JA
I think it's fair to say that one of the big post-war problems for this country, both in an economic and political sense, and also in a psychological sense, has been to adjust to a place in the world that is radically different to that which she had in 1935. She came out of the world with economic problems, she came out of the world … . her colonies, which had economic implications. Do you think that process is complete, and do you think Britain has found a proper role in the post-war world, and if so what is it?
PM
The answer is yes, but it wasn't quite as sudden as you've indicated. I remember the pre-war period, and I remember the great empire conferences. I remember the day we went into World War II. Within 3 days so many dominions and colonies declared war. And I remember that one expected that. I remember the 6 years. You know, had you known that it was going to take 6 years, perhaps you wouldn't have taken it. And it was a long 6 years, and I remember a very difficult time afterwards. But we didn't come out of them shorn of our colonies. If you remember, it took a very, very long time. It was quite a shock in a way that we were trying to bring them so rapidly to independence, one after another. But it wasn't as sudden as you think. The point is that one had more time to get used to it. Nevertheless at the same time we had the world's oldest and perhaps one of the most important monarchies. This gives us stability. It also gives us influence the world over. It was a sellers' market. We did not have that much economic difficulty once we came out of the first 5 to 6 years. Difficulties with rationing, the post-war period. Now after that life does come one day, one week, one month at a time. It is not sudden. Winston was still making his fantastic speeches. And we had the biggest political giant in the world in Winston. We lost him in 1964/5. But by that time he'd been doing these colossal speeches, these visionary speeches. Always I think when you read his books one knew what the Communist world was going to be like. And he always understood that somehow previous protagonists had [end p1] to be brought together. And so it was he who said that we must have a United Europe. But you know all this. This is a matter of history. You can't compress it. But to me you're talking about not an eclipse, but you're talking about a gradual change. Now, we still have—can I put it this way—and I hope it doesn't sound pompous—I still think we have a certain integrity in the world. I find it wherever I go. We still have Commonwealth links the world over, and naturally one is always expected to take something of a lead at those Commonwealth Conferences. A mixture of a lead and knowing that you're one among equals. You must be very careful how you do it. In Europe we play a very active and vigorous role. In NATO we have an extremely high reputation. And so we should have. We are the only country in Europe that was in the war on the side of victory from the first day to the last. And it is still known that our armed forces are highly professional. And so wherever they go we have a fantastically high reputation. So I think all told, yes, we have.
JA
Does it bother you at all—I don't think you would deny you're a woman who's proud of your country—that Britain has gone—admittedly over a long period—from being the most powerful country in the world to being less powerful than a minimum the United States, and Russia and Japan economically?
PM
No, it doesn't bother me. It's a fact economically. And one accepts that the United States is the most powerful free country the world over. I think you produce something like a quarter of the world's GDP. And therefore one is always saying that whatever happens, the United States will play the foremost part in the world because she is the biggest and most powerful country in the free world. Japan is economically very powerful. I think we still have one or two things.
Our research, for example, is quite outstanding. Our inventiveness—radar, a computer, the first nuclear power station, first jet engine—just a fantastic number of firsts. You will find that we still have a fantastic scientific reputation. [end p2]
JA
Does this situation make it in any way difficult to conduct foreign policy—it's very important obviously that you stay in step with the United States, but that you don't stay—if I could use such a phrase—in locked step with the United States?
PM
No, you'd lose all respect if you were in locked step but a country with our history, with our influence, with our fight for freedom which we never hesitated to pursue, with our integrity, has influence in excess of her economic power. We're not likely to get locked onto anyone. We are likely to be loyal allies when the chips are down.
JA
Which brings me to a somewhat more specific question. You expressed quite candidly, I thought, displeasure over the Grenada episode, centrally, it seemed to me, over the lack of communication by the American Government.
