Speeches, Interviews & Other Statements

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

1986 Jan 13 Mo
Margaret Thatcher

Press Conference for American Press (CSIS Group)

Document type: Speeches, interviews, etc.
Document kind: Press Conference
Venue: No.10 Downing Street
Source: Thatcher Archive: COI transcript
Journalist: -
Editorial comments: 1730-1830.
Importance ranking: Major
Word count: 8263
Themes: Executive, Executive (appointments), Civil liberties, Commonwealth (general), Conservatism, Defence (general), Defence (arms control), Defence (Falklands War, 1982), Economy (general discussions), Employment, Industry, Privatized & state industries, Public spending & borrowing, Taxation, Trade, European Union (general), European Union Single Market, Foreign policy (Americas excluding USA), Foreign policy (Asia), Foreign policy (Central & Eastern Europe), Foreign policy (International organizations), Foreign policy (Middle East), Foreign policy (USSR & successor states), Law & order, Leadership, Northern Ireland, Race, immigration, nationality, Science & technology, Terrorism, Trade union law reform, Famous statements by MT (discussions of)

Prime Minister

It will only be a few words, but I know you have been across Europe, and I thought you might like to hear from me how I see our economic performance, because if I do not tell you, no-one else will.

We had a very good reference this morning from David Lomax, who of course is the Economic Advisor to the National Westminster—to say that we had joined the big league of countries as far as growth was concerned, balance of payments and stable prices—the big league being West Germany, Japan and Switzerland. And we shall enter this year our sixth year of uninterrupted growth.

We shall continue to get inflation under control and as you know, we have been fortunate in having a strong balance of payments.

Consumer spending is buoyant. Profits of industrial and commercial companies as a whole were in 1984 at their highest level for 20 years.

Investment was running at record levels last year, and manufacturing productivity is up on average 6%; a year since 1980. 1980 was not a very good year. [end p1]

Unemployment, of course, gives us considerable problems. We believe that it is flattening out, although we had an increase last month and, of course, we always get an increase this coming month, because that is the time of the year. It will be interesting to see what is the seasonally adjusted increase.

But nevertheless, in the United Kingdom, we have created more jobs in the last two years—over 600,000—than any other country in the rest of Europe; so the job creation has been going well.

We also have demographic problems which mean that we are in a period for several years when we have more school-leavers coming on to the job market than we have people retiring, and that means that the job that we create do not necessarily—they are net jobs created—but they do not necessarily go to reducing the numbers of unemployed as fast as we would wish.

We have been returning State industries to private hands and we expect that 40%; of the State sector that we inherited in 1979 will have been privatised by the end of this Parliament. You will think that there is still quite a lot in public hands. Yes, you are right. There was a great deal in the public sector, and we have been going as fast as we can to privatise it.

We have also been trying to get a great spread of home and capital ownership. Home ownership, of course, is the very first thing that matters to most of us, but we are nothing [end p2] like as far advanced as the United States in individual share ownership. Indeed, in individual share ownership, the numbers were falling. Fortunately, under this Government, they have been increased very considerably, partially by our privatisation programme which has meant that when sold shares of a public sector company to the private sector, we tended to give specially good offers to people who worked in the company and to advertise it widely among them, and a lot, in fact, have purchased shares on their own account. That is bringing about changes in attitude.

We have also, of course, brought about a transformation in the trade union movement. We have had a number of legislative changes. The essence of what we have been doing is trying to restore power to the rank and file of the trade union movement through giving them the right to vote on certain matters where they did not have it before. That, I think, has restored our faith that when ordinary people were given power, they would use their power responsibly, and of course we have, over the 6½ years, resolved a number of issues that have been about for some time. The first one, of course, was from Rhodesia to Zimbabwe and we have an agreement with Peking over Hong Kong.

We have got a reasonable arrangement over the European Community Budget, although there is still quite a lot of work to do on other reform of Europe. Particularly we must adapt the CAP which still gives us enormous surpluses which cost great sums of money, and thinks like airports policy, like the [end p3] Stansted London Airport, where we have got a policy where it had not been possible to get one for a long time.

Those are some of the things, so can I go over to your questions. [end p4]

Question

Particularly on the question of unemployment, some supporters of the Reagan economic programme in the United States say that where yours differs and where it falls short on the question of unemployment is in the area of taxation, that the problem is you have not been involved in cutting taxes. Have you seriously considered that view?

Prime Minister

Well, we have cut taxes. For example, when we came into power, the top tax on savings was 98%;. The top tax on earnings was 83%;. The top tax on both now is the same—it is 60%;.

We have raised the taxation thresholds because it was important we should do so. That is particularly important to the people who are low paid.

