[Question missing] (Poland)
PM
It's not easy for ten Governments to agree—that I wholly agree because the particular interests of their several countries tend to be slightly different, but I think they have one thing absolutely in common. They understand the importance of the whole of the Western Alliance staying together. They understand that what Russia is trying to do is to divide the United States from Europe, and this must never happen, because together we constitute the free world. So there will be, I believe, some agreement on the steps we take with regard to the military government in Poland. I believe there will be some action to indicate that we believe that Russia not only knew exactly what was going on, but was playing a part in it. Those things might be slightly different in some respect from the steps which the United States has taken, but I believe there will be some action.
Gordon Clough, BBC
No one doubts the unity of interest of the Alliance in this matter, but whatever they do, can it really make any difference?
PM
Well you know, I think it could make a difference with regard to Poland, because, don't forget that for quite a long time now, when Solidarity was growing, we were trying to help Poland with providing food, very cheap, we were providing industrial credit, we were rescheduling debts, we in this country were giving grants towards a big tractor factory, we were trying to help them in every way, because we recognised the significance of what was happening, that for the first time you were trying to get a spark of freedom alongside a Communist system. Now you have a military government, they've tried to snuff that out because they recognise Communism and freedom cannot co-exist. So it would seem if we were to say to the military government, look, I'm sorry, we're not going to help with food so long as there's a military government, and we fear the food might go to the military instead of to the people, or we're not going to help so much with the industrial credit or rescheduling so long as you run this kind of oppression, detention, and so long as you stop people from acting in a way [end p1] commensurate with a little freedom in your country. Then maybe we could have an effect.
Gordon Clough, BBC
But has there been any indication at all from the Polish Government via its Embassy here that the military government is at all responsive to this kind of pressure?
PM
Not yet. You remember when the military government took over, some of the things which they said at the outset. They said that things would never go back to where they were in the days before Solidarity started, that this kind of renewal would continue. We didn't quite know how to evaluate it. I think we do know how to evaluate it now. And don't forget that General Jaruzelski is of course Head of the Communist Party in Poland as well as the military government.
Gordon Clough, BBC
After Afghanistan there was considerable feeling—which you shared—that the West had been less than positive in its response, less than united in its response, and that next time something of the same kind happened there would be a swift and concerted response—which we haven't actually got in spite of what you say about the unity of interest of the Western Alliance countries. Isn't that an indication perhaps that the strains on the Western Alliance are beginning to show rather openly in this and in other matters?
PM
No, let me put a different interpretation upon it. The Russian tanks rolled into Afghanistan. In Poland the Russian tanks did not roll into Poland, and obviously a number of countries will feel that if the Russian tanks rolled into Poland, then there would be very much sharper, swifter action. And therefore that there's quite a good deal left in reserve, should that eventuality happen. A different technique was employed, and I think there perhaps is a certain amount of variation of opinion about how far the Russians were fully implicated in the operation. I believe they were implicated; so does the United States, and I think most of us believe that it was planned in conjunction with Russia. [end p2] But it's rather different from the whole of the Russian military might rolling into Poland. You would have got a much swifter, sharper, more concerted action than in this difficult period we've had, when we've had really to assess precisely what the military government was going to be like.
Gordon Clough, BBC
What about strains in the Alliance—divisions perhaps in the Alliance—over other matters. Over, for instance, the United States' nuclear policy?
PM
I think that the unity in the Alliance is far greater than the divisions. You are implying that there is a feeling towards unilateralism on the part of some movements.
Gordon Clough, BBC
A great many people surely.
PM
That has always been there. But you know, I think that there are far far more people who realise that a bully has no respect for a weakling. And the way to stop a bully is not to be weak. The way to stop a bully for ever being a bully is to say, “I'm as strong as you. Anything you do to me, I can do to you.” We are going for nuclear and conventional disarmament, but we're going about it in the right way. And I don't know among Heads of Government or Heads of State in Europe any difference of view on that. And we shall be leading our people very very clearly. One more thing. If you believe that that is the position, as I do, then I personally think it is thoroughly dishonourable to say, “right we know we must have nuclear weapons to be able to defend ourselves against another country that has nuclear weapons and to be able to deter them, but we're all going to rely on the United States to have them”. Now that's thoroughly dishonourable.
Gordon Clough, BBC
Could we talk now for some minutes about the British economy. When we talked about the same time last year you said inflation is falling comparatively fast, and will continue to fall during the early months of next year. As the rate of inflation falls, the rate of interest rate will fall further. Now a year later we have inflation at 12%; and edging up rather, only 1%; less than this time last year, we have unemployment of [end p3] pretty well nearly three million which is very nearly a million up over the year. Can you look back over this year and say with your hand on your heart that the policies are working?
