Nick Lloyd, Daily Express
I wonder if, just to start Prime Minister, we could discuss the two subjects of the day. The main subject I think is your visit to Russia, but just before that, football hooliganism, just to kick off with. It is four years after Heysel and yet we still have these dreadful and appalling outbreaks of behaviour by Englishmen allegedly supporting a national team when it travels abroad. How do we stop this? I see the Home Secretary has already ruled out taking away their passports because it is extremely difficult to do and anyway they do that in Eastern Europe and it does not work terribly well. Do you think the Football Spectators Bill is strong enough to actually begin to eradicate as far as we can this spectre? [end p1]
Prime Minister
You certainly cannot take away a passport and you are not entitled to take away a passport. You cannot say to someone: “We are going to enquire of everyone where they are going to go and if you are going to go to the match we are going to take away your passport”. That is not freedom, you cannot do it.
We did as you know ask the Football Association to look to see whether they were wise to play friendly matches in Europe, you know they did not come under the general FIFA authority. Apart from that, the only thing we have got in the Football Spectators Bill is if people have been convicted of offences of football hooliganism …
Nick Lloyd, Daily Express
Which most of them usually have I think.
Prime Minister
… well, if so, then we can insist that they have to report at the time when an overseas match is played. So if they have been convicted we can get at them that way but that is because they are a convicted person, convicted of an offence like that.
Otherwise I think football has to consider whether we are ready to return to Europe, quite apart from whether we are allowed to, whether we are ready to return to Europe. [end p2]
I feel strongly about it. You must. Almost everyone in Britain feels strongly about it, that this is a terrible disgrace. We have dealt with the convicted ones when we got the Football Spectators Bill wholly through, but not the others.
Nick Lloyd, Daily Express
They seem to indulge in tribal rites. They seem to get together, as perhaps young men do.
Prime Minister
But it is uncivilised behaviour.
Nick Lloyd, Daily Express
Yes.
Prime Minister
It is behaviour totally and utterly without thought for anyone else.
Nick Lloyd, Daily Express
Yes. There has been a suggestion, I think Sky Television are playing it rather heavily, that you would consider asking us to think of England withdrawing from the World Cup. They may have got that wrong, but is that a … [end p3]
Prime Minister
I think first they have to consider whether they should withdraw from other friendly matches, what we call friendly matches, because if we get this again we shall be once again covered with shame. I think it is their first duty to think about the World Cup, it is the Football Association's first duty.
Nick Lloyd, Daily Express
Yes.
Prime Minister
Why, for example, at football should you say that the spectators must be segregated? That is astonishing in itself, is it not?
Nick Lloyd, Daily Express
Well, football needs to get its whole house in order in a way, they need to get all seating stadia.
Prime Minister
I think they need to get very much better stadia. When you look at the amounts which they in fact pay for transfer of players you wonder why in fact they have not first and above all first put it into having really good smart stadia, all seat stadia, with things for families, just really as they have in the United States. [end p4]
Nick Lloyd, Daily Express
Yes they have stadia where you feel safe and happy.
Prime Minister
But if you have bad conditions I am afraid you may well get bad behaviour, not that that excuses the bad behaviour ever.
Nick Lloyd, Daily Express
Because I think it has been better over the last season but it does seem to break out again every time England travel.
Prime Minister
It is not fair to the overwhelming majority of honourable, decent football supporters who want to go and see a decent game played decently and to take their families. It is not fair that the hooligan minority should stop that and that the hooligan minority should in fact focus in on football to pursue the very worst of their violent tendencies.
Nick Lloyd, Daily Express
It is extraordinary that it breaks out in the way it does. One wonders whether if we still had conscription - I sound like an old man - this would happen? [end p5]
Prime Minister
I do not think that would necessarily stop it. Do not forget that we are not alone in Europe in experiencing this phenomenon.
Nick Lloyd, Daily Express
Denmark of course and Sweden themselves.
Prime Minister
And Germany.
Nick Lloyd, Daily Express
And Germany.
Prime Minister
Germany has conscription. Does Holland have conscription?
Nick Lloyd, Daily Express
Yes it does.
Prime Minister
You see we are not alone in this phenomenon at all. We feel deeply about it, I think so do other countries. But it is bad in other countries as well. [end p6]
Nick Lloyd, Daily Express
The ID cards too. Just briefly, I happen to agree with them myself but I was talking to the Deputy Chairman of Arsenal only the other day, David Dean, who is opposed to them, and he said: “Well look what happened in Denmark where at the beginning of this season they tried to have a sort of similar system introduced and the police have found that not enough supporters when they arrived had the cards and so they had to let them in anyway”.
Prime Minister
I think that the whole of football has got to stop sort of throwing up its hands in horror and saying: “Look, we cannot do this, we cannot do that, we cannot do the other”.
