What if Thatcher had lost the Falklands war?

One of the most tantalising "what ifs" of recent British history
January 20, 1996

It is one of the most tantalising "what ifs" of recent British history. Thatcherism could so easily have come to a grinding halt in May 1982, rather than eight and a half years later, in November 1990.

The whole Falklands venture was fought on a knife edge. "One major mishap, a mine, an explosion, a fire, whatever, in either of our two aircraft carriers, would almost certainly have proved fatal to the whole operation." (Not Tam Dalyell or some other opponent of war, but Admiral Sandy Woodward, the task force commander.) The American chiefs of staff did not believe the British could recapture the islands, doubts shared by many in the ministry of defence. If the Argentinian commanders had gone after Hermes or Invincible, the operation would have had to be abandoned. If their bombs had been properly fused for low level air raids, the losses could have been catastrophic.

Withdrawal of a beaten task force with hundreds, if not thousands, of casualties, would have been as humiliating as Gallipoli, and could not have been presented as a "victory in defeat" like Dunkirk. Any rallying round Thatcher would have been temporary, like the hollow Tory support for Eden after Suez.

A bruised Thatcher would then have been vulnerable. Her main hope for survival may have lain in the absence of credible successors: Francis Pym, the foreign secretary, would have looked too old-guard; and Sir Geoffrey Howe, the then chancellor, had not yet suffered his conflicts of loyalty. Thatcher would also have benefited from the weakened state of Labour under Michael Foot. But a disaster in the Falklands would have provoked a palace coup to make Denis Healey leader, despite bloody battles with the still strong forces of the Bennite left. By the spring of 1982 the SDP had lost the momentum of its launch the year before, even though Roy Jenkins had just won the Hillhead by-election. But it might have taken advantage of the Tories' disarray and Labour's splits. Either way the government would have been forced on to the defensive-and would have almost certainly lost a general election in 1984.

At the time of the Falklands war the Thatcher government had achieved little. Manufacturing industry was steadying itself after the horrors of 1980-81, unemployment was rising sharply and money was still being poured into the nationalised industries. Privatisation had yet to take off; legislation on British Telecom was still in the planning stages. The government was ahead on points in early battles with the trade unions, but not yet ready to confront Arthur Scargill.

A weakened Conservative government, let alone Labour re-elected in its unreconstructed state, would have compromised and hedged on all the reforms that came to be known as Thatcherism. Public spending would have risen and the tentative advances on deregulation and liberalisation would have been halted. The undermining of the public sector and the trade unions would have been slower, or would not have happened.

Above all, British foreign policy would have been very different. Before the Falklands war, Thatcher was still a curiosity on the international arena, popular in the Reagan White House, but not yet respected. (Indeed, many US Republicans were contemptuous of how little she had achieved.) In Europe, Thatcher was still seen as an irritant rather than a force. Defeat in the Falklands would not only have weakened her personal influence, but would have undermined Britain's global pretensions. After Suez, Macmillan moved closer to America before the later Whitehall push towards Europe. Thatcher would have tried the same. But many in the Reagan administration, if not the president himself, would have seen the UK as a less useful ally. Talk of the "special relationship" would have sounded even more like empty rhetoric. The UK would have been forced to accept more of a European role. A well-aimed Argentine Exocet missile might have achieved what Jacques Delors later failed to do: turn the British into "good Europeans."