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Tonight, live on T.V. Eye, the Prime Minister and the state of the nation. The interviewer Llew Gardner.
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Llew Gardner
Prime Minister, you're now completing your third year in office, the third year of what's almost become your personal fight to get Britain back on its feet. Are we winning the battle of the economy?
Rt. Hon. Margaret Thatcher
I think we're winning. I think I could perhaps best describe it by saying, I think we've laid the foundations for a competitive industry that can expand the moment we get improvement in world trade, and that's quite some achievement, because we weren't competitive before.
Llew Gardner
In sort of historical terms, where are we? Have we just had the Battle of Dunkirk, or the defeat at Dunkirk? Or have we got as far as Alamein?
Rt. Hon. Margaret Thatcher
Oh I don't think those analogies hold at all. We have to fight our battles every day. They're never won. You've got got to sell your goods every day, you've got to be efficient every day, you've constantly got to think of the morrow. It's a daily battle for each and every day.
Llew Gardner
Let's have a look at just this week for instance. We saw that industrial production fell again in December. Both industrial and manufacturing production are considerably lower than they were when you came to office. How can you say we're even laying the foundations in those circumstances?
Rt. Hon. Margaret Thatcher
Let's deal with the December point first. Not surprising was it, when we had really one of the coldest Decembers, not for fifteen years, but really since the end of the eighteen hundreds? So not surprising that production fell that month. If you take it [end p1] over the whole quarter, it actually was up on the previous quarter. Yes, you're right. It is down over when I came in. There's been a world recession. Not our fault. Germany, France, Europe's suffering as well. Some suffering even worse. Some got their unemployment actually rising faster than ours now. We're not responsible for that world recession, but I hope we're soon going to come out of it. Nevertheless, if we hadn't gone for the policies I've gone for, namely efficiency, increased productivity, getting the over-manning out of industry, we wouldn't be fit to compete with the Germans and Japs and French, when we get an expansion in world trade. It has been difficult. What's happened is we've taken the over-manning and hidden unemployment out of industry, and it's come onto the unemployment register. But at least we've got an efficient industry from which to expand. And doing very well in exports…
Llew Gardner
… Prime Minister, we've got three million unemployed, if I may say so.
Rt. Hon. Margaret Thatcher
Yes indeed. And you know even countries, like, for example, Germany, about two million. She was efficient, her inflation is down to six percent. Even on a two million figure it's much less than ours, but you have to remember, she and France have a whole years conscription for all young people, so that takes a lot off the register, and you have to remember that she took in a lot of people for extra work when times were very good, but they left and went back to Turkey and Yugoslavia and times were not so good, so she lost jobs without getting increasing unemployment. Remember those things, even for countries that are very efficient. We've struggled to get efficient, and last year our record in increased productivity was better than anyone.
Llew Gardner
But let me come back to the question of unemployment. I recall an interview of yours in which you said, “It really should be a question of pride, a question of saying, I can look after myself and my family, this is a matter of personal pride” . Prime Minister, how does an unemployed man in Liverpool, in Glasgow, in Newcastle look after his family? How does he have personal pride in your Britain of '82? [end p2]
Rt. Hon. Margaret Thatcher
I entirely take your point. Of course one would like everyone to have a job. But you know if some of the people who talk so much about it were able to go out and create the the businesses that would do the jobs, and make the jobs, then I don't understand why they don't do so. Yes I do want more jobs, obviously. So does Germany, so does France, so does everyone who is suffering from unemployment. What we have to consider is how best are those jobs of the future going to be created? They're not going to be created if we shy away from taking on new technology. If we shy away from getting rid of old Labour practices. They're not going to be created if we have two men doing the work of one and taking two men's wages. We shall simply lose the business elsewhere. We're going through a period of new technology. We're going through a period when many countries overseas are producing the sort of goods which we used to produce, and sell from here. All of that requires great adaptation. We cannot get the jobs of the future, which I am after, more than anyone else, unless we compete.
Llew Gardner
Prime Minister, many of your critics, and many of your sternest critics these days are in the ranks of the Conservative Party itself. They see the cost to the national [word missing] of three million unemployed as totally unacceptable, whatever the other gains that you may say come from your policies. They say that that figure of three million is damaging the whole social fabric of our country, and that somehow or other you have to do something now, and immediately to end that situation.
