Speeches, etc.

Margaret Thatcher

Press Conference after Toronto G7 Summit

Document type: Speeches, interviews, etc.
Venue: MTCC Centre, Toronto
Source: Thatcher Archive: COI transcript
Editorial comments: 1645 onwards (local time). Nigel Lawson also took part.
Importance ranking: Major
Word count: 3450
Themes: Agriculture, Commonwealth (South Africa), Economic policy - theory and process, Education, Employment, Monetary policy, Trade, Foreign policy - theory and process, Foreign policy (Africa), Foreign policy (development, aid, etc), Foreign policy (USA), Foreign policy (USSR & successor states), Law & order, Media, Religion & morality, Society, Terrorism

Prime Minister

Ladies and Gentlemen:

This has been a highly successful and well-organised summit in a splendid city and I would like to thank and congratulate Brian Mulroney for the excellent way he has presided over our discussions. He must be delighted—as I am—with the outcome.

I would also like at the outset to mark President Reagan 's last summit by saying that he could not have had a better one. His final summit has underlined the success of the economic policies we have pursued in the second cycle of summit meetings in which he has played such an important part.

We are enjoying unprecedented economic success—the longest continuous period of growth since the War—and this stems from the cooperation and common sense of purpose between the summit countries during the 1980s in applying sound economic policies, containing inflation and promoting efficiency, enterprise and competition. [end p1]

So the task confronting the Toronto Summit has been first, to lay the foundations for maintaining this rising prosperity and greater individual freedom into the 1990s; and second, to tackle the outstanding problems which remain with us. So the very clear message which goes out from Toronto is one of confidence, coupled with a commitment to build on and reinforce our success. Success, however hard to come by, may not make news, but it does make for a better world and I believe that summits have played an important part in improving the lot of billions of people.

In charting our course for the future, we in the United Kingdom have given a strong lead on promoting freer trade and reducing protectionism, on rolling back agricultural support and helping the poorest debtor nations. Toronto has given a fresh impetus to each of those matters.

Furthermore, with wholehearted British support, the summit has sharpened up the attack on terrorism and more particularly on air piracy and on drug trafficking. I look forward to an ever-widening network of agreements to enable countries to confiscate the proceeds of drug trafficking and effectively to prevent the laundering of drug money.

So a very successful summit indeed. Next year, we embark on the third cycle of economic summits and I hope that in 1995 we shall leave Canada as confident and united as we leave Toronto in 1988.

Ladies and Gentlemen, over to you. [end p2]

John Dickie (Daily Mail)

Prime Minister, you talked of a very successful summit. Can you say, basically, what does it mean for the ordinary citizens of Britain to have a successful summit—does that mean more jobs, does that mean controlling inflation more effectively?

And secondly, you talked about a sharp attack on terrorism. I recall that at the last summit in Venice there was a robust statement condemning concessions to terrorism, yet since then two governments have made deals with terrorism. Do you think this new statement will prevent that in future?

Prime Minister

First, if you contrast—because I think you were with us—the end of the first round of summits with the end of the second round, you will find a transformation has taken place.

In the first round of summits, we were really tackling things by short-term measures. In the second round, we have been tackling them by effective long-term sound measures, so for the ordinary citizen it means that inflation has come down from well over double digits to about an average of 4 percent throughout the OECD countries. It has meant they have a higher standard of living. It has meant that unemployment is falling. It has meant that there is a good future stretching ahead, provided we stick to those sound policies. [end p3]

That is not the end of the matter. Unless we really battle against protectionism, it would reduce world trade and that could reverse some of the things that we have done.

Unfortunately, during the period 1980–86, agricultural subsidies have gone up and that cannot go on. We have just started to take the first steps to roll them back in Europe and have given fresh impetus to that here.

So I think that what has happened over the last seven years really has benefited the ordinary person, not to speak of tax reductions which the Nigel LawsonChancellor has brought in over that period, which has helped to create wealth.

