Speeches, Interviews & Other Statements

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

1985 Dec 17 Tu
Margaret Thatcher

Radio Interview for BBC Radio 3

Document type: Speeches, interviews, etc.
Document kind: Radio Interview
Venue: No.10 Downing Street
Source: Thatcher Archive: COI transcript
Journalist: Michael Charlton, BBC
Editorial comments: 2000-2100. The interview was broadcast live as the last in a series of four interviews with British party leaders.
Importance ranking: Major
Word count: 9884
Themes: Autobiographical comments, Autobiography (childhood), Executive, Parliament, Conservatism, Conservative Party (history), Defence (general), Defence (arms control), Defence (Falklands War, 1982), Economy (general discussions), Education, Employment, Industry, Monetary policy, Privatized & state industries, Energy, Pay, Public spending & borrowing, Taxation, Trade, European Union (general), European Union Single Market, Family, Foreign policy (Asia), Foreign policy (USA), Foreign policy (USSR & successor states), Foreign policy (Western Europe - non-EU), Labour Party & socialism, Law & order, Local government, Leadership, Northern Ireland, Religion & morality, Security services, Society, Trade unions, Trade union law reform

Michael Charlton

Prime Minister, you were at Oxford in the 1940s, and after the War, Britain would embark on a period of relative prosperity for all, the like of which it had hardly known. But today, there are three-and-a-quarter million unemployed and Britain's economic performance—by one measurement—has fallen to the rank of that of Italy.

Now, can you imagine yourself back at university today: what must seem to be the chances in Britain and the prospects for all now?

Prime Minister

They are very different worlds you are talking about because the first thing that struck me forcibly as you were speaking of those days was that now we do enjoy a standard of living which was undreamed of then, and I can remember Rab Butler saying, after we returned to power in about 1951/52, that if we played our cards right, the standard of living within 25 years would be twice as high as it was then; and he was just about right, and it was remarkable, because it was something that we had never thought of.

I do not think now one would necessarily think wholly in material terms. Indeed, I think it is wrong to think in [end p1] material terms because, really, the kind of country you want is made up by the strength of its people and I think we are returning to my vision of Britain as a younger person. I was always brought up with the idea: “Look! Britain is a country whose people think for themselves, act for themselves, can act on their own initiative, they do not have to be told, they do not like to be pushed around, they are self-reliant and then, over and above that, they are always responsible for their families” and something else: I think it was Barrie who said: “Do as you would be done by!” [Lord Chesterfield.] You act to others as you would like them to act towards you, so you do something for the community.

Now, I think if you were looking at another country, you would say: “What makes a country strong?” It is its people. Do they run their industries well? Are their human relations good? Do they respect law and order? Are their families strong? All of those kind of things …   . just way beyond economics.

Michael Charlton

People still ask though: “Where is she going?” Now, General de Gaulle had a vision of France. A certain idea of France, as he put it. You have fought three major battles in this country: the Falkland Islands; against the miners; and local councils; and against public expenditure, and people, I think, would like to hear what this vision you have of Britain is. It must be a powerful one. What is it that inspires your actions? [end p2]

Prime Minister

I wonder if perhaps I can answer best by saying how I see what Government should do and, if Government really believes in people, what people should do:

I believe that Government should be very strong to do those things which only Government can do. It has to be strong to have defence, because the kind of Britain I see would always defend its freedom and always be a reliable ally. So you have got to be strong to your own people and other countries have got to know that you stand by your word.

Then you turn to internal security and, yes, you have got to be strong on law and order and do the things that only governments can do; but that is part-Government, part-people, because you cannot have law and order observed unless it is in partnership with people.

Then you have to be strong to uphold the value of the currency, and only governments can do that by sound finance.

And then you have to create the framework for a good education system and social security; and at that point, you have to say: “Over to people!”

People are inventive, creative, and so you expect people to create thriving industries, thriving services. Yes, you expect people—each and every one, from whatever their background—to have a chance to rise to whatever level their own abilities can take them. Yes, you expect people—each and every one, from whatever their background—to have a chance to rise to whatever lever their own abilities can take them. Yes, you expect people of all sorts of background, almost whatever their income level, to be able to have a chance of owning some property—tremendously important, the ownership of property, of a house, gives you some independence; gives you a stake in the future. You are concerned [end p3] about your children.

Michael Charlton

But can you sum this vision up?

Prime Minister

You said my vision. Please let me just go on!

And that is not enough. If you are interested in the future … yes, you will probably save; you will probably want a little bit of independent income of your own; and so constantly thinking about the future.

So it is very much a Britain whose people are independent of Government but aware that a government has to be strong to do those things which only Government can do.

Michael Charlton

But can you sum it up in a phrase or two? The aim is to achieve what or to restore what in Britain, when clearly, risking a lot and winning in a case like the Falkland Islands, is just as important in your philosophy for Britain as restoring sound money, reducing the money supply in the Bank of England?

Prime Minister

Of course! It showed that we were reliable in the defence of freedom, and when part of Britain was invaded, of course we went. We believed in the defence of freedom. We were reliable. [end p4]

I think, if I could try to sum it up in a phrase—and that is always, I suppose, the most difficult of all—I would say really restoring the very best of the British character to its former preeminence.

Michael Charlton

But this has meant something called “Thatcherism”. Is that a description that you accept as something quite distinct from traditional conservatism in this country?

Prime Minister

No! It is traditional conservatism.

Michael Charlton

But it is radical and populist and therefore not conservative!

