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WITHIN THE FOLKLORE of the Conservative Party a myth has taken root which so confounds reason and reality that psychoanalysts may understand it better than historians. Its grip has been so strong that a false history has arisen in some Conservative circles and in the media. The myth is that in a moment of inexplicable folly and conspiracy, even madness, Conservative MPs ejected a leader at the height of her powers, presiding over a healthy party, a quiescent nation and a benign set of outside circumstances. It really was not like that.

In the autumn of 1990 the British economy was in deep-seated trouble; huge internal disputes were raging over Europe; the Community Charge, known and hated by millions as the Poll Tax, had proved unworkable and hugely costly; the Prime Minister was barely on speaking terms with the Deputy Prime Minister; a long-standing chancellor had resigned over policy; the party was far behind Labour in the opinion polls; an election was due in eighteen months; and within the parliamentary Conservative Party a sense of exasperation with the leadership was palpable.

I became prime minister because Margaret Thatcher fell. And her downfall was precipitated by two items on this list of troubles: the Poll Tax and Europe. I believe she could have survived either on its own. When they came together, she was trapped.

From the Falklands War onwards Margaret Thatcher had enjoyed an extraordinary dominance in the Conservative Party. Like all prime ministers, she had members of her party who disliked her style and some of her policies, but their opposition was muted by her three successive general election victories against a weak and disoriented Labour Party. Their unease had been a side-issue in the heyday of Tory triumph and Labour woe. But from 1989, as trouble piled upon trouble, their reservations seemed more valid and their numbers grew. In Parliament, they were joined by Members from the loyalist centre-right of the party – worried by the impact of the Poll Tax – and by colleagues uneasy at the Prime Minister’s stridency over European policy. This combination of concerns was the crucial change. Although many still venerated ‘the Iron Lady’, there was widespread dismay that, too often, she was wrongheaded, and a growing belief that her best days were over. These doubts about policy were reinforced by a dire opinion-poll position that suggested many Conservative seats would be lost at the forthcoming general election. Members’ instinct for self-preservation added to the sea of troubles facing the Prime Minister.

But, as the affection for her was strong, opposition tended to be more in sorrow than in anger. ‘If only she would listen,’ was the constant refrain. ‘Why doesn’t she soften?’ Had we but known it, this was the voice of a parliamentary party that did not like its unpopularity and was looking for a change. This sentiment did not make Margaret Thatcher’s removal a certainty, but it made the once unthinkable much more possible.

The signs had been there for some time. The Prime Minister had overwhelmingly defeated Sir Anthony Meyer’s token challenge for the leadership of the party in late 1989, but amidst the cheering most of us missed the significance of the result. A long-serving, hugely successful leader with three successive election victories behind her had been challenged – and sixty Conservative MPs had declined to support her.

Margaret’s campaign had been organised by Ian Gow, Richard Ryder and Tristan Garel-Jones. After it was over Tristan told me that, apart from the sixty malcontents, a further hundred members of the parliamentary party had needed to be ‘worked on’ to keep them on-side. I suggested to Tristan that he should see the Prime Minister to ensure that she knew this. He delivered his message on the Sunday evening following her victory. In his usual colourful style, he told the Prime Minister that pro-European Members were deeply unhappy with the ‘tone’ of her policy, and that dissatisfaction with the Poll Tax was everywhere. ‘Unless you’re careful,’ he warned her, ‘they’ll be back. Hezzie [Michael Heseltine] will run, and they’ll kill you.’ It was vintage Tristan. ‘It will be the daylight assassination of the Prime Minister.’

Margaret Thatcher did not react against the messenger, as she sometimes did. She defended the Poll Tax, and lambasted the Europeans. Tristan simply repeated the message. ‘I’m only the Deputy Chief Whip,’ he said as he left. ‘But I’m telling you – the daylight assassination of the PM.’

I was more aware of her danger in retrospect than at the time. As a former whip, I kept my network across the party, and I heard that there were rumbles. In fact it was worse than that: grumbling was maturing into strong opposition. As a new chancellor I had my hands full with the onset of recession and my first budget, and was having trouble trying to control public expenditure. We were new members of the ERM, and had to prepare for the economic impact of the Iraqi invasion of Kuwait. With these Treasury preoccupations, I was insulated from the scale of the growing distress in the Tea Room. Despite the political gossip that reached me, the Prime Minister had been so powerful for so long that I could not imagine her removal. I discounted much of what I heard as political froth.

