Julian Haviland, ITN
Mrs Thatcher, do you think you would have won the general election if there had been one last week?
MT
Yes I do, and it's interesting to think that we might not have been sitting here now.
Julian Haviland, ITN
And if you as Prime Minister were talking in No. 10 tonight with the TUC, what would you be telling them that you thought the right level for wage settlements now was?
MT
I don't think I could tell them any specific level. I'm constantly asked what I think the country can afford. The country can't afford anything unless we produce more. It's people and factories and offices and shops who produce more. And they won't produce any more unless they get some incentive to do so. So the country can't afford anything without more output. You won't get that more output unless they're allowed to bargain individually with their own companies, with their own businesses.
Julian Haviland, ITN
If the TUC leaders were to ask you as Prime Minister what level of settlement was a reasonable one for them to go for, what the community could afford, you'd say “nothing” would you?
MT
The community as such can't afford anything in return for no extra output. If we're really going as a result of incomes policies to expect an extra x per cent every year for no extra output, then we're going to have inflation forever and if you expect money supply to accommodate to that. We can't. I think that's one of the drawbacks of incomes policies, people get bewitched with what they're entitled to take out and no one has the incentive to put in more. And you know a country only gets richer if we produce more, and we've had far too little concentration on production productivity. Other countries have done it differently, they've said “We must produce more, we must have more wealth creators, we must have more firms getting on well with their work people” . They've produced the goods, they've got the prosperity. We've had rigid incomes policies, we haven't.
Julian Haviland, ITN
So if you were in office, only increases paid for by genuine productivity arrangements would be allowed? [end p1]
MT
Not quite. I am saying that unions should go back to their traditional role. And you know free trade unions do need a free society in which to operate, they cannot operate under a socialist society and that's what they've said, we've come to the end of the road with that. They've said—and I think they're right, because I think we've all learned the lessons from incomes policies—they said you can have a rigid incomes policy for so long but, in the end, you've got to return to the traditional role of trade unions, you've got to accept that some companies are very successful. They will not carry on being successful unless the people who are employed by that company are entitled to have a part of the success. And you know unless you back success we're none of us going to get richer.
There is I think a limitation on free collective bargaining, there's no freedom without some restraint, we all know that. The limitation is the price of the product. If they take too much out in wages, people won't be able to afford to buy their goods. They'll then buy the goods of some other firm, or overseas. Now these trade unions are people who work in these organisations, they know that, they're not fools, particularly if they've been through some of the difficult years. They're prepared to bargain, I believe, the vast majority of them, realistically.
Julian Haviland, ITN
Do they all sympathise with you? If … haven't you just outlined what Sid Weighell would call the philosophy of the pig trough, those who are the biggest snouts get the biggest feed or whatever …
MT
I really didn't think that that was a very great compliment to his fellow trade unionists. I've been round many, many factories where I think they will be thoroughly offended at that. Now there are problems where socialist governments have created monopolies, because the competitive restraint doesn't always work. But even in some monopolies in this country it does work. For example, steel, we've lost such a lot of the steel market and a lot of the steel jobs because we haven't been competitive, because we're concentrated on what we take out rather than getting better schemes for higher productivity, using investment to great advantage. We shan't get more jobs here, we shan't get more prosperity here, until we've learned the lessons of how to create prosperity. There's no magic in it. Go and look at the recipe they operate in countries which have a higher standard of living for their people than we do. Look how they operate in Germany, look how they operate in Japan, and you will find a lot of answers that we could put into effect here, very much to our advantage.
Julian Haviland, ITN
You've always said the government five per cent pay policy was too inflexible. You may think that's been vindicated now but, do you see the failure doing you or your party any good?
MT
Er, I really wasn't looking at it from the viewpoint of party. I think we talk so much in terms of these … [pause] big things—five per cent—eh, so much in terms of things like ‘stimulating economies’, em, ‘what the country can afford’. All of it breaks down in the end to people wanting to do better for their families. They will do better for their families if there's an incentive. If there isn't they'll feel burning resentment, and rightly, and you've got to work with the grain of human nature. Of course there are some people who will try to abuse it and you have to try to get constraints on those. In ordinary private industry the constraint comes—well if you don't do a good job and produce goods that you and I as consumers will buy, someone else will. And you and I are free to buy the goods we choose.
Julian Haviland, ITN
But talking about ordinary private industries, especially profitable private industry, are you confident that rigorous cash limits, you're still confident, that they will keep pay [end p2] settlements in the public sector down, even if profitable private firms like Ford take the average up?
MT
I think they have a very good chance of so doing. I admit that when it comes to big nationalized industries the decision a government has to take is whether it's going to take out of the taxpayer's pocket money that the citizen will not pay in the way of price, because that's what it comes down to. And in … and in some cases, to keep certain railway lines going, I think they're entitled to. In others you're not, and that decision has to be taken. I think it has a good chance. But you know, we really have to talk and put over our view of, of free and responsible society far more than we have. There used to be a phrase, which came with, um, free collective bargaining, it was a very old one: “enlightened self-interest” . It's about time we revived it. Enlightened self-interest is to produce goods, good value that other people want to buy. Other people are satisfied, you have a future with your own company, it will grow and prosper. We haven't put over our philosophy nearly enough.
Julian Haviland, ITN
Thank you very much Mrs Thatcher.