In her last interview before tomorrow's Tory vote, Margaret Thatcher tells Simon Jenkins of her regrets, and her scorn for Mr Heseltine 's policies
I have not finished yet
If a certain autumnal Chiltern vale had dared to utter an echo at the weekend, its cry would have been unmistakable. “I've not finished!”
Under lowering rainclouds, Margaret Thatcher rested at Chequers before what could just be her last trip abroad as prime minister. She poured out a truly Wagnerian fury at the timing and content of Michael Heseltine 's challenge to her leadership. Of that leadership she repeated as the thunder crashed outside, “It's not finished yet … And it will be finished!”
For a politician now under extreme pressure, Mrs Thatcher shows an otherworldly absence of strain. After only half her length of service, Eden and Macmillan were sick, Edward Heath and Harold Wilson exhausted. Whatever her shortcomings, physical or intellectual fatigue is not among them. She confronts Mr Heseltine with the same alert doggedness with which she has confronted miners, Argentinians and European diplomats. She fights them all.
For Mr Heseltine she has no time. Her aversion to him is longstanding and personal. She could never bear to stay in the conference hall for his famous party speeches, and bridles at the mere mention of his name. Yet she regretted his famous Downing Street exit in 1986. “It was the path that he suddenly chose at a cabinet meeting. There was no need for it. The rest of the cabinet were completely united about what we should do … We all agreed on one course of action. Michael wouldn't.”
Today she says he would “jeopardise all I have struggled to achieve” . She refers constantly to the trauma of 1973–74. “We lost because we had gone over too far to the left. We had strayed from every single thing we believed in.
“If you read Michael Heseltine 's book, you will find it more akin to some of the Labour party policies: intervention, corporatism, everything that pulled us down. There is a fundamental difference on economics and there's no point in trying to hide it. Those of us who sat with Michael on economic discussions remember full well.”
Mrs Thatcher's staff have done their work. She stabs at marked passages from otherwise obscure Heseltine writings. “Look at this: ‘British industry depends crucially in many fields on having government as partner …’ This is not only different from everything I believe in, but I find it very arrogant to think that there is a small group of people that could determine all of these things. Look, you've seen the crumbling of the more extreme forms of that philosophy in the Soviet Union.
“It is one of my great accomplishments,” she continues, “that we have restructured our industry, got rid of so much over-manning, got the framework of law pretty well right. It does mean difficult choices. It was extremely difficult in 1980–82 and in 1986, yet we came out of it. I remember then thinking, with fantastic relief, that enterprise lives.”
To Mrs Thatcher, her opponent would take the country back to the bad old days; he would “stop up the well-head of private enterprise” . She complains wearily: “He says he would reduce the community charge, he would reduce taxation. That sounds just like the Labour party … We would end up with more community charge and more tax. We cannot go that way. We cannot go that way!” [end p1953]
But surely she had seen off Mr Heseltine and what she regards as his industrial philosophy in the past? What had brought it to the surface now? What flank has she left uncovered that his supporters are now able to exploit?
Her vulnerability to what she sees as Heseltinian corporatism is partly the plea of MPs for intervention for local firms in recession: “Obviously the tendency is to say, ‘Please can we have some help to see us through a difficult period?’ When we came in we were told that you can never let a big company go. But we had to. The more you help, the more you are helping the industries of yesterday.”
But to Mrs Thatcher, the black hole now threatening to engulf her is, of course, inflation. Press Mrs Thatcher hard it has to be hard and the one error to which she will confess is the credit expansion of 1987–88, when Nigel Lawson halved interest rates. Cut open her heart on her deathbed and you will find written the words, “Shadowing the Deutschmark” . She refers to these years as “the two I lost” , the “setback” , the time “when I gave in” . If she is beaten this week, it will be to those years that she will look back in despair.
The culprit is obvious, a belief in Mr Lawson that she allowed briefly to overcome her belief in monetarism (coupled with the name of Sir Alan Walters). Yet she retains a strong loyalty to Mr Lawson. “Nigel was a very original thinker, an imaginative thinker.” But times were different then. “We used not to have as many general discussions. He liked to play his cards close to his chest. That was his style. I had my style (Mrs Thatcher implies that hers was modest by comparison) and he had his. I wish to goodness that he had not left. I had thought he would wish to stay until inflation was down. He didn't.
