Part One
Brian Walden
Hello and Good Afternoon. Today Weekend World comes from 10 Downing Street, where Margaret Thatcher now faces the most decisive months of her premiership. Before the end of May 1984 a General Election must be held. Whether Mrs Thatcher wins or loses is likely to depend more than is usually the case on the personal impact she makes on voters in the months ahead. She’s already given us an indication of the course she intends to follow—she’s declared that she intends to pursue a resolute approach. But what precisely does the resolute approach involve for Britain? Today, in a live interview with the Prime Minister, we hope to find out. We’ll be asking Mrs Thatcher about what the resolute approach means for certain immediate issues she faces, like the date of the General Election and the level of the pound. And we’ll also be asking her about some of the more long-term questions that she’ll have to tackle if she’s re-elected. First though, let’s hear the latest News headlines from ITN and Norman Rees.
ITN News
Brian Walden
Prime Minister, obviously I want to question you about what the resolute approach means for the quite crucial long-term issues you will face if you are re-elected, but I want to start by asking you about an immediate issue, which everybody’s talking about, namely the date of the next General Election. It’s always been assumed that your personal instinct was to soldier on the whole way till next year, but of course this hasn’t stopped speculation. There’s been speculation while you’ve been away, there’s been a run on the pound, you appear to have temporarily stabilised that and said that there won’t be an early General Election. The trouble with the word early is that it isn’t very precise. What does not having an early election actually mean? [end p1]
Margaret Thatcher, Prime Minister
I thought you’d ask me that question. I haven’t really begun to think about the date of a General Election yet. After all, we haven’t been here for four years yet. I hear all sorts of other people coming out with specific dates, but there is so much to be done and my mind is on what has to be done—on the coming budget, on legislation for this session, on preparing legislation for the next session. Norman Tebbit’s Green Paper is the forerunner of legislation which we could start in November. So my mind is always really on the job. You’re quite right, my personal preference is to run the whole way, but what I will have to consider is what is best for Britain and I’m not going to close any options, I admit that perfectly freely. I do not want an early election but I’m not closing any options at all. It would be wrong to do so.
Brian Walden
That’s important, and I’m not going to press you any further, Prime Minister, because you can’t tell me the date of a General Election here and I don’t want you to, but I want to stress what you’ve just said and put it back to you. When you say you haven’t closed any early options, this means that when you’ve got the budget over and you have time to sit and think about the way things are going, you could in perfect honour call a General Election in June if you wanted to.
Margaret Thatcher
I wish to play it long, I’m that sort of person. But when it comes to deciding the date of a General Election I have to consider the national interest as well, and that I shall do. And I don’t close options, it would not be right to do so.
Brian Walden
What are the sort of factors, whenever you do decide to call the election, what are the sort of factors that will be in your mind that will determine your choice? [end p2]
Margaret Thatcher
There comes a time when uncertainty can tell and it can affect a current Government’s performance. At such times one has to consider what is the best date for a General Election. It may be in the face of that we shall run on the whole way, it may be that I think it better to get rid of the uncertainty. I can’ t tell you now. I’m so busy doing the job in hand that I have not yet given my mind to it, nor do I think it’s time to give one’s mind to it yet.
Brian Walden
You mentioned uncertainties. What sort of uncertainty are you thinking of?
Margaret Thatcher
It’s not the uncertainty as far as we’re concerned, we believe that we shall run through, we believe that we shall have another period. But you know, sometimes you find people thinking, “Well, there’s an election coming up, I wonder what view will be taken after the election.” When you’re doing big international negotiations, that’s the kind of uncertainty I’m thinking of.
Brian Walden
I see. All right Prime Minister, let’s move on from the question of the date of the General Election, where you’ve been quite clear you don’t close options, though your instinct is to run the whole way, and ask you the related issue, really, which is what’s been happening while you’ve been away to the pound. Now there’s no doubt that investors are very nervous and uncertain, and you said yesterday that you thought that one of the reasons for this was the policy of the Labour Party—its desire to have a further devaluation of the pound. I want to put to you that if that is true—after all that’s your explanation, it isn’t theirs—that if that is the correct explanation, you’re going to have further runs on sterling before the General Election, aren’t you? [end p3]
Margaret Thatcher
I think there have been two things. As you know the Deutschmark and the Yen had been very weak, unusually weak for their performance as an economy, unusually weak against the dollar, and of course we are always caught in the cross-fire. And so it was not surprising that we got a realignment against the Deutschmark and the Yen. I think for totally different reasons from any other changes. There have been other factors. There have been people getting nervous about the future, a number of factors affect that, and therefore some moved into other currencies. There will be a number of people, and I think the Labour Party programme is one, who can rock the boat. They have been rocking the boat. All I can do is to try to keep the boat steady, and that means saying very firmly the policies will continue. We may go through a period of rocking, but if we keep our policies firm and do all the right things, you know, keep public spending under control, keep the budget deficit low, keep public borrowing down, keep the money supply under control. These are the things that will tell, and the boat will come through surely and steadily, and sterling will stay firm.
