Interviewer
Prime Minister, looking at the history of Britain's role in Europe, do you think it would be a good idea to have a referendum on monetary and political union in Britain?
Prime Minister
Well, I do not think it will get to that. We have to have the inter-governmental conference first, we have made it quite clear we are not going to have a single currency imposed upon us, we are quite prepared to have a common currency which means that we could have a currency which went right throughout Europe and keep our own national currency which is the pound sterling, one of the biggest currencies in Europe as well as the Deutschmark, so I hope it would not come to that.
Interviewer
When you said you would not put this before Parliament, is that because there is no chance of Parliament passing it? [end p1]
Prime Minister
I do not think there is and quite right, quite right. But do not forget that our Parliament is quite different from the Parliaments of many in the Community. First, it is much older- second, it gets down to things in much more detail- third, the debate is much more vigorous. I do not think there is a single other Prime Minister there who will go back and report to his full Parliament and submit to cross-examination of the kind I have to submit to. That is why we are the Mother of Parliaments and that is why we think very very carefully indeed when we are negotiating on Britain's behalf and quite right too.
Interviewer
If you felt a change in the national mood would you then reconsider?
Prime Minister
I do not know what will happen in thirty, forty, or fifty years time. I do believe now that people would react very very vigorously against any suggestion from the European Community that we be made to give up the pound sterling and it would set them against Europe. We have ideals for Europe which are really quite different from some other people, ours is an open trading Europe and looking out to the wider world. Some people I am afraid have a very inward vision of Europe which I think would be very damaging.
Interviewer
… in the communique the intention to make really firm decisions by 1997 at the latest, what happens if the rest do go [end p2] ahead?
Prime Minister
The lesson of this Council is this. When you have got an urgent decision to make on trade which may affect the standard of living and the future of your people, you cannot make it because it is too difficult. When you have got something that is in the distant future you can cloak it, cloak your differences by grand words because you have not got to get down to the detail. I think that it is an appalling Council [sic:counsel?], run away from the difficult economic decisions you have to make now and do not make provision for them to be made properly and then have something which you have still yet to discuss in the whole conference which you still have yet to set up.
Interviewer
But Mr Delors and the French and Germans would say that we need a single market and that now in this communique they have …
Prime Minister
Maybe they do but you do not, and of course it is not urgent, the urgent thing is the trade, you do not need a single currency or a single market, of course you do not. You negotiate in your own currency, you use your own currency which ours has been freely convertible for years. Some of those in the Common Market are still not convertible yet, not freely convertible, because they have foreign exchange controls, Spain still has foreign exchange controls, some of the others could not even sustain being in what [end p3] we have joined, the Exchange Rate Mechanism, because their economies are so very different.
All of this is just ignored at the moment. If it came to making detailed decisions you would have to look at it much much more carefully.
Interviewer
If the others do press ahead, would you take Britain out of the Community on this issue?
Prime Minister
I should have regard to what I believe is the view of our Parliament and I believe it is right. We are not going to have a single currency imposed upon us, we shall keep our pound sterling.
Interviewer
What do you say to people who say looking at what has happened on agriculture and farm subsidies that effectively what the French and Germans say goes and there is not much we can do about it?
Prime Minister
The French and Germans I am afraid have taken a very selfish position. Their farmers are the richest in the Community, they are not interested in having a Community position, they are interested in making the Community come to let them continue to have their own subsidies to their own people so their own farmers do better. And then they talk about being communautaire, it is ridiculous, they are not. [end p4]
Interviewer
What is going to happen on the farms?
Prime Minister
I hope that we have shamed them into coming to some agreement. France would have to be voted down because in fact it is something that you can do by majority vote. But it is very difficult for the other members of the Community who have said: “Well, we are prepared to do something to negotiate with the United States, Japan, Switzerland and the developing world on agriculture, we are prepared to sacrifice something in order to reach agreement” when the two richest countries as far as their farm subsidies are concerned say: “No, our interests must take preference over those of the Community and if that upsets the Uruguay Round and makes trading for everyone else difficult and makes it difficult for the developing countries, so be it.” That has been their approach.
I just hope that they will change and that we will get some kind of reasonable decision, we were very near to it on Friday. And it must be fair, of course it must be fair to our farmers. We want fairness, not privilege.
Interviewer
Do you think Chancellor Kohl might change his mind after the election?
Prime Minister
Chancellor Kohl was not the really difficult one on Friday, I think that the Germans were prepared to reach agreement when it came towards the end of that meeting. It was France who said no and [end p5] President Mitterrand again repeated it in this meeting, France will not accept that particular arrangement which we were debating. This is the isolated person and then of course France says no, Germany does not like to be divided from France. But this is not in the Community's interests nor in the interests of the people that the Community represents. I hope most earnestly that they will come to their senses and will get something tabled so we can negotiate with other countries otherwise it will be bad for our trade.
Interviewer
It sounds from what you are saying that you have doubts whether this Community really has a future?
Prime Minister
The Community if it follows the things that we believe its true ideals are - to get barriers to trade down as an example to others - you know if it comes to fair competition, my goodness me, our farmers could compete and do extremely well in Europe, if it comes to fair competition in the many many goods that we sell we could compete and sell a good deal more. We are a long way from fair competition in Europe and we are a long way from getting the right kind of agricultural policy for our farmers.
What they do at the moment is to subsidise the very small farmers who obviously could not make a living without the subsidies. If they want to subsidise them you do not do it by the price of the goods, you do it for environmental reasons. But if you subsidise the very small inefficient people what you are doing is undermining the efficient people and preventing them from getting trade. [end p6]
Our family farms are much bigger than the Community because our family farms they make their living from farming. In Germany, Germany has the biggest number of small farms where the farm is the second income and they work at other occupations in the week. And it is not fair and we just have to watch that everything is fair for our farmers because they are good and they are efficient and they would prosper from a reasonable deal.
Interviewer
You did make one European gesture which was to take the pound into the ERM. There have been rumours here that Britain went in too high and looking at wage settlements and such like, that we might already have to renegotiate the terms pretty soon, do you think that is likely?
Prime Minister
We went in first at the level that the pound was against the Deutschmark on that day- secondly at the average level it has been for the last ten years- and thirdly at the rate which the IMF when it had studied all of the rates said that at the moment our labour costs, that is not your wages it is wages in relation to productivity, are at the moment competitive at that particular rate. So it was the right rate to go in at.
Interviewer
Are you worried about labour costs? [end p7]
Prime Minister
That is a matter for each company to look at. It is quite wrong to look at wages just as one thing, it is what you get in return for what you give, that is the productivity and it is the management as well. It differs from each company from one company to another. If you really want the maximum amount going into investment to put up your productivity and then of course you can have your wages going up. We really want a high wage, low cost economy, but you cannot separate the one from the other, you have got to have both.