(Note: Introductory exchange, including a reference by the Prime Minister to how much she was looking forward to the visit next week by President Koivisto of Finland. Then an exchange on the U.S. election results)
(Recording starts here:)
Prime Minister
I have a whole book of American Presidential quotations and it is full of all things which are true for ever, you know, which are eternal truths.
Interviewer
Do you believe it was a victory for Ronald Reagan personally or does it represent a really more profound trend?
Prime Minister
I think Ronald Reaganhe is the symbol of the things in which he believes. The things in which he believes are the things which really represent America.
Sometimes, some of the fundamental truths tend to be [end p1] clouded by what I would call artificial argument and I think that this is really a return to the fundamental truths, which I think affect all countries.
He has rebuilt confidence in America by re-asserting the things for which America stands and how those principles are reflected in industrial policy, in an enterprise culture, in effort and hard work and the fact that the government must keep inflation down, defend its freedom, uphold the rule of law. All these are things which people know deep in their hearts and their truth has been re-asserted and it has been done by Ronald Reagan, so it merges into one. But it is not just that he is a popular guy. He is. He is a popular guy who represents something.
Interviewer
Do you think this trend, which seems to be very powerful now in the United States, is something that will be felt also in Western Europe? In Britain?
Prime Minister
Well, if I might say so, it was felt in Britain, because in a way, I mean, I was returned to power—we are both in our second term, the Ronald ReaganPresident and I—I was returned to power on very much the same things, but if I might put it this way: America is very very fortunate in that she has never had a Socialist Government in the real socialist sense that some people believe here: nationalization as a means of production, distribution and exchange. She has never had that; she is never in danger of having it. All her [end p2] constitution is geared to a free society politically and not only politically but the economics of free enterprise, which of course undermines [sic] the political freedom. She never had, therefore, to deal with some of the things that I have had to deal with, the extent of the public sector, and so on.
She has the sort of society in which people expect to make a tremendous effort themselves and they admire other people who do so. I am afraid for a time in this country there was a feeling fostered by Socialism: “Ah, we have a problem, the Government must solve it!” I still have to grapple with that problem.
But in a way, my return in 1979 and again in 1983 was due to the same things, but is more difficult because we have more problems to cope with in this society than the United States.
Interviewer
Well this, I think, is something that interests me and I am sure very many people in Europe today. What happens in Britain has always had a profound impact on the rest of Europe, beginning with Keynes, Beveridge Report, the first Attlee Government after the Second World War and the National Health Service or Welfare State concept. I think that was copied a great deal in other countries, and now your Government, trying to well, change or reform, or renew the social and economic system in Britain, and I think everybody is watching how that will succeed.
I think there are, however, some misgivings on the [end p3] side of those who, like myself, are basically very much on that same side. Unemployment, of course, is one thing. I read what you have been saying about this. But more deeply, about the Welfare State, the structure of the Welfare State. Has it really been changed during your time in office?
If I may clarify, I think we are all grappling with this problem of the Welfare State. How can we make it work better, more effectively, and yet preserve the basic welfare structure which I think everybody wants to preserve?
Prime Minister
I think you have put your finger on it. You know that the OECD countries, when they met, I think it was in both February and May, produced a paper, and I was very pleased to see it, because it began to talk about the thing that many politicians feel they cannot talk about, and when I talk about it my views are totally distorted in a calculated way by the Opposition. They know that everyone faces the same problems, they know that they have to cut, but nevertheless they use anything one says for party political ends.
But you know, I sometimes wonder whether the Western countries are yet ready to face this, although a number of us are already facing it, and the real issue is this: there will continue to be basic pensions, basic retirement pensions, up to a certain standard of living and then it will be up to us to make our provision on top. There will continue to be a Health Service. The real thing is that those things must not take such a large proportion of national income and personal income that people are prevented from doing things for [end p4] themselves, and if ever they do, then one tends to become not a State run for its individuals, but individuals who have to conform to a State.
This is where the United States constitution is the best constitution of liberty I have ever seen. Marvellous. Yes, we have to have these basic things of welfare, but they must not absorb so much that they in fact take away from fundamental freedoms, and I think that we can somehow get that message over, because no-one is more interested in the fundamental freedoms of Britain than the ordinary person at all levels of income. If you were to ask them to say, would you please say what you think is the character of Britain and its people, they would say—and it would not be in any great prose— “It is a free country, isn't it?” and expect that to be upheld.