Brian Walden
But you mentioned a period of rocking you see, and again you mentioned the Labour Party as being a factor involved in all this. If your explanation is right on this, after all, bear in mind how comparatively low Labour is in the polls, and yet investors started panicking when they thought there was going to be a General Election. What on earth is going to happen if Labour stages a recovery in the polls? Surely that will mean that you won’t just have a period of rocking, you’re going to have a first-class run on sterling again, aren’t you?
Margaret Thatcher
I think the rocking’s only temporary. You do go through those periods with international currencies , the dollar’s gone through it, the Yen’s gone through it, the Deutschmark’s gone through it, we all do. The rocking is temporary. [end p4]
What ultimately will determine the value of sterling is the policies which we pursue steadily and consistently. Even if the IMF were to come in and run Britain’s economy now, they could not ask us to do anything that we’re not doing. It is that steadiness which will tell ultimately. If they were to believe that we should not be here, then there may be other difficulties which would arise and that would be a fact or I would have to take into account in deciding a General Election. I think at the moment the rocking’s been temporary, we’re carrying on with those firm policies because they’re the right ones, not because they’re firm but because they’re right. If they’re right, it’s right to be firm.
Brian Walden
But you see where my doubt lies, don’t you? Now I’m taking you on your own terms here for the moment, we’ll come in a moment to whether in fact the Government has done the right thing on this. But let’s suppose for the sake of the argument that you are right and that a major factor in the rocking is the fact that the Labour Party is telling investors that when it comes to power there will be a devaluation of the pound. Now you see my doubts. They’re going to go on saying that, and investors are going to go on having that doubt in their mind. So to that extent a run on the pound is somewhat out of your control, isn’t it?
Margaret Thatcher
I wonder if they are going to go on saying that.
Brian Walden
They say they are.
Margaret Thatcher
Well, it’s thoroughly irresponsible. And I do not think it will adhere to their credit or to Britain’s credit if they go on saying that. It is thoroughly irresponsible [end p5] to try to secure a major devaluation of your currency. Totally irresponsible. It means that we have to pay more for all raw materials and all pre-fabricated things coming in. It would not be to Britain’s advantage. It would be to Britain’s disadvantage. The right thing is to try to run your economy in such a way that your currency is strong. That is the way to have continuing good performance. I think the Germans have discovered that, I think the Japanese are discovering it, and for them to go like that would be utterly irresponsible and I think they may well learn from what has happened. [end p6]
Brian Walden
Well, let me put to you what it is I think that the Labour Party would say, and indeed to some extent have already said. They say, it’s nothing to do with us, not our fault, it’s the ruin of Thatcher’s own policies;, and—and this is the question I want to put to you it’s a very good thing that the pound should fall, it makes our imports dearer and our exports cheaper, and we could do with having the pound down further. Now what do you say in reply to that case?
Margaret Thatcher
If it makes all your imports dearer, it means that the next round of imports and semi-fabricated manufactured goods which go into our finished exports are dearer, and that has the tendency in the longer run to put up your prices. That is bad. This kind of devaluation which they are trying to get never lasts. It’s a substitute for getting your industries efficient, and that only lasts about a year or so then you’re right back in the fundamental problems. The only one way to get prosperity and a higher standard of living in this country is to get our industries running as efficiently as any of those in the rest of the world. To get the sort of new products that will sell, to be right up front in the science-based industries, that is the real fundamental road I am treading. Devaluation may be a temporary palliative. It will never last. The Labour Party is always after devaluation, they’ve done it many times. Look at the other, deeper, more fundamental things for a lasting cure to Britain’s problems.
Brian Walden
All right. So then do I take it, Prime Minister, that whoever’s fault it was—you have your view and obviously your opponents have theirs—that you regard the recent fall in the value of the pound as having been a bad thing? [end p7]
Margaret Thatcher
You cannot hold what is a fundamentally wrong value of your currency in relation to some one else’s performance. Part of there alignment as I have indicated, against the Deutschmark and the Yen, I think was reasonable because their industrial performance had been much better than ours for a long time. And for reasons which were totally in explicable to me their currency was performing very weakly for a time. So I’m not surprised at that change because it goes to the fundamental thing, the underlying industrial performance. If we want that back, we have to go on improving our own industrial performance. That is one thing. You get these other rocking things that you can get through great sums of money moving around, but they are temporary. Fundamentally you look at your performance and at your Government’s financial performance. Government can do some things, keep the financial performance sound and the money honest and sound, that we’ve done, that we shall continue to do. The rest does come over to industry and commerce, with fairly disciplined financial government.
Brian Walden
Well that answer provokes me to ask you Prime Minister…
Margaret Thatcher
I’d hoped twasn’t provocative…
Brian Walden
No, no, no, I don’t mean in that sense. It was stimulative, and it stimulates me to ask you what is a reasonable value for the pound at the moment? Do you think we’ve got Sterling just about right now? [end p8]
Margaret Thatcher
I can only say this;there is no reason, sound reason, for Sterling to fall any more.