PM
No, that is not so. Not over lack of communication or—because I never—if you're going to put your troops in the field, then I can understand why you don't blazon the truth abroad, or why you are slow to communicate that fact to anyone. Look, I've known what it's like to put my people in the field, and I know the very very first thing you're concerned about is the safety of your armed forces. If you look, we had a lot of thinking about foreign policy over the long recess, particularly in the context of East/West relations. We had come to a number of conclusions, some of which you'll find both in the speech I did to the Canadian Parliament and the speech I did in Washington at the Winston Churchill Award. I was aware that we were being portrayed, I think beyond the Iron Curtain, as warlike peoples. That is just not true, as you know. If you look at the skeleton of the speeches you will find, first NATO is a defensive alliance. No-one need fear anything from NATO. We democracies hold to certain values, and hold them and cherish them, and would fight for them. But we do not pursue [end p3] those values through means of force. We pursue them ideologically, yes. So do the Soviet Union, and I accept Andropov 's challenge, and I would always go on pursuing them. No one need fear anything from us. We do not pursue our aims by force. We do not use force to resolve disputes. So anyone in the world knows that this is our standard of integrity. But we are highly professional, we are passionate about the things we believe in. Now that was the background, and then one said, we have different ideologies from the Soviet Union but we both have to live on the same planet. In these days of enormous and immense power the tragedy would be if anything terrible were to happen because of misunderstandings between us. Now, it's against that background and against the background that when international law was flouted with the Falklands we went in pursuit of international law. If you do not do this you must learn that if you do this you will have to bear the penalty. So, this was applauded in the United States. Now can you see Grenada against that background?
We had been in Grenada, our Deputy High Commissioner in Grenada on the Sunday, asking about the safety of our people—they'll soon be able to get out—they're perfectly all right—your people, I think, will be able to get out within the next 2 or 3 days—the airport will be open. There was no suggestion that intervention was apparent. So it wasn't like Julius Nyerere who had invited us in when we had left Tanzania.
JA
So you thought it was a mistake?
PM
You do not, in my strong feeling, use force to go in under those circumstances until you have first done something else. I am not going to say there is never a case in which you use force. Because in politics you very rarely say never. But there has to be an overwhelming case. We had been told, and been in to see, that our nationals were all right, they were ready to be let out within two or three days.
JA
Why do you think Mr. Reagan did it?
PM
Well I have said many times, first, I think he may have had [end p4] a different perspective. Second, I think that he was influenced very strongly by the East Caribbean states. He is the kind of person who would be influenced by that plea. There are a lot of small states saying “look, help us to get out this canker from Grenada”. And I think he was strongly influenced by it.
I thought that our people there were safe. You had more, but I thought that they were safe. If they were going to be in danger the time I thought of maximum danger would be the time when anyone else set foot on the island. That's the time when they could all of a sudden have been in danger. And secondly of course in the context of East/West I had one enormous job to complete in Europe and we were coming up to it … . I had to get Cruise deployed. I had to. Now, don't forget we had lived with Grenada. All my time as Prime Minister, Grenada had had a Communist Prime Minister. I had never attended a Commonwealth Conference when Grenada had a freely elected Prime Minister and so we had learned to live with it. We understood there were other islands in the Caribbean who had major air strips and needed them. Antigua three of them. So although there were great claims made for this airstrip there was certainly three other small Caribbean islands who had similar airstrips. They wanted them for tourists. This did not seem to me sufficient to displace two things. One the reputation that we do not pursue our ends by force.
JA
We the free world.
PM
That's right. Whereas we always said the difference was that the Soviets did. And secondly to displace the urgency of getting Cruise deployed. All right, I put on a debate in the House very quickly. I had not thought I had to have a special resolution in the House of Commons. But I realised that if we were to get Cruise deployed I must have a resolution in the House of Commons behind me. And we put it on quickly. We got it. That helped Germany.
