MT
The 10 per cent, now, is being put across as if it were a maximum. It's an average. I agree that the average increase cannot be above that because the figure is set in relation to the amount of money in the economy and already to increase the money supply by up to 13 per cent is inflationary. So on average, earnings can't go up by more than 10 per cent and I wholly agree with that and agree that the government must keep the money supply accordingly.
But it is an average for the very reason that some people who've had a rotten deal during Phase One and Phase Two and who, nevertheless, have said all right, we'll agree with Phase One and Phase Two, some of their problems must be dealt with now, and it will demand more than 10 per cent. Others, I'm afraid, will have to have less.
That is in the nature of things, according to the job you do, according to whether there's a greater demand for your particular skill, and for some there's a lesser demand. You've got to have enough to get enough skilled people back into industry, so the 10 per cent is an average, and I believe it is a mistake to look at it as a maximum. You'll cause trouble if you do that.
The twelve month rule—I do think it's reasonable to ask, in general terms, for a twelve month rule. There were times when we used to negotiate for longer periods. If you're going through a period where you're going to have increases in pay demanded within twelve months, no-one will know where we are.
Nik Gowing, Granada TV
Do you approve then of the freely negotiated deals of around 20 per cent increases at companies like Heinz and Reynolds—should these deals be allowed to go ahead?
MT
I'm not saying anything about specific deals. What I'm saying is the government must make up its mind whether its promise to go back to normal free collective bargaining stands, or whether it's trying to impose something else which is not there. [end p1]
Nik Gowing, Granada TV
Briefly, to the economy. Next week the TUC meet in Blackpool. Do you believe the TUC should vote to accept the Government's 10 per cent voluntary limit and maintain the 12 month rule between wage increases?
MT
I don't … never dictate to the TUC about what it should do. It will discuss and then it will decide. We have been told that we are going back to a period of normal free collective bargaining. You can't promise that, and you can't promise that people will have a start in having the differentials that have been squeezed, to some extent restored again. You can't promise that and say you're all then going to have the same percentage increase. The two are mutually contradictory. As you know, there are some people in the last two years have had the money they received for their skills get progressively … proportionately smaller compared with the unskilled. They therefore feel that they have a grievance, and I think they have a grievance.
And unless you get enough skilled people in many jobs, in industry, in the professions, you won't in fact be able to keep everything working and steadily expanding, and we're not expanding at all, and that will limit the amount of others you can take on. You must start to restore differentials. Otherwise you're going to have endless legitimate grievances, and that means that everyone cannot have a flat rate. And it also means you've got to make up your mind whether you're going back to normal free collective bargaining against a background of responsibility, or whether you're trying to put an artificial Phase Three on, although you're not going to call it that.
Nik Gowing, Granada TV
But given the options facing the TUC next week, would you like to see them accept the limits or not?
MT
I have just, I think, explained that as far as the limit is concerned. I think it is reasonable …
Nik Gowing, Granada TV
[interrupts] … decision … [inaudible]
MT
That is a matter for them to make. The TUC is a body which will do its own discussion. Don't forget, my belief in unions is that their job is to look after the interests of their members. The interests of their members are not only short term, the immediate term, they are long term as well.
You've got to leave enough in a company for it to be able to invest in the future, for it to be able to have the latest up to date machinery, if you want to keep it in business tomorrow. So they have the two things to consider, some of the grievances that are now there and have to be coped with and the long term prospects. That they must consider.
A union's job is to represent its members. Our job, in Parliament, is to represent the people as a whole. When it comes to a twelve month rule, I think it is reasonable that you should have twelve months at least between wage claims. Sometimes, you know, you used to do a claim for three years. Those days are gone and I think that, um, incomes policies have contributed to ending that state of affairs, so I do think it's reasonable to have a twelve month rule.
There will be problems which we'll find difficult. Now productivity deals which are self-financing are outside, as you know, so we can have those outside a twelve month rule. The sort of problem we're going to find difficult is where they've got a very good [end p2] productivity deal in a factory where you may have quite a large number of unions, and common sense would lead you to combine that productivity deal with the annual uprating. But if they're all up-rated at different times …
[tape cuts then resumes]Nik Gowing, Granada TV
Mrs. Thatcher, in view of what happened at Lewisham and Ladywood, do you feel there is a case for banning National Front marches?
MT
First, I have absolutely no sympathy with the National Front at all. I believe what they propound is racial hatred and I will have nothing to do with it. But then there are many people who, uh, march and demonstrate and protest, and one doesn't ban those because people have a right to march and demonstrate and protest within the law. I think once you ever get a blanket banning of marches, what you'll be doing is saying, anyone who has a march that happens to be wrecked by a number of people out to wreck things, then you'll be along the road to the beginning of the end of freedom. If you stop a march which itself might be orderly and peaceful, merely because some other people want to wreck it, where do you stop that process?
