PART ONE
Brian Walden
Hello and good morning. Election year has begun with the present Labour Government in worse shape than it's ever been before. The Pay Policy on which it's staked so much is looking more and more tattered with every week that passes. But in spite of Labour's difficulties, the Conservatives don't seem to be doing all that well. Indeed, the latest opinion poll out last week showed the Tories trailing three points behind the Government. The election may not be much more than a couple of months away. Mrs. Thatcher is with us today and we'll be asking her what she's going to do to win the support she needs. But first let's have the latest news headlines from ITN and Sandy Gall.
ITN News
Brian Walden
Thank you, Sandy. Since the War, Conservatives have been pretty clear about the kind of Britain they'd like to see. All of them want the role of the State reduced. They want more freedom for individuals and more scope for private enterprise. But up till now Conservative leaders have hesitated to try and impose their vision on the country too energetically. They've realised that in a freer society inequality would increase. They've feared that the spread of inequality would be resented, and that the Government would therefore lose the support of the nation as a whole. Nicholas Scott was a Minister in Edward Heath 's Government.
Nicholas Scott M.P.
The Conservative Party has managed to remain very close to power or indeed, up to the last few years, to be the natural party of Government, in Britain, and I think we did that because of the leadership that people like Rab Butler and Iain Macleod gave the Conservative party for a very long time, and we must never allow ourselves to be driven away from that into being rather a narrow, class-based party. I reiterate, we're a national party or we're nothing.
Brian Walden
In the past Tory Prime Ministers have been prepared to compromise on their principles in the hope of winning a broad base of support. They haven't tried to dismantle the welfare state, but have merely settled for modest tinkering instead. Tories who have been disappointed by this strategy used to accept that the party must compromise if it's to win power. But when Ted Heath lost the two elections of 1974, the mood of the party changed. Mr. Heath's betrayal of Conservative [end p1] principles had been more dramatic than any of his predecessors. But he'd failed to deliver the power for which the party's ideals had been sacrificed, and many Conservatives decided that the time had come to try a more radical strategy. If pragmatism didn't win elections, maybe hard-line Tory policies would. Many Tory M.P.s now wanted a leader who would actually try and put Conservative principles into practice, and Mrs. Thatcher was elected leader in February 1975 because many M.P.s believed she was the only candidate who really meant what she said.
Norman Tebbit M.P.
Most Tory leaders for a long time have just been compromisers and pragmatists. She's a Conservative, one hesitates to say it but perhaps she's a Conservative like, say, Michael Foot in his younger years at any rate was a Socialist. He actually believed in it. She's not a Conservative like, say, Stanley Baldwin or some of those leaders who were essentially compromisers and stayers in office and trimmers to keep the ship of state just going that way. She sees that we need a much more radical change of direction than that, and that's what made her attractive to people like myself.
Brian Walden
As Opposition leader, Mrs. Thatcher's lived up to the reputation that won her the job. She has sounded more determined to change British society than most of her predecessors. In the Autumn of 1975 she told the Party Conference:—
“Let me give you my vision. A man's right to work as he will. To spend what he earns. To own property. To have the State as servant and not as master. These are the British inheritance.”
Mrs. Thatcher quickly made it clear that she wanted large-scale tax cuts. She said she'd cut public spending too. She'd also try and curb the power of the unions. If she found herself locked in a confrontation with them, she'd hold a referendum to demonstrate that public opinion was on her side. At first Mrs. Thatcher's radical message seemed to be winning enough support to sweep her comfortably into Number 10. By October 1976, an N.O.P. opinion poll showed that support for Labour was only thirty-five per cent. Support for the Conservatives had risen to fifty-three per cent. This was a remarkably encouraging result for a new Opposition leader. But this early triumph wasn't to last. Mr. Callaghan decided to meet Mrs. Thatcher's challenge by trying to switch public attention onto an issue on which he believed he could outdo Mrs. Thatcher. The opinion poll showed that most people thought inflation was the most important issue facing Britain. So he insisted that any Government must make beating inflation its Number One priority. Mr. Callaghan knew that most people thought incomes [end p2] policy was the best way of bringing inflation down. And he believed he could convince voters that Labours special relationship with the Trade Unions gave the Party a unique chance of making incomes policy work. He succeeded in switching the debate towards inflation, and away from Mrs. Thatcher's promises of a freer Britain. Mrs. Thatcher found that she had to talk about counter-inflation more and more frequently. But she didn't argue that she'd have a better incomes policy than Mr. Callaghan's. She said she'd try and bring inflation down in quite a different way. She decided that if she came to power she'd take drastic action. Mrs. Thatcher felt that the key to the fight against inflation lay in the Government's ability to control the supply of money in the economy. She decided she'd slow down the rate at which extra money is printed. Once she'd done this, there'd be less and less extra money flowing into people's pockets. They'd have less extra money to spend. Firms would still be able to raise their prices, but if they raised them too much people wouldn't be able to afford their goods any longer. Their sales would fall and they'd end up bankrupt. If