Speeches, etc.

Margaret Thatcher

TV Interview for ITN

Document type: Speeches, interviews, etc.
Venue: No.10 Downing Street
Source: Thatcher Archive: COI transcript
Journalist: David Rose, ITN
Editorial comments: After 1600.
Importance ranking: Major
Word count: 1267
Themes: Employment, Monetary policy, Privatized & state industries, Energy, Pay, Public spending & borrowing, Taxation, Strikes & other union action

David Rose

Prime Minister, looking back on the first 8 months of your Government have the economic difficulties, in particular, been greater than you anticipated?

Prime Minister

I think the one thing that has been more difficult has been the very rapidly increasing price of oil. That is coming through to add yet a further boost to prices and that has been very very difficult indeed. I think the other thing is that it's taken longer than we thought to dampen down the amount of borrowing that everyone is doing. And you know you just can't go on borrowing. You have sooner or later to cut it down and come more nearly to living within your means. Those I think have been the two things that have been even worse than expected.

David Rose

Prime Minister are you resigned to a long and disastrous steel strike starting in the New Year?

Prime Minister

Long and disastrous? No I am never resigned to a strike until it actually gets under way. There is still a few hours to go. As you know the Government has already committed itself to paying to the steel industry on behalf of the public another £450m next year. Within that sum, which is very considerable on top of all the others that have gone, there is still scope for further negotiation. It has to be along productivity lines because if people just take out more pay, without putting in more effort then it would only go on the price of steel and then we shouldn't be able to sell it and then we would lose more jobs. And within that sum there's still scope for negotiation on productivity lines and I hope the chance will be taken.

David Rose

How big could increases be out of this money, out of productivity deals on top of the 6%;?

Prime Minister

Well I have understood that negotiating locally, which is perhaps one of the best ways to do it, because you are nearer management and workers there, it could be something like 10%;. But they have got to produce the work before they get the pay. [end p1]

David Rose

But are you refusing, is the Government refusing to intervene directly because in fact you want the country to learn the lesson now that this Government is not going to bail out strikers with public money?

Prime Minister

Well in a way you might say that committing £450m to the steel industry next year is quite a big intervention, but you really can't start as politicians to manage the steel industry. Those who are on the shop floor know far more about management than politicians. Those chaps who are working on the shop floor really should be able to negotiate with management. We have seen that this amount of money is—made available. We have seen that there is within that enough to help them with redundancies, because if you are taking away a chap's livelihood you must have good redundancy money. That's the way other countries have done it and their steel industries are much, much more efficient now. Look politicians don't know how to manage business and really both the steel managers and the steel unions ought to be able to do it between them. And they must just stick together until they do. It's their industry but it affects each and every one of us. It affects no-one more than the steel workers who depend upon the efficient steel industry for their future livelihood.

David Rose

But won't you the Government, you the politicians have to intervene in the end when much of industrial Britain is brought to a complete stand-still? It seems very possible.

Prime Minister

Well I just hope that it will not come to that. Do we have to intervene in the end? We have to make contingency plans to keep things going but you know what always puzzles me about these negotiations between management and unions is that in the end they have got to agree on something and I only wish that they could agree within the money available before they go on strike and not afterwards. But let me make this point, I can't make it too strongly you can't just take out more in pay without producing steel more efficiently, because if you just take out more in pay it goes on the price, you can't sell it, because other people are producing it more cheaply, and then you are with fewer jobs. And the sooner we get that home the better. There's only one secure prospect of jobs and that's to be efficient and profit-making and keeping one step ahead [end p2] of your competitors. They could do it.

David Rose

You said the Government have contingency plans, would you be prepared to use troops to keep steel moving in British industry, if the trade unions stop it as they have said they will do?

Prime Minister

Let's not talk about that, there's still some hours to go—there's still scope for negotiation on productivity lines within the £450m that the Government has committed itself to—tax payers money—for next year to help the steel industry.

David Rose

Looking further forward, are you going to be able to fulfil your election pledges to give people back more of their own money by further tax cuts this year?

Prime Minister

You are asking me already to make a budget. Provided people produce more, we can do nothing unless they produce more per head and there's plenty of scope for that. Provided they do then we could get more tax cuts. No-one could be more anxious for it than I am. I think people are already taxed too highly. But you know how difficult it is to get down public expenditure further. We must have another go because we are taking too big a proportion of people's income and when that happens they say “why work?” . And so if they produce more then we can take a smaller proportion of their income. And that's our objective. But it has to be co-operation between Government, which has already lowered direct tax, and people taking advantage of the possibilities and opportunities ahead of them.

David Rose

How far are these further cuts in public expenditure going to go this year? Are you going to have to re-write the White Paper in fact on public spending this year?

Prime Minister

Well to re-write it I hope we will be able to get some further reductions in public spending because the fact is that taking it compared with last year, we haven't reduced it at all. We're still spending the same amount as we spent last year. Why it sounds like a cut is that enormous increases had been planned for which the money wasn't there. It's just the same as last year. But you know this country only really started to recover after the IMF came in we really got right down into the abyss and the IMF [end p3] insisted on much deeper cuts than we have yet made. Now we have tried not to make cuts on capital expenditure because that after all is investment for tomorrow. We have tried to make in on revenue expenditure. Anyone will tell you, whether it's in local government or central government that there is still a lot of waste to cut. And I believe that. And we have got to try and get at it. But it's not easy and we have got to carry on and try it.

David Rose

Further cuts this year?

Prime Minister

I hope we will be able to make further reductions for the year 1980/81 that's not this year, next year. 1980/81.

David Rose

It sounds as if 1980 is going to be a tough year, Prime Minister?

Prime Minister

It is tough living within your income, if in past years you have lived above it. But nevertheless it's got to be done.

David Rose

Prime Minister thank you very much.