Mark Webster, ITN
How do you think the meeting went this morning?
PM
I think we all enjoyed it. We were all determined, right from the beginning to be very constructive and very realistic and Terry Beckett, whose last meeting it was, opened and said “Look, there is a lot of good news about, and just let us accentuate the positive” , and we did.
Mark Webster, ITN
But you are not a very regular attender of these meetings, unlike some of your predecessors, are you? One of the union leaders said afterwards, perhaps it is just a cynical piece of PR as you are talking to union leaders and others.
PM
Well, that is a bit uncharitable, isn't it? I went down, it was the 25th Jubilee of the start of Neddy [NEDC], I have been before, usually I go about once a year, but normally I leave it to the Nigel LawsonChancellor of the Exchequer, that is how it was started. But I think they all enjoyed it this morning. [end p1]
Mark Webster, ITN
Do you think that sort of forum then was something you would use more often and have more regular discussions with trade union and business leaders?
PM
No, I think one leaves it normally to the Nigel LawsonChancellor of the Exchequer to take it, it is his job to be in the chair and he does it very well. It was a rather special occassion today so I took it and from time to time I have been in the past to talk with them about the things on the agenda.
Mark Webster, ITN
What they did say was on the agenda was two papers which they said contradicted some of the central tenets of your policy and …
PM
Well, perhaps you will read them. I think you will find they do no such thing. Just read them, they do no such thing. I think what they do is try to look at things realistically and we did and we are no longer looking at pay as isolated from performance but pay in relation to performance because otherwise you just cannot be competitive and everyone, but everyone realised it was in the interests of everyone round the table in that room that we have flourishing industry and the only way it is flourishing is if you can compete with and beat your rivals.
Mark Webster, ITN
The unions did say they challenged some of your ideas. Do [end p2] you feel that you came away with any different ideas or in any sense change your philosophy?
PM
No, some of their ideas were very, very firmly challenged. You see it is no good just going on talking in some of these big numbers, talking all the time about what I call graph paper economics. You have got to think of the people who are running the factories, finding the products that will sell, dealing with all of the problems on the shop floor so that they do not cause any problems, knowing how much to put in investment, how much into research, when they have got to change their product, where in the world they can sell it. This means far more to the successful company than saying “Look, can't we get growth up by 1%; or anything like that?” It is the people on the factory floor and in the office. They will get the growth up when the conditions are right. They know their market.
Mark Webster, ITN
One of the things that the unions challenge, particularly the idea of regional pay bargaining, the idea that you could pay people less, say, in the depressed northern areas than you would in the flourishing south east.
PM
We did not discuss regional pay bargaining.
Mark Webster, ITN
But they do say that that is something that has been brought [end p3] forward.
PM
One of them, I think mentioned it, but we did not, in fact, discuss it. One of them—you are quite right—mentioned it. I think you have to remember that if a manufacturer only has a certain amount to pay out for wages then obviously if everyone demands more he has got to employ fewer. Now that is happening and it is one of the causes of productivity but it is also one of the causes of unemployment so indeed, as you can say that if the people working for a company demand more in pay than the price of the product can bear then the whole factory will go out of business and in that respect pay is very much related to unemployment wherever the problem occurs.
Mark Webster, ITN
But it was on the issue of unemployment that there was very little comfort you could offer them, was there not?
PM
No, I am afraid there is a great deal of comfort there being offered on unemployment. First, as you know for the last six months, unemployment has been falling and we are very relieved and pleased about that. Secondly there is a bigger programme to help people who are unemployed either into jobs through the Community Programme, through Enterprise Allowances, through the Voluntary Programme, through various forms of training or through job clubs and everyone having an interview to see what their needs are. Never has so much been done for those who are unemployed and as David [end p4] Young frequently points out, people come from Europe, from the mainland of Europe, over to us to see what we are doing for the unemployed because they recognise it is far more than any other country is doing.
Mark Webster, ITN
Because we have far more unemployed to deal with.