They also reckon that we have a firm rule of law, and this is why they are so horrified as indeed I am at some of the things that are going on now. What we are seeing now is not so much an industrial strike, but we are seeing a leadership of a union using an industrial strike for political ends, and those political ends, I believe, are alien to the things the over-whelming majority of us believe in.
Interviewer
But this fundamental issue of how can we reduce the public sector or proportion of … .
Prime Minister
… . constrain it, yes, constrain it to give more freedom … [end p5]
Interviewer
You feel that you have made real progress in this respect so far?
Prime Minister
Yes, I think we have, but it is a yearly fight. The battle is never done. You see, as well as constraining, … . within the overall task of constraining the growth of the public sector, we were committed to spending more on defence, which we had to do, and to spending more on law and order, so that put a tremendous burden on some of the other parts of the economy. I am not for a weak government, I am for a very very strong government. The Government must be strong to do the things which only Government can do, that is strong in defence, strong in law and order, strong in upholding the value of the currency, and strong to leave to ordinary people what ought to be left to them.
Interviewer
I think in all our countries we have the same basic problem. I know this OECD paper and I agree that this was one of the first attempts to really talk seriously about these problems.
Prime Minister
I will tell you something, but it is not to go into your paper. In my opening speech at the London Economic Summit, this is one of the things which I set down as a problem. We did have some discussion about it. You must not [end p6] this in your paper!
Interviewer
No, no, I won't!
Prime Minister
I tried to get something into the communique, because it is a problem that affects us all. They would not take it. There were three countries there that would not take it. They said: “No, it will be distorted to such an extent that we cannot have it!” If I might say so, I was a little bit horrified, because I have not drawn away from discussing anything that I think has to be discussed.
Interviewer
It would immediately be said that you are cutting the welfare.
Prime Minister
Yes.
Interviewer
But what then can be done? I read a leader in “The Times” today criticizing your Government on the grounds that it has not really tackled the structural problems of the Welfare State.
Prime Minister
I wonder what it means? Is it suggesting that we [end p7] abolish the National Health Service, because if I might say this to you: I do get fed up with these generalizations. When people write these leaders, I wish to goodness they would say what they meant, because they are quite capable of writing a leader tomorrow saying that I am cutting certain fundamental things in the National Health Service, and if I might again say so too, they do not have to be consistent one leader with another, because different people write them. I do. So I will just get on to Charles Douglas-HomeCharlie and say, what does he mean?
Interviewer
What about making some of the Health Service users pay?
Prime Minister
We do that, as you know, in prescription charges, and we pay for some of the spectacles and for dental services, and of course, we have not gone as far, ironically enough, as President Mitterrand. I understand he has introduced boarding charges in hospitals.
Interviewer
We have that in Finland.
Prime Minister
I was pledged at the election not to do that, therefore I cannot do it. What I think is important is that people should be free from the worry that if they all suffered some [end p8] terrible accident or terrible disease which meant that they really were invalids for life, it is important for them to know that they would be looked after. I mean, I think this is a very very good thing of the Hospital Service.
Interviewer
We have always had to pay for our board in hospital.
Prime Minister
Have you? That is very interesting. How much do you pay, in our terms, roughly?
Interviewer
Very little. I think people pay only about £1 a day, or just over £1 a day.
Prime Minister
Then you probably have exceptions, do you?
Interviewer
Yes, those who cannot pay anything, but that requires a means test.
Prime Minister
By the time you have administered a means test, with all of the number of people that absorbs, by the time you have collected the money, I wonder if it is worth it? [end p9]
Interviewer
It is!
Prime Minister
It is?
Interviewer
It is.
Prime Minister
That is very interesting!
Interviewer
Definitely, because first of all, I think it means that people feel some responsibility themselves for this.
Prime Minister
That is important.
Interviewer
The principle, but also I think from the point of revenue it does mean something. This payment has been increased a little bit in the past few years. It has caused a lot of political opposition, but nevertheless, it has been done.
Prime Minister
Yes, I do not know whether you find the same, but [end p10] frequently you do things which cause a lot of political opposition. Then the Opposition retains it when it gets into power. It has to, and then it comes up against sharp reality.
