Brian Walden, LWT Weekend World
Hello and good morning.
Last week's Shadow Cabinet punch-up over the Grunwick affair has highlighted one question to which everyone wants to know the answer. If we vote Margaret Thatcher into No.10 at the next election, will we be voting for a disastrous and futile confrontation between the government and the unions? Today on Weekend World we're going to try and answer that question. Mrs Thatcher's here with us in the studio and I'll be talking to her in a few minutes.
But first let's have the latest news headlines from ITN and Gordon Honeycombe.
headlinesBrian Walden, LWT Weekend World
Mrs Thatcher's spent the summer waging a hectic and unusual political campaign.
film of MT campaigningBrian Walden, LWT Weekend World
In speeches up and down the country Mrs Thatcher has often startled her audiences. Instead of the reassurance we've come to expect from Conservative leaders, Mrs Thatcher's conveyed a sense of imminent danger.
MT
[end p1][speaking to large audience in ballroom or restaurant]Unless we're prepared to defend our freedoms, and be seen defending our freedoms, we shall soon have no freedoms to defend. [hear, hear]
And I don't believe it does Britain â¦
Brian Walden, LWT Weekend World
There's a reason Mrs Thatcher sounds more militant than other post-war Tory leaders. They've avoided identifying the party too closely with any particular doctrine, because they've been afraid that ideology costs votes.
MT
[filmed speech extract, same venue, mostly inaudible under Walden commentary:] ⦠make it quite clear â¦
Brian Walden, LWT Weekend World
But in speech after speech this summer Mrs Thatcher's made it clear that she's broken with this approach. Surprisingly in a secular society, she claims that the roots of her political beliefs lie in Christianity, the Old Testament and Greek philosophy, which hold that the freedom of the individual is sacred. Religion teaches her that people must take responsibility for their own lives.
Patrick Cosgrave, Special Adviser to Mrs Thatcher
Her attitude to politics is a religious one. She believes that each individual is, whatever their talents or abilities, or chances of success or failure, viewed in the eye of God. And whether he is rich or poor, disaffected or affected, uh, successful or a failure, each individual matters equally in the eye of God. And it is not the job of a politician to try to alter the balance, uh, between individuals.
MT
[speech extract; same venue]
⦠That's really what personal liberty means—taking personal responsibility for yourself, for your family and doing your bit by the community you live in. The whole of society is based on kind of reciprocal obligations. I look after you if you're ill, because I know that you'll look after me if I'm ill.
Brian Walden, LWT Weekend World
The principle that individuals should solve their own problems does, of course, clash with the prevailing philosophy of the post-war era. It's been taken for granted that it's the government's duty to pursue equality, by providing for the community as a whole. Mrs Thatcher's post-war predecessors [photos of Churchill, Eden, Macmillan, Home, Heath]all disliked the steady expansion of the role government and the trade unions. They, however, didn't think it expedient to resist the apparently widespread demand for more equality. Mrs Thatcher believes that because individual liberty is sacrosanct, there must be no compromise with ideologies which might threaten it.
Patrick Cosgrave, Special Adviser to Mrs Thatcher
So far as I understand her, she believes that most creeds (other than her own)—socialism, fascism, all government intervention creeds, all creeds that depend on the [end p2] assumption that government will do things for people—are destructive of freedom. It is not for politicians, not for civil servants, not for government ministries, the state, or all the machinery thereof, to decide what is good or bad for people. It is for people to decide these things. Now she feels this so deeply, and she believes the people feel with her, and she has attacked more rigorously, at greater length and more often than other Tory politicians have, the socialist arguments.
Brian Walden, LWT Weekend World
So Mrs Thatcher seems to be very different from the sort of Tory leader we've been used to. Because she's ideologically committed, she's likely to try to push her policies through whatever the cost. Today we are not going to consider whether or not those policies are in themselves good, or bad, for Britain. Instead we are going to try and work out whether she'd overcome the opposition from the trade unions she'd be bound to run into.
Mrs Thatcher's main policies are designed to reduce interference in the life of the individual by the government and the unions. What she's stressed most has been her desire to change the balance between spending by the state and spending by individuals. She wants to cut taxes. And public spending.
Caption appears on screen: “The excessive size of the public sector has led to excessive taxation” . Margaret ThatcherBrian Walden, LWT Weekend World
Mrs Thatcher believes that tax cuts would regenerate the economy by restoring incentives. But whether or not this happened, serious tax cuts would pose problems. Mrs Thatcher's difficulty would be that to achieve any noticeable reduction in taxation, she'd have to cut public spending drastically. Just tuppence of the basic rate of income tax means a loss of revenue to the government of £974 million. And that's more than the entire cost of the road building programme.
A more hefty tax cut—say a reduction of 10p in the pound—would have much more serious consequences. Spending cuts running into thousands of millions would be extremely difficult to find. [Caption appears: “Revenue loss £4837m” , above the drawing of a street sign depicting a man in bed, with a no-go red line running across it.]
Terry Burns, Economic Forecaster—London Business School
Further cuts in capital expenditure would be very difficult. This would mean building even fewer schools, fewer hospitals, even less investment in the nationalised industries. We've already had a series of cuts over the last few years, which has left us with a level of capital spending which by historical standards is ⦠is low already. And therefore further major cuts in that area would be very difficult to implement. [end p3]
Brian Walden, LWT Weekend World
Well, if you can't make cuts on the capital side, but you're really determined to make cuts in government expenditure, where can they be made?