So we have tried to do as much as we can in that way. Yes, we should like to do more, but do not forget we could not run a deficit of the kind which the United States runs. We are very conservative in our financing. Thank goodness we are! We have a very very low borrowing requirement and I believe it is right to keep it that way, so that we have got no in-built problems with a large deficit. Nor indeed could a country like this have had—we should not have attracted money from all over the world in the same way as the United States has but even you still have to tackle your deficit. We have kept our borrowing down and where public spending has been higher than we perhaps have wished in total, although it is now coming down as a proportion of gross domestic product, we [end p5] have felt that we have had to cover it by taxation and not have a large deficit. Our deficit is coming down. It is one of the smallest. It is about under 3%; as a proportion of GNP.

Question

We have no interest in delving into the intracies of your domestic political situation but we would like to raise one question that comes out of the current Westlands controversy. It seems to some in the United States that that is giving rise to expressions of anti-Americanism and perhaps opening you up to charges of being too pro-American.

Do you feel that there is that side of this current issue and do you feel that the accusation of pro-Americanism is something that will hurt you in the upcoming election?

Prime Minister

I am not going to say anything about Westland or the political problems, because I am speaking in the House on Wednesday and therefore, for obvious reasons, I cannot say anything now.

But let me put it this way. We are all in NATO and NATO consists of Europe and Canada and the United States, so I have never accepted that being pro one is being anti-the-other. We are all in the same Western Alliance and that I adhere to very strongly indeed. [end p6]

Question

We asked about SDI. Heseltine was dragging his feet somewhat on the agreement. Some reports in Washington indicated that he was fundamentally opposed to the agreement. Then I understand that you personally directed him to speed up and sign that agreement with Mr. Weinberger.

Prime Minister

As you know, we were the first to come out in support of the United States on SDI and we were the first to sign an agreement. We do not say who does what in Government; it is the action of the Government. We were the first to come out in support. We were, I think, the first—indeed, I think I did it in my Congress speech—that we would like to be involved in the research and we were actually the first to sign the Memorandum of Understanding and I hope that the United States found that very satisfactory.

I am not quite certain whether the Germans have yet signed theirs—not yet—but I do not expect that they will be very far behind.

Mr. Heseltine did a good deal of the negotiation, yes, he did.

Question

Did you find him opposed to it? [end p7]

Prime Minister

Look! The policy is the policy of the Government. I announced the policy of the Government and we were the first to sign. Mr. Heseltine did the negotiations on the Memorandum of Understanding.

Question

To follow on that, your Government went into those negotiations looking for a commitment, as I understand it, of £1 billion five of research work for British firms and you did not officially get that set aside. Were you disappointed that you did not get a specific commitment and have you gotten any assurances from the United States that the firms in your country will get a certain percentage?

Prime Minister

We would not expect to have a specific amount written into the Memorandum of Understanding. We hope that our people will get a goodly amount by virtue of their ability to do it, at a reasonable price, in competition.

Question

The President recently signed into law the Phil GrammGramm-Rudman- Hollins (phon.) deficit reduction plan. According to House and Senate Defence Committees in the United States, in the worst case this would entail 90 billion in defence cuts in 1987—in the best case 65 billion in defence cuts.

What kind of impact do you think this will have on [end p8] the defence …   . in Britain and in NATO as a whole and on the European view of United States participation in defence?

Prime Minister

I think we recognise that the United States has spent a tremendous amount on defence. She spends more as a proportion of GNP than we do. We are just over 5%;. We are greater on proportion of GNP than most of Europe, not necessarily greater per head of the population, but I think we recognise the amount which the United States has spent and are immensely grateful for the shield of the United States in NATO in Europe.

I am not going to get involved in what that particular Amendment would mean on either reduced expenditure or increased taxation. That is for over there to decide and one has to be very careful not to get involved in things which are none of one's business.

Question

To broaden it out then, what kind of impact would it have if key governments in NATO, in order to deal with their economic problems, do start a trend of pulling back … 3%;?

Prime Minister

We ourselves, of course, have honoured the 3%; now for nearly six years, but we have made it clear that we cannot go on increasing in future years by an extra 3%;. We just cannot and therefore we shall not be going on at the rate of 3%;. We [end p9] have made clear in our Public Expenditure White Paper for three years hence what we shall be doing. We cannot go on like that, otherwise it takes too large a proportion of your public expenditure.

Question

Prime Minister, it appears Mr. Reagan is not going to get the …   . he expected or at least asked for from Europe on the subject of Libyan sanctions.

Could you give us your thinking on what Great Britain might be doing with Libya?