I was here 7.15 on the Monday night. I had [end p5] all the reports back and then we had the terrible things happening in the Lebanon. We were as anxious as you were. Over that weekend don't forget we had these terrible, these dreadful things happening in the Lebanon and also we were as anxious as you were. There appeared to have been some attack on the golf course where the President was that weekend. And at 7.15 on the Monday night. I had a reception here for the first day of Parliament, and a telegram came in. I was here and Michael Heseltinethe Minister for Defence was here. We looked at it straightaway and drafted the points we wanted to make in reply. He had to go out for a dinner, Sir Geoffrey Howethe Foreign Secretary had to go out for a dinner, I had to go out for a dinner with the American Ambassador—he was saying farewell and someone was giving him a dinner. The American Ambassador, one shows what one thinks both of him and of the country by going to it. So I left and said “those are six points, can you flesh them out? We'll be back by 11.00. The Foreign Secretary, the Defence Secretary and myself.” At 10.30 I got a message, please will you return quickly. I was just about to leave anyway. And then we got the telegram that the American forces would be moving in at dawn. Now by that time we still—the thing had been fleshed out. We sharpened it—I say sharpened: We did the final redraft. Sent it off immediately and I telephoned Ronald Reaganthe President to say: “Look I don't like to say anything over the telephone, which I don't, and we had a brief word”. But by then of course it was too late. But please understand this. I have had my soldiers in the field and been responsible for them. I do not think I have any sense of being left out of the consultations. I know what it's like. Now I'm sorry I've answered you in detail.
JA
That's good. I'm delighted to have it. I wanted to ask one tiny point. Has it done the reputation of the United States any damage in Europe? [end p6]
PM
No, I don't think so. I think Europe says, well it could have made quite a bit of difference in that part of the world as far as the Cubans are concerned and recognises that the United States does have a different perspective. But above all, Europe recognises that, come what may, when there are really enormous questions the United States and Europe stick together. And also I think there is a bigger recognition in Europe that Central America and the Caribbean matter tremendously, particularly Central America, to the United States.
JA
President Reagan made a speech, he mentioned the East/West context. President Reagan made a speech just before the meeting in Stockholm which has been universally interpreted in the United States and very nearly universally in Europe as a softening not of substance but of tone towards the Soviet Union, as a conciliatory speech. Just to cite one example, in a number of his speeches previously he used the expression “forces of evil” or “malign forces trying to take over the world”. This was completely absent from this speech and both politicians and leader writers have commented on this. Do you think that is an important change and if so what do you think is the cause of it?
PM
I think it is an important change. I think it is the kind of change that we ourselves were making over the long summer recess. You'll find it again in my own speech, in the Winston Churchill speech, and in my Party Conference speech because they didn't pick it up at the Winston Churchill awards speech.
JA
I would have said notably in the eyes of the British press in the Party Conference speech.
PM
I think it comes to the same conclusion. That in a very dangerous world the thing is not whether you agree with the other very powerful bloc's political views or not; the important thing is you simply must make an effort the more to understand one another. Secondly, if as the President wishes and as all Europe wishes, you want to get down the tremendous expenditure on armaments, then you can only do it if you both agree on it. You can only both agree on it if you do more talking to one another. It was this realisation that we've got to do more talking; can I just go on and explain this a little bit. The question is, are you [end p7] going to get greater understanding by getting a breakthrough at one of the many sets of disarmament conferences or are you only going to get a breakthrough there when you get greater understanding? Do you see, which comes first? And I think the realisation is that you have to pursue really on all fronts. If I were asked to sum it up I would say that we were just coming to this viewpoint, I think simultaneously, all of us. In the post-Afghan period, I know they are still in Afghanistan, but that period was beginning to come to an end just when the Korean airlines happened.
I think that this new phase was just beginning to start and then the Korean airline put it back enormously. Now once again one has gone back, I think all of us almost simultaneously, to the same viewpoint that these weapons are immensely dangerous. We really must do everything we can to try to get down not only the expenditure on them but their numbers as well.
Can I say one other thing? You have to get it in the right order. I was really a little, what is the word, upset etc, whatever you wish to say, to see that some of the commentators suggested that the President's speech was for domestic consumption—or the Soviet Union thought it was for domestic consumption. I am convinced it was much much deeper than that. Convinced because Ron Reagan and I think very much the same way; because I had come to the same conclusion. We had discussed these matters when we were over there.