Brian Walden
And you don’t want it to?
Margaret Thatcher
There is no reason either for interest rates to go up. I believe ultimately in a strong currency, that’s the way my policies are going. I believe in a revival of the economy, which is why I believe there is no earthly reason, I do not want interest rates to go up. I have to look at a number of things, running a government is keeping a number of balls in the air simultaneously, and you have to look at each of them. There’s no sound reason for Sterling to fall any more, nor for interest rates to rise.
Brian Walden
That’s clear enough. Let me ask you about one consequence of course of what you call the realignment of international currency values and the fall in Sterling. Surely, Prime Minister, this is going to mean that this, over a period of months, will work through into inflation and will either mean that inflation rises or that it doesn’t fall as much as it otherwise would. Now that is the case, isn’t it?
Margaret Thatcher
I think there’s something of a problem, but nothing like as much as some of the commentators indicated. Everyone wants to keep their export markets at the moment, and those who are exporting to us will do anything to keep their markets. The profit margins of exporters have been quite good, they can cut those substantially and therefore hold their prices to us, and they’ll try to do that. They’ll want to keep their markets. Our people have a chance now to compete with them [end p9] more effectively, but I do not think for that reason that there’ll be so much impact on inflation as some commentators think. On commodity markets, as you know, the commodity market is weak, the market will not take the increase in prices. That would be the mechanical increase if you were looking at it strictly on an arithmetical basis. So the effect on inflation, even on the present rate of Sterling, will not I believe be as serious as some of the commentators think. And of course it depends what happens to Sterling. Sterling may well recover.
Brian Walden
If it—of course it could go the other way—if, let’s suppose your analysis of what Labour is doing is right and they keep on doing it, presumably if sterling did fall again that would be bound to work through in quite a significant way on inflation.
Margaret Thatcher
But just still bearing in mind the two factors which I’ve indicated. Export markets are very difficult to get at the moment, we struggle to keep ours. Others who are exporting to us will struggle to keep theirs. That means they will be prepared to lower their margins and keep their prices down in order to keep their markets. I do not think that will change within the coming year. You know full well that some of the oil companies have been trying to put up the price of oil because their margins here are very low, the market wouldn’t take it, the commodity market is weak and these are things which I think will not let inflation go up.
Brian Walden
All right … [end p10]
Margaret Thatcher
… to the extent that some of the commentators have said, and will help us to keep it down. Ultimately your inflation depends upon your monetary and other financial policies, that is a long-term thing and we shall keep those steadily, and those will exert a downward pull on inflation the whole time.
Brian Walden
You do say that you disagree with the commentators that inflation will rise sharply. Do I take it from that that you envisage the possibility, as you would claim through no fault of your own, that it might rise a bit as a result of the drop in sterling?
Margaret Thatcher
It depends on what happens to Sterling, and it depends on the profit margins. I do not think it will rise a great deal, it may rise a little, depending upon what happens. You can’t keep a downward fall steady, you know, it just had a hiccough, in about the 1981. But I believe that because we are holding the financial policies firm, and that is what ultimately determines your inflation, we shall keep a downward pull on inflation and we shall continue to go in that downward path, with a slight hiccough possibly.
Brian Walden
Well, this is all very clear, Prime Minister, what you are saying is that you do not want the pound to fall any further, you envisage the possibility that in fact there might be an improvement in its value, that you do not agree with some of the commentators that this is going to have a very significant effect on inflation, and you don’t want to see interest rates rise. Let me ask you one very last question, as it were to tie this package up. Of course, if the pound does fall again, if there is another run on it either because of Labour’s policies or because your policies as they would say are not working properly, etc. [end p11] Whether you want to or whether you don’t, you may have to let interest rates rise, may you not, in order to steady sterling?
Margaret Thatcher
Or you never know, speculators may say that the pound might recover quite significantly, quite sharply, and then they might get their fingers burnt if they sell it down. That’s another factor which they must take into account.
Brian Walden
Well, I don’t think many people would break their heart if that happened, Prime Minister. We must take a break at this point. When we come back I want to talk to you about some of the less immediate consequences of the resolute approach. We’ll … . be back in a moment.
End of Part One
[end p12]Part Two
Brian Walden
Prime Minister, I’d like to bring up with you now what many people think are probably the two most fundamental long-term problems that you will face for the rest of the life-time of this government, and if you are elected for a second term during the life-time of that government as well. And the first one that I want to put to you is nuclear weapons, particularly nuclear disarmament. Now it has been assumed that the resolute approach as you call it, your approach, means that we do want disarmament but if we give up anything we must have an absolutely equivalent giving-up by the Russians. The trouble is this approach hasn’t produced any quick, dramatic results. A lot of people have become impatient and worried. I just thought I’d like to start out by checking with you that you at least don’t want to vary that approach at all.
