Speeches, Interviews & Other Statements

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

1980 Nov 28 Fr
Margaret Thatcher

Radio Interview for IRN

Document type: Speeches, interviews, etc.
Document kind: Radio Interview
Venue: No.10 Downing Street
Source: Thatcher Archive: IRN transcript
Journalist: Peter Allen, IRN
Editorial comments: 1530-1600. The interview was broadcast at 1000 on Sunday 30 November 1980.
Importance ranking: Major
Word count: 3324
Themes: Parliament, Conservative Party (history), Economy (general discussions), Employment, Industry, Monetary policy, Privatized & state industries, Energy, Pay, Public spending & borrowing, Trade, Labour Party & socialism

Peter Allen

Mrs. Thatcher, the package of measures announced by Sir Geoffrey will take more money out of the economy that presumably will mean a deeper recession for industry, now hasn't the time come when you have to forget your balances, Public Sector borrowing requirement, and actually concentrate on increasing public spending so that you do give industry the chance to pick up a bit from the kind of recession it is in?

Margaret Thatcher

Well the purpose of that package wasn't to take more money out of the economy. We are already spending that money. What we have got to do is to raise some more money from the tax payer to meet the spending we are already making, and that is why you have got increased National Insurance contributions.

PA

If you are spending more at the moment, under your ideas of the way the economy works, inflation should actually be going up, or we should be feeling some affect since at the moment money supply is not under control, and yet inflation is still falling at the moment so does you equation hang together?

MT

Yes, money supply was under very tight control during the earlier part of this year and then we took off something which Denis Healey put on, it was known as the corset. He put on a corset on the Bank of England lendings in 1978. Well you know what a corset is meant to do, conceal the underlying situation. We decided it was time to take it off and then we saw what was happening underneath, now give us credit for saying we've got to know the full facts and we haven't yet got that situation under control. Now unless we do get it under control it will come through in inflation in a few months' time or in a year or so's time. So we've got to get that under control. Because what surplus money means, is money not backed by the production of goods and services and what it does is to go into increased prices and that means the value of the Pound falls. [end p1]

PA

If you believe the only way to control inflation in the long run is to keep that supply under control, can I ask you is there any logical reason why we should not continue to go spiralling downwards?

MT

It is not a spiral downwards. Public spending cuts don't necessarily produce unemployment. Over the last years, public spending has been massive, those have been the very years when unemployment has been steadily rising. When I first came into Parliament unemployment was about 300,000. Public spending has risen and risen and risen and risen over the last twenty years, so has unemployment. It went up to 300,000 in Macmillan 's time, with Harold Wilson it became higher than that, about ½ million, with Ted Heath it averaged ¾ million, in the life time of the last Labour Government it averaged 1.2 or 1.3 million and they left us with a base of 1.3 million. During all that time public spending was going up and so was unemployment. So don't ever fall into the trap of thinking that cutting public spending produces unemployment, it doesn't. Cutting public spending means there is more money left for producing goods and services in the private sector. That is the wealth of the nation, afterall even independent radio is the wealth of the nation. It is producing something not paid for by public money. When I have to take more money from people who are investing in insurance and factories, if I have to take more money from them into public expenditure it means they have got less to invest. If they have got less to invest they can't create the jobs and the unemployment has been coming in the private sector. So if we release some money from the public sector we should get more money and investment and more jobs in the private sector. [end p2]

PA

That clearly is the key of your policy so where are the signs of this Renaissance in British Industry? At the moment their output is declining.

MT

I'm afraid you put your finger on it earlier. Public spending is too high, and I am afraid one of the things Sir Geoffrey Howe had to announce was that we were spending £3,000 million more than we thought. As you know we have agreed to protect the standard of the pension, and more pensioners are drawing it and we are still keeping up spending on the Health Service. Education is coming down a little because the number of pupils is falling and defence is high. Now we are not getting expansion of industry at present because of the massive increase in the price of oil, and international economics work just the same as home economics. If you are spending a lot on rates you have less to spend on other things. In the last year OPEC has put up prices by more than 100%;. That means people have less to spend on other things.

PA

Surely the things which are most bothering industry are interest rates and the value of the Pound.

MT

It's a combination of things. 30%; of our output is exported, we are very good exporters. Other people buying from us have less money to buy our goods, and what British industry is really short of is orders, first because of this recession and second because other countries are better than we are at competing. One of the principal reasons why we are not competing is that we have put wages up and up without having extra output to match. That hasn't happened in Japan. They've got more wages, but they've produced more cars, more radios, more televisions, more electronics, so they've earned that extra, we haven't. Our extra wages have gone on to extra prices.

Yes, the Pound is high and there are far fewer problems with a high Pound than there were when it crashed under Mr Healey. [end p3]

PB

Wouldn't you like it down?

MT

A high Pound means that the same amount of production here buys more goods abroad, and that has meant that the British people have been able to buy more with the same amount of work here. There are many Countries who would like that, and if it suddenly turned down all our raw materials would go up and then there really would be problems, so you want it just about right. A high Pound does protect inflation and gives you cheaper raw materials and cheaper oil.