JA
But isn't it always true for any political leader, any national leader that it is silly to say that it's only for domestic political reasons because the two are inter-related?
PM
The two are inter-related.
JA
Metternich, I think, said it was impossible to conduct a successful foreign policy unless you conduct a successful domestic policy, meaning that you can't take people where they don't want to go.
PM
That is correct, but quite apart from whether he had [end p8] an election coming up he would have made that speech.
JA
Now, given that speech, given what you've been saying, given the general views of President Mitterrand, given the fact that there have been meetings between Sir Geoffrey Howe and Mr Gromyko, and between Mr. Shultz and Mr. Gromyko, do you think there is any prospect that we are beginning to get back on the track toward disarmament talks and if so, within what sort of very very rough time zone?
PM
Don't expect too much too soon. I always think that that is a great mistake when you start on a new policy. The people expect it to come to fruition soon and they are always saying “when are you going to get results?” You have to work at this persistently. You are dealing with a country whose politicians don't travel round the world anything like as much as we do. Like Mr. Gromyko does, obviously as Foreign Secretary. Who are not a free society in the way that we are free to ideas.
Who haven't our understanding of the rule of law. So sometimes when you use the same words they may not have the same meaning. So it's much, much slower.
With them, they're not used to having perhaps as much put to them from the outside world as we are. You mustn't expect too much too soon. You just have steadily to work away at it. And quite obviously the Soviet Union will be wondering what causes the change and why, and so on. Therefore it's really rather getting confidence and getting I think contact far more often.
JA
Suppose we are sitting her two years from now, as I hope we might do, do you think that we will be in a considerably better situation than we are now and that our peoples, the American public the British public, will be less apprehensive about the world blowing up than they obviously are right now?
PM
Well I would hope so and I believe so. But it will take two to make it so. As you say on your side of the Atlantic, it takes two to tango. It's going to take more than two; I mean we can row in and help as well.
JA
The other strictly foreign policy area that I wanted [end p9] to ask you about is the dollar. It seems to my temporary benefit to be going up inexorably. There seems very little disposition in the United States, at least in the near term, to do anything to stop its rise on the foreign exchange markets. You have been very restrained, the Bank of England has been very restrained and there hasn't been any panicky increase in interest rates or intervention buying like the time we all got used to in the 70s. How long can that go on before you have to do something? It obviously creates inflationary pressures in this country. It obviously creates problems for you.
PM
With a country as strong economically as the United States and with its total enterprise economy and the tremendous momentum towards success—the momentum pulling in spite of any government towards success in the United States is colossal—with never any danger of a socialist take-over in the United States. With all of that and her secure position geographically, the United States is a natural magnet for money in the world. With all of that isn't it astonishing that she actually needs such a high interest rate!
JA
Perhaps she doesn't.
PM
I can't think that she'd have it if she didn't.
The only reason that she does is that people must be putting a questionmark over how long can these enormous deficits go on. Year after year piling up. Not only debt but year after year piling up bigger and bigger burdens of interest payments on public expenditure.
JA
This is not something which you would want in this country.
PM
Oh my goodness me, no. The fact that she has higher interest rates also keeps ours higher than it might otherwise be. And certainly it means that it makes our recovery very much slower. Because when people are trying to start up small businesses, [end p10] when they are trying to get construction, big construction projects, going, you simply cannot take that height of interest. In the United States the level of interest does not seem to perturb some people. It must perturb construction, it must perturb the new businesses. But if you are buying property, whatever the interest you have to pay you can write all the interest down against your income. Here we can't. The only thing you can write down if you are a private person against income is a limited amount of interest on one property. So it bothers us much more. But I personally think that sterling is too low in relation to the dollar and I think that a number of European currencies are possibly too low in relation to the dollar. But you see we haven't quite this automatic momentum to enterprise and success that you have. And therefore the higher interest rate is a great penalty for us. It's like when we're trying to recover we have this thing pulling us back. And so, yes, it is a problem. Your deficit can't go on like this indefinitely because of the effect of your interest payments on your public expenditure.
JA
Do you tell President Reagan that?