Margaret Thatcher
Can I put it in my own way? The purpose of defence is to keep peace, not at any price, but peace with freedom and justice. To do that you have to deter a potential aggressor, to stop him from being tempted to use his armaments to attack us. Weakness would tempt him. Strength stops him. To deter him you have to be strong enough at each and every level of armaments to stop him from using his on us. So if we go down in our nuclear or conventional armaments—and we want to get both down—then we do so on condition that he comes down as well, so we always keep this balance of deterrence. To do anything else would be to be weaker on our part leaving him stronger, and that would be more likely to put peace, freedom and justice at risk than to keep it.
Brian Walden
All right Prime Minister, can I switch now to the particular missile that I think is giving you most of your problems, namely the Cruise missile and its suggested deployment in [end p13] Europe and particularly in your case in this country. Cruise and Pershings in Europe, and Cruise in particular in this country. Now of course you have always said, the West has always said in general, that it won’t deploy Cruise and Pershing if the Russians get rid of their equivalent weapon, namely the SS-20s. They get rid of all their SS-20s, no Cruises and Pershings. But the Russians have made it clear that they won’t do that and they want to keep some of their SS-20s. Now the option you’re going for is called the Zero Option, all of theirs out and then ours don’t get deployed. But it isn’t producing a settlement. Now do you therefore still stick to the Zero Option?
Margaret Thatcher
I don’t think this has been gone into in public discussion anything like enough. This is a N.A.T.O. policy. In 1977 Helmut Schmidt gave a very interesting lecture in this country pointing out that now there was virtual parity in the big strategic weapons between the Soviet Union and the United States. The nuclear umbrella was perhaps not quite as firm from America over Europe as it had been when there had been superiority. Moreover, outside this parity of the big weapons the Russians had gone below the level of the S.A.L.T. agreements and were starting the deployment of these big new SS-20s, which are the modernisation of previous weapons. And that left Europe vulnerable. Now that was 1977. 1978 there was a very big N.A.T.O. meeting in Washington. They had a ten-point defence programme, a good deal of which was not about extra weapons but modernising older weapons. And the tenth point was modernising weapons to match these SS-20s. They set up two groups that year and early next year. One to look at the modernisation of older weapons, and the second one, the arms control aspect, to say ‘look, we needn’t modernise or deploy them if we can in fact negotiate with the Soviet Union for them to stop deploying them and get them down’. Those two groups did a lot of work. They came in with one fundamental recommendation, which came in the lifetime of our government in December 1979, to the whole of N.A.T.O., which said that we modernise our older nuclear weapons at a smaller level, [end p14] below the strategic level, and we deploy them unless—and this was right back in 1979—the Soviet Union will negotiate those weapons down. So the possibility of negotiating them down was right there from the beginning. Now the next point to realise, not only it’s a N.A.T.O. decision but negotiation was possible right at the beginning, is that Cruise missiles are not extra missiles. As they go in, one-for-one the older ones will be taken down. So they are not increasing the number of nuclear warheads at all. They are substituting a modern weapon for an older one. And the last one; we needn’t deploy any if the Soviets can be persuaded to negotiate and take their SS-20s down. Now I think that this whole thing has been dealt with without that background. This is a N.A.T.O. decision, ours will be deployed, I think 572, unless the Soviet Union take down theirs of which there are more, about 660 facing Europe, but they’ve got more over the other side of the Soviet Union. All the opportunities for negotiation are there. Could we go on just a little bit longer?
Brian Walden
Well, I’d like to ask you, because all of that’s very clear …
Margaret Thatcher
There’s a good deal more that’s clear, too …
Brian Walden
I’m sure there is Prime Minister, but all of that is very clear to me except one thing. Back to Zero Option. Do you want all the SS-20s out before you agree not to deploy Cruise? Or are you prepared to let the Russians keep some and not deploy?
Margaret Thatcher
It’s because I thought you were going to ask me that question. I wanted to give just a little bit more background. I will of course answer it during the course of what I say. Immediately [end p15] after we’d come to that decision—the whole of N.A.T.O. in 1979—MrBrezhnev said “no negotiations unless you agree not to deploy any.’ Typical Russian position. Later he went to see Helmut Schmidt in Germany. Helmut Schmidt had the same sort of firm approach that I do. He wasn’t going to be persuaded of that. And he said to Mr Brezhnev ‘look, unless you negotiate and get it down, we will deploy.’ He was firm. The firm approach worked. After that they dropped that condition. We had tabled our negotiations in Geneva, our proposals. They then tabled theirs. Now their negotiations had involved bogus counting on their side and we mustn’t have wool pulled over our eyes about what they are doing. They came off that. The firm approach got them negotiating. Now for the first time it looks as if they are prepared to consider reducing their SS-20s. In the meantime of course President Reagan had said he is prepared to go for the Zero Option. But you see I am getting the full background in. The negotiation was always possible right from 1979, December 1979. Brezhnev said no negotiations, we said right, firm approach, we deploy if you don’t. Now they are starting to negotiate on a bogus figure, and even so the firm approach is much more likely to work to get theirs down and ours down. But if we are not going to deploy we’ve got to have them down to zero. And if we start to deploy, it takes five years to deploy the full number of Cruise missiles, there’ll be plenty of time to get them down provided the Russians will reduce theirs. Now I’ve set that out at some length because that is the true position. But you see, if you want nuclear weapons reduced in the world, and I do, you have to take the firm approach with the Soviet Union. You’re much more likely to get them all down that way and then the world would be a safer place.