With regard to terrorism: yes, it is a thing which has not got better and we are constantly trying to increase our effective cooperation from one country to another. I hope that once again we shall give a fresh increase to that, but do not think I will ever be able to come and say terrorism is over. I am afraid there are people who do not accept the ballot box and who try to override it by the bullet. We must see that they do not succeed.

Jon Snow (ITN)

Prime Minister, just at the end of the summit, Mr. Mulroney paid tribute to President Reagan 's leadership. You were charged with providing leadership in the economic debate—you led off with a keynote speech. Do you see yourself now as carrying the mantle of summit leadership during the transition in the White House? [end p4]

Prime Minister

Mr. Mulroney paid a handsome and well-deserved tribute to President Reagan with the support of each and every one of us—wholehearted support and affection for President Reagan and what he has done.

I just see myself as carrying on, believing in the things in which I have believed and trying to translate them into action.

It so happens that I believe that if you are going to get the economics right, you have got to get your view of human nature right—the things that will encourage people to work hard—because it is by individuals creating wealth that we have more as a nation and have more to have higher standards of social security as well.

So I think we as a team here will carry on. We have always believed in those things. We steadily put them into practice. President Reagan believes in the same things, and I think most summit countries now have come to accept that it is those things that produce results.

Al Holm (Canadian Broadcasting Corporation)

Prime Minister, one of the stickiest wickets you faced was agricultural subsidies and in the final brief there is one word changed that the Canadian briefers are making quite a thing about and that is that the negotiators in Geneva “must” develop a framework approach as opposed to in the draft it said: The negotiators in Geneva “should” develop a framework approach and the [end p5] fact that the “must” is seen to be marching orders that Prime Minister Mulroney has got the kind of strong message that he wanted on agricultural subsidies.

Could you characterise how that came about?

Prime Minister

I would not put all that much emphasis on one word! I think, if you take the general sense of that, there was a recognition that we in Europe have started to tackle our problems, as you know, in the Community; a recognition that the United States too is trying to cut its subsidies; so we are already realising that this cannot go on.

In addition to that, there is a positive commitment to try first to freeze and then to roll back the subsidies and various other kinds of support for agriculture in an ordered and substantial way.

It means not just having a higgledy-piggledy haphazard reduction, but really trying to set some principles so that we can get regular substantial reductions so that our short-term measures fit in with that long-term framework.

So I would not rest anything on one word, but on the realisation things cannot go on as they have. We have made a start, but we need to set long-term objectives and each have our short-term objectives going towards that long-term one. [end p6]


Prime Minister, if I could carry on from that point, the communique refers to the reduction of all direct and indirect agricultural subsidies. In your mind, is the goal of the exercise to eliminate totally all agricultural subsidies?

Prime Minister

Our goal is to have substantial reductions in all forms of support.

If you take that on ad infinitum, then you will come to what you said, but I think that the framework that we shall set will be to have substantial reductions in all forms of support and just work steadily in that direction.


The summit was primarily based on Russian economies. There was a considerable amount of discussion on primarily East-West relations. A very important conference is coming up in Moscow soon—the June party conference—have you any views on the current reforms that are happening in the Soviet Union?

Secondly, has your mind changed or have you any new ideas towards sanctions on South Africa? [end p7]

Prime Minister

With the regard to the latter—let me take the last one—No!

With regard to the former, we have made it quite clear that we believe that Mr. Gorbachev is right in the bold reforms that he is introducing because it will have more personal initiative, more personal responsibility and enlarge liberty. That we believe it is right both for the Soviet people and for all mankind and we hope he will succeed. We know that it can be quite a bumpy ride when you are making fundamental reforms of that kind and you need to have the strength of character and the determination to see it through. We hope that it will be seen through.


Prime Minister, you talked at the dinner last night of your concern about the behaviour of young people, suggesting that training and education reforms and that better economies were not enough. In what direction do you now want to head in attempting to solve this problem?

