Speeches, Interviews & Other Statements

Complete list of 8,000+ Thatcher statements & texts of many of them

1976 May 9 Su
Margaret Thatcher

TV Interview for London Weekend Television Weekend World

Document type: Speeches, interviews, etc.
Venue: Unknown
Source: Thatcher Archive: LWT transcript
Journalist: Peter Jay, LWT
Editorial comments: Broadcast live, around 1300.
Importance ranking: Major
Word count: 5274
Themes: Conservative Party (organization), Economy (general discussions), Employment, Industry, General Elections, Local elections, Monetary policy, Pay, Public spending & borrowing, Taxation, Labour Party & socialism

PART I.

Peter Jay

Hallo, good morning and welcome yet again to Weekend World. I must say, I think matters are much better arranged nowadays. No sooner are the crack troops of Britain's Special Air Services Regiment found to be on the wrong side of a Southern Irish border post, than the whole thing is swiftly cleared up with a brief reference to a map reading error. I mean, think how much trouble could have been avoided if someone had had the sense to proffer the same explanation after, for example, Caesar crossed the Rubicon, or after the Goths sacked Rome, or after Napoleon marched on Moscow, or even after Hitler invaded Poland. Ah well. Too late now. But conflict goes on, not least between Britain's political parties. The Liberals have their preoccupations at the moment; but the Government is cock-a-hoop over the settlement this week with the TUC on the next stages of pay restraint, while the Tories are savouring their victories in Thursday's municipal elections. Today, we take this opportunity to talk about tactics and strategy to the Leader of the Conservative Party, Mrs. Margaret Thatcher. We shall also report on the long running saga of the so-called European Airbus, symbol you may think of a new era of technological co-operation amongst Common Market countries or you may suppose another grisly monument to Euro-phoria. All that after the latest news from ITN and Robert Southgate.

ITN NEWS BULLETIN

Peter Jay

Thank you Robert. And now, the Leader of Her Majesty's Loyal Opposition, the Right Honourable Mrs. Margaret Thatcher. Mrs. Thatcher, what do you think that the man-in-the-street today sees as the relevance of the Conservative Opposition in parliament and what do you think he thinks its impact on national government is at the moment? [end p1]

Rt. Hon. Margaret Thatcher M.P. (Leader of the Opposition)

Well, he's made his views on the relevance very clear in the by-elections and the local election results last week. We did extremely well in the local elections er, as well as we've done almost since the war. I think there've only been two other occasions when we've had so many gains, so we're naturally, we're very pleased with that. But I think there's something even more significant than that. I think that the average person in Britain is steadily beginning to realise that Socialism is going, in reality, further and further Left, in that it's taking more and more controls from the centre, more and more industries are being nationalised, heavier and heavier tax on the pay packet. Perhaps at last they're beginning to realise that there's no such thing as a government grant, only a tax-payers grant. So locally, extremely well; nationally, I think the big issues are coming to the forefront.

Peter Jay

Why do you think in these municpal elections, to which you've referred, the Tories got a slightly smaller percentage of the poll this year than last May?

Margaret Thatcher

Er, it's very difficult to say because we haven't in fact had municipal elections over the whole country and it's difficult to judge the full impact. It's always difficult, you know, because we have gained greatly in the urban areas, and we're very pleased about that.

Peter Jay

Well, perhaps we could turn to an area where the relevance of the Conservative opposition is very much, er, in dispute, in both, in the Conservative Party as well as outside it. Are you disposed at the moment to congratulate the government on securing their pay deal with the unions for a second year which the government claims is going to halve inflation yet again?

Margaret Thatcher

No pay deal will solve our problems at the moment, if pursued alone. [end p2] Er, if a pay deal would solve things, then Britain would've been out of the woods on many, many occasions. In my early days in politics we had a 3%; guiding light. That didn't solve the problems alone and nor will the present one. Any incomes policy can be only one part of a main strategy and one part is, of course, extremely important, but I fear sometimes that because we talk so much about incomes policy, without always defining it, that we're only tending to look at what we take out of the economy and really your inflation arises because of we fail to put in as much as you take out. Inflation is what has to be tackled right at the beginning, but also we have a lot to do after that and what's happening now I think is that a lot is being stopped from happening; but you've not only got to stop what's wrong, you've got to start doing the things that ought to be done to get expansion going again.