Terry Burns, Economic Forecaster—London Business School
Well, there are two ways of making cuts in current expenditure. One is to simply reduce the standard of service that is offered. This means having fewer teachers, fewer doctors, fewer hospital beds. The other way, if you want to make major inroads into this area—but it involves a major shift—is of course to introduce the principle of payment, whereby people have to contribute themselves towards the service that they receive. So that instead of having it paid for out of taxation centrally, they are required to make some contribution themselves.
Brian Walden, LWT Weekend World
So tax cuts on a serious scale could lead to a major change in the kind of society we've got used to. We'd either have to accept cuts in services, on which many poorer people depend, or we'd have to start paying for them. Neither of these things would go down well with the unions. What's more, they'd be bound to protest about the lost of public service workers' jobs.
Unemployment could also result from another of Mrs Thatcher's policies. She wants to get rid of state interference in pay bargaining. She's now virtually ruled out any kind of incomes policy. Mrs Thatcher believes that industry will benefit if employers are allowed to attract the workers they need, with high pay. And as well as encouraging free pay bargaining, she intends to keep tight control on the supply of money in the economy, in order to bring down inflation. And it's the combination of control of the money supply with free pay bargaining that could lead some people to lose their jobs. Mrs Thatcher hopes to make workers aware of the reality that excessive pay claims lead to unemployment.
Caption: “What I will try to do is to confront people with reality” . Margaret Thatcher Cartoon sequence follows, intended to illustrate Walden's theorising.Brian Walden, LWT Weekend World
If there's no incomes policy, powerful groups of workers can win large wage increases. To pay this increases, employers may have to raise their prices. People who have have to buy their goods will then have less money to spend on other things—if the supply of money is limited. So demand for less essential goods falls and workers who make these goods may lose their jobs.
End of cartoon sequence. [end p4]Terry Burns, Economic Forecaster—London Business School
The guideline really is, that if you have monetary targets, then the permissible rate of increase of wages, uh, is the same as that monetary target, if we wish to avoid any further increase in unemployment. So if we have monetary guidelines of ten per cent, this really means we can have wage increases of around ten per cent and the unemployment level will remain broadly unchanged. To the extent that we have higher wages than that, unemployment will rises, and a broad calculation is that for every ten per cent over and above the guideline that people pay themselves, unemployment will rise to the extent of, say, half a million.
Brian Walden, LWT Weekend World
If unemployment did rise seriously under a Thatcher regime, the trade unions would almost certainly react more vigorously than they've done so far under Labour. At least the unions believe the present government is sensitive about unemployment, even if it's not managing to keep it under control.
But Mrs Thatcher could well find herself arousing the anger of the unions long before the impact of her economic policies had had time to work through. There's one issue on which she could find herself tackling the unions head on. It's the one on which the Shadow Cabinet did so much soul-searching last week: industrial relations.
Caption: “The Trades Unions of the TUC are a minority interest” . Margaret ThatcherBrian Walden, LWT Weekend World
Mrs Thatcher's often said she believes the trade unions wield power out of proportion to their size, and that it's necessary, as she says, to restore the balance and the community. But how exactly she'd do this remains something of a mystery. Mrs Thatcher seems to want to do something to the extent of the closed shop, and curb the sort of mass picketing we've seen outside the Grunwick factory. On neither of these issues has she ruled out legislation. Yet at least as far as picketing is concerned, she's also talked of a voluntary code of practice, to be drawn up by the government and the unions. She's clearly anxious to avoid a showdown with the unions of the kind that Ted Heath ran into when he passed his Industrial Relations Act in 1971. But specialists in industrial relations believe that attempts to draw up a voluntary code would lead inevitably to the very sort of unpopular legislation it's designed to avoid.
Lord McCarthy, Industrial Relations Specialist—Nuffield College, Oxford
Well, the first problem I suppose is that it's a voluntary code of practice so that you expect it to be agreed. Uh, and you can't get agreement. Now, if you want to put into the voluntary code of practice the kind of thing that the Conservatives are now talking about, on picketing, for example, on the closed shop, you wouldn't get agreement with the TUC in a month of Sundays. You'd be consulting forever. They would never agree. [end p5]
So you would have to decide at the end of the day what to do. And I suppose you'd have to legislate. Because if you didn't legislate, you'd be backing off and people would be saying “you're running away” .
But if you did get agreement, or you got agreement on some things, it would still have the problem—this is a voluntary code of practice, how are we going to enforce it? You might have things in the code of practice you could get the TUC to agree to, but it wouldn't necessarily follow that all workers would agree, or that all trade unionists would agree, and then people would be saying: “Well, what is the good of a voluntary code of practice if it's not being observed” .
