Speeches, etc.

Margaret Thatcher

Interview for Sunday Times

Document type: Speeches, interviews, etc.
Venue: No.10 Downing Street
Source: Thatcher Archive: OUP transcript
Journalist: Michael Jones, Sunday Times
Editorial comments: 1815-1918. The transcript has been prepared from a tape in the Thatcher Archive. Published on Sunday 18 November.
Importance ranking: Key
Word count: 7872
Themes: British Constitution (general discussions), Executive, Civil liberties, Conservatism, Conservative Party (organization), Economic policy - theory and process, Education, General Elections, Monetary policy, Privatized & state industries, Public spending & borrowing, Trade, European Union (general), Economic, monetary & political union, European Union Single Market, Foreign policy (Central & Eastern Europe), Foreign policy (Middle East), Foreign policy (Western Europe - non-EU), Health policy, Housing, Community charge (“poll tax”), Conservative (leadership elections), Religion & morality, Social security & welfare, Transport

Michael Jones, Sunday Times

To take the challenge of this leadership election head on, your challenger says that only he can secure the advances made by your Governments against the threat of a Labour Government turning the Tories out at the next election.

MT

That is just not on. That is just nonsense. We have been through difficult times between elections before, twice, but the fundamental direction of our policy and the recognition of what it has done to our reputation overseas and our prosperity at home has been confirmed at two further elections since I got in. So we have won three times and we have won three times by having a clear policy and going forward always in the same direction so people knew what we stood for and could rely upon us to do the things that we said we'd do. And it is just that same resolve, that same willingness to take difficult decisions for the sake of the long term that will stand us in very good stead and will help us win the next election. But depart from that and what is there left? Perhaps I should not say that, but depart from that and you go to something totally unkown.

Michael Jones, Sunday Times

So without Thatcher there can be no on-going Thatcherism and the fundamental policies for which this Government has stood. Is that what we are saying?

MT

The whole cabinet is behind me in pursuing these policies, the whole cabinet is behind me. These policies really have transformed Britain so that our industry is very much better than it ever was before which is why we shall not have so much difficulty now as we had in the early years when we came in. But you have to be prepared to take difficult decisions and you have to be prepared to [end p1] say no to certain expenditure. It is totally and utterly wrong to say, “Well, I can in fact give you more expenditure and I will cut taxation.” In the end your sums simply have to add up and you are far more respected if you say, “No, we cannot do that, we have to live within a budget,” and because we live within a budget we will be able to continue for many years with the kind of policies that we have now.

Michael Jones, Sunday Times

Well, Michael Heseltine the challenger of course claims to be economically very dry. It is on social policy and on European policy that there are differences. The Poll Tax is the obvious hot potato that immediately surfaces, then we have whether one catches this train to EMU or not, which as far as I am aware is not grabbing the general populace. They are not worried about the ERM or the ECU, they are worried about the Poll Tax, although that has diminished in the polls as a hot issue.

MT

If you want in fact to improve the standard of living of the people, you have to have a fundamental economic policy which is a policy which releases enterprise, which has released enterprise. We have got something like 400,000 new businesses since 1979 and so on. You can only have a policy which creates the wealth by saying it is not governments who know how to do that, it is for governments to set the general framework within which enterprise can work. You have first to create the wealth before you can distribute it. Then it is really one of our pride and joys that we have in fact always done better on the social services under our policy than you do under Labour interventionism or anyone else's interventionism.

Michael Jones, Sunday Times

Isn't that attitude now, because of your leadership and winning three elections, isn't that common to all Conservatives? There is no difference on that. On the leadership election, they are being asked to make a political choice about ‘winability’.

MT

I would hope that it was common to all Conservatives, but I would not necessarily say so. Look at all of the hot debates we have had over quite a number of things. The hot debates for example when we have continued our [end p2] basic privatisation programme. It is a fantastic success, tremendous success. It has extended the property-owning democracy, capital-owning democracy, and it will be extended ever further. But look at the battles we have had this time to bring those things thing in.

Michael Jones, Sunday Times

What, within the party?

MT

There have been many many people who have criticised, “Oh look, people do not in fact want any more privatisation.”

Michael Jones, Sunday Times

This is what the word was, retrenchment or consolidation.

MT

Consolidation. So in fact we have had quite a number of battles. Now, the one thing everyone is agreed upon about local authority finance is that rates were the worst system of tax ever. Everyone was able to vote in local authorities but fewer than half the people actually paid rates and therefore it was very tough on those, and so everyone agrees that it is very much better to have a system of local taxation under which everyone pays something for which everyone benefits. And so that we have in fact introduced. It is always difficult to get a new system and to have it settle immediately, you will always have some problems with it and that is why we had the first review.