Rt. Hon. Margaret Thatcher
Well, say what they may, and I agree, I would like everyone to have a job. The question is, how do we create them? Now let's just—just let's go through it. … .
Llew Gardner
You could reflate.
Rt. Hon. Margaret Thatcher
Reflate? How in the world, if we reflate it from twelve percent inflation, taking the annual level of inflation up, would we have a chance to compete with Germany on six percent? On Japan lower. On Switzerland lower. How would we have a chance? That would be pushing our problems into the future. [end p3] Taking a few artificial jobs now, not many, just a few, and then having a bigger inflation and an even bigger unemployment. It would also be saying to all the people who have saved, “look I'm going to diminish the value of your savings deliberately” . I'm going to make it more expensive to invest. Look, who's reflated in the past? The Government of which I was a member, 1970 to 1974. We did a big reflation in 1973. It ultimately led to the highest rate of inflation this country's ever had. Eighteen months or so later. And we were panic-stricken. And eventually, shortly after that in another year or so, we had to go to the I.M.F. It led to a property boom. It led to a secondary bank collapse. All of that led eventually to a much higher level of unemployment, one point six million. Then we had to try to deal with that high inflation.
Llew Gardner
May I come in Prime Minister?
Rt. Hon. Margaret Thatcher
Then Mr. Callaghan reflated in '78, and we've gone through the whole of the thing again. Please don't go that way. Let's do it in a sound way this time. Really competitive, sound, honest, honourable money. Reflation is dishonest money and no Government should go that way. Your turn.
Llew Gardner
Thank you very much. Let me suggest to you that all the points that you make are the things that come from inflation. But what, and I come back to what I said before. What your critics say, is that, what is happening to the social fabric of the country? What is happening to the inner cities? What is happening last summer in the riots? These are all symptoms of three million unemployed. And that you may end up destroying more by the unemployed than you do by inflation.
Rt. Hon. Margaret Thatcher
I wouldn't say those riots were a symptom of unemployment. And I was interested that Lord Scarman did not put necessarily unemployment as high on his list, indeed it was very low. And indeed you remember we had the Notting Hill riots years ago, at a time of very considerable, well almost full employment, and very low inflation. So I don't think it's quite right to analyse it that way. But whichever way you take it Mr. Gardner, there's not much point in going [end p4] on commenting on it, we've got to say how are we going to get the new jobs, the industries of the future to compete with the Japanese? Because the Japanese have got the industries of the future. They embrace new technology, and they have not lost jobs through it, they've got very little unemployment. So we have to embrace new technology. We have to try to give help and we are to small businesses to start up and to expand. All that we are doing, and in the meantime we have to say, well we must give a hand, particularly to the young, so, and a vast majority of school leavers get jobs. Those who don't go on a special Youth Opportunities Course. Or we've had a look, we've got a new scheme now. We think that one of the reasons that young people are not taken on is because the wages they have to be paid are too close to those of an experienced adult. Therefore we've got a new scheme, it started on January 2nd, where companies can take young people on in the first year away from school, at forty pounds a week, and if they do so, then the tax payer will pay fifteen pounds a week. There have been a lot of enquiries about that, and we've already got about twenty thousand applications in in about the first six weeks, and I think they'll go much faster. And then we've got a scheme, I might say so, it's rather similar to the German scheme, where we want to get to the position where a young school leaver or at sixteen, a person can either stay on in full time education, or can get a job obviously if there are jobs available, and a number of them will. Or they'll go to some sort of training. I want to get to the position where unemployment is not an option. Education, job, or further training, so each and every one of them can look forward to something when they leave school. That's really the German scheme.
Llew Gardner
Prime Minister. A year ago you told an interviewer that we will not reflate. Are you telling me now, as we come up to the budget, that is still the message quite firmly, we will not reflate?
Rt. Hon. Margaret Thatcher
Of course not, of course we can't reflate. It would be totally wrong, and just let's get one thing clear. Anyone who says that we reflate is asking a Government to be dishonest with money… [end p5]
Llew Gardner
But Prime Minister, the CBI thinks you should reflate, the T.U.C. thinks you should reflate. Mr. Heath, Mr. Rippon, Sir Ian Gilmour think you should reflate. Why are they all out of step and you in step?