Brian Walden, LWT Weekend World
So if some unions flouted a voluntary code agreed by the TUC, Mrs Thatcher would probably end up having to legislate. And she could well find herself in a trial of strength with the unions. Of course, industrial relations wouldn't endear Mrs Thatcher to the unions any more than high unemployment and the pruning of the welfare state, and it's not surprising that many people she'd run straight into a confrontation like the one that ended Ted Heath's premiership in 1974. [sic]
Still, things have changed since then, and there are reasons why Mrs Thatcher might fare better than her predecessor. It was Mr Heath's insistence on a statutory incomes policy that precipitated the miners' strike of 1973. Now, Mrs Thatcher doesn't seem to believe that incomes policies work. So she'd be unlikely to get into a conflict with the unions on the issue that finished off Mr Heath. What's more, many Tories believe that she could be helped by a change in public attitudes since the Heath era. In those days an unemployment figure of a million was thought to be intolerable. But it's now risen to 1.7 million with little effective resistance. Some Conservatives also think that public opinion is turning against all forms of government control.
Lord Blake, Editor Conservative Opportunity
The climate of opinion is moving in her favour. I think that the ⦠that there is widespread discontent with the level of taxation, to take just one simple thing, which was not really the case seven or eight years ago. People have always grumbled about paying income tax, of course, and they always have and always will, but, uh ⦠the sort of feeling there is now, I think, about in the country is a much stronger one than it was. There's also a great deal of resentment about bureaucracy and over-government and one hears much more of it in the media, in the press and everywhere else. It's a much more widely felt thing than it was a few years ago, and that's largely because there is much more of it I think. And it's ⦠that I think is the reason why this time Mrs Thatcher is particularly that way minded, uh ⦠the situation coincides with her own ideology, as a matter of fact.
Brian Walden, LWT Weekend World
The Tories may, or may not, be right in thinking that public opinion is swinging their way. But if they are right, this must help weak opposition to them amongst trade union members.
Nevertheless, Mrs Thatcher may need to do more than win our hearts and minds, for the unions remain a deeply entrenched institution, buttressed by class attitudes, history, and legal privileges. And in spite of all that's changed since Ted Heath's day, Mrs Thatcher could yet find herself on a collision course with organised labour.
To try to work out how Mrs Thatcher might come unstuck, we've indulged in a little crystal ball gazing. We've produced our own scenario of what could happen if Mrs Thatcher got to No.10.
Partially animated cartoon sequence begins:Brian Walden, LWT Weekend World
October 1978. Margaret Thatcher comes to power after a close-run General Election. Unemployment is running at nearly two million and inflation's still in double figures. Immediately Mrs Thatcher cuts taxes and announces large reductions in public spending. She abandons the remnants of the present government's incomes policy, but says she'll still keep tight limits on the money supply. She tells nationalised industry bosses they must work on strict commercial lines. They'll get no state subsidies.
November 1978. The National Union of Mineworkers present the Coal Board with a pay claim of 40 per cent. After long drawn out negotiations, Coal Board Chairman, Sir Derek Ezra, tells Mrs Thatcher that the miners won't budge on their claim. She tells him he's the boss of the Coal Board, not her. He should abide by normal commercial criteria.
January '79. Sir Derek tells miners leader Joe Gormley that a 40 per cent pay increase would add £400 million to the Coal Board's pay bill. The miners are not impressed.
February '79. A national ballot of miners comes out overwhelmingly in favour of strike action.
March '79. Sir Derek, anxious to avoid a devastating strike, decides to pay the 40 per cent pay rise. At the same time he annces a £7 rise in the price of coal. There's a public outcry. Mrs Thatcher goes on television to say that this is what happens if unions use their monopoly bargaining power to win excessive pay settlements.
September '79. Sir Derek finds that the demand for coal has fallen because of the price rise. So he announces that twenty unprofitable coal mines will have to close. Twenty five thousand miners' jobs are threatened. Joe Gormley and the other miners' leaders ballot members on strike action. The miners vote for a strike.
October '79. The miners appeal to the TUC for support. The unions are furious about rising unemployment, now nearing two and a quarter million. They blame it on the government, and the TUC decides to back the miners' strike by any means necessary.
December '79. The strike starts to bite. Sterling holders panic and sell and the stock market collapses. The TUC proposes a general strike to guarantee the miners victory. Mrs Thatcher comes under pressure to give in. She can't do this without sacrificing her principles. She has a curious feeling that she has seen all this before.
Closing frames of cartoon show MT at the Cabinet table imagining Heath sitting in her seat. Heath chortles, but is brought low by a miner wielding a spade. [end p6]Brian Walden, LWT Weekend World
Will she be able to stand firm?
Shot returns to studio.Brian Walden, LWT Weekend World
[Walden laughs at film; shot of MT smiling fixedly.]
During the course of last week, we talked to lots of informed observers—from Mrs Thatcher's colleagues in the Tory Party, to trade unionists, industrialists, and financiers—and many of them told us that they believe Mrs Thatcher would face a test like the one we've outlined soon after getting to No. 10. If it happens, it could be the toughest challenge any government's had to cope with since the war. So what would Mrs Thatcher do to head it off? And what would she do if it came to the crunch?
Well, we'll be back in a moment to ask her.
Commercial break.Brian Walden, LWT Weekend World
Welcome back.
Uh, thank you very much for joining us Mrs Thatcher.
I suppose the question that most people always want to know about political leaders is, not what they feel, but what they're going to do, and where the worries are, and I wonder if I could run you through the major worries, beginning with industrial relations?