Prime Minister

We have taken steps with Libya because we had occasion to do so some time ago when, as you know, one of our WPC Yvonne Fletcherpolicewomen was murdered on our streets by guns from … by a gun shot from the Libyan Embassy in St. James's Square, and we broke off diplomatic relations. As you know, they have not been restored. We do not supply defence equipment to Libya. We have not gone further.

I can only tell you that I do not believe that general sanctions will work. When I came to this job, there had been sanctions on Rhodesia for over 12 years, mandatory United Nations sanctions. They were not working. A lot of stuff was getting through to Rhodesia and, of course, she being a country which has considerable resources, had worked up her own industry, and we have occasion to know that they do not work. [end p10]

But we ourselves had already broken off diplomatic relations with Libya and do not supply defence equipment. We had already gone, really, quite a long way before the latest call from the President.

Question

In the instance you cited of the tragic shooting of the policewoman outside the Libyan Embassy and in other instances since then, there has been increased evidence of violation or abuse of diplomatic immunity—not just with the Libyans, there are other instances which you know well.

Have you considered and do you plan on examining more closely the terms of the Vienna Convention and the steps that you would hope to be taking. …

Prime Minister

We did all of that for a very good reason. We did undertake that examination and I do not think we can do anything more than we are doing and we have obviously been in touch with our European partners, but if you want to change a Convention, as you know, everyone has to change it.

We looked at it very carefully but I would be, I think, misleading you if I gave you to understand there was a lot more that can be done.

Obviously, we keep in close touch with our colleagues, other countries, about people who have asked for diplomatic immunity and so on; of course we do. This is the kind of [end p11] thing that we can do.

Question

Do you feel the terms are too lax now?

Prime Minister

The question is can you get agreement to change them and is it advisable to do so? In some cases, any changes which are advisable and you have been able to get agreement on, you make, and otherwise you do have as big an exchange of information as you possibly can.

Question

If I could get back to the SDI for a moment. We spoke to Chancellor Kohl last week. He seemed to make it clear that West Germany's support for the programme is limited to research only at this point.

I am wondering along that line, whether your support for concept of SDI is limited only to research or whether you now think if the research should pan out, deployment would definitely be a good idea, and related to that, if an arms control deal where the US would trade SDI testing and deployment for significant cuts in Soviet missiles. …

Prime Minister

I think you are making leaps a long long way ahead. We are talking about research, but we are talking about research [end p12] within the present Anti-Ballistic Missile Agreement. ABM Treaty, which as you know, was negotiated I think in 1972 between the Soviet Union and the United States and what you can and cannot do is clearly laid down there and when they foresaw that there might be technological developments beyond those which were existing at that time, they provided a mechanism and a committee for those to be discussed and you know that I have said many many times we uphold and reaffirm the Anti-Ballistic Missile Treaty, so it is within the terms of that treaty.

Question

… trade of SDI for offensive cuts?

Prime Minister

I think that one will have to look between the East and West, at the arrangement between your offensive and defensive weapons, but there is nothing new about that. That, to some extent, is what an anti-ballistic missile treaty is.

Question

Prime Minister, the Northern Irish have asked for a vote on the initiative concerning the agreement that was reached and they want to have a say in whether or not the Republic of Ireland would have any part in their affairs. What do you think about having a referendum vote up there? [end p13]

Prime Minister

That Agreement does not give any joint authority nor any joint sovereignty. It is an inter-governmental agreement. It does not require referendum. The referendum that we had is on a border poll and there is provision in the constitution of Northern Ireland for a border poll from time to time. That is whether Northern Ireland should stay part of the United Kingdom. That is determined by the majority. There is a majority for that. I expect there will continue to be a majority and so long as there is a majority, Northern Ireland will stay part of the United Kingdom. But otherwise, under the Anglo-Irish Agreement, there is no such thing as joint authority; there is no such thing as joint sovereignty, so there is no constitutional change.

Question

Prime Minister, I would like to ask you a question if I could on continuity which I suppose is ironic considering Europeans usually …   . the United States with great concern about continuity from government to government. But given Labour's feelings about nuclear missile deployment emplacements, given what seems to be a certain anti-American if not simply anti-Reagan feeling of Labour, could you give us an idea of what you would expect down the road. Will you for certain be a candidate in 1987? Do you intend to serve out another full term after that? [end p14]

Prime Minister

How long will you go, up to the end of the century?

Question

Would you give us your views?

Prime Minister

One wishes oneself to win another election and carry on in the third term obviously. Whether they will take me for a fourth, I do not know.

But on the point of your question. In the last election, defence did play a considerable part and British people know that to keep our freedom, we must keep our defence, we must keep our alliance, we must keep our deterrence. There are enough people who will recall what happened last time or who know historically to know the truth of those things: that your greatest security lies in strong defence and sure deterrence and a strong alliance, and they would not like anything which did not give them those things.

