MARGARET Thatcher faced down her leading Cabinet colleagues and refused point blank to take Britain into a European monetary union in the 1980s.
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The Tory prime minister flatly refused to tie the Pound to other European currencies in the ill-fated Exchange Rate Mechanism.
Files released yesterday under the 30-year rule reveal that chancellor Nigel Lawson, foreign secretary Geoffrey Howe, Tory chairman Norman Tebbit and trade secretary Leon Brittan, backed by Bank of England governor Robert LeighPemberton, urged her to join the mechanism that was the forerunner of the euro.
But the documents released by the National Archives in Kew, London, reveal how she gave them short shrift.
A record of their meeting said: “The prime minister, bringing the discussion to a close, said she had not been convinced by the arguments in favour of joining.”
In a scenario prescient of this year’s EU referendum debate, the pro-Europe group said Britain should jump at joining the ERM.
Mr Lawson said any suggestion that Britain enjoyed greater freedom outside the ERM was “illusory” while joining would bolster the confidence of the markets.
His briefing note to No 10 said: “I am forced to conclude that not to join now would be a historic missed opportunity in the conduct of economic policy which we would before very long come bitterly to regret. My judgment is shared not only by the governor of the Bank of England, but also by senior officials in both the Treasury and the Bank.”
The then chancellor was also backed by leader of the Commons John Biffen, chief whip John Wakeham, and Cabinet fixer Willie Whitelaw.
At the showdown meeting in November 1985, they were also supported by Mr Leigh-Pemberton.
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But Mrs Thatcher had been warned about their machinations by David Norgrove, her private secretary.
He told her: “I am told privately that the chancellor has seen separately all of the ministers who are coming to this subject for the first time.
“The Treasury tell me their reaction has been that of course this is a subject where they are prepared to trust the judgment of the chancellor and governor. This suggests to me that the chancellor has blinded them with science.”
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The official note of the meeting shows it opened with Mr Lawson, now Lord Lawson, putting his case that Britain would struggle outside the linked currency system.
When Mrs Thatcher ignored his pleas and tried to argue back, Mr Howe and Mr Leigh-Pemberton weighed in against her.
Mr Whitelaw said he trusted the judgement of the chancellor and the Bank governor, adding: “If they felt the time was right to join, their views needed to be given full weight.”
The prime minister abruptly shut down the discussion, stunning the plotters and forcing Mr Lawson to secretly consider resigning from the Cabinet.
Five years later Mrs Thatcher was persuaded to sign up to the ERM by Mr Lawson’s successor as chancellor John Major.
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However, after succeeding her as prime minister, Mr Major took Britain out again during the notorious Black Wednesday debacle of September 1992.
The withdrawal came after prolonged economic crises meant Sterling’s value was in danger of falling below the lower limit against other currencies set under ERM rules.
Meanwhile, papers reveal that baby Prince William became an unwitting device in the Government’s bid to avoid bad publicity surrounding the deployment of US nuclear missiles in Britain in the early 1980s.
The Cabinet feared negative news coverage of an Easter 1983 peace march against the deployment of cruise weapons at Greenham Common air base in Berkshire.
But the Kew papers show how Mrs Thatcher’s press secretary Bernard Ingham saw nine-month William, visiting Australia with his parents Charles and Diana, might be the answer.
He said: “What would take the trick would be press and TV pictures, for TV release on the evening of Good Friday and/or Saturday newspapers of Prince William in Australia.”
http://www.express.co.uk/news/uk/691720/Margaret-Thatcher-refused-join-european-monetary-union-euro-currency