Do you plan any legislation that might legally affect the trade unions at all?
MT
Not of the kind that Edward HeathTed had. I think that we tried that—we tried really to bring the whole of trade union legislation up to date. It didn't work.
But there are some things that we do plan, and we're committed to. Those are to mitigate some of the worst effects of the closed shop. Now, we're all against the closed shop in principle in the Conservative Party. There's no doubt about that. The only question is: how far can you put things which you don't don't agree with—how far can you put those right by legislation? You can't always, as you know.
For example, picketing. What happened outside Grunwick was wrong, by law. But the existence of the law didn't put it right. So it may be that we won't put the worst aspects of the closed shop right by law. [Walden tries to interrupt] But there are some things that we are going to do.
Brian Walden, LWT Weekend World
Sure. I wonder if I could ask you about that, you see. Because I'm ⦠I'm slightly puzzled by it. If you make a series of liberal exemptions—if you expand the [end p7] conscience clause and all that on the closed shop—won't it cease to be a closed shop? I mean when is a closed shop not a closed shop?
MT
Well, as I say, we are absolutely against the closed shop in principle. We believe it's wrong, it's very strange that an employee has a right of action against an employer who is unjust but he has no right of action, no recourse to Parliament or to the law, as things are at the moment, if his union is unjust to him. Now that's what a closed shop brings about. I think it's wrong. But there are a number of things which are particularly bad. As things are at the moment, as Michael Foot made them and the Socialist Party approved, a person can lose his job—not because he's been bad at it, he may have been working at it and been very good for years—because he refuses to join a particular union. Not that he refuses to join a union, but if he refuses to join a particular union. And what happens to him then? He's lost his right to work. He's sacked, he's no right to compensation. It's very ironic I think. If that had happened to an employee years ago the trade unions would have been the first to complain about it and say “This is iniquitous” . Now they are the people instrumental in bringing it about.
I can't have compulsory reinstatement. I don't know of any law that will make men and women work with someone they are determined not to work with. But we can bring in legislation to make certain that that man gets good and abundant compensation. He should—he's lost his livelihood.
There's a second thing. We can bring in legislation to make certain that, if he applies to join the union and they won't accept him, or if he's thrown out of a union because of some quarrel that he's had, then at least he's got an appeal to a court of law. The union should not be above the law. They've made themselves above the law. That's wrong.
And there's one third thing. May I deal with it quickly, because we are all committed to this? We think it is wrong to have a closed shop imposed on a person that has worked in a particular firm or nationalised industry for years, quite wrong, and we shall legislate about that. It won't deal with all the problems, but it will be a very good start and I believe we shall have the great majority of people behind us in this.
Brian Walden, LWT Weekend World
Well, I wonder since you've mentioned both the closed shop, and indeed Grunwick, if I can take you on to what I suppose is the news of the week—and it won't come as any surprise to you—that a lot of people would like to know your attitude about the Keith Joseph and James Prior apparent disagreement. A lot of people feel that Sir Keith is harder and Mr Prior softer and more conciliatory about trade unions, and you traditionally have been thought to rather favour Sir Keith's view. But your Washington statements seem to back Mr Prior. Now, which way is it?
MT
Well, you'll not be surprised if I don't see quite the difference that you do. I say we're all against the principle of the closed shop. There's no doubt about that. James PriorJim is in charge of industrial relations and Sir Keith JosephKeith is in charge of [end p8] Industry. I did not see the difference. Would you please just tell me the difference which you are asking me to comment on?
Brian Walden, LWT Weekend World
Well, I can tell you â¦
MT
But as you know Grunwick was not about the closed shop. It just wasn't.
Brian Walden, LWT Weekend World
I think I could tell you the difference. Take the Scarman Report, which was about Grunwick. Now Sir Keith was a very great critic of it. Mr Prior on the other hand was strongly in favour of it. Now that does seem to show a clear difference between major Conservative spokesmen.
MT
Yes. Uh ⦠Keith was not the only person to criticize it. Indeed, as you know, a number of leaders in the papers came out with criticisms of the Scarman Report long before Keith did. Keith and Jim did I think take a slightly different view about that. It's a very important question and I don't want to ⦠have people not discuss it at all. I think they should discuss it. The whole of trade unionism, the whole of closed shop, the whole of what was happening outside Grunwick, is something which is giving the public a great deal of cause for concern. They are asking questions about it. Let's have discussion open. In the Conservative Party we don't say it's bashing Parliament if you criticize what's happening in Parliament. We don't see that it's bashing the civil service if you criticize what's happening in the civil service. We don't say it's bashing the Tory Party, the Health Service, or any other institution, if you want openly to discuss it.
There's a view grown up that if you want openly to discuss things that are worrying people about the unions, that that's union bashing. Nonsense. It is not. And I'm not going to stop discussing things merely because I'm accused of that. People who say that don't want it discussed because they haven't arguments. Let's listen to the arguments. Keith and Jim are putting arguments. Let's deal with them as arguments. Let's deal with them as arguments.
Brian Walden, LWT Weekend World
I wonder if I could, uh, pass on to another issue, where I think you're likely to get, uh, a measure of trouble—and that's incomes policy. Incidentally, were we fair and just in saying that we think it is most unlikely that you'll have an incomes policy?
