Thatcher's Disagreement with Howe and Lawson in Madrid Council Encounter

Margaret Thatcher faced a notable political confrontation with her Chancellor of the Exchequer, Nigel Lawson, and Foreign Secretary, Geoffrey Howe, during a meeting at the Madrid European Council. The point of contention was Britain's potential membership in the Exchange Rate Mechanism (ERM), a precursor to the European single currency. Thatcher had long been skeptical of greater European integration and was particularly wary of ceding monetary control to a supranational entity. Lawson and Howe, on the other hand, saw the ERM as essential for economic stability and as a step towards reducing inflation. They believed that aligning with other European currencies would strengthen the UK’s economy and improve relations with European partners. The disagreement highlighted a deep rift within Thatcher’s Cabinet concerning Europe’s direction and Britain’s place within it. The clash at Madrid came after prolonged internal government debate and external pressure from both the financial markets and European leaders advocating for more cohesive economic policies across Europe. Thatcher's firm resistance to ERM membership was grounded in her commitment to economic sovereignty and a suspicion that the mechanism could undermine British interests. The debate had immediate and far-reaching implications. It foreshadowed the eventual resignation of both Howe and Lawson, which weakened Thatcher’s leadership. Howe’s resignation speech, in particular, was a critical moment that paved the way for a leadership challenge and Thatcher's eventual departure from office. The discussions on Britain's European policy during this period were a turning point, influencing the broader debate on the UK’s relationship with Europe, which has continued to be a contentious issue in British politics. #MoofLife #Thatcher #UKPolitics #EuropeanPolicy #ERM #EconomicDebate #CabinetConflict