For Mrs Thatcher’s new Chancellor, John Major, membership of the ERM was a means to an end. ‘Like Nigel Lawson, I never saw it as a stepping stone to a single currency,’ he says. ‘Inflation for me was a week in which the week lasted longer than the money, as had been my life experience, and I knew that was the experience of many people. It wasn’t an abstract political theory, I hated it – and I saw the ERM as the only available way of bringing inflation down. We had tried everything else and it failed.’20
By early 1990, the tension at the heart of government had begun to affect party morale from top to bottom. Mrs Thatcher had survived a leadership challenge from Sir Anthony Meyer, a stalking horse on the left of the parliamentary party, but speculation only intensified about Heseltine’s intentions. Shortly after winning her third victory, she angered some by promising to ‘go on and on’ when asked by an interviewer about when she might stand down. Aside from Europe, a major aspect of domestic policy had become a serious bone of contention. Hailed as one of the flagship policies of the third term, the Community Charge, or ‘poll tax’, was intended to make local councils more accountable for the services they provided, but it became instantly unpopular in the country. Mrs Thatcher was determined to push ahead with the plan to replace the local rates, despite warnings that it would be a political disaster. ‘How could a leader who was wise make thirteen million people pay a tax that they had never paid before? It showed she was no longer thinking in a rational way, and really created controversies where it was unnecessary,’ recalls one of her ministers, David Mellor.21 The costs of implementing the poll tax were spiralling, and when it was piloted in Scotland before being introduced in England, thousands refused to pay. Anger would soon spill out onto the streets, when a large demonstration in central London turned into a riot on 31 March 1990.
For the party’s footsoldiers in local government there would be a heavy price to pay in town hall elections later that spring. But it was the Prime Minister who had become the real electoral liability. By April 1990 Mrs Thatcher’s ‘satisfaction rating’ had fallen to 23 per cent, a post-war low, and many Tory MPs began to conclude that unless she stood down their seats would be in jeopardy. A series of disastrous European and by-election results in the summer reinforced their fears. ‘My trouble was that the believers had fallen away,’ she regretted in 1993.22 She could not believe that her troops had lost the fire in their bellies. However, after eleven years in office, the party was exhausted and desperate for a change of leadership style, if not a change in policy direction. ‘One of the mistakes that some ultra-Thatcherites made was that [they believed] you could have radicalism forever – a permanent revolution,’ says another former minister, Norman Lamont. ‘I don’t think the public would have ever accepted that and I think there’s always been this argument between those who wanted radicalism for ever and those who wanted to go back to a more traditional Conservative Party.’23
‘Ten more years! Ten more years!’ was the evangelical chant from the party faithful during what was to be Mrs Thatcher’s last conference speech as leader in October 1990. The country, though, had lost its appetite for the Iron Lady’s revolutionary fervour. True, Britain was no longer considered the sick man of Europe after years of economic decline and industrial unrest, but the harsh edges of Thatcherism had begun to grate on the electorate. For every admirer there seemed to be a sworn enemy. Not only had the Prime Minister become dangerously estranged from most of her Cabinet and many Conservative MPs, she had polarised public opinion to such an extent that something would have to give.
The fatal blow came from her long-suffering ally Geoffrey Howe. ‘No! No! No!’ was how she reported her reaction to plans for a single European currency, Social Chapter and federal Europe when she returned from an EC summit in Rome on 28 October. For Howe, her open hostility to Europe was the final straw. On 1 November he resigned. Thirteen days later a packed House of Commons listened to his resignation statement in silence. Speaking from the backbenches for the first time in fifteen years, he delivered a withering critique of Mrs Thatcher’s increasingly abrasive style of leadership and ever more strident position on Europe. As he went on, the faces around him (including that of Lawson, who sat beside him) turned to ash. Uncharacteristically savage for a politician whom a Labour opponent once described as a ‘half-dead sheep’, Howe tore into the Prime Minister. He derided her ‘casual’ dismissal of the idea of a single currency, which he argued had undermined ministerial dealings in Europe. ‘It is rather like sending your opening batsmen to the crease only for them to find, the moment the first balls are bowled, that their bats have been broken before the game by the team captain,’ he declared to ecstatic laughter from the opposition benches. The Prime Minister sat on the frontbench visibly trying to restrain her anger. Proclaiming loyalty to the Prime Minister he had served for eleven and a half years in office, and as party leader for fifteen years, was no longer possible for Howe. ‘The time has come for others to consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long.’24
In one of the most dramatic scenes in the House of Commons for years, the Prime Minister’s longest-serving minister had fired the starting gun for a leadership election. Heseltine now declared his hand, arguing that he could take the party to a fourth term in office. As Mrs Thatcher left for an international conference in Paris with her entourage just before the first ballot, she was not even contemplating defeat. While she could hardly bring herself to court MPs in the Commons tearoom, her lacklustre campaign team led by her complacent Parliamentary Private Secretary Peter Morrison assumed it was in the bag.
Mrs Thatcher won the first ballot on 20 November, with 204 votes to Heseltine’s 152, but under the rules of the contest she fell short of outright victory by an agonising four votes. Her authority was shattered. Yet on hearing the result in Paris, Mrs Thatcher resolved to fight on. The BBC’s political correspondent John Sergeant was talking live on camera when the Prime Minister strode out of the British Embassy to address reporters. As Bernard Ingham, her press secretary, brushed Sergeant aside, she vowed to put her name forward for the second round of voting. The chaotic scene, watched by millions on television at home, caused widespread dismay among Tory MPs. On her return to London Mrs Thatcher held individual interviews with members of the Cabinet. Almost all of them warned that she would not win in a second ballot, despite pledging their support. ‘It was treachery,’ she said later, ‘with a smile on its face.’25 The following morning, Thursday, 22 November, she tearfully told the Cabinet that she had decided to resign, and urged ministers to unite behind the figure most likely to defeat Michael Heseltine. ‘It’s a funny old world,’ she told them.
For the young team of researchers in Central Office, the defenestration of their idolised leader was an act of total betrayal. How could their political masters have done such a thing? Cameron feels that Mrs Thatcher had every right to be aggrieved, and friends remember his sadness on the day she fell. ‘We were all as upset and horrified as anybody else was about her departure. But we soon adapted to the new regime,’ Guy Black recalls.26 Life had to go on: a new Prime Minister had to be found midway through the Parliament.
In the three-horse race that ensued in the week after Mrs Thatcher’s announcement, John Major, the Chancellor, emerged as the winner. The outgoing Prime Minister had worked tirelessly to advance his interests, phoning newspaper editors and friends to tell them that the revolution would be more secure with him than with the other two candidates, Michael Heseltine and the Foreign Secretary, Douglas Hurd. Yet Major was hardly in need of her assistance: he already had 160 Tory MPs signed up on the day he declared his intention to stand. Heseltine admitted that ‘He who wields the knife rarely wears the crown,’ while the affable Douglas Hurd was considered to be too much of a patrician to have widespread appeal in the country. In the second ballot on 27 November, Major won 185 votes to Heseltine’s 131 and Hurd’s fifty-seven. Heseltine and Hurd graciously conceded, handing the leadership and the premiership to Major. The following morning a tearful