Statement by the Rt. Hon. Nigel Lawson, Chancellor of the Exchequer, at a Press Conference at Conservative Central Office, 32 Smith Square, Westminster on Monday 25 May 1987.
Our Economic Success Story
The British economy today is stronger and sounder than at any time since the War.
In the context of a General Election campaign that may appear a controversial assertion. But throughout the world, where there are no electoral axes to grind, it is now recognised as a simple statement of fact.
Take inflation. Until we took office every single Government since the war had presided over a higher level of inflation than its predecessors, which ruined small businesses and robbed the pensioners of their life savings. As the chart shows, we have decisively reversed that disastrous trend, and inflation today is at the lowest levels for almost twenty years.
When we first took office, most people had come to believe that high and rising inflation was inevitable. Even the minority who believed we could conquer it thought that this could be achieved only at the cost of permanent recession. [end p1]
In fact, as the chart shows, we are now embarking on our seventh successive year of steady economic growth, with living standards far higher than ever before. Indeed, by the end of this year we shall have registered the longest period of economic growth at a rate approaching 3 per cent a year that we have known since the War.
There are some who try to pretend that this economic revival isn't happening. They merely show themselves to be wholly out of touch with the real world. Look, for example, at what businessmen themselves say in successive CBI surveys. Others admit that we are indeed experiencing healthy growth, but claim that it will soon come to an end. I remember them saying that four years ago, during the 1983 Election campaign; and look what has happened since. There is no more reason to expect the economy to turn down now than there was then.
This performance has transformed our position in the international league. In the 1960s, and again in the 1970s, Britain had the slowest rate of growth of all the major European economies. In the 1980s we have had the fastest rate of growth of all the major European economies. This league table, incidentally, only goes up to 1986. This year, 1987, it is widely accepted that our rate of growth will be the fastest not merely in Europe, but of all the major nations of the world.
If we are to compete successfully in the modern world, high productivity is essential. In the 1960s, and again in the 1970s, Britain's rate of growth of productivity in manufacturing industry was the slowest of all the major nations of the world. In the 1980s, as the chart shows, we have jumped from the bottom of the league to the top. And, incidentally, as a result, our volume share of world trade in manufactures, which had been falling for decades, is now rising. [end p2]
Until recently, the one disappointing aspect of this British economic renaissance was the persistence of high and rising unemployment. Even here, our relative performance has been striking: as the chart shows, during the whole of the period since the last General Election we have generated far more extra jobs than any of our European competitors. And now this is being reflected in a steady fall in the number of people out of work, a fall which is set to continue.
What I have been describing here is no flash-in-the-pan, no mere ‘go’ in the tired old cycle of ‘stop-go’.
Nothing could better demonstrate the underlying strength of the British economy and the soundness of the policies we have been pursuing, than the fact that we have, over the last Parliament, achieved this success despite having to endure first a year-long coal strike and then the collapse of the North Sea Oil price, on which so many had assumed our economic success depended.
What we are witnessing, as The Economist acknowledged last week, is the end of decades of relative decline.
By contrast, the high spending, high borrowing policies of the Labour Party would be nothing short of an economic disaster—with inflation going through the roof again and the pound going down the plughole.
Britain's unparalleled economic success today is the result of eight years of sound policies and good management.
The question before the British people is this: are you prepared to throw all that away on a single day? [end p3]
(2) Conservative Party Archive: transcriptPrime Minister
Now can we have questions on the economy? Yes—Mr. Rutherford.
Q
… without imposing intolerable strains on inflation—payment, exchange rate and so on. After all, given the amount of ground to make up, it is still a relatively low growth rate.
Mr. Lawson
It is the highest rate of growth, as I mentioned, in the world today—all the major nations in the world. It is going to be 3 per cent. this year or may be a little bit over 3 per cent. Some of the outside forecasters are forecasting over 3 per cent., but it is 3 and a little bit more. That, I believe, is faster than any other country, faster than the United States, faster than Japan, faster than Germany, faster than France. That is something which we can maintain. I think that if we try to go substantially over that, then you will run into balance of payments difficulties and you would go back to the old stop-go. That is why the keynote of the policy that I have been pursuing—and Geoffrey Howe before me—is steadiness. This is very important because the Labour proposals to go to massive extra spending to boost growth would, in fact, lead to disaster, because we are already growing at the maximum long-term sustainable rate of the British economy.
Prime Minister
Thank you, yes.
Q
What are the implications of your policy … for inflation. Do you think you can get it below 3 million in the next term?
