fallen from 11 per cent in 1981 to an average of
4.4 per cent in 1985–7, and wages for those
in work rose much faster than inflation, while
mortgage-holders benefited from low interest
rates. Council-house sales proved very popular
too. But unemployment, at over 3 million, re-
mained stubbornly high, though government
training measures had slightly reduced the total.
Manufacturing industry had shrunk, and what
remained was leaner and more productive; but
the 2 million jobs lost added greatly to the num-
bers of the long-term unemployed.
In foreign affairs Thatcher was equally deter-
mined to make her views clearly known. She
strongly supported NATO and the American
alliance and established an especially close rapport
with President Reagan, though that did not
inhibit her from making strong protests when she
thought he was wrong, as when the US invaded
Grenada in 1983. But she permitted the use of
US bases in Britain for the American attack on
Libya in April 1986, because she regarded it as
justified by Gaddafi’s support for terrorism. She
continued to show that she deserved the sobri-
quet ‘Iron Lady’, maintaining her robust opposi-
tion to all communist tyrannies. Yet she was the
first world leader to recognise that Mikhail
Gorbachev was a new phenomenon in Soviet
leadership, a man with whom ‘one could do busi-
ness’. At the end of March 1987, she visited
Moscow and had long talks with the Soviet
president which helped to pave the way for the
ending of the Cold War.
The future of the Crown colony of Hong
Kong, much of whose territory would return to
China in 1997, was another problem her admin-
istration tackled. To her it was a practical ques-
tion of making the best deal possible. At the time
of the negotiations in December 1984, China was
in a reforming phase, and Britain appeared to
have secured at least some safeguards, preserving
for Hong Kong a high degree of autonomy.
Less happy were Thatcher’s relations with the
rest of the Commonwealth. She opposed any but
innocuous sanctions against the apartheid policies
of South Africa, arguing that they would harm the
black Africans more than the whites. This placed
her in a minority of one. In Western Europe, too,
she frequently found herself isolated. She was no
friend of the Brussels bureaucracy and was
inclined to resist the claims of the Commission to
regulate in detail. As she saw it, she was not about
to free Britons from Whitehall only to subordi-
nate them to Brussels. She was a free-trader at
heart, believing in the unhindered flow of world
trade as the best guarantee of prosperity. Oppos-
ed to the interventionism of Brussels and in
particular to the featherbedding of French and
German farmers, she made unremitting efforts to
reduce the cost of the Common Agricultural
Policy, which kept food prices artificially high for
the people in the Community, partly by accumu-
lating butter mountains and wine lakes. But her
tone was often strident and abrasive. It secured
results over such issues as the reduction of
Britain’s excessive contribution to the common
Community budget but was counter-productive
in other ways. Mrs Thatcher was not regarded by
her fellow EC leaders as a ‘good European’, yet
she believed that the policies she pursued were
right not only for Britain but for the Community
as a whole.
When Margaret Thatcher decided to call her
third general election in 1987, the majority in
work were better off than ever before. The econ-
omy appeared to be progressing steadily and the
opposition was split between the Alliance and the
Labour Party. Since October 1983, the Labour
Party had had a youthful new leader in Neil
Kinnock, the son of a Welsh miner. Kinnock, who
belonged to the moderate left, had succeeded in
uniting the party once again but was handicapped
by an electoral pledge to remove all nuclear
weapons from Britain. On the nuclear defence
issue, the Alliance was also in complete disarray.
All three parties made use during the election
campaign of slick advertising-agency promotion.
Television and media consultants were pressed
into the campaign as never before. For Labour,
the red rose replaced the red flag. For the
Conservatives, Thatcher was bathed in blue with
golden hairdos of singular height. The Alliance
sported a ‘battle bus’ vividly decorated with
balloons. On polling day in June 1987, the
Conservatives achieved almost the same level of
support (42.3 per cent of the vote) as in 1983. For