Friday 9 January 1981
To Chequers by 10. Norman, Alan, self and MT. Morning spent reviewing monetary policy on the lines of Niehans-Walters analysis. I had a slight brush with Margaret because when I was re-capitulating the position I said that we had had a tighter monetary policy than we realised, by accident. She seized on this and started delivering a lecture to me about the fatal error of saying such a thing - that it would come through in speeches and undermine Geoffrey's position. There were many in the Cabinet who would exploit that. She seemed to think that I was actually drafting what we would say to the Bank of England. I explained that I wasn't drafting, merely getting clear the truth. ... I got rather bored and restated my position in a threatening manner, saying we seemed to be talking at cross-purposes. She immediately shut up and said nothing; then predictably tried to score a point to 'get even' later. Thereafter all friends again.
... And yet it was a good meeting: she is in good spirits and absolutely symbolising the will to win etc. David W joined us after a v good lunch ... and we talked ... about the Budget, on which she insisted it would all be bilaterals between her and Geoffrey, no question of a team approach. I fear we'll never move her on this, "They'd all disagree and argue on every point, and leak". You really have to decide from the outset whether to preside from a position of paranoid and incurable distrust - or to build a happy and united team.