Prime Minister

It is radical, because at the time when I took over we needed to be radical. I would not call it populist. I may say many of the things that I have said strike a chord in the hearts of ordinary people. Why? Because they are British. Because their character is independent. They do not like to be shoved around. Because they are prepared to take responsibility. Because they do expect to be loyal to their friends and loyal allies. You call it populist. I say it strikes a chord in the hearts of people. I know, because it struck a chord in my heart many many years ago. [end p5]

Michael Charlton

But conservatives acknowledge, would you agree, that they will never possess more than a part of the truth, that they have no monopoly of truth? You say there is no other way but conservatives believe that there is no certainty about the way, and a very great conservative, Edmund Burke, as you know—using a maritime metaphor appropriate to this country—said: “The lead must be heaved every inch of the way!” Now that does not sound like you.

Prime Minister

Don't you think that in any country there are some outstandingly able people who are very creative in that they have immense initiative in building up a business. They know one particular thing; they want to create and build up a business. They know more about it. My father was not one of those, but he built up a small business, and he used to say to me: “I could never work for anyone else!” There are those. They create the businesses. They become larger, they become stronger, and lots more people then start up smaller ones. But they are the people who have the industrial talent, the commercial talent and many of the rest of us do depend upon them to create the employment.

Of course that is so, and those who do rely on others to create employment know how important it is to keep the creative person in Britain.

That is so. I do not find any difficulty with that. Some lead and others choose where they should follow and that, after all, is politics. I say what I believe, of course I do, but then I say to people: “You choose! You choose whom you follow!” [end p6]

Michael Charlton

But it makes you sound, if I may say so, much more like an old-fashioned Liberal, a remark which you must be familiar with, because it has been made about you before.

Now, take a liberal philosopher like Hayek who you are known to much admire. His fundamental criticism of conservatism was, as he said: “By its very nature, it cannot offer an alternative to the direction in which we are moving.” That again, sounds very like you.

Prime Minister

That came from one of his earlier works. Was it in “The Constitution of Liberty”?

Michael Charlton

“The Road to Serfdom”.

Prime Minister

“The Road to Serfdom” … much earlier than that.

I think you will find that he has been one of my staunchest supporters as events have turned out.

Michael Charlton

But you agree?

Prime Minister

With what? [end p7]

Michael Charlton

That the nature of conservatism is that it does not wish to offer an alternative to the general direction of events, and that is what you have challenged.

Prime Minister

Ah, but that means that there is something fixed for all time, which is the general direction of events. That is not so!

Michael Charlton

Hayek said it. It was fatalistic to say that. The only point I am making is that it is not in the nature of conservatism to say that.

Prime Minister

Well, I find that the conservatism which I follow does have some things in common with what Professor Hayek was preaching and also has some things in common with what you called old-fashioned Liberals. Let me just quote one, to whom I am devoted, John Stuart Mill …   . on liberty. “A nation that dwarfs its citizens will find that with small men it can accomplish no great thing.”

Is that not what I have been saying?

Yes, it is partly perhaps old-fashioned liberalism … my pride that it has something in common with that … but that also has something in common with my belief that really nations are there to try to help people to bring out the best talents and abilities [end p8] and initiatives in themselves and that, I think, is conserving the best in human nature and trying to change the rest, but trying to change it through the character of men and women.

Michael Charlton

But should we see Thatcherism …

Prime Minister

Why do you call it “Thatcherism”?

Michael Charlton

Well I invited you to say whether you accept that as a description.

Prime Minister

It is much much older than Thatcherism. It is much much more significant than Thatcherism. Thatcherism is a way of kind of running an economy, which certainly takes into account the fact that you only get it successful when people work together and you have a system which enables people to work by their own talent and ability; but so many countries in the Western World practise what they call “Thatcherism” now. They have all taken it on.

Michael Charlton

A point that we will come to, but should we see your indictment of conservatism as …   . [end p9]

Prime Minister

Indictment?

Michael Charlton

I have not finished. … indictment of conservatism as it has been practised by the leaders of the party for the most part in this century as something like what your favourite poet, Kipling, said once: that a lifetime spent watching which way the cat jumps does not breed lion-tamers. In other words, it is the trimming aspect of conservatism that you objected to?

Prime Minister

Kipling also said: “The female of the species is more deadly than the male!” I sometimes think perhaps he was right.

I do not spend a lifetime watching which way the cat jumps.

Michael Charlton

Exactly! …   . a lion-tamer.

Prime Minister

I believe in the British lion and I believe that the British character is lion-hearted, and I believe that it has not been lion-hearted in some of the post-War period, and I want it to get back to being lion-hearted. So I do not watch which way the cat jumps. I know, really, which way I want the cats to go. [end p10]

Michael Charlton

But this is the difference, isn't it, between you and leaders of the Party in our time, in this century? That they have trimmed, in the sense that people like Lord Hugh Cecil said conservatism was not blind anti-socialism—that was not conservatism.

Prime Minister

No, it is much older than socialism, much much older, of course it is. Socialism is a much more modern thing. When I was at university, we did not know so much about Stalin as we know now. We did not know the terrible regime that he was running inside Russia and there were some people … you called them socialists then, because do not forget Russia is the Union of Soviet Socialist Republics or the Soviet Union … were thinking: well perhaps there is a different way of running a country, and they were—some of them—looking to the Soviet Union. But then it was a theory, and they were posing the theory of the totally controlled society against the freer society of liberal conservatism or conservative liberalism.