Peter Jay

But do you see orgainsed pay restraint as being a necessary though not a sufficient part of any politically viable programme for containing inflation?

Margaret Thatcher

There are times when for temporary purposes you have to have an incomes policy. We had one. Labour had one when they were last in. Selwyn Lloyd had a pay-pause. I don't think any nation in the world has learned how to run a statutory or a permanant, even voluntary permanent incomes policy in a free society for a long period. None that I know of.

Peter Jay

Do you think this is one of the moments when it is temporarily needed?

Margaret Thatcher

I certainly thought that the initial impact was temporarily needed, the £6 limit. You remember that we had a freeze for Phase One and got through that very well. You'll remember that we then came through to Phase Two. I've consistently said that you can do the first stage and the second stage of an incomes policy without the troubles [end p3] emerging that inevitably become apparent later.

Peter Jay

Do you endorse Mr. Michael Heseltine 's speech, the other day, towards the end of last week, in which he said that union leaders should be ashamed of trying to sell the deal to their members?

Margaret Thatcher

I think you've taken one particular aspect from Michael HeseltineMichael's speech. What I think he was trying to say, it's what I was trying to say earlier, it's not only what you take out, it's what you put in. And my recollection is that he went on to point out that if you have a pay deal which does not give more pay for more effort, then you're heading for trouble. You could of course have had one where you don't give 4½%; in return for nothing. That would've enabled you to give rather more than 4½%; in return for extra production. Again what Michael said is in line with what I was saying earlier. It's quite good to stop the wrong things happening—of course it is. But you've got to start the right things happening. And you and I both know that one of the problems with this pay deal is going to be that it is going to compress differentials, that will lead to enormous trouble and that it doesn't give any incentive for extra effort. Those are the weaknesses to which Michael was referring and those are the weaknesses which I think will become more and more apparent as we go on further.

Peter Jay

But do you think Mrs. Thatcher, that people like Mr. Jack Jones and Mr. Len Murray and so on have something to be ashamed of in asking working people to accept the degree of restraint which the first and second stages of this policy require?

Margaret Thatcher

Michael's words were directed to exactly what I've said. That it would be far better if you made some provision for extra effort in extra pay. One of the weaknesses of an incomes policy is that you divorce completely a man from the fruits of his labour. [end p4] Naturally of course, you cause increasing resentment, because if a chap works a lot harder, if he acquires a lot of extra skill, if he takes a lot of extra responsibility, he expects to get more out. And unless he gets more out in return for those extra things then you're not to get British industry in a prosperous condition again.

Peter Jay

What exactly do you have in mind when you talk about enabling people to get more out if they put more in, because of course, the policy allows people to get more money if they're promoted or take new and more responsible jobs. Have you in mind that perhaps there should be a clause allowing productivity deals because I think it would be interesting to have your view on that, because critics say that the productivity deals under the Conservative's incomes policy and indeed under a former Labour one, provided one of the worst loopholes that led to the policy collapsing.

Margarter Thatcher

I'm the first to admit that it is difficult in some cases to decide what is a genuine productivity deal and what isn't. That doesn't mean that you shouldn't try to make some provision for them. I can only repeat that unless you make some provision for productivity deals, you will not get either the increase in production, or the increase in productivity that we need. It really ought not to be impossible Mr. Jay; I don't believe that our workers are any less good than the French or the Germans. But the Germans are getting better results than we do. And we really ought to be looking at this aspect of incomes and economics policy. You know that bit in the CPRS Report where they exam the motor car industry …   .

