Brian Hanrahan, BBC
Prime Minister, a very crowded agenda and two major issues seem to have come to the fore - the future development of Europe and the Gulf. On the future European currency, the other eleven appear to have agreed to a goal of a single currency and a timetable to phase it in, has not Britain been by-passed in these discussions?
Prime Minister
No, we have never been by-passed in them, we certainly have a different route. We are prepared to have a common currency alongside our own national currency so we should keep the pound sterling. Others seem to be prepared at this stage to go for a single currency but they have not really got down to the conditions because really you could not possibly have a single currency while the economies of the members of the Community are so widely different. At any rate if you did, they would require enormous amounts of extra money to their own economies in order to sustain them through it. None of that has been discussed, the real discussion has still to come and it is quite absurd to pre-empt it in this Council. [end p1]
Brian Hanrahan, BBC
But the others here seem to have agreed on their aims, have we not forfeited our voice by not joining in that discussion at this point?
Prime Minister
No, most certainly not. We have put up an alternative route which they have not really discussed either and they have not got beyond the general objective which we do not agree with as a single currency but more of a common currency, and of course until you get down to the details you do not know quite what it involves. And that was proved when we started to talk about trading matters which are urgent and have to be agreed before the end of this year, they could not agree because it was detail which affects each of them differently. So when it is distant you can talk in grand general vague terms, when it is immediate it is much more difficult. So we did not take the urgent decision on trade. We have in fact got a communique on vague things.
Brian Hanrahan, BBC
You do not feel that by turning your back on the discussions they have turned their back on you and refused to include you in these?
Prime Minister
What are you calling turning our back on them? There is, going to be a conference of members of governments to discuss this, matter, that will start in December. It is quite absurd to try to pre-empt what they will discuss or their conclusions at this [end p2] conference.
Brian Hanrahan, BBC
When December comes and we go into a conference and the others have already set an aim which you are dissenting from, what will Britain do at that point, are you prepared to block agreement towards that aim?
Prime Minister
I think we will go into that conference and discuss it and I think when they discuss the details they will find that there are very very many difficulties for a number of them in attaining that objective. You could not possibly have a single currency with someone whose country has a totally different economy, a much poorer economy, you could not sustain it, you have to in fact really slash your expenditure, you would probably have an enormous amount of unemployment and you would come along and say: “Please we want a terrific amount of aid from the rest of you in order to do this.”
We in Britain are a very big contributor to the Community even though we get some rebates, we already contribute annually to the Community £2.2 billion that is about half a billion more contributing to the Community than we give to the Third World. So obviously we are not going to get involved in even more subsidies to others. But all this will come up as it is discussed in detail, it was not considered today, and you will find a very very different view coming out when we get down to those details. [end p3]
Brian Hanrahan, BBC
There is a suggestion that Britain could work its way back into the common flow here by accepting in principle a goal down the line but take its time about coming in, would you accept that?
Prime Minister
No I would not, most certainly not, I would not accept a single currency and the abolition of the pound sterling, nor would our Parliament, nor would I believe the British people.
Brian Hanrahan, BBC
So it is not a question of the timetable, it is a question of principle, something you cannot accept?
Prime Minister
I would not accept to have the Community saying we must abolish the pound sterling. We will not have that imposed upon us. I do not know what the Parliament in forty or fifty years time will say. What I do know now is that I am not prepared to go to Parliament and suggest we abolish the pound sterling and if I were it would not get through. I think that the most obvious practical expression of your sovereignty is your currency, your currency, your coin and your notes and your capacity to uphold that currency by your monetary and economic policy. We are prepared to have a common currency, we are not prepared to have a single currency imposed upon us.
Brian Hanrahan, BBC
Do you think that with such fundamental disagreements with the others and their goals, that it is time to re-think Britain's [end p4] position within the Common Market?
Prime Minister
No. I still think that you have not taken on board what I have said before. We have not got down to the detail, there are some of those countries who are not in the European Exchange Rate Mechanism, which we have joined, there are some of those countries which still have foreign exchange control, they could not possibly sustain a single currency, they just could not.
Brian Hanrahan, BBC
But they are subscribing to it as a goal?