Mr. Lawson
I think you will find it below 3 million very soon indeed, and still going down. [end p4]
Q
Would you accept the extrapolation from Lord Young 's remarks on television yesterday that your target is to get unemployment down by 900,000 in three years?
Mr. Lawson
We do not have unemployment targets and David Young did not give an unemployment target. Our objective is by the policies we have been pursuing of a combination of policies that will enable business industry to prosper and, therefore, to have a good rate of economic growth steadily coupled with the special employment and training measures carefully targetted for the young and long-term unemployed, which David Young has been responsible for. That way we will get unemployment coming down and coming down as fast as it can. But we have never given a target and those who do give targets are just being dishonest.
Prime Minister
We have the Secretary of State for Employment here——
Lord Young
Can I just point out that what I was doing was gently pointing out that unemployment today is falling at the rate that the Alliance hopes it won't—if their plans ever could work—and, secondly, that the largest fall ever recorded for unemployment was 44,000 three months ago. The Labour Party claims that it would have to fall that rate every single month for the first two years—from the first day they took office. I was just pointing out how implausible that was.
Q
Lord Young actually said yesterday, “I believe it (unemployment) will continue to come down at 25,000 a month and you can work out where that will take us” . Mr. Lawson, today, says—he talks about the fall in unemployment and then says, “a fall which is set to continue” . What are we supposed to infer from these remarks please?
Mr. Lawson
That unemployment under these policies is likely to continue to fall. That is very good news.
Q
… not at this rate? [end p5]
Mr. Lawson
I cannot predict the precise rate at which unemployment is going to fall, because unemployment is not something which is in the Government's gift. If unemployment were in the gift of Government, it would never have gone up under the Labour Government as it did, because they did not want unemployment to go up. Nor do we want unemployment to go up. So it is fatuous to suppose that unemployment is in the gift of Government. There are a whole lot of other factors—the behaviour of management, the behaviour of unions, the world conditions. All you can do is to pursue policies which, in the circumstances, will be likely to lead to a fall in unemployment, and that is what we are doing.
Q
But you cannot, therefore, say, “a fall which is set to continue” . If it is not in your gift, you cannot say that.
Mr. Lawson
… I have done.
Lord Young (?)
Can I just comment on this? If you look at the full quotation and the tape of the programme, the commentator said to me, “Assuming world conditions remain as they are, assuming everything else remains as it is today, what then will happen to unemployment? Then I said, “In those circumstances, one can see it continuing at the present rate “in the future” . But that is not the premise—the world does not always remain in the same place.
Prime Minister
I have the quote. You said in the middle of it, “I am not going to get into the position of making false promises” .
Lord Young
That is right. Nor will we.
Q
I seem to remember, Mr. Lawson, that you said that unemployment was going to come down in 1983. Is there any reason why we should believe you this time when it did not happen last time?
Mr. Lawson
In 1983, I did not say that it was going to come down. I said that there was a good chance that it would [end p6] start coming down within, whatever it was, 18 months or something. What happened, as you know, was that the rate of increase was diminishing. Then later on it rose again as a result of the stickiness of pay. That has been a problem which many people are well aware of. The great thing now is that it is coming down.
Q
If I have understood correctly, the Chancellor said that you expect economic growth, all else being equal, to continue to grow to about 3 per cent. a year. The employment Secretary said that, all else being equal, the unemployment rates will continue to come down at a rate of about 1 per cent. of the working population a year. That implies that productivity will only grow at about 2 per cent. a year. Does that really satisfy you?
Mr. Lawson
This would be steadily year by year. This would be a satisfactory evolution of the British economy. It would be, as I said, far better than we have ever achieved before. It would be considerably better than any other major nation is achieving at the present time. I have to say, too, that that will only be achieved if there is a return of this Government pursuing these policies. If there were to be a Labour Government elected, it would be collapse and back to the asylum of the IMF within 18 months to two years.
Q
… but 2 per cent. productivity——
Mr. Tebbit(?)
There is a point here which is being missed. Productivity growth where? In manufacturing, in the public sector, public service—things of that kind. I think, therefore, that the rate simple arithmetic which you did was not one which at all relates to the tables which we have shown concerning where is the key factor for productivity growth, which is in the industries which are in international competition.