PM
I'm not known for being reticent about my views. But if we tried to do that we couldn't. It's only because you've got this underlying colossal strength. And as I say, you ought to be able to get it without having a high interest rate, so strong is your economy, you ought to be able to.
JA
The Lebanon. I think that my colleagues in the United States and most people in the Administration, at least so they are telling us, believe that the pressure to get out of the Lebanon, or at least out of the present configuration, perhaps pulling the American contingent back on to ships, will increase rather than decrease as the election year progresses. Were President Reagan to decide as many of his people suggest that he will before the summer to do that, would that put you in a difficult position and would you be willing to do likewise?
PM
I do think that on the multi-national force that's a thing that the four of us have to discuss. We do discuss, we [end p11] had a long talk with Mr. Shultz when he came over, Sir Geoffrey Howethe Foreign Secretary had a long talk with him and I had a long talk with him. It was much appreciated. He was here for an hour, half an hour there. We sat down and had a very long talk about many things. On a multi-national force, there are four of us in to try to support President Gemayel in his efforts to get a government of reconciliation with his army behind him. The consequences of pulling out without trying to make effective alternative arrangements I think would be very damaging. Not only to the Lebanon but to the reputation of the four who are contributing to the multi-national force. So constantly what I'm saying is, look, we must make contingency plans.
JA
Are you doing so?
PM
Well, as you know we are active in the United Nations, saying, look, the multi-national force can't stay in there for ever. There must be an extended role for the United Nations in the Lebanon. But the United Nations could not possibly do that without the President of Lebanon asking for it. Now I think probably what he hopes is that he can get the reconciliation process going and more actively. And that is the most important thing. It's not easy, as you know. You can't do it without Syria.
JA
Yes, I think that's clear. I've been in the Lebanon several times in the last six months and I was at the Geneva meetings and I see no sign of progress at all frankly.
PM
It is not very easy at the moment. He will say that he is making some progress. You have got to get Syria with you to get the amount of progress which he must have. You can't have your multi-national force in there indefinitely, it's not meant to be there indefinitely. Therefore there's a time when it won't be there. But you must do it together.
JA
So we needn't look for any strains amongst the four members of the multi-national force.
PM
I strain against strain if I might put it that way. [end p12]
JA
Now there is a question which some people in the South Atlantic, or the southern hemisphere, might describe as a foreign policy question. I'm sure you've considered the domestic policy question and I don't want to take up a lot of our remaining 8 minutes on that subject, being the Falklands of course. But I wanted to put this to you. My impression would be that a large majority of the backbench members of all Parties represented in Parliament are impatient on the subject of the Falklands.
PM
Impatient? In what way?
JA
Impatient in the sense that they feel it's consuming an inordinate amount of resources, impatient in the sense that they feel that a long term solution must be found, impatient in the sense that they would hope that the new regime in Buenos Aires might make that possible. Whether you agree with that or not, it's my appraisal of the political situation. And against that of course I wonder if I can ask you this?
PM
First of all, I don't agree with your appraisal about the majority of backbenchers. But having said that, let's go on to your next question.
JA
Fair enough, I'm sure yours is much better than mine. At least it should be. Do you see any way, now that Senor Alfonsin has taken over, that a way can be found temporarily to skirt around the sovereignty question? I don't mean to give way on the sovereignty question. I mean to get progress started between London and BA on other subjects that might eventually lead to a way to deal with the sovereignty question? Do you see any room for maneouvre, in other words?
PM
We're not negotiating on sovereignty. And we expect that a country that's just returned to democratic rule would understand that the Falkland Islanders too have a right to determine their own future. So we're not negotiating sovereignty of the Falklands. In fact many of the families were there long before some of the families were in the Argentine. The Argentine's not negotiating the sovereignty of the Falkland Islands. The fact that we're not going to negotiate about that should not preclude better relations on other things, like commerce, finance [end p13] air flights through, and so on. You cannot have diplomatic relations restored until they are prepared to say that hostilities have ceased.
JA
You wouldn't be willing to fudge that for the moment?