Peter Jay

The Think Tank, that's right—sorry to interrupt you, the Think Tank? [end p5]

Margaret Thatcher

The Think Tank Report—where they examined the motor industry here and on the Continent, where they looked at cases where they've got identical machinery, manned by an identical number of people and they found that here in this country we were not getting out anything like the same production as they were getting in Germany. Now why not? This is the kind of thing we've got to look at. We really can't have our neighbours going streaking ahead with prosperity while we are going further and further behind. It's all part of the same thing. Certainly we're trying to stop some of the things that are going wrong, but you won't do that just by concentrating on pay. There's got be some incentive to put in more effort, more production, and some incentive and some effort at sorting out just why, when our people are every bit as good as the French and the German people, we are not getting the levels of production they are. Of course, they haven't had anything like the kinds of incomes policy that we have. Perhaps their bargainings has been more responsible. Perhaps their management is better. Perhaps ther union arrangements are better. But until we tackle those problems we're not going to get the increasing prosperity that we should have. I've been to Germany and France. Every time I am told when our people go over there, they work every bit as hard as the Germans and the French. Now what is wrong? Oughtn't we to be concentrating on this as well? You're putting far too much emphasis on incomes policy, not only that—one aspect of income policy—pay restraint. Is Britain to be thought of wholly in terms of restraint? Can't we advance? There used to be something called the white heat of technological revolution and all we got was Socialism.

Peter Jay

I shall resist the temptation to answer your rhetorical questions, Mrs. Thatcher, but I want to press you just one bit further on pay restraint because I discern that you feel it has a role to play, to play even if there are other things which are important. Do you believe that a Conservative government could have reached an equally good, or indeed, better voluntary agreement with trade unions had they been in govern ent at this moment faced with the present problems? [end p6]

Margaret Thatcher

I hope, Mr. Jay, that we should never have got to the stage that Labour took us into, when you were getting under Social Contract Mark One, pay increases of up to 30%; with nil production increases. That was the prelude to this pay agreement and that was one of the reasons why Britain got into such very grave economic troubles. You fully realise that we tried to tackle that position long before it arose, so that was the background. It was a problem and a situation of their creation. And at the end of that time we were having inflation at a level unheard of under Conservative governments. We were having unemployment at a height which people would never have tolerated from a Conservative government. That was the legacy of Socialism and that was the point of time at which the present incomes policy was negotiated. Quite different, as you know, from the er, kind of economic situation in which we were negotiating, because we were negotiating on an improvement in expansion and productivity.

Peter Jay

I appreciate, Mrs. Thatcher that like the Irishman you wouldn't have started from here, or wouldn't have wished to start from here, but I'm sure you wouldn't wish to miss the opportunity to answer the question, which was had you been in the same situation do you think you could've got an equally good or better deal from the trade unions?

Margaret Thatcher

I think it's the situation that's getting the deal at the moment. Not necessarily the colour of the government. The situation is extremely difficult and when you're faced with unemployment at the present level, it's not only the existing people who are out of work that one is worried about; there are many others who wonder whether they are going to be out of work next week. And naturally under those circumstances, you can get a very, very different pay deal from one which you can obtain when the economy is on a, er, major improvement and expansion. So I think it's the situation at the moment that is fighting inflation. The real problems will occur when we've had a certain amount of recovery, which I hope we're going to get this year, and then we shall get all the problems with [end p7] differentials arising, all the problems with trying to get some incentives.

Peter Jay

But hasn't the government's, er, success if that's what it is, in getting agreement with the unions, doesn't it owe something to the fact that their legislation, their social policies, and more particularly the form of the pay restraint which, er, puts, as you've already said, some burden on the higher paid and some bias in favour of the lower paid, isn't that part of what it's made, part of what's made it possible to get the deal and would a Conservative government have been willing to concede those kind of things for the sake of a voluntary agreement?

Margaret Thatcher

I haven't made the point very clear. I think you're on to the wrong point. When inflation got to 29–30%;, when unemployment got extremely high, that's the point of time when people are extremely worried. And when they are prepared because of the reality of circumstances, to come to what they believe to be a reasonable and good deal. I have quarrels with some of the details as I've pointed out. But it is the circumstances, and the circumstances are those created by Socialism.

