Glyn Mathias
Prime Minister, were you surprised so soon after the Election to face a public spending crisis of the kind you did.
PM
Well, I don't think it was a crisis. Indeed, the action we took was precisely to prevent a crisis. If you see your expenditure overrunning your forecast or your budget, then you obviously have to take action to keep it within your budget. So that action we took was actually to prevent a crisis. And that's very, very good government.
GM
Why should it be once again the National Health Service which has borne the brunt of that action?
PM
But, as you've heard me say many times in the House, the expenditure from the National Health Service will not be less than the figure which was in our Public Expenditure White Paper on which we fought the Election.
GM
But whatever the global arithmetic, the fact is that some staff are going to have to lose their jobs, some beds are going to have to go, some equipment isn't going to be purchased.
PM
There are one million people in the National Health Service. What the Minister has asked for has been a reduction in staff of less than one per cent—10,000. I would have thought it was not unreasonable to expect that, especially when you look back to the time when Sir Alec Merrison was chairing the Royal Commission on the National Health Service. And you'll see that he said then—and that came out in the early part of 1979—There was room for improvement of efficiency in the National Health Service. There is a good deal of room and we've been very modest in the manpower reductions we've asked for, very modest indeed.
GM
Nevertheless, it's enough for the Royal College of Nursing to have accused you of betraying your Election promises of the National Health Service. [end p1]
PM
Well, do you really think that to ask people to reduce their staffs by less than one per cent is betraying promises. They know full well that over the last four years there have been an extra one hundred thousand people employed in National Health Service. You know, whichever service you work in, Government has a duty to see that it's run as efficiently as possible. It doesn't matter whether it's education, or the National Health Service or pensions, it has to be run with quiet, good efficiency and we all have a duty to do that—a duty to the taxpayer who has to foot every single bill, and the nurses have to pay for education, and the civil service for nurses. We all have to run quietly, efficiently and conscientiously. And that's what we're trying to do.
GM
Is public spending now sufficiently under control for you to be able to contemplate significant tax reductions in the next budget?
PM
Public expenditure is under control and we're keeping it under control. And people expect the Tory Government to keep it under control. That is good housekeeping. We want to secure tax reductions over the next year. But this depends to some extent on the revenue that comes in, on expansion that one can manage to get, on how much comes in from your VAT, on how much comes in from your corporation tax and industry, and so on. I'm not altogether optimistic about April because, as you know, what we've tried to do is to correct the taxation levels for inflation. That isn't really a change in taxation, that's keeping its real level the same. Over and above that, I think it would be very difficult this April.
GM
What about the long-term problems of public spending which I know concerns you? How are you going to tackle that?
PM
Long-term problems of public spending always concern me, because there is a natural tendency for it to rise. People are always asking for more and when it comes to the budget and you say, well, it's got to come out of the taxpayer's pocket, the taxpayer doesn't like it. So you have got to look forward to [end p2] the longer term. By the longer term, I mean the next Parliament and beyond that. By the time people like me are old age pensioners, there are going to be rather more than there are now, they're all going to live longer and more young people are going to want to stay in education longer. And we have to look at the burden of both those ends on the working population because they have to earn the money and they have to feel that they're being left with enough of their own earnings to make it worthwhile for them. So of course we have to look at the whole of that balance.
GM
Is there going to be a fundamental reassessment of the kind of benefits the state can provide—unemployment benefit, for instance.
PM
Well, you always have to look at the burden of your social services, your education and your training on the working population because that's who it all comes from. Everything comes from them. So of course, any Government has to look at the pressures upon them.
GM
Can I finally turn to Central America. You give the impression that you are giving total 100 per cent support to President Reagan and his policy towards Central America. Is that a fair impression?
PM
I believe it's in the interests of this country, in the interests of the whole of the free world that Communism does not make great strides in Central America. Remember this, once you've got a Communist Government in it will never let you vote it out. That is not their way. It is a form of dictatorship. We, too, have interests in that part of the world, in the whole of the Caribbean which were British colonies and they're struggling now, absolutely struggling to keep their people in freedom and give them a reasonable standard of living. And we also have troops in Belize, a bastion of democracy in Central America. And it's important that stays democratic. What President Reagan is trying to do is to give the peoples of Central America a chance to choose their own government. He did that in El Salvador. They did have an election [end p3] in spite of intimidation by the guerillas. We sent observers. It's a very good thing to try to keep democracy or to get democracy in Central America. You'll never do it if you get Communism.
GM
Does that support for President Reagan continue, even if it leads to military conflict in Central America?
PM
I do not believe he's planning military conflict. What he's doing at the moment is he's engaged in exercises and he has done far more than any other country and it's as well that people realise it. Three-quarters of all the aid he gives to those countries is civil aid. Not military aid. Three-quarters! Seventy-five cents in every dollar goes to foods, fertilisers, to engineering equipment, to help them build up their country. Why don't we recognise this and give America more praise for doing that. Look at Cuba. She's got ten times the number of military advisers in Central America than the United States has. Who is helping Central America? It's the United States. Who is putting the most military advisers in there? It is Cuba and the Communist countries. Try to keep Central America free of Communism, only then will they have a chance to get a higher standard of living and democracy and self-determination. Thank you very much.