I frequently say that this government, this party, is not anti-American. You will find a tremendous outburst of applause, so if you hear anything to the contrary, I beg of you do not believe it, because when you get to the heart of the matter, they know that we need a strong defence and a strong alliance and they expect that we would play our full part in it, and that again was what I was trying to say when I spoke to Congress. You see, we do play a pretty full and staunch part in defence, as you know, and will continue to do so. [end p15]

Question

Regarding your political future, do you think you are going to be able to withstand a challenge …   . at the next party conference?

Prime Minister

We do not have a challenge at our party conference. I cannot remember a challenge. …

Question

Do you see any dark clouds on the horizon, not regarding Westlands specifically but …

Prime Minister

I told you, I am speaking in the House on Wednesday and it would be absolutely wrong for me to say anything about that for very obvious reasons. What I say must be said first to the House.

Question

Let me ask you …

Prime Minister

You are going to have a try in another way! Exactly the same question in different words …   . spot it.

Question

Aren't your 5,000 Britons still in Libya? [end p16]

Prime Minister

Yes, that is so.

Question

President Reagan has requested that no other nations replace these 1500 Americans he has asked to leave.

Prime Minister

It is no part of our policy to undermine any sanctions which the United States herself might have imposed on Libya, obviously no part of our policy at all.

Question

You could not control though whether any of these Britons working in Libya were to replace Americans in the jobs …   .

Prime Minister

No, obviously we cannot. I know that the President has advised American citizens to leave under penalty.

Question

Prime Minister, unless appearances are deceiving, there seems to be a strong series of consultations gone on between President Reagan and the NATO allies leading up to and just after the Summit in Geneva. Now that we are looking ahead to the second Summit, the one in Washington some time in the summer or early autumn, there seems to be a feeling that was expressed in Germany over there that the get-acquainted [end p17] Summit was necessary, but that is over, it is time to look ahead towards more substance of agreements specifically on chemical arms. Do you share that feeling that it is time to move on?

Prime Minister

I think one was hoping that there would be some movement in the actual arms control negotiations, in one or other of them, or more than one, before the second Summit.

Chemical you mention; we have been very active in the chemical field. At Vienna there have been proposals. Vienna has been going on without much progress for nearly ten years now. Chemical we have been very active in.

It seemed as if at one stage the intermediate nuclear weapons had been separated out from …   . on SDI … but I am not quite certain whether that is so and how far they are going to get negotiating on intermediate nuclear weapons, but I accept the general proposition that it would be highly desirable for there to be some visible progress in the arms control talks by the time the next Summit occurs and I think people are trying to do that.

Question

Prime Minister, this is not a Westland question, I swear! We have been reading about … [end p18]

Prime Minister

You know, I said to Leon Brittanhim [?] this morning, when he said the Government has nothing. … I said do not say that because they will promptly conclude that it has!

Question

We have been reading editorials about the clash of style particularly in inner Cabinet relations. Our President has chosen, apparently, a board of directors style. Can you typify and describe for us what your style is?

Prime Minister

Well the style is firm but my goodness me, we have a lot of discussion, a great deal of argument and debate, and that is how we reach conclusions. That is the style I have always worked by and shall continue to work by and so do my Cabinet, and they have been a very effective Cabinet. Our system is different from yours.

I would say, if I might respectfully say so, that the Ronald ReaganPresident has given a very clear lead and a very firm lead and I believe I have too. I would say that the styles are perhaps very similar in the firmness of the lead and the firmness of the approach. Indeed, I would say that that has been one of the characteristics of President Reagan's presidency and it is that which has given rise to the restoration of a confidence in the United States. [end p19]

Question

Prime Minister, isn't that one of the criticisms about your style, that it is too presidential and not suited to British tradition?

Prime Minister

I do not think I would say my style is presidential. We have a different system. We have a cabinet system where Ministers are answerable to Parliament, and so am I, and I am there twice a week. Now you can see, it is pretty different from your system, very different, but you need, if you are head of government—President Reagan is also head of state, I am not—if you're head of government yes, you do need to give a clear lead. Yes, I do give a clear lead, but we argue things through very vigorously indeed and we cross-examine them, because those decisions have to stand up in the House. Yes, I intend to go on giving a clear lead.

You have just been talking about defence. What do you want over this side of the Atlantic? Someone who never gave a clear lead on defence? Someone who did not get Cruise deployed to give a lead to others? Someone who is not staunch on East-West Relations? Someone who is not staunch on giving a lead to be a strong member of the alliance? Someone who is not staunch on economic policy? Yes, if you believe things, you do give a clear lead and I will continue to do so.