Now, they know not only the theories, but how it works out in practice, and they know that the theories that they were looking at in 1945 bring neither prosperity nor dignity to human beings in the Soviet Union. They have not got human rights. Because they have not got liberty, they have not got prosperity. We know that now but we did not know what socialism was like worked to its extremity as it is in the Soviet Union. We did not know what Stalin was like; but that is the way it has worked out.

Socialism only goes further and further left, and we have seen it. We have seen it in Liverpool; we have seen it in [end p11] Haringey, we have seen it in Tottenham. It is not right for Britain, but in the immediate post-War period people were playing with it.

Michael Charlton

While economic decline has not led to the crisis in this country that Marx predicted, and as Mr. Scargill perhaps discovered …

Prime Minister

One moment! Not economic decline. Don't forget! I remember Rab Butler saying “We can double the standard of living in 25 years” and it has doubled. Now that is not decline!

Michael Charlton

Relatively, this country's economy has declined.

Prime Minister

Relatively to Germany …   .

Michael Charlton

France.

Prime Minister

…   . France, Japan, because we were doing very well in the post-War period until there came competition and under the kind of pink socialism that we were operating we were not sufficiently dynamic to rival them, and we are getting that way now. [end p12]

Michael Charlton

Well, relative economic decline, if I can put it like that, seems to co-exist in this country with political stability, but it has not led to the kind of renewal, for example, that Joe Chamberlain used to talk about in Birmingham. Now, he was one of a line of economic prophets in this country that Britain, historically, seems to reject. They refuse these offers of economic salvation that are made to them.

Chamberlain talked about economic resurgence and he was rejected. Now is that a concern of yours, that you may be another in that line?

Prime Minister

Resurgence comes from the talents and abilities of people starting up, producing goods and services that others will buy. It was the same in Joseph Chamberlain 's time. The argument then was about protection or not. It is the same today. You look at satisfactory flourishing businesses, whether they are in Japan or in the United States, Germany. They are people who knew what to produce, knew what others would buy, produced it in good design, produced it to price, produced it to quality. That is a fundamental faith and it goes through governments; it does not change.

If you run the sort of economic system which does not allow them to do that or which discourages them or which makes them say: “Right! I can do better for myself and my family abroad!” you will not keep them here.

But this does not belong purely to Thatcherism. This belongs to all times, and people know it. They would far rather go [end p13] for someone who is jolly successful in business and successful and dynamic the whole time. They will say: “He is a live wire! He keeps the business going! He will get the orders! He will have the ideas!”

Michael Charlton

A charge against you is that democracy, in your time, has been reduced in this country. Why was it essential, as you judged it, that for example, the overall administration of a great city, London, should cease to be in directly-elected hands?

Prime Minister

Because so many of the duties formerly carried out or allocated to GLC have in fact gone to the district councils. In inner London you have the Inner London Education Authority and in the outer they have education each in their own borough, and it works very well. Housing went to outer borough. They do not run transport any more. If you look, there is not really a great deal left for them to run and, in fact, no regrets at all, because we do not take over most of those things. We are certainly taking over some of the grants to the Arts which I think most people would accept. Most of the duties are going much nearer to the people. They are going to the district councils, which are smaller. I confess that I have always thought that when it comes to running schools, it is very much better for the local authority nearer the people to run them than a great big amorphous mass. We are keeping on ILEA at the moment, but it will be reviewed in some years' time, to see if people would rather get schools nearer to …   . [end p14]

Michael Charlton

But no regrets, with hindsight, about that other reduction of democracy, as many people saw it …   .

Prime Minister

But it is not a reduction of democracy. It is taking away an extra tier of government.

Michael Charlton

But a reduction of democracy at the Government Communications Centre, GCHQ, where a legitimate and open shop trade union was suppressed by the Government. No regrets about that?

Prime Minister

No, because the practice has been that agencies whose activities are mainly devoted to security do not have unions. Now the others did not. GCHQ was different, because its purpose was never never never avowed and once it was avowed, this was after the Prime case, and we had been very very worried about the effect of strikes in GCHQ and we had been desperately worried about the attitude of some of the unions to those strikes and I read out many of the things in the House of Commons which I think shocked ordinary people; namely, that the Civil Service Unions deliberately called strikes at a security establishment because they knew it would cause difficulty with NATO, they knew it was at the heart of our security and they deliberately caused strikes there because it would cause difficulty with Britain's security, and so we said right: on the security matter, GCHQ should be on the same basis as other intelligence security organisations. [end p15]

Michael Charlton

Prime Minister, yours is the first government for a long time—for perhaps more than 20 years—to have developed what is claimed and seen as a politically sustainable anti-inflation policy, and you have done that by dropping the commitment to full employment.

Prime Minister

No, I am sorry. I must challenge you there! If you go on with inflation, that will lead to higher unemployment, because it undermines the confidence of everyone in the currency. Do you remember under a Labour Government—no, perhaps you do not—when inflation went up to 27%; and people did not know where to turn because the prices went up in the shops almost every week.

No, inflation in a world where other countries have not got inflation or even inflation per se undermines people's confidence in their currency, makes businesses uncompetitive, and sooner or later will lead to higher unemployment.

If you really want to tackle unemployment, you have got also to tackle inflation.

Michael Charlton

It was widely supposed that democracy could not sustain that. Now, to what extent are you satisfied … have you satisfied yourself that you have proved to your own satisfaction that the government of this country can be carried on outside the constraints of the post-War settlement and consensus, which was for full employment? [end p16]

Prime Minister

Do not say the consensus was for full employment, because there is nowhere in the world in which a government can guarantee and create in a free society jobs for everyone. You can do it in Communist Russia, because you say: “You shall have no choice of jobs. You shall be totally directed. You shall not have free wage bargaining. You shall not be able to decide where you live. You shall have that decided for you.” In a free society, there is no way in which a government can guarantee a job for everyone.