MT
I thought you weren't quite right, because I think you confused incomes policy with statutory incomes policy. You said “Mrs Thatcher has no incomes policy” . Uh, as you will remember from your long time in politics, no one ever defined an incomes policy—a very useful lack of definition.
It must be in the mind of any government that if any people take more out than they are prepared to put in, in broad general terms, and the money is supplied for them to have extra wages, although we haven't got the extra production, [end p9] you're going to get inflation. So in that sense every government has an incomes policy.
The view that I take—I think it is very similar, ironically enough, to the view that a large number of trade union leaders and members (because the members of the unions don't always follow the trade union leaders)—the same as they take.
Brian Walden, LWT Weekend World
[words inaudible; talking over MT] ⦠that Mr Clive Jenkins.
MT
Well, let me just deal ⦠Clive Jenkins had rather a bashing last week, I thought, from Hughie Scanlon. It made any disagreement between my two look like real kid glove stuff—real kid glove stuff. I've never seen anyone take Clive Jenkins to the cleaners as Hugh Scanlon does.
No, what I was thinking about was what Len Murray said. Because it could have been pure Tory policy. Uh, and that's not surprising because he was talking common sense. What he said—and I paraphrase him, but I intend to convey his meaning as accurately as I can—the trade unions are now free to bargain with their employers in the circumstances in which the employers and the company find themselves. And those circumstances include, of course, whether there'll be sufficient profits. Because you can't carry on without profits. You can't have investment, you can't have expansion. That would be my view—that collective bargaining means responsible collective bargaining â¦
Brian Walden, LWT Weekend World
[sceptically] Y-e-s.
MT
⦠and if you want jobs tomorrow—and I do, because unemployment is no part of my creed; if people are to look after themselves and families they must have jobs. If you want jobs tomorrow, you can't take so much out today that there is no tomorrow.
So you will find that on the—when I say “face reality” , you won't find that Len Murray and I are very different on this, you see the government hasn't got a compulsory Phase Three, we're back to free collective bargaining, and I want responsible collective bargaining.
Brian Walden, LWT Weekend World
Well, let's go to something where I think you might find that Len Murray and you would differ, quite substantially.
We've assumed that you really are for substantial tax cuts—uh, not just a penny off, but that it's a major item in your credo that there should be substantial tax reductions. And obviously it follows from that, that there have got to be substantial reductions in public expenditure—and that indeed that you want substantial reductions there as well.
Now, where's it going to come from? [end p10]
MT
Well, I had a complaint about that film, uh, and you often find it when you see people doing this financial-economic films. They look at it as if the whole thing is boxed in, and you've only got a particular box or a particular sized cake and one decrease here must mean something different there.
But you know that the whole difference between our society and things like United States and Germany is that they've grown, because they've got incentives.
Brian Walden, LWT Weekend World
Yes â¦
MT
[speaking very fast] We haven't. Well, just ⦠just let me carry on for a moment. They've got incentives. Over in the United States they've grown five, six, seven per cent this year. That's as much as the whole of North Sea Oil will bring in in a year, when it's fully on stream. They've got incentives, so they've grown.
So if you have incentives—you know, people say it's not worthwhile to work, and I get in Ashfield, Stechford, Workington, all where they've been voting for us, miners and all—then they will earn more. If they earn more, the yield doesn't go down.
Now, there's going to be a gap. And this I think is the point that uh, that ⦠that some of the economists could well have put to me—that there is a gap between giving the incentives and getting the extra output, and getting the extra work. And it's what happens in that gap—and it is worrying â¦
Brian Walden, LWT Weekend World
And what does happen in that gap?
MT
[speaking quickly and vehemently] Well, one moment. There's one thing you didn't take into account at all. North Sea Oil is going to make a difference because it's going to bring in extra revenue from Petroleum Revenue Tax and from royalties—twelve and a half per cent per barrel. Every eighth barrel belongs to the government coffers, if you put it that way.
How are you going use that? I am going to say: that gives you the chance to give incentives, the incentives we haven't had. And I am going to say that people will respond to those incentives. And I am going to say that I think a socialist government cannot give those incentives. And I am going to say that I think a socialist government cannot give those incentives, because all of its philosophy, all of its ideology, is that government knows better than people and what government takes to spend is better spent than leaving it with the people.
And that's why the people are coming to us, and not them.
Brian Walden, LWT Weekend World
Well, it's a vision. But governments are conducted on visions, are they? Suppose â¦
MT
Oh no no no. It's a reality. [end p11]
Brian Walden, LWT Weekend World
Well â¦
MT
It's taking all the factors into account, it's not a vision.
Brian Walden, LWT Weekend World
[talking over MT] Well, supposing incentives don't work, you see and â¦
MT
[interrupting] Well, I'm prepared to try them. They've worked in every other society. They work in the United States, they work in Germany, they work in Japan, and as I go about the world and I tell them the direct rate of tax that our people are bearing, from the chap on half average earnings â¦
Brian Walden, LWT Weekend World
[murmurs] Yes.
MT
⦠right up to the top of the scale, they are amazed. And they say “It's no wonder you don't get extra production” .
Brian Walden, LWT Weekend World
But does that mean you're not going to cut public expenditure at all?