PB

While your policies with the economy work their way through one of the consequences appears to be very high unemployment which is still rising. Mr. Heath expressed the fear that Conservatives were being branded as the party of unemployment.

MT

Unemployment is rising because we are not producing enough goods of the right design at the right price which people are prepared to buy. Take cars for example. There's a great demand in this country, but people are not buying cars produced in this country; 58 out of every 100 are imported. So it's not a shortage of demand it's a failure to meet that demand in this country. We've had problems in the car industry, I am not responsible for those problems, I'm not responsible for the fact that at Halewood, on which a lot of public money has been spent, the work force produced far less per head then they do in Germany. They're responsible for that, their management, and their unions and they must pull up their socks and not turn around and blame me! This is one of the reasons that the recession has hit more deeply here, why we've lost more steel out-put here. When people buy foreign cars they're buying not just foreign cars but foreign steel. It's happening with British workers with British wage packets buying foreign cars made with foreign steel, but we have got to compete.

PA

Mr. Heath said you were branded as the Party of unemployment, let me go back to that question.

MT

Unemployment rose very sharply in Edward HeathTed's time as well. He tried to overcome it by pumping money into the economy. [end p4] We got an artificial boom, and do you know where the money went? It did not go into investment or expansion it went into the biggest property boom we've ever seen and I don't wish to see the like of that ever again. It did the Conservative party immense harm, it not only went into these enormous prices of property, the boom eventually collapsed, and in the mean time inflation rose and rose and the moment inflation goes up you are much less competitive and eventually unemployment rose again. The party of unemployment? It's my every wish to try and get British Industry into a shape where we can compete with other factories the World over, and when we can do that we shall get the extra jobs. But don't forget I started with the base of unemployment handed over by the Labour Government and although they more than doubled unemployment I didn't call them the Party that liked unemployment, because I know they didn't any more than I do. They handed me over 1.3 million unemployed. The only answer, is to produce goods at prices, designs and delivery that our people will buy and other people will buy.

PA

Mr. Heath said he represented a significant voice in the party. He thought there were many who thought as he did about your policies. Do you accept that?

MT

I am just as worried as he is about mounting unemployment. I hope that he will admit that unemployment has gone on mounting for the last twenty years, what I will not accept is the policy of those who want to spend more money. We haven't got more money, we're already over-spending. If you were to say to a family that was over-spending and in difficulty, never mind, go on spending, borrow it from where ever you can, let the future take care of itself, the future will not take care of itself. That is the morality of a man who has his hand in someone else's pocket. Spending more money then you've got when you are already overspending is not the answer. What that does is to have another big artificial boom, have prices going into property going up and up, and that would finish up with increased unemployment. [end p5]

We've gone that way for twenty years, I cannot go that way again. We've got to get it sound this time and we shall, and when we do, we shall be the most formidable country in the Western world because we've got a secure supply of oil and coal and gas, so the future's bright.

PA

Compassion seems to be the element missing from everything you've said.

MT

Of course I'm thinking about the people involved. I'm every bit as worried about them as you are. If I was just to print more money, pump more money in, do you know what we'd get? We'd get much bigger unemployment within five to ten years time, and I'm trying to get it down. There's been that rising number over twenty years and I'm trying to get it right down by being sound and reasonable and producing the right goods at the right time, and making sure that people do a jolly good day's work for a jolly good day's pay. Get rid of restrictive practice. But compassion, of course we've got that element, why else do you think we are spending quite a lot of the tax payers' money taking it in from the people who work in order to help those who don't work, particularly the young people, so that every young person who leaves school will be guaranteed next year some kind of job by Christmas. That's earlier than the Labour Party. We're pouring more money into it because I think it's so dreadful for a young person to leave school and not have a job to go to. And then we're pouring money into training because inspite of the fact we've got unemployment there are times when you just can't find a plumber or an engineer or a carpenter or a computer operator or someone who knows all about electronics. In the midst of unemployment, we're short of skills. So we're trying to sort that out …   . so there is compassion. It's like a nurse looking after an ill patient. Which is the better nurse? The one who smothers the patient with sympathy and says ‘never mind, dear, there there, you just lie back and I'll bring you all your meals. I'll bring you all your papers. Just lie back, I'll look after you’? [end p6] Or the nurse who says ‘Now, come on. Shake out of it. I know you've had an operation yesterday. It's time you put your feet to the ground and took a few steps. That's right, dear, that's right. Now get back and take a few more tomorrow’ …   . which do you think is the better nurse?

PA

I know which one sounds more like you, Mrs Thatcher.

MT

Which is the one most likely to get results? The one who says, come on you can do it. That's me.

PA

Let's look forward to the economy recovering and to brighter days. How do you stop the employers and the unions putting up wages and putting up prices?