But then we say this for example about education. The amount that goes to local government from the taxpayer's grant, from the taxpayer, the revenue support grant, plus the amount that goes from business, is very much greater than the amount spent on education, very much greater. So you could say that in fact the cost of education, if you hypothecate the amount that the taxpayer pays, is already more than covered by what the taxpayer pays and by what the businessman pays.

What you simply cannot do is to give the impression that somehow you can leave all the money with them but take away all the responsibilities of education, finance them again for the taxpayer and the taxpayer will be no worse off …   . Moreover, if in fact you did that, there is no guarantee [end p3] whatsoever that local authorities would reduce their community charge. They could quite well say, “Well, we have got fewer responsibilities now for education, we can spend the money elsewhere,” and you would finish up with higher taxation, a higher community charge and much higher government and local government expenditure.

This is why you simply cannot come up with proposals that are not properly worked out and why you take the course that we have done that when you have problems with introducing a different kind of tax, you abolished one, you changed it to another, then in fact, yes, it will take a time for it to settle, as it took time for Value Added Tax to settle.

Michael Jones, Sunday Times

And how fundamental a review do you think is in prospect this time around on the community charge?

MT

It is not for me to say. We have had our fundamental review. The benefits of it have not yet been felt.

Michael Jones, Sunday Times

I thought you alluded[sic] going on this afternoon in the House?

MT

The benefits of the fundamental review have not yet been felt, they still have to take effect. They are benefits where we are changing the way in which local authorities can do the standard charge. We gave them discretion before, they exercised any discretion much too harshly. Many of them by charging double the community charge on people who should not have had anything like that amount to pay. So we are bringing in new regulations about that. Some of them are in. We still have some to do. Secondly, because some people suddenly had to pay a lot more under the community charge than they did under rates, we are increasing the transitional relief to help those people. And thirdly, we have increased the amount that the taxpayer pays. So we have done those things. The effects of those have not yet been felt. Now of course we shall find from time to time, as you keep things under continuous review you will find things which you haven't dealt with, with the major reviews over, and of course you will continue, as you always do, where you have got a genuine grievance you try [end p4] to redress it, that is the on-going continuous business of politics. It may mean redressing certain things by legislation if you can't do it by order. But the main review has happened. Of course if you get new grievances becoming apparent then we will deal with those.

Michael Jones, Sunday Times

Within the framework?

MT

Within the framework. The fundamental principle that everyone benefits from local authority services therefore everyone must contribute to them and also on the basis of affordability. Don't forget, broadly speaking only one quarter of local authority expenditure is met by community charge. Three quarters comes either from the tax-payer, that is the biggest lot plus all the business payers.

So you take what the taxpayer gives and what business gives, it is way way above the amount that the local authority spends on education.

Michael Jones, Sunday Times

I think since we last did an interview, the economic climate has worsened, against expectations obviously. Will it come right in time for the general election which is a political point, because the poll tax and other complaints and grievances are compounded are they not by the general feeling that things aren't going as well as they were?

MT

The fact was that we got growth growing too fast, because as you know after the October 1987 crash we were fearful of a heavy recession setting in and therefore we in fact got growth growing too fast, we had got too big a money supply in the system and now we have to take it out. It is taking it out that is painful. There is only one way to cut the supply of money and that is to increase its price, which is your interest rate, and therefore it has to our sorrow, it does bear heavily on the small business who has heavily borrowed. If you haven't heavily borrowed you are all right. If you have heavily borrowed, you have real problems. And therefore frequently when you are purchasing a house—I have done it several times—as you change from one to another, you do I know tend to spend not only every penny you can afford on it but a little bit more, [end p5] because somehow you always see the house that is a little bit more than you wanted to give. Now if you did that in the last two years then it is tough, because you are already stretched because you had given a little bit more and then the interest rate catches you out. It has had a 1%; reduction which we hope helps a little bit, but once you have got it going too fast then I am afraid you have just got to take it out, because the long term disadvantage would be infinitely worse than the short term problems. But I am aware that the short term problems hit unevenly and they do particularly hit mortgage payers and, believe you me, the amount that people are paying on mortgage for many of them it is a much bigger factor than the community charge. For others, according to the house they lived in, the community charge may be bigger but they are comparing their community charge with what they paid in rates. Had we gone on with rates you would have to have had a revaluation after seventeen years, so those small terraced houses wouldn't have been valued at what they were seventeen years ago. Their value has rocketed. Every time that has happened in the past, local authorities have put their spending up and in fact we really have had enormous trouble from revaluation on domestic property. I have lived through it so I was determined never to have it again. And of course it's the smaller properties that revaluation often hits the worst. We have had that with small businesses and small shops on the revaluation of businesses. So, we should have, believe you me, even worse problems had we gone through with a rating revaluation, it might have been distributed differently, we should have them. But it doesn't absolve us in any way from alleviating some of the problems that have been caused by a change from rates to community charge and that we have…we are in the process of doing. The results were announced but they will not work through fully …

