John Major: The Autobiography

It met on 20 October, and was fairly bloody. There was dispute on nearly every sentence, and much of the discussion was emotional. I was utterly isolated, and was fighting on two fronts: to keep out the prejudicial wording proposed by others, and to retain the British view in the communiqué against opposition from every other foreign minister. The meeting became very bad-tempered despite all that Joe Clark, the Foreign Minister of Canada and Chairman of the group, did to keep it in order. The disagreement with the African and Asian foreign ministers was blunt, but the clashes with Gareth Evans from Australia were altogether rougher. We had clashed pre-conference when he had tried to bounce me into a meeting with leaders of the African National Congress, when our policy at that time was not to meet them. I had declined, and he had been very sore about it. ‘You’ve got your script, but you’ve turned up for the wrong bloody play,’ he yelled at one point.

In the drafting group our positions on sanctions were diametrically opposed. As each line was fought over the atmosphere became more sulphurous, and it spread to involve the other participants. When I queried the title of the Southern African section of the communiqué (‘Southern Africa – The Way Forward’), Gareth said, ‘Oh, I suppose you want to call it “Southern Africa – The Way Backwards”.’ There was a lot more gratuitous and sometimes rather light-hearted abuse. At one stage Gareth was so infuriated by an amendment from the Zimbabwean Foreign Minister, Nathan Shamiyurira, that he threw his draft to the floor, exclaiming, ‘It’s not the f***ing Koran.’ I swear the Muslims went pale. The Malaysian Foreign Minister drew the edge of his hand across his throat, and for a few moments I enjoyed the luxury of having some allies.

Eventually at 1 a.m., after sixteen hours of hand-to-hand verbal combat, a text was agreed in which, in four separate places, I set out Britain’s disagreement with the majority view. Reasonably satisfied that it was the best we could have done, I went to bed; but not before a piece of foolishness I later regretted. Tired and weary, I was overheard saying that Gareth Evans’s behaviour was ‘an example of the Les Patterson school of diplomacy’. Inevitably this was picked up and heavily featured in Australia. The remark was unfair, because in fact Gareth had made many skilful drafting amendments that helped mask our conflicting positions.

Over breakfast the next morning with Patrick Wright, Patrick Fair-weather, the Under-Secretary for Commonwealth Affairs, and Stephen Wall, I reviewed the outcome. I suggested that some of the black African states who benefited from trade with South Africa were being hypocritical in calling themselves the ‘front-line states’, and that we should tackle them about it. The two Patricks stared thoughtfully at their cornflakes. Stephen, who knew me better than them, simply remarked that if I did, ‘they’ll think you’re completely loopy’. He did not believe in holding back if he saw trouble ahead.

That day the text hammered out by the foreign ministers was placed before the heads of government for agreement. Some members of the Commonwealth felt that it was not severe enough on South Africa, and said so, but Margaret Thatcher proposed that it should be adopted without amendment, and this duly took place.

These proceedings were my first direct experience of the unbridgeable gap between the UK and the rest of the Commonwealth over South Africa, and I found them very frustrating. I loathed apartheid, but did not believe sanctions were an effective way of hastening its end. I thought they were mere window-dressing – and harmful with it; they simply hurt the poorest black South Africans. ‘I want to satisfy empty black African bellies in South Africa, not liberal consciences outside it,’ I said at a press briefing.

The Prime Minister was a veteran of such disputes, and was increasingly fed up by them. She approved of my reservations on the agreed statement but, as I learned later, felt I had missed one – namely the statement that sanctions were not intended to be punitive. I had accepted this because I thought it was an important admission by the other Commonwealth states which we could use as an argument against any proposal from them for comprehensive sanctions. Margaret Thatcher did not know my reasoning, since she did not ask me about it. I did not know of her reservations, since she didn’t tell me about them.

Neither did I know that she had asked Charles Powell to draft a second statement, making plain our views as distinct from our reservations about the majority view. I was content with that. Charles set to in robust fashion. The heads of government had retired to the island retreat of Langkawi – reports came back that Margaret spent her lunchtime feeding Benazir Bhutto’s fifteen-month-old baby, while Denis complained of the cold (the temperature was over 100 degrees Fahrenheit) and repaired to the bar for comfort.