Now, what I think you mean by the post-War consensus is that it was beginning to be assumed that in a democracy governments could not take tough decisions even though they were the sort of decisions that ought to be taken. Do you know I never really thought that, although I remember writing an article, some time post 1965, I cannot remember when, saying “Look! If democracy is just going to be a public auction of promises at election time, then democracy will not last.” But I remember also my father saying: “People were far wiser than many governments thought and people knew that governments would have to take tough decisions.” People know that when governments make promises they can only make promises with the people's money and the people did not let me down in that fundamental belief. And so I did make decisions by saying: “Look where consensus got you to. It got you to a winter of discontent where you practically had to ask the unions for permits to do certain things.” Now that was not British. People did not like it, and they said: “Please! We would rather [end p17] have someone in government who is prepared to take the tough decisions than this. It is not British. We do not like being pushed around. We are not going to ask the union bosses. Union bosses are not there to be bosses over their people. They are there to respond to the people!” and so, if I might put it this way, the consensus, if there was one, swung behind someone who actually said: “Look! This will not do for Britain. Try my way!” and they did.

Michael Charlton

Does your achievement depend on keeping the British economy depressed in this sense, that a return to full employment would revive union power which, as you pointed out, became very unpopular?

Prime Minister

I do not keep the British economy depressed. The British economy has grown for five years in succession and we hope it will grow for a sixth, and it has grown because business has got its own house in order. It was grossly overmanned. There were terrible restrictive practices. As the unions got more and more power, that occurred at a time when they were going more and more left. Management was not managing; they were not able to manage with a Prices and Incomes Policy. They could not take their own decisions. That has gone.

Britain has a better chance now, because industry has put its own house in order. They are making profits; they have got a better future. Commerce is thriving and flourishing. [end p18] There are far more jobs in commerce. Jobs are being created faster in Britain than in any other country in Europe. That is because we run the kind of economic policy which enables them to do it. We changed the law which enables unions to be responsible, to give more decisions to their rank and file people and management to manage. It is what I said at the beginning. Governments have to be strong to do things that only governments can do. They have to be strong enough to say: “Yes, I do have faith in the people!” Overall, the majority will act decently and honourably and will create their own future.

It is happening, and it is happening well!

Michael Charlton

As you have said, in most of the OECD countries and the United States and in Europe, there has been the same decline in old industries and the same tendency for the State to withdraw from active intervention in the economy. The same attempt to summon up what the great Lord Keynes called the “ancient vein of puritanism”.

But it raises a more general question, does it not, this? Are we living through a transition now from one kind of political economy to another and if so, what is it?

Prime Minister

I think you are generalising perhaps a little bit too much. I mean, the United States, the world's strongest economy, never got besotted with socialism. If it had, it would not be anything like as strong as it is now. It has got two political [end p19] parties which say the role of government is to be strong in defence and in making the law and then over to the people and government is there to serve the people.

There are countries in Europe which have been nothing like as left as we have been in this country, and France, even under Mitterrand, is nothing like as left as socialism is here. Germany, nothing like as left as socialism is here.

That bug bit us harder than anyone else and that is one reason why we, I think, did not do as well as we should have done.

Yes, I think we are looking and saying again: this was not in tune with the British character. We were the land of the free. We were the land of the rule of law. Yes, there were some things which did need changing in the post-War period and the balance had to be re-struck, but the balance got much too much in the hands of a government which was expected to do far too much and the responsibility was being taken from people, and we had to redress that balance.

Just before the 1979 election, one of the people in my constituency said to me: “Mrs. Thatcher, we have got to vote for you this time. We have not done so before!” and I said “Why?” She said: “Well, we have got to vote for you really to bring back the middle to the centre, because it has gone much too far out!” People were feeling things had gone much too far, too much power in Government's hands.

Michael Charlton

What are you there for? Are you there to restore a balance or do you still have a theory—a balance that has been [end p20] lost—or do you still have a theory of the minimalist state? And what does the State do? Surely it has a duty in this field of employment to connect those who are unemployed to society in the last resort?

Prime Minister

And that we do and do in abundance.

Let me put the policy this way:

We still have incentives so that people will create business here. We had to bring down the top rate of tax in this country to be something like what it was in the countries which were rivals. That is the creating of business.

We still have a strong education system and we are trying to persuade them—if I might put it this way—to come out of their older habits of training people for administration in the times when we had a great empire, to training people to go into creative industry and commerce and we are trying to persuade them to do more in science and technology because a great deal of future industry is there.

We are still looking at young people very anxiously, because nothing is worse if you feel the world does not want you and you cannot get a job, so we say: “Look! They are going to have much more chance if they are going to have training!” and so we have given them the best training that any government has even given—two years of Youth Training Scheme. They can stay on at education and get higher education or get a job, as many of them do, or stay in the Youth Training and a lot of them then stay on … [end p21]

Michael Charlton

But we lag far behind other countries on this question of youth training. The Government may, as you say, be doing … quite a lot … but what about individual corporations, individual businesses?