Michael Jones, Sunday Times

And the door is still open for further consideration on legitimate grievances?

MT

[talking over each other] Yes. Of course it is. That is the daily business of government, and let me tell you where many many MPs and Ministers and myself included get it from. We get it from the letters which come to us, from our own constituents, and here we have between four and seven thousand letters a week. You find something and you just say, “This is wrong. We have got to cope with it.” [end p6]

Michael Jones, Sunday Times

But you can't cope with the interest rates side of this equation as easily as you might be able to …

MT

We can't cope with that because inflation…the expansion was running very very fast and frankly it took us longer than we thought for the 15%; interest rate to start working through. We have to do it. It is working through now.

Michael Jones, Sunday Times

But you are requiring of a…

MT

But you cannot if you are a leader, you cannot run away from the difficult decisions. You must never give the impression that ask and you can have everything you want and somehow the money will come from somewhere. You have got to live within a budget, you have got to learn as a leader to say, “Yes we will do this, but it will be at the cost of that.” Now, we have already put a good deal of priority this year into finding more taxpayers' money to assist local authorities and they should use it to reduce the community charge. I am afraid that there are some of them who say, “We will just spend more.” This is one of the problems. We have never, yet, taken draconian powers to tell every local authority precisely what it may spend and no more, and if you were to do that and if you said, “Right, we will take away the education expenditure,” first if you took away the money it wouldn't make any difference on the community charge. If you took away some of the money … if you took away all of the education and left some of the money there, the chances are that the local authorities would spend that money and not reduce the community charge.

Michael Jones, Sunday Times

Now can I…

MT

The last position would be worse than the first.

Michael Jones, Sunday Times

Now the damaging thing, I thought, in Geoffrey Howe 's resignation speech, which must have been painful to listen to, was his connecting the whole argument of ERM, which most people consider somewhat abstruse, with inflation which they don't consider abstruse at all.

MT

Well, if I might say so, that was dealt with very effectively by Nicholas Ridley and if I might also say so very effectively within Geoffrey HoweGeoffrey's own speech who pointed out that he had got down inflation from I think 22%; to 3.5%; while we were outside the Exchange Rate Mechanism. So it is not needed actually to get inflation down because he did it. What is more, Germany does not need to link her currency with anyone else in order to keep her own inflation down. She has that inner discipline. [end p7]

Michael Jones, Sunday Times

And an independant central bank some people might say.

MT

Some people might say it, but some people's views might have been very severely modified on that by what happened on German reunification and the rate at which the Deutschmark and Ostmark were linked with one another.

Michael Jones, Sunday Times

Now, to take up another point in the resignation speech which may have an echo among the younger generation. In your attitude to Britain's role in Europe, the preservation of the pound, the importance of the British heritage. How would you plead to the charge that you live in “a ghetto of sentimentality” ?

MT

It is just absolutely absurd. First, I don't. Secondly, I do not regard being proud of our traditions, which have been built-up over the centuries and have grown and have evolved, as “a ghetto of sentimentality” . Indeed, far from it. The next point I would make is this. I think it was in his resignation letter, but please check, Geoffrey said he was not a Euro-idealist. I must say, in one sense of the phrase I have always thought of myself as a Euro-idealist and I will tell you in what sense.

I am a Euro-idealist in the sense that we talk about civilisation and what quite a large part of the world accepts as civilisation are the ideals which came from the several countries of Europe or which were fostered in the different countries of Europe. Not, note, in Europe as a whole but in the differing countries, because the characteristic of Europe is that it has never been dominated totally by one power. There was always another country people could move to, in fact, to exercise and enlarge their liberties. Now, let us just look through these.

