Political Editor Hugo Young reports on an encounter with Mrs Thatcher

The view from the shop

• The Prime Minister said: “You saw the last thing I did in there was to switch every light off?” I replied, truthfully, that I had particularly noticed it.

“And why did I do it? Firstly, I'm on public sector money and therefore I'm bound to be careful. But also I know that's what every person has to do when they walk out of a room in their own home.”

This exchange, near the end of our interview, tells almost all there is to say about Mrs Thatcher's private state of mind 15 months after coming to power.

To begin with, it shows how accommodating this fearsome politician, the bane of many of her ministers, can be to interviewers. The room where the lights were on was her study in 10 Downing Street, a handsome but somewhat gloomy place which she does not seem to like, mainly because the sun is blocked out from it by the jutting wing of the next building.

So, to please our photographer, she moved us smartly into a grander, well-windowed room nearby, the white drawing room, where, since it was 10 am, the lights did not need to be on at all.

Secondly, Mrs Thatcher's obsession with the intrinsic wastefulness of every penny spent on mere administration now extends to her own business expenses. Throughout our talk, she indicated that her anxiety about public-sector excesses had taken on many of the features of a religion.

Again, more than a year's hard labour as First Lord of the Treasury has not altered her belief that by far the soundest economic laws are those which every housewife knows: you can't spend what you can't earn. Or those of the Grantham grocery: you can't earn what you can't produce and sell.

Thus, the moral of the switched-off lights was not, as you might expect, about energy conservation. People switched off lights because electricity is very expensive. And why is electricity expensive? Because domestic coal is too dear. Hence, by implication, it is the consumer switching off her lights who can force the miner to ask less for his labour and the National Coal Board less for its coal. Q E D.

Note, finally, that the Prime Minister personally went round turning out these lights. In the White House or the Elysée this would surely never happen. A lighting-flunkey would appear. Number 10 has very few flunkeys. Its large, silent, unpeopled rooms are a monument to the under-manning this government cares so much for.

For the same commendable reason, no doubt, the Prime Minister said: “If you want coffee, it'll have to be instant. We only have instant coffee round here.”

We Began with unemployment. A year ago, had she honestly expected that it would now be standing at almost two million?

“No. But then I never myself forecast unemployment. A year ago we were in the middle of the increase in the oil price. It went up more than 100 per cent in 1979. But I knew that if we were to get productivity up, unemployment in the interim would be bound to go up. I also knew that we must deal with structural change, because for too long we have gone on pouring money into keeping yesterday's jobs going.”

Other countries, like Germany, had dealt with their steel and car industries when the writing was on the wall. Britain had not. “If we'd got the steel industry slimmed down earlier, you'd now have a hard, fit, healthy, efficient steel industry.” This now had to be tackled. The fact that our need for structural change and a competitive level of productivity happened to coincide with a world recession was just bad luck, or, rather, bad management in the past.

But, I asked, in view of the recession might not some relaxation of Britain's own domestic squeeze be in order?

“No, no, no!” , she insisted. There then followed the first [end p1] of several homilies on the vices of printing money.

At one point I suggested she had sometimes made unemployment sound like a therapy, and was about to ask whether an unemployed person would see it like that when she fiercely interrupted. “Oh, I have never spoken of unemployment as a therapy.”

“For the economy?”

“I would never use the word. It may be [long pause] an unpalatable consequence of fighting inflation. It needn't be so bad, I might tell you, if we weren't spending so much in the public sector. That's why you constantly hear me say we've got to fight the public sector for the sake of getting new jobs, genuine jobs. Fight the public sector down on expenditure. And we haven't really succeeded there.”

At this point, the full extent of Mrs Thatcher's desire to assist interviewers became clear. Brushing aside several half-put questions on this point, she said, with a winning smile: “I am trying to give you what I genuinely think—and you can fix the questions.” Later, of course.

This procedure has certain drawbacks, but before I could challenge it with a really searing interrogative, the prime minister volunteered something surprising: a revolution in civil service objectives, as one contribution to public-sector reform.

“We really must pay more attention to sound management as an objective on its own. It's not enough to support ministers, provide supreme service on parliamentary questions and debates regardless of cost—triple, triple insurance in case you are ever inquired into by the Ombudsman. You have to get supreme management and efficiency, and we haven't given enough attention to that.”

“Are civil servants resisting this?”

“No, it's a change of attitude, not that they're resisting. Throughout the Labour government the more they employed, the better it suited Labour. Now I know we simply cannot go on that way because every single one of us, including me, depends on a flourishing market sector.”

This, of course, is where jobs are very short. What would she say not to a journalist but to a young school-leaver whose first experience of adult life, under her regime, was about to be the dole queue?

“The first thing is to try and get a skill. Most youngsters could get a skill and the idea that they couldn't is absurd. They sometimes come out of school without the basics, and that's a pretty awful reflection on 11 years' compulsory education. If they haven't got them, they'd better acquire them.

“Secondly, there are quite a number of skill-centres still which are not full. Yet we could do with those skills. They can go to skill centres.

“The third thing is that there should be the maximum number of places under the Youth Opportunities Programme. I'm sorry it hasn't got a more attractive name. There are 250,000 of those opportunities. We are spending £450m altogether on training. That's larger than was planned, and than the last government was spending.”

The Prime Minister then revealed an encyclopaedic knowledge of ICI schemes and GEC schemes, and the criticisms business makes of the government schemes. But, as ever, personal experience is what she remains most open to.

“I heard on the radio yesterday that staffing in hotels is frequently from people who are neither British immigrants nor from the EEC. They're still coming in. This is ridiculous. I'll tell you why. I know from having been Education Secretary that we do some marvellous hotel and catering training courses, and our youngsters should be getting those jobs.”