Mr. Lawson
The rate which you saw earlier is a rate of economic growth, which—now that the main phase of getting rid of the overmanning in industry that was the problem we had in the beginning; we inherited massive [end p7] overmanning in industry, both private and public sector alike, that had to be corrected. But now the bulk of that is over, this rate of growth coupled with the measures that we have on the employment and training front should produce a continuing decline in unemployment, other things being equal.
Q
How do you expect to keep downward pressure on wages if unemployment falls? And will income tax cuts be enough?
Mr. Lawson
Income tax cuts are beneficial in a number of ways and that is why we are committed to them. They are helpful on the pay front; they are also necessary to increase the incentive for people to give of their best. That is why a rise in income tax would be so damaging. But this is a responsibility of management to ensure that its costs—not just its pay costs, but all its costs including its pay costs—are kept under control, so that it can compete effectively against managements overseas in France, Germany, the United States and so on. That is a responsibility of management to keep control of its costs and it is doing that now very much better. Our unit labour costs now are going up at something like 1.2 per cent. a year, which is lower than most of our competitors.
Mr. Oakley
The Manifesto talks of bringing down the standard rate of tax to 25p as soon as it is prudent to do so. At what level of Government spending and borrowing will it be prudent to do so? And what are the Chancellor's targets for higher rate tax and how swiftly would he expect to bring that down?
Mr. Lawson
The spending and borrowing will be the spending and borrowing which have been set out in the Public Expenditure White Paper and in the Budget … book, which is low borrowing, more PSBR around £4 billions a year. This is something which, as you know, the other Parties would increase very substantially which would mean a rise in interest rates, a rise in mortgage rates and all that the damage we saw when they were in office before.
As for the higher rates of tax, as I said earlier we will have to look and see what is the effect on the jobs market for people of very great talent when the Americans [end p8] bring down their top rate—which they are going to do to 28 per cent. We will obviously have to have regard to the brain drain and keeping talented people here. But there is no commitment on that front. I wish to see what the situation is there. But it is significant that in almost every country in the world now the top rates of tax are coming down.
Q
The Chancellor made it clear that you have a target as far as income tax cuts are concerned. Why then can you not have a target for unemployment. Is it really so wonderful and are you really managing the economy so well with so many people out of work?
Mr. Lawson
The number of people out of work is coming down. Indeed, the rate of unemployment in this country is around the European Community average now, whereas in most European Community countries it is still going up, but ours is coming down. The recent figures from the European Commission showed that very clearly. Although I do not for a moment pretend that the present position on employment is satisfactory, there is no doubt that it is improving. You only have to look, for example, at the pages of job vacancies in any of the newspapers up and down the country to see the transformation there has been in the labour market, the jobs market and job opportunities in this country.
As for why is it easier to have targets for tax reductions than for unemployment—well, because, tax reductions obviously are within the Government's power directly.
Q
Chancellor, what would you see as the remaining obstacle to higher economic growth in this country?
Mr. Lawson
I think that the main obstacle at the present time is still the fact that we have not made as much progress towards the enterprise culture as we need to see. We need to make more progress there and, in particular, in improving the workings of the labour market. That is one of the reasons why I put forward the proposal for profit-related pay, which [end p9] over the long term will improve very considerably the workings of the labour market.
Lord Young (?)
Can I just talk about the workings of the labour market. The proposals in the Labour Party Manifesto at the last Labour Party Conference to reintroduce minimum wage was calculated by my Department to demolish 600,000 jobs in two years. That and trade union reform would certainly bring such rigidities in the labour market that I can make no promises whatsoever about unemployment.
Q
What progress do you expect to make in a third term towards differential wage settlements in the public sector between different regions of the country?
Mr. Lawson
The only aspect of the public sector that is directly under our control is the Civil Service, and that is something which obviously there will be discussions with in the coming months and years with the Government and the Civil Service unions. We have already just recently negotiated with one union a scheme which will give a greater degree of flexibility.
Q
Can you tell me why put the burden (?) of taxation on people below average earnings please?
Mr. Lawson
No, we have not. Anybody who was earning below average earnings—say, half average earnings—in 1979 and if they were earning the same amount in real terms today, they will be paying considerably less in income tax and National Insurance contributions.