First, you have the ideal of democracy and discussion. Sorting out your problems by discussion from ancient Greece. You have our idea of the rule of law which is founded on Roman law, it came from the second Roman Empire. You have our ideal of human rights founded really not in politics at all but in Judaeism and also in Christianity, the two big religions that say quite clearly that both nations and individuals are accountable for the use of their powers. And so, it is in the Old Testament, Moses, you love thy neighbour as thyself as [end p8] well as in the New Testament. This I think is the origin of the tremendous emphasis we have always placed on human rights. It is a religious origin, it is the fundamental belief. These things cannot come from governments, they come from something much deeper. So from Ancient Greece, so the law from Rome, so Christianity came and started to flourish in Europe, this is where the human rights came from. You had your glorious Renaissance and the Enlightenment, your literature and your art, again in Europe, in Italy, in Holland. You had this marvellous discussion of science, but more than the discussion of science you have something which started in Europe which didn't start elsewhere. You had the turning of science to the use of the people through our industrial revolution. We were the origin of that and then the others elsewhere. Now, in that sense I look at it and think, and our Parliamentary system, the Mother of Parliaments, grew in this country, the common law grew. So everything that is regarded as civilised based on human rights, based on discussion, based a rule of law which you simply cannot have freedom without a rule of law. Based on the increasing prosperity of the people by turning science through a private enterprise, Adam Smith kind of economy, market economy, which grew, which only succeeded by pleasing the masses going through a capital owning democracy, came from the different countries of Europe each with their own tremendous tradition. Now in this sense, yes, I am a Euro-idealist but you do not get that tremendous fantastic gift to the world from having been under one domination. It didn't come from the Ottoman Empire, it didn't come from the Chinese Empire, didn't come from the Mogul Empire, all of them under one great big rule fearful of the freedom of the people. It came from the countries of Europe where you could always move elsewhere to freedom, and look what it produced. Yes, I am a Euro-idealist and I want a larger Europe. Europe is older than the European Community. I wanted the larger, wider Europe of which Moscow was also a European power.

Michael Jones, Sunday Times

Are you equating an over-weening Brussels bureaucracy with a super- …

MT

I do not think you get this by or seeking to impose something on Europe which does not come naturally by growth, which is not accepted by virtue of close co-operation between these marvellous countries of Europe which added to those things its fantastic battle for freedom and liberty. [end p9]

Michael Jones, Sunday Times

Eleven countries may feel that within the EC they can have all that excitement and drama and you are fearful of going on a train you don't know where its going to.

MT

I think it is very silly to get on train if you do not know its destination, very silly indeed. When you have belonged to a country …

Michael Jones, Sunday Times

Even if you are all on it?

MT

Look, how do you know it is not going to go over a ravine and plunge into the abyss? Very silly. When you have run a country which has given the world the Mother of Parliaments, whose common law is deeply regarded by most people when you have been the bastion of liberty …

Michael Jones, Sunday Times

But Geoffrey would say you should be in the driving seat, not as he said in Bournemouth in the rear carriage. If you are in the driving seat, you won't go over the ravine.

MT

Anyone who is saying that says if everyone else is getting on it, what he is then saying is, if one of us is in the driving seat the eleven of us will follow. That is the inevitable consequence of that analogy. Otherwise, I don't get on a train which might plunge into an abyss and I don't know where it is going, how much it is going to cost. Of course I don't.

Michael Jones, Sunday Times

You can't have twelve drivers. [end p10]

MT

So have the other countries of the Community and I think people are too readily accepting the objective of a single currency before they have worked out precisely what it means. And the moment you look at some of the discussion in the finance ministries of Europe, they know, the moment you look at the person who has a semi-independant bank in Germany, he says, “Do you realise what you are doing? Do you realise that if you have absolutely no latitude in your exchange rate the strain will come out elsewhere, it will come out in much higher unemployment?” Notice that France's inflation is way below ours, but her unemployment is much higher. That is not so in Germany but it is now because of reunification.

Where was I? It will come out in greatly increased unemployment. It will come out in massive immigration of people from the poorer countries to the wealthier centres right across Europe. Or it will come out because they will say, “We simply cannot go on in a single currency, we cannot support this, we will have to slash our expenditure, we will have to slash our wages,” and therefore they say, “We can't do it. You must in fact give us enormous grants towards it.” And who would be giving those grants? Germany, France and ourselves.

These things have not yet been worked out and what we are doing is trying to say to people, “Look, in our way in this country we don't just buy a pig in a poke, we work things out. And when we say we will do something, we like to know that we can do it and that we will do it.” Others take a different view and say, “The vaguer you are, the more readily you can agree to something.” That is not our way.