When we saw Charles’s text, Stephen Wall added some preliminary sentences to stress areas in which the communiqué made progress, and on that basis I was content for it to go forward. I was unaware of the dispute that had taken place on Langkawi over the foreign ministers’ draft, or that, in the words of Brian Mulroney, Prime Minister of Canada, our Commonwealth partners had ‘watered their wine’ to accommodate Margaret Thatcher. Nor, in my innocence, did I realise the extent to which the issuing of a separate statement breached normal procedure. Even if I had, I would have seen no reason why we should not express our own view. I did, though, see the risk that the second statement would be seen as a rift between myself and the Prime Minister, and for that reason asked for it to be issued as a joint statement.

The statement provoked two huge rows. The first, soon disposed of, was in the Heads of Government Meeting. ‘How could Mrs Thatcher sign an agreement at 5 p.m. and repudiate it at 6 p.m.?’ was the charge. Our view was that we stood by the agreement, but had added to it the reasons for our open and stated dissent to part of it. In fact, this irritable but perfectly straightforward squabble between heads of government suited everyone, because it enabled all concerned to peddle their views to their own domestic audiences. They all saw the advantage of that, and did so with gusto.

The second row had wider domestic impact. I had briefed the British press in very upbeat fashion about the communiqué I had agreed. They were grumpy and disgruntled that a novice foreign secretary had robbed them of a spectacular row at a boring conference. Unfortunately Bernard Ingham’s initial briefing of the press was done in a rush – like the rest of us, he was catching up with the new draft – and delivered with characteristic Inghamesque brutality. It involved him more or less reading out a confidential letter from Charles reporting on the discussion on Langkawi, and recording the Prime Minister saying she did not much like the foreign ministers’ text.

This was taken as a criticism of me, and was manna from heaven for the press. Ever eager for drama, they presented it as Mrs Thatcher disowning my negotiations, slapping me down and embarrassing me. The new boy on the block was being put in his place. There was some flavour of this in questions put to me at my press conference, but since I knew the Prime Minister did not intend to undermine me I did not allow it to worry me.

As I flew home, a day earlier than Mrs Thatcher since I had questions to answer in the Commons, I reflected on my first three months as foreign secretary. I was tired but reasonably satisfied. I thought I had made some solid gains. I was now infinitely better informed on foreign policy. I was comfortable and confident with bilaterals, and prepared to take on all comers. I had re-established relations with China after Tiananmen Square and was moving towards doing so with Argentina. I had staked out a pragmatic position on Europe and was getting the measure of how the EEC worked. I had weathered difficult confrontations at the Commonwealth Conference and felt the substance had gone well.

When I arrived at the Spelthorne Suite at Heathrow, however, I realised I was being complacent. The press were playing up the supposed row at CHOGM for all it was worth and more; the damage being done was evident. I licked my wounds and prepared to be more careful the next time Margaret and I travelled abroad together.

But there was to be no next time. After ninety-four days my brief tenure as foreign secretary would come to an end.

CHAPTER SEVEN An Ambition Fulfilled (#ulink_75b88920-63d1-5d18-8073-35cc77d65211)

ON 26 OCTOBER 1989, after the Prime Minister had delivered her Commons statement on the Kuala Lumpur conference, she turned to me on the front bench and invited me to join her for tea in her room behind the Speaker’s Chair. I assumed she wanted to make peace after the fuss over the foreign ministers’ communiqué. Though she never apologised, she could be extraordinarily friendly to colleagues to whom she had caused trouble, sometimes treating them to an informal chat about politics in the stream-of-consciousness way she so enjoyed when she was relaxing. This, however, was to be no such cosy occasion. She had a bombshell to drop.

We had no sooner settled on the sofas in her room than she said without preamble: ‘Nigel is going to resign and I might want you as chancellor.’

This was startling news, with political implications which shocked me even as the drama stirred my blood. ‘When?’ I asked.

‘Today,’ she said.

So far so clear, but the question in my mind was ‘Why?’ The strains between the Prime Minister and her chancellor were well enough known. Equally, however, I had noted in Cabinet how she generally supported Nigel, and sometimes even deferred to him – behaviour so out of character that it was, perhaps, an attempt at peacemaking, though I had not viewed it as such. She certainly never treated him in the cavalier, intolerant and often discourteous style she displayed towards Geoffrey Howe – whose forbearance, in its own way, was as remarkable as her rudeness. In the Commons, where not long before she had described Nigel Lawson’s position as ‘unassailable’, he was accepted as just that, a great figure in the party, one of the long marchers, a fully-paid-up member of the Radical Tendency, and the Chancellor who, a mere eighteen months earlier, had been practically walking on water. Almost nobody, therefore, believed he really would resign – the Prime Minister and myself included.