The government had just announced its legislative programme in the Queen’s Speech, and the Prime Minister, with the coming general election in mind, was in no doubt that she would be in office to carry it out. She too was preoccupied with the imminence of a war in the Gulf. Talk of a challenge to her leadership, at fever-pitch in the spring, had died away in May after Labour’s opinion poll lead fell back, and Michael Heseltine had appeared to resolve the matter by announcing that he would not challenge her ‘this side of an election’. Anyone who did so, he said, would fail.

I supported Margaret Thatcher as prime minister. I was pleased to serve in her government and I defended her with conviction when criticisms were brought to me. Still, in private, I was uneasy; uneasy at Margaret’s increasingly autocratic approach. Her warrior characteristics were profoundly un-Conservative. In public, her utter certainties were off-putting. In private she was capable of changing her mind with bewildering speed until she had worked up her public position. Often this way of working served her well. But not always. There were occasions when arguments were put to her which were extremely good, but which ran into the slammed door of a closed mind. Too often, she conducted government by gut instinct; conviction, some said admiringly, but at any rate without mature, detached examination of the issues. She lost her political agility; the Poll Tax and crude anti-Europeanism were the policies that resulted.

It was the Poll Tax which sowed the seeds of her destruction. The theory of the tax was impeccable: everyone benefited from local government services, so everyone should contribute towards the cost of them. This had never been the case with domestic rates, where only a minority paid for local government. High-spending local authorities were insulated at the ballot box from the wrath of the few who had to pay by the many who did not. By giving every resident a financial stake in local government, it was hoped that voters would compel rotten boroughs to clean up their act.

Ken Baker, as Environment Secretary, had promised that the Poll Tax would cost many residents less than the rates. But as councils set their Community Charge levels, it became evident that average bills were going to be far higher than before. It was an extremely painful prospect. Tory MPs were coming back from their constituencies in despair, and even strong supporters of the reform were getting edgy.

The twists and turns as we dealt with the ravages of the tax dealt a body-blow to our reputation for efficiency. Some £1.5 billion of public money was lost setting up, administering and replacing the Poll Tax; the total transfer costs to the national taxpayer reached over £20 billion by 1993–94. The Poll Tax also left local government dependent on the Exchequer for 80 per cent of its finance. It was a wretched tale, and one in which, late in the day, I had a walk-on part. Eventually, although I played no glorious role in opposing the introduction of the tax, it was brought to an end under my leadership.

Why did Margaret press ahead with what turned out to be an act of political suicide? Even lemmings have their reasons. So did she, and they were compelling. In the outcry that followed the introduction of the Poll Tax, the unfairness of the old rating system was forgotten. It was riddled with anomalies: the elderly widow paying the same as four wage-earners next door was a much-quoted example. Conservative Members had bulging postbags denouncing the rates, and motions were tabled at every Conservative Party conference demanding their abolition.

Revaluation of rateable liability – which pushed up bills for millions – fanned the embers of this resentment into flame. It came first in Scotland in 1985, and brought public and political outcry, coupled with demands that the rating system should be abolished forthwith. In England, where the system was different, the impact of revaluation was likely to be even greater. The atmosphere of barely suppressed panic left no doubt that something had to be done, and quickly; fear of the impact of rating revaluation turned the Poll Tax from the inconceivable to the unavoidable.

So, in May 1985, when I was just a junior Treasury whip, Cabinet endorsed proposals from Kenneth Baker to replace the rates with a flat-level Poll Tax; Nigel Lawson dissented and was overruled. Ken Baker was a red-hot presenter of a bad case. He was unmatched as a master of black propaganda, and he won many battles in Cabinet by handling Margaret Thatcher with sly skill.

Kenneth Baker’s original plans were well received. His estimate for the level of the Poll Tax was an average of £30 a head in 1990, when the system would be only partly in operation, rising to a fully-fledged £250 in the year 2000. There would be a rebate system to help the least well-off. These low sums were hugely attractive; it was not until much later that we found out they were utterly unachievable. The non-domestic rate, which was a milch cow for many local authorities and was loathed by business, was to be abolished and replaced by a Uniform Business Rate, set nationally and indexed to inflation

It is ironic that the Poll Tax was introduced early into Scotland at the request of the Scots, shocked by the revaluation of their rates; later, its unpopularity – and the inaccurate claim that Scotland was being used as a laboratory to test the tax – was central to the argument for devolution. The Poll Tax cast a long shadow.