Peter Jay

Now you've blamed the inflation and indeed the unemployment for the policies of the Labour government during its first year in office. Do you not feel that the policies pursued during the 3½ years that, er, you were a member of the Cabinet under Mr. Heath contributed anything to this situation? I ask this question because you were elected leader by a majority of your party, but it was believed to include a lot of those people who thought that monetary policy way extremely important in determining inflation and of course, while Mr. Barber, now Lord Barber, was Chancellor of the Exchequer, the money supply doubled in 3½ years, and some economists blame that for the inflation which followed. [end p8]

Margaret Thatcher

I think everyone, almost everyone I know, would agree that money supply is important. If you've got an excess of it it's going to come out somewhere in the economy. We're not fully conversant yet with the time lags, er, and indeed, I think you'll perhaps bear me out, that detailed figures of money supply were only available from 1972 and we know a good deal more about time lags, than we did at that time. But I'm the first to admit and accept that money supply is important but I would say that money supply alone is not sufficient. You've got to look at the various sectors of the economy to see which sector has the money supply, to see where the money is and where it should be shifted if you're to get the expanse [sic]. So, it's one of the factors, it's one of the factors just as incomes policy is one of the factors. But it's only one. And the important thing is to have all the strategy pulling in the same direction and, er, as I need hardly tell you, the imporant thing too is to get the timing right. To judge where you are on an economic cycle, whether you're expanding or whether you're contracting and it's not very easy.

Peter Jay

But was it one of the factors which caused the inflation in 1974 and 1975?

Margaret Thatcher

Money supply, one of the factors, public expenditure increases are another. And you know full well, the massive increases in public expenditure that were made in response to the first social contract and that is one of the things that'll put it into great difficulty in the future. I think the first year of Socialism was extremely badly handled. Every single ploy was made in order to win the number two election in October 1974, and the people are now paying the price for that.

Peter Jay

Mrs. Thatcher, that might be a convenient place to interrupt ourselves. In a moment we'll come back and talk about the importance of public expenditure and other things. We'll be back in a moment. [end p9]

PART II

Peter Jay

Welcome back, well in Part I, I was talking to the Leader of the Opposition, Mrs. Thatcher, about her attitude and her party's attitude to the Government's new pay deal and also about her attitude to the importance of other elements in economic policy, including the control of the money supply and she mentioned towards the end of part I, the importance of public expenditure. Mrs. Thatcher do you think that the budget deficit at the moment, the difference between the Government's income and expenditure as announced by Mr. Healey the Chancellor in the Budget is too large or too small, or about right?

Margaret Thatcher

Next year's budget deficit is much too large, it will dominate the economy for a number of years to come, it could be the foundation of the next bout of inflation.

Peter Jay

So what would you do specifically and as concretely as you can reasonably say to make it smaller?

Margaret Thatcher

May I make it quite clear that we would never have got here, that you were critising me earlier for having a budget deficit, indirectly—of £4,000 million it is now £12,000 million and we were taking steps to deal with it when it was £4,000 million so again I stress that we are where we are now in great difficulty again because of socialism. Last year's budget deficit was larger than we expected, the year's before was larger than we expected, in spite of that, the Denis HealeyChancellor of the Exchequor is still going on borrowing more next year. I know full well that when you look across public expenditure, you can justify a great deal of it, sometimes individually you could justify even more things, it doesn't alter the fact that if together these make up to more [end p10] than you can afford, it is absurd to continue with the things altogether. I believe that a deficit of £12,000 million next year, could be increasing the inflation which the Chancellor is at present trying to tackle by other methods and that is part of what I meant when I say that all your strategies have to go in the same direction and not in different directions.

Peter Jay

So having said that Mrs. Thatcher, I'm sure you'll be anxious to explain precisely what you would do to make it smaller.