I learned later that Nigel had demanded that the Prime Minister sack Sir Alan Walters, her old mentor who had returned in May for a second term as her economic adviser. I had never met Walters, but I did know that he had long been undermining the Chancellor in private. His contempt for Nigel was undisguised, and was a common topic of conversation in both the City and Fleet Street. Now he had broken cover with an article in the Financial Times ridiculing as ‘half-baked’ a line of policy Nigel was known to favour and the Prime Minister to oppose, namely joining the European Exchange Rate Mechanism (ERM), which would keep the value of sterling within pre-agreed limits against other European currencies. It is true that the piece had originally appeared in an American journal eighteen months before, but this second airing was accompanied by a note making it clear that Walters had in no way changed his view.

This situation would have been impossible for any chancellor, and Nigel was taunted on account of it both in Parliament and outside. Who was the real chancellor, Lawson or Walters? Who had the Prime Minister’s ear, Lawson or Walters? With whom did she agree? Sadly, the answer to that last question was evident. She agreed with Walters, and for a proud man like Nigel this was intolerable. He demanded that Walters be sent packing, and he was right to do so. But by bluntly stating ‘He goes or I go,’ he placed Margaret in an equally cruel impasse – even if, by appointing Walters, it was of her making. She agreed with Walters and not with her chancellor. She could not back away from that, nor did she wish to. If she sacked Walters it would be clear she had done so with a pistol at her head. She had relied on him far too long for his departure, if it occurred, to be seen as anything other than a climbdown. She remembered the Madrid summit of June 1989, when Nigel and Geoffrey Howe had combined to compel her to agree to join the ERM when certain conditions were met. To capitulate and sack Walters would have destroyed her authority.

All the elements of disaster were assembled, and there was no Willie Whitelaw to mediate. The Prime Minister and the Chancellor had dug themselves into positions which allowed no compromise. For the moment at least, Margaret Thatcher was still the stronger. She refused to dismiss her adviser, and in the afternoon of Thursday, 26 October Nigel Lawson resigned. Ironically, his resignation was swiftly followed by that of Alan Walters.

Recalling the period today, my lack of foreknowledge of these events strikes me as odd. The signals were there, if only we had decoded them. Perhaps I should have done. It was clear to all that Nigel was no longer working in harness with Margaret; by shadowing the exchange rate of the deutschmark and pressing, repeatedly, for our entry into the ERM, he was setting out his own economic stall in competition with his prime minister. Indeed, with Geoffrey Howe he had put his position on the line even before the Madrid summit. Their differences with the Prime Minister became all the greater as the economic clouds gathered in the first half of 1989.

This discontent intermittently boiled over in public. In June 1989, a month after Alan Walters’s return to Number 10, Nigel announced in a television interview that the length of his stay at the Treasury – already, at six years, a near-record – ‘is a matter partly for the Prime Minister and partly for me and it will be resolved in the fullness of time’. Pressed on whether he would stay in office if asked in the coming reshuffle, he could only reply, ‘You’ll have to wait and see.’

These were not the words of an ‘unassailable’ chancellor. Indeed, in the reshuffle that followed, Margaret gave thought to moving Nigel. Even so, I was not alone in my surprise at the events of October 1989. The Prime Minister was just as stunned. There had seemed to be no differences that could not and would not be best worked out with Nigel in the government rather than outside it. Only later, when I had experience of the chancellorship, did I realise just how difficult his position had been. His departure was particularly tragic because he and Margaret agreed on almost everything apart from the management of the pound. They had dominated the government machine and, when working together, had done much to restore the British economy to vitality.

Nigel is unlucky to be remembered as the author of an unsustainable boom, for his radical policies had, with his predecessor Geoffrey Howe, reshaped a ramshackle inheritance into a vigorous economy. His achievements in areas such as privatisation, tax reform and the Public Sector Borrowing Requirement (PSBR) laid some of the foundations for the steady recovery of the 1990s. And, like all the best chancellors, he resisted the temptation to panic in the face of cries from the opposition, the press, the backbenches and, at times, his own prime minister.