After the 1987 election, the government introduced a Bill to apply the Poll Tax across the United Kingdom, with the exception of Northern Ireland. The whips calculated there were twenty-four outright opponents to the Bill on our backbenches, and a hundred doubters. Margaret Thatcher was undaunted: the ‘wets’, she thought, would be seen off again. But in a vote on an amendment to the legislation, tabled by Michael Mates in April 1988, sufficient Tories voted against or abstained for the government’s majority to fall from eighty plus to twenty-five.

I entered the Poll Tax story as chief secretary to the Treasury after the 1987 general election. Within Cabinet, Nigel Lawson continued to oppose the whole idea, and to warn that the tax would be unworkable and politically catastrophic. Although I warmed to the intellectual rationale of the tax, I was persuaded by Nigel’s warnings; and as chief secretary I was often deputed by him to argue the Treasury case in Cabinet committees. Even when I thought I had won the argument, I lost the decision. Defeated on substance, I remained involved in practical questions of implementation.

The Poll Tax brought dramatic changes in the burden of local taxation for millions of people. We faced a crucial decision: should we introduce these changes in one go, or phase them in gradually? Ken Baker had proposed a long period of phasing. Nick Ridley, his successor as Environment Secretary, was determined on a short period or, preferably, no transition at all. Nigel Lawson, so often Nick’s ally, regarded this view as ‘apolitical to the last degree’.

At first, phasing won. But Nick did not lie down. He never did. He launched an energetic lobbying campaign for a clean switch to the Poll Tax. At the party conference in October, speaker after speaker got up to demand the abolition of the rates, with no transition period. At the Treasury, we believed this show of impatience had been contrived by Nick to impress Margaret. When I suggested this to Nick he denied it strenuously: it was, he claimed, a spontaneous uprising by thinking Conservatives. If so, many of them were soon to think again.

Margaret, however, was impressed, and despite the clear opposition of the Treasury team the decision was taken to abolish the transition in all but a few councils. In June 1988 we abandoned dual running altogether. Nick Ridley had won.

The Poll Tax became law in July. The issue then lay fallow until, nearly a year later, we began to discuss how much taxpayer subsidy should accompany the new tax upon its introduction. After the Treasury and the Department of the Environment failed to settle on a figure, Margaret adjudicated and an increase of £2.6 billion was agreed. It was at this point that we really lost control. By now, the estimated average Poll Tax bill had risen to well over £300. Colleagues were aghast. Worse was to come. Inflation and wage costs had begun to rise, and local authorities were increasing their spending and blaming the new tax for the higher bills. By late autumn, headlines warned that Poll Tax bills could be even higher.

Margaret replaced Nick as environment secretary with the more voter-friendly Chris Patten in late July 1989. Chris warned her in private that the tax was a liability, and began the first of many reviews of it – but Margaret made it clear to him that ‘review’ did not mean replacement.

Slowly, the scale of the political problem became clear. Conservative Central Office found out that in ten marginal constituencies, 82 per cent of individuals would be out of pocket as a result of the change from rates – and that was on the heroically optimistic assumption that local authorities increased their spending by just 7 per cent. The rates system had been untenable, but the Poll Tax was turning out to be worse.

Things slid downhill fast. By January 1990, by which time I had succeeded Nigel as chancellor, the Poll Tax monster was rampaging voraciously. As local authorities set their budgets in stormy town hall meetings, headline Poll Tax levels averaged £360, with some much higher: my old borough, Lambeth, set theirs at £560. In March we sustained a massive by-election defeat in Mid Staffordshire. The press blamed the Poll Tax. Our backbenchers blamed Margaret and Nick.

In late March, Margaret rang me in something of a state. She had assumed, she said, that if local authorities put up spending, they would get the blame for putting up taxes. Instead, the government was getting the blame for changing to the Poll Tax. She was worried about the impact of high bills on people of modest incomes (‘our people’, she said) just above the cut-off for Community Charge benefit. She asked me to examine means of exercising some sort of direct control over local spending which, with a larger level of grant, might bring down the Poll Tax bills. I agreed to do so.