Margaret Thatcher

That is not difficult, er, it has been explained before and it makes it easier now because you've only to look at some of the things which some of the Conservative controlled authorities have been doing with their own particular expenditure, they have gone through programme after programme, er, Kent as an example, they have been able to find economies in each department, they've gone through their staffing programmes, they've gone through sometimes, the number of staff they take on to see that none extra are taken on unless it is necessary, cumulatively these things have added up to quite a large some and have made quite a difference to local budgets, so it does mean going though each department individually. Secondly, you will see in the public expenditure White Paper, that there are cuts laid out, now its always a mystery to me why this government lays out cuts and says we're going to do these next year, but every year its moved on to next year, those cuts are there, the ones I would disagree with are further cuts on defence, otherwise department by department, you've got the cuts laid out. Now the third thing, is that I think that both some of the housing subsidies and the food subsidies are too high and I'm bound to say that I think a subsidy of, it will go up to say some [end p11] £350 million on school meals alone, is too high, as you know they've cancelled the increase, or postponed the increase that they were going to make this September. Fourthly, some of the nationalisation projects are extremely expensive, not only the way in which they take them over but the large sume they then inject into them, and yet almost every week in the House of Commons, we get more programmes for nationalisation, more programmes demanding more cash, you just cannot go on like this but can I stress, you have to do something about it, you have no choice.

Peter Jay

So you talk about higher council rents, higher prices for school meals, higher social charges perhaps for other things, and less jobs in the public sector, isn't that rather a funny policy to be pursuing when as you yourself have said, unemployment is extremely high, and inflation is still running strongly, though less strongly than it was a year ago?

Margaret Thatcher

It would not necessarily mean less jobs, in fact, as you know full well, your main jobs come from the private sector, and one of the reasons why you are not getting the expansion and increase in the private sector, is because money is being drained out of private industry, out of small businesses, er, in order to finance non-productive expenditure in the public sector, and so you've got to drain it back, I think there's been an awful lot of nonsense talked about this, people have said, if you cut down public expenditure you'll get increase in unemployment. One of the reasons why we've got this level of unemployment now, under socialism is because they've drained the money out of the private sector out of businesses which should have it. Do you remember Healey's first budget put up the taxes on business, so that they could not in fact, get the increasing number of jobs which they [end p12] should have had, and it's because he's pursued this policy of putting so much into the public sector, that is one of the reasons why we've got a large amount of unemployment now, and it's got to go back into the private sector.

Peter Jay

Mrs. Thatcher I'm sure people listening to you will want to be as clear as possible precisely of what you are recommending. I thought we were talking about cutting down the budget deficit, which as I understand it means cutting government spending without cutting taxes, but what you were saying just now suggested that what you had in mind was that both the expenditure side and the revenue side of government should both be cut down, which would of course not have the effect of reducing the deficit.

Margaret Thatcher

I think that you have to do some of one and some of the other, but I think again it's a mistake to look at the economy as an absolutely closed box. You get your treasury calculations, you get your treasury calculations on taxes, and they assume that you're not in fact going to get the requisite expansion in the private sector, there are some taxes which you could cut down and I do not believe you would cut the yield one little bit. Maurice Macmillan you will remember made the same point very effectively, in the House of Commons in an excellant speech.

Peter Jay

So can we try and sum up now what would be your economic strategy? It would include an element of pay restraint at the moment, though it would be rather more permissive, it might in our productivity deals … [end p13]

Margaret Thatcher

There is an element of pay restraint at the moment, I have never known any incomes policy of the kind we have now, work permanently, I have known a number work temporarily, they are a means to an end, they are means to putting economy back into such a shape that you can then go ahead with other economic policies.

Peter Jay

And it would in addition include a smaller budget deficit, which initially would be a little bit deflationary but also less expenditure and rather less, less taxes, is that right?

Margaret Thatcher

I think that is about right.

Peter Jay

And, er, how would you then expect unemployment and prices to move over the ensuing two years if that strategy were put into practice, combined with the other policies that you have in mind?

Margaret Thatcher

Because your new employment will come from your private enterprise sector, that is a sector which has been hit extremely hard. Your small businesses are where expansion comes. Small businesses have absolutely no confidence in the present government, they've no confidence in the future, they've been taxed not only on their current income, they've had a massive capital transfer tax imposed on them, there is very little incentive for them to grow bigger, if we don't have industries growing bigger, we shall have no employment tomorrow, or no increase in employment tomorrow. As you know tomorrow's jobs come from today's expansion, if we don't get that expansion that comes from the smaller businesses, we do not get the increasing prosperity tomorrow. [end p14] The money for expansion has been drained away from those small businesses, their confidence has been undermined, their management has very little incentive to go for, so all of the people who could in fact build the prosperities for tomorrow, have had a bad deal from this government, that is where you'll get the jobs, but you won't get them under this policy.