they wanted to stay in business they'd have to keep price rises down. So Mrs. Thatcher calculated that by forcing firms to keep their prices in check she'd be able to eliminate inflation. So she decided to make a slow-down in the rate at which extra money was printed the basis of her counter-inflationary strategy. So Mrs. Thatcher seems to have been in no doubt that monetary policy must be her main weapon against inflation. This approach has the advantage that it permits workers and bosses to negotiate pay settlements free from the shackles of a Government incomes policy. But Mrs. Thatcher appears to have recognised from the outset that if she acted only on the money supply, success on the inflation front might be outweighed by new difficulties elsewhere. She knew that there was a problem with a counter-inflation strategy like hers, which depended on slowing down the rate of increase in the money supply. The impact of a slowdown in the rate at which extra money was printed would be uneven. Powerful groups of workers supplying vital goods would still be able to win large pay increases. For these workers would know that their firms would still be able to get away with price rises. People would have to pay whatever price was asked for vital goods. But because the supply of money would be limited, people would have less money to spend. If they had to pay more for some essential goods, then they would have less to spend on other goods. So sales of less essential goods would drop, and workers who made these goods would lose their jobs. Unemployment might rise dramatically. If Mrs. Thatcher's counter-inflation strategy seemed to carry with it the threat of a steep rise in unemployment, the voters might reject it. She recognised that this was a genuinely weak spot in her counter-inflation plan. Mrs. Thatcher seems to have decided that if she came to power [end p3] she'd have to do something to try and stop excessive pay rises causing unemployment. She didn't want a rigid policy of pay restraint which would curb the freedom of workers and employers. But she'd try and persuade powerful unions not to abuse their bargaining strength. At the same time as her Government acts on its money supply targets, it would explain what level of pay rises the nation could afford. Trade Unions would be exhorted to bear this figure in mind in their pay bargaining. In October 1977 the Conservatives published ‘The Right Approach to the Economy’ which is still their main economic policy document. This states:—
“In framing its monetary and other policies, the Government must come to some conclusions about the likely scope for pay increases, if excess public expenditure or large-scale unemployment is to be avoided, and this estimate cannot be concealed from the representatives of employers and unions whom it is consulting.”
The most appropriate occasions for such consultation, the document explained, could well be the regular meetings of the National Economic Development Council. There, industry and the unions could all sit down with the Government to discuss the policies it was pursuing. So although Mrs. Thatcher rejected rigid incomes policy, she did have some interest in what would happen to pay. And as time went on, the gap between the two parties on countering inflation began to narrow. The Labour Government argued more and more frequently that it too felt that monetary policy was important. But Jim Callaghan knew it was his incomes policy, based on Labour's special relationship with the unions, which appealed most to the voters. And by the middle of 1977 he was able to argue plausibly that his incomes policy worked. Phase Two had stuck and inflation was coming down. By the beginning of last year Labour had overtaken the Tories in the polls. From thirty-five per cent in October 1976, Labour's support had risen to forty-six per cent. The Tories support had fallen to forty-four per cent from fifty-three per cent fifteen months earlier. On his chosen battleground, counter-inflation, Mr. Callaghan seemed to be wielding an apparently unbeatable weapon. It was time for a re-think, and at the beginning of last year Mrs. Thatcher seems to have decided that if Jim Callaghan was beating her on economic issues, she'd try and shift the debate to different battlegrounds on which she might do better. The polls showed that the voters thought the Conservatives had the best policies on certain other issues—Law and Order, Immigration, for example. Mrs. Thatcher appears to have decided to try and convince voters that these were important issues. The Tory campaigns in these areas had some impact but it didn't last long. Voters quickly swung back to the view that inflation was the most important issue. And by last summer Mrs. Thatcher seems to have concluded that she had to return to the inflation arena if she was going to recover her lead, and in this area things suddenly began to look up for [end p4] her. Mr. Callaghan still insisted that incomes policy was central to his counter-inflation strategy. But in September, the Government's pay policy was defeated by a huge majority at the Trade Union Congress in Brighton. Then a few weeks later it was defeated again by the Labour Party conference at Blackpool. Ford workers began a strike which seemed bound to lead to a settlement way above the Government's five per cent norm. The centre-piece of Mr. Callaghan's counter-inflation strategy, incomes policy, seemed to be crumbling. By the time of the Conservative Party conference in October, Mrs. Thatcher appeared to feel she could now afford a head-on attack on the Government's rigid incomes policy, and in a television interview during the conference she did challenge Mr. Callaghan's pay policy more forcefully than she'd ever done before.
Margaret Thatcher M.P.
‘Tonight’ 10th October 1978.
I believe we're now after three phases of incomes policy, entitled to say look, we really must return to the proper role of trade unions, and the proper role of trade unions is to represent their members with the employers, and not to get too involved in politics. So I think it is time to return to bargaining between the employee on the spot and the employer.