Nik Gowing, Granada TV
In view of the provocation that is obviously stimulated by the National Front marching, do you feel there is a case, a special case, for the National Front marches?
MT
If they are doing anything contrary to the law, then the law will, of course, deal with that. I think what you have to watch very carefully is the routing of a march. But I believe the police have powers to route the march. But once you take powers to stop a right to march, or stop a right to protest, or stop a right of demonstration or of freedom of meetings, where do you stop? Is the stopping point—just because some people who disagree with that, and I happen to disagree with it—just because some people disagree with it express their disagreement violently. If that's the yardstick, then any group of wreckers can go along to any march, any meeting they disagree with, wreck it, and then say you must stop that meeting. That would be the end of freedom of speech in this country.
But may I make it quite clear: I dislike the National Front, I dislike everything they stand for, I have no sympathy with them whatsoever, but I believe we have to beat [end p3] them on argument, on showing up what their cause really is, and that's the way we must overcome them.
Nik Gowing, Granada TV
You did, recently though, call for effective action against what you call the wreckers of society …
MT
Indeed yes.
Nik Gowing, Granada TV
… and you mentioned the fascist and the communist left as having much in common, wanting to wreck society, if you like. Does that mean you would like both banned, because this is the confrontation we are seeing at the moment, isn't it?
MT
No. I had thought that I had just explained that. Freedom of speech isn't freedom to say things that everyone agrees with. It's freedom to say things which some people won't agree with. As you know, I disagree passionately, both with the National Front and I disagree passionately with the Socialist Worker's Revolutionary parties and with Communism. I have never in my life suggested that those be banned, because to do so would be using the very tools that dictators use. They ban all opinions which are in disagreement with their own. That is to use the tools of dictatorship. We believe in the tools of democracy and we must overcome it with argument.
Now once you've got violence, that is not a question of political argument. That is a question of being contrary to the law of the land. And then you deal with it as violence, as contrary to the law of the land, and those people who use violence, either against the police, or against other people, must be dealt with most severely, because it is they who are putting all our freedoms in danger. But they're law breakers, and it's not an offence of law to say what you think unless it happens to be an offence against the race relations law, and then, of course, it must be dealt with as such.
Nik Gowing, Granada TV
That's what you mean by effective action?
MT
Indeed, yes.
Nik Gowing, Granada TV
Do you agree with Peter Walker, a former shadow minister, that the way to solve the problems in immigrant areas is to put a large injection of cash into improving housing and conditions there?
MT
When I was Minister of Education we always tried to put extra money into areas where you had, uh, a large number of immigrants or deprived children of any kind. The one obvious reason why you have to, many of them for example don't speak the language, and you can't start to teach children in a language which they don't fully understand. They've come from a very different culture and background and, therefore, it takes them longer to get into ours. So, always, you have to put in, I would say extra resources to deal with these problems, to help them to assimilate, to be able to have the kind of education which we like to give in our schools. So you have to do that.
I wouldn't necessarily confine it to immigrant areas. You tend to … to have to do it wherever you get people who are less well off and who are disadvantaged, so don't necessarily confine it to immigrant areas.
Nik Gowing, Granada TV
So you see this as a place for immediate action? [end p4]
MT
It's a problem of trying to raise the standards of living, and the standards for living, and it's a thing which naturally you try to do everywhere where you get standards lower than normal.
Nik Gowing, Granada TV
And would you be prepared to put in more money?
MT
More money has been going in for a very long time. Sometimes they will say not enough. I mean there are areas, for example, like—Leicester is one, and Blackburn certainly would say that it had a claim for more resources to go in. One of the problems, as you know, is that you get people going to one particular area and then there are tremendous strains on both the educational hospital resources of that area. But that is the way to deal with it, to try to get more resources there.
Nik Gowing, Granada TV
But you feel it is …
MT
But it's not necessarily immigrant areas. It's where you've got deprived problems of people who are less well off and who need help. They're social cases really, not just confine it to immigrants.
Nik Gowing, Granada TV
So you're not saying the immigrant problem is a specific problem which desperately needs more money?
MT
In certain areas, it is one of the social problems which we must deal with, undoubtedly.
Nik Gowing, Granada TV
Can I turn very … tape cuts then resumes
Nik Gowing, Granada TV
… non cooperation with the Price Commission who are able to put sanctions upon firms who seem to be going over the 10 per cent limit?
MT
I haven't seen that statement by the CBI. Wherever anything has come into law there is no question in my view of anybody in this country disagreeing with it. I will never have any part of anybody saying we will obey the law only selectively. I have never heard the CBI say that they would do anything like that once it's passed into law.
Nik Gowing, Granada TV
It is being suggested that one way of getting round it …
MT
What have they said?