Margaret was right: a radical rethink was necessary. But it was ironic that she should advocate it, since the pain endured by people just above the benefit level was the direct result of the hard-edged ‘financial accountability’ which had always been proclaimed as the main advantage of the Poll Tax.

On 31 March, the day before the Community Charge came into effect in England, political protest erupted into violence with rioting in Trafalgar Square. Many of the demonstrators may have been of the ‘rent-a-mob’ type; but many were not, and I was shocked that the British people, normally so slow to anger, should have taken to the streets over the reform of local government taxation. The event was unprecedented in post-war Britain, and it was becoming clear that the Poll Tax was not so much an albatross as a ticking time-bomb, ready to explode. The political consequences of this riot were nothing in comparison to the fury that erupted from the Tory shires when the first Poll Tax bills arrived. The local government election results in May were dismal.

Sinking beneath a sea of angry correspondence, our backbenchers began to panic. As the year wore on, the issue fuelled a whispering campaign about Margaret’s leadership. She was in a bind, and did not know how to escape. Although she had executed more than a few U-turns in her time – pretending they were no such thing – she had comprehensively boxed herself in on the Poll Tax. The zeal with which she had advocated it meant that its unpopularity was seen as a failure for her personally, and its progressive emasculation was viewed as a climbdown of the most wretched sort. The Empress was losing her clothes.

Throughout April and May 1990 argument raged between the Treasury, the Department of the Environment and Number 10. At first we believed we would have to legislate to control the amount local councils could spend. As chancellor with a budget to stick to I supported this idea, but as a former whip I had grave doubts, given the mood on our backbenches, whether any such legislation would pass the House. Then, in July, we struck lucky. Fresh legal advice suggested that if the government set a figure for what it considered to be ‘excessive’ spending, we would be able to use our existing powers to prevent local authorities from exceeding it.

After a good deal of haggling we announced that local authorities could increase the total level of their spending by up to 7 per cent on the year before. We increased grant provision to them by £3 billion – an amount that should, according to Department of Environment estimates at the time, have produced a Community Charge that averaged around £376. This was a generous settlement, but was nothing like enough to satisfy many of our colleagues. It was becoming clear that any average charge above £300 was unacceptable to them.

Margaret could go no further in easing the pain, or her policy would have faced ridicule. Still the backbenches wanted more. By the autumn it was obvious the tax had to go; but Margaret was not ready to remove it. The muttering grew louder. Then a second wave of discontent hit Margaret. It was Europe. This time something had to give. It was to be her.

There were many myths which came to surround the fall of Margaret Thatcher. One of them is that she was brought down by a cabal of pro-European ‘wets’ for pursuing a clear and forthright line against anything to do with a united Europe. But nothing with Margaret Thatcher was ever quite that straightforward. For most of her time in government, her actions showed the Prime Minister to be as much a pragmatist over Europe as she was a sceptic: she tested new ideas to destruction before she accepted them, but accept them she very often did. Though many thought her line on Europe too abrasive, few disagreed with the decisions she ultimately took. She was unpersuaded on the need for a single currency, but was prepared to accept, even welcome, integration on issues such as the single market. Overall, the Prime Minister was undeniably ‘on board’ the European train, even though she was uneasy about where it was heading and complained loudly at every stop.

The trouble was that there was another Margaret Thatcher, usually confined to private quarters, whose gut reaction was much more hostile to Europe. She bridled at the very mention of Brussels, and was thought by many to share the views on Germany which Nick Ridley was quoted expressing in a Spectator interview in July 1990, and which were so intemperate he was forced to leave the Cabinet; he resigned, it was said, but in fact he did so at Margaret’s request conveyed through Charles Powell. He was effectively sacked. Nick was unlucky. He told me he had made his remarks privately after the end of the interview – but they were printed anyway, and they destroyed him. Margaret’s view was equally direct: ‘Never trust the Germans.’ Two world wars, she thought, proved that the country was expansionist by instinct. Britain’s role was to stop it. She organised a seminar on German reunification at Chequers, and voiced sentiments so hostile to Germany that they alarmed many of those who attended.

These two Margarets could co-exist. They did for most of her premiership, to great effect. But, after ten years in power, she began to lose the knack of keeping the two sides of her personality bolted together. It can be a terrible error to argue straight from your emotional bedrock, but the Prime Minister was beginning to do so; like a shorting circuit she flickered and crackled. Intermittently the lamp of European statesmanship still glowed; then – fssst! – and a shower of vivid commentary would light up the Margaret who attracted the last-ditch Englander. It cost her the trust of many in her party, but also gave her the devoted admiration of Members of Parliament she would never have put in her government.

