The Iron Lady

eschew. It took a strong nerve to resist this chorus of advice, but Mrs Thatcher was morally armoured by her certainty that what she was trying to do was right. Indeed, her combative nature positively relished the adversity. The more the apologists of the old consensus insisted that she must change course, the more determined she became not to be deflected, until the importance of being seen not to be deflected became an end in itself, irrespective of the economic arguments. Thus the style of the Thatcher premiership was forged in these first two testing years.

A traditional Tory Cabinet

The formation of the Cabinet reflected this mixture of long-term determination and short-term realism. For all her brave talk in opposition of having a ‘conviction Cabinet’ with ‘no time for internal arguments’,⁹ Mrs Thatcher had in practice no choice but to confirm in office most of those who had comprised the Shadow Cabinet before the election. Having maintained a broad front of party unity in opposition, she could not suddenly appoint an aggressively Thatcherite Cabinet in the moment of victory. As it was, when she sat down that first evening in Downing Street with Willie Whitelaw and the outgoing Chief Whip, Humphrey Atkins, to settle the allocation of departments to be announced next day, she let herself be guided to a great extent by Whitelaw. With one major exception, no figure of importance was left out and no new faces were brought in, while several old ones were brought back. It did not look like a Cabinet to launch a social revolution. Yet at the same time Mrs Thatcher made sure that the key economic jobs were reserved for those she called ‘true believers’.

So far as most commentators were concerned, her trickiest dilemma was whether to include Ted Heath. In fact she never seriously considered it. As she frankly explained to one of her first biographers: ‘He wouldn’t have wanted to sit there as a member of the team. All the time he would be trying to take over.’¹⁰ She sent him by motorcycle a brief handwritten letter informing him that, after thinking ‘long and deeply about the post of Foreign Secretary’, she had ‘decided to offer it to Peter Carrington who – as I am sure you will agree – will do the job superbly’.¹¹ She later added public insult to this perceived injury by offering Heath the Washington Embassy – a transparent way of trying to get him out of domestic politics – even though he had made clear his determination not to leave the Commons. For the next eleven years the former Prime Minister’s glowering resentment on the front bench below the gangway served as the most effective deterrent to Tory malcontents tempted to criticise the Government.

The price of excluding Heath was that Mrs Thatcher was bound to fill her Cabinet with his former colleagues. Thus Whitelaw became Home Secretary, Francis Pym had to settle for Defence and Carrington asked for and was granted Ian Gilmour as his deputy in the Commons, with a seat in the Cabinet as Lord Privy Seal. James Prior was confirmed as Employment Secretary. Most significantly, Peter Walker was brought back as Agriculture Secretary. It was widely assumed that she considered Walker (unlike Heath) too dangerous a potential critic to leave on the back benches. In fact, she had always regarded him as an effective minister, as she proved by keeping him in a succession of departments for the next ten years.

She had much less regard for Michael Heseltine, whom she already distrusted as dangerously ambitious as well as ideologically unsound, but she could not afford to leave him out. In opposition Heseltine had accepted the shadow Environment portfolio only on condition that he would not have to take the same job in government; but after turning down the Department of Energy he reluctantly accepted Environment after all, and then found that it suited him admirably.

Other former Heathites filled most of the spending departments. The engine room of the new Cabinet, however, lay in the economic departments. The relationship between the Prime Minister and Chancellor is central to the success of any Government. Four years earlier Mrs Thatcher had chosen the dogged Geoffrey Howe, rather than her intellectual mentor Keith Joseph, to be her shadow Chancellor and now, slightly reluctantly, she kept faith with him. Howe had worked hard in opposition to lay the groundwork of monetarist policies and was said to be ‘the only man who can work with Margaret at his shoulder’;¹² but she always found his mild manner exasperating and was already inclined to bully him.

