Westland – did the helicopter firm really bring Thatcher to the brink?
From the perspective of hindsight, the middle term of the Thatcher government in 1983-87 may look like plain sailing. It did not seem like it at the time; it was the parliament of the ‘banana skin’ – a term then used to describe a number of unrelated mishaps which tripped up several ministers. The biggest, slipperiest banana skin of them all was the Westland Affair, the one that led Margaret Thatcher to speculate on 27 January 1986 that:
I may not be Prime Minister by six o’clock tonight.
How did the business arrangements of a helicopter manufacturing company in Yeovil bring Thatcher apparently so close to the edge? She even stepped back at one point after a long meeting between senior ministers and marvelled:
Do you realise we have spent three hours of precious time discussing a company with a capitalisation of only £30 million? What is the world coming to?
Westland was in financial trouble in 1985 and was looking for a commercial partner so that it could sort out its problems. There were two options: a tie-up with the US helicopter manufacturer Sikorsky (through its parent company United Technology Industries, UTC) or a European consortium. The Thatcher government was divided, in an increasingly public, embarrassing and vitriolic argument, on the best course of action.
The main disruptive element was Michael Heseltine as Secretary of State for Defence, who actively supported the European option and worked hard for it, politically and commercially. Heseltine feared that Sikorsky was interested in Westland because it could be used to get a piece of the enormous Al-Yamamah arms deal agreed between Saudi Arabia and the UK in 1985, which allegedly mentioned an order of 80 helicopters. Defence procurement – the very word has a slight whiff of the illicit – has never been a simple or transparent industry and Westland was a cork bobbing on the surface above deeper currents.
It should not have been a big political issue. The government professed neutrality, although Thatcher herself had sympathy for the US option. But it worked on fault lines that were already there. Although Heseltine had been a good Thatcherite in many ways, particularly in the 1983 election on defence, their personal styles clashed. Many suspected Heseltine was looking for a reason to have a ‘good resignation’ as part of a long term career plan. A confrontation about something was clearly in the air, and it coalesced around Westland. Heseltine grew frustrated in late 1985 that the future of Westland was not being discussed in Cabinet, and Thatcher felt that Heseltine was blatantly ignoring collective Cabinet responsibility.
In retrospect Thatcher should have sacked Heseltine for insubordination in December 1985. She would have been well within her rights as Prime Minister and the storm would probably have blown itself out over Christmas. But instead spin wars between Heseltine and Number 10 continued and escalated seriously in the New Year; the Economist noted that ‘irate ministers were reading whole chunks of Cabinet papers directly to journalists’. Another weapon used by both sides was writing or prompting letters with the intention of leaking them. The worst part of the briefing war was on 7 January 1986, when the Sun shouted ‘YOU LIAR’ at Heseltine on the basis of a selective, heavily spun leak of a letter from the Solicitor General.
Heseltine tried again to raise Westland in the Cabinet meeting of 9 January, was rebuffed and attracted little support from his colleagues. He gathered his papers, stood up and left the Cabinet Room. He called a press conference that afternoon at which he announced:
If the basis of trust between the Prime Minister and her Defence Secretary no longer exists, there is no place for me with honour in such a Cabinet.
The resignation started the frenzied stage of the scandal which covered most of the rest of the month and largely concerned the Thatcher style of government and the methods used in the briefing wars, in exhausting detail. The key issue became the leak of the Solicitor General’s letter, which had been organised through the Department of Trade and Industry (DTI) under Leon Brittan but prompted by Number 10. Law Officers tread a delicate line between the political and the legal and the Attorney General took a dim view of what had happened, threatening to send the police in if a civil service leak inquiry did not take place.
Brittan was under the most intense pressure, thanks to several missteps and his department’s direct involvement in the leak. His political position at Westminster was also weak, in part because of red-faced backbench anti-Semites. On 24 January the Westland affair claimed its second Cabinet casualty. Brittan received an unusually warm response to his resignation letter, with Thatcher saying, ‘I hope that it will not be long before you return to high office to continue your Ministerial career’, which Brittan thought was ‘an informal understanding… I was resigning as part of a balancing act.’
Leon Brittan kept his counsel for years, although he had told his PPS Gerry Malone in 1986 that the leak was personally authorised by the Prime Minister; his first full account was posthumously published in Charles Moore’s Thatcher biography. The Solicitor-General’s letter, it is clear now, was indeed procured by Number 10 in order to be leaked to embarrass Heseltine. Charles Powell conceded to Moore that ‘her hands were not entirely clean’.