After Margaret’s bombshell I returned to the Foreign Office and phoned Norma. She was at Finings preparing to go to a constituency event. ‘Oh, no,’ she said. ‘Another upheaval just as we were beginning to enjoy ourselves. But it is the job you always wanted.’ And it was.

Stephen Wall, my Private Secretary, came in to see me. He knew I had been with the Prime Minister and sat down, pad in hand, for a read-out. I told him I might be leaving the Foreign Office, and he went white, believing the Kuala Lumpur row had escalated. Knowing how irritated I was by the criticism that I was only at the Foreign Office to do the Prime Minister’s bidding, he feared the worst. When I explained what had happened he was relieved on my behalf, but also aghast at the political implications.

Stephen and I had worked well together, and our partnership was about to end. He would have a new foreign secretary – the third in under a hundred days. ‘Careless,’ I suggested, ‘to lose two foreign secretaries in such a short time.’

He grinned but, being the excellent civil servant he was, he was already thinking ahead and calculating who my successor might be.

‘Douglas would be the best choice,’ I said.

‘Is he going to be?’ asked Stephen.

‘I’ve no idea,’ I replied, ‘but I’ll do all I can to see that he is.’

Stephen didn’t comment. For nearly two hours we paced around, considering the options, and regretting what might have been with our plans for Foreign Office reform, reliving the events of the past three months and waiting to see if the phone would ring. It did.

When I arrived at Number 10, Margaret was in her study on the first floor, tense but composed. At times of crisis officials close to prime ministers throw a protective girdle around them. Margaret knew that a storm was brewing, and her remarks were already beginning to take on the character of the response she would make in public to Nigel’s departure. This was a sure sign of preparation for battle. She often convinced herself in private in order to be convincing in public. She told me that Alan Walters would also be resigning, thus ensuring that I did not have to raise this sensitive matter.

I accepted the chancellorship, reflecting that in this same room, only a short time before, I had tried to talk Margaret out of appointing me foreign secretary. I had thought that promotion premature. Now, a mere ninety-four days later, I was again reluctant to accept a glittering prize. I remember thinking gloomily that few people could ever have felt as I did at both such moments. Yet again political Christmas had come early for me and I was to have the job I most coveted, but under the most unhappy circumstances. The Chancellor had resigned because, despite his persistence, he had been prevented from pursuing the economic policy he thought right for Britain. Indeed, it was the only coherent policy on offer. Despite carping at Nigel for wanting to join the ERM, Margaret had no alternative policy of her own to put in place. I was now stepping into the destabilising policy vacuum that had been created.

The Prime Minister and I discussed the politics of Nigel’s resignation. ‘It’s unnecessary. He’s being silly,’ was the view she expressed, but I don’t think she really believed it. Sometimes this remarkable woman could seem very vulnerable, and she did then. I thought she was close to tears at one moment, and briefly took her hand. I would have offered her any support she needed. She seemed to be trying to convince herself that he was resigning because the economy was going wrong and he didn’t know what to do. That seemed to me highly improbable; Nigel Lawson was a battler, not a shirker. We talked briefly about the economy and inflation, but no mention was made by either of us of European monetary union or the ERM. It was not the moment.

As for myself, I had begun to enjoy the Foreign Office. Only later were malicious tongues to say that in fact I had loathed it. And yet here I was being moved before I had had a chance to make any mark on policy, or to leave any lasting legacy. Even worse, the fact that I was being moved so swiftly and in a crisis meant that the canard that I was the Prime Minister’s alter ego would follow me from the Foreign Office to the Treasury. This was no good, either for me or the Prime Minister.

The offer of the chancellorship did put me in a position to argue for Douglas Hurd to succeed me at the Foreign Office, and I did so. I seem to recall the Prime Minister wistfully expressing a preference for Cecil Parkinson, but officials assure me that he had been ruled out of contention. Tom King also got a mention. In any event, she conceded readily that Douglas was the obvious choice. Allowing yourself to be persuaded to do something you intend to do anyway is a useful ploy if you want to win over the persuader. Margaret may have been playing that game – as prime ministers sometimes do – but whatever her motives, the right decision was made, and Douglas, formerly a career diplomat, aware of other countries’ problems but no pushover, got the job for which he was so exceptionally well qualified.