Brian Walden
But this attack on the Government didn't go down well. In spite of the difficulties Phase four had encountered, the opinion polls soon showed that voters still supported incomes policy. And they showed Labour ahead of the Tories too. When Mrs. Thatcher's predecessor, Edward Heath made it clear that he supported incomes policy, he won a higher rating in the polls than Mrs. Thatcher herself. And Mrs. Thatcher seems to have decided towards the end of last year that she couldn't win the support she needed by attacking the Government's incomes policy. The public seemed to expect to see excessive pay claims resisted. And of course Mrs. Thatcher herself had always recognised that even though she would rely on monetary policy to bring inflation down, she too had an interest in moderate pay settlements, so the debate on the Queen's Speech, in the House of Commons in November, she declared:— “Pay policies of course are extremely important, so of course we have to take a view of the growth rate. Of course in taking that view we have to take a view about the element in it of wage costs, and how much that is going to be.”
So Mrs. Thatcher has felt it necessary to re-emphasise that excessive pay claims are undesirable. To that extent her position has appeared to move closer to Mr. Callaghan's since the Tory Party Conference, and last month Mr. Callaghan's position moved closer to Mrs. Thatcher's, though this was much against his wishes. Mr. Callaghan was stripped of one of [end p5] the most important remaining planks of his incomes policy when the Commons voted against pay sanctions. Now the positions of the two parties on inflation look rather similar, though they've arrived at them by rather different routes. Both Mr. Callaghan and Mrs. Thatcher say that the Government must control the money supply. Neither of them wants to see excessive pay settlements, but neither of them seems to intend to use much more than exhortation to keep settlements down. Mrs. Thatcher doesn't want to take a harder line on pay, and Mr. Callaghan can't. But this isn't a happy situation for Mrs. Thatcher. For if the voters think that there's little to choose between the two parties on policy, they're more likely to make their choice on the basis of personality, and the opinion polls show that Mr. Callaghan's much more popular than Mrs. Thatcher as a leader. Despite the damage Mr. Callaghan's pay policy has suffered, the Tories are still in difficulties. Last week's N.O.P. put Labour's support at forty-eight per cent, the Conservatives had the support of forty-five per cent of the sample, and on the basis of this figure Mrs. Thatcher clearly can't feel confident of winning an overall majority in the near future, unless something changes. Well, there have been signs that Mrs. Thatcher does intend something to change. Just before Christmas, Mrs. Thatcher seemed to be suggesting that she might be about to unleash a new campaign. She appeared to have some new proposals in mind, which might give her counter-inflation strategy certain advantages which Mr. Callaghan wouldn't be able to copy. In a speech in Paddington, Mrs. Thatcher seemed to be suggesting that the problem of excessive pay settlements might be tackled by some means other than incomes policy. She hinted that she might try to reduce the power of the unions, so they'd find it harder to win excessive pay rises.
Margaret Thatcher M.P.18th December 1978.
Today, union power is feared, sometimes even by union members. And there's grave public distrust about their willingness to bargain responsibly. It's as much in the interests of the unions themselves as of the public, that a start should be made towards finding a remedy for these problems which are daily becoming more pressing. We intend to make that start.
Brian Walden
In her speech, Mrs. Thatcher argued that over the years the balance of power in wage bargaining has been tipped away from management towards the unions. If she were to produce plans for tipping the balance back again she could claim to have buttressed her counter-inflation strategy at its weakest point, and after a winter of strike chaos, such an approach could prove a big vote winner. For the Labour party's special relationship with the unions would make it very hard for Mr. Callaghan to compete with her in this field. So what exactly is Mrs. Thatcher going to do? We'll be back to [end p6] ask her in a moment. [end p7]
PART 2
Brian Walden
Mrs. Thatcher, most politicians seem to agree that one of the main problems in the fight against inflation is to prevent powerful groups of workers from forcing their bosses to give them inflationary wage awards. Now, I notice that in your speech at Paddington, on December the 18th, you spoke of “Open discussions and explanations between Government, employers and Unions.” Now I wonder if you could spell this out a bit. For instance, how often are these meetings going to take place? Who's going to be there? Is it going to be done through the N.E.D.C. National Economic Development Council Could you give us some details?
Margaret Thatcher—M.P. Leader of the Opposition
Can I just make one point first? I think you've got the debate on the wrong point. Why people are talking so much about incomes policies and having government impose incomes policies on the unions is because they fear the power of the unions. Every power implies responsibility, every liberty a duty. The unions have tremendous power over the years. Power enough to smash any incomes policy. They smashed ours, Edward HeathTed's policy, it was statutory. So incomes policies as such will not work to keep inflation down. Monetary policy could keep it down, but not alone, without causing other problems. So people have gone to the debate on incomes policy, when what they really should be debating, and the great debate should be on, how Unions use their power. There are two things, the existence of the power, and how it's used, and that's why they are so much in favour of incomes policy, because they think it reduces the power of the unions. It doesn't in fact. It enables the strong ones to smash anything, and leaves the weak ones having to take the policy, and I think it's absolutely important to get that right at the outset.
