Margaret Thatcher tore into John Major over his handling of the economy at a meeting held little more than a month after he succeeded her as prime minister in 1990.
Although he was regarded as her anointed successor, the Iron Lady still took him to task on interest rates and the poll tax.
Records of the fraught meeting, which are among the latest papers to have been released by the National Archives in Kew, west London, reveal that she told him he risked making a mistake of Churchillian proportions over the pound’s value that could plunge Britain into recession.
Margaret Thatcher tore into John Major over his handling of the economy at a meeting held just after he succeeded her as prime minister in 1990 (pictured, the pair in 1991)
Mr Major, now Sir John, would have his revenge, cutting Mrs Thatcher out of key general election events in 1992, despite her indications that she would be ‘hurt’ if this happened.
In a scathing memo, his aides even proposed blocking her from attending an election rally because the party wanted to be ‘forward-looking’.
Relations between the two soured quickly after Mr Major became prime minister. She felt he was tearing up her legacy, he resented her interference.
Mrs Thatcher was furious that he had pledged to abolish her flagship reform of domestic rates, the poll tax, one of the factors which led to her resignation on November 28, 1990.
In an effort to improve the situation between them, Mr Major wrote to her a month later asking for a meeting.
He wrote, nervously: ‘I am a little concerned at some of the Press comment on a “new style” as this suggests new policies and I don’t wish to change the drift of policy.’
Mrs Thatcher lambasted Mr Major on his approach to the economy, files have recently revealed
The meeting, which took place in January 1991 in Mr Major’s room at the Commons, was tense. A ‘note for the record’ reveals that the pair clashed.
Mrs Thatcher lambasted Mr Major on his approach to the economy, telling an apparently silent prime minister that setting ‘excessively high’ interest rates to sustain a high pound value risked creating a recession.
She warned him against repeating a ‘historic error’ committed by Winston Churchill who as chancellor in 1925 had fixed the pound at too high a level against the gold standard, crippling the economy and causing deflation and strikes.
Relations between Mrs Thatcher and her successor (left) soured quickly after Mr Major became prime minister
A month before her resignation Mrs Thatcher oversaw Britain’s entry into the European Exchange Rate Mechanism (ERM), which saw the pound’s value pegged against the strong Deutschmark.
Mr Major found his voice and replied that the current situation was ‘not remotely comparable’. Mrs Thatcher’s warning would prove to be prophetic as the UK tumbled out of the ERM less than two years later.
The memo notes that the discussion turned to the poll tax, which Mr Major warned her was not ‘politically sustainable’ before Mrs Thatcher launched into a defence of the tax.
The meeting ended on a cordial note but Mr Major still abolished her initiative, pronouncing it ‘unfair, uncollectable and indefensible’.