It all came crashing down at the end of October 1990, when she answered questions in the House on her return from the Rome European Council. It was a summit meeting which need never have taken place, and at which she had been unexpectedly pushed on monetary union. A deal had been reached, and in the Commons the pragmatic prime minister who had achieved so much, the leader who recognised that we needed to take Britain into the ERM, was on display. ‘Of course we wish to see both the United Kingdom and the European Community flourish, and the government and the country have done a great deal to ensure that the Community does flourish,’ she soothed MPs at Prime Minister’s Questions. ‘I believe that solutions will be found which will enable the Community to go forward as Twelve,’ she said a few minutes later in her subsequent statement on the Rome summit.

Then the other Margaret Thatcher was unleashed. Monetary union – which she had signed up to in the Single European Act – was nothing more than ‘a back door to a federal Europe’. My own scheme for a hard ecu (which could have unified Conservative opinion because it would have let the market decide whether we ever entered the single currency) was brushed aside even though she had agreed it. ‘In my view,’ she suddenly told the House, ‘the hard ecu would not become widely used throughout the Community.’

I nearly fell off the bench. With this single sentence she wrecked months of work and preparation. Europe had been suspicious that the hard ecu was simply a tactic to head off a single currency, and now the Prime Minister, in a matter of a few words, convinced them it was. Nor had she finished. She reached for her gun. ‘The President of the Commission, Mr Delors, said at a press conference the other day that he wanted the European Parliament to be the democratic body of the Community, he wanted the Commission to be the Executive and he wanted the Council of Ministers to be the Senate. No. No. No.’

As I listened, astonished at her outburst, I understood where it came from. It was pure frustration. She had returned from the Rome Council bruised and bursting to speak. She had been stung by Geoffrey Howe’s statement on the Walden programme that the hard ecu could in time become a single currency. Even so, she had still made a prepared statement in line with policy – as a prime minister must. Then, in response to a question, she lunged into that now-famous unscripted outburst. I heard our colleagues cheer, but knew there was trouble ahead. As I was to find, it is very easy in the cockpit of the House of Commons to overemphasise noisily for fear that somebody will interpret a soft answer as a prelude to a shifting position. That carries great risks.

The immediate effect was to dislodge Geoffrey Howe, who resigned the following day. Though the fire in Margaret’s Commons stand was impressive as a display, she seemed, as Geoffrey wrote later, to be ‘breaking ranks with her own party’. I heard of the resignation as I drove into the Commons in the early evening. There were not many Tories about, but small groups were gathered together in heated speculation. Geoffrey was the kind of figure every government needs if it is to thrive. What attracted him about politics was not the drama or the glamour, but the substantive building up of policy. His departure could not easily be explained away, and I thought our hopes of winning the next election were fading. But even then, I did not imagine that Geoffrey’s resignation spelled the end for the Prime Minister. Neither did the next day’s Times: it described her leadership as ‘robust, undaunted and unchallenged’.

In fact we were in real trouble, and it was getting worse. The Chancellor had resigned; the Deputy Prime Minister had resigned. And these two senior colleagues were long marchers, architects of much of our programme and of the intellectual force behind Thatcherism. If they were disillusioned, what was happening to relationships between the most long-serving members of the government?

I would not have been surprised if Geoffrey had left the previous year, when he was removed from the Foreign Office to become Leader of the House and nominal Deputy Prime Minister: it was a blatant demotion. But he had stayed on, to be treated with increasing intolerance by the Prime Minister. Her general tone towards him was sharp, occasionally even cruel. If he felt aggrieved, he would have been justified in doing so.

His last Cabinet meeting, on the morning of his resignation, was the worst of all. Geoffrey and Margaret were sitting side by side, directly opposite me. They could barely bring themselves to look at one another. Geoffrey stared down at his papers, his lips pursed; Margaret had a disdainful air, her eyes glittering. When he looked down the long Cabinet table, she looked up it. When she put her head down to read her notes, he looked straight up. The body language said it all. This treatment of a senior colleague was embarrassing for the whole Cabinet. Few, if any, members would have stood it for long; and none without resentment. Geoffrey, who has a placid temperament, did not know how to deal with it. He was – in the face of this ill-mannered lady – too much of a gentleman.