Rt. Hon. Margaret Thatcher
I think we're perhaps using the word reflate in two different ways. All Government spending has to be covered in one way or two ways. A Government spends money it's got to get it either from the tax payer, or from the savings of the people by borrowing them. Now insofar as you spend money therefore, you must cover it in one of those two ways. And you ought to limit your spending to reasonable taxation, plus borrowing at a reasonable rate of interest. Now if you're going to do that, you're all right on honest money. But there is already what I would call unemployed money in the economy, of course there is. We've got twelve percent inflation, and that means there's twelve percent of money which isn't going into increased production, it's going into increased prices and wages. There is that money available to go into increased production, and we're trying to get it in that direction, but that does mean a certain amount of discipline, both on the part of Government and on the part of industry.
Llew Gardner
A marginally reflationary budget are you hinting at in that case? I mean everybody's talking, everybody says they want something like three billion put into the economy. Are you prepared to go as far as that?
Rt. Hon. Margaret Thatcher
I'm not prepared to say anything about the budget for obvious reasons. I know you'd love me to, it would be headlines tomorrow morning.
Llew Gardner
But you're hinting that there is some money available.
Rt. Hon. Margaret Thatcher
I'm not hinting, I'm not hinting. I am saying that you have to run your finances in a sound way if you want to be able to compete with countries that are doing that. And if you want to get the jobs here, the fact is that the countries that have run their finances in a sound, honest way have the lowest unemployment, and have the best prospects for the future, and the lowest inflation. [end p6]
Llew Gardner
Prime Minister, can you remember a time when the Conservative Party, and you've been a Conservative for some years now. Have you seen a time when the Conservative Party was so deeply divided, when ex-Ministers, when even a Tory Prime Minister go around the country making speeches against the policies of the Government, and against the Prime Minister?
Rt. Hon. Margaret Thatcher
Mr. Gardner, you are not right in saying it's deeply divided, you are right in saying that some people have differences upon certain particular issues. You ask me if I can remember a similar occasion. There was the Suez group, in the 1950s…
Llew Gardner
That didn't include ex-Cabinet Ministers and an ex-Prime Minister.
Rt. Hon. Margaret Thatcher
Well there was the European difficulties when the Tory Party had a very considerable group that did not want to go into Europe. And I must say this of Edward HeathTed, he's always supported us in the lobbies. Yes there are one or two differences, they are very very small compared with the enormous things that we have in common, which are a free society, a free enterprise society, certainly with some things which are state owned, but mainly a free enterprise society under a rule of law sturdily robust to defend itself, and willing always to take a full part in the councils of the world, through Europe, and through our other relationships across the Atlantic. Those are the great things we have in common, and I think it's most unwise and quite wrong to stress what are very minor differences.
Llew Gardner
Well I'm not sure that they think they are minor differences, but I think we'll move on, if I may, Prime Minister. If I may move to some of the recent news events? Can we start with the railways first perhaps. Isn't the result that we have today a living proof that for all your talk of a change of attitude among trade unionists, among workers, that in fact determined men, if they use their industrial muscle can win and get what they want? [end p7]
Rt. Hon. Margaret Thatcher
I think you put your finger on one of the differences at the moment, between the private sector and nationalised monopoly industries, because the private sector, there are excellent industrial relations on the whole between management and the shop floor, excellent. It's not we and they, it's all us. And they're doing some superb work, exports are up, they're getting orders, they are competing, their productivity is up. Excellent. We then come, and if you look at some of the trade union difficulties we're having now, you'll find they're pretty nearly all in the public sector. British Railways, London Transport's threatened to go on strike for a day. British Leyland. There's a strike up in the Teesside Docks which is stopping the gates for the Thames Barrier, coming down to London, and my goodness we need them. All of those are in the public sector. Now the public sector, you're quite right, where it has the monopoly, it has muscle. And the tragedy today is that the trade unions have more capacity to harm their fellow trade unionists and fellow citizens, than they have to defend those trade unionist and citizens from the harm they cause. We are trying to say, “look, Governments don't pay these wages, it's the people that pay them, and you are trying to take more money out of their pockets at a time when we've not got increased output, and you are saying to people that if we have industrial muscle we're going to use it to take more money out of your pocket who haven't” . Mr. Gardner that is wrong. It's unfair, and I believe that even that that attitude is slowly and steadily changing. In the public sector too there have been far more moderate wage settlements because they know that the future of our country also depends upon it. But the truth is there are still some difficulties with them, and the prices in the public nationalised sector are going up faster than they are in the public sector.…
Llew Gardner
ASLEF have won haven't they Prime Minister?