Brian Walden
All right Prime Minister. Now that will come to many people as a new idea of … [end p16]
Margaret Thatcher
I think I did answer your question…
Brian Walden
Yes, yes indeed. I’m going to put it back to you in a slightly different form now. I’m going to tell you …
Margaret Thatcher
… must be very wary … .
Brian Walden
No, no, no don’t. No need to worry at all Prime Minister, least of all for you. What you are saying is a rather new idea, which is that we may not get immediately to Zero/Zero. But the Russians can be moved in these negotiations and it might be that they’ll take out some of their SS-20s and we shall deploy some of our Cruises. And then over the course of time we may be able to negotiate that further, to the point where in the end they take out all theirSS-20s, in which case we take out all our Cruises. Now is that what you’re saying? That you see this step-by-step approach to eventually removing Cruise and SS-20?
MargaretThatcher
Ionly quarrel with you in one thing. There is nothing new in that. It is an aspect which has not been highlighted by the commentators. It was inherent in the original decision in December1979 and in the negotiations since. Totally inherent init.
Brian Walden
All right.
Margaret Thatcher
The other thing which has not been stressed, and I stress it yet again, is that as Cruise go in one-for-one other nuclear warheads would be withdrawn. So it is a modernisation, not an extra. [end p17]
Brian Walden
Allright, now what you’ve said of course means that it may well be that Cruise will have to be deployed because we won’t have a situation by the time its deployment is due, which is towards the end of this year, which enables us not to deploy it.
MargaretThatcher
That depends on the Russians…
BrianWalden
Ofcourse.
Margaret Thatcher
I do wish people who brought pressure on Greenham Common and everywhere else would understand there’s no public opinion in the SovietUnion.
Brian Walden
Ah, well now it’s just that sort of thing I want to ask you about. You see, I don’t think you’ve got much of a hope with the out-and-out unilateralists who go to Greenham Common. They in fact will be angered by what you’ve said this morning. The gap between you and them is so colossal that I don’t think you will be able to bridge it. But I want to ask you about another group of people who may not be out-and-our unilateralists but are worried about Cruise being deployed. Now I want to put some of their fears to you and see if you can reassure them. A lot of people, who are not unilateralists, say that they don’t want Cruise in Britain. That will make a nuclear war in Europe more likely. Now what would you say to that?
Margaret Thatcher
Where you’ve had effective nuclear deterrence on strategic weapons, that deterrence has been so powerful, because these weapons are so awful, that it’s kept the peace for thirty-seven years. [end p18] Where you have not had that effective nuclear deterrence, we have had since the last war some 140 conventional wars, conflicts or hostilities. This indicates that where you keep nuclear at a deterrent level it is a great saviour of peace. Because the alternative is so horrific. That means that the deterrence works. I would say to the people who said just what you’ve said, I don’t think unilateralism has any attraction for Britain. One-sided weakness makes war more likely. Particularly when the Soviets were the people who when they had a spark of freedom in Hungary or Czechoslovakia put in their tanks, and in fact put in their troops into Afghanistan. That’s the kind of person you are dealing with. He’s shrewd. He’s astute. He’s tough. But if other people who are negotiating with him are equally shrewd, equally astute, equally tough, as equally determined to defend freedom and justice as they are to extend communism the world over, that is the way to do business. That’s the way to get it down. What they want, look at their negotiating stance, I will tell you what it is. They want to act in such a way that they can have a tremendous preponderance of SS-20s over similar weapons, land-based missiles of that type on our side. Why? Why do you think they want that? [end p19]
Brian Walden
You tell me Prime Minister.
Margaret Thatcher
Because I think they want to make us vulnerable.
Brian Walden
In what sense?
Margaret Thatcher
I think the peace has been kept in Europe because of the strength of NATO. That has deterred the Soviet Union, not one foot across that line. If we are weak at any time they can come gradually by one means o another across that line.
Brian Walden
All right.
Margaret Thatcher
No. I believe so much in our way of life. I’m prepared to defend it and I’m prepared to watch what they do, and look at their negotiations, and be just as firm with them as they are with us, and as just as canny. That is the way we’re going to get all nuclear weapons down, and I don’t understand the unilateralists. If they hated nuclear weapons as much as I do, and wanted them down as much as I do, they’d want them down in the world as a whole and they’d want them down in the Soviet Union.
Brian Walden
I suppose … [end p20]
Margaret Thatcher
I am the true disarmer. I keep peace and freedom and justice with it.