Brian Walden
Well you see, what puzzles me about that is this, if you're going to invite them along for these nice cosy tri-partite chats, surely that would give them even more power? [end p8]
Margaret Thatcher
Ah, no, it will not give them more power. I hope it will get a public debate going on the right issues. After all, there's a tremendous amount of trade union law; the law consisted of exempting trade unions from certain legal provisions, which apply to other people. I just looked back the other day at some of the early history, you know they were put above the law in some respects in 1906, when there were only 1½ million members of trade unions, now there are 11 million members, and Carson, a very famous lawyer of the day, said the King and trade unions are above the law, but they were put above the law not to have a licence to inflict damage, harm and injury on other people. They were put above the law then because it was thought that they needed it to get decent wages. Now, if I may say so, the conditions have changed totally. There are now 11 million members of trade unions, who used also incidentally to have restraints on strikes in public utilities, you couldn't suddenly break your contract if you worked in water, gas, electricity. We removed that. This is what the debate has got to be about—How unions use their power. I'm a Parliamentarian, I am not in Parliament to enable anyone to have a licence to inflict harm, damage and injury on others and be immune from the law, and if I see it happening, then I've got to take action, and I expect many members of trade unions themselves to go to their union leaders and say “Hey, we're unionists too, we're trade unionists too, what are you doing about stopping those others inflicting damage on us and our wives” .
Brian Walden
I can't seem to interest you very much in these poor old tri-partite meetings can I? Are you sure you're going to have them at all?
Margaret Thatcher
I am prepared to talk with anyone, I love talking, I love arguing, I love debating. Of course, but I'm only prepared to talk on a basis of realism. I'm not prepared to flannel over anything, I'm prepared to take the facts and not flinch from them, and say, “This is the problem, we've got to meet it.” I'm in Parliament to look after the interests of all people, whether they're trade unionists or not. There are 11 million members of trade unions, I don't believe [end p9] there are 11 million irresponsible people. There might among that 11 million be a few tens of thousands wanting to smash the system, otherwise, that 11 million are no different from those who don't belong to unions. Oh yes, of course I'll talk, but I'll take the whole thing, monetary policy, the other great inflationary factor, government expenditure, because if government takes too much out of the pay packet, they'll apply for wage increases to get the tax back. Ah, those are two very important things. Incomes policy, depends what you mean by it. No-one in government can ever stand back and see people being able to take more out than they're prepared to put in in production. They just can't.
Brian Walden
Let me make quite certain I've got you clear on this. Despite this stuff about tri-partite meetings, I get the feeling from you that you don't think that that's going to have much impact.
Margaret Thatcher
Oh please, in that case it's a false feeling, ah, because I do think, if you get to grips with the real issues, but just glossing over them won't. We've been afraid to talk about trade union power for four years. I remember when I came to see you before, I started to, I started again in the debate on the Queen's speech because I sat down and thought about this, and thought someone's got to grasp this nettle, dare I? And I did.
Brian Walden
All right, now let's talk exactly about that, about grasping this nettle. Let me take you through a few of the possibilities that have been suggested here, for, let's put it quite bluntly—Curbing the unions' negotiating powers to some extent, to redress the balance. For instance, a lot of people talk about having secret ballots before strikes. Now are you going to legislate to do that?
Margaret Thatcher
Can I take that in stages? We're prepared to legislate to have free secret postal ballots for the election of union officials and for secret ballots, but permissive, paid for by the government. It would be cheap at the price. I believe then, that with the number of responsible trade unionists, they then would demand those, and so [end p10] that's permissive. Postal ballots, which must be secret, either for the election of union officials, or for any major decision which affects the livelihood of their members, and of course a major strike does. Now you are going to say, “Am I going to impose that decision?” At the moment, I'm reluctant to impose it, until I see where I can get by giving the full facilities. There are other things we could do … Can you just, because there's one variation … But you would like to come first, yes.
Brian Walden
Well, you see, what worries me about that is this, if you leave it as a purely voluntary choice by the unions themselves, the people that you regard as the worst offenders won't have the secret ballots, will they?
Margaret Thatcher
There is another thing that I could do, without imposing it. Now we've not gone as far as this yet but it would be possible to say that you should only be able to get benefits, social security benefits, etc., as a result of a strike, if it is quite clear that that strike has been taken as the result of a secret ballot. Now that would be one possibility, without imposing it. We've taken no decision of that kind yet, but what I'm trying to do is say to you, I'm going to have postal ballots paid for, by governments. It'll be very cheap at the price. Before going all of the way to imposing a secret ballot, because it's not very easy to draft, we've had a go. Not very easy to draft all the circumstances when you should have at a secret ballot. Let's consider all other possibilities … that would be an intermediate one … please, we've taken no decision to have it yet, but all right, I am prepared to have tri-partite talks to discuss it, but never lose sight of the power, the fact if you have power, you must use it responsibly. If you have power, you must be seen to use it democratically, and don't flinch from that. I won't flinch from it, if asked to take a decision.
Brian Walden
Let's come back to something you said there, which I confess is plainly is, a new one on me. If you're going …
Margaret Thatcher
We do have new ideas in the Tory party, we have a lot of them and they are relevant. [end p11]
Brian Walden
Well, well, if you're going to withold social security benefits, in fact … no, let me say what I think you said … for people who may be on strike without having taken a secret ballot, that surely is going to require legislation, isn't it?