I quoted something yesterday. They did not know I was quoting. I quoted and said: “Unemployment is caused by paying ourselves more than the value of what we produce.” “Rubbish!” , said the Opposition, “Rubbish!” I repeated it. “Rubbish!” I said: “Oh really! I was quoting from the last Labour James CallaghanPrime Minister!”
Interviewer
May I take up another issue which is important, I think, for us and for Europe as a whole. I come from a country where consensus is a very strong concept.
Prime Minister
Yes. Please would you define “consensus” because this again, is a word that is used. You see, I always say to people: My goodness me, thank goodness we have not had people who only live by consensus. We should have never have known Christianity or any of the Prophets or anything else, if their message had been “Brothers, I believe in consensus!” . It was not, it was “Brothers, this is what I believe in. I ask you to follow me.” Right, so now what does consensus mean?
Interviewer
I can only define it in the terms that it exists in Finland. It really was reached towards the end of the 1970s [end p11] between, on the one hand, the Social Democrats and on the other hand, the Conservative Parties, the unions, the employers, the various interest groups, including the farming community, that we had to put a stop to the increase of taxation. We had to put a stop to the expansion of the public sector, even at the cost of fairly severe unemployment, severe for us because we have never had very high unemployment. Unemployment went up to over 7%; at that time. We had a coalition government and it did carry through economic policy which did all these things. The public sector stopped growing in 1977. In fact, it went down a little bit, and the total burden of taxation went down a little bit. The public sector went down from about 42%; to about 40%; of GNP. It has now crept up again a little bit.
Prime Minister
What are you now?
Interviewer
About 42%;, 43%;.
Prime Minister
We are 42%;, 43%;, you see. I am trying to get it down about a half-percent a year. It is difficult. It is on the high side. You see, the golden years of Harold Macmillan were 33%;. [end p12]
Interviewer
Yes. It has gone up also in Finland, in the 1960s it went up sharply, from about the level of 30%; to 40%; and after that it has been extremely difficult to keep it down or to reduce it. Even to keep it down has been difficult.
Nevertheless, this is roughly what the consensus in Finland has been about and a great deal flows from these basic decisions: not to allow taxes to go up, not to allow the public sector to go up. And on the whole, both the unions, the employers and the political parties have cooperated within this framework and I think we have done very well on that basis. We have had now a lower unemployment. We have created quite a lot of new jobs. Our public debt is low.
Prime Minister
How do you reckon the creation of new jobs came about? Because I reckon the only way is by constantly searching out the products that people will buy.
Interviewer
Yes, it has come about on the private sector. It has not been … there has been very little done by the Government … by Government action. There have been some jobs created by Government action, but very little. On the whole, it has been through small enterprises, especially in the service sector.
So what I wanted to say was that consensus can work. It causes a great deal of dissatisfaction now, but especially [end p13] on the left, because the left feels that consensus, as it is practised in Finland, is a Conservative concept.
Prime Minister
As you have described it to me, it is explaining what is common sense and why common sense … what common sense means in terms of practical policy in a society that still wishes to keep its freedom and getting agreement to what you believe. Now, I do not call that consensus. I call it leadership, but we are still talking about the same thing.
What you must not do, I think, and I think we both agree, is give people the impression that all they have to do is ask, have protest groups, have rallies, have demonstrations in terms of violence, and the Government will give in. It will not!
So I do not think we are talking about a different thing. You are talking about explaining your policy, of what you are going to do and why.
Interviewer
Well, I think the country which has the highest degree of consensus is also the country which has the best economic performance, and that is Japan, and I do not think we in Europe can ever reach that sort of … .
Prime Minister
It has certain characteristics … . the people in Japan … that they will … they do have a conformity as well as an agreement. [end p14] They have a tendency to conform. As you know, a tendency to conform—please do not put this down, because I am very pro-Japanese—can be dangerous if it turns to conforming to something that is not in accord.
Interviewer
Yes, I know what you mean.
Prime Minister
Japan, we try to keep close to because all the best is now coming out in Japan and my goodness, it is a good best.
Interviewer
It is terribly impressive. I was there just two weeks ago and it is fantastic—but it is a little bit frightening too, I suspect. I could be frightening.
Anyway, would you agree that you reject consensus because you want to … .
Prime Minister
On you definition, it seems to me that you are practising what I call “leadership” and getting people to understand what you are doing and why and getting their support. That, I think, is reasonable.