My goodness me! It is thrashed out in Cabinet Committee in small groups. Of course it is. Yes, we do work a great deal by argument, by cross-examination, before we arrive at [end p20] our decisions. Yes I do give a clear lead. I do not reckon I am here just to be a chairman and collect the voices. No-one told me I was standing as Chairman Thatcher!

Question

I am sorry to jump about like this. Soviet relations. We interviewed Helmut Kohl a couple of days ago and were quite surprised by the strength of his anti-Soviet rhetoric and his misgivings about the …   . he said that he is undergoing a full barrage of Soviet propaganda because he is supporting SDI. He spoke very strongly …   . people, useful idiots who think the Soviet is OK now because …   . Mrs. Gorbachev goes shopping and behaves like a Western woman.

How do you rate Gorbachev as NATO's number one adversary after his first time in office?

Prime Minister

You want a clear lead? I have always given it. I have always recognised that Mr. Gorbachev is and will remain a staunch Communist. I believe that the Soviet Union will continue to be Communist during my lifetime. I recognise that is what we have to deal with. I recognise that Communism will work relentlessly for its objectives, although its methods may change.

Recognising that, as I have always told you in my speeches, just as he recognises that I am staunchly for freedom based on economic free enterprise under a rule of law …   . saying [end p21] all that, it is still in the interest of the people of the Soviet Union and its leaders, as well as the people of the Western Alliance and their leaders, that we never have another conflict and therefore that we negotiate arms control agreements which retain a balance, which can be verified and which continue to give both of us security, because it is when you feel that you have got security that you believe your own system will continue.

I have never changed or faltered in that. You will find that the style may change a little. I think perhaps you may find too that it is very interesting when Kadar and I were talking—Hungary, came over here comparatively recently—he used a phrase which struck me: “Our people demand peace and security!” It was very interesting that even in a Communist system they could not ignore some expressions of public opinion, though it is very much smaller public opinion than we have because they do not have the freedom to discuss and so on.

But I think that you might find with increasing radio getting into the Soviet Union that there might be some small public opinion developing. Nothing like as much as ours, but that cannot be ignored, and I think Mr. Gorbachev feels this, which is why he knows that people want a higher standard of living in the Soviet Union and after all, they see a higher standard of living in some of the satellite countries and wonder why they cannot have it. So that also will be a factor.

I am not saying anything new to you than what I previously said. [end p22]

Question

Perhaps your most quoted comment in the US press in the last year was your comment, after meeting Mr. Gorbachev, that …   .

Prime Minister

I can do business with him, yes. Every other person that has met him has confirmed that. Yes, that is right.

Question

I wonder now that he has been in office for almost a year, do you still share that view?

Prime Minister

Yes, of course, because you can do business with a person of whom I believe you have made a correct assessment of their country's objectives and the way they are going about them. What you cannot do business with is if you cannot make a correct assessment.

Question

In terms of doing business with Mr. Gorbachev …

Prime Minister

I hope that President Reagan is doing business with Mr. Gorbachev. I rather took it that is what was happening.

Question

On arms control business, President Reagan sent his third [end p23] report on Soviet violations of previous treaties to Congress and the report accused the Soviets of violating just about every major arms control agreement they have ever signed.

In the light of that, how is it possible to continue to do business with the Soviets on arms control and what is the …   .

Prime Minister

If there are such claims, then there is, under the Anti Ballistic Missile Treaty, a particular means for reviewing that, to see whether that is correct. There is a particular committee, I cannot remember which one it is, in which you do it.

Question

So you would like to see the Reagan Administration take those complaints …   .

Prime Minister

If there are suggestions of that nature, there is a method of dealing with them.

I think there are two things: one, whether they are violations or, two, whether they are ambiguities. In either case, you need to deal with them.

Question

Mrs. Thatcher, do you see any change coming out of the Party Conference in Moscow in February? [end p24]

Prime Minister

No, I do not see any fundamental change in Communism. I think they will probably obviously wish, indeed those were the speeches, that they will wish to try to do something to raise the standard of living of the Soviet people. I mean, here you come to the great question. They say they can do it by making the system more efficient and we say that the real standard of living you get in the West is a function of a free enterprise economic system and that without that, you are unlikely to get the same standard of living that you get under such a system, and this is the question which ultimately they will have to answer.

Question

The debate there is about some sort of market economy.

Prime Minister

As it has in China, where they have gone far more to personal incentives. I myself think that the Soviet Union will be more rigid in its Communism than China. China has said: “Look! If we are not getting the results, then we will have incentives!”

Question

Have you any advice for fellow European heads of state confronted with the doctrine of equi-distance? Particularly the European continental view of equi-distance between Moscow and Washington? [end p25]

Prime Minister

You never get tangled up with one of those doctrines which clearly never take into account everything that has to be taken into account. It is really much easier for the Soviet Union to reinforce than it is for us.