Margaret Thatcher
Oh, that would, yes, that would, and I think we do everything by persuasion before that. This is why, I'm not going into straight legislation, other than on postal ballots. There are a number of other pledges, for example to relieve the closed shop, to relieve some of the Employment Protection Act decisions, and to undo some of the things which were done by this government to increase the power of the unions. But you're not asking me about those at the moment.
Brian Walden
No, and I may come to that, but let me, I'm very interested still in this idea of legislation to withhold social security benefits, in the circumstances that you explain. Let me put another idea on the same lines. If a man goes on strike at the moment, he, and is paying P.A.Y.E., he gets an immediate tax rebate, either from his employer or in fact from the inland revenue. Now a lot of people have said that this is, in effect, financing strikes. Are you going to do anything about those tax rebates?
Margaret Thatcher
Point number one, ah, the employer is under no legal duty to open up his clerical department to pay back the P.A.Y.E., no legal duty at all, if he does it, it's by choice. If people want back tax from the Inland Revenue, they should do what you and I have to do. Go and apply and wait nine or ten months to get it back, or even eighteen months to two years. So he's under no legal duty. Point number two, one of the problems is, that the short term benefits, unemployment benefit, sickness benefit, social security benefit, are not taxable, so you've got, I think the silly position, under which your earnings are taxable, but your substitution for earnings are not taxable. So a chap who earns, say £80.00 a year, of earnings pays full tax on it, £80.00 a week on earnings pays full tax on it, a chap who gets his £80.00 a week, partly from earnings and partly from social security benefit is better off, because the part from benefit is not taxable. We are going to tax the short-term benefits, so that they are just as much a part of your taxable income as other things … and that of course …
Brian Walden
How are you going to do that? [end p12]
Margaret Thatcher
Well, it's been said for years that you can't tax short-term benefits. My goodness, they don't hesitate to tax pensions, which are also National Insurance benefits, and if anyone is trying to tell me that after thirty years of increasing office equipment and computers you cannot pick up these benefits on tax, then I just plain don't believe them. They've no difficulty if I'm paid a Royalty by ITV or BBC on picking that up and taxing it. They've no difficulty on taxing you, as you go from one employer to another, why in the world should they have difficulty on taxing you, merely because your benefits are paid by a government office. It is ridiculous.
Brian Walden
Well, that's going to involve legislation … .
Margaret Thatcher
Oh indeed, but ah … why do you think I'm flinching from legislation?
Brian Walden
Well, it's just … .
Margaret Thatcher
We've got the position, this government …
Brian Walden
I'll tell you why I keep asking that …
Margaret Thatcher
This government used legislation to increase the powers of unions, it would like to increase them even further …
Brian Walden
I'll tell you why I keep asking you about legislation, because a lot of people have been saying, “Oh, well, the Conservative Party are not planning any substantial legislation on unions.” Now you've [end p13] already told me two things this morning, which will undoubtedly in fact involve legislation.
Margaret Thatcher
The first thing, the social security benefits, unless it's a full democratic decision, is not a decision that I, has yet been taken. It is a possibility, and no more than that. Postal ballots are an absolute pledge, there are other things as well … .
Brian Walden
Now let me come back again, because I do think this is very important, the whole idea of taxing short-term benefits. Do I take it that …
Margaret Thatcher
That … that's a decision, yes … .
Brian Walden
You're really putting that forward, basically, are you, as a way of reducing the benefits that strikers can get if they choose to go on strike?
Margaret Thatcher
Oh, no, on taxation of short term benefits, no, that is making it taxable income. I mean if all you've got during a year are social security benefits, or unemployment pay, you're not going to come into the tax bracket at all, but what one wants to stop is people stopping work after nine months, and then going onto unemployment and wage-related unemployment, which is not taxable, that is totally wrong.
Brian Walden
But it would have the effect, would it not, of reducing the amount of money that strikers would have immediately available when they went on strike? [end p14]
Margaret Thatcher
Well they'd probably pick it up as they went back to work on the P.A.Y.E., it just depends how you did it.
Brian Walden
Yes …
Margaret Thatcher
I mean after all, when I get a Royalty from you … . ah, I don't well, I'm leader of the Opposition, I hasten to say, I'm not paid for anything other than my duties as leader of the Opposition and a member of Parliament, ah, we pay towards the end of the year, or frequently, it's picked up in your re-coding on P.A.Y.E.
Brian Walden
Yes, but I still want to stress this particular point to make quite sure that all the viewers have followed this. Of course eventually, any rebate that you're entitled to, you do get, but at the moment, strikers usually get an immediate rebate from their employer. Now what you're suggesting is in fact that they wouldn't get that rebate, and therefore they'd be worse off … .
Margaret Thatcher
Now there are two things and I do think it's important not to muddle them up. They get back P.A.Y.E.
Brian Walden
Yes … .
Margaret Thatcher
Because their income is below the calculation that would otherwise have held. There is no duty on the employer to open up his clerical department when everyone else is on strike. It amazes me that people expect the clerks not to strike, to pay out the P.A.Y.E., no duty on him, they in fact should get the rebate from the tax office later.
Brian Walden
But it's hardly the point is it, because what, what in practice happens is that they more or less force the employer to pay them the rebate [end p15] By being very troublesome about it.