Michael Jones, Sunday Times

But what happens if the train leaves without us?

MT

I don't know whether they will get on that train without us. There is no reason to think that we have lost this battle in any way, and I have said to those people, to my fellow heads of Government, “Look, you know that the fundamentals of our Parliamentary system are financial control. That is how it started. You cannot in fact have very much policy unless you have fundamental financial control. You've lost it. Our Parliamentary system is that Parliament is supreme.” We have already given up some sovereignty on the Common Agricultural Policy, and really that is not the world's best advertisement for how Europe works. We [end p11] have given up fundamental sovereignty on trading and that's not the best example of how Europe works. But we have not lost this battle. Indeed I think that the John MajorChancellor and I would say that by constantly facing them, not with broad vague things talking about trains when you don't know where they are going to, even though they may plunge down a ravine because the bridge has broken. But facing them with what it actually means, steadily and patiently and saying, “We disagree with you, we cannot accept the objective of a single currency, we cannot accept with our great Parliamentary traditions, and we think it is wrong on its own to put all the powers in the hands of a European bank accountable to no one. No democratic body. But however we recognise that you want some common financial institution in Europe, so we suggest that like the International Monetary Fund you have a European Monetary Fund.” We have already in London as a financial centre led, yes led, the rest of Europe on saying there is this thing called the ECU, instead of issuing securities in terms of pounds, all of them. But we will issue some measured by the ECU so that what you get back is measured by a basket of currencies. Therefore because you want a new institution, we suggest the European Monetary Fund, we suggested that can issue an ECU-it is not just a basket of currencies, but you can physically hold an ECU, that that could be used for commercial things, that could be used for transactions right across Europe in every country. It might be very helpful for tourists and young people who might want it. We will try that, that is used alongside the Deutschmark, alongside the French Franc, alongside the Peseta, alongside the Lira, alongside Sterling and then people can choose.

Michael Jones, Sunday Times

But you said you didn't think many people would. This is why Geoffrey was upset about this.

MT

Why am I not allowed to express an opinion? We do still have a free country, you know. Why is it that everyone else is able to express theirs but they don't want other people similarly to do so?

Michael Jones, Sunday Times

This was labelled sabotage of your colleagues.

MT

Absolutely absurd. It's sabotage if I have freedom of speech but natural if they [end p12] have it. How very strange. I went on to say it is not for me. I am prepared to put the power of choice into other people's hands. How I would choose? I would choose to be paid in Sterling. I choose to save in Sterling. I have as much right to say that as other people would say, “I would choose to be paid in a hard ECU. I would choose to save in a hard ECU.” The fact is that at this moment under this Government, if someone now wants to change their pay or their savings into holding them into Deutschmarks, or French Francs, or in Dollars, or in Swiss, or a foreign bank in London, they can do so. I have a pretty good idea of what most housewives would say. If we were going to change the currency all the prices will go up; it is just like changing to decimalisation, only worse.

Michael Jones, Sunday Times

Wouldn't people prefer the hard pound to a hard ECU?

MT

We should be able to get and keep inflation down by virtue of our own discipline. But why are people afraid to put it to the choice of the British people? Why are they afraid, those people who want a single currency? Is it because they think that people don't want it and they know in their heart of hearts that people do still have some belief in the pound sterling in our power to issue our currency? Are they going to surrender that? If you surrender that, you surrender so much. Are they afraid that if you put it to the choice that our system would be the one that people would prefer? I am not afraid to put it to the choice. I am not afraid. But that then, if they choose it, more and more there would come a time when our currency became less and less and then you would have to decide and go and discuss it with people, and we would have to decide in Parliament. Now are we actually going to give up our own bank and stop our power? Stop any institution in this country from issuing its own currency? Have one single currency which we can have no control over, which we cannot determine our own interest rate or anything? I am prepared to choose. And it would be a thing for future generations, not only for Parliament, because we are accountable to the people and it would be for Parliament to consult with the people and some people may say it would be such an enormous constitutional change that there should be a referendum. It is not yet to make up our minds, if that point came. But I think that could not be ruled out. It would be such an enormous constitutional …

Michael Jones, Sunday Times

[end p13]

The question would be so complex and technical, how could you frame it? What would it be?

MT

Quite simple: Do you give up the power to issue your own currency? Do you give up the pound sterling?

Michael Jones, Sunday Times

Could you do that before a general election?