Brian Walden
I suppose the unilateralists would say that they think that their method of giving it up unilaterally would produce these consequences in the Soviet Union. However, it’s not that I want to put to you, I want to sum this up. Am I doing any injustice to your view, Prime Minister, if I say that what you’re really telling me is that you know there is some risk to deploying Cruise—there are risks with all weapons, especially nuclear weapons—but it’s your considered judgement that that risk is worth taking in order to preserve the values that you think are important?
Margaret Thatcher
I don’t think you’re being quite fair, because I think you have not taken into account what I’ve said before. Cruise is the modernisation of those land-based missiles. The Soviet Union has already modernised hers, we still have a lot of older ones. As the new ones are deployed in NATO, the five hundred and seventy-two, the older nuclear weapons would be withdrawn on a one-for-one basis. So it is a modernisation not an increase in nuclear, a modernisation of them, and I think that factor has to be taken into account in what you said.
Brian Walden
But all nuclear weapons are a risk, aren’t they?
Margaret Thatcher
The ones we have now are a risk. But equally …
Brian Walden
A risk worth taking, you think. [end p21]
Margaret Thatcher
They are a great protection.
Brian Walden
All right.
Margaret Thatcher
They have in fact deterred.
Brian Walden
Let me move from nuclear weapons, Prime Minister, to something that perhaps for many electors will be the most important of all issues, namely the economy. And let me again start by a checking question on what you call the resolute approach. Do I assume by this that if you are re-elected in broad terms—of course you would like no doubt a little thing here and there to go better, we all would. But in broad terms you intend to pursue thes ame sort of policies, and you see those policies producing at the end of your second term there generation of the British economy.
Margaret Thatcher
Yes. Because they’re sound, long-term, and sustainable. And I think are the only basis on which to give us long-term recovery and to give us a chance to compete effectively with other industrial nations.
Brian Walden
All right. Now on inflation, even some of your critics would say you’ve had a considerable measure of success. Of course, some of your critics wouldn’t say anything of the sort, but I won’t go into that at the moment. I’m more interested in your supporters. Your supporters sometimes say—some of them do anyway—‘we’ve been very successful on inflation but we want to go further, we would really like to get to a situation of nil inflation.’ Now is that a long-term objective for you, Prime Minister? [end p22]
Margaret Thatcher
Oh yes, of course it is. That is honest money and sound money. That means if you save out of your money, out of your earned money savings today, it will still have the same value in retirement. There must be millions of pensioners who could wish that the money they’ve saved painfully over very much less prosperous years than we have now, still had the value today it had when they put into the Post Office or National Savings.
Brian Walden
So you’re giving—I’m not all myself I know you’re not either, I’m not myself terribly keen on the word ‘pledge’. But you’ll know what I mean when I say you are in effect then giving me a pledge that within five years you see a real prospect that there could be nil inflation.
Margaret Thatcher
I am giving you a purpose, an objective to which I shall go firmly and steadily. It is honest money.
Brian Walden
All right. Now let’s talk about what some of your opponents say are the costs. They say that’s all very well, it sounds fine, but the trouble is that there are costs in reducing inflation. For instance, Mrs Thatcher may have to do it at the cost of some rise in short-term unemployment. Do you accept that that’s so and is that a price you’re willing to pay?
Margaret Thatcher
The costs of reducing inflation are not nearly as great as the costs of refusing to …
Brian Walden
But they’re different though, aren’t they? That’s the trouble. [end p23]
Margaret Thatcher
They’re different. I mean, already Germany has lower inflation than ours and she’s a competitor, so she has a chance, an edge over us in the international markets, and you can’t overcome that edge permanently just by devaluation. That’s only temporary. So already we’re competing with others who have lower inflation than we are, that’s another aspect of it. And the price of not reducing inflation is infinitely greater than the other thing, and of course it’s another aspect. So much is index-linked now. I mean you have enormous differences between those who have index-linked pensions and those who don’t. The only way to equate them is not to have any inflation, that is justice. My policy is one of honesty and justice and will work steadily in the long-term. As far as the costs of reducing inflation further are concerned, I think provided wage increases are below the current level of inflation, you need not have more unemployment, that depends upon wage increases.
Brian Walden
All right Prime Minister. You’ve never said of course, that inflation was the only means, the reduction in inflation was the only means to regenerate the economy. You used to talk a great deal, and so did Sir Geoffrey, about tax-cuts. Now I want to ask you about this again. If you were successful and got a second term of office, is a substantial reduction in taxation still one of your aims?
Margaret Thatcher
Very much so. I agree with you. To get inflation right down is not enough. It’s a very, very good start and it gives people a chance to compete the world over in their goods. You still need that inspiration, that genius, that inventiveness, you still need those people who have the capacity not just to talk about things but to set up on their own, to build up businesses—whether they be industry or commerce—to start employing other people. [end p24] They’re rare people, these people who can create new businesses. We need them here. They need incentives, they need to know that if they do well they personally will do well, their company will do well, they can make profits, they can plough them back. These people are wonderful, we all rely upon them to create the industries of tomorrow, so you have to have incentives, and that’s why I regret that we haven’t been able so far to do more. It would be a very real objective to do more in the next Parliament.
