Chancellor Nigel Lawson at work with his budget box on March 8, 1989.
Chancellor Nigel Lawson at work with his Budget box on March 8, 1989. © Getty

This article was first published in the Financial Times of October 28, 1989.

The question of Britain’s role in the European Community hangs like an axe over the head of the Conservative Party.

It was Sir Geoffrey Howe’s disputations over the EC that so irritated Mrs Thatcher and her immediate advisers earlier this year that she removed him from the Foreign Office. It was a long-standing quarrel over Britain’s membership of the exchange rate mechanism of the European Monetary System that led to the avoidable resignation of Mr Nigel Lawson as Chancellor. The irony of this is that Messrs Howe and Lawson are both unsullied torchbearers of free-market liberalism - the very creed that the Prime Minister, in more than one outburst, has insisted is threatened by ‘Marxism’ and ‘socialism’ imposed from Brussels. ‘We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level,’ said Mrs Thatcher in Bruges on September 20, 1988.

‘Sovereignty is not virginity, which you either have or have not,’ said Sir Geoffrey in Blackpool on October 11, 1989. 'Only Robinson Crusoe could count himself master of all he surveyed.' The Deputy Prime Minister's view is that in every international treaty and transaction there is a giving and taking of the elements of national power. The joke that tired in its use against Sir Geoffrey by No 10 is that just as the Department of Industry represents Industry, so the Foreign Office 'represents foreigners.'

Would his immediate successor, Mr John Major, have been any different had he remained at the FO for more than three months? In conversation, Mr Major comes across as one who understands very well that Britain's future lies in the EC, and that it must, indeed, seek to be a leader on the other side of the Channel. Even if you fight for British interests, you do best if you use the language of the Community-minded. He knows that this is the young-moderniser view, the one held by what he sees as the rising generation of potential Cabinet ministers inside the Tory Party. The doubt, which has followed him to the Treasury, is whether his evident desire to maintain a good relationship with the Prime Minister overrides other considerations. We shall see.

We shall also see about Mr Douglas Hurd. His personal history suggests that he arrives at the FO as a European, more Foreign Office than the Foreign Office itself. Putting him in as Foreign Secretary just one short summer after ousting Sir Geoffrey is a sign of how desperate Mrs Thatcher must have felt on Thursday. You could assume that Mr Hurd will be in a strong position to argue with the Prime Minister, since to lose more than one foreign secretary per quarter would be regarded as careless, but I remain to be convinced.

The potential schism runs right through the party. Mrs Thatcher's mistrust of foreigners is shared by perhaps a majority of the rank and file; the perception that we must move with the rest of the EC has a strong following on Tory benches in the House of Commons, in spite of its association with Mr Edward Heath and perhaps because of the skilful way in which Mr Michael Heseltine has picked up the banner of modernism.

Against that, Mr John Redwood won attention in July with a midnight speech asserting the rights of the House of Commons. ‘ . . . the ultimate power to make proposals from Europe comes from this ’ he reminde d it. Some in the Cabinet, like the Environment Secretary, Mr Christopher Patten, are not crusading economic liberals; others, like the Employment Secretary, Mr Norman Fowler, or the Industry Secretary, Mr Nicholas Ridley, express the very spirit of Bruges.

All of this is well understood by that canny pair of old socialist plotters, Mr Jacques Delors, the president of the European Commission, and Mr Francois Mitterrand, the President of France. They were astounded by the Bruges speech, irritated by the period of British nit-picking over Brussels regulations involving cigarette-packets and the like, and bruised by Mrs Thatcher's handbagging of Sir Geoffrey's tortuously won agreement at the recent Madrid summit. They are now rather clumsily and publicly preparing an ambush for Britain at the next summit in Strasbourg.

Mrs Thatcher cannot look to the German Chancellor for help, since Mr Kohl is known to harbour a strong personal antipathy for her; he is, anyway, preoccupied with the German elections due at the end of next year and committed to his alliance with the French.

Her best hope lies in the possibility that the Delors-Mitterrand team will overdo it, particularly in persisting with every dot and comma of the latest draft of the social charter. If that happens, the Bruges-minded Tories will begin to win more of the arguments. Better yet, the Labour Party will probably continue to parade itself as the most European-minded of all on the ground that the EC will eventually enforce the 'social justice' denied Britain by Thatcherism.

They cannot bank on such hopes, however. The reason lies in the intense political and nationalistic passions that are now seen to reside in the Prime Minister's soul. A week ago today, in Kuala Lumpur, Mr Foreign Secretary Major manoeuvred the 49 other Commonwealth heads of government a long way towards the British position on South Africa. Mrs Thatcher destroyed his victory by putting it all in much stronger language, just as she had done with Sir Geoffrey's carefully worked-out formula at Madrid. She would need to develop a wholly uncharacteristic restraint to keep herself from doing the same thing at almost any time over the coming months.

That axe over the party's head is in the Prime Minister's own hands.

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