Interviewer
You have agreed that the Report should be ready by December but is there a danger that that is not going to be soon enough to help Mr. Gorbachev and the urgent economic problems that he is facing?
Prime Minister
We are already giving help separately. Germany has just got an extra large line of credit. We had a line of credit from our banks for some time, covered by ECGD—that is not fully drawn down yet by any means; and also, we are all giving technical help—some of their managers are coming over to learn how to manage things in a totally different economy, so it is not as if we are doing nothing—separately, we are each doing quite a large number of things. It is what we can do together that we are considering.
Interviewer
And do you genuinely believe that President Gorbachev is capable of making a transformation to a full, free market economy? [end p1]
Prime Minister
Yes, I do. I think it is going to take some time because it is a complete change of attitude. People have had to look for every decision to Moscow—they have not been allowed to take it for themselves. They have got no structure of costs and prices, they have got no structure of a free banking system, no structure of private property, no structure of company law and they are going to have to learn all this. They know the results they would like to achieve—they don't know quite how to do it and that is where we come in to see what we can do to help.
Interviewer
And do you think the Soviet people are going to be patient enough because it is going to be pain, it is not going to be straightforward?
Prime Minister
I think the Soviet people at any rate are enjoying the enormous new political freedom and the freedom of discussion.
Of course, as I indicated when I was over there in 1987, the moment you go to freedom of discussion for the first time, don't expect to get praise for what you have done, just expect that all the complaints will emerge—and of course they have—but that is the way of life.
There is really very vital and interesting debate and discussion going on and I think that they are people knowing the direction in which they want to go. [end p2]
Interviewer
On trade, why did you feel it so important to get some sort of deal here on farm subsidies and what will it mean for consumers back home?
Prime Minister
As you know, consumers already pay higher prices for their food because of the way we run the Common Agricultural Policy. At the moment, too, we have always felt that our family farms, which are much bigger than those on the Continent, did not necessarily get a fair share of the action because there was protection of less competitive and less efficient production on the Continent, so I think it should be in the end to the advantage of our people.
We are taking it a step at a time. You cannot go from our kind of help suddenly to none at all and we all realise that.
It was vital to say that we are going to take those steps towards freer trade and efficient production, not only in agriculture but also that we are supporting the freer trade in the whole Uruguay Round and that we are not going to do it separately—we are going to do it together—and if we offend, then it will be a matter for for GATT to look at.
Interviewer
The Declaration on the environment has already been criticised by environmentalists as being back-tracking and too weak. Isn't it the case really that you and the other leaders effectively [end p3] caved in to President Bush who has difficulties in transforming the American economy and taking those tough decisions on carbon dioxide emissions?
Prime Minister
No, it most certainly isn't and I think some of the environmentalists do not fully realise what those of us in government who are also environmentalists have so far done.
We have got an agreement about the ozone layer which was undreamed of ten years ago. We have dealt with that and we are now trying to get an agreement, starting about two years from now, about what we shall do about the greenhouse gases. Certainly, we do not know what proportion of the climate change is due to man-made changes and what to natural changes but we do know that we cannot wait for the final results and we do that in any event, there are some things that ought to be done.
We ought to be economical in our use of nature's basic resources. I was brought up on something called “Waste Not—Want Not!” We ought to make certain that the tropical forests are not just cut down; they are part of the fundamental heritage of this earth; they lock up the carbon dioxide; they contain something like 90 per cent of the earth's species and we ought therefore to be making a joint effort to help those parts of the world to preserve them.
All of these things we have agreed on and it really is a major step forward. [end p4]
Interviewer
Of all of the countries represented here, Britain's inflation record is the worst. On Friday, we are expecting to see, when the latest inflation figures come out, another rise. Is it an embarrassment to you at this stage that Britain's inflation record is so poor?
Prime Minister
Each of us has different problems. Some of them have a colossal budget deficit and are criticised for it. We have not—we have a budget surplus. Some of us have a trade deficit and we are one of those and criticised. Others have corresponding trade surpluses. Others have bigger problems on unemployment. We have not—we have created a fantastic number of jobs, more than in the rest of the Community.
The point is it is possible to have low inflation, low unemployment, higher growth, a budget surplus and a trade surplus although we cannot all have trade surpluses but a trade balance if we persist for long enough in doing the right things and those right things are set down, although each of us has a different set of problems.
Interviewer
But if inflation is to be—to coin a phrase—the judge and jury of your Government's record, isn't it a matter of considerable disappointment at the least that inflation continues to be so high? [end p5]
Prime Minister
But it is not only the judge and jury. We have got growth going; we have got an enterprise, a vital economy, where people say: “Yes, we can do it!” and people remark on it if they come—the remarkable transformation of the whole spirit of Britain from a declining “Well, we cannot get out of our difficulties!” to a “Can do! Yes, we are going ahead!” and our American friends, as they come across, say: “Yes, the economy is going tremendously strongly!” so strongly that the fact is that we are having a job just to slow it down enough to get down inflation.
So the economy is strong. More jobs are being created and the standard of living is higher than ever before and the standard of investment. That is good, very good!
Interviewer
Finally, Prime Minister, in the Political Declaration, the leaders here said all hostages should be released. As you know, there is intense speculation that Belfast man, Brian Keenan, may be released over the coming days. If he is, isn't it going to raise comparisons between the type of diplomatic effort pursued by the Irish Government to get him out compared to what your Government has done?
Prime Minister
No. I have indicated several times that we do every possible thing we can. We keep our ambassador and staff in the Lebanon. His main task is to try to find news of the hostages and we do try by every possible diplomatic means but look! The people who should [end p6] be blamed are the people who take hostages. It is a barbaric, uncivilised thing to do and every nation that holds diplomatic relations with others should make all efforts to secure the release of those hostages in the name of humanity and civilised conduct. That is what is wrong—the taking of hostages.
From time to time, we get these rumours. They cause the families immense heartbreak because sometimes they raise hopes falsely and sometimes one is released. They should all be released and that is what the G7 civilised nations have said.