How splits over Europe undid Thatcher
‘Part of what you are seeing in these papers is the beginning of this vast argument about Europe’
THE government is riven by the question of Europe, the Prime Minister is at odds with key members of her Cabinet and at the same time faces threats to her leadership. Sound familiar?
A set of private papers from 1989 reveals Margaret Thatcher’s personal reaction to the divisions within her party that ultimately led to her downfall – and which still reverberate to this day.
Hundreds of documents published by the Margaret Thatcher Archive lay bare her response to the behind-thescenes drama of her penultimate year in power, when she was ambushed by two senior Cabinet colleagues over the Exchange Rate Mechanism (ERM).
One never-seen-before note written by Mrs Thatcher records her furious reaction to what came to be known as “the Madrid Ambush”, when Nigel Lawson, her chancellor, and Geoffrey Howe, the foreign secretary, attempted to force her to tell the European Council that Britain would join the ERM by a specific date.
Mrs Thatcher preferred the idea of Britain joining “when the time was right”.
The ERM had been introduced 10 years earlier by the European Economic Community, the forerunner of the EU, to reduce exchange rate variability in preparation for monetary union across the Continent.
In her account of the June 1989 ambush, Mrs Thatcher wrote: “[Mr Howe and Mr Lawson] demanded that I give an undertaking to join the ERM and specify a date … If not they would both resign.” She went on to add: “Andrew and Charles [Andrew Turnbull and Charles Powell – her closest No 10 aides] are utterly appalled that my two chief ministers should attempt to put me in such a position. I am determined not to give a date.”
Chris Collins, of the Margaret Thatcher Foundation, said: “This event was unprecedented in the history of the Thatcher governments – the foreign secretary and chancellor, Howe and Lawson, acting in combination to impose a policy on the prime minister on pain of resignation. Margaret Thatcher was bitterly angry at the confrontation.
“There are obvious parallels with the situation today. Part of what you are seeing in these papers is the beginning of this vast argument about Europe.”
The pair did not resign, and Mrs Thatcher gave a positive indication of joining the ERM to the Madrid conference, without specifying a date – allowing all sides to claim victory.
But it was only a temporary respite. In October of that year Mr Lawson, the chief economic architect of Thatcherism, again threatened to step down over the role of Mrs Thatcher’s per- sonal economics adviser, Sir Alan Walters, who opposed entry to the ERM.
Mrs Thatcher records: “This seemed to me an absurd, indeed reprehensible proposition. Nigel explained that Alan took a different view from him, his views sometimes came out in the press & this made his task intolerable . . . I said go away & think again . . . I then put the matter out of my mind.”
Mr Lawson did subsequently resign, creating one of the most damaging crises of the Thatcher premiership.
It led to an attempt to unseat the prime minister with the emergence of stalking-horse candidate Sir Anthony Meyer, an event Mr Collins describes as a “dry-run” for Michael Heseltine’s leadership bid the following year.
Lady Thatcher’s private papers, owned by the Margaret Thatcher Archive Trust, are being selectively published online by the Margaret Thatcher Foundation.