Nigel was gone. Now Geoffrey was gone. Michael Heseltine was waiting. Michael had long been a vocal critic of Margaret’s policies on Europe and the Poll Tax, and now believed himself vindicated on both. He felt, too, that he had been the victim of dirty work at the crossroads over the Westland Helicopters affair, which had led to his storming out of the Cabinet in 1986. Of all Margaret’s colleagues, he was obviously the best-placed to challenge her. Michael was able. He was experienced. He was the best platform orator in the party. Temperamentally, he was the wolf that hunted alone, but he had a large body of supporters who were keen to hunt with him. Even some of his opponents thought he offered the party an election-winning personality. If Margaret were to face a contest, Michael was by far the most formidable opponent on offer.

At the time, I was no ally of his. Apart from his help to me over the peace camp at Molesworth in 1984, I knew little of him. He was friendly, but he moved in a different circle. I did not wish to see a challenge to the Prime Minister, and did not support Michael. My loyalties remained where they were. I was forty-seven and had the job in politics I had always coveted – Chancellor of the Exchequer. I hoped to remain chancellor until the general election. Thereafter, I assumed there were two possibilities. The first, which the opinion polls said was likely, was that we would lose to Labour, in which case I expected Margaret would retire soon after and we would elect a new leader of the party. I would not have been a candidate. I did not wish to be leader of the opposition. Opposing is a special art, and Michael Heseltine, Ken Clarke and Chris Patten were all more suited to it than myself. In such circumstances I would have wished to take a leading shadow portfolio, possibly returning to foreign affairs.

If, though, we won the general election, it would have been my wish to stay as chancellor for about a year and then move back to the Foreign Office or to the Home Office. And then, insofar as I thought of it at all, I expected Margaret to retire as prime minister during the course of that Parliament. Her departure from Downing Street before the election never crossed my mind as a serious proposition.

I was aware that some in the party saw me as Margaret’s long-term successor. Soon after I became chancellor, Peter Morrison, the Prime Minister’s patrician PPS, and Francis Maude, the ascetic Financial Secretary to the Treasury, came to see me to say they believed I was well-placed to be the next leader of the Conservative Party. Peter invited me to his house for drinks to tell me I should stand ‘after she’s gone’. Our conversation was private, but Peter was an intimate of the Prime Minister, and his message was clear enough. Whether or not Margaret knew what he was up to, he would not have said such things had he thought she might disapprove.

Peter Morrison was a classic Tory figure whose father had been Chairman of the 1922 Committee of Conservative backbenchers. Although a few months younger than me, he had been in the House since 1974, and was one of those MPs who do not seek office for themselves, thinking – rather modestly, in his case – that they are not fitted for it, but who want to see their party successful and in government. I was flattered by his confidence in my future. ‘Maybe. It’s a long time ahead,’ was all I said. Nothing more. No plans were made, and nothing came of it.

Over the weekend after Geoffrey’s resignation, Michael Heseltine sent a public letter critical of the leadership to his constituency chairman. It was a warning shot, hardly obscured by his statement early the next week: ‘I think Mrs Thatcher will lead the Conservative Party into the next election and the Conservative Party will win it.’

Number 10 responded by encouraging an early date for any leadership contest, in order to ‘flush out’ any challengers. They dismissed Geoffrey’s resignation as a conflict over style, not substance, another error of judgement which only served to further infuriate Geoffrey, leading him to retort in his resignation statement in the Commons: ‘I must be the first minister in history to resign because he was in full agreement with government policy.’ And Michael Heseltine was taunted in lobby briefings for the press that he should ‘put up or shut up’.

But the backbench rats began to desert the Prime Minister. Tony Marlow, the populist MP for Northampton North, was the first off the ship, declaring that there would be ‘a new prime minister by Christmas’. Even after all that had happened, this seemed a barmy remark. But Tony was always around the Commons, and he turned out to be more in touch with backbench opinion than anyone realised. The press began to sense drama. Malcontents stalked the parliamentary lobbies, and trouble mounted.