MT

We did have one referendum on Europe. I am not suggesting that we should have one. I am suggesting that we do not rule it out. I believe myself that you should only have referenda on a constitutional matter and that would be such a constitutional matter that I would not rule it out, because as with Europe, whether or not we went in, it is the only way of putting one single very great constitutional issue to the people. I am not saying we would have one. I am saying I would not rule it out. BUT I am prepared to fight for choice. Why are other people afraid? And I would fight my corner. I always fight my corner.

Michael Jones, Sunday Times

You do, indeed.

MT

That is my style, and it has been a corner well-fought. But Charles PowellCharles and I and all our colleagues have, together with the help of the City, have constructed this system because we know that other people in Europe want a common currency, so be it. It can be very very useful to have a common currency and so we are meeting that demand, meeting it, and saying it is a matter of choice. If the common currency becomes more and more and more used, to the exclusion of something else, there will come a time when we will have to look and say, “Well now, how do we go forward?” It is not for us to pre-empt that choice for future generations before we have even tried.

Michael Jones, Sunday Times

There is something very fundamental though in what you say about all this that, [end p14] in one basic respect, one gets the impression that Britain and the rest of the EEC-there is a cheese and chalk divide there. We have never been conquered, we have continuous traditions. They have been shaken up, shattered to their roots, and they cling together in a way that we have recently come to in historic terms.

MT

I think that when it came to it that some nation states in Europe, and I notice, feel exactly as we do. When you stop looking at what they say and look at what they do, you will find Germany acting very much as a nation, very indeed as a nation, more so than ever. You will find France acting very much as a nation. She doesn't even put her forces available to NATO. Very as a nation. Italy has not been a nation of course, not historically the same, a grouping city states, and very very distinguished they were and some of them wish to act as city states, but she has not been a united nation as the United Kingdom has for a very long time. Spain has, with a very very distinguished nation state, and so has Portugal. The others have been very much more a part of one empire part of another. So they don't all think in the same way, but more and more you will find that the larger ones who have a nation state history think, and particularly France, are saying that the operative part of the Community is the European Council of Ministers where decisions are made by people who are presidents and prime ministers because they are elected to represent their country and that is the accountability and you keep that. And believe you me, when you stop talking vaguely and get down to this, which is part of our function to do, you will find many others, in practice, unwilling to give up their nation states.

Michael Jones, Sunday Times

If that is so, you have great experience on this, this whole argument that we have created within the Tory Party is bogus.

MT

I have never faltered on this.

Michael Jones, Sunday Times

But why are we all getting so steamed up about all this?

MT

[end p15]

I am not getting steamed up, other people are getting steamed up.

Michael Jones, Sunday Times

No, no, but it is ironic that we had a Rome Summit which jumped the gun on this debate which led to Geoffrey Howe's resignation which has led to a leadership election. Isn't this deeply ironic?

MT

I don't think that was the whole of the Rome Summit. It is for the person in the chair to decide how he takes the agenda. The Giulio Andreottiperson in the chair refused to have the discussion of the trading round on the agenda. I had written to him and said if it was not on it, I would raise it. It was the single biggest issue. There was no point in saying we were a community and then ducking the immediate urgent issues which could affect the welfare of our people and our standard of living for generations to come and talking about something which was not going to start until December …

I did put my point of view there and because I put that point of view, because I persisted in it, the Agricultural Ministers I think not only met again but persisted until they came through to some agreement. That was right. That again is in keeping with our practical view of Europe, and although others were very silent then. I must make it quite clear, there are times when the smaller nations do not speak up and are needed there, and it is known, that because we speak up … There are times, I have heard some of them say it, that if France and Germany agrees on this the rest of us must agree, and I have said, “Look, we analyse things on their merits. We are here to use our brains and our minds and our experience. We are not here because-that is not a community, that is saying whatever two nation states decide, we will just follow. I am not elected to do that. And alone among the Prime Ministers of Europe, alone, I go back to a full Parliament and make a full statement and cross-examine.” Believe you me, some of the things that have been said about the political union, it will come out a very very much smaller thing.

Michael Jones, Sunday Times

Of course, you did sign the Single European Act. Did you not read the preface, with your great reputation for looking at the words, realise all the implications?

MT

[end p16]

Yes, and it was a very, very, very much smaller amendment of the Treaty than they ever thought they would do. They went in with enormous things.

Michael Jones, Sunday Times

There are some grandiose phrases in it about all sorts of things.