Q
I am sorry; that is not the question. The question is taken from Hansard on 1 May 1987—a reply from your Department—in which it was stated that for people on below average earnings the burden of taxation in terms of income tax and national insurance contributions had risen in spite of the fact that when you went into both Elections previously, you said that you would cut the burden of taxation, and are announcing it again. [end p10]
Mr. Lawson
May I answer that quite straightforwardly? It is a point that I have made many times in the past. During our first Parliament, we inherited a grossly excessive borrowing requirement—public sector borrowing requirement; budget deficit—which was, of course, associated with the very high rate of inflation at that time. We had to reduce it and there had to be some increases in taxation in the early period on VAT and other aspects of tax as well as curbing public expenditure in order to get borrowing down. But that period was long over when we fought and won the last General Election in 1983. Since then, the burden of taxation has steadily fallen. It is true. Adjusting for all that, the only reason why somebody on half average earnings is paying a bigger proportion in tax is because their real earnings have gone up so much. The fact is that living standards—take-home pay—under this Government, even for the person on half average earnings have gone up in real terms very substantially—18 per cent (??)——
Q
73 per cent. (?)
Mr. Lawson
And what was it under the Labour Government? Do you have the figures there since you defend it?
Q
We are talking about the burden of taxation.
Mr. Lawson
It went up by about a couple of per cent. Living standards have gone up 18 per cent., as you yourself said, for the person on half average earnings.
Prime Minister
Look, you brought up national insurance contributions. I thought that this was going to come up sooner or later. I have got Nick Lyell here, the Parliamentary Secretary on the social security side. He holds today the job which I held 26 years ago in 1961. Good luck for the future Nick! Would you like to answer because national insurance contributions are not a tax.
Mr. Lyell
There are two points to make. The is that we reduce the rate of national insurance contributions for those on lower earnings. The [end p11] point to make is about the contributory principle. People do not realise how closely related are the amounts that we get in from national insurance contributions, and the amounts that we pay out on contributory benefits. They are actually really very closely related indeed. That is an extremely important principle that people should remember, particularly when other parties say that they will amalgamate the whole system. How they would reframe their tax system is a question you might well put to them.
Mr. Lawson
The Labour proposals, as you know, are to increase the burden of taxation on everyone, and also as far as national insurance contributions are concerned, to abolish the upper earnings limit. I wrote a letter to Mr. Hattersley about that seeking further clarification, but he was very evasive in his reply. But it is quite clear from earlier statements that they want to abolish the upper earnings limit, which will mean that everybody over £300 a week will be paying substantially more in national insurance contributions.
Mr. Bryanson
Are you saying that national insurance contributions are not part of the burden of taxation?
Prime Minister
They are not a tax. Go right back to the origin of this—right back to Beveridge. Thank goodness I was in your job in 1961. The whole essence of the social security system is this. By paying a weekly premium, you insure against loss of earnings through old age after retirement, through sickness, through unemployment benefit and later various things have been added, like maternity benefit. The whole essence is by paying that weekly premium—for some it is a monthly premium—you insure against loss of earnings for that reason.
Then you come to make your claim upon the national insurance system whether by way of pensions or widows' pensions—that is another loss of earnings thing—or by way of sickness benefit. They will look at your contribution record and a proportion of whatever is the current amount, the total amount, the proportion which you get will vary accordingly to your past contribution record. The test will [end p12] be on a different basis from pensions, because that is a test over a longer period than what it will be on unemployment benefit, which is over a much shorter period and what it will be on sickness benefit. But it really was an absolute scheme of genius really, but that is what it is—a national insurance weekly or monthly contribution. In those days, it was a stamp. Nowadays, it is a percentage from employee and employer. It is a premium to insure against absence of earnings. Nick, I am sure you can put it much better.
Mr. Lyell
No, I could not.
Mr. Tebbit
One thing is for sure; Mr. Gould found some difficulty in understanding it the other day.
Prime Minister
Now it is a percentage; it used to be a flat rate. But that is the essence of the system. That is why it is the national insurance fund. That is why you do not automatically get it. That is why your unemployment benefit runs out, then you have to go on to a plain straight ordinary taxpayers' system, which is supplementary benefit which is met wholly by the taxpayer. So you do not count national insurance as a tax. It is a contribution.
Q
… the effect——
Prime Minister
Having been through the figures every Tuesday and Thursday in preparation for Questions I was or was not asked, I know exactly what he is saying. He is saying, “Yes, you have got income tax down” . Well, if he is not, he ought to be. And you have also got up the personal tax allowances—tax-free allowances. Those are up for everyone. The basic rate of tax is down from 33p to 27p in the pound. The actual tax-free personal allowances are up considerably than what they were. But he is saying that a part of that has been negatived by increasing national insurance contributions. One of the reasons for that increase in national insurance contributions, he will say, is unemployment. That is one. But the big one is pensions, because what goes out this year from the national insurance fund has to come in this year. There are over [end p13] 1 million more pensioners now than there were in 1979. Obviously the national insurance contributions in have had also to go up to meet some of the increased numbers of pensions, which have been paid out. You will see that there is a report laid before Parliament every year on the social security—on the national insurance fund—and it is, of course, extremely interesting. We tried to counter the increasing national insurance contribution by then having a new differential by taking down the percentage amount for those who are lower paid from something like 9½ to, is it a 5 per cent.?