MT

I don't think you are ever going to get a boom going as fast as that. I must say I do think you've put your finger on a very great problem. There is a tremendous new attitude of realism because people realise now that they can't just make enormous demands for extra wages unless they are matched by extra output. And that's happening even in the monopoly industries because they realise if they, like electricity, they just demand a lot more prices go on to other people who are already struggling. So there is that realism, and the thing to do is to keep that realism when we do get expansion, because we are only going to get our share of world trade if we're better than the Germans, the Japanese, the Americans, the Italians, the French, and if we are not better than they are, they will get the business, they will get the rising prosperity and we shan't. The only way we shall, is by getting a much much bigger understanding of how you do get the business. And that understanding must be done between management and everyone in a company. It is no longer we and they. It should never have been. The prosperity of a company and everyone who works in it depends upon all pulling together, on you designers having the best design, on having the best method of production, attention to detail, on dropping restrictive practices so that the person who works the machine knows simply how to maintain it without having to call in someone else and their mate. [end p7]

It all cuts costs. That means we can deliver on time. We can do it economically. We'll get the business. Then you make profits and out of the profits you can plough back and get expansion. What we've got to get is greater understanding. The Government can do something, but the rest is up to management. For heaven's sake, let's say to everyone: you want a jolly good profit, then you've got profit to plough back, then you can keep a step ahead. It's a completely different attitude and approach from any the Labour party every operated.

PA

It's been a pretty hard week in Parliament. Thursday was described in the Guardian as one of the most damaging Parliamentary days in the life of the Government so far. Does is get you down?

MT

Not at all. Not at all. I answer questions every Tuesday and Thursday. We have a very noisy session on Thursday I must say the adrenalin flows when they really come out fighting at me and I fight back and I stand there and I know: now come on Maggie you're wholly on your own. No one can help you. And I love it. I really fight back and I bash back, and what we've been seeing this last week on the part of the Labour Party is sheer hypocrisy and humbug. They've got one tactic at the moment; lets have a row and uproar. Never mind the cause. They complain we put an Answer out about housing by Written Answer. They've done the same over the years. Does that bother them? Not in the least. They complain about National Insurance increase in contributions. I quoted that year after year after year they've done it themselves by Written Answer.

PA

Can we go back to that Answer? It came at the end of a Session didn't it? There was one Written Answer released on the last day of the session when they stopped Black Rod coming in. [end p8]

MT

The Labour Party had always done it by Written Answer. There were two years when they didn't do it by any answer. There they have an artificial row about someone who the first time says, I am actually going to consult local authorities. No, it's just froth and bubble tactics. They haven't got anything really worth while to say so their tactic is: Brothers let's have a row a day. People will soon rumble them for what they are.

PA

You think that has changed dramatically since Mr. Foot?

MT

Oh yes of course it has. Michael FootHe'll take the press cuttings of the day and have a row about them …   . I accuse him of what he has been doing. I think we have just had a row a day and they have had a procedural row a day and the things they have chosen to have a row on are the things where we have followed exactly the precedent set by the Labour Party. They've had nothing to have a row on but the press have said row is news. They know a row is news, and we are just going to carry on and we are just going to do the job and we are going to get it done, and we'll have a rough ride, yes we will have a rough ride this next year. We shall have the rough ride of the patient who is ill and taking medicine who for a time is suffering from the illness and the medicine. You do not stop taking the medicine when it is that very thing which is going to restore you to health and strength. We will do everything we can to help the unemployed and particularly the young to have a job to go to and we shall come through stronger.

PA

Haven't the first eighteen months at Downing Street persuaded you at all that your policies have to be amended?

You sound more confident, if anything, then you did when you took over. [end p9]

MT

Six months ago in Parliament the Opposition were saying that we could never get inflation down at the rate we had forecast. Never. In speech after speech they said we would never get inflation down to 16½%; in November. We got it down below that. The rate in the last six months is very very much below that and so it will come down in the future months. If we hadn't succeeded in that people would be worried to death and so would industry. They were saying we could not do what we have done. Even we were forcasting that we would not have a very positive balance of payments. We have got a really positive balance of payments. The change and turn around of attitudes is greater and better than we foresaw. Certainly the unemployment is worse than we foresaw. We are not the only country suffering. Belgium has an even higher percentage rate of unemployment than we have. In the United States there are 900,000 people out of work in the car industry alone recently because there hasn't been the demand for cars. We are all suffering from that and I will do everything I can to help, but we have got to get it restored on a sound basis so that when we do expand it's not the sort of bubble that bursts, it's the sort of steady expansion which is a solid base for another tranche of expansion, the sort of thing that's made Germany a strong industrial country, and the sort of thing that has enabled the Japanese to grow. We will do it. It does mean a rough ride and it does mean what I call cushioning the hard corners of change for those who are suffering badly from it. That we are doing …   . We are helping with young unemployed helping with new training, putting money into help new industries get going and putting money into help new industries get going and putting money into those who become redundant because it's their livelihood therefore the view we've taken is that they deserve a good capital sum and I hope they will save that and invest it or use it to start their own small business, because there is a tremendous lot of enterprise, vigour and skill in some of those people. [end p10]

PA

Sir Harold Wilson said on television the other night that you wouldn't last the course.

MT

I feel fine, how does Harold Wilson feel?