I
Mrs Thatcher, if we could look back at the last year first of all, and I suppose one of the most significant political developments of that year was the growth of the Social Democrats Party. Now some people say that the reason for that growth was a sort of despairing with the other two Parties, with your own Party as well, do you agree with that?
PM
I think you should know one thing, they don't like extreme Left wing policies in this country. They see that part of the Labour Party has gone extreme Left wing, frankly that doesn't surprise me. We've seen it coming and known about it for a very, very long time. We've been able to identify [words missing] with the public. There's another reason why it doesn't surprise me. The welfare state is totally intact, let me give you an example: the National Health Service continues not merely continues, but we've got 21,000 more nurses than we had [under Labour?]; the pay bill for nurses as a whole is 75%; up. I just use that as an example. The whole of the welfare state is intact and will continue, it is a fact of life. And what has happened then is the left-wing Parties have gone much further extreme left; much, much more [word missing]; much, much more nationalisation, [words missing], higher taxation and everything else over and above [words missing] So, people see merits. We don't like this. But we recognise that the tradition of Britain is that we must always had a second Party, an alternative Party to Government and I think that's [words missing.]
I
So you think that [Labour voters are?] going to a second Party, the SDP, but there is a great mass of Conservative voters as well going to the SDP, so they're disillusioned with you as well?
PM
One thing that interests me a great deal, hitherto the actual increase in votes have gone to the Liberal Party. Now the significant thing is the SDP did not join the Liberal Party, presumably the Liberal Party as such is not Left wing enough. That means that the SDP now consists of a vast majority of people who would, had the Labour Party won the last election, be sitting with the Labour Government in a Labour Cabinet with Wedgwood-Benn and his [word missing] being pushed over to the Left. Of course, [words missing.] [end p1]
I
Have the difficult things been done? Can we look forward now to better times?
PM
[When?] we go through the worst, you know there's only one way to get the economy right and that is to run it in a sound financial way and make it perfectly clear to everyone, whether they work in industry or whether they work in commerce or whatever kind of trade, there's only one way to succeed and that is to please the customer, to compete on price and to please the customer. And you know we've made far better progress than we've ever done for a very, very long time. Exports are holding up well. What I hope we'll be able to do next year is to get a much bigger share of our home market. Because, you know, the British housewife is a very shrewd buyer. She buys best value for money. And what I want is for her to buy British because it is now best.
I
But look at what happened in the economy over the last year, more people out of work, and even those in work are poorer than they were. You are over half way through your term of office, the policies certainly as yet are not working?
PM
Oh, but the policies are working. Certainly you're quite right about unemployment this is the last thing [words missing] for the simple reason that the people who are already in work can produce quite a lot more before in fact the employers need to take on more people. And it's well known, I'm afraid, that unemployment is the last to respond to an improvement. And, after all, they have a higher number of people out of work in Germany, and a higher number of people out of work in Germany, and a higher number of people out of work in France, than at any time in the post-war period. So we're all in the same boat. Not quite as high as ours because they haven't got as many problems to deal with, like over-manning and very, very high pay in relation to output that we've had to cope [end p2] with. But, yes, these are improvements—very much so. Output is going up. We've got output per hour, this is an all-time record; productivity up; our costs per unit of what we produce have been very good this year, they've been almost [word missing] much, much more competitive and things are beginning to [words missing.] We're keeping, I hope that the trend of getting inflation down will continue because no one thing, and it matters a great deal to me, the countries that have done best at keeping down inflation are the countries that have the low unemployment. The two are linked. You manage to keep down inflation, you'll soon get your unemployment down after that.
I
You quoted some hopeful factors and signs in the economy that, can I return to that original question, how long before those are translated into a few jobs, into a few bob in the pay packet, that's what the people who voted for you are caring about?
PM
Yes, there's only one way to do it—I've already mentioned it—we've got, in fact, to please the customer on price, on quality, on delivery. And a heck of a lot of people aren't doing that. There's a lot of our industry working better than it has ever worked before. It's getting business overseas. As I go round Governments and big industry can get contracts together. We're doing it on performance. That's the very best news possible. Let me give you one more thing—you won't mention it so let me. [Words missing] this is the month which in 1976, after two-and-a-half years of Labour Government, we were so down and out they had to go to the IMF to borrow money. They couldn't borrow a penny piece more on their own credit. When we got into power we've never got into that position and what is more, although they were broke we've been steadily repaying their debts and now our reserves are far greater than the money we owe. That's very good. It has been done by sound Conservative policies. And the final point I want to make on the economy is this. The improvements are soundly based. Not by printing money into the economy. Not by artificial incomes policies which always break after two years. Soundly based … [end p3]
I
But there is a section of your own Party which is demanding that you change your policies. You say it's soundly based, they want a change in that policy?