MT
It is astonishing that the government is now doing—now it's under the IMF and things are improving—all the things that we've been advocating and they said couldn't be done. Oh no, they couldn't be done when we advocated them. Then they got into such a mess the IMF said “If you want to borrow more money, do this” and they are doing it. Example? You will remember that I had to put up the price of school meals from, uh, 9 pence to 12 pence. Uh, the Socialists said it was an outrage although people's incomes were actually going up at that time. Under Tory Governments the standard of living rose because we had more tax incentives. Now, people's standard of living after two years of socialism is still falling. What do they do? Put up the price of school meals to 25 pence. All of the ⦠the Labour backbenches trot in and say “well this is realism and we've got to do it” . Because they had to. They were faced with realism, and no one in fact can run away from that.
Brian Walden, LWT Weekend World
Uh, simply looking at what it would cost you to make anything that I think most people would regard as a worthwhile tax cut, I think many people find it very difficult to believe that you won't need substantial cuts in expenditure, that you won't need, for instance, to bring payment in for education, and for many of the social services. Because all of the things that you've just being talking about—school meals and all the rest of it—as you know, piddling sums, the whole lot together won't raise you £100 [end p12] million. That's a tax cut not worth having. Why the reluctance not to talk about the more substantial savings that you might make?
MT
There's no reluctance to talk about it. Indeed, that's just exactly what some of our new Conservative local authorities are doing. They're going through things department after department. If, for example, we were to do on the national scale what our Conservative leaders have done in Leeds, just by going through and seeing what economies are to be made, we'd have £750 million off.
Inside every department there'll be lots of things that neither the head of the civil service nor ministers have got at. They don't arise because of the civil service. They arise because there have been regulations, statistics, jobs—jobs in the sense tasks to do—that have been going on for years. They all beaver away at them. The question we now have to ask is whether some of the work they are doing is information which provides the basis for decision. You've first got to assess that. This is good administration. If you find that you don't need those statistics, some of that information, some of that work, then gradually, and only gradually, can you cut it down. In Leeds, for example, in many local authorities they've had no recruitment, no redundancy. And it's working. And it will have to work. Because people recognise that where you've got static production—and we have in this country—you simply cannot have government going on taking more and more while people's standard of living declines. And they've had enough of that.
And even this Government being realistic. At the moment—I don't believe it would if it got in again.
Brian Walden, LWT Weekend World
Well, with equal realism, how much do you think you actually need in cuts? Could you put a figure on it?
MT
But exactly. This is why I said to you, “you are looking at it as if it's a limited size cake” . May be under Socialism we shall never get growth, we shall never get expansion, because we haven't had in the last three years. We did have under us. In our thirteen years was the real year of growth—real years of growth in the British economy. I admit that everyone's thinking the way you're putting, because we've had no growth under socialism, no incentives â¦
Brian Walden, LWT Weekend World
[sceptically] Yes â¦
MT
⦠no growth. You give the incentives, you get the growth.
Brian Walden, LWT Weekend World
[speaking over MT] Growth ⦠growth takes time. Supposing the Permanent Secretary of the Treasury comes to see you and says “Prime Minister, look, you know you want these tax cuts, and we're very anxious to give them to you. But we simply can't do it unless we cut public expenditure by £5 billion, and there's no way [end p13] of cutting it by £5 billion unless you get people to pay for their own education and their own health—and you believe in personal responsibility, why shouldn't they?
MT
£5 billion was the figure we were using. £5 billion is the figure this government had now had to put in operation. Some of them are still to come through. They are doing—under the IMF—exactly what we said. You've chosen the figure. And it will have to go on. And we will have to watch economies. But there are some things which this government wants to do which we shall have to cut out. They want to have all land development with land bought by the community. It is a ridiculous waste of money. They want 51 per cent in ⦠in oil. It is very ironic that all of the oil was explored, found, brought ashore by private enterprise and what do they then do? Say that we want to take part of it over by the state. There are still great problems in the housing area, as you know. Some local authorities still putting up council houses, which will require massive subsidies, some of £2,000 a year. They will not be able to do that.
But I notice you said something twice, and I wouldn't like people to run away with the idea that I'm going to impose charges on education. Education is the opportunity to pull yourself up to do your best in life. It's the opportunity to use your talents. And I noticed in the film that you spent a lot of time on equality. Education gives you the opposition [sic] to deploy your different talents.
Brian Walden, LWT Weekend World
Yes â¦
MT
⦠all equally entitled to consideration â¦
Brian Walden, LWT Weekend World
Yes â¦
MT
⦠but all different, thank goodness—made different. And I don't want any question that we are going to impose charges for education.
Brian Walden, LWT Weekend World
Certainly.
MT
I would like to bring back—and am pledged—direct grant schools. Carry on, sorry.
Brian Walden, LWT Weekend World
They are ⦠[laughs]
MT
[laughs] I'm not giving you enough chance. [end p14]
Brian Walden, LWT Weekend World
There is something about this argument that worries me. I think that must be about the third time you've said that the present government is already doing it, that on the whole you'd carry on, though trimming off a few excesses here and there. Doesn't this really make it sound rather as if Jim Callaghan 's already got it right, and if he has, there really isn't much point in putting you there anyway, is there?
