Speeches, Interviews & Other Statements

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

1981 Feb 27 Fr
Margaret Thatcher

TV Interview for CBS Morning News

Document type: Speeches, interviews, etc.
Document kind: TV Interview
Venue: Blair House, Washington DC
Source: Thatcher Archive: transcript
Journalist: -
Editorial comments: 0730-0745 broadcast live.
Importance ranking: Major
Word count: 1510
Themes: Defence (arms control), Economy (general discussions), Employment, Monetary policy, Energy, Pay, Foreign policy (Americas excluding USA), Foreign policy (Middle East), Foreign policy (USA), Foreign policy (USSR & successor states)

Q

I would like to, if I may start out by asking some questions about economics. Your programme for economic recovery in Britain is almost identical to the one that President Reagan is proposing here. Do you have any words of advice for him and for us about the course we should be following in the next year or so?

Mrs T

I think he's started off in exactly the right way and I'm amazed at the speed that they got the package of public expenditure cuts before Congress. I hope very much its successful because I think that the essential first step. To reduce the amount of the national income that the Government takes. That inevitably leaves more for the private sector which is the wealth creating and enterprise sector and secondly it will raise the standard of living of the American people. So I'm very much in favour of that and of course its wonderful to get those expenditure cuts before in fact you have the tax packet along side. And the genius is is that the whole thing fits.

Q

Of course, many Americans are now looking to Britain as a model for what he has proposed for our future. It seems that things have not gone exactly as you had planned. Unemployment is soaring, productivity did not rise as you promised, it's fallen 14%; just last year. Were there lessons in what you did for us to learn from?

Mrs T

We came in at a time of the onset of world recession. And it would I admit, have been very much easier to have done it without that world recession. You will remember the recession was caused by the sharp increase in the price of oil, about 150%; over the last 2 years in the world price of oil and we're on world prices of oil. Inevitably that meant difficulties with industries. You've had the same thing here. You had world recession affecting cars, world recession affecting steel, world recession affecting an increase in unemployment. That was a time when we had to start to implement our policies. But some of the unemployment of course is caused [end p1] by world recession and not the policies. It's absolutely vital though that if you're to get unemployment down and the number of opportunities for jobs up that you must in fact tackle inflation. Our inflation went up, I'm afraid to an average annual rate of 22%;. We've taken very firm measures to bring it down. It's now down to 13%;. But if you take the six month figure it's down very much below that, almost into single figures. So we are in fact laying the foundations for a confident economy for the future.

Q

Will we experience worsening conditions—will our unemployment rates go soaring? Is that what is to be expected from the kind of medicine both you and Mr Reagan have prescribed?

Mrs T

That will depend in large part on the course of world recession. Because unemployment has gone up in very nearly all the western countries. It depends on how much is taken out of the economy by increasing prices of oil and of course one watches every OPEC meeting with a certain amount of unease as to whether it's going on. But you must in fact continue to get inflation down. You can't have an honest government unless it's going for honest and sound currency.

Q

This Administration keeps telling us that outside forces won't affect our economy that much, that OPEC is not going to make that much of a difference if we cut spending and increase taxes. Are you saying that the outside forces will make a difference?

Mrs T

No, I think probably what they're saying is that there have been countries in the world, Switzerland and Germany are two, where they've not had such rapid inflation as the rest of us. I suppose the real reason is that here (here, I'm thinking that I'm at home) in a way we have almost had the extra money for government policies to accommodate the increase in the price of oil. Now we've tried to stop that. We've said that if you pay much much more for one thing you've less money to pay for something else and then you will not get inflation. Thats the road the Swiss and Germans took and therefore they had a much much lower increase inflation. Its much much more difficult for us to get that rate of growth of money supply [end p2] down and therefore it's taken longer for us.

Q

One last question on the economy. You have said that really the only way to bring inflation down is to, at least in the beginning, to expect some increases in unemployment. Do you still hold to that view?

Mrs T

In the early stages. If you've got inflation you've got surplus money in the system and therefore it goes into increased prices not into increased goods. If it all went into increased goods, rate of growth, it would be marvellous. Now when you're bringing down the amount of surplus money. If your wage increases are within that you will not in fact get higher unemployment. Unfortunately one of the features of the British economy is that people have expected an annual increase in wages regardless of output and it's that in fact, that annual increase, which takes more and more money out of the economy for the people who are in work that causes the unemployment. So people too have a role to play. They take more out for themselves; they'll cause more unemployment for others.

Q

Well of course American workers are going to expect higher wages too.

Mrs T

Higher wages fine—provided they're earned by higher output and higher productivity. Thats what life is about. But higher wages just by demanding them and using industrial muscle—either it comes from someone else or else it has to be financed by printing money, and that's where you get your inflation. So President Reagan will refuse to print the extra money and thats what we've been trying to do as well.

Q

Let me ask you about President Brezhnev 's invitation to Mr Reagan for a Summit meeting. Do you think that President Reagan should accept that invitation?

Mrs T

Well, I don't think you want to dash at making a decision at the moment. It was a very long speech, as you know they go on and on making speeches, much much longer than we do, just on and on and it contained a large number of points. Each and every one has to be considered, weighted, the aspects considered and replies prepared. Summits are very important. They should be comparatively occasional. The whole world somehow expects some new philosopher's stone to emerge from them which will solve all problems. Life isn't like that. It's very very careful negotiations, very [end p3] careful consideration of the other persons point of view and preparation of alternative courses of action. And I think it would be a great mistake to dash into a reply.

Q

There are some US officials who think Mr Brezhnev 's speech and invitation were nothing more than a propaganda ploy to sort of lull the Europeans back into believing in detente. Did you see it that way?

Mrs T

Well I don't think the Europeans or Americans are to be lulled back to as you say, believing in detente. We still believe in detente, but it has to be two-way. But you know the real thing that would have given an earnest of good faith would have been if the Russians had shown any signs of withdrawing from Afghanistan. We have to remember the background of this invitation. That Soviet troops are still in Afghanistan holding down an independent country by force. One has also to remember on the moratorium on what are called Theatre Nuclear Forces that Russia is way way way in advance of us, both with the numbers and sophistication of those Theatre Nuclear Weapons. And the moratorium would suit her. And it's just precisely for that kind of thing that I say we have got to look at every single word of that speech, analyse it and prepare response. And all that must be done before a reply is given to that invitation.

Q

Do you see genuine signs of conciliation in that speech from what you've read so far, studied so far.

Mrs T

It was indeed a very carefully prepared speech, but it was not followed by withdrawal of forces from Afghanistan. It would have been wonderful if it had been.

Q

One last question on El Salvador. Do you think President Reagan should send American advisors and war material there? Is that the place to draw the line?

Mrs T

The American Administration has provided us with evidence of the number of weapons that are being supplied to the guerillas by outside bodies. And we obviously have condemned that. We issued a statement just before we came here. The El Salvador people must be allowed to decide their own future. We condemn the supply of these arms to the guerillas [end p4] and called upon the El Salvador government to protect all the people in El Salvador. And I think the proper and right approach is for them to sort out their own future in their own way. Unhindered by outside interference, unhindered by weapons supplied to the guerillas.

Q

Thank you very much.