It was Geoffrey’s devastating resignation speech on 13 November which brought all this to a head. In her memoirs, Margaret calls it ‘poisonous’. But he was driven to it. As Chancellor of the Exchequer and Foreign Secretary, Geoffrey had been a perfect foil for Margaret’s more strident tone. But just as in partnership she had relied on his strength of purpose, in battle she had ignored it at her peril. The iron had entered into his soul, and he responded accordingly. ‘People throughout Europe see our Prime Minister finger-wagging, hear her passionate “No, No, No” much more than the content of carefully-worded formal texts,’ he said. ‘The task has become futile … of trying to pretend that there was a common policy when every step forward risked being subverted by some casual comment or impulsive answer.’

I felt a mixture of agreement and dismay as he addressed a Chamber listening intently to every nuance. When he spoke of the way in which the Prime Minister had destroyed the hard ecu I could only agree. Still, I had not expected Geoffrey to deliver a speech which would destroy her. Geoffrey’s steel has always been underestimated due to his easy-going manner. Again it was Margaret Thatcher’s folly that she ignored this side of his character. Quite simply, she had disregarded all his private arguments; this was his only chance to put the record straight publicly. That was what he was doing. As I looked around the House I could not see the faces of my colleagues behind me, but I could see the reaction of the Labour and Liberal Members across the floor of the House. Their pleasure at Margaret’s discomfort turned to glee as, to follow Geoffrey’s cricketing metaphor, ball after ball hit the stumps.

I was sitting on the front bench beside Margaret. It was a struggle to know how to react. She was tense from top to toe, and it would have been utterly unconvincing to turn to her with comforting words; we sat in silence, listening and, in my case, wondering what would happen next, and how we could cope with the fallout. What defence would we have to the charge that the two great architects of Thatcherism had both repudiated the Prime Minister? Bernard Ingham, Margaret’s loyal spokesman, had insisted that Geoffrey’s departure was merely over a matter of style. Geoffrey’s resignation speech had shown all too clearly that it wasn’t, and had made stark the division in the Conservative Party; the iceberg to which Nigel Lawson had alluded in his resignation speech, formerly nine-tenths hidden, had now emerged above the waves.

Afterwards, I spoke to Margaret in the Prime Minister’s room behind the Speaker’s Chair. She knew well enough the political damage Geoffrey’s speech had done her, though not, I think, that it would precipitate a leadership election. It appeared to me that her principal concern was what the speech revealed about her fractured relationship with Geoffrey. I do not think she understood how it had come about, how hurt he must have been by the disdain that she had heaped upon him. We sat for a while, and I tried to put the best gloss I could upon what had happened. I could not pretend that it was anything but a serious setback, and I did not. I offered Margaret the hopeful analysis that the speech might be cathartic, causing her colleagues to rally round her. I suggested too that as she was beleaguered, a lot of sympathetic support might emerge.

It was not to be. Geoffrey’s call in his resignation statement for ‘others to consider their response’ brought Michael Heseltine out into the open: ‘I am persuaded that I would now have a better prospect of leading the Conservatives to a fourth election victory,’ he announced the following morning from the steps of his home.

Douglas Hurd and I were immediately asked by Peter Morrison to propose and second the Prime Minister’s nomination for the leadership contest which would now take place. I did so without reservation. It seemed natural to me that the Prime Minister should be backed by her Foreign Secretary and her Chancellor. Despite my concerns I believed Margaret had earned the right to contest the next election as prime minister, and to let the electorate judge her record as a whole. I thought it bad politics to attempt to remove a sitting prime minister, and in no circumstances would I have stood against her.

Those with more recent memories of leadership contests within the Conservative Party might find it surprising that, though a contest was actually under way, on this occasion the Cabinet thought it its duty to stand foursquare by the Prime Minister. But we did. I and, to the best of my knowledge, all my Cabinet colleagues but one, David Hunt, voted for her. We turned away those in the party – and there were more than a few – who urged us to stand against her. We told everyone who asked our advice to back her, and made it clear that we would be doing the same. And we meant it. I believed that if Margaret Thatcher were to be dismissed from office it should be by the British people as a whole.

At the end of the week, I issued a statement of support describing Margaret as ‘one of this country’s most successful peacetime prime ministers’. It was a true representation of my views, but incomplete since it excluded my concerns. Nonetheless I would have been willing to help further in her campaign, but there was no attempt to rope me in. Peter Morrison was confident the operation was under control.