Prime Minister

We were talking about training and education reforms, the importance of knowledge and the kind of changes that we are going to see, and one pointed out that if you looked back over this century—over, say, the lifetime of our parents—there probably will be few [end p8] periods ahead which have seen as many changes—really enormous fundamental changes—as we have seen over this last century, and we really have managed to ride those changes very very well indeed. So there is nothing to be afraid of in the kind of changes—which have been enormous—that we have seen. We can tackle those. We can tackle them with education, we can tackle them with training, but you have not quite got the message right, which is not surprising—it gets very garbled when it goes…   .

What I was saying is: “Look! Those we can tackle! We are tackling education. We can tackle training, but after all, our parents and grandparents, who had nothing like the same amount as we have, managed to have the most enormous changes in their lives and still go on building a very much larger and more prosperous society!”

What we are left with now is some of the really tricky problems, some of the behavioural problems. You talk about drugs, you talk about crime. These are the behavioural problems which really go to the root of the quality of life and how do we tackle those? A certain amount of scientific work may be part of the answer.

I raised the matter here partly because of the debate that had gone on before, partly because here in Toronto we are in a highly prosperous, very beautiful city—clean, tidy, with very little crime. There you have an actual success story. [end p9]

In other cities, you do not have them always as clean; you see graffiti, and as you know, there is a great deal of violent crime, and I think that many many people would say it is not only a rising standard of living but a rising quality of life and we have to try to analyse why some cities have both and others find it difficult to tackle violence. It has something to do with who sets the standards of life—is it parents, is it communities, is it schools, is it all the other institutions? Why is it that some of those standards have perhaps slipped in some places and not in others?

If you look back, you must know J.B. Priestley. He wrote many novels and used to broadcast on BBC when I was young and when I was not so young and there is a quotation—I cannot remember it precisely—that runs something like this: that many of us when we were young were constrained by force of circumstance, as indeed we were. We were also fortunate to live at a time when custom and conventions and the accepted standards were very well understood, and he went on to say that we have not yet gone from force of circumstance to reach the plateau of self-discipline. Now he put it perhaps slightly differently, but the thing I was trying to get across—I hope now I have got the message across—is we can cope with the scientific changes, we can cope with the industrial, the commercial changes. Heaven knows, it has been done before! But we are really up against something much more fundamental than that. We [end p10] are really up against why do people behave in some ways. You might ask why Cain slew Abel and you might have some idea of what it is all about, but freedom will only work under a rule of law and it is how to make the rule of law work and a rule of law will only work if about 95 percent of the people at least observe it because they want to observe it and do more than observe it. Is that clear? (laughter)


Prime Minister, what discussions delayed by an about an hour the morning session termination this morning and how much financial relief could be provided to the African countries under the debt initiative that is endorsed in the Declaration?

Prime Minister

You say: “What delayed discussion for an hour?” I have not known a communique of this length go through as easily as this one did! There were a comparatively small number of paragraphs that came under the magnifying glass because the main meaning of most of them was clear, so it is one of the most successful communiques and least debated and argued about communiques that I have come across.

On debt, it just depends first on overseas development aid, what kind of proportion of the help has in the past been given by grants and what proportion by loans. [end p11]

I think you will find that now more people, especially those who have written-off their past loans, are now giving aid by way of grants to the poorest because obviously that is a very much fairer way, but there is still some that has to be written off or otherwise extinguished and I am not quite certain how much that will amount to in total.

When it comes to the other things, all the trade debts, as you know, are rescheduled or otherwise dealt with in the Paris Club—they will be many and various. What we tried to do is not to have just one system of helping but by setting out a number of options and each nation can choose the options which they have—whether, for example, they cancel a certain amount of debt but have the rest repaid earlier; whether they reschedule it longer and whether they put down the interest rate, or various combinations—provided that we have a roughly equal sharing of the burden or fair sharing of the burden between us. The amount which is at stake I could not tell you. Can the Nigel LawsonChancellor?