You find that it silences, do you, those who are what I would call a socialist society? You see, there are two things: there is social democracy, which is different from a socialist society. [end p15]
Interviewer
Well, I think in our case, consensus came after a period of fairly radical socialist social democratic tendencies, which created the fear on the part of many people that the very structure of our society was being threatened, and it did mean a very fundamental change in the attitude of the social democratic party. It really rejected its left wing by accepting what we call consensus.
Prime Minister
That is right. You see, it is what our Labour Party is not prepared to do, because by insufficient leadership within that party over the years, they have allowed the left to … well, they call it entryism … to take a far stronger position than they ever should have done. I always say that if the SDP had not left the Labour Party, the Labour Party would be in a stronger position, because I believe when you see that happening, something which is basically alien to your people, you should fight it. Stay within and fight it, not say: I am going to have nothing to do with this; I am going to get out.
Interviewer
Well, I was going to suggest that consensus is rejected by you because you want to change British society and the economy. [end p16]
Prime Minister
Bearing in mind when we started off this conversation that I believe that I am returning to the fundamental strengths of British society and putting those into practice and trying to proclaim those and get people to understand what I am doing and why.
Interviewer
May I switch the subject?
Prime Minister
Of course. It is almost a conversation. It is most enjoyable. I do not know how you are ever going to turn this into an article.
Interviewer
About East-West relations, I thought it was a very interesting piece of news this morning that Mr. Gorbachev is coming here in December. How do you interpret this? Do you believe the Russians are beginning to come back into the negotiating process?
Prime Minister
Oh yes, I think they were undoubtedly waiting for the results of the American election, but you know, that Mr. Gromyko saw the Ronald ReaganPresident during the course of the election, and also Mr. Mondale, was a very very significant act and it signalled to me that they are getting ready when the election is over to come back to the negotiating table for good reasons which I can very [end p17] well understand. If we go on to the next phase of weapons, the cost will be enormous. Both sides would have to [do it?] and at the end, the balance would still be the same, but it would have taken a larger proportion of national income from each country. And if we can avoid that and if we have the confidence and trust in one another to make an arrangement that can be verified—and I cannot stress that too much; you do not get confidence or trust unless you get clear verification—then we can also go ahead and get down the extensive nuclear armoury as well.
It stands to common sense, they must be facing some of the same problems of expenditure that we are, perhaps even more so, because there must be some feeling amongst many people in the Soviet Union that they would like there to be more consumer goods, and that one day people will not stand it if there are not, because they cannot stop news filtering in from the outside and as television gets more and more advanced there will come a time when they cannot stop that getting in either, anymore than they can stop radio getting in now. So they must also want that.
I think there is another factor which I found when I spoke to Mr. Chernenko, the present generation—his generation and also my generation which are slightly different—we still remember World War II. We remember it. We remember how terrible a conventional war was, so will you. How terrible conventional war is. I do stress this, because the way some people talk you would think conventional war was quite cosy.
Interviewer
I agree with you entirely. [end p18]
Prime Minister
How terrible conventional war is and it would be even more terrible if that ever got going again. And, therefore, they think, as I think, that those of us who remember it really have a rather special duty to try to make agreements that will last, so that that will never happen again, and therefore the best chance we have of doing that is while you have President Reagan in the White House and Mr. Chernenko and that generation of which Mr. Gromyko is one and Mr. Ustinov, while they are still there, because there is nothing which can imitate experience. It curbs any ideas which others may have about war and it makes you—should make you—feel you have a special duty to the next generation.
Interviewer
May I ask you what is your view of the Soviet Union? Do you look upon it as a power which is expansionist, ideologically motivated or is it a more conservative power which tries to hold on to what it has?
Prime Minister
It is expansionist, ideologically motivated. It is written in every book. It carries out its aims either by force—Afghanistan—by subversion, in any and every country where it can and does; by proxy and if need be, when some of those things will not work and it has got a Communist Government where you have riots against them, by military government. Very interesting. That was the most recent development.
But subversion is the way it is doing it mostly now and [end p19] it is very dangerous, and we have got to be as fanatical in pursuit of liberty, and we have got to use the language of liberty and we have got constantly to proclaim the benefits and advantage of liberty, and to show that the creed the Soviet Union preaches may preach the freedom of the masses but in fact it takes away the freedom of the masses in practice. We have to show it up for what it is.