MT

The European Economic and Monetary Union is in 1972. We were saddled with that because it was between our agreeing to the Community and actually going in. In the Single European Act, economic and monetary union are defined as economic and monetary co-operation. That is my definition. Economic and monetary co-operation. You will find it in the Single European Act. That is my definition. We have all the co-ordination and co-operation actually needed and that is the way. We in this country think perhaps things are better when they have grown. Our legal system grew up. Our Parliament grew. Our procedure in Parliament grew and it is far more embedded in reality, and you do not go from what you have got to something else until you are certain that that something else will be better. For that you must look at it very very carefully.

Michael Jones, Sunday Times

I have to say to you, Prime Minister, having two first-time voters in my family, that they are of a generation which did not have to fight for any of these things. They travel to Europe with much greater freedom than we ever did and they think we are all a bit fuddy-duddy.

MT

Fuddy-duddy in what way? They can travel. You have just got it immediately in one. Yes, they can travel to Europe with much greater freedom. So they should be able to do so. So in the Single European Act we led-don't forget, it was we who wanted the Single European Act, because we said, “We joined the Common Market, we haven't got it. Let us get a single market. So let us have similar standards with relation to our goods and services and then we have what we joined for, a big market and among that big market,” we said, “our young people will wish to practise their profession anywhere in Europe. So let us agree the qualification so they can practise their profession anywhere in Europe.” Long before the others in Europe, except Germany, got rid of foreign exchange control. We did. So you can have a bank account anywhere. Believe you me, we still have a much freer country on trade than some of those European countries [end p17] and part of our task at the moment is the one to which they find it difficult themselves, is to break down some of their trading barriers. I can give you two examples. Any ship that comes from Europe into one of our ports can pick up goods from one port and take it on its way round to another, all the way round Britain. Our ships still can't call in some of the ports … Lorries can come here and pick up loads, come here with one load and then pick up another load and take it back across to Europe. Can ours with Germany? No, it's been very very difficult. Sometimes our hauliers have had to go and take their load and come back empty.

We have part freedom on insurance and still Germany for example is finding it difficult to agree to give us freedom to sell our insurance there.

Michael Jones, Sunday Times

But all of this has a confrontational sort of ring. It is rooted, I am sure, in absolute fact and I know it is, but it's us versus …

[Tape turned over.] [end p18]

MT

… we say it is also in our interest for the completion of the single market to have some things, not all, some things determined by majority vote for the purpose of getting the single market. That has served us well on many things, because otherwise we should not have got the freeing up of trade that we are getting, but we go into those saying, “You have your view and we have ours, and we want some things and you want others, but we discuss them.” It was under my presidency that we started this off. Straight away we did something like 44 directives, and the others are coming and going on. We started this off. We wanted it. This is practical. This is enormously to the practical advantage of young people. That is fully in with…dare I say it?—my ideals for Europe. I want young people to be able to travel more freely. I hope they will be much more adept in languages than we are. And it wasn't all of these other people who say they are communautaire who started to say we will have a Channel Tunnel, no. It was practical people like me who said, “This will change people's attitudes of history, but that is part of growing. Let's do a Channel Tunnel. Let's get the qualifications.” Do you know, I was talking about this when I was Secretary of State for Education?

Michael Jones, Sunday Times

What, the Channel Tunnel?

MT

No, qualifications. We were talking about scientific work, inter-changeable. I remember the Ralf DahrendorfScientific Commissioner and if you look and see what he says he will agree: it is cooperation between nation-states. This is what will build the very best Europe and I am most active in it. BUT I am answerable to our people. It is up to me to see that I do what they will accept, and what I can genuinely say, after I have looked at it very carefully and [end p19] examined it, will be in our interest and it will enlarge our liberties and not constrain them.

Michael Jones, Sunday Times

Now, to what degree is the next Rome Summit the rubicon?

MT

There is no rubicon about the next Rome Summit. And I hope they will not try to make it a rubicon. But what the last one was doing, instead of concentrating on saying “Let's get the inter-government IGC set up and let them discuss it,” they were trying to put constraints on what they could discuss. I said we were not going to do that. It is for them to discuss these things. They, for example, said they wanted to enlarge the amount of majority voting and diminish the amount which requires unanimity. I was not going to sign up to that. But look, there are two countries there which have signed up to quite a number of that, were not even in the exchange rate mechanism, not even in it.

We reserved our position. We said, “No, we are going to have an inter-governmental and they are free to discuss these things. We are not going to pre-empt them because we have had no discussion here about the detail of these things.” Moreover, then we said on the economic and monetary union, we said that we disagreed with their version of a single currency and a central bank and at the end we put all of the things agreed with. It did not set out our position. That is what the IGC is there to discuss. It will be discussed far more knowledgeably by the Finance Ministers on the one hand and the Foreign Affairs Ministers on the other, and perhaps calling in others from time to time.