Margaret Thatcher
Why should they expect the clerks to go in to pay it when they're out on strike, it does not always happen …
Brian Walden
But they do do it though don't they …
Margaret Thatcher
Yes, I'm afraid sometimes they do, but I'm saying there's no legal duty on an employer to do it. After all, if people stay honestly and earnestly and conscientiously at work, they will pay tax on every penny piece of their earnings. What I am saying is, if you go on strike, or you leave a job say after nine months and you pick up unemployment benefit, it's absolutely wrong that you should be better off than a person who's stayed conscientiously hard at work. I'm really in favour of the conscientious hard workers.
Brian Walden
But there is an important point involved in this, of general application, not that I'm not suggesting that what you've already said is not in a way quite surprising, almost sensational perhaps … but …
Margaret Thatcher
Oh no, no there's nothing sensational about it, please don't, you chaps use ‘sensation’ far too easily.
Brian Walden
I think it's a radical suggestion, shall I put it like that? But there is a general point involved in it, and we keep having this disagreement on this point. Let's suppose I was an employer, and came along to you and said, “All right, Mrs. Thatcher, it's quite true, I don't have to give them their rebates, but, my god, you don't know much about industrial relations if you think I could get away with not giving them their rebates, unless you legislate, so that I can't give them the rebates, now why don't you [end p16] do that?”
Margaret Thatcher
No, why should I? We live in a free country. He's a responsible person and should make his own choice, and if everyone is going to come and say, “I'm not going to make a choice myself, unless you legislate and tell me I've got to do it,” then we're well on the way to a totally different state to anything we've ever known. No Do you know, there's a marvellous quotation of a—I think it's George Bernard Shaw, and he wasn't exactly one of us. “Liberty means responsibility. That's why many men dread it” Yes, Liberty does mean responsibility, and the choice is his. He may prefer to make it, it won't make any difference at the end of the year. If you have the short-term benefits taxable.
Brian Walden
But I don't really see, you see, what this great philosophic difference is, between … . now, wait a moment, between, for instance, taxing short term benefits, which will involve legislation, and while you're at it, passing another bit of legislation, which says “and by the way, employers can't in fact give you tax rebates, and neither will the revenue until you go back to work.”
Margaret Thatcher
But Mr. Walden …
Brian Walden
Now what's the difference?
Margaret Thatcher
I just said I'm not going to pass legislation on tax rebates. Employers have the choice, you and I together …
Brian Walden
Do they really? [end p17]
Margaret Thatcher
Of course they do … .
Brian Walden
You talked yourself about the imbalance in bargaining. Now you know employers don't have the kind of choice you say they do.
Margaret Thatcher
Employers have a choice and they must exercise their choice. If they wish to pay it out, so be it, but if you tax the short term benefits, the amount of tax you pay at the end of the year won't differ, according to whether you've honestly stayed at work and earned it all, or whether you've had it as unemployment pay. Now, if you're one of the real unfortunates and can't get a job, then your unemployment pay ought not to bring you into the taxing bracket at all, because the threshold should start above that. So it won't harm the really unfortunates, but taxation of short term benefits, I think, is just and reasonable. After all, they don't hesitate to tax the long term benefits like pensions. Pensioners have to pay tax on their National Insurance benefits. But you said earlier, “Is there any difference between you and Mr. Callaghan?” A tremendous difference, money supply isn't everything; if you get your money supply wrong, look, there was no inflation in a barter society, when you exchange goods for goods, there's no inflation. There might be a price rise in something one year, because a harvest fails, it'll be corrected when the harvest is good another year. There is no inflation in a barter society. It's only when you introduce money that you get problems, and then you find the tendency of governments is to promise so much that they have to debase the coinage, and that's what inflation is, it's a fraud on everyone whos saved, because they debase, they clip it or they substitute copper for silver. Now, money supply isn't everything, if you get it wrong, you'll get nothing right. Further, you accuse me of leading to unemployment—I have not ever led to unemployment in my policies. It's Mr. Callaghan's policies that in practice have led to unemployment. He will take far too much in government expenditure. The Labour Party doesn't believe in leaving people's earnings in their own pockets in sufficient quantity. These are things that enormously, they believe in government power over everything. I believe in freedom of choice. [end p18]
Brian Walden
Let's come back to the issue that I suspect is on people's minds most this weekend, and indeed may well determine the result of the next election. The questions that everybody keeps asking, what is going to be done about the unions? Now you've mentioned certain things, they seem in some ways peripheral. Let me tell you why I think so, and ask your opinion on a current dispute. Take the lorry drivers' strike. That's having a devastating effect, can't move food from the docks, prices are going up, there's talk of farmers having to slaughter livestock, etc.. Now none of the things that you've suggested in fact would have very much impact on that, because the strikes so devastating. If you were Prime Minister, what would you do about the lorry drivers' strike at the moment, which is likely to become official next week?