PM
No, we do not. There are about 16 million unemployed in Europe as a whole. As you know it is—I will not say it is a world-wide thing, Japan does not have it, the United States does not have it to anything like the same extent and much, much more market orientated economy; lower proportion of public expenditure, much, much more initiative, much, much more self reliance—but throughout Europe we do have a considerable measure of unemployment and that is why we frequently discuss it in the European Economic Community.
Mark Webster, ITN
One of the things, certainly some of the people round the table will be looking for from you, would be a more inflationary budget in order to help the economy and create jobs.
PM
Inflation will not help to create jobs except in the very short term. What possible good would it do to make our inflation much, much higher and then expect to be able to compete with Germany whose inflation is nil. What you do then is lose jobs. As you know, Mr Callaghan used to say “You put up inflation, it leads to [end p5] even more unemployment” and if inflation went sharply up now, I will maintain that we should have far higher unemployment than we have now.
Mark Webster, ITN
Can I ask you on a different subject? Mr Gorbachev has put forward new proposals on arms reduction, what is your reaction to them?
PM
Well, they are not new proposals. They are some old proposals which have been put on the table before and they were put on the table also at Reykjavik and then when I went over to see President Reagan at Camp David, you will remember if you look at the communique that we said that we thought progress could be made on reducing the intermediate nuclear weapons which are stationed in Europe and there was a proposal that they should go to zero/zero each side. Now that one has been modified because we would infinitely prefer that it would be a genuine zero/zero and there were not ones that could be moved right beyond the Urals and then possibly could be moved back. They have got a slightly different proposal now on that but there are two points I would like to make about the proposals, well three really.
First, anything that you agree to must first be capable of being verified.
Secondly, that as well as the intermediate range missiles, there are a lot of short range ones stationed in east Europe and we sitting here and in the greater part of the British Isles are within range of those and so it really will not help us if all of the [end p6] intermediate ones are moved out but they are left with a lot of short range ones which can hit us and we have no reply or deterrent to those. You have got to take that into account.
Thirdly, you have got to remember they have a lot of chemical weapons; we in this country have none. You have got to take that into account.
And fourthly, they have an overwhelming preponderance of conventional weapons and conventional forces and we have to look at that as well. Defence is a total thing and so you have got to look at a lot of the small print before you sign up for anything in the disarmament field. That it has been proposed is a step forward, now it has to be negotiated, not in television studios or by great public pronouncements but by getting down to the hard work and detail in Geneva, but that the proposal has been made is good.
Mark Webster, ITN
Do you feel you can make some progress on this sort of issue on your trip to Moscow?
PM
We do not do the negotiation in Moscow, the negotiation is done between the two teams who are still sitting in Geneva. They were going to have a recess after today—I am not certain whether they are now going on or not—but the actual deep negotiation, because they are all very detailed, verification is very detailed. Some have one warhead, some have three, some are mobile, some are not. You have to deal with all of these things in detail and you have to look at them in relation to other aspects of defence. You cannot do that even in four or five hours discussion with Mr [end p7] Gorbachev. It has to be done at the negotiating table in Geneva.
Mark Webster, ITN
So what might you hope for out of your trip to Moscow?
PM
I think a much more realistic assessment of what is possible, of how they see things, of how they see things internally and how it is going to affect their military programmes. We have very different systems. We have a number of things in common. It would help both of us if we could live in security—and I always emphasise the security because you have got to be secure—but a much lower level of weaponry, but to be secure you have got to keep an overall balance and that is what one has got to look at.
Mark Webster, ITN
Do you feel, in any sense, President Reagan 's recent problems back in the States have impaired his ability to reach that sort of far-reaching negotiation?
PM
No, not at all on Arms Control. All of the details on Arms Control are worked out at Geneva, the general principles are worked out at the top level and then the details have to be worked out at Geneva and there is continuous consultation both within NATO and between those who are actually carrying out the nitty gritty of the negotiation. [end p8]
Mark Webster, ITN
But you do not think your close ally President Reagan, as some people have been suggesting, might have become a lame duck president?
PM
No, I do not. I just have the feeling that Ronald Reaganhe is still very popular and that people realise that there are nearly two years left and they must be used productively and to the advantage of the United States and therefore to the whole of the free world.