Mr. Lyell
5 per cent.
Prime Minister
5 per cent. these days, and we deliberately did that to relieve the burden on the lower paid because they are lower paid, therefore, they should have to contribute a lesser amount, but still you would look back at the record and see the numbers in contributions which they should have made. Did they make them or did they not?
Q
May I make one quick point to relate all this to the sheer strength of the economy? The amount extra which this Government is able to make available for the long-term sick, for pensioners, for an increase in the average amounts of benefit paid as well as caring for the unemployed is £30 (?) billion extra in real terms over and above what the Labour Government were able to make available. That is more than everything we have returned in standard rates of tax cuts over the period. So anybody who says that this Government does not care—we have got the strength, the economic strength, to care.
Q
The general perception is that during the first week of the campaign Labour has done rather well. How do you propose to regain the initiative in this election campaign?
Prime Minister
Well, I do not expect that we have lost the initiative in any way. We have been putting forward our positive policies. We shall go on putting forward our positive policies. That is one reason why we have got the Chancellor here today, because the essence of the economic [end p14] scene is: under which Government are you going to get that prosperity which enables us to have a higher standard of living and a higher standard of public service. We would say there is no doubt about that. The policies which we have pursued are those which have done it and will continue to do it. Always, as you know, I have said, “Have you positive policies; go on putting them” . Frankly, it is not always as attractive as having a good go at the Opposition policies. Part of our task in putting our positive policies is also to say and to show why the other policies would not work. Yes, we shall be doing that. By tradition, I have always made a speech on that one when I went to do the Welsh Rally. I am doing the Welsh Rally tomorrow.
Q
So you are not going to change your tactics?
Prime Minister
I shall continue to put the positive policies. We shall also direct rather more of our attention to the Labour Party iceberg manifesto—the bit which shows above water, and the enormously larger amount which is below water, but it is quite well documented. We must put positive policies. We shall go on to show that their policies would not produce that prosperity, would not produce a property-owning democracy and, above all, would not produce a defence policy fit to defend and safeguard the liberties of our country. So, yes, we shall be looking much more closely and explaining much more closely, because I think that people have forgotten quite a lot. We must, in fact, do that. It will happen this week. But you would expect us to continue to put up positive policies here. But we shall have a go at the others. We have to, because we believe that those policies would be absolutely disastrous for our country, for its reputation and for the fundamental liberties for which it stands.
Mr. Lawson
It is of fundamental importance that no Government has ever gone to the country with a stronger economic base than we do today. That is something that is, I think, widely acknowledged among people who are not our own supporters. It is certainly widely acknowledged by the [end p15] entire business community. It is that which gives credibility to everything we say, not merely in the economic policy fields, but in all the other fields as well. It is that, too, which destroys the credibility of the promises put forward by the other parties.
Q
Even accepting what the Chancellor and what Nick have said this morning, how do you deal with the question in the election campaign that, notwithstanding the underlying strength of the economy under your Government, the major advantage to voters has passed to the better-off rather than … (words lost from beginning of tape)
Mr. Lawson
… the benefits from this strong economy has been felt throughout the country. It is not confined to any one sector, nor have the tax reductions been confined to any one sector. Everybody is benefitting from the reduction of 2p, for example, in the basic rate of income tax this year.
Prime Minister
Can I just say one thing? I do not want to detain you long. Most of us would not have increases in prosperity unless we kept in this country the very best people who can build up businesses, the best engineers, the best managers, the best scientists, the best entertainers, the best authors, the best film producers and so on. It is they who build the businesses, they who build the financial centres which the rest of us rely upon. Of course, if you reduce the basic rate of tax; of course, if you reduce the higher rates of tax, those who have the biggest incomes benefit more. But are we really going to a levelling-down society where people say, “We'd far rather everyone were worse off and the gap were smaller” than that everyone were better off and we had, in fact, the engine of propserity to produce the higher standard of living which people want. But if you look—the average family man on average earnings is paying now £10 a week less in income tax than he would have been paying had the Labour Party regime which we inherited still been in force. If you take away from that £10 the increased national insurance contribution to pay the increased pensions and other things, then it is down to £4. But what that is saying is, please we ought to [end p16] reduce the basic rate of income tax more and it would be moral to reduce it more, so that man has more to enable him to look after his own family and choose to do what he wants to do with it. That is precisely our policy.