Michael Jones, Sunday Times

What would bring the debate to a pitch that the consideration of a referendum would become germane?

MT

The IGC has to sit and decide what it recommends. It has not yet started. So it is quite absurd to be talking about this now. It may be that we shall persuade several others to come our way. It may be that when they are told that they cannot expect large grants from other countries, that they would then say that we couldn't possibly have a single currency. For some of them, they are quite willing to hand over responsibility for their finances because they have got them [end p20] in rather a tangle. We haven't.

Michael Jones, Sunday Times

So it is a long shot, something in the locker, this referendum idea? It wouldn't happen before the election?

MT

No, of course not.

Michael Jones, Sunday Times

It is something very deeply in reserve if we were pushed to the point of going into a form of EMU you did not want and you did not think the British people would accept. It would be a constitutional issue of that dimension.

MT

Look, there are some countries in Europe which have not even yet—big ones, for example Spain—got rid of foreign exchange controls. She is due to do it in about 1992. France got rid of them this year. She had had them till then and Italy has now got rid of them this year. But they are taking these things, they are coming to their conclusions, before the thing has been properly discussed. That is not our way. I have to account to our Parliament. What are Members of Parliament for but to see that things are properly talked through before we agree to things and we know what we have agreed to? That is our way. That is, if I might say so, in my view the right way. That is the way that has served Europe very well indeed.

Now there is another thing. We in fact agreed at the European Summit a whole communiqué that we would stand together and none of us would send emissaries to Saddam Hussein, because he was attempting to play one of us off against another and release a few hostages here and a few there, and get a few there and get people to go and see him to get a few more here and there. He should not be holding hostages at all, and none of them send emissaries and we would try to discourage anyone … countries from going. You know what happened, the very next day…

Michael Jones, Sunday Times

Willy Brandt

MT

Yes. And an effort was made to…an effort was made to try to…

Michael Jones, Sunday Times

General Secretary.

MT

To try to get Mikhail Gorbachevthe General Secretary… Now look, we don't sign things unless we are prepared to live up to them. Now if other people are going to sign them as easily as that and then disregard them easily … [end p21]

Michael Jones, Sunday Times

That is cheese and chalk again.

MT

That may be cheese and chalk, but ours is the right way and I don't see why we should go the wrong way.

Michael Jones, Sunday Times

Now, we have spend a lot of time on Europe. Is there time to recover the Tory fortunes before the General Election?

MT

Yes, there is. The 15%; interest rate took a long time to work, I think longer than we had expected. We saw that the money supply was coming down and we saw in the real economy which was starting to work, and we said now is the time to reduce the interest rate. The year previously, we hadn't hesitated just before a Conservative Party Conference to put it up, because that was the right thing to do. This time we didn't hesitate to put it down, because that was the right thing to do. No one has been able to give a valid criticism of us that we are stuck. We got it right. The John MajorChancellor did say the other day that he believed now that we were in a modest recession. You can never quite tell until you have got all the facts and figures. But don't forget that we still have a growth rate and a standard of living greatly in excess of where it was for example in 1987 and 1988, so we are still coming down from levels which have been achieved since 1987. Don't forget the tremendous amount we have done since 1987. It is since the 1987 election for example that we took the standard rate of tax down to 25p and the top rate down to 40p. It is since then that we have for example abolished the earnings rule for pensioners and since then we have helped to create the biggest number of jobs that we have ever had in this country. And it is since then, in the last three years, that we have got levels of investment in the whole economy higher than we have ever had in the post-war

Michael Jones, Sunday Times

And by-elections, … live with it, endure it and the goods will come? [end p22]

MT

It is since then that we have put up the monies spent by the taxpayer on the health service, up again and again and again until, over and above inflation, it is half as much again as it was before we took over. We may not have got these things through, but it is since then that we now have more money spent per pupil than ever before, more teachers than ever before. Yes, we have achieved these things. Other people are giving the impression now that they are for those things. We should never have had this low level of taxation, this much higher wealth-creation, this capital-owning democracy, unless we had set our course further right at the beginning. Fought Labour every inch of the way, fought Liberals often, and we have got this and now some of them say they would improve on we should never have had but for our policies, and when you listen to them, as to what they would do, and they are spelling out more regulation, intervention, interference, of the kind which in fact landed us in the difficulty when the Labour Party was last in power.

Michael Jones, Sunday Times

Thank you very much.