Question

Prime Minister, may I ask you about two widely separate but linked interesting pieces of territory—Hong Kong and the Falkland Islands?

In the case of Hong Kong, you made an arrangement, which you mentioned, whereby the People's Republic will take sovereignty of that piece of territory by the turn of the century, and in the case of the Falklands, I understand that a great amount of money is being spent to secure the Islands' defence. How much, I would like to ask you? But also, the Argentinians complain that you will not discuss with them the subject of sovereignty.

Can you put Hong Kong and the Falklands in perspective for us?

Prime Minister

Yes, very simply. Hong Kong is subject to a lease. 90%; of Hong Kong is subject to a lease which terminates in 1997.

Question

That is the new territory, it is not the Crown Colony is it? [end p26]

Prime Minister

Yes, but over 90%; of the territory of Hong Kong is subject to a lease which terminates in 1997. It is not possible to run the other small part when everything comes from China. Over 90%; is subject to a lease which terminates in 1997. That is the difference.

Question

What about the Falklands? Is there any difference?

Prime Minister

Freehold. British. There is a clause called “self-determination” in the United Nations Charter. Do read it! It should apply to Falklands. That the wishes of the people should be paramount.

It was a source of great disappointment that so many people who are bound by the self-determination of the United Nations Charter did not seem to know it when the vote came … on the Falklands. Self-determination. You have self-determination in the United States. We have self-determination. I wonder why some people wish to deny it to the Falkland Islanders?

Question

The last thing I want to do is stand opposite you …   . and battle with you …   . however …   .

Prime Minister

I am being very gentle! I thought you had noticed my style! [end p27]

Question

I wish we could have a chance to see it when …   . self-determination in Hong Kong. What reference will there be to the populace there about the arrangements?

Prime Minister

We have the lease of 90%; of Hong Kong by agreement, a treaty, with China. The lease would end in 1997 and therefore we had to try to make an arrangement with them which ensure the continuation of Hong Kong for a goodly period of years under its present system. That was negotiation. Negotiation was facilitated by Deng Xiaoping 's belief and stated belief that you can have one country, two systems, and that is why, under the agreement, for 50 years after the end of the lease, the broad system that is now in Hong Kong will continue.

I believe that Deng Xiaoping believes that after a further 50 years that he might … that the standard of living in mainland China may be considerably much closer to that in Hong Kong. How far they will have got with incentives, one does not know, but I think that is possibly some of the thinking. As you know, they have got their special economic zones just close to Hong Kong where they are running perhaps not quite a Hong Kong system, but a different system from in China.

That is the real thing. Britain keeps her treaties. The lease ended in 1997 of the overwhelming majority of the territory. [end p28]

Question

Prime Minister, you said you can do business with Russia. What about doing business with China?

Prime Minister

We have in fact signed an agreement with China over the future of Hong Kong after something like nearly two years of patient and painstaking negotiation and therefore we are already doing business with China, not only by virtue of that agreement, but we have just had word that the French and ourselves are going to do the Guangdong Power Station. It is still to be finalised but there have been considerable negotiations about that and we are having considerable trade negotiations with China, because it is in both their interest and ours that we do business with them.

Question

Prime Minister, what is the importance of the Commonwealth nowadays to Britain and to itself? Has it become a purely semantic institution or is it a practical institution in the world?

Prime Minister

It is a very good institution. It is practical in the sense that it is the organisation through which a good deal of technical cooperation is given. It is practical in the sense that there are regional organisations where a number of small islands get together in the several regions with the larger [end p29] countries in those regions and discuss their problems and some of the problems may be strategic defence, and we discuss those too.

It is practical in the sense that we get together in the Commonwealth as a whole every second year to discuss the larger issues and as you know, this last time, we got together to discuss South Africa. And when we get together, it is the only big international forum that I go with their 47 countries now, where we all speak English and we have no interpretation—no need of any interpretation. It is quite interesting. There is not another big international organisation where that happens. We all of us talk, and so it is much quicker to do the debating.

Would you like to rejoin?

Question

Since the United States invaded one member of your Commonwealth in Grenada, does that bother you? Do you mind if it occurs again?

Prime Minister

I think the use of the word “invasion” is not accurate. As I usually say to people, the United States pulled out when the objective was achieved and there is now a democracy in Grenada, which I hope will endure.

Question

The French are setting up an alternative programme to the [end p30] SDI called “Eureka” ?

Prime Minister

That is not an alternative; it is quite different.

Question

O.K. What will the extent be of Britain's participation in that?