MT
Ah no, I think James Callaghanhe's gone up and down and fluctuated. You remember, for example, that it was his proud boast—and I happen to think he was right in doing this—in cutting off the subsidies on prices to nationalised industries. I didn't complain about it because I thought it was right, because if people don't pay a price they pay in taxes. Uh, and uh, he was right. Then he goes and says “all right we're going to put on extra subsidies on food” . So he cancels out what's he doing one thing in another.
He has in fact doubled the subsidies on housing. But he hasn't solved the housing problem. And I don't think he's spending the money right. You see, so many of our problems on housing don't come because we haven't spent money on housing—not a bit of it—they come because we've spent it wrongly.
Uh, he isn't doing it. The IMF have made him do it and until they made him do it, he was saying it couldn't be done.
Brian Walden, LWT Weekend World
Do you see yourself—I think all of this discussion is leading us towards a point that's often put to me â¦
MT
Mm.
Brian Walden, LWT Weekend World
⦠and therefore I should put it to the person who pronounces it. Do you see yourself, as we see you, as a very radical figure, who wants to substantially change a lot of things in our society, a lot of things that have happened since the war, who wants to roll back to a much more individualistic sort of society?
MT
I think government's got into far too many areas, far too many decisions in society and government really has tried to stop a good deal of individual liberty and have all the decisions taken either by great big groups or by government. That's the reason, of course, why Paul Johnson resigned—because he said we're no longer a nation where individual liberty counts.
Now, I want to roll back the areas of decision by government, both from people and from businesses. That's not government's job. The fact is that other nations that haven't so much control by governments have far better, higher degree of prosperity for their people than ours has. And so certainly I agree. I want to go from the present, flat non-expansion, non-growth, non-incentive society, to what I would call an incentive enterprise package. And indeed in The Right Approach we [end p15] had an enterprise package. Don't clobber small businesses—encourage them. That's where the growth is, that's where the employment is.
Brian Walden, LWT Weekend World
Tell me this, because it is a question I think that interests very many people. A lot of what you say about incentives and all the rest of it—I have heard Tory leaders say that for many many years. You seem to say it in a different pitch, and with more certainty that you can do something about it. Now what I'd like to ask you is, why couldn't they do anything about it? If all these terrible things have been happening for thirty years, the Conservative Party has been in power for a lot of that time, why couldn't your predecessors roll it back?
MT
Well, on taxation they did, just that. I remember Rab Butler—oh years ago—having what was called an incentive budget. 1953. They said it couldn't be done. 1952 he cut expenditure. 1953 an incentive budget. That was the beginning of the real rise in prosperity which went on for thirteen years. We held the level of public expenditure, as a proportion of income, that's the important thing—as a proportion. I'm afraid towards the end it rose again, in 1964. Then we came back in in 1970. And you know, do give Tony Barber really credit for some of the tax cuts that he introduced. If we were still on the same tax level as Tony Barber left, there'd be now £4,000 million more money in the hands of the people. Their tax—the standard rate of tax—would be thirty pence in the pound. All this government's done is to bring it down from thirty five to thirty four, having put it up to thirty five. The level at which you started to pay tax as a proportion of average earnings would be higher. Oh what a pity we didn't get in. Ironically enough, in that February 1974 election, everyone says we lost it. But you know more people voted for us than did for Labour.
Brian Walden, LWT Weekend World
Let's get to that February '74 election by â¦
MT
I thought you'd come to that.
Brian Walden, LWT Weekend World
Indeed. Uh, it's the question, as I'm sure you well know, that everybody most asks. “Well, if she were in, and she faced something similar to the things that Ted faced in February '74, a straightforward confrontation” —the sort of thing that we rather jokingly put up, as a perfectly legitimate, serious scenario. Now, everyone wants to know what you do? Well, now, what would you do?
MT
Yes. Uh ⦠I almost don't quite know where to start. First, I don't believe that would come, but you're trying to put it to me—what would happen if it did. First, that happened because there was a statutory incomes policy. The government said: “we've put the increase into law therefore you must have it” â¦
Brian Walden, LWT Weekend World
[end p16][speaking over MT] But supposing â¦
MT
[several words inaudible] ⦠everyone else â¦
Brian Walden, LWT Weekend World
But suppose that it happened the way that we depicted it on our film?
MT
That ⦠that there was no statutory incomes policy?
Brian Walden, LWT Weekend World
No. No policy at all.
MT
Quite without that. And then what you're saying is either that they would confront any government who wanted to flout their power, in which case it's a real constitutional crisis.
Brian Walden, LWT Weekend World
A threat to democracy?
MT
Well, I'm not quite sure what you're saying. Are you saying that the miners hold the whip hand and they can confront any government and say “We'll do what we say, and you've no power to stop us” ? In that case you say they hold the whip hand, but who are they whipping? Not government, the people â¦
Brian Walden, LWT Weekend World
[interrupts]
MT
⦠because it is the people who would pay.
Brian Walden, LWT Weekend World
What would you do?