Nik Gowing, Granada TV
It is being suggested that … [end p5]
MT
I know—what have they said?
Nik Gowing, Granada TV
Do you approve then of the freely negotiated deals like at Heinz and Reynolds which are averaging around 20 per cent? Should they be allowed to go ahead?
MT
If you're going back to free collective bargaining, it is bargaining between management and workers, against a background of the extra production and productivity which that factory can do. Some factories do a lot better than others. They do a lot better because the work force is cooperative, because it works jolly hard. Now you must always have people prepared to work hard and put a lot into their job and cooperative, they must expect to get some of the fruits of their labour. That is what normal free collective bargaining means. It must have some relation to the group for which you are working and in a factory to the success that has, otherwise what you are saying is management must deny labour the fruits of its own work and success. What incentive is there in that? That's one of the reasons I believe why this country has had no extra production for three years.
Nik Gowing, Granada TV
So you favour those deals?
MT
Normal …
Nik Gowing, Granada TV
Do you approve of the blacklist which the government have drawn up of certain firms who have gone through wage deals which are higher than the 10 per cent they've recommended?
MT
No I don't approve of government blacklists at all. I approve of anything which a government operates being operated through the law, which is openly discussed and debated in Parliament, and I don't believe you can operate in a democratic country by this blacklisting procedure, nor should you.
Nik Gowing, Granada TV
What would you like to see in place of the Phase Three that the Government have at the moment?
MT
The Government have not got a Phase Three. That is precisely the point. The statement Healey made in the House and which is in a White Paper is a return to normal free collective bargaining. The yardsticks which the Government have, and the controls it has are two. One is to keep the amount of money in the economy within a certain limit and, therefore, they have set what they believe an average increase of wages, 10 per cent, to be within that 13 per cent money supply limit. So, it's an average increase within that limit, and they must hold the money supply.
Secondly, as far as government is concerned, when it is an employer directly or indirectly, it must keep to what are called its cash limits, which you and I—in more homely terms—would call ordinary budgeting. You have a budget you've got to live within and you have to live within that.
Those are two of its main methods. They are and can be very effective methods if it will stick to it. Within that, I think they must leave firms to negotiate their own bargaining according to their own circumstances, their own success, their own prospects, their own workforce and the relationships between the various groups of people within their own company. In the end, you know, if you believe in democracy, you must go back [end p6] to some sense of personal responsibility and decision within the particular company or the negotiating group itself.
Nik Gowing, Granada TV
If you return to free collective bargaining, isn't that going to inflate the economy faster than your shadow chancellor Sir Geoffrey Howe has recently said? He said there is a danger of reflating too fast.
MT
Oh that's quite different. If you hold your 9–13 per cent money supply, then you can't use up more money than there is in the economy. Reflation is partly whether he is going to do certain other things. But he must hold the 9–13 per cent money supply[pause] … 9–13 per cent increase.
Nik Gowing, Granada TV
Do you consider that the Prime Minister is right when he says that we are going to see an increase in the standard of living over the next year?
MT
I rather thought he'd said something different. I rather thought he said we've come to the end in the fall of the standard of living. I frankly thought that that was a rather optimistic statement.
Uh, if he's going to have average increases of 10 per cent, and at the moment, as you know, the annual inflation rate is 17 per cent, even if it were to fall to 10 per cent, someone, I think, has not taken into account that out of your gross wages, and out of your gross increase, you have to pay income tax at 34 pence in the pound and social security benefits of what, five-six per cent. So out of every extra pound you get, you're going to lose about 40 pence, and I cannot see that, therefore, for many people we have seen the end of the fall in the standard of living. And I thought it was a very optimistic statement and might raise people's expectations too much.
Nik Gowing, Granada TV
Has the current improvement in the economic situation rather taken the wind out of the Conservative election sails at the moment? After all, over the past two years, you've said that things have been getting worse and worse, and now the Government are saying things are getting better.
MT
I don't call much improvement the fact that we've had no increase in production for three years. And I don't see any prospect of expansion in sight, because there aren't any incentives. That's not an improvement when you're just shuffling round what we've got between different groups of people.
I don't see much improvement when you've still got an annual inflation rate of 17 per cent. You ask the housewife.
I don't see much improvement when the rate of unemployment is continuing to go up.
I don't see much improvement where the rate of investment in our industries is way way way below what it was in 1974—way way way below. I don't see much improvement when we're not back to as high a rate of production as we were achieving in 1973.
These are the realities. We will not get better off as a nation unless we expand and increase output. That is not happening and our rates of inflation are way above those of our industrial competitors. Oh [pause] … I wish I shared the optimism. The thing is, we're being saved, not by dealing with these fundamental problems, but we're being saved just in the way as some people are saved by winning a football pool, by having a windfall, which means that they often don't have to … tape ends