Prime Minister

Yes, but let me take an example with Germany. Germany does have a very good apprentice scheme. Companies themselves take in apprentices. You know, companies here would take in more apprentices provided that the young people were paid a smaller proportion of the adult wage. You know, the electricians union has just done something that I think is marvellous some months ago. It reduced the amount apprentices earned compared with the amount adults earned and so the companies in the electrical industry took on far more apprentices. That is emulating what Germany has done. But when the unions expected young people to be paid 65 to 80%; of the adult wage, they were denying the young people jobs. This is what we have been saying, and we have been right! Now I think we are getting it right, because I want those people to feel wanted, to feel that they have something to contribute.

Michael Charlton

The moral flaw in Thatcherism is held by many people to be this question of the inner cities. Now three pillars of continuity in British life have drawn attention to it: the House of Lords says that what the Victorians called “the condition of England” is on the agenda; the Church of England has echoed the concerns attributed to the Prince of Wales about growing [end p22] inequalities.

Now, what is your view of those growing inequalities?

Prime Minister

We have poured money into the inner cities and I do not think pouring money in is just the answer. Somehow, when people went from the village and small town life into the big cities with all of the conventions and customs and constraints which are the cement of society and the family life and the church life, all of our institutions with their standards—some of those broke and we have not yet got them back.

The thing which really disappointed me about that book “Faith in the Inner Cities” which I read with the greatest possible interest, was one which has not been focused on sufficiently. They addressed no recommendations either to individuals or to families. When they did look at law and order and family life what they said was they were not sure that you could expect families to discipline their children or to teach them standards in a society in which families were not sure they were authorised to do that. I must say I was really absolutely shocked at that, because if you cannot look to families to set standards and you cannot then look to education to set standards and the Church admitted that it does not hold much sway, to whom can you look?

And so I think it is much deeper than that particular report indicated. Right now, we are trying to do even more in the inner cities. Our inner city programme is larger than it was. It is about £330 million. We are trying to do more in derelict [end p23] land. We have a community programme. It is not about programmes as such. It is about young people and families feeling that they are wanted; that someone minds about their future; that they belong; that someone cares about them and that someone is creating the sort of business in which they can work.

You have got to work much harder at it than just putting money there. So often, money is used as an excuse for not giving of your own personality to these things.

Michael Charlton

Prime Minister, reported crime in this country was only 70%; of what it is today when your Government took office. Now Mr. Tebbit says the public is demanding stricter punishments and they will get them and I imagine that is your view also, but is it your view that this is a time when we must be more concerned with the enforcement of law than the enjoyment of rights?

Prime Minister

One moment! Are you putting a false antithesis? You cannot have rights and freedom without a law which protects the weak. That is the function of the law. You cannot have liberty without the rule of law. Otherwise, the strong would oppress the weak. That is why you have a law. And so I do not quite see the antithesis that you are trying to create.

Yes I am for very strong sentences. Yes, I am deeply concerned about the level of crime. You know, I think, again, if you look back to one's own experience: when we were young [end p24] there was not nearly as much money about as there is now. Young people did not have as much money as they do now.

You take a society in which young people have far more money to spend and all of the old customs and conventions in the city centre, some of them have gone, and there are not the family disciplines and they do not accept certain standards. Then they have a combination of more money, more temptations and fewer disciplines. You have to have far greater personal responsibility than we had to have because people are not exerting the self-discipline and society is not, and that is the really serious thing; and when those conventions and customs have broken down, then people are falling back on to the State and giving far too much for the State to do. That is the problem in the inner cities. We have to get ordinary people working again, with the restoration of the family, with other organisations taking responsibility, with them being taught what is right and wrong. It is absolutely at the heart of it.

Michael Charlton

Would it be true to interpret what you say as something like this: that you are perhaps more concerned about crime than you are about the riots. The riots can be put down to a not yet fully assimilated minority in the country …

Prime Minister

They are both related. The riots. There are people whom it would suit very well to have anarchy. That is part of their political belief; have anarchy and their particular system [end p25] will come in and then they take total control and there would be no liberty. But anarchy and riots also suit the criminal population. They suit those who are drug pushing. They can do it under cover of riot. They suit those who want to loot. They can do it under cover of riot. The two are very much related.

Michael Charlton

Do you not detect a climate that is changing against you? That while you may have won the ideological battle, what about the economic war?

Now how are we to weigh your record? Total growth in Britain over the whole period of your government from 1979 to 1985 has grown at about the same rate as it did after the first OPEC oil crisis and in the time of Mr. Heath, Sir Harold Wilson and Mr. Callaghan. In other words, your performance is about a draw with theirs in terms of economic growth, but if the price is the highest unemployment since the Thirties in the country, is a draw good enough?

Prime Minister

You are taking it over the whole period, taking in the recession that we did face on the OPEC thing. There is absolutely no comparison between the way in which we dealt with it and the way in which the Labour Government dealt with it. They spent and spent and spent, got the finances of Britain in appalling condition, inflation up to 27%; and had to go to the IMF. Faced with an [end p26] even deeper recession, we have run the finances of this country responsibly. We are now creating more jobs than any other country in Europe and do you really think that this country would have been better off …   . Indeed it would not … had you had overmanned industries run by the trade unions with enormous restrictive practices, with low profits and just being run without any hope of future efficiency for people to go to? No, it would have been in a terrible state.

People knew we had to take the steps we took. Now we have had five years of growth. We are actually closing in on Germany. Our productivity is going up. Comparatively, we have been doing better in the last two or three years than they have. That is a very very great achievement, but it is done by saying:

“Look! The talent and ability are there in the British people if we can get the system right to enable them to show what they can do!”