Howe was joined in the Treasury by John Biffen as Chief Secretary (in the Cabinet) and the most brilliant of the younger monetarists, Nigel Lawson, as Financial Secretary (outside the Cabinet). Keith Joseph went to the Department of Industry – amid accurate predictions that he would prove too compassionate in practice to implement the sort of ruthless withdrawal of subsidies which he advocated in theory;¹³ while John Nott got the Department of Trade. These five – Howe, Joseph, Biffen, Nott and Lawson – with Mrs Thatcher herself, formed the central group in charge of the Government’s economic strategy. The only non-monetarist allowed near an economic job was Jim Prior, whose appointment to the Department of Employment was welcomed as a signal that the new Government did not want an early confrontation with the unions. Mrs Thatcher accepted this analysis. ‘There was no doubt in my mind’, she wrote in her memoirs, ‘that we needed Jim Prior… Jim was the badge of our reasonableness’.¹⁴

Most press comment found the moderate composition of the Cabinet reassuring and failed to anticipate the way Mrs Thatcher would get around it. In fact, with an instinct for the reality of government which belied her relative inexperience, Mrs Thatcher had calculated better than either her supporters or her opponents that neither the individuals nor the numbers around the Cabinet table mattered. So long as those she came to call the ‘wets’ had no departmental base from which to develop an alternative economic policy, she and her handful of likeminded colleagues (who naturally became the ‘dries’) would be able to pursue their strategy without serious hindrance. Short of resigning – which none of them was keen to do – the ‘wets’ could only stay and acquiesce in policies they disliked, in the belief that political reality must force a change of direction sooner or later.

From the start, the full Cabinet never discussed economic policy at all. Yet in her early days as Prime Minister Mrs Thatcher operated for the most part quite conventionally through the Cabinet committee structure: economic policy was determined by the ‘E’ Committee, chaired by herself. She held weekly breakfast meetings with the monetarist inner circle, Howe, Joseph, Biffen and Nott, with just one or two of her own staff in attendance. These Thursday breakfasts remained secret until they were revealed by Hugo Young in the Sunday Times in November 1980 – by which time they had achieved most of their purpose and the group was anyway beginning to unravel. On wider matters Mrs Thatcher allowed much freer discussion in the Cabinet than Ted Heath had ever done; partly because she lacked his personal authority among her colleagues (nearly half of whom were older than her and several much more experienced), partly because she always enjoyed a good argument. In the early years she quite often lost the argument; but she never lost control, not only because she had her key allies in the posts that mattered, but also because in a crunch Willie Whitelaw and Peter Carrington would not let her be seriously embarrassed. She never held a vote, so she could not be outvoted. At the same time it was undoubtedly good for her to have powerful opposition within the Cabinet, composed of colleagues of her own age and independent standing who would argue with her, even though she could usually prevail in the end. In later years, when her colleagues were all much younger and owed their positions entirely to her, she lacked that sort of opposition. For this reason her first Cabinet was in some respects her best.

The linchpin of her authority was Whitelaw. It was many years later that she made the immortal remark that ‘Every Prime Minister should have a Willie’,¹⁵ but it was in her first term that she needed him most. As the acknowledged leader of the paternalistic old Tories, he could easily have rallied a majority of the Cabinet against her had he chosen to do so. Instead, having stood against her in 1975 and been defeated, he made it a point of honour to serve her with an almost military sense of subordination to his commanding officer. He had strong views of his own on certain matters which he did not hesitate to argue, normally in private. He would warn her when he thought she was getting ahead of the party or public opinion. But he saw his job as defusing tension and ensuring that she got her way. In the last resort he would never set his judgement against hers or countenance any sort of faction against her. Some of his colleagues felt that he thereby abdicated his proper responsibility to act as a traditional Tory counterweight to her more radical instincts; but so long as Willie stood rocklike beside her it was impossible for any other group in the Cabinet successfully to oppose her.

In effect she used him to chair the Cabinet. In business terms Mrs Thatcher acted more like a chief executive than a chairman, concerned not with seeking agreement but with driving decisions forward. She would normally speak first, setting out her own view and challenging anyone with a good enough case to dissent. ‘When I