Prime Minister

We already do. That is really government encouragement to companies from different countries to get together in certain collaborative ventures on the basis of if they do so they will then have access on equal terms to the whole of the European market with any product from a particular country. You can see what we are aiming at. You have a large market for any product that is produced in the United States. Now the tendency in Europe has been, in spite of many declarations to the contrary, that each country would order things produced in its own country.

Now, unless we are prepared to open up the whole of Europe on a similar basis, on a similar competitive basis, to the way in which the United States deals with things … I mean you might have two people competing against one another in the United States, but the market is the market of the United States as a whole … then we are not likely to get a lot of these collaborative projects, because if each country still says: “Well [end p31] there is the collaborative project and there is my own, and I am not going to look at it on the matter of plain straightforward competition; we are going to buy from our own!” then the thing will fail.

If we want a better technological chance in Europe, then we have got to look at those as European ventures and the decision has got really to go on the basis of value for money and cost effectiveness, as it does, I am sure, in the States.

Question

Prime Minister, will the extent of Britain's involvement be limited to encouraging private firms?

Prime Minister

We do not in fact have special money allocated to Eureka. Any special money we have is allocated by virtue either of innovation …   . for example, we have a big programme on fifth-generation computers which we have entered into in conjunction with …   . in partnership with our companies … but it is given to them for innovation, rather than attached to a Eureka programme.

Question

We still have the question, even though there has been talk about making an interim agreement on European lines, that the Soviets are talking about no deal on intercontinental so long as SDI is …   . but as we move towards the Summit can you [end p32] say anything about the attitude your Government will be expressing in terms of what some Germans said last year about making a grand deal, deep cuts versus limits on future deployment, future testing and the like? Otherwise, we might get to the next Summit and still have the Soviet veto and be making no progress.

Prime Minister

Well, I cannot go further than I have, and I recognise that this is the heart of the matter. Research is fully in accordance with the Anti-Ballistic Missile Treaty and I am absolutely 100%; behind the research continuing. There is nothing to the contrary in the treaty.

When it comes to deployment, then that is right in the treaty, and it would have to be negotiated and yes, you are right, what happens between the one and the two? That obviously would be, insofar as testing comes in the treaty, there is a certain amount permitted in the treaty and a certain amount not, so what we are talking about is future negotiations under the Anti-Ballistic Missile Treaty and we are saying that there is a framework there and we believe that that framework should continue, because it is that which gives some confidence in international relations, that you have treaties and you respect those treaties, and without that confidence, there is not a system of international law that can be upheld independently of that.

So yes, I recognise that you have come to the bullseye, [end p33] but I cannot give you an answer other than that. There is an ABM treaty; it was freely entered into; it obtains and various statements have been made about it, and my advice always is in international negotiations that you continue to uphold your treaties, because that to some extent, is the stability and security that you have.

You come back to negotiating through the treaties, don't you?

Question

If we get to the point where it is still stuck, can European …   . if it looks like the Russians will not budge on deep cuts and the Americans will not budge on agreements about limits about testing and deployment. This was bypassed before the last Summit.

Prime Minister

It did not in fact prevent a very good Summit and I hope that it would not prevent a very Summit in the future. I think if you try to take every hurdle before you come to it, you will find some difficulty in getting over. I think that you might find that if you wait a little bit longer you might get quite … get quite run up to it and have an aspect that you do not have at the moment. It is as if you look at the whole course and say: “What are you going to do when you get to hurdle 19?” and it is not always possible. You say: “Jump it if we can!” but you do not necessarily know quite how. [end p34]

Question

I get the impression you are optimistic about progress at Geneva, also that there is some continuing progress between President Reagan and …

Prime Minister

I believe it is important for both countries that progress should be made and therefore that strenuous efforts will be made to make progress, but I believe, as I indicated, that it is in the interests of both countries that you do have balance and verification and it is that which gives you your security and both sides are entitled to their own security.

Question

You are a little more optimistic, Prime Minister? Is that a correct impression, that you are optimistic about Geneva?

Prime Minister

Yes, if I say I am optimistic, you will go away and say: “Thatcher optimistic!” I am always very very cautiously optimistic, very cautiously optimistic. Thatcher cautious! I believe that strenuous efforts will be made to find a way through.

Question

Within the context of unemployment among the black population of this country and the tragic race riots in the past year, do you feel that the present limits on immigration that [end p35] you have are inadequate or will you be seeking a fine tuning or improvement of them?

Prime Minister

They operate under our present immigration and nationality law and I do not think we have any plans to introduce any new whole immigration law. Whether we find it necessary to make any amendments or not is a matter to which we do not address ourselves until the particular amendment arises.

Question

Given what you have to say about arms control treaties that are in force, were you pleased by President Reagan's decision to extend his compliance to the unratified SALT 2 treaty beyond its scheduled expiration date and how long should the US continue to comply with an unratified treaty like that?