PM
No. We're doing quite a bit financially.
Our banks are in consortia, so we have done quite a bit. And I hope we'll be able to get better commercial relations. I tried before to restore what we call invisible trade, all service trade, to what it normally was. But they refused to do that.
JA
But you agree that Britain has recently been at war and that other countries have recently been at war.
PM
We weren't actually at war. There was never a formal declaration of war.
JA
There never is any more. There never will be again I don't think.
PM
No, we were going to recover our own territory and to have a formal declaration of war implies all sorts of things, all sorts of consequences. But if they said that hostilities were permanently over then of course you can start to do something about the exclusion zone.
JA
Are you optimistic about something happening in the next 12 months? Any easing of the situation?
PM
I think looked at at the moment they obviously have an immense number of economic problems on their hands to which they will wish to give their immediate attention.
JA
They are also going after the people who made the people disappear? [end p14]
PM
Yes, so they've got a tremendous amount to do. After that I would hope that we can look more closely at commercial relations to our mutual advantage.
JA
Is there any way that closer relations can be established between the Falklanders and the Argentines? Before the tensions boiled over there were a number of relations that existed.
PM
Yes. But it's not going to be very easy. As a result of having had those relations they found invading forces, some 10,000 of them running over their homes, living in their homes, herding some of them into village halls, leaving them there for three or four weeks.
JA
It's never easy when there's a war.
PM
Well, the short answer is no, I cannot imagine the Falkland Islanders showing anything other than what I would expect towards an invading power.
JA
But the Germans blasted Coventry, the Germans killed in two great wars in this century hundreds of thousands, probably millions, of British soldiers and relations between Bonn and London now couldn't be closer. These things don't go on for ever.
PM
Forty years on. But Germany is not laying claim to London. Nor is she laying claim to Paris. And the essence of good relations is that she is not laying claim to it.
JA
I have time for one more question and I'm going to ask the question that I wish Brian (Walden ) had asked on domestic politics. He kept getting after you on whether you were a Thatcherite, whether you were as radical as he thought you ought to be. Whether you were going to be able simply to hold public expenditure rather than cut it; whether tax cutting had a greater priority, and he kept trying to pin you down. I don't want to do any of that. No hostages to fortune. However, if my understanding is correct, you have set up as part of the apparatus to look forward four or five years a sub committee under Lord Vaizey. [end p15]
PM
I have not set it up. I know that one is being set up. You go on and ask your question before I give the answer.
JA
Yes, because we'll get off the track a little bit. As I am told the remit for Lord Vaizey 's sub committee is to look in a rather broad free-wheeling way, something that is done all the time in the United States so we don't get quite so upset about theoretical papers as the British press seems to be every time you have a study done. To look rather broadly at the post-Beveridge world of social services, excepting as I understand the National Health Service. What I'm asking is this, do you think that this great 20th century problem, which is not exclusive to Margaret Thatcher if I may say so or anybody else: it's going on in Scandinavia it's going on in Germany it's going on in the States, it's going on in Italy.
Do you think the time has come in Britain at least to have a whole look at the way this is paid for and the way it is spent?
PM
You've got to have a look at what is going to happen in the coming 20 years.
Perhaps you have seen the paper that the OECD have put up for discussion in February. We can just about cope with the cost of financing the present welfare state. If it's going to go on increasing people are going to object because they are going to say, well, the result is to take too much out of their own pockets to be churned through the state machine, losing a percentage to the bureaucracy every time. That is affecting us all and as that paper pointed out many people feel that they could do far better for having that money in their own pockets; they could make a better provision for themselves. And you've now come to the ironic situation where quite a number of people are being taxed heavily, well we're all taxed heavily, more heavily than we would wish, but quite a number of people of comparatively low income are paying tax, quite a bit of tax, and the result is their net pay, their net take-home pay, is not enough for them to have a reasonable standard of living and they then have to apply for means-tested benefits. Now this really doesn't seem to make sense to quite a lot of us. If I pay that amount of tax, it leaves me with not enough to live on, and therefore I have to apply for a rent rebate [end p16] or a rate rebate or for some help. And I get some help back which is in some cases much less than the tax I pay. Now first it's debilitating. Secondly it is not an effective use of money. Thirdly if you go on that way—and I tried to explain to Brian (Walden) it's not only a question of money—you are redistributing responsibility. You're taking it away from the individual, and at the same time you're taking away quite a bit of his independence because you're taking away his income. That is something which is affecting us all.