Michael Charlton

But British manufacturing output has fallen in absolute terms since 1974 and this is what the House of Lords Overseas Trade Committee called upon you to address. Lord Aldington, a former Chairman of the Conservative Party, says we are still not back in terms of manufacturing output to where we were when you took office. Now when he calls for Government reaction to revive these manufacturing industries are these still heresies to you? [end p27]

Prime Minister

It was very strange that House of Lords Report, because to whom would you look to run efficient industries—the people who are at the head of industry. It is they who are the managers; it is they who create the products; and some of them who gave evidence—one of them in particular—had just broken through the billion pound profit barrier. Not the only one. It is those people to whom you look. I do not run industry, and who ever looks to politicians to run industry, they will get into a mess. They are not skilled. You have got to look at the people at the top of industry to run it and some of them are doing it extremely well. Indeed, last year, we had an all-time record of exports in manufacturing. But why why why do those people in manufacturing industry restrict it to manufacturing? Why do they not also look at some of our great extractive industries? Yes, oil is a great success. Why should they ignore it because it is not a manufacturing industry? It gives a lot of business to manufacturing industry.

Coal is going to be a greater success because we have tackled the problems and I hope coal will get much much more efficient and therefore our output as a whole is at an all-time high. I am very proud of that. It has been done by people at the head of business, manufacturing and commerce, and it has been done by the cooperation of the people who work in it. Let me say to them: if you say manufacturing is not doing well, I do not wholly agree with you. There was a lot that had to be done when we came back in. We enabled business to do it, but business did very well last year. [end p28]

Michael Charlton

But do you agree that any future that holds out the hope of rising prosperity for the economy as a whole and a move back to full employment must include a reversal in the decline of manufacturing industry?

Prime Minister

It must include a very large part in your country for manufacturing industry. Yes, manufacturing industry had excellent investment last year. As I said, record volume of exports. That is not bad in a highly competitive world.

Yes, I hope they are going to get stronger but, you know there is something in common with all Western industrialised countries: manufacturing industry will increase its output but it will tend to do it without increasing the numbers of people employed, until you get to the next phase when technology also creates more new businesses as well as enabling us to produce more in existing businesses with fewer people; please do not under-estimate British success in manufacturing, and that is why I was cross with that House of Lords thing. They were running people down and there are very very successful British companies with good profits, good investment and good future, and if they are running business down they are running down the people in charge of business, so they should look to themselves for their salvation, bearing in mind that we have done everything possible to help them to do better. [end p29]

Michael Charlton

The point of that Committee was that the world is not a world of theoretical free markets. Governments do intervene; they do extend credit and they were calling upon you to do that to help them compete as other governments are competing.

Prime Minister

Yes, and they have not had more help from any government than this one in selling goods overseas. We have gone around; we have backed our good industries. We have backed them where credit has been given in other countries; we have tried to match it.

We cannot match the Japanese credit and do you know why? Because the Japanese manufacturing industries are so jolly efficient that they built up the profits the world over to enable the credits to be given to others. So let our industry emulate them. First get efficient! That is a matter for those in charge of business. I do not tell them what to do, and the moment a government does they will not run it well. They will just pour in subsidies instead of getting efficient. Those businesses are now efficient.

Michael Charlton

Prime Minister, North Sea oil has masked the consequences for this country, would you agree, of our decline for some very important years? Do you agree that if there were to be another major fall in the price of oil, the political landscape in this country would be transformed and the task of restoring the non-oil balance, the balance that is made up by revenues from the North Sea, would come sooner and not later? How do you see the [end p30] prospects for your Government in that possibility?

Prime Minister

Point No. 1. Do not run down North Sea oil. It is a colossal success story. It has great associated industries with it. We should in fact be able to keep the offshore industries after the oil has gone. But North Sea oil is going on for quite a long time.

Do not over-estimate it either. It is 6%; of our gross domestic product, so it is nothing like such a big proportion of our economy as in most of the OPEC countries where it is well over 90%;.

Now, if North Sea oil ceased to be 6%; of our economy, then all kinds of things would change. First, it may well be that the exchange rate would change and that would mean that different companies exported abroad or had other opportunities abroad.

Yes it would mean probably that you would have a bigger proportion of manufacturing industry, again because of differences of exchange rate, but North Sea oil is going to go on for quite a long time.

Michael Charlton

I am far from running it down. I am trying to draw attention to its vital importance. It was the declining revenues from the output from the North Sea that I was asking about …   . I was asking if the oil prices fall any further, would that transform the prospects for your Government? [end p31]

Prime Minister

It will mean that one has to adjust all across the economy for a time until other industries also become successful. They are able to compete here partly because of the exchange rate. They are able to compete here in import substitution better than they are now. They are able to export. A whole lot of things change.

Do not be depressed. The British people are very able to adapt to change. They adapted to change in creating North Sea oil. They have been adapting to change in manufacturing industry. We will be able to adapt, whatever happens.

Michael Charlton

Has the prospect of tax cuts receded?

Prime Minister

I think people have come under the Tories automatically to expect tax cuts every budget. In a way, it is a great bonus that they expect that of us, but I did say do not take tax cuts for granted. We first and foremost will run the economy soundly. That matters to me more than anything else. We do not come up to an election and say: “Look! We have got to have tax cuts!” You only have tax cuts if that is a sound thing to do. It is a great compliment to us that people expect us to have tax cuts, because they know that we will not spend more of their money than we think it is right and proper to do.

Michael Charlton

Has the prospect receded because of OPEC's challenge to the price of oil? [end p32]

Prime Minister

I indicated that I think we have to look at the prospect on what will be the oil revenues very carefully. Of course that is a factor which will have to be taken into account. It is one factor.