Margaret Thatcher
The Government's job is to see that essential services are continued, and they must use all means in their power to do so, their duty is to the population as a whole, but I also expect a number of Trade Unionists to be at their leaders. Come back to this, 11 million trade unionists, they're not sort of set aside from other citizens, they're the same as the rest of us. Those people who are on strike are a small proportion, they are damaging the rights of their fellow trade unionists just as much as they're damaging the rights of those of us who are not trade unionists. Why don't the rest go to Len Murray, and to their trade union leaders and say, “Look, what are you doing to protect our interests because …”
Brian Walden
But, Mrs. Thatcher … .
Margaret Thatcher
Because, can I just make the fact … [end p19]
Brian Walden
Well, the fact remains that they don't do that do they?
Margaret Thatcher
Not yet, …
Brian Walden
We shall wait for ever if we wait for that to happen.
Margaret Thatcher
Oh, no, no, no, we shall not, oh no, we shall not, the fact is that under trade union powers at the moment, we've got to the stage when each and every trade union has more power to inflict damage on others than it has power to protect its own members from damage inflicted by other trade unions, that seems to me ridiculous, that was not what the trade union movement was started up for. Why don't they look to their ideals again? That, this is exactly why I say, is the debate on trade union power. People cannot go on paying more and more. Look, another point you've left out, critical … production's no more than in 1973 … .
Brian Walden
But let's turn back to this lorry drivers dispute … .
Margaret Thatcher
Production's no more than in 1973, but we're paying ourselves twice as much, so the value of money's halved, people cannot pay any more.
Brian Walden
Let's come back to this lorry drivers dispute. Do I take it from what you've said, namely that the Government has the responsibility to make sure that these supplies go through, that you'd declare a state of emergency and use the troops? [end p20]
Margaret Thatcher
You must in fact, you must keep the essential supplies through to your hospitals, to your old people's homes, to your schools, and also, I must say, I would be pretty critical of any unions who deny and who strike against the weakest members of society. Now lets not be mealy-mouthed about it, of course, and don't think that there's anything unusual in that, the troops were used to break to, to, break the firemens strike ultimately. The Governments duty is to see that essential services are kept going, there can't be any doubt about it.
Brian Walden
All right, now lets come back to this general thing about trade union powers, because I think, er, you and many other people think that this is the key to the problem.
Margaret Thatcher
Oh, it is undoubtedly … .
Brian Walden
All right, then, have you any other proposals at all, in regard to diminishing, or if you like well diminishing trade union power, as you put it, redressing the balance between the employers and unions?
Margaret Thatcher
We've started, on the powers of the unions over their own members, this is why I say postal ballots for the election of union officials because they are secret. We also fought, as you know, the enormous increase in powers that Michael Foot and Jim Callaghan put through in 1974 and 1976. In 1974, we could introduce certain safeguards. The moment the Labour party got a majority, they introduced the closed shop, you could have sympathetic strikes, even if they were in sympathy with overseas things. So … .
Brian Walden
Are you going to change it …? [end p21]
Margaret Thatcher
One moment, they removed the right of a person to have compensation for loss of his job because of a closed shop, we shall restore that by law. They removed… .
Brian Walden
Who will pay this compensation?
Margaret Thatcher
It'll have to be by the employers, because the employers decide, along, with the unions whether there shall be a closed shop. At the moment a chap can be sacked because of a closed shop, even though he's done a jolly good job for thirty years, and there's a case going to the European court about it, because it couldn't happen in Europe, it can happen here, because the difference between trade union power in Europe and here is that these, our trade unions, have powers that no other unions in the world have, so that's compensation. He must have right of appeal to a court of law, if a union won't allow him in or if they expel him. The Labour Party removed that right. Now that's three things that we're pledged to do. Now there are a number of other things under the Employment Protection Act …
Brian Walden
Yes.
Margaret Thatcher
There are a number of things about the terms of reference at A.C.A.S which are are perhaps not wholly impartial, there are a number of things about unfair dismissal. As you know, employers say they spend a tremendous amount of time at those tribunals and they daren't take people on. The period of time under, in, in which, after which a person can take an employer to a tribunal, at the moment is six months, we'll need to look at that, it may be too short, we may need a longer period. There is a section, section 11, which people are using to get round any incomes policy, any pay policy, because what section eleven says, if someone else in the area [end p22] is doing a similar job to you, you can have the same pay, regardless of the condition of the company. That is ridiculous. Now that's a number of other things that's quite a start, and I don't want to get too detailed, because it sounds dull, but I just want to say enough to let you know that we have considered these things, and we're pledged to do things on some of them, and on the big things, we are going to discuss them, and have the great debate with the unions, the employers, the small businesses and, don't forget, it was the small business which kept people going during the bread strike and they didn't put up their prices.
Brian Walden
Well, far from being dull, it sounds on the whole to me to be reasonably comprehensive, but admittedly it's got to be a matter of judgement. But I do see one great problem with it and I put it to you now. If you do that, or even a half of it, the unions are going to resent it and you may find yourself in a confrontation, do you expect that?