By now the Prime Minister was thoroughly relaxed. “Stop me if I'm talking too much,” she said, and for five seconds I believed she meant it.

We turned to the problems of production. “Some of my union chums tell me that if management are clear and decisive and make it quite clear they are determined to get what they want, and have a rapport with the people they are explaining it to, then they will get it.”

Mrs Thatcher may have acquired a few union “chums,” even among the leadership, although they probably keep pretty quiet about it. Their reported verdict on management is the second golden thread, along side monetary control, of an economic philosophy from which, as must by now be perfectly clear, she shows no conscious sign of deviating.

“I'm very, very critical of management. But look—for the last eight years, and even during our time, they haven't been able to determine the pay of their own people or the price of their own products. Prices, incomes, dividends, they weren't allowed to. They streamed along to someone else to say ‘Can I do it?’ They couldn't say: ‘I really must pay my skilled people extra to get them.’

“All of a sudden, it's up to them to manage. All of a sudden it's up to them to be enterprising.”

People actually liked the tough line this led management to take, because “in their hearts they know that's the way they're going to get through to profits. And that's also why what I'm doing—what I'm insisting on doing—finds such an echo in the hearts of many people.”

Overmanning and restrictive practices were deeply unpopular. “It's ridiculous that there's an argument about lagging at the Isle of Grain. It's ridiculous that every power station is late. Quite apart from your Dungeness, 11 years late. Or every one of the Polish ships, delivered late. Or Sealink—every ship late. From heavily subsidised shipyards.”

The answer was more democracy, and more personal responsibility. “I really am trying to bring into British life everything I deeply believe about democracy. Which means facing the consequences of your own actions, like overmanning.”

The Prime Minister conceded that not all the faults of the British economy were caused in this way. World recession and the exchange rate—which, once again, she said she could do nothing about—were important factors in closing down some businesses. I wondered whether she could really understand what it meant to a community when a factory closed.

“Of course, Every time, I think, gosh, what would I have done if my husband had come home and said we've got notice and there just don't seem to be any places to go.”

But sometimes it was the workers' own fault. “Sometimes that factory would not have closed if it hadn't paid out too much in wages without getting the extra production. Sometimes it would not have closed if other people with their wages had bought British instead of Japanese.”

These other people, however, weren't saying they had to buy British. They were asking what was best value. “People who've taken out more than they should have done as producers are rejecting the products of their fellow countrymen who've done the same thing. There's nothing I can do about that, except to say, if you'd done like the Japanese and had your extra pay related to extra output, wouldn't you still be in business?”

Time and again, analogies from private conduct seemed the best guide to public policy.

Public sector pay? “What do you think companies would say, fighting for survival? They'd say 10 per cent is too much. They'd say you're jolly lucky to have a job. Stick to it. Now I have to say to the public sector, this is the amount of money available. That's what any business would do, even The Sunday Times! And any housewife.”

Or local authority excesses? “The vast majority of people simply don't understand why government finds it so difficult to get spending down when they see waste all over. They see enormous increases in pay going to the town hall and Whitehall and they say why?

“Deep in their instincts,” the Prime Minister deliberately added, “they find what I am saying and doing right, and I know it is, because that is the way I was brought up. I'm eternally grateful for the way I was brought up in a small town. We knew everyone, we knew what people felt. I sort of regard myself as a very normal, ordinary person with, all the right, instinctive antennae.”

Against this degree of self-belief, many of the waves of current political argument seem to crash without avail. I didn't have time to ask the Prime Minister how she had managed to say in her speech in the confidence debate that “no U-turns are available” , while in the selfsame speech doling out money to Dunlop for all the world as if she were imitating Ted Heath. But I'm sure she would have dismissed it as a trivial deviation.

I did tell her I was struck by how often she had changed her mind, on large matters as well as small. This clearly astounded her. “Go on,” she said with a level gaze. I said I was thinking of Rhodesia, to begin with.

“I think you put it wrongly. I'm always prepared to listen, and not merely as a matter of courtesy but to look at all the facts and try and reassess on the basis of things as they are now. Always, always, always. The office will tell you. One of the things I say, first find the facts, always—what are the facts.” Which is why she did change her mind over Rhodesia.

By comparison with the national support she is convinced she enjoys, any talk of possible social unrest next winter seems trifling and is conceived of only in terms of far Left extremism.

“There are some people who are deeply hostile to everything I believe in because they don't want to work a free enterprise system. They want to destroy it. They are out to create anarchy and chaos because they don't want recovery under this system. They want a closed, tight, controlled system run by government, where everyone will have to depend on government for their housing, their jobs, everything.

“There's nothing I can do about them, except to try and show them for what they are. But the vast majority of people don't want that.”

Beyond next winter there is 1984 and an election which, despite the ever-more-fevered claim of some ministers that theirs is a 10-year not a five-year programme, still has to be fought. How confident was she that by then there would be something to show for all this, in people's prosperity. Her answer offered no hostage to fortune.

“I believe there will be very much better prospects. By that time people would hate to go back to an intimately controlled economy—sanctions on firms and so on. They will know they can buy their own houses—the way to become a really independent person. They will be able to look forward to a different kind of life to the one they were having at the end of socialism.

“I believe this will generate a greater prosperity. Whether it will have succeeded in doing so by then, I don't quite know, because of these two things. We've got to get better productivity. And we've got to get our big nationalised industries right. As a matter of pride.

“Other people still believe we can do it. But, if I give up, we will lose. If I give that up I just think we will lose all that faith in the future. We'd lose the justification. I hope that doesn't sound too … arrogant.”