The Price of Everything

With my emphasis added, Alan Travis writes:

Some of Margaret Thatcher's closest policy advisers voiced strong concerns that the Falklands Islands were not worth the fight, from the earliest days of the campaign, according to the latest release of files from the former Conservative prime minister's personal papers. The papers show that, contrary to the jingoistic spirit at the time, the divisions over the Falklands went to the very heart of Downing Street with both Thatcher's senior economic adviser, Sir Alan Walters, and her chief of staff, David Wolfson, proposing schemes offering to buy-out the 1,800 islanders rather than send a taskforce to the South Atlantic.

The scepticism extended to the head of the Downing Street policy unit, Sir John Hoskyns, who voiced the fear of making "almighty fools of ourselves" and worried that an essentially minor issue could precipitate the downfall of the Thatcher government. Hoskyns also told her press secretary, Bernard Ingham, that it was "rather unwise" to talk about the islanders' wishes being paramount, and criticised the public tone being struck: "If we talk about it as a combination of Stalingrad and Alamein we risk looking absurd. This is not a battle for our homeland and civilisation."

Wolfson made an explicit proposal in a note to Thatcher on 22 April 1982 to avoid war by way of buying off the Falklanders. He suggested that the "bribe" of a US-backed index-linked guarantee of $100,000 per family and lifetime guarantees allowing residents to settle in Britain, Australia or New Zealand with full citizenship, be offered. "This is the bribe which would have to convince Galtieri that they would vote for Argentine sovereignty," he told her.

Walters records in his private diaries made public today that he proposed his compensation scheme on 6 April, four days after the Argentinians had seized the islands. "I sent PM a memo saying we should get Argentina to pay compensation to the Falklanders – objections from John Coles [her foreign affairs adviser] that PM would through [sic] it out – need some blood first for credibility to H/C [House of Commons] and to Argentine – I doubt it. This Jingo mood will pass but JH [Hoskyns] thinks she will miss the change." The prime minister's private secretary, Michael Scholar, said the PM had already considered a number of similar ideas but concluded that "it would mean the end of the government to pursue them now".

Walters did not give up however. Sir Geoffrey Howe, chancellor at the time, told him two days later that the compensation scheme was logical but would be taken as a sell-out. But her monetarist guru persisted with the idea throughout the crisis. He even revived the notion in a 1995 article for an Argentinian paper suggesting that they offer the islanders £475,000-a-head to leave. This March, the Falkland islanders voted by 1,513 to three to retain their status as an overseas territory of the UK. The Argentinian president, Cristina Fernández de Kirchner, this week urged Pope Francis (the former archbishop of Buenos Aires) to intervene against the "militarisation of Great Britain in the South Atlantic".

The release of the 1982 personal papers by the Margaret Thatcher Foundation also show that the prime minister's chief whip, Michael Jopling, was warning her about the deep divisions of the Conservatives in the Commons that went well beyond her battle with the traditional Tory "wets". The popular image of the Conservative party was defined at the time by reports of a belligerent meeting of the backbench 1922 committee, held on 3 April, as the taskforce set sail; the Foreign Office was sharply criticised and the meeting triggered Lord Carrington's resignation as foreign secretary the next day.

By the time the taskforce arrived off South Georgia on 21 April the chief whip had outlined six groups of MPs, ranging from the hardline "no surrender" group headed by Alan Clark, to more than a dozen MPs who thought not a single shot should be fired in anger or that the Falklands were not worth the effort and that it was dangerous to go on describing the islanders' views as paramount. Jopling quotes one blunt Scots Conservative peer, Lord Drumalbyn, who told him: "I think the government are mad. We do not want the place, in any case."

One Tory MP, Marcus Kimball, said: "Let the Argentinians have the Falklands with as little fuss as possible." The Tory "wet" Sir Ian Gilmour said: "We are making a big mistake. It will make Suez look like commonsense." Even the distinguished political historian and MP, Robert Rhodes James, was reported to be "hopelessly defeatist, depressed and disloyal". Ken Clarke, later a cabinet minister under Thatcher, was bracketed with Sir Timothy Raison in the chief whip's note as hoping "that nobody thinks we are going to fight the Argentinians, we should blow up a few ships but nothing more".

Chris Patten, later party chairman, rather more opportunistically offered to "write a supportive article in the press once the situation is clearer". Another future cabinet minister, Stephen Dorrell, was described as being "very wobbly" and reportedly would "only support the fleet as a negotiating ploy; if they will not negotiate we should withdraw". Even dry-as-dust Thatcherite ministers outside Downing Street, such as Jock Bruce-Gardyne at the Treasury, sent Thatcher personal letters telling her that compromise "should not, one feels, be beyond the wit of man", posing the question that "more spectacular solutions may appeal to the gallery, but would they last?" He went on to warn that failure "would involve irreparable damage to the government out of all proportion to the significance of the islands". But one MP, West Devon's Peter Mills, said: "My constituents want blood."

The papers, which are stored at the Churchill Archive Centre, in Cambridge, include a letter from John Murray, a close family friend of the Thatchers, sent after the UK's Falklands victory. It suggested it was time to re-open talks with Argentina and for the islanders to be moved on "perhaps with our assistance". The effect of all this internal criticism appears to have driven Thatcher ever deeper into the heart of the Whitehall machine and made her rely only on a handful of her most senior ministers and officials, and military and intelligence chiefs.

It was this isolation that perhaps led her to declare that she "never had any doubt about the rightness of the decision" and then to tell journalists to "rejoice, just rejoice" over the recapture by the British forces of South Georgia on 25 April 1982. There was one sequel when Thatcher made some unscripted remarks in a speech to Scots Conservatives on 14 May when she said: "What really thrilled me … is that when it really came to the test was being able to serve a great cause, the cause of liberty." These remarks led the seasoned war correspondent, James Cameron, to reflect in the Guardian: "I wish Mrs Thatcher a long and happy life, but I wish she could know what it is like to be on a landing craft getting her thrills first-hand."