We have all got to do whatever we can to get it right because it disfigures the British reputation. It is not good saying: “We cannot do this, we cannot do that, we cannot do the other”, we have got to have decent stadia. They pay enormous sums for football transfers. They get very considerable subventions from the football pools in order to improve their grounds, to get them up to safety standards which is absolutely vital, but the majority of people who want to go and watch football, the supporters want to go into decent conditions and to be certain that the conditions do not attract the very worst people. They want to be certain that the overwhelming majority of people are going to behave. [end p7]
Nick Lloyd, Daily Express
I think the public are behind you on this, do you not?
Prime Minister
And it is no good saying what we cannot do. We have got to sort out what we can do and everyone has got to do their bit.
Nick Lloyd, Daily Express
Yes, it has to be a joint enterprise.
Prime Minister
And I believe firmly that football membership cards would be a great contribution. You know David Evans of Luton really did wonderful things when he was Chairman and I remember how people were behind him. He took a different view, he said that there should be no away spectators and when your own team is playing away you watch it from your own ground on a massive screen and the people come and watch your team playing away and then they have various amusements for the children at the same time.
Now that may be one solution, there may be others. But we do not have this thing the world over and we have got to combine and say: “How should we do it?”, not “Do not do this, do not do that, do not do the other”. [end p8]
Nick Lloyd, Daily Express
Must be positive in other words.
Prime Minister
Must be positive. There must be a will and resolve on the part of everyone connected with football - the players, the people who run the clubs, the people who go - to restore it to a decent game to which families can go, and say: “What can we do?” and stop being negative but be positive about it.
Nick Lloyd, Daily Express
Yes, and that should solve the problems.
Prime Minister
Yes, yes.
Nick Lloyd, Daily Express
Talking about being positive and going on to your visit to see Mr Gorbachev on your way back from Japan, I think with the attempted mass exodus of the East Germans at the moment through Hungary, etc., and all the problems in the Baltic States and the nationality problems, what do you think we can positively do to help perestroika and the growth of some kind of democracy in Eastern Europe? Can we, for example, if we took Poland as a starting place, we have a new Prime Minister, if they could get the IMF in place are we then willing to do a Thatcher Plan or a Marshall Aid Plan to help? [end p9]
Prime Minister
We are trying to do some things before there is an IMF Plan in place because in fact it takes time to get it in place. They have got a lot of debt that ought to be repaid this year. They cannot repay it, we all know that, and so we said we will not wait for an IMF Plan to be in place, we will reschedule that and we have said we will give you five years grace on the monies that were otherwise due this year. The United States and France have done something similar so that gets rid of their immediate repayment and if need be for 1990 would have to do a similar thing. So that gets rid of one immediate thing this year.
The second thing that the Poles let us know about was that they were short of meat and short of food. I reported this because it happened to come to me first in the room next door when their economists came to see me. I reported it at the Madrid Summit and said: “Surely either we can use some of our surpluses or acquire some meat to send to them because if you want to raise the morale of a people you obviously do not want them to be short of food and it is something that we could do”.
We agreed beyond Europe, we agreed at the Economic Summit, which of course includes the United States, Japan and Canada, and we set aside a considerable sum of money and that is being done through M. Delors and the Commission because they are coordinating the whole thing. So that should help. [end p10]
Nick Lloyd, Daily Express
So there is some short-term help already?
Prime Minister
Short-term help already in the pipeline. And the third thing we said straight away is: “Look, your people are obviously under a communist system, they have all received instructions, they are not used to learning how to manage themselves, how to make decisions and on the basis on which you make decisions.” So we have allocated £25 million at the rate of £5 million a year for management training. We can do it there or we can get them here.
We sent over our Minister of Trade to see what we could do with joint ventures. But you see so much of their business is nationalised and you cannot have a joint venture with a nationalised industry so they have got to start to privatise them. When you start to privatise them someone has got to know how to manage. Now we are doing it, France is doing it, the United States is doing it.
Now all this is ahead and we want them to know that it is vital to us that Poland succeeds. This is the great first experiment of going from a totally communist government to a government led by Solidarity.
So this we have said is ahead of getting an IMF programme. It matters that they get a good IMF programme because the IMF are full of people who are used to doing this kind of work. The IMF will guide them as to what they have to do. They have got problems with inflation, they will have all kinds of problems. [end p11]
Nick Lloyd, Daily Express
How long does that sort of thing take to set in place? [end p12]
Prime Minister
I should think it will take over a year to do, but in the meantime this is why we all recognise we have to do interim help and then after that they still have these enormous sums gradually to repay and if you just pile in more credit it will go to just the same place where the last lot went, not being properly used. You will find that you gave them credit, for example, on things that were exported; we were helping them to build a tractor factory and the credit was given and the factory was going to build tractors for Poland and tractors to export. Well, they are not born and bred in trade and in fact producing the right piece of equipment either internally or externally and it did not work, so that money is gone.
If credit comes easy, it is easy come, easy go. Then you spend it on the wrong things. They spent that and it has not profited them as they thought it should because they do not know about business. In a Communist country you have to buy what that produces and you are able to export it, so there is no point in doing big credit until they have got things right. [end p13]
Nick Lloyd, Daily Express