Margaret Thatcher
Do you know, I think, you underestimate, if I might say so, the tremendous feeling of many, many members of trade unions. Look, I come back to it again and again, 11 million members of trade unions, many of them, when surveys are done, and that's a poll you didn't put on, say the trade unions have too much power, and I believe that if you did a survey again among trade unionists about the power of trade unions, that is the conclusion they would come to. And many of them, who else can they look to, other than Parliament, to have these questions discussed? Parliament put unions above the law, it put them above the law to use their powers responsibly, provided they use them responsibly, then we don't need to interfere, for Heaven's sake if something's working well, if a firm and company is working well and can afford to pay its workers more, leave them.
Brian Walden
But you don't know if it is working well, do you … . [end p23]
Margaret Thatcher
At the moment there are some spheres in which the unions have the power to hold the nation to ransom, gas, electricity, water is one, we I'm afraid removed certain provisions in that Act, those workers were not allowed to break their contract just without notice, we removed that. It may be that you have to say, that there are certain services which are so vital, so vital, that you're not allowed just to withdraw your labour under the same terms and conditions as other unions but …
Brian Walden
You'll take … .
Margaret Thatcher
… then you'd have to make certain that the pay of those people was looked after. I'm not suggesting anything outrageous.
Brian Walden
No, but let me make it quite clear what …
Margaret Thatcher
One moment, let me make it quite clear, the army can't withdraw their labour, the police can't withdraw their labour,
Brian Walden
Yes.
Margaret Thatcher
We've been the party that's insisted on looking after …
Brian Walden
But who are you going to add to this list?
Margaret Thatcher
The people who can't withdraw their labour.
Brian Walden
This sounds interesting, who are you going to add to this list … .? [end p24]
Margaret Thatcher
Again, there used to be in legislation the public utilities, now the Donovan Commission recommended that that stay as it was, it so happened they were criminal sanctions, and we didn't like criminal sanctions, so we took them off, but again, we're going to have to look at it with the unions, if you've got power to hold the nation to ransom …
Brian Walden
Yes, but … .
Margaret Thatcher
If you've got power, then it maybe, and if you use it in a way against the sick, the elderly, the children, then we have to look at that power, of course we do, and we have to find another way. Do you know, those provisions on public utilities were only removed by us, in the Industrial Relations Act?
Brian Walden
But, let me come back to confrontation …
Margaret Thatcher
I don't like criminal sanctions …
Brian Walden
No, I understand that, but let me come back to confrontations …
Margaret Thatcher
What is confrontation?
Brian Walden
Well …
Margaret Thatcher
They're confronting the public, the sick, the elderly … [end p25]
Brian Walden
All right, but your the Government, you represent the public and you will be asked again and again and again this year, and you may win or lose the election on whether your answer's believed or not, if you get into a confrontation, and a lot of voters think you will, even if you don't, what are you going to do?
Margaret Thatcher
A confrontation, with whom? One moment …
Brian Walden
The Trade Unions.
Margaret Thatcher
Trade Unions. Eleven million. Do you think I'm going to be in a confrontation with eleven million …
Brian Walden
You might.
Margaret Thatcher
No, no, no, things have changed …
Brian Walden
You were in 1971.
Margaret Thatcher
Things have changed, things have moved a lot, public opinion has moved a tremendous amount, you would have asked me that question about the bread strike, had I'd been here three months ago, because you would have said, the bakers will withhold bread, they've a closed shop, oh, no, some trade unionists went in, conscientiously, the small businesses came, cooked the bread, baked the bread, didn't put up their prices, look. Please, public opinion has changed tremendously since 1971, it is ready for things which it is was not ready for … [end p26]
Brian Walden
That may be true … .
Margaret Thatcher
There are more trade unionists, and they are ready to do things …
Brian Walden
Yes, but that may be true …
Margaret Thatcher
That they were not ready to do before.
Brian Walden
I think in that sense you aren't being wholly frank with me.
Margaret Thatcher
Oh, I am.
Brian Walden
You may be right, that the public believes all sorts of things. What I'm trying to put to you is, that the public may, the trade unions may not, and they may say, “We're not having it, we don't care what the public wants, or what the government wants.” Now if they say that, and they act on it and there are sympathetic strikes and blacking, what are you going to do?
Margaret Thatcher
At the moment, there's a case about sympathetic strikes before the courts, an extremely important one. Let me tell you what I'm not going to do. This government increased the capacity for sympathetic strikes in the 1976 Act. We tried to hold it, and say you couldn't have sympathetic strikes with things overseas, unless they've increased the powers. I am saying to you and I will say again and again, my duty is to the people of Britain as a whole.
Brian Walden
And will you have a referendum for instance? [end p27]
Margaret Thatcher
Unions have been given enormous powers, by Parliament, Parliament's placed them above the law, anyone who does not use power responsibly must expect its position to be reconsidered by Parliament. Referendum, you asked me about referendum, we discussed it last time, since then I've had a study group on it, it's reported completely, it was published, I think, in August and September, er, we haven't made a final decision on its recommendations, but all the recommendations are there for everyone to read, we have considered it, and they suggest that we do in fact have a general enabling power for referendum, in a bill, when we return.
Brian Walden
That's …
Margaret Thatcher
Now, I stress, we're still discussing it, we've done the work, published it, there are the recommendations.
Brian Walden
Mrs. Thatcher, thank you very much indeed. Well, that's all for this week, good bye.