It is not infrequent for political parties or political leaders to build in great new benefits into the social security system for which you have to start to contribute immediately. The benefits don't have to be paid in full for 10–20 years time. In the meantime you take the contributions for the general welfare state. Such a scheme we have here. Coming up towards the millenium, we shall have enormous earnings-related state pensions coming to be payable. Now the money that is now being paid for those state pensions is not put aside into a fund, it is regularly used to pay out the current funds. Now frankly I just can't sit and let this happen, because I can see that there's a kind of social security time bomb. We have now to look at these things and bring them before the people, because democracy is doing things with the consent of the people. But you simply can't leave things like that and say just before it comes in, well I'm sorry—look, you're going to have to pay enormous increases in tax to fund the pensions of the retired population. We've got now to think about this. And this is what I am steadily beginning to try and set up. It is ways of bringing the facts, the reasonable forecast, before the public so we can take decisions in time. What I'm after, if I might put it this way, is the next Parliament so that we discuss openly all these things. It is no earthly good my opponents or the commentators trying to have a go at me and saying you can't do this, cutting this, this, this, it's scandalous, etc. I simply have to say to you, it would be absolutely scandalous if, seeing these big problems coming up, I did nothing about them. In my view people would rather have more of their own money in their own pockets. And then I believe a lot of them would make quite a bit of their own provision. But to make them go for means-tested benefits because you've taken too much from them in cash does not [end p17] seem to me a sensible thing to do without once again explaining and putting the choice to them.
JA
Would it be a fair summary to say that you would like to begin broad public discussion of what is going on with a view some day at some point in the future to some structural change?
PM
Well, to putting a choice before the public again.
JA
About structural change?
PM
Yes, putting a choice before the public. Saying if we go on like this it will mean that we'll have to take this amount out of your pocket in taxation, now do you want to go this way or do you want a different way. Do you want to have to insure yourself for this kind of thing with your own money in your own pocket without churning through the state system? They must have the facts put before them. You obviously conclude that you have your basic state pension and of course your national health service. But you must, when you see these problems coming, you must gather as many facts together, you must get as many views and dispassionate assessments as you can. We're all right, if I might put it this way, for the next four years. What I am thinking of is coming up to the millenium. I've always thought forward to what is the effect on your society.
JA
Putting to one side basic state pension, putting to one side an NHS of some sort. The other things you think should be open to discussion?
PM
I think we have to. I think we have to look at the whole burden of expenditure forecasts on the tax position, taking certain forecasts about growth. You must. And you can't leave it till you're nearly towards the millenium. I am now thinking of the kind of arrangements which will be in our minds in the next Parliament. But I know we have got to get this very much more openly debated. Now we are obviously trying to do this. It's better that it comes from outside the state machine although [end p18] inside you must make available the maximum number of figures people want. Now what is happening in this country is our documents were being leaked. When they were leaked they were used not the better to assist genuine discussion but in order to stop genuine discussion by implying sensational changes by edict.
JA
You don't sound like someone who expects someone else to be sitting in this room after the next election.
PM
No I don't. I am every bit as radical as I was. I'm going on being radical until I feel we have got, and people are with me, the right balance between what the state should do and what the people should do. We haven't got it; we're told that the state in this country is still too strong if you take all the public sector, all the nationalised industries etc. You have things inbuilt into your constitution, you've got a marvellous constitution, that's why I say you will never go socialist. We always have a threat that if the socialist party got in, the state would become enormously powerful again, and I feel that they try to get so many people having a vested interest in the state that it will try to keep them in for all time. And it would only be done by a fundamental change in the character of the British people from which I recoil.