Peter Sissons, Channel Four
Mrs Thatcher, what is the direction you most wish to influence things in the post Reagan era?
Prime Minister
I think the direction we have been taking has been the right one. It is right for a sound and strong economy, it is right for East-West relations, it is right for solving problems that have been there for quite a long time like Afghanistan, like Angola, like the Iran/Iraq war. Therefore, that is the direction which we should continue.
Peter Sissons, Channel Four
Mr Gorbachev gives the signs of being a man in a hurry, witness his recent decisions to come to the United States and see the people here. Do you think Mr Bush should respond in kind and drop some of the old caution? [end p1]
Prime Minister
I am not quite certain what the old caution is. We are fully behind Mr Gorbachev in the reforms which he seeks. We admire his boldness, we admire his resolve, we will do everything to see we can that they come about and we hope that they will be accompanied by much greater human rights within the Soviet Union. To some extent that is happening but not nearly enough.
We should never drop our guard on defence. We have great hopes for the Soviet Union but hopes are not good enough on which to base a defence policy. The defence policy is in defence of those things which we cherish, it is a place with freedom and justice and the freedom and justice is very important.
Peter Sissons, Channel Four
Is it not against the spirit of the new mood to modernise our nuclear deterrent?
Prime Minister
No it is not. If you have a strong defence policy you must have a defence and weapons and effective soldiers, sailors and Air Force which deter. Obsolete weapons do not deter. [end p2]
Peter Sissons, Channel Four
Would you accept that Britain, and the United States for that matter, have an interest in preserving what Mr Gorbachev is doing and this might mean a large element of financial support?
Prime Minister
Well I do not think so. Obviously some countries will offer some credit to the Soviet Union because the Soviet Union has a very good record of meeting and repaying that credit. It is a very good record and that is why she is offered it. But I do not believe that one should dash into giving grants from governments or anything like that. You have to stand behind your export credits.
I also think that it is for private banks and private industry—if they wish to make a judgment that it would be a good thing to have a joint venture in the Soviet Union, a particular factory to help certainly with teaching management to the Soviet Union, they must make their judgment on will they get a return on the investment, will they be able to make a profit, will they be able to get some of the profits out? So that is for the whole of the private sector to do.
We do the credits for trade and that depends upon the very good record the Soviet Union has had in repayment. [end p3]
Peter Sissons, Channel Four
Finally, have you had any advice from Mr Bush on the budget deficit, that enormous problem that he faces from inauguration day?
Prime Minister
The budget deficit is about 3 percent of their national income which, in European terms, is comparatively small but allied to their savings ratio, which is small, is a problem. I think Mr Bush said in his speeches during the election campaign that yes he would intend to deal with the deficit. There are a number of ways of dealing with it, he will have to consult with his advisers and his Treasury Minister and also with Congress as to precisely which is the best way to tackle it, and I believe that they will tackle it in a measured and responsible way.