Once Douglas’s appointment was agreed, Kenneth Baker joined us and the Prime Minister briefed him on the changes. As chairman of the party he would have to bear the brunt of the inevitable media onslaught. He rallied quickly from the shock and was practical and supportive. Kenneth’s great strength was his presentational skill. As he braced himself, I reflected that if the Prime Minister had sent Beelzebub himself to the Foreign Office, Ken, with a straight face, would have presented his appointment to the media as that of a man with a wide experience of dealing with problems in a warm climate. Ken, thank God, was without shame.

At the Treasury rumours that ‘John M’ was to be the new chancellor were causing confusion. Did the ‘M’ stand for Major, MacGregor, or Moore? No one knew, but bets were struck. At least they could console themselves with the knowledge that all three Ms had a Treasury background. A ripple was caused when rumour suggested, mistakenly, that the choice was John MacGregor.

When I arrived it was like a homecoming, with a warm welcome extended in an atmosphere of expectation. But this was a crisis, and preparations had to be made in case measures to deal with it were needed. Luckily, the Treasury enjoys a crisis, having had a good deal of experience of them. The immediate decisions were straightforward. I did not wish to change ministers and precipitate a wider reshuffle. I was keen to keep Andrew Tyrie, Warwick Lightfoot and Judith Chaplin, Nigel’s special advisers, all of whom I knew well. They were a good mixture. Andrew – known as ‘Fang’ because he liked to get his teeth into issues – had a rigorous intellect and was relentless in pursuit of his preferred policy; Judith was more detached but equally hawkish; while Warwick was bouncy and an excellent technician. I was also delighted to have John Gieve, a Treasury high-flyer, as my Private Secretary.

It was clear that we needed to reassure the markets that policy would not change, and a statement was issued to make it clear. I decided not to raise interest rates, despite pressure from colleagues and officials to do so. I was told this would demonstrate ‘firmness of purpose’. More cynical voices suggested, ‘Put them up now and blame the crisis. Bring them down later and take the credit.’ But such a move would have been wrong. It would have added to the political turmoil and harmed a business sector that was already crying out for lower interest rates.

I telephoned Nigel to express my regret that he had gone. It was a brief and friendly conversation, but uncomfortable for us both. He was a little withdrawn, obviously tired, and probably, though irrationally, hurt that the post he had held for so long should have been filled so swiftly – and by one of his former junior ministers. I too was embarrassed, believing (though Nigel never hinted at such a thought, and disliked travel) that he would have liked to be appointed foreign secretary instead of myself earlier in the year – and now here I was taking over as chancellor. But none of this surfaced as, with true English decorum, we both said what needed to be said. Nigel wished me well. I silently and sincerely hoped that the manner of his departure would not, in the end, mar his satisfaction in his achievements.

Yet this man, with whom I had enjoyed working, would inevitably be bruised and hurt. The parliamentary party would be split and angry at such a damaging public dispute, and would take sides. A great deal of trouble and unpleasantness would follow. It soon did, and we gravely underestimated its extent.

The following day I was due to speak at a party meeting in Northampton, and I knew that my remarks would set the tone for future policy. The economic inheritance was dismal. The late-1980s boom had ignited inflation, set us on the road to recession, and destroyed even the strategy by which the economy was managed. I decided to concentrate on the objectives of policy rather than the means of achieving them. The principal objective was the destruction of inflation, an insidious demon, always waiting in the wings, that I had every reason to loathe. Inflation is disastrous and morally corrosive, and it destroys lives. Those who can best protect themselves or even gain from it are often those who have most, and the losers are those who have least. It is a tax on the poor and a tax-free benefit for the rich. While my own family’s financial hardships were brought about by other causes, I had had enough experience of inflation’s effects on neighbours and friends to make my detestation of it personal as well as theoretical.

I woke early the following morning and began making notes for the speech. Base rate now stood at 15 per cent, and I knew that defeating inflation would be a long and painful haul. Time after time, rising prices had wrecked the economy and led to a slowdown in growth or a full-blown recession. And each time, the cries for help from business – and the instant demands of politics – had led government after government to engineer a premature reflation that had eased the pain in the short term but led to a repeat of the problems later on.

We had been down this dreary path often, and it was a route I was determined to avoid taking. This time we had to kill inflation even if the cost was high. It would be immoral to shirk the task, and we didn’t. But the measures would hurt. Many businesses and individuals would suffer, and the government would certainly not have an early recovery in the polls.