Interviewer
Prime Minister, do you think that Mr Gorbachev, a man that you have said in the past you can do business with, is going to be disappointed that he is going to have to wait at least six months to find out if there is any prospect for coordinated financial aid from the West?
Prime Minister
No I do not think so, I think Mikhail Gorbachevhe will realise that the aid we give must be such that it will obtain its objective of enabling him to get to a market economy. He already has lines of credit from Germany and certainly from us and he may well also have it from other commercial banks backed by Export Credit Guarantee. So he has that already and I think that if we get a report within six months he will be very pleased if that targets the really helpful measures that we can take. [end p1]
Interviewer
But Prime Minister, you have been to the Soviet Union recently, you have seen the problems, the queues, the absence of goods on shelves, is there not more that should have been done as you did at NATO—a collective response—this is not a collective response?
Prime Minister
Oh, but it is a collective response. But you know we cannot take on the job of looking after 280 million people in their own country, they have got to do this themselves. It is a massive country, eleven time zones, goes from tropical areas right up to the ice cap, we cannot take on the job of running it. All we can do is to help them to help themselves, they already have quite a bit of mounted debt round their necks and any other debt that they take on, they really want to be constructive in helping to bring about this fundamental change.
He has brought about so many political changes, they love the discussion, it is of a vital, vibrant, real debating nature that we thought never to see there. But I know what is happening, they thought: “Well now, the government is giving us political freedom, now they can give us economic prosperity.” The link has not been made that in order to get that you have to have distribution of responsibility and in fact it depends upon the work and the initiative and the attitude of the people. It is easier to say than it is to bring about, they know what they want to do, they are asking to be taught the how to do it. [end p2]
Interviewer
You addressed the comment in those terms in your opening remarks to the leaders two and a half days ago, how seriously do you doubt that Mr Gorbachev will pull off democracy in the Soviet Union and a free market?
Prime Minister
I believe he is well on the way to pulling off democracy in the Soviet Union, we know that from what we have already seen. I believe that they will come to the free market. Changing people's attitude is the most difficult thing, changing from a total central control where every decision had to go to Moscow to dispersing those decisions will take a time. But you know the people who have been elected in the new separate republics, they are just rearing to go. And until you get some of the decisions, the day-to-day things dispersed, things are very different in Moscow from what they are in Kiev, I have seen that for myself, you will not get the market economy developing until they know about private property you will not get it; until they know about company law; until they know about contract law you will not get it. These things are second nature to us, we have offered to help and we hope that they will take up that offer.
Interviewer
Shifting to trade, if we may, do you seriously believe the European Community will agree to cut farm subsidies? [end p3]
Prime Minister
But they had and they had before we came here, we had all agreed that we should reduce the amount of agricultural support and that is right, because some of the support was going to non-competitive production. When you give support to non-competitive production, much more on the continent than with us, you are really not doing justice to your farmers who are fully competitive and can compete against anyone. Our family farms are larger than the family farms on the continent, quite a number on the continent are really second sources of income whereas ours are mostly the main income of the people. So I think it will be to the benefit of our farmers and I am certain it will be to the benefit of the consumer and to the competitiveness of the agricultural industry generally.
Interviewer
You required the support of the United States though in pulling that off, you have been arguing for it for ten years, you come here, America backs you and you pull it off, is that a new relationship?
Prime Minister
It is a developing relationship because I remember we had this argument at Toronto which was two Summits ago when I was quoting then just how much America subsidised her farmers, Japan subsidised hers, Canada subsidised hers and we subsidised ours in the European Community. And we said that this just is not fair on the consumer and it is encouraging non-competitive production. But we can only get it down together and this is an agreement that we must get it down together. [end p4]
It has been helped along by a really rather marvellous report by a Dutchman called de Zeeuw who says you must get down the combined agricultural support, whether it is guaranteed price, whether it is export subsidies or whether it is import protection. In one way or another you must get it down and in particular get down the total and get down the export subsidies and we have all of us agreed that we will set about doing that. It will take a time and we will all do it together.
Interviewer
Finally, you will be the host nation for the next Economic Summit in London. Would it help to invite Mr Gorbachev to attend in some capacity?
Prime Minister
I do not know, I do not think we need address that question yet, we all benefit from seeing him from time to time and discussing things with him and doing as much as we possibly can to help. It has been a very very active year this past year in which we have seen remarkable things happen. Let us get a little bit closer to the time, we will have got the IMF and World Bank report and the European Bank of Construction report and then we will see how best we can go ahead.
We have enjoyed the dialogue but I think we will say, look, we want it to be now much more practical help to see practical results, so we will address that nearer the time.