JH
Prime Minister, it's said you like a challenge. Labour have conducted this campaign as a referendum on your own track record. When you get the verdict, will you accept it in that context?
PM
What you're saying is Labour has conducted a campaign that is nothing about Europe. It's not about Europe at all. I have conducted a campaign with the best manifesto on the future of Europe, setting out in detail practical steps in the way ahead, because I believe that our future lies in Europe and my whole approach is we want a strong Britain, which we have built, and in a strong Europe. And we can have the two. And we've set out the way ahead.
JH
Peter Brooke has conceded that Labour have had a lead and may still have a lead, I wonder whether you're prepared to accept an overall defeat on the day?
PM
No. I think we're coming up extremely fast. This often happens in the last week of an election, particularly an Euro election and all of a sudden people become aware of the importance of coming out to vote. I think they are more aware now and I've noticed it very much in the last few days, because this time the European Parliament has more powers than it did when we voted last time. And we have made them aware of the very narrow majority that the Conservatives and the centre right parties have. All of a sudden they are beginning to realise the importance of coming out to vote. This is an election that depends very much on the proportion of your own supporters you get to the polls.
JH
It was noticeable in your keynote speech in Nottingham that you said more than once that Tory supporters ought to get out and vote. That was interpreted as a sign of some panic on your part.
PM
Good heavens no. Panic merely because you urge your supporters to get out and vote? It seems to be thorough common sense. [end p1]
JH
What do you say to those critics, there have been some in the Conservative Party as well as your natural opponents, that you have all too often talked about doing battle for Britain in this campaign and that you may have perhaps been a touch too strident?
PM
No. I have fought for Britain. I've fought for Britain very hard, and as I said in that particular speech, yes, we have been combatant and we've won great advantages for Britain. If I hadn't fought hard we'd now be paying twice as much for Britain as we are. If I hadn't fought hard we should not have got the Common Agricultural Policy surpluses down. We're fighting hard to get a fair deal in Europe so that Europe opens her markets to Britain, as we open our markets to other countries in Europe. You need to right hard. Believe you me, the others fight their corner too. Of course they do.
JH
But what of the danger that you risk alienating European partners. That Britain in the end becomes isolated? A fear expressed not just by the likes of Ted Heath but by people like Michael Heseltine.
PM
I think it's quite absurd. Sometimes you have to be isolated in giving a lead. We were jolly nearly isolated over the last few months when the other countries wanted to put a tax on savings. As a condition of free capital movement, they wanted to have a uniform tax on savings. ....... right across Europe. We said nonsense, we already have free movement of capital. Europe is about getting down the barriers not putting them up. Yes, we started alone and we won the battle. We won the battle. And that's good for Britain and it's much better for Europe because had they won, I can tell you what would have happened, the capital would have left Europe and gone outside. But it took Britain to stand alone, to argue our cause and to win the case.
JH
Could I put to you the observation made by a number of leading businessmen in this country that we ought now to be full members of EMS? The Gallup Poll conducted for the European Commission says that nine out of ten top-flight businesses that responded said Britain should now be full members of EMS and that to do otherwise, to delay it any longer, would be to handicap British business. [end p2]
PM
No, I don't believe that at all and I think if you talked it through with some of those businessmen they'd say as we do, that at the moment the overriding priority is to get inflation down and also one must point out to them that we have free movement of capital, we have abolished exchange rate control which has been tremendously advantageous to them. Some of the others who belong to the exchange rate mechanism, as distinct from the EMS - we belong to the EMS - have not done those things at all. And some of them are trying to put extra taxes on before they do those things. Now the businessmen would hate that.
JH
Do you accept that perhaps the most decisive factor on Thursday will be the people's verdict on your Government's handling of the economy and that there is a concern now that actually you have lost control over the economy?
PM
What absolute nonsense! If its a verdict on the handling of the economy, and let's just go through it again, we have the highest standard of living we've ever known, the highest standard of consumer goods we've ever known, the highest standard of social services we've ever known, the highest standard of investment in manufacturing we've ever known - that's good for the future - the highest standard of investment in all businesses we've ever known, the highest standard of numbers of people in jobs we've ever known, the highest standard on the wider standard of capital ownership, we've ever known. We're spreading the ownership of capital ever more widely so that every earner can become an owner and within twenty years I think everyone will have something to pass on to their children. That is our record on the economy. It is because of that record, and having got rid of a number of controls, that overseas companies are pouring into Britain to set up factories here, rather than pouring it into some other countries in Europe. Because of the way we've done things here. That is the record on the economy and that is what they're voting on. My goodness me, we should come in with a very very good majority.
JH
Your support for your Chancellor, Nigel Lawson, couldn't have been more emphatic yesterday and again this morning. The next question would be whether the markets accept it on issues like exchange rate policy. They are still asking who runs the economy, is it advisers from Downing Street or is the Treasury? [end p3]
PM
Oh, how absurd a question. We discuss things. The policy which the Nigel LawsonChancellor runs is the policy which is fully and unequivocally supported by the Government. Fully. He's done extremely well. Yes, we have one problem with inflation. Our overriding priority is to get that down. Look at what Geoffrey Howe, who as our first Chancellor, and Nigel Lawson have managed to achieve in this country. It has been terrific. We wouldn't have the reputation we now have abroad if we hadn't in fact run the economy of this country in the way we have. It's been magnificent. It is Government Policy. Yes we discuss things and thrash them out. Of course we do. When you're looking at policy. We do have debates and arguments and we come to a clear conclusion. Nigel Lawson is an excellent Chancellor, as was Geoffrey Howe before him, and we've been very lucky and its been greatly to the advantage of the people of Britain.
JH
Finally, Prime Minister, the best possible signal you could give the markets is to say now that Mr Lawson will survive your Cabinet reshuffle. Would you comment on that?
PM
If I start to say anything about a reshuffle you'll go through my Ministers one by one. Let me tell you this, I have not thought about a reshuffle. I have not begun to address my mind to it. Why should I? I've got a very good Cabinet.