We also have to look into the amount of public expenditure and if I might say so, that is probably a much bigger factor than anything else—keeping public expenditure under control. That is the biggest single factor.

Michael Charlton

And your own Centre of Policy Studies, the Government's Think Tank, feels that you are demonstrating an apparent inability to hold public expenditure to the targets.

Prime Minister

One moment! Can you tell me when that was?

Michael Charlton

It was the day before yesterday. It says that while the fall …   . it queries your claims of success about inflation. It admires the fall from 15 to 5%; which is much admired as the norm, but it says the first disappointment of this second term is that inflation has not fallen—in fact it has risen from a low point of 3.7%; in 1983.

Prime Minister

Tell me, was that in a booklet which came out very recently where three economists … there were three different [end p33] economists and they each had three different views as to what is happening, so do not say that there was one single view.

Michael Charlton

They made this a corporate view.

Prime Minister

No, it was not a corporate view. Three different views from three different economists.

Michael Charlton

But they are all from the Think Tank.

Prime Minister

They all contributed to a booklet put out by the Think Tank. I do wish, in fact, we had been able to get public expenditure down further as a proportion of national income, but we are now getting it down and in any event, public expenditure never went up as high as a proportion of national income as it did under the OPEC prices under the Labour Government.

Michael Charlton

Prime Minister, I would like to talk in this last part of our conversation about Britain's place in the world. After 6½ years or so of your government, there are still doubts, I think, about the sense of purpose and general direction of Britain in terms of foreign policy and its commitment to Europe in particular.

Taking a current item, there was an apparent split in [end p34] the Cabinet over whether Westland Helicopters has a European or a transatlantic destiny. Now, surely if we had a coherent strategic policy, an issue like that would not be in doubt?

Prime Minister

I think you have chosen one which is not for Government to decide. Westlands is not a nationalised company. It is an ordinary limited liability company. What we did was to remove a difficulty which would have hampered one of their choices. We removed that. It is for them to make decisions. It is for Westlands only to make the decision, because only they can assess the different bids that have come in. Only they can assess the work-force, their skills. Only they can assess the financial position of the company. Only they can look at everything. They have all the information. It is not for Government to tell a limited liability company what to do. The directors are responsible to the shareholders. Directors have an obligation to the work-force. The banks have their obligations and the auditors have a legal obligation in regard to the company's accounts. It is not for Government to tell them what to do.

Michael Charlton

Why not, if this bears upon the strategic policy of the country?

Prime Minister

I am sorry. It is not for Government to tell a limited liability company what to do. Government has to make [end p35] the decisions which it has to make. Government did make certain decisions in regard to Westlands. So far, in fact, Westlands has one helicopter which it has fully designed in this country. The Ministry of Defence has not so far purchased that helicopter. That was a decision for the Ministry of Defence to take. It properly took it. It is not for the Government to tell the company what to do. The company must make that decision. Government has to decide what it should order.

Michael Charlton

But what is your assessment about the future of the Anglo-American relationship? Where does it lie? Given the disparity in power and performance which has widened and widened ever since the Second World War, does the Anglo-American relationship and its future lie in a greater British participation in Europe or, in a degree of Anglo-American exclusivity?

Prime Minister

It is not either/or at all and it is quite wrong to look as it as if it were. Really, the free world is centred round the Atlantic. One one side Europe, the older free world; on the other side the United States, which I hope they will not mind my saying is Europe overseas; a compound of European peoples overseas. Both the European in origin, certainly a number of people from …   . both black and white in the United States … and also we have both black and white in Europe now …   . but it is the whole of the Atlantic community and the important thing is that you [end p36] regard it as a whole and sticking together; and it does Europe no good, it does America no good, it does freedom no good at all, and liberty and the rule of law no good, if we take it as an either/or and this has been one of my great battles in Europe. If ever France says to me: “You have got to show your European virility by being anti-American”, never! We could not ensure freedom in Europe; we could not ensure freedom in the Western world without the United States and Europe sticking together, and most of Europe understands that.

Michael Charlton

Indeed, and that was not really the point that I was on. I was saying that the agenda for today is not the Anglo-American partnership; it is the European-American partnership. Now what is Britain's task? Is it to—as the Americans would like us to do—build up this European pillar, in which case one would expect us to be doing rather more in directing firms like Westlands to reinforce this European pillar in Europe?

Prime Minister

What we are doing through Europe, actually slightly wider than Europe, we are joining in what is called Eureka, which is a scheme which encourages companies across national boundaries to get together on specific projects and then says, as a condition for getting together, that we free up the internal market in Europe, so that we have a market in Europe as large as in the United States; but the companies do it themselves. The price [end p37] of doing it is that we urge our partners in Europe not to have the barriers in the internal market that they have now, but to reduce those barriers. We have been very prominent in trying to secure the reduction of those barriers.

Michael Charlton

But are you in favour of a concerted European voice on defence issues in the alliance?

Prime Minister

The EEC has not itself a defence role. The defence role is NATO. I think you have to be very careful indeed. The important thing is to keep, as I have indicated, the United States and Canada, together with Europe and people like Norway who are not in Europe but are very important in NATO; you have to be extremely important in Europe, but you do not take on the defence role of NATO. After all, do not forget that the Republic of Ireland, of course, is in the European Community and is neutral, so you cannot in fact gear your defence policy to the European Economic Community. It has to be done by a number of people in the Community operating, not through the Community, but through NATO or as some of us do, out of area activities on our own.