PM
No, no, no I'm sorry they do not. They all agree the main strategy is right. They might want a little bit of change on tactics and they had it. We certainly have changed tactics a little in this last year. We have given a little bit more on public expenditure because the situation demanded it. But, again, just let us have some regard for the people listening. I don't get money from nowhere. Every time the Opposition demands more expenditure, or my own people, I have to say to them: [Words missing.] And the people are already saying to us ‘Look, taxation is just about as high as you can get it; rates are high; direct taxes are high; indirect taxes are high’. And I'm the person, together with the Geoffrey HoweChancellor, who has to make the sums add up.
I
So no change in policy?
PM
The policy is right. The strategy is absolutely right. All my own people recognise it. They wanted some change in tactics. Of course they did. Though my main worry is how in the world are we going to get unemployment down and the only way is to get your industry, your commerce efficient—that's happening—and then to give a real boost to your small businesses. And over the last year it is now internationally recognised that the incentives for new businesses [words missing], and small ones as well, are just about the best in the world.
I
Can I mention briefly an international issue. It has to be Poland?
PM
Of course.
I
Once again it seems that our alliance is in disarray. President [end p4] Reagan says ‘sanctions against Russia’; some parts of Europe say ‘no’; what do you say?
PM
The alliance is not in disarray. And it will never get in disarray. This is the most important thing of all. We in Europe are a free democratic world. The United States is a free democratic world. The whole of Russian tactics are to try and divide us. They must never succeed. What Poland wants, and Russia knows it, is peace with freedom. Poland wants the very thing which we have, which we don't value enough. And those of us who have peace with freedom absolutely stand together, and we will stand together. The Foreign Ministers of Europe who wanted a meeting, and I'll be absolutely frank with you, Lord Carrington and myself wanted a meeting yesterday. Some people weren't quite ready to come. We then said ‘All right, then let's have one Thursday (today). We must get on with it’. And they said: ‘Let's do a little more work first’. And then we're meeting next week in Brussels
We must stick together and we will. Just recognise what is happening. The whole of the Eastern Bloc have had enough of the oppressiveness of Communism and now the oppressiveness of military rule. But oppression [word missing], they saw a spark of freedom in their midst, just a spark; [word missing] not only trade unions but people saying look we want more freedom. It's crushed out under the communist rule. Communism and freedom cannot exist side by side. We in the West know that and we in the West must and will stick together.
I
Will we then back President Reagan?
PM
President Reagan has given an excellent lead. We must follow some of the leads he has given. Slightly different because of slightly different circumstances, different treaties and different conditions attached to the US and Europe. We must back some of the initiatives he has taken.
I
Right, now just the final question. Some good news, at least, let's be positive, some good news for the [word missing] today. [end p5]
PM
I thought I'd given you quite a lot of good news. Some good news for the disabled, you know, it's the end of the International Year for Disabled, and we want the work to go on very much so. It mustn't just be one year when we have a special spotlight on them and nothing after that. We've a particular admiration for the work which is being done at Stoke Manderville.
We know Jimmy Savile has been marvellous and collected, I think, just about half as much as he needs to go ahead with that new hospital. And we wanted to mark both his work, the end of the International Year for the Disabled, and our faith that the work will continue, by saying that this Government would and half-a-million pounds to that fund. I hope [words missing] the work must continue. I'd just a special reason. When I was a very young Parliamentary secretary at the Institute of Pensions and National Insurance I used to attend seminars on the disabled and there was a marvellous person, I'd never met him before, Dr [name missing], I'd never known this man. I'd never worked for this firm. And he was talking about how he managed to rehabilitate the disabled. And he said, you know, they'd come in and they'd sometimes had an accident sometimes at sea [words missing] horses, sometimes a motorbike or a car accident.
He'd decide to talk to them and say ‘Now what are you going to do?’ ‘Oh, I'm just going to lie here until the Good Lord takes me.’ ‘Oh, and what do you intend to do until the Good Lord decides to take you? You must use your life somehow.’ And all of sudden he gave them some meaning to life. Told them what some disabled people managed to achieve, some of the fantastic work they managed to achieve. And he did this and ever since I've taken an interest in [words missing.] And then Jimmy Savile always helped me especially with my [words missing.] And then this year the cast of ‘Anyone for Denis?’ gave a special charity do and we halved the proceeds between NSPCC and Stoke Manderville. So I just have a special personal reason going back over many, many years for this. And we just wanted to say ‘You've done a marvellous job.’
We wanted a express our admiration for the courage of the disabled and we wanted to say to this wonderful spirit that exists in Britain.[End of transcript]