Rt. Hon. Margaret Thatcher
… . there's absolutely, there's no substitute for competition. Oh, but Mr. Gardner, it's much, much, much too early to say who's won. I hope in the end British Railways will have won using that term in its wider sense, because unless we have modernised British Railways, modern working practices, high productivity, we can't put in the investment and we shan't have good modern British railways, we've got to wait and see what comes out of Lord Gardner 's final enquiry. I hope they negotiated between British railways and the unions, that's the best way. And they [end p8] ought to. But this country cannot stay in the 1919s [sic]. It's got to come into the 1980s, it's got to think more about next week's pay packet, it's got to think about the industries for our children. We've got to be up-to-date in our working practises, got to be efficient, we've got to have profits to be able to invest, and we've got to think of, not industrial muscle, but what is a fair and reasonable price, to take out of other people's pockets, at a time when they are having to earn their living by competition.
Llew Gardner
… ask you about something else that's in the news, and I know that a statement is to be made by the Secretary of State for Northern Ireland tomorrow about DeLorean. However, I just wonder whether it isn't your own inclination really to say enough is enough, and we've poured enough money into DeLorean.
Rt. Hon. Margaret Thatcher
My own inclination. I have to get the money from the tax-payer. There's no such thing as public money. There's tax-payer's money. What I can get is limited, because they think they're paying too many taxes and rates, quite right, I mean I think they're paying very high taxes and rates. Therefore I have to think what is best to do for it. Many is the time when I've been over to Northern Ireland, when other people in other industries have said to me, you know with that self-same money we could have created more jobs. Now I don't know quite what will happen to De-Lorean. There is a meeting, I understand tonight, and we shall know tomorrow what's going to happen. But every time the constraint on me, is look I've got to take money out of the pockets of people who are earning it by their efforts in industry, in the great service industries. And they're entitled to say to me, you must use it properly. We must use it wisely. Money has been poured into some industries, and indeed what has happened in some of them is proof positive that public expenditure will not necessarily create efficient industries. You've got to have other things as well.
Llew Gardner
I think you're very nearly telling me that enough is enough in DeLorean. [end p9]
Rt. Hon. Margaret Thatcher
I am telling you that we have to use tax-payer's money wisely, and well, and that I shall continue to try and do it.
Llew Gardner
Prime Minister, how long do you wish to go on being Prime Minister?
Rt. Hon. Margaret Thatcher
Until I'm tired of it.
Llew Gardner
How long will that be?
Rt. Hon. Margaret Thatcher
Oh, I don't get tired very easily.
Llew Gardner
Are you not tired at all? I saw that the Sunday Times recently suggested that you were suffering from metal fatigue.
Rt. Hon. Margaret Thatcher
I'm not suffering from any fatigue. I say until I'm tired of it, so long as Britain needs me I shall never be tired of it.
Llew Gardner
The new factor, however, that might stop or might make the nation tired of you, is the, of course the introduction of the SDP. I was intrigued at watching Michael Foot the other night, that he seemed to be condemning the SDP in exactly the same terms that I've heard yourself do it, in namely that they have no policies is the usual cry against them. I wonder whether both of you are missing their fundamental attraction to the people, that their fundamental attraction is that they aren't the Conservative Party, and they're not the Labour Party, that people are actually fed up to the teeth of the other two main Parties in their wranglings and their broken promises.
Rt. Hon. Margaret Thatcher
You know it's quite an accusation to say of a Party they haven't got any policies and they can't make their mind up. It's not exactly the best recommendation for anyone who wants to achieve Government.
Llew Gardner
Are you missing the point of their appeal Prime Minister?