Q
Schools which opt out of the state system, or rather the local education authority, will be able to control their own budgets. Will they also be able to offer higher salaries in order to attract the best teachers?
Prime Minister
They, in fact, will have precisely the same budget as they would have had under a local education authority. They certainly will have more lattitude in how they deal with it. They will opt out. They will apply to the Secretary of State for Education for permission to opt out. He will consider it. You will see from the speech he made on Saturday if they apply as a comprehensive, they opt out as a comprehensive. If they apply as a grammar, they opt out as a grammar. If they apply as a secondary modern, they opt out as a secondary modern. If they want to change their character, they do exactly what a local education authority-maintained school now does. They then, in fact, would have to apply for a change in character. They would certainly have more lattitude. It is intended that they have more lattitude, but do not forget, it is going to be accompanied by a whole change in the financing of the schools that are within the local education authority now, because your head teachers, parents and governors there are going to have the budget and be given much more latitude. So the freeing-up is going on simultaneously both in the local education authority-maintained schools, and in the grant-maintained schools.
Q (?)
… salaries.
Prime Minister
They will have more latitude. I am not going further than that. As a matter of fact, our policy as you know has been to get higher salaries under the existing local education authority regime, and there are several schools which are already practising a policy of the budget going to the head teacher. The answer is to go and have a [end p17] look at those schools and see how the different education authorities are running the system under the increasing lattitude they have given.
Mr. Cole
Dr. Owen predicted at his press conference this morning that in the course of this campaign, Conservative support would fall below 37 per cent. In the event of a hung, or as he would call it, “a balanced” Parliament, what would be your personal intentions?
Prime Minister
You asked me the same question midweek of the last policy in an interview. I repeat the same answer which I gave then. Would you like to look it up? We are not interested in hung Parliaments. We do not believe that one would come about. We believe it would be absolutely disastrous for this country, but we understand why some other people have to try to keep the hope alive.
Mr. Jenkins
A small point, Prime Minister, but we were shown a picture a minute ago of you and Richard Branson. You seem to be celebrating something. I wonder if you can say whether he is going to be able to make a start on cleaning the streets between now and June 11th?
Prime Minister
I think he has already made a very good start in conjunction with those working young people working on the Community Programme. No one is more keen than I am to get the streets cleared. The best thing would be for people not to throw rubbish down. It is a sort of personal responsibility in this. Everyone talks about environment and the best thing we could do quickly is not to throw anything down, but carefully to wrap it up and take it away. Thank you for letting me get the message across.
Q
You have ruled out charging fees for these opted-out schools——
Prime Minister
Yes.
Q
Would you rule out being able to solicit further contributions from parents in order to top up the grant that they get? [end p18]
Prime Minister
We would not, in fact, have in any way any extra money raised by fees on parents. If they would like to raise money in other ways—ordinary local education authority schools do now—of course, they are welcome to do so. Next question please. Make it a good one. Don't let me down!
Q
Do you expect to have to make increases in national contribution rates and if so, to what level?
Prime Minister
This matter—national insurance contributions—is looked at every year. Nick.
Mr. Lyell
On the PESC round, yes.
Prime Minister
It is looked at every year on the PESC round, because you have, in fact, to give certain assumptions to your actuary who makes you a report upon it and upon that report, you make your decisions.
Q
Does the Prime Minister believe that Mr. Kinnock 's Freedom Fighters will frighten the enemy?
Prime Minister
We are not that silly.
Q
Welcome to the ranks of the spectacle wearers, anyway, Prime Minister.
Prime Minister
I have not got them on today.
Q
I have met Gorbachev and, of course, Kinnock and you have met Gorbachev and Kinnock, but you have met them so much more often than I have——
Prime Minister
And so have other people as well.
Q
Now, for the sake of historical accuracy—and I do not suppose that you were prepared for this, so make it a good answer—do you think——
Prime Minister
I told you I should have closed this down two minutes ago. [end p19]
Q
Do you think Gorbachev is like Kinnock, and I did not throw this into this Election campaign?
Prime Minister
No … you've got the briefest one possible. It is the best sort of word a woman can use.