It wasn’t. At Number 10 there was no chain of command, no systematic canvassing and not enough recognition of the political danger. During the crucial final days of the contest the Prime Minister was in Paris, at the Conference on Security and Cooperation in Europe (CSCE) summit to mark the end of the Cold War. In retrospect it is probable that a hard-fought battle against Michael (who did more than fifty press and media interviews within a day of declaring his candidacy) would have flushed out the two missing votes which would have enabled Margaret to win on the first ballot. Even had it done so, she would have been mortally wounded. In the event, those closest to her left her behind ‘like an old umbrella in a taxi’, as Tristan Garel-Jones put it.

Nonetheless, Margaret was right to go to Paris. The presumption on all sides was that she was going to win. As the only other prime minister who has fought a leadership election while in office, I know it would have been undignified for her to rush around asking MPs for their support. Clearly a contest against Michael Heseltine was quite a different proposition from the fight with Tony Meyer a year previously, and the whips had warned her that he would get a substantial vote. Still, Margaret had led the party for almost sixteen years, and had won three general elections. Conservative MPs knew everything there was to know about her. If she had fought tooth-and-nail in Westminster, people might have put it around that she was being forced to do so because Heseltine was ‘doing better than expected’. Far better, she must have thought, to appear as one of the victors of the Cold War among world leaders in Paris than to throw herself into the Tory scrum in Westminster.

I, though, was not on the pitch. On the morning of Saturday, 17 November, three days after Michael kicked off the contest, I entered the Herts and Essex hospital in Bishop’s Stortford for an operation on my wisdom teeth that had been arranged weeks before. Though I was discharged the next day, I recuperated at Finings, and did not return to London until the following Thursday, by which time Margaret had decided to stand down.

When Michael announced his candidature, I did consider postponing the operation. I had been warned that I might be out of action for up to a week. The government was in crisis. The press in ferment. Should the chancellor be hors de combat? Jeffrey Archer, one of the Prime Minister’s most energetic supporters, thought not. He called to see me at the Treasury and urged me to delay the operation. I declined: if I had done so, the impression that I expected the Prime Minister to lose and was preparing myself to stand in the second round of voting would have been overwhelming.

In the event, when Margaret had resigned and I did enter the contest, the rumour spread that my operation had been a ploy. David Davis, the MP for Haltemprice and Howden, picked up this mischief. It came, he thought, from an over-enthusiastic supporter of Douglas Hurd who was trying to damage my candidacy; it fell away swiftly, but it had entered the political bloodstream and was often to emerge, as though it were fact, in later years.

It was nonsense: I was in pain from an abscess under a wisdom tooth, and had been for a long time. The operation had been booked weeks earlier after Jenny Acland, wife of the British Ambassador in Washington, had rushed me to a dentist there for late-night emergency treatment. Norma was insistent that the operation should go ahead, and Graham Bright, my PPS, also urged me not to postpone it any longer.

‘Don’t worry,’ he said. ‘I’ll report to you every day and let you know what’s going on.’

‘I don’t want you running around organising things,’ I said to him.

He followed my orders, but he kept tugging at the leash – ‘You’ve got to stand’ – and his certainty began to persuade me that I stood a chance should Margaret fall. People had said this sort of thing to me before, and had left me unconvinced. But now I began to wonder. The support did seem to be there. Shortly before my operation, Terence Higgins, the MP for Worthing and a senior figure in the Commons, had called on me at the Treasury and urged me to stand if the Prime Minister failed to survive. Since Terence was a former Treasury minister, a Privy Councillor, a leader of moderate Conservative opinion in the House and one of the great mandarins of the 1922 Committee, I took his words seriously. I had suspected I would be written off by senior figures in the party as too inexperienced, but Terence’s advocacy was reassuring. I would make a credible candidate.

Still, I was not keen. Late on the afternoon of Thursday, 15 November, as I worked in my study at Number 11, a call came through. It was Tristan Garel-Jones, ringing from the Foreign Office. Tristan’s reputation as a Machiavelli-in-waiting is so strong that it is easy to overlook the fact that in his personal behaviour he is very straightforward and rather old-fashioned. What he thinks, he says without frills, especially to his friends. And he did to me. ‘I think you ought to know,’ he said bluntly, ‘Norman Lamont has canvassed me on your behalf, and I must say I think his behaviour is rather improper.’

I agreed. Norman was not acting with my encouragement, and I told him so. ‘If he’s doing that, it’s not my wish,’ I said. ‘I intend to vote for the Prime Minister, and I shall tell others to do likewise.’