PM
I think at the beginning of last year you'll find that we did say that production output would fall, that it would be a difficult year, but inflation in fact has fallen since the beginning of the year. We started I think at about 15%; at the beginning of the year. We went down to 10.9%;. It has gone up from 10.9%; to about 12%;—the main reason there being the fall in the dollar exchange rate. I believe it will resume a downward trend when that particular thing has worked through the system. Unemployment, you're quite right, has risen, and this is the thing which gives us most concern in this country, and in other countries of the western world. Let me point out that unemployment is also at its highest for the last thirty years in Germany, also at its highest in France. That's both those countries—not quite as high as we are. But don't forget, both those countries have conscription. That takes quite a lot of people off the unemployment register. We as you know do not have conscription, and are not intending to bring it in. Even with those circumstances, Europe too is suffering from increased unemployment, and so is the United States. Because of the tremendous world recession caused by the sharp increase in the price of oil. Unemployment is the most difficult of the problems we have to face, and how to create new jobs, and of course my first worry when I first saw this weather before Christmas was, goodness, that'll make our immediate unemployment problems even worse.
Gordon Clough, BBC
We're all in the same boat, but what is the Government doing to help Britain get out of it perhaps before anybody else does? The Youth Employment Schemes, the various job creation schemes, are seen by many people as little more than palliatives.
PM
There's only one way to get out of unemployment, and that is genuinely to produce goods which other people will buy at a price they're prepared to pay. There isn't any system, as some of the other political parties try to indicate, whereby you can just sort of twiddle a few nobs, press a few buttons, and [end p4] everything will be all right. There's a right way to go, it's a sound way, and many many companies are doing it, and they're coming out of their difficult time, and their profits are rising, and their order books are going up. That's one way. Secondly, you notice that the countries that have embraced all the new technology haven't got the highest unemployment—they've got the new jobs. Look at Japan—she produces all the new video recorders, she produces a lot of the new electronics because she didn't say look, new technology stops jobs. She said look, new technology gives the opportunity for new products. So we've got to take that on board, and we simply must not have anything under which trade unions say if you take on new technology you can't run the new machines properly, you've still got to have as many people as there were on the previous ones. That's the second thing. Third, we're obviously going to get far more jobs in the service industries. Look at the new packaged holidays. That's a whole new area of employment. And fourth, we've got to do something to help small businesses develop and grow because that's where the new jobs come from, and this government in fact has done more to encourage the growth of new small businesses than almost any other in the world. And we've done it to try to get the new jobs. And fifth, because you did ask me about it, it is going to take a time for that to work, therefore obviously we have to take measures to try to relieve the very difficult circumstances in the meanwhile, and to give the youngsters more hope. Don't just think that there are lots of people who will never never get a job. Even the Manpower Services Commission pointed out in the year 1980 which was perhaps one of the worst, there were seven million changes of jobs. It isn't as if it's a static thing, and a great big lump of unemployed,—seven million changes of jobs. Each month something like a quarter of a million people go off the unemployment register. So yes, there is hope. There's more hope now than there was at the beginning of the year because industry is very much more competitive. It's put its own house in order.
Gordon Clough, BBC
You say there are no buttons that can be turned, there are no levers that can be pulled to make things suddenly right. But isn't there one button, or one lever that can be adjusted? The complaint of a lot of businesses, small and large, is the largest [end p5] cost input is interest. Now is there nothing the government could do to help reduce interest rates?
PM
We tried to reduce them as much as we possibly can. If you look at interest rates across the world you'll find that they're all above the rate of inflation. They weren't in the last recession. Strange enough, people were prepared to lend money at below the rate of inflation. Now you'll find they're all above the rate of inflation.
Gordon Clough, BBC
… . don't believe inflation's going to go down.
PM
No, well, when they see inflation resuming its downward trend, they may well be prepared to lend at rather lower interest rates than at the moment. Those countries which have the lower inflation have the lower interest rate, and that's why it's so important to continue to get your inflation rate down. You see, Helmut Schmidt, who after all is a Social Democratic Party, and even tougher on inflation than I am—I would like to be tougher—is even tougher on public spending than I am—I would like to be tougher—I have to do what I can get through Parliament. The policies we are operating are the right ones. I can't go faster than Parliament and people will.
Gordon Clough, BBC
You came into office, Prime Minister, on a commitment to cut taxation. A lot of people often feel that they're paying out more in taxes of all kinds now—income tax, national insurance contributions up—rates rising all the way round. Is there any thought in your mind that, come the budget, anything can be done to help people who feel that they have been misled by the Conservatives into thinking they were going to pay lower taxes?