Michael Charlton

But what is Britain's role? As you point out, the Irish neutrality and the Danish attitudes are problems in this area, but what is Britain's role? [end p38]

Prime Minister

Britain's role is very very special. I think we have probably the best view of Europe. It is not a view which is determined by high-flown rhetoric or grandiose speeches. It is very practical, which turns round and says to people: “You believe in greater cooperation in Europe. Do not talk about it! Let us judge you by what you do in the internal market! Let us judge you that way!” and when we came down to the nitty gritty, we found that we were prepared to be much more practical than they were.

Now that is our role in Europe and it is a very very practical one.

It is also part of our role—and we are very foremost in playing it—in saying “Do not regard Europe and America as either/or. Regard it as two pillars between which a bridge runs!”

Michael Charlton

Star Wars gives warning, would you agree, of the possible obsolescence of the British and French nuclear deterrents and a quite strong argument is developing across parties in this country on Trident on these grounds, I think, as much as others, leaving out outright opposition to it: that this country has not managed to reverse its economic decline relatively against the main European countries; that we do rank with Italy in terms of economic performance … how should people see those two things?

Prime Minister

When you say that, their deficit, their inflation etc., the problems which they are encountering, that just is not quite [end p39] true. You are being very selective indeed. You simply cannot get away with some of these things! What should be your next point?

Michael Charlton

Well if I can just say that based on gross, on domestic product in the country, this country ranks with Italy. A nation's wealth divided among the people in it. My point was how should we see … or how do you see these two things? If they become locked in the public mind—Trident and decline—we cannot afford it.

Prime Minister

Trident—we get more deterrent value for Trident than we could possibly get by spending the same amount of money on extra tanks or aircraft. In other words, than by putting it into conventional. Trident is very good value for money. We shall not know whether the Strategic Defence Initiative is feasible yet. We shall not know for many years. In the meantime, we must keep up our independent nuclear deterrent. I remember hearing someone vividly put it on an occasion on television: if we do not keep an independent nuclear deterrent, if we do not keep a nuclear deterrent which you are sure about, then you simply could not fight anyone who had got one because they said if ever you started to fight with conventional arms, you fight and we will go nuclear, and we will be finished. You cannot have a country like Britain, which has stood for freedom, ever put in that appalling position, ever. Trident is very good value. Will continue to be very good value and we must continue to have that as one of the corner stones of our defence policy. [end p40]

Michael Charlton

Prime Minister, you appear to have changed your mind because you were dismissive of the possibility of joint authority or agreement with the Irish Republic a year ago in putting forward the new Anglo-Irish Agreement, and you have said that a further attempt to reconcile the two communities was considered necessary.

Could I quote this to you from the great English constitutional historian Walter Bagehot who said in the last century: “Not only is there no unity between these races; there is no prospect of any. They differ radically in race, creed and civilisation, in everything in short which has ever divided mankind.”

Now what would you challenge in that?

Prime Minister

Right! Your first statement which, again, was a false premise. It is a technique which is always very difficult. I have not changed my mind about joint authority. I made it perfectly clear after Chequers that we would have neither a federal system in Ireland which we have not, nor would we have joint sovereignty, nor would we have joint authority. We have none of those things in the Anglo-Irish Agreement and I was very careful not to get them, so I have to quarrel with your premise.

What I have said is: “Look! There are two traditions in Northern Ireland. I happen personally to want the union to continue, but I want the two traditions in Northern Ireland, different as they are—they may be different as Bagehot said—to say: “Look! If we are going to live together within the union [end p41] in Northern Ireland, and the union will last as long as the majority wishes, we have got to have a go at living together in much better conditions of stability, peace and reconciliation.” You really cannot go on without making another effort. We are making another effort. It is not joint authority.

Michael Charlton

Why could you not go on without making another effort if you accept what Bagehot said, that the possibilities do not exist, that they are divided in all the things that divide mankind?

Prime Minister

Many people are different, but they can still get on well together. They can still get on, and you would expect them, I think, to say, for the sake of their children: “Look! We believe different things!” Many communities believe different things. The religions are different, the traditions are different, but they are not living in history. They are going to live in the future, and it is the future they are going to determine.

Michael Charlton

Prime Minister, may I end a little ungallantly by reminding you that you have just had your 60th birthday.

Prime Minister

Very ungallant! You just cannot conceal it. Isn't it terrible, you just cannot conceal it. It is not nearly as old as I thought it was. [end p42]

Michael Charlton

…   . and that you approach your seventh year of office as Prime Minister. Now, you have dropped hints before that you might go before the end of your next term if you are elected. Do you regret having said that? Have you not narrowed your options by suggesting that?

Prime Minister

No, I have not narrowed my options. I obviously want to go for a third term and I want to carry on for as long as I can carry the torch better than anyone else, bearing in mind the things I believe, but the time will come when someone younger carries it and will carry it better.

Michael Charlton

It depends on what you think of the people around you. Are you going to go on and on?

Prime Minister

No, no, it partly depends upon what other people think. No-one goes on for ever and let us face it, there will come a time when someone will carry the torch for everything in which I and my party believe better than I shall do. I hope when that time comes—I hope it will not come too soon. I believe that one still has something to give. When t, hat time comes, I hope that I will be the first to realise it and not hang on.

Michael Charlton

For a full term? [end p43]

Prime Minister

Look! As long as I believe that I could do it very well and as long as other people believe it too, but do not cling on too long. Only when you can really do the job.

Michael Charlton

Thank you, Prime Minister.