Years ago, you had both the philosophy of a free society and you saw some of the economic problems with the recession and people then looked to see if there was another way in Communism. You know, it was a rather beguiling creed to some people. That was before people knew full well what Stalin had done. But no excuse now. They have seen what a free society can do and the dignity it brings to each and every person and in the prosperity it creates. They now can compare that the world over, the aid it gives, with the practice of Communism, what it does to individual people and the much lower standard of living that it creates. So there is no excuse now.
Interviewer
But is that contest not already over? Has not Communism in fact lost that contest, at least in Europe?
Prime Minister
But it is still pursuing it. Do not forget you have got Communist Parties in Europe. What we have is something I think even more difficult. Anyone who put up as a Communist here would be totally rejected and so what you have got here is much more difficult and coming disguised in different clothes and [end p20] working through into the top unions, top positions in the unions, and working into the Labour Party.
So it is much more difficult to see, but every bit as dangerous.
Interviewer
In all those European countries where there has been or is a large Communist Party, that party has in fact lost its significance. I am talking about Finland. We had a big Communist party for historic reasons. In France, the party is divided and is losing ground; in Spain, it is split into two, and so on; and above all, young people are no longer attracted to Communism, I do not think in any country in Europe, so in that sense, I feel, as I said, that the contest has already been won against Communism, and Communism as an ideology I do not feel is any more a real danger.
Prime Minister
No, it is not, but we have a real problem. It is the problem of terrorism, as you find people trying to impose their will, their creed, which has no attraction in the ballot box. Trying to impose it by the bullet and the bomb.
Some of those who practise terrorism are highly educated. What they wish is control for themselves and it is a problem which we are all having to tackle. Control to impose their will on others. [end p21]
Interviewer
If I may say so, that is a little bit of a different kind of challenge.
Prime Minister
Oh, it is a challenge. It is a challenge.
Interviewer
I do not dismiss it. I just feel that compared to how Communism seemed some ten, fifteen, twenty years ago in Europe, this is rather different.
Prime Minister
Yes, you are quite right.
Interviewer
It is no longer a dynamic force.
Prime Minister
In the immediate post-war period—and I am thinking very much of … you know I read and re-read Koestler 's Darkness At Noon. My goodness me, anyone who ever thinks of playing with Communism should read it, and then the Solzhenitsyn works. Fantastic, telling the same story. It was all in Doistevsky [sic: Dostoevsky?] years ago. It has not changed, and you and I think, how ever can it have any attraction for people? And the only now it has attraction for are those who are keen to gain power for themselves and are prepared to manipulate others in the most [end p22] merciless and cruel way to do so. It is very interesting isn't it? Now you wanted to ask me just a couple of more questions. One and a half …
Interviewer
Well, to come back to, I think, East-West relations …
Prime Minister
We shall try. We shall be very prominent in trying.
Interviewer
Do you see a special British role in this context?
Prime Minister
Yes, I think we have tried to take one. We are part of the Western Alliance. We recognize we are part of the free world. That the free world, the Western Alliance, the Warsaw Bloc [sic] we have this in common: we believe passionately in our own philosophy. The Soviet Union practises a totally different philosophy; it is going to be there, and they believe in it.
We have to negotiate with one another because it is in the interests of both our peoples and the people is the important thing, that we never let conflict occur. That is the overriding interest we have in common and, if we can ensure that, then we can gradually increase our standard of living and freedom to travel and everything we wish to do. So we have to negotiate on the basis of mutual respect; that we have our way of life and they have theirs, but we have this thing in common, that we do [end p23] not have conflict.
And then, we do not fear visitors to our society; I hope they will not fear visitors to theirs or visitors from theirs. Then perhaps we can go on to other things, influencing one another.
Interviewer
The issue of the British nuclear force was brought up by the Russians in the INF talks, as you know. Do you think that it is possible in any future arms control negotiations …
Prime Minister
What I have said is that ours is only something like 2½%; of the total ballistic missiles of the Soviet Union. It is minute. It is a false point. If ever the ballistic missiles of the Soviet Union and the United States came down and down and down so that ours became a significant proportion, then of course we should have to enter into negotiations. That time is a very long time ahead.
Thank you very much.