MT
Because they are holding whip hands against any government, that's a real constitutional crisis. If they are holding only against a Conservative Government, then what they would be saying is that “we” —either the trade union leaders, because I don't believe it would be the trade union movement, either trade union leaders or the Socialist Party have seen to it that democracy is finished in Britain, because however you vote you can only have one government and that's red. Now—and I've often had to think of this, but I ⦠I ⦠we haven't finally discussed in the Shadow Cabinet because you'd only discuss it in Cabinet what you would do—in 1974 [end p17]
Brian Walden, LWT Weekend World
[talking over MT] You haven't discussed what you'd do?
MT
Well, you don't normally discuss the final solution until you're, uh, faced with the problem. Then you know the nature of the problem. In 1974 there was only one thing we could do, having got a statutory incomes policy, and that was take a General Election. Uh, as I say, we got more votes but we didn't get more seats. And there were things which happened in that election which did not make it of the nature of a constitutional crisis, because you remember right in the middle the Relativities Board came out and said “Oh, but they haven't asked for enough” , and I remember the whole thing falling apart then.
Brian Walden, LWT Weekend World
Yes.
MT
I can only under those circumstances do two things. First, appeal to the rest of the trade union movement. Because it would be â¦
Brian Walden, LWT Weekend World
How would you â¦
MT
⦠their members and wives.
Brian Walden, LWT Weekend World
How would you do that?
MT
It would have to be through the Trade Union Congress. Say ⦠look, the miners â¦
Brian Walden, LWT Weekend World
[talking over MT] You'd go to the Trade Union Congress?
MT
[smiles] Can I just remind you again? Len Murray said one thing for which we've never given him enough credit, in 1974, February 1974. He said to the then government, “Let the miners be a special case, and we will see that no one else is” . Now that really was—I thought—one of the biggest changes, I thought one of the most responsible things, and in retrospect I think, um, perhaps it would have been better if we'd taken up that offer. Because you see it wouldn't be, as you depicted it, confrontation between the miners and government. It would be confrontation between the miners and the people who pay the price of coal. That's the other ten or ⦠ten or eleven million in the trade union movement and their wives.
Brian Walden, LWT Weekend World
What's the second ⦠[end p18]
MT
The other members of the population.
Brian Walden, LWT Weekend World
What the second thing?
MT
So you first have to say, do you really think under those circumstances all the other trade union members and people would say, “You can take as much as you like out of us and we won't murmur” . No. I don't believe it would happen that way—any more than, um, it would have happened before when Len Murray said we'll see they're a special case.
If absolutely forced, then one has to remember all of the people of this country are shareholders in miners. Every single one. They're all consumers. And it's only one other way—and I had in mind after the last referendum â¦
Brian Walden, LWT Weekend World
Yes.
MT
⦠when I said in the House of Commons, after the result of that referendum, we have seen what a referendum can do â¦
Brian Walden, LWT Weekend World
Yes.
MT
⦠no General Election can do. It can put a single issue to the people. And if that came—and I don't believe it would come—then I think I should have to say, “Let the people speak” .
Brian Walden, LWT Weekend World
I think, if I may say â¦
MT
Because they will be the sufferers.
Brian Walden, LWT Weekend World
I think, if I may say so, Mrs Thatcher, that's a tremendously important point, I think the first time you've ever said it. I ⦠I take account of your saying that you think it wouldn't come to that â¦
MT
I don't believe it would come.
Brian Walden, LWT Weekend World
[end p19]But if it comes to a direct confrontation, you're going to put—or at least you're thinking of putting—issues affecting the unions to a referendum, so that there can be a universal public vote on what ought to be done.
MT
If it is a, uh, confrontation, it would not be between unions and government. It is between unions and people. Under those ⦠unions and their fellow workers, unions and their fellow workers' wives, unions and the pensioners in the bread queue. Let's get rid of this idea â¦
Brian Walden, LWT Weekend World
But â¦
MT
⦠of confrontation between—one moment, I want this absolutely clear—between unions and governments. Governments have to get the money from the people. If unions hold the whip hand, on whose back does the lash fall? It's their fellow workers, their wives. Under those circumstances my reply would be: let the people speak. You can do it it two ways, through a General Election, or there's a possibility that you can take a single issue—which we have now done—through a referendum. And when I rose in the House of Commons to make comments on the last referendum, I said, “We have learned the advantage of this. It is a way of putting a single issue to the people. It is a way of letting the people speak” . And on a constitutional matter—if it arose—that's a time to use it. I stress: I don't believe it will happen. If it did happen, I don't think it would happen in the way you showed. Because I believe that a large number of trade unionists are not only with us—we know that one in three votes for us—I believe that more than one in half [sic] will probably vote for us at the next election, because they don't like some of the powers that some of the trade unions—trade unionists, not trade unions—are prepared to use. They are just as democratic as I am, and they won't see democracy die, because people say “we'll have the government of our choice or nothing” , because trade unionists say “we'll have the government of our choice or nothing” . It'll be the government of the people's choice, and trade unionists will help to vote a Conservative Government in power.
Brian Walden, LWT Weekend World
Thank you very much, Mrs Thatcher. Uh, I think in many ways that will be regarded as a remarkable statement. Certainly at the next General Election, I think it is going to be quoted a very great deal. In next Sunday's programme I'll be talking to Ian Smith about his attitude to the new proposals for a settlement in Rhodesia. I'll be leaving to Rhodesia very shortly [sic] Goodbye from all of us at Weekend World.