PM
Can I make this one point which is highly relevant? When we came into power the international price of oil was under $14 a barrel. We hadn't got this big world recession. It is now $34 a barrel. That is a colossal increase. It is that which has put the world into economic recession. No one could have foreseen that. Now, may I go on to exactly what you said? It is very ironic that the very people who are urging me to put up public [end p6] spending are the very people who are urging one to put down taxation. Now look, that I think is just plain dishonest. The sums don't add up. The Geoffrey HoweChancellor of the Exchequer and I have to make the sums add up. For everyone who says they want more spent, I have to say to them, all right. Where are you going to cut to make room for that expenditure, or are you going to put on even more income tax or higher value added tax? Because that is the choice. I reckon throughout this very difficult recession we've run a reasonable course, e.g., however difficult it may be we've kept up—let me give you one specific example—we've kept up the Christmas bonus to the pensioners. Three Conservative Christmases there have been three Christmas bonuses to the pensioners. The first three Socialist Christmases there weren't three Christmas bonuses to the pensioners—there were only one out of three. However difficult it has been, we've thought very highly of having a health service which serves the people, and in spite of everything that was thrown us at the last election, there are now 21,000 more nurses than there were when we came in. There are more doctors, there are more dentists. We've honoured the Clegg awards and the pay bills. And, we've had to say to people, if we have a better service, you have to pay more tax. You have to pay more national insurance contributions. But do you know, today we now pay for nurses alone 76%; more than we were paying the day we came into office. This is to the nurses. It shows how much we think of them. There's only one place for me to get it and that is from the people.
Gordon Clough, BBC
… . not at all satisfied with the pay offer that was made to them?
PM
There has been no pay offer asked or demanded this year. Everyone would like to be, shall I say, a Lady or a Lord Bountiful. But it's wicked to imply that you can be that without getting the money out of taxation and national insurance contributions on the people. And rates. And I would say to you that the people are now saying to me, “Mrs. T.—we're paying enough in direct tax. We're paying enough in rates. Yes, everyone would like more to be spent. But you know, we want more in our pockets too because we spend it fairly economically. And therefore [end p7] you, Mrs. T. have to look at what every Government has to look at. You have to look at what are your priorities. You have to be ruthlessly efficient and see we get value for money.” Mr. Clough, that is the message of my Government. That is what we're trying to do.
Gordon Clough, BBC
Why do so few people believe the message of your Government? Why does only one in three people apparently believe it?
PM
I wonder if it is fully and properly put across. That is why I said to you, I do get very—not merely angry—that's not the right word. I am dismayed when people seem to me to use democracy as a vehicle for saying, “look vote for me. I will see that you get more and someone else will pay.” That is not right. Some people are offering it now—they're calling it reflation. Now this is what I just have to say to people. Come off your dreams, come off your wishes.
Gordon Clough, BBC
All that being said, it looks very much, doesn't it, if you look at opinion polls at all seriously, that if you had a General Election next week, the electorate would say no, we've had enough of these policies. We want different policies. We probably want the SDP/Liberal alliance.
PM
Well, the SDP/Liberal alliance, very interesting. First, they don't know what they stand for. Second, if the SDP had stood for the same thing as the Liberals they could have joined the Liberals without having an SDP. Third, the SDP are being very careful to say, not to say what they stand for. Very very careful. Because when it comes to find out what they stand for, they won't agree. Fourth, the vast majority of SDP are the old Labour Party. It was the old Labour Party that gave [words missing] unions. It was the old Labour Party that gave the unions more privileges. It was the old Labour Party that was in power when an opinion poll—I remember it vividly—said, who do you think has more power in this country today? Mr. Callaghan 's Government or Mr. Jack Jones? And the opinion of the people was Mr. Jack Jones. It is the same old Labour Party that nationalised, that monopolised, [end p8] that gave the unions more power. Same old Labour Party, some of whose Cabinet Members stood on the Grunwick picket lines. The same old Labour Party that killed grammar schools, same old Labour Party that would be in a Labour Cabinet today sitting alongside Benn operating left-wing Labour policies had they won last time. I do not agree with you. I think so long as people know there's not an Election, they can in fact vote in a way [sic]—of course they're worried about unemployment, who isn't? I'm the most worried person of all. But I know you don't create more jobs by printing money. You merely lay up troubles in store for the future. Of course they're worried. So am I. When it comes to an Election, you are looking at policies, you are looking at records, are looking at what is reasonable and what is sensible. Oh yes, we've been through this before. But the SDP/Liberal alliance is a novelty. It is a fashion. Mr. Clough, novelties cease to be novelties. Fashions change.
Gordon Clough, BBC
There was a time when President Carter—I think before the Democratic Convention a year and a half ago—was interviewed, and in the course of the interview was asked if he would grade his own performance as President. He was asked under several heads, his handling of the economy, handling of foreign affairs, handling of defence matters, and so on. If I were to put the same question to you, how would your rate your Government's performance?
PM
Mr. Clough, it is not for me to grade my own performance. It's for other people to have a look at it. But I hope to have a look at it in context, and I hope to have a look at it against all of the background. When it comes to Election, I shall lay out the whole performance in relation to the facts of life. I shall lay it out in relation to what I implicitly believe, that for a long time this country's tried to avoid the realistic questions, tried to avoid the common sense and sound solutions. I've been trying to face them because that I believe is the way to get Britain back to fundamental long-term prosperity. And my passion is my country. My passion is that I believe Britain is such a wonderful place. She can have more influence in the world than she has at the moment. And I believe she'll really rise to that supreme influence when she can show that in peacetime we're as good as the Germans. [end p9] We're as good as some of those other industrialised countries. And I want to prove that we're not only as good, but when we can do it all, then as a people we're better.