Brian Walden
All right Prime Minister. Let’s see if we can get some sort of target there as a guide, a bench-mark as it were. Sir Geoffrey used to talk about how he desired to see, in the end, a standard rate of income tax that was not higher than 25 percent, 25p in the pound. Is that the sort of realistic objective that you can see for the end of your next government? [end p25]
Margaret Thatcher
I wouldn’t like to set a precise figure. I will go towards getting it down as fast as one possibly can, not only for the top people that I’ve indicated but I think at the moment the level of tax for the working population—and that’s about 95%; or 96%; or 97%; of all of us in the working age— is too high, and I would steadily like to get it down. I’m not prepared to get it down at the cost of having such an enormous amount of borrowing that that puts us in jeopardy another way.
Brian Walden
But you are talking …
Margaret Thatcher
But I want incentives at all levels and I am talking about getting it down.
Brian Walden
And substantial tax-cuts…
Margaret Thatcher
Depends on how we perform in growing. Substantial tax reductions in the long run—but don’t think I can promise it in the next budget.
Brian Walden
All right. Let me ask you by the way about this, because you know what your opponents say. They say ‘Well, it’s all very well, Mrs Thatcher always promises substantial tax cuts before general elections, but look at her record—far from the tax burden having gone down while she’s been in power, it’s actually risen from 36%; to 39½%;.’ Now what do you say to that?
Margaret Thatcher
They’re taking into account not only direct taxes but indirect taxes as well. I prefer the indirect taxes—as you know we swung from a certain amount of direct to indirect tax for very well-defined reasons at the time. If you look at the increases in pay that have occurred during the lifetime of our Government, you’ll find that on average—and I do take averages ‘cause that’s the only way I can do it—the average person is better off taking the increases in pay and the levels of taxation. [end p26]
On direct taxes [we?] reduced the standard rate from 33 pence to 30, which was a very, very definite move. I’ve not been prepared, ever, to go on with tax reductions if it meant unsound finance. We had to spend, we had to spend quite heavily, I’ve not been prepared to borrow more than I think is wise, so we haven’t been able to do as much as we would wish.
Brian Walden
All right, now Prime Minister, very many people think, and I have a feeling that you probably think as well, that there’s no way that we can have substantial tax cuts unless we have some pretty substantial cuts in public spending, and there again your record hasn’t been all that some of your supporters would have wanted it to be. I put it to you—do you feel that you will in the period of your next government, if you are re-elected, be able to produce substantial cuts in public spending?
Margaret Thatcher
I think you usually get reductions in taxation when you get a period of growth, therefore you’re getting increasing revenue in without putting up the rate at all. And I think the growth has to go to, to, mainly to cuts in taxation, and I think you have to try first to hold your public expenditure generally, and then to look selectively at where you can reduce. I think there are a number of places where one can and one’s been very, very disappointed at the levels of local government expenditure. Some councils have been very, very good indeed in trying to get it down, some councils have looked at the numbers of people they employ very care fully to see if there are too many, so I think there are areas, selective areas, where we can reduce, but I think you’ll get your tax cuts by making a priority from growth as going to reducing the burden on individuals. Is that clear?
BrianWalden
It is indeed, though actually Prime Minister, you know you used to say it the other way round.
Margaret Thatcher
No.
Brian Walden
You usedt o say‘Let’s have the tax cuts and then we shall get the growth’. [end p27]
Margaret Thatcher
No. Not always. That was a Laffer-ism you know, and I remember having arguments with Laffer and saying ‘Yes, but there’s probably a three year gap and how are we going to get back that three years, how are we to survive that three years?’ And also, I’ve been in politics a long time—you know that, we were in it together—and I’ve watched many many years reductions in public spending as an objective. If you actually hold it and then take selective reduction. If you actually hold it, you’re doing very well, and then you take the growth to reduce your personal taxation. Once or twice one’s been able to do certain reductions because one’s found inefficiencies, this is always there, and of course we always have a go at that.
Brian Walden
All right Prime Minister let me swing away from the economy now, to ask you something rather more general but I think very important. Politics isn’t all about promises and pledges and rates of inflation and percentages. A great deal of it is about vision. People have to get a feel of what they’re being offered and why they’re being offered it. Now, in your case, I happen to personally believe that this is rather more important both for good and for ill—as far as the Conservative Party is concerned—than it has been with most Prime Ministers for a long time, so can I ask you—What sort of Britain do you eventually want? And give you some benchmarks to go at. Am I wrong when I say that what you seem to be looking for is a more self-reliant Britain, a thriftier Britain, a Britain where people are freer to act, where they get less assistance from the State, where they’re less burdened by the State, is that the sort of Britain that you want to bring about at the end of your Premiership? [end p28]
Margaret Thatcher
Yes, very much so. And where people are more independent of the State. I think we went through a period when too many people began to expect their standard of living to be guaranteed by the State, and so great protest movements came that you could, by having sufficient protests, sufficient demonstrations against Government, get somehow a larger share for yourself, and they looked to the protest and the demonstrations and the strikes to get a bigger share for them, but it always had to come from the people who really strived to do more and to do better.