“You may accuse me of being very tough. But that was Nigel 's style. He had his own way. They had a new theory (shadowing the Deutschmark) and they wanted to do it Nigel 's way. He had a fertile imagination. You need that. Nick Ridley had a fertile imagination, to think the unthinkable and do the impossible.”
And what of other colleagues who, like Mr Lawson, ultimately found her style too much for them however differently she may have seen them? Sir Geoffrey Howe, for instance? “Geoffrey had very great qualities. I think his greatest time was as Chancellor of the Exchequer. I think that was when we came nearer to a sort of fervour. We had to lay the foundations. We switched taxation from direct to indirect. We did things that were tough, and believe me, the polls were terrible.”
And now? “Now we have got inflation. We have got inflation because we departed from those fundamental principles. You went away from the medium-term financial strategy to look at the exchange rate and that meant you were shadowing something else.” (Mrs Thatcher is famous for switching to second person when distancing herself.)
“You cannot have two masters. If your exchange rate is your master there will come a time when the exchange rate will either signal an increase or a reduction in interest rates, when your money supply is signalling something different. The interest rate came right down when monetary conditions were signalling that it should not.”
And whom did she blame? “That's the time when I departed from the plan. If I might say so, I think my view has been upheld, even though I did not press it to its logical conclusion. Ironically, this was the one time I didn't stand out for what I believed in enough. That put us back into inflation.”
Inflation, the cause of her woes, is never out of her mind. “Mortgages really have become very heavy indeed. We are trying to cope with the community charge by extending transitional relief. But these two things, mortgages and community charge, are the difficulty. I believe we are within sight of dealing with them. It will take time. But if we are led by the polls, we should be guilty of the worst short-termism.”
Mrs Thatcher has often been taunted with her political longevity. But, she points out, she cannot put dates on her departure. “I am not going on and on and on, but I do want to entrench what Keith Joseph and others believed in. I have more believers round me now than I had before. Then I had to fight people who were not believers, because I had to get a majority. That is why I now feel very deeply that it might not go the way for which I have fought. We would not have commanded the respect overseas had we not done these things fearlessly.” [end p1954]
If inflation is acknowledged an error, the same is not true of the cause of the moment, Europe. Here her anger is directed at the familiar target, the double standard. “I've seen (other European leaders) being much more of a bulldozer, either because they were contributing a lot of money or because it really mattered to them that they got it. You see what has happened in agriculture. Yet some of our people say, it's all right for them but not all right for us: we're too diplomatic for that.”
Certainly, Mrs Thatcher sees Europe as a negotiating forum rather than a system for “tying up basically different cultures” . But her commitment to European co-operation, as over world trade, is strong: “Unless we had kicked up a fuss about the Uruguay (Gatt) round when they wouldn't face the immediate issue, we should not have got that thrashed out.”
The consensus so often demanded by her critics at a time of cabinet defection is, for her, the source of ideological scorn. “You would never have had any of the great philosophies or religions if you had gone out and said, ‘Brothers, I believe in consensus’. Never. Consensus is a form of words you use when you cannot get agreement, which means different things to different people. That's what you sometimes have in the United Nations.”
As in her response to all charges of being overbearing, Mrs Thatcher cannot resist hinting at the old bugbear of male chauvinism, what she calls “a little bit of psychology” . “Had I faltered, or taken some of the easy short-term ways out, we would have neither the success nor the international reputation we have. Yet when a woman is strong, she is strident. If a man is strong, gosh he's a good guy. Some of the things that have been said to me … but never mind.”
Mrs Thatcher this past weekend cuts the same solitary figure she cut in her first bid for the leadership. She came to the job as an outsider, the candidate of the “peasants' revolt” , of the dispossessed right wing. She studied the rules to which she is now vulnerable. Those rules are the law and order of her politics and she cannot deny them, infuriating though she finds them when she is fighting at home and overseas and feels entitled to her party's support.
She used these rules to combat the grandees, the mandarinate, the party establishment, and crushed them. Now another generation is pushing forward. But she sees the battle not in generational but in ideological terms. The enemy is the same old guard, demanding the three Cs of consensus, compromise and corporatism, bound up in the person of Michael Heseltine.
She has given the Conservative party three election victories in a row, seeing it through good times and bad. To her, now is merely another bad time from which recovery is certain. Yet she must put up with tomorrow. Her resolution does not crack, but she does start forward in her chair and permit a rare glimpse of human vulnerability. “After three election victories, it really would be the cruellest thing” .