Chancellor Lawson

Yes. It is of course purely indicative, but it will rise over time as debt falls due for rescheduling, but it could be over time anything up to $500 million a year of relief to the sub-Saharan African countries. [end p12]

Peter Coe (TV AN)

Chancellor, if I could just pursue that debt question a little further. As we discussed, Chancellor, yesterday, it was suggested by the former Tanzanian President Nyerere, last week, that the richer nations should write off 100 percent of the debt to the poorest sub-Saharan countries. Others have suggested that a majority of those loans would have to be written off if those economies are ever to turn round or ever to grow again. What prospect is there of that?

Chancellor Lawson

Of course, these countries have enormous difficulties. Of course, they are very poor and, of course, they have heavy burdens of indebtedness and that is why I have been fighting hard for an initiative on this front over a year now and I am very glad that we have got this agreement at the Toronto Summit. It is a good agreement and it will benefit these countries very considerably if—and that is an essential part of the condition—they have agreed an economic programme with the International Monetary Fund or at least have an IMF-approved economic policy in practice because, clearly, there is no point or very little point in relieving these countries of their burden of indebtedness if they are not carrying out themselves the economic policies needed to turn their economies round. But I believe that the countries concerned are aware that this is a substantial move. [end p13]

Prime Minister

Did you give the figure that Britain has written off?

Chancellor Lawson

The old aid loans, we have already written off over a period of years pretty well everything, getting on for a billion pounds altogether, of which about £300 million is in sub-Saharan Africa.

A number of other countries more recently have written off old aid loans, including Canada and, of course, we are urging others to do the same.

Prime Minister

Tanzania—they had a visit to us just a few days ago—is of course one of the countries that is cooperating with the IMF and the condition for all of this debt relief is that the country cooperates and gets an agreement with the IMF. Tanzania is one of those countries and she came on a visit ten days ago and we gave her some more aid. I will not say how much, because it might encourage others to come on a visit! [end p14]

Philip Stephens (Financial Times)

Prime Minister, you have talked about the need to maintain sound policies against inflation. Are you convinced that at the moment the leaders here are doing enough to contain inflation with growth in the world so buoyant? Should not other countries perhaps be following West Germany and tightening their monetary policies to make sure there is no resurgence of inflation in the next few months?

Prime Minister

West Germany has not had, of course, anything like the rate of growth that we have had. That has been of enormous benefit to our country and we have managed to do it at a time of low inflation.

I think the combination we have had of low inflation and growth which greatly exceeds that on the Continent has been highly beneficial.

There is a sentence in the communique that we have to be vigilant to watch that there is no resurgence of inflation and we are very much aware of the point you are making and we will most assuredly continue that vigilance. [end p15]

Paul Currie (The Globe and Mail)

Prime Minister, every year we have some degree of lament at the Summits that they continue to be too formal and they have strayed too far from the original idea. There is also an attempt most years to make them more informal.

Do you think in the third cycle there is anything further that can be done to get back to the idea of leaders instead of reading set-pieces, actually being able to discuss for longer and longer periods of time with fewer expectations?

Prime Minister

When the Summits were informal right at the beginning, there were not about four thousand journalists following them. They went away and there were no journalists, so I do not think you would like that. So just recognise your part in making them informal, but to be perfectly honest, I think we have got it about right now. After all, we have got to get our message across and we could not do it without you—and we have had a good Summit, so please get that across and there is a confident future! [end p16]


Prime Minister, in the United States there is some concern that if the Democrats take the White House in the next election there may be a return to policies of the past. Do you think that the course that has been set on now under President Reagan—the forces of economics—will cause it to continue or are you concerned that if the Democrats take the White House there may be a change in economic policy?

Prime Minister

You are provoking me to get involved in United States elections aren't you? Well, I cannot possibly rise to that, but the policies set out in this communique are right for all nations and you will notice that they are now being followed by nations of very different political complexions within the Summit Seven.