Brian Walden
All right, now you know, when you say you agree with those values, those values don’t so much have a future resonance, there’s nothing terribly new about them. They have a resonance of our past. Now obviously Britain is a very different country from the one it was in Victorian times when there was great poverty, great wealth, etc., but you’ve really outlined an approval of what I would call Victorian values. The sort of values, if you like, that helped to build the country throughout the 19th Century. Now is that right?
Margaret Thatcher
Oh exactly. Very much so. Those were the values when our country became great, but not only did our country become great internationally, also so much advance was made in this country. Colossal advance, as people prospered themselves so they gave great voluntary things to the State. So many of the schools we replace now were voluntary schools, so many of the hospitals we replace were hospitals given by this great benefaction feeling that we have in Britain, even some of the prisons, the Town Halls. As our people prospered, so they used their independence and initiative to prosper others, not compulsion by the State. Yes, I want to see one nation, as you go back to Victorian times, but I want everyone to have their own personal property stake. Property, every single one in this country, that’s why we go so hard for owner-occupation, this is where we’re going to get one nation. I want them to have their own savings which retain their value, so they can pass things onto their children, so you get again a people, everyone strong and independent of Government, as well as a fundamental safety net below which no-one can fall. ChurchillWinston put it best. You want a ladder, upwards, anyone, no matter what their background, can climb, but a fundamental safety net below which no-one can fall. That’s the British character. [end p29]
Brian Walden
Shall I put to you the argument that I think is most likely to be put against that, and by the way I’m bound to say an extremely frank and revealing statement of your basic attitudes. But a lot of people will say, ‘Well, it’s all very well Mrs Thatcher talking about Victorian values and citing self-reliance and all these excellent things, but that isn’t going to give us equality. If we’re going to have those sorts of values we’re going to have a more unequal, or at least an equally unequal society than the one we’ve got at the moment. Thatcher will never give you equality’. Now what do you say to that?
Margaret Thatcher
That nations that have gone for equality, like Communism, have neither freedom nor justice nor equality, they’ve the greatest inequalities of all, the privileges of the politicians are far greater compared with the ordinary folk than in any other country. The nations that have gone for freedom, justice and independence of people have still freedom and justice, and they have far more equality between their people, far more respect for each individual than the other nations. Go my way. You will get freedom and justice and much less difference between people than you do in the Soviet Union.
Brian Walden
All right, then that’s your view on equality. What would you say to those people who are not necessarily equalitarians, but say, ‘The trouble is, Mrs Thatcher, we don’t find your vision compassionate enough. You’re not—you’re too concerned withvarious economic regenerations and all the rest of it. You don’t appear to have sufficient compassion, either in your character or in your Government.’ Now what would you say to that?
Margaret Thatcher
Compassion isn’t determined by how much you get together demonstrations in the street to protest to government that government, which is other tax-payers, must do more. It’s determined by how much you are prepared to do yourself. Of course we have basic social services, we will continue to have those, but equally compassion depends upon what you and I, as an individual, are prepared to do. I remember my Alfred Robertsfather telling me that at a very early age. Compassion doesn’t depend upon whether you get up and make a speech in the market-place about what governments should do. It depends upon how you’re prepared to conduct your own life, and how much you’re prepared to give of what you have to others. [end p30]
Brian Walden
All right, now I think we’ve learnt from you this morning in very clear terms what the resolute approach means. It means that your options on the general election are open from June onwards, you haven’t pre-empted them. It means that you feel that the pound may well rally and you don’t think it’s going to have a great impact on inflation. We’ve learnt that you’re still very, very firm on nuclear weapons and that you feel that it’s the Russians that must make the concessions. We’ve learnt on the economy that you more or less intend to adhere to what you’ve been following through. Can I ask you a very last question, for unfortunately a very brief answer. What do you say to those people, and there are some you know, who say, ‘The ends are all splendid, it’s the means, does she have to be so bossy, does she have to be so strident, couldn’t it all be done much more emolliently and consensually?’ What would you say to them?
Margaret Thatcher
Consensually, anyone who’s had any convictions has always put those convictions. There would have been no great prophets, no great philosophers in life, no great things to follow, if those who propounded the views had gone out and said ‘Brothers, follow me, I believe in consensus.’ No Brian, no.
Brian Walden
So it’s going … it’s the tough approach, verbally as in every other way?
Margaret Thatcher
No, it’s the sincere approach.
Brian Walden
All right …
Margaret Thatcher
Born of the conviction which I learned in a small town by a Alfred Robertsfather who had a conviction approach.
Brian Walden
Prime Minister, thank you very much indeed.