Thatcher was protected in a way that would probably not be possible nowadays. Government was more secretive – what is now the Ministerial Code only became a public document in 1992 – and the Select Committee system less powerful and respected; the government, including the civil service, seemed to regard outside investigations as impertinent, and civil service leak inquiries were less than rigorous forensic procedures. But the inquiry served a purpose in that it was used to stop the civil servant participants in Westland from testifying outside the walls of Whitehall.
Asked in 1987 about her much-quoted fear of losing office over Westland, Thatcher downplayed it:
Oh, you suddenly come out with these things. I would not necessarily take them as if they had any very great, deep significance.
The same scepticism could usefully be extended to some other well-polished pearls among contemporary history quotations. Although if the full story had been known, she would surely have had to go, she was protected by Whitehall and Conservative Party traditions and the skills of her Chief Whip John Wakeham. Wakeham had established that Brittan was not going to undermine her in the debate, and negotiated an agreement with Heseltine. Thatcher would use some words written by her former Defence Secretary, in which Thatcher conceded that:
with hindsight, it is clear that this was one, and doubtless there were others, of a number of matters which could have been handled better, and that too I regret.
Heseltine in return would not rock the boat in the debate, and indeed he made a rollicking partisan attack on the Labour Party. All Thatcher had to do was stick to her brief, which she did, and in the absence of new evidence ‘the great traditional Tory combination of loyalty and humbug’ would do the rest, as Charles Moore put it. Even if Neil Kinnock had made the best speech in history, Thatcher was still going to survive, but his speech on 27 January was unfocused, poorly delivered and disrupted by barracking. As he conceded later to his biographer Martin Westlake:
It was inept. It produced my worst ever parliamentary moment and gave me nightmares for years, but it didn’t “save” Thatcher.
From then on, the steam had gone out of Westland and it quickly forgotten by the electorate, insofar as they had followed the ins and outs of an attempted corporate rescue and various leaked letters. In a classic piece of ‘burying bad news’ the critical Defence Select Committee report was published to coincide with the Royal Wedding between Prince Andrew and Sarah Ferguson on 23 July 1986. Westland contributed to a downward lurch in Conservative support that was reflected in poor results in the local elections in May 1986, but the Tories recovered in the autumn and by the time of the 1987 election Westland seemed a distant memory.
Even so, there were political consequences. It left an impression of deviousness on the part of a Prime Minister who had built a reputation for integrity and straight-shooting. It made her less trusting of ministers, including some of her fervent supporters like Norman Tebbit, and more reliant on the Praetorian Guard of Bernard Ingham and Charles Powell in Number 10. The divisions, policy errors and resignations of the 1987-90 government ultimately became unmanageable, while the affair had left Heseltine outside the metaphorical tent with a full bladder, ready for the crisis in November 1990. It also damaged Kinnock’s image and confidence. It was hard to see in 1986, but the real longer term winner of Westland was John Major, who was then a little-known junior Social Security minister.
But what happened to the helicopter firm? Friends and allies of Mrs Thatcher – Lord Hanson, Rupert Murdoch, and several others operating through nominee accounts – bought shares and cleared obstacles for the Sikorsky bid, essentially to dispose of the political issue. Murdoch had particularly clear motives, as he was launching his Wapping print works in January 1986 and he was a board member of UTC. But the 1986 solution was ultimately a failure, and alternatives were sought as early as 1988. Then the defence sector hit the end of the Cold War, Westland somehow missed out on the Saudi bonanza, and GKN made a hostile takeover bid in 1994. The Times noted in 1995 that:
Political ramifications aside, the industrial outcome of the Westland affair has proved a disaster for Britain, and the taxpayer… Several times the MoD has had to place orders for unnecessary or over-costly aircraft to help it survive.
The next stage was a GKN-Finmeccanica partnership in 1999 that led to Westland being absorbed into AgustaWestland. The last chapter was written this month, when Westland ceased to exist. The Yeovil factory is now just one of many Finmeccanica production facilities, and Michael Heseltine is still around to raise a glass of prosecco towards Italy. Westland ended up going European after all.
Charles Moore Margaret Thatcher Volume 2 Allen Lane, 2015 p449-498 gives a full account with much interesting new material.
Michael Heseltine Life in the Jungle Hodder & Stoughton, 2000
Michael Crick Michael Heseltine: A Biography Penguin, 1997
This article was originally published on Conservative Home on 15 January 2016.