by the memory of the war. Thus she never really grasped the idea of a European community as understood by the other members, but always saw it primarily as a defence organisation, an arm of NATO.

Winter of discontent

The winter of industrial action against the Government’s 5 per cent pay limit began in the private sector with a short but successful strike at the Ford Motor Company, which was doing well and preferred to pay increases of 15 – 17 per cent rather than suffer a long strike. On 3 January the road haulage drivers went on strike, demanding 25 per cent, followed by the oil tanker drivers, stopping deliveries to industry, power stations, hospitals and schools. Action quickly spread to local authority and National Health Service manual workers – porters, cleaners, janitors, refuse collectors and the like – demanding a ?60 minimum wage. There followed two or three weeks of near anarchy, displaying the ugliest face of militant trade unionism. The transport of goods by road practically dried up. Employees were laid off as businesses were crippled by lack of deliveries, enforced by intimidatory and often violent picketing of docks and factories. Piles of rubbish lay uncollected in the streets. Roads were not gritted (in very cold weather), schools were closed and hospitals admitted only emergency cases, while shop stewards took it on themselves to determine what was an emergency. Most famously, in Liverpool, the dead went unburied. On 22 January 1.5 million workers joined in a national Day of Action, the biggest stoppage since the General Strike in 1926. All this left the Government looking helpless and irrelevant – an impression damagingly reinforced by Callaghan’s ill-judged attempt to play down the seriousness of the crisis on his return from a sunny G7 summit in Guadeloupe. He never actually used the words ‘Crisis? What crisis?’ but the Sun’s headline accurately paraphrased the impression he conveyed.⁵ The whole shambles could not have been better scripted to turn Labour’s hitherto biggest asset, the party’s close relations with the unions, into its greatest liability and deliver the Conservatives an irresistible mandate for tougher action against the unions than Mrs Thatcher had previously dared contemplate.

Yet she was initially hesitant in gathering this electoral windfall. Public opinion was the key. Mrs Thatcher was still determined not to commit herself to any confrontation with the unions without first making sure that the public would be on her side. She was convinced that the great majority of decent trade unionists wanted only to be allowed to work for a fair wage without being bullied by politically motivated militants. But to win their support she must not seem to be spoiling for a fight. The critical test was the speech she was due to make when Parliament reassembled on 16 January, followed by a party political broadcast on television the next day.

In the Commons she therefore offered the Government Tory support for three specific measures: a ban on secondary picketing, funding of strike ballots and no-strike agreements in essential services. There was never any likelihood that Callaghan would accept – he brushed her off with his usual weary assurance that it was all much more difficult than she imagined – but the offer gained her the patriotic high ground, particularly when she repeated it on television. The Government’s refusal left Mrs Thatcher free to assert that it was now up to the Tories to shoulder alone the responsibility of bringing the unions ‘back within the law’. ‘That’s the task which this government will not do, it’ll run away from it,’ she mocked. ‘I don’t shirk any of it. I shall do it.’⁶

For the first time Mrs Thatcher had a clearly understood cause to which the long-suffering public now emphatically responded. The polls which at the beginning of the year had still shown the Tories neck and neck with Labour, or even a few points behind, now gave them a twenty point lead, while Mrs Thatcher’s personal rating had leapt to 48 per cent. The various disputes were eventually settled, on terms mostly around 9 per cent, and life returned to something like normal. But the legacy of bitterness remained. It seemed that nothing could now stop the Tories winning the election, whenever it was held.

Callaghan could still have tried to hang on until the autumn in the hope that the memory of the winter’s humiliation would gradually fade, but his heart was not in it. The issue which finally precipitated the Government’s demise was devolution. On 1 March the Welsh and Scottish people were finally given the chance to vote on Labour’s proposals for assemblies in Cardiff and Edinburgh. On turnouts which suggested a profound lack of interest, the Welsh overwhelmingly rejected their proposed talking-shop (by a margin of 8 – 1), while the Scots voted in favour of an Edinburgh parliament by a margin too small to meet the condition written into the Bill by dissident Labour backbenchers. The Scottish result left the Scottish National Party with no reason to continue to support the Government (except that, had they considered the alternative, they were even less likely to get a Scottish parliament from Mrs Thatcher). For the first time the parliamentary arithmetic gave the Tories a real chance of bringing the Government down. On 28 March, therefore, Mrs Thatcher tabled yet another vote of confidence.

There was still no certainty that it would succeed, even when the SNP, the Liberals and most of the Ulster Unionists declared their intention to vote against the Government. There were in that Parliament an exceptionally large number of small parties and maverick individuals: Labour still held a majority of 24 over the Conservatives, but the two main parties together accounted for only 592 MPs out of the total of 635. In the days before the vote the corridors and tearooms of the Palace of Westminster saw a frenzy of arm-twisting and bribery, bluff and double bluff. But by this time Callaghan saw no point in bartering his soul for a few more precarious weeks in office. He had already pencilled in 3 May for an election, whether he lost or won the crucial vote.⁷

For her part Mrs Thatcher made it clear that she would do no deals with anyone. ‘In my heart of hearts’, she confessed in her memoirs, she thought the Government would probably survive.⁸ On the day of the confidence debate she made – as usual on these big occasions – a pedestrian speech indicting the Government on four charges: high taxation, centralisation of power, the abuse of union power and the substitution of ‘the rule of the mob for the rule of law’. ‘The only way to renew the authority of parliamentary government’, she concluded, ‘is to seek a fresh mandate from the people and to seek it quickly. We challenge the Government to do so before this day is through.’⁹

It reads well enough, but it was heard ‘in complete silence’. Callaghan made a good debating speech twitting Mrs Thatcher for putting down her confidence motion only when she knew the Liberals and Scottish Nationalists were going to vote against the Government. ‘She had the courage of their convictions.’¹⁰ At the end of the debate Michael Foot wound up with a brilliant barnstorming performance; and then came the vote. Kenneth Baker best describes the scene:

We returned to the Chamber looking rather crestfallen while the Labour benches looked very cheerful. Margaret was looking very dejected when suddenly Tony Berry, who had been counting in the Labour Lobby,