Prime Minister

Well you know, I hardly need tell you what happened. It was Afghanistan that really interfered at the critical moment, but on the whole SALT 2 has been observed and I understood the President to say that he was continuing to observe SALT 2, which is again in broad agreement with what I am saying: that in an uncertain world, one of the securities you try to have is that [end p36] nations uphold treaties that they have freely entered into, and that is one of the securities that you have, because there is no such thing as international law which can be upheld in the same way as national law. Therefore you have to look to countries that when they have entered into treaties, they do in fact honour them, which President Reagan has, and I understand from his statements that it has been very much to that effect.

Question

What is your estimation of the Reagan Administration's withdrawal from the World Court?

Prime Minister

This is the Court at the Hague. You can only take a case to the Court at the Hague if both sides agree. That has always been the case as far as I am aware. Therefore he has done what he has been fully entitled to do.

Question

Considering the tensions between the Government and the government of Argentina, over the Falklands affair, to what extent should that define any relationship between the United States and Argentina in terms of arms sales, equipment sales, military assistance?

Prime Minister

I have always said that if you demand self-determination for yourself, you cannot deny it to others. The people of the [end p37] Falklands are British. Some of them were there before some of the families of the present-day Argentinians.

Question

No question about their sovereignty and I do not think there was any question of assistance in your efforts there regarding their sovereignty, but I am discussing the relationship between the United States Government and the Argentine Government with respect to military equipment sales and technical assistance.

Prime Minister

We should obviously be grievously upset if the United States supplied equipment to the Argentine at a time when she has certainly not said that hostilities are at an end with us and nor indeed has she given up her claim to the Islands.

Question

Do you have any confidence in Soviet emigration of Jews in the coming months?

Prime Minister

I have a wish. I do not have a great deal of optimism about it. It is one of the things which one had hoped would happen, because we do not understand why other countries want to keep people in when we have so many people wanting to come in [end p38] and do not stop people from going out. It would be greeted with a very great welcome if they were to let out far more Soviet Jewry than they do at the moment. They used to, as you know. In the initial period of detente, it went right up to several thousand a year. Now it has gone right down and we watch it fairly carefully and it is still very considerably down.

You asked me if I am optimistic. You have to keep alive a little hope.

Question

After Geneva … after the Summit between Gorbachev and Reagan, that we might see. …

Prime Minister

That is right, that it would be one of the things which one would hope would come about by another Summit. That one would hope would come about by another Summit.

Question

May I just follow up on the Irish question very quickly. Assuming that there is a British Government game plan beyond just this agreement now, what do you believe is the next step in the process of bringing peace to Northern Ireland? Do you anticipate the need for British troops there through the rest of this century? [end p39]

Prime Minister

We obviously will try to implement the agreement, which involves the SDLP taking a much more active part in the political life of the province and, of course, even more intense activity on trying to stop terrorism. Those are two things which are very very important.

At the moment, as you know, there are elections going on, but we shall do everything we can to try to see that that agreement works, because sooner or later the two traditions have got to be reconciled and the only way that they can bring it about is by reconciling themselves within Northern Ireland. That is what one is reaching out for—some stability in the province.

Question

How long do you think the troops will remain?

Prime Minister

I do not know. The troops have been there as aid to the civil power for a very long time and, of course, we have suffered grievously from terrorism. We know about it.

Question

Could you give us your analysis of the recent racial trouble? Specifically, what do you think is the main underlying cause of the black riots?

Prime Minister

We have had enquiry after enquiry. I would not like to [end p40] give a particular cause for that. After the Scarman Inquiry, those areas where we tried to implement—and will still continue to implement—his recommendations. Handsworth was one of them. We were deeply disappointed. We had troubles breaking out again. It is thought that that was connected among other things with drugs. We are very active against drugs, as you are. It is not possible I am afraid, but if we could eradicate them totally we would. It is a very difficult thing to do. I do not think I can go further than that. We do everything possible to try to keep the temperature down, to try to have special grants to do things in inner cities.

Question

We have heard the problem being described as fundamentally a police problem, a problem of relations.

Prime Minister

We have tried to do every single thing which Lord Scarman indicated and I think he was quite complimentary about what had been done and we also would like more of our immigrant minorities in the police force. We shall do everything we can to recruit more and we also like the ethnic minorities to take a lead in these and other matters so that they too can give a lead to their own communities, because without the ethnic minority finding their own leaders to give a lead to live peaceably and constructively, it is going to be difficult and some of them are absolutely marvellous and they do not have always a very easy [end p41] time, but we shall just go on trying with all the same old recipes and perhaps some new ones.