Peter Jay

Could we persue the theme of the Conservative Party's relations with industrialists, because we've been talking about their potential relations with trade unions. Now I wondered what your reaction was to a recent letter in the Times from Lord Alport who was a previous Conservative member of parliament and indeed a previous Conservative minister who was replying to an attack which had been made by your former colleague Mr. Rippon on the industrialists for not standing up for Conservative principles, and Lord Alport wrote that Mr. Rippon 's speech in Liverpool last week, with it's shrill denunciation of British industrial and financial management, illustrates the extent to which Conservaties have lost touch with what that section of the community is thinking, the fact is that a very large number of industrialists have lost confidence in the ability of either political party by itself to persue policies which will enable the nation to regain real economic stability, and he went on to say that they are looking, these industrialists are looking for leadership to men like Lord Watkinson, who are rather closer to the realities of British industrial life than Mr. Rippon or for that matter, any of the cleverer of lawyers who lead the Tory Party today. Now, you are of course a qualified barrister, Mrs. Thatcher, what is your reaction to that?

Margaret Thatcher

That if you look at what the President of CBI has been saying over the past year about public expenditure, about incentives, [end p15] about middle management, about the need to look after small businesses, you'll find he's been saying almost exactly the same as I have just said, and he said over and over again.

Peter Jay

So do you think that Mr. Rippon was wrong to complain about the failure of industrialists to stand up for Conservative principles, or do you agree with Sir Keith Joseph, who made a speech last week in which he said that, er, he thought one should allow for the fact that the first loyalty of these industrialists had to be to their commercial interests and to their families?

Margaret Thatcher

Inevitably, we always find it in Conservative policies, most of our people are so busy getting on with the job, they don't have half the time to make speeches, that are made by some on the other side, of whom far more seem to be professional politicians. Inevitably we wish that far more of them would make more speeches about the private enterprise system, it's the best system the world's had, both to ensure increasing prosperity and political freedom, if you have less and less of it and a mixed economy under the present government getting very much less mixed and very much more socialist, you go to a kind of Iron Curtain country state, with that goes your political freedom, every single speech we get, from many, many members of the left wing of the Labour party, puts forward more and more schemes for nationalisation, we've now got another one for some of the pharmaceutical industry, some of the Pensions, some of the Insurance companies. This tends to go eventually into socialist policy. Of course we want people not only to operate free enterprise [end p16] but to stand up for it, that's the only way to fight socialism, and we hope that we shall be joined by an increasing number, its not only CBI that makes them, the small businesses association has been very active indeed, but again I repeat they are so busy getting on with the job of running their companies and running their businesses, that they don't have half the time to make speeches that some of the other people do.

Peter Jay

Very briefly Mrs. Thatcher, do you think though that Mr. Rippon is right or wrong or Sir Keith Joseph is right or wrong in this matter for just a few seconds?

Margaret Thatcher

Well can you put the specific point, which specific point, because …   .

Peter Jay

The specific point is that …   .

Margaret Thatcher

…   . there are quite a lot of points in both Geoffrey Rippon 's speech …   .

Peter Jay

Well, Mr. Rippon said yesterday …   .

Margaret Thatcher

… and in Keith Joseph 's speech. Let me put my point, just forget about either of those, my point is that with the private enterprise system, is the best friend of the working person the world has ever known, and I'm a working person, like most other people, that we must in fact extol it's virtues when were under attack, that we need everyone to do this, er, you will [end p17] find for example in the United States that the most ardent advocates of the free enterprise system are trade union leaders, and the sooner we get them in this country expounding the values of private enterprise, the better pleased I will be, so I want everyone to expound the virtues of it.

Peter Jay

Mrs. Thatcher, thank you very much indeed and I'm sure that will help to restore unity in the Conservative Party. In part three we shall return to look into the matter of the European Air Bus which is causing a good deal of controversy, until then we take a break.

End of interview.