Interviewer
Prime Minister, how isolated do you think you now are on economic and monetary union?
Prime Minister
We have not even started to do the main discussion yet because we have not set up the relevant conferences. What I think has been very evident from this particular conference is that when it comes to practicalities and making urgent decisions we are way ahead, when it comes to implementing what we have agreed, we are way ahead. But when you are dealing with a Giulio AndreottiChairman whose country has not yet implemented sixty-two Directives, it is the worst record, obviously there is a great difference of approach.
Interviewer
But is not the reality that on economic and monetary union eleven other members basically just decided to ignore Britain's reservations and press ahead with a definite timetable on the road to single currency? [end p1]
Prime Minister
They tried to set a timetable for the next stage but they have not yet decided what the next stage shall be. Do you know why? Because it is easier to set a timetable, you just agree a date. It is much more difficult to decide what the next stage will be. So they are quite willing to make the easy decisions but they run away from the difficult ones.
We have put up proposals for the next stage, they are not proposals for a single currency, we will not have a single currency imposed upon us, they are proposals for a common currency so that we would have a common one all through the countries of Europe to be used for trade if wished or for other things, but also keep your own national currency. Of course we wish to keep and shall keep our pound sterling, Parliament would not accept anything else and neither would the people, we insist on keeping the pound sterling.
Interviewer
Are you prepared to use your veto to keep the pound sterling?
Prime Minister
Yes, because we are quite prepared if something does not suit us then we are not going to have it. The pound sterling apart from the Deutschmark is the biggest currency in the Community, it is freely traded, we were one of the first to get rid of foreign exchange controls. Some people in the present European system still have their foreign exchange controls on, Spain for example. [end p2]
Interviewer
Do you acknowledge the possibility that the eleven other members may decide to go ahead without Britain, that you are going to face the reality of a two-speed Europe with Britain left in the slow lane?
Prime Minister
No, I do not think we shall be left in the slow lane just because we have a different view and because we have a very big and important currency. If it comes to a two-speed Europe let me point this out. First, we contribute the second largest sum to the European Community, we contribute net £2.2 billion a year, £2.2 billion. Let me give you just some measure of that. We have overseas aid to Third World countries of £1.7 billion, so we actually contribute to comparatively wealthy Europe, over and above what we get back, £2.2 billion, half a billion more than we give to the Third World. So that puts us in the top speed. Secondly, when it comes not to talk but to action we and Denmark have the best record for implementing what we have agreed, we still have only fifteen or sixteen directives still to implement. Italy, who is in the Chair, has not implemented sixty-two Directives and this is the difficulty, we are discussing on a different basis. Italy will go in her same old way. We in fact shall take the directives seriously and implement them. So it is not really the same approach that we have.
Interviewer
How irritated are you by that difference in approach? [end p3]
Prime Minister
One does get a little bit irritated by it sometimes, it came out again in another way in this conference. There are some urgent decisions to be taken on trade. Now trade is our lifeblood, that is what your prosperity is, and your trade must include agriculture and if you want to be able to export to third world countries they must be able to export their agricultural products to us. But that is not the view which France and Germany takes, she is protectionist, heavily protectionist, particularly with regard to agriculture, even more protectionist than the rest of us, and what is more she protects the smaller inefficient farmers and the part-time farmers. Whereas we have the larger efficient farms and we do not believe they should suffer, they are efficient and it is their livelihood.
So we have many many differences of view from our differences of background and we have to fight our corner for our people. But unless we make the difficult decisions on trade then the European Community could be blamed, and rightly so, for the breakdown of the trading talks of the world. But it would not be Britain who was to blame, it would be France and Germany.
Interviewer
It looks as if you have been bounced on the question of the timetable for those negotiations?
Prime Minister
I have not been bounced on the timetable, they say: “Let us have a date?” and I say: “Really what is the next stage?” I am not going to set a date when I do not even know what it is a date for, [end p4] but that is the way they work. I think we work rather differently.
Interviewer
On the Gulf, the communique talks about the inadvisability of representatives from Member States going to Baghdad to plead on behalf of hostages. Is that a backward swipe at Mr Heath?
Prime Minister
No, I do not think so. I think what has happened is that some of them feel that they have been put in a difficult position when private people, and however public a person Mr Heath was, he is a Member of Parliament and ex-Prime Minister when he goes, have gone to plead with Saddam Hussein for the release of more hostages. They feel that when they have held the line and said no we do not plead for the release of hostages. It is outrageous and monstrous and barbaric that this man should take or hold any hostages and the line that we must take is that he must give them up and that is the message we must send and not one after another going to plead for the release of a few.
We as you know got out nine hundred women and children really by shaming Saddam Hussein on some of the terrible things he was doing and we got them out. Mr Heath went off his own bat and he is a free person and he is entitled to do what he wishes and got out thirty to forty and obviously the relatives of those will be very pleased. But it does put others in a difficult position so we said for the future we will send neither official people to discuss with Saddam Hussein because he will only try to separate us and divide us, and it is quite wrong that we should have to plead for the release of hostages, and we will discourage people from going off their own [end p5] bat. So it is for the future, it is not meant to be criticism of what has happened in the past.
Interviewer
Do you hold out any encouragement from the visit by Mr Primakov to Baghdad that he might be able to manoeuvre some sort of peaceful resolution to the crisis?
Prime Minister
There is a clear way to peaceful resolution and that is for Saddam Hussein to get out of Kuwait, for the legitimate government to go back and for Saddam Hussein to pay compensation over a period of years for the enormous amount of damage he has done to property and the cruelty to the people of Kuwait, cruelty which is going on day by day by day, even now. That would be the right way to get a resolution. But we are not negotiating upon that, he has to leave.