Rt. Hon. Margaret Thatcher
No, I don't think I am missing the point of their appeal, because I think as it comes up to an election you have to ask yourself, what is in issue and what are the policies? But my complaint against the SDP is quite simply [end p10] this. These are the same people, most of whom, many of whom, sat either in the last Labour Government or behind them. They are just exactly the same people, who if the Labour Party had won the election would still be sitting there, alongside Wedgwood Benn, taking the Party further and further Left. They hadn't the plain guts to fight when they were in, and they're the same people now. It was they who put us under the thumb of trade unions. It was they who increased the legislation in favour of trade unions. It was they who took us into the Winter of Discontent. It was they who took us to the I.M.F. They are the self-same people, and they haven't changed, they didn't fight then, they went the easy way, and they want the easy way now. The easy way is not the way for Britain. The successful way, the proud way, is the way for Britain. That's not the way they take us, they'll run.
Llew Gardner
Sorry. I still think that perhaps you're not either answering my point, or seeing their appeal to the people. You see I recall, I recall by looking in cuttings, a speech you made in Scotland on the eve of the 1979 election, in which you castigated the Labour Government for the fact that prices were going up at ten percent a year. For the level of unemployment at that time. For the rate of business bankruptcies. Well you've broken all those records. And when you recall that speech yourself, do you begin to understand why people have a deep suspicion of the two main Parties? And why perhaps they're prepared to turn to anybody who is different and comes along in new clothings?
Rt. Hon. Margaret Thatcher
You've taken very selected figures. For in fact the Labour Government's record on inflation, food prices went up nearly a hundred and twenty percent during that time. Our prices.…
Llew Gardner
Prime Minister, I'm not discussing their record with respect, I'm trying to find out whether you can understand why people are disillusioned with the two main political Parties, and I will abandon this line of questioning after putting it once more. [end p11]
Rt. Hon. Margaret Thatcher
You used some figures, which I quarrelled with, because I said you have to look at the record of the Labour Government on inflation over its whole time. On food it was up by a hundred and twenty percent. Disgraceful. If you look at their average record on inflation, ours now actually is not much better, but better, and we're on a downward track, providing we don't go for reflation. You say am I missing the fundamental attraction. Are you really saying that when it comes to an election the British people would say, we want to go for a Party, which will not stay together, they've divided three ways, four ways on the Unemployment Bill, some with us, some with Labour, some abstained, and some didn't turn up. I mean really, I see no future at all for Britain, if you're saying that the British electorate will go for people who can't make up their own mind, who never fought when they were in the Labour Party, who in fact put us under the thumb of trade unions, got industries nationalised, and took us further and further Left? I'd just disagree with you. Of course in the middle between elections you get these things, we got it with the Liberals, and hang it, afterall, it was the Liberals who kept the last Labour Government in power. Of course you get these things, of course people are resentful when there are three million unemployed. Of course they are, of course you will get these things. But if we're to think of the future I still have to lay the foundations. We still have to get industry competitive. We still have to tackle the real job. I still have to say to people, who talk and talk and talk about unemployment, but say nothing about how in practical terms to cure it.…
Llew Gardner
Prime Minister, can I ask you something?
Rt. Hon. Margaret Thatcher
… . we still have to bring them down. Look at the task in hand. But they don't do that.
Llew Gardner
Will we ever return to full employment Prime Minister? What was known as full employment?
Rt. Hon. Margaret Thatcher
I don't know. It depends on your definition of full employment. I believe that when we're through this period the same enterprise that created jobs in the past with new technology, will once again come and create new jobs for the future. You see if you look at it, the [end p12] first industrial revolution, people were frightened. Machinery, they thought, took their jobs. But machinery gave us a whole new standard of living. And then we got the computer age just after the war. I remember Leon Bagrit coming out with “The Age of Automation” and people were frightened that computers would take jobs. But they created jobs. Now we've got the micro-chip age and they're frightened. But I believe that, just as in the past, new jobs will be created through new products so in the future.
Llew Gardner
Prime Minister may I ask you lastly in the last minute of the programme, you've claimed you're sticking to your guns again and again, you've proclaimed it throughout this interview, deep in yourself are you convinced that this is a matter of principle or just plain cussedness and obstinacy?
Rt. Hon. Margaret Thatcher
I'm convinced it is the right way to go and I hope that I will have the courage to see that way through because it is the best way for my country and it is the best way to get the jobs for the future.
Llew Gardner
Prime Minister thank you very much indeed.
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