Prime Minister
Maybe they are, they can do that, but when it gets down to the detail of how you bring it about they will not be able to, quite a number of them.
Brian Hanrahan, BBC
On GATT, do you think there are chances of agreement in the weeks ahead after the disagreements there have been here?
Prime Minister
You know my view of this particular Council, we ran away from the urgent decisions because we could not agree, they were too difficult, and we went to vague ones which are going in fact to be discussed at other Councils and at inter-governmental conferences. I am astounded. We have been trying to table our own negotiating positions since September 1986. The GATT Conference ends now at the [end p5] end of this year, we have only two more months. We have done nothing in those four or so years and we have not even agreed today. That shows you the sort of priority of this Council - run away from the urgent decisions and take refuge in the vague ones.
I hope that the Agricultural Council will agree a position. We have no competence nationally on agriculture, you have to agree right across the Community, so you have got the agreement and you can take a majority vote. We must do it because otherwise the damage to the whole of the trade between nations could be appalling and bearing in mind we are a big exporting nation it would affect us very badly.
Brian Hanrahan, BBC
You seem profoundly out of sympathy with your fellow leaders after this meeting?
Prime Minister
No I am not, we were supported very well on the trading matters and the agricultural matters and Mr Lubbers came in greatly in our support and we very nearly reached agreement on Friday night. The people who blocked it were not us, it was the French who blocked it and then the Germans said: “Well if the French will not vote for it we will not.” It was the French, the two countries whose farmers in the Community are the richest - they blocked agreement.
How could you possibly expect some of the other countries whose farmers are very much poorer and ours who have had a rather difficult time over the last two years to be prepared to make sacrifices in the interest of the Community as a whole when the two countries with the richest farmers were taking a strongly [end p6] nationalist line? If you want to go from nationalist selfishness, you go to them.
Brian Hanrahan, BBC
On the Gulf, there is strong condemnation here in the resolutions but peace talk coming from President Gorbachev, do you think this crisis can be settled without going to war?
Prime Minister
There is one way to settle it and that is for Saddam Hussein to withdraw from Kuwait, for the legitimate government to be restored, for compensation then to be paid by Iraq to Kuwait for the terrible damage it has done to both property and people and then we shall have to consider how to deal with the chemical weapons, biological weapons and nuclear weapons which Iraq has so that they could never be used. That we would have to do through the United Nations, it is possible that we could keep on sanctions until we had settled that matter. There is no negotiation about withdrawal and the restoration of the legitimate government, no negotiation at all.
Brian Hanrahan, BBC
So you think sanctions might need to be continued after Iraq withdraws in order to force disarmament?
Prime Minister
In order to deal with the chemical and biological and nuclear weapons otherwise it is quite possible that we shall be back in precisely the same position within a few years. [end p7]
Brian Hanrahan, BBC
If Iraq does not withdraw, does your instinct tell you that you will have to use force?
Prime Minister
We are prepared to use military force, of course we are, otherwise the aggressor would have won and he would not stop there.
Brian Hanrahan, BBC
You have had to make that decision before, does it make it more difficult to contemplate it again?
Prime Minister
It is not a decision I ever welcome but you do not appease an aggressor otherwise, as Winston Churchill said: “There is no end to the humiliations you may have to endure.”
Brian Hanrahan, BBC
There has been some anger also here about Mr Heath's mission to Baghdad, that that has made it harder for other countries to avoid being drawn into negotiations. In retrospect do you think that was a mistake?
Prime Minister
That is not for me to say. I think they felt that Mr Heath was an emissary of the British government, he was not in any way, Mr Heath as an ex-Prime Minister is capable of making his own decisions, he wished to go, we obviously extended to him the courtesies of our Embassy in Baghdad just as we would to any other [end p8] Member of Parliament. He did not go as an emissary of the government. What they felt was that if people are going to go from each country in turn then Saddam Hussein will play one country off against another and they felt it thoroughly undignified to go and ask for a few hostages back in return for a visit and that that would drive a wedge between what are at present nations absolutely united in their intention to reverse the aggression into Kuwait and to free Kuwait and to restore the legitimate government.
And so we have said no official missions to Saddam Hussein and we will discourage other independent missions, that is as far as we can possibly go.