The Iron Lady

poisoned chalice of Northern Ireland without appearing cowardly. In his memoirs he confessed ruefully that he had been outmanoeuvred. ‘That is probably why she was Prime Minister and I was certainly never likely to be.’⁷³ More than the sacking of Gilmour and Soames, it was her trumping of Prior that showed the surviving wets who was boss.

Meanwhile, she used the vacancies she had created to shift the balance of the Cabinet to the right. In a wide-ranging reshuffle, three new entries were particularly significant. Nigel Lawson went to the Department of Energy, to give new impetus to the privatisation of gas and ensure that the Government was ready the next time the miners threatened to strike; Norman Tebbit took over at Employment; and Cecil Parkinson, to general amazement, was plucked from a junior post in the Department of Trade to replace Thorneycroft as party chairman, with the additional job of Paymaster-General. In addition Patrick Jenkin moved to Industry and Norman Fowler began what turned out to be a six-year stint at the DHSS. David Howell moved from Energy to replace Fowler at Transport, while Mrs Thatcher picked Janet Young, the only other woman she ever appointed to the Cabinet, to take Soames’ place as Leader of the Lords.

For the first time she had a Cabinet of whom perhaps nine or ten – out of twenty-two – were ‘true believers’. Yet the autumn brought very little respite. The party conference gathered in Blackpool in an atmosphere of crisis, fuelled by the worst opinion-poll ratings of any Government since the war, a stock market crash, another rise in interest rates (back to 16 per cent) and a powerful intervention by Ted Heath, lending his voice to the chorus calling for a national recovery package to tackle unemployment. Heath was coolly received and was effectively answered by Howe, who quoted back Heath’s own 1970 pledge to put the conquest of inflation first, ‘for only then can our broader strategy succeed’. ‘If it was true then,’ Howe argued, ‘when inflation was half as high, it is twice as true today.’⁷⁴ Howe won a standing ovation.

Two days later Mrs Thatcher’s own speech was unusually conciliatory. Yet she gave no ground where it mattered. She repeated that she would not print money to buy illusory jobs at the cost of further inflation. ‘That is not obstinacy,’ she insisted. ‘It is sheer common sense. The tough measures that this Government have had to introduce are the very minimum needed for us to win through. I will not change just to court popularity.’⁷⁵ If her delivery was gentler than the previous year, she made it plain that the Lady was still not for turning. She too got her usual rapturous reception. Not for the first or last time, the party faithful at conference backed her against the parliamentary doubters.

The same slight softening of tone was detectable when the Commons returned at the end of October. Labour immediately tabled a confidence motion. Mrs Thatcher had no difficulty demolishing Foot’s emotional demands for a full-scale Keynesian reflation. ‘His recipe is to spend more, borrow more, tax less and turn a blind eye to the consequences. He wants all that,’ she mocked, ‘and he wants a reduction in interest rates!’ But she also met her Tory critics by taking credit, for the first time, for the fact that public spending had not fallen, but was actually some ?3 billion higher than the Government’s initial plans. ‘To accuse us of being inflexible is absolute poppycock,’ she declared. ‘We have increased public spending, but not to profligate levels.’ As a result, she concluded, ‘I believe that underneath the surface and beginning to break through is a spirit of enterprise which has lain dormant in this country for too long.’⁷⁶

Still the Government’s position in the country remained precarious, as the Alliance bandwagon gathered a heady momentum. First the Liberals won North-West Croydon, the Government’s first by-election loss. Then, a month later, Shirley Williams swept aside a Tory majority of 18,000 to win the well-heeled Lancashire seat of Crosby for the SDP. This was a landslide of a wholly different order, suggesting that no Tory seat was safe. December’s Gallup poll gave the Alliance 50 per cent, with Labour and the Conservatives equal on 23 per cent. The Government’s approval rating was down to 18 per cent and Mrs Thatcher’s to 25 per cent: she was now the most unpopular Prime Minister since polling began. Admittedly Michael Foot was even more unpopular; but with a credible third force for the first time offering a serious alternative to the Labour/ Conservative duopoly, it would take more than just a normal swing back to the Government to secure Mrs Thatcher’s re-election.

In fact the end of 1981 was the nadir of her popularity. Despite unemployment hitting three million in January, there were some shoots of economic recovery – output was rising, inflation continued to fall and interest rates fell back again – and the polls responded. ‘We are through the worst,’ she claimed in an end-of-year message.⁷⁷ By the spring the Alliance had slipped back and the three parties were roughly level- pegging at 30 – 33 per cent each. This is the basis for the claim that the Government was already on the way back before the Falklands war changed everything. Clearly it is true up to a point. Alliance support had hit a peak in December which it could never have sustained; but it gained a fresh boost with Roy Jenkins’ stunning victory at Glasgow, Hillhead, in March 1982 – just a week before the Argentine invasion of the Falklands. There is no reason to think that the Alliance was about to fade away. Three-party politics introduced an unpredictability into election forecasting which makes it impossible to say that the Tories, without the Falklands, could not have won a second term. But it is most likely that no party would have won a majority in 1983 or 1984. Mrs Thatcher’s popularity may indeed have touched bottom at the end of 1981. The economy may have been beginning to recover. But her Government was still desperately beleaguered when events in the South Atlantic turned the whole landscape of British politics upside down.

13 Salvation in the South Atlantic

Falklands or Malvinas?

THE Argentine invasion of the Falkland Islands on 2 April 1982 was by far the greatest crisis Mrs Thatcher ever faced. After nearly three years of mounting unemployment, a record level of bankruptcies and unprecedented public disorder, she was already the most unpopular Prime Minister in living memory, with a huge mountain to climb if she was to have any hope of being re-elected. If nothing else, however, she had taught the public to see her as the Iron Lady: she presented herself above all as a champion of strong defence, a resolute defender of British interests and British pride. Failure to prevent the seizure of British territory by a tinpot South American junta could easily have been the end of her. Instead, over the following ten weeks, she turned potential national humiliation to her advantage and emerged with an improbable military triumph which defined her premiership and set her on a pedestal of electoral invincibility from which she was not toppled for another eight years.

Yet it was a deeply ironic triumph, since it should not have been necessary at all but for serious errors by her own Government in the previous two years. Mrs Thatcher snatched victory out of a disaster caused by her own failure, for which she might easily have been arraigned before Parliament for culpable negligence. Not only that, but the result of her military recovery was to land Britain indefinitely with precisely the expensive and burdensome commitment which successive Governments had quite properly been trying to offload. By any rational calculation of political results the Falklands war was a counterproductive folly. Yet it was a heroic folly, the sort of folly of which myths are made, and, instead of finishing her, it was the making of her.

The legal title to the Falkland Islands – las Malvinas in Spanish – has been disputed between Spain, France, Britain and Argentina for centuries and still remains debatable. Mrs Thatcher took her stand on the defence of British sovereignty: she was on stronger ground asserting the islanders’ right of self- determination. Situated just 300 miles off the coast of Argentina, but 8,000 miles from Britain, the islands were an anomalous legacy of imperial adventurism; it was natural that Argentina should claim them. But the awkward reality was that they had been colonised since 1833 by British emigrants who had built up a British way of life and developed a fierce loyalty to the British flag – as well as total dependence on the British taxpayer.

Successive British Governments had been discreetly trying to give away the sovereignty of the islands since at least 1965, so long as they could guarantee certain safeguards for the population. Since they were militarily indefensible if the Argentines chose to take them by force, the Foreign Office had concluded that the islanders’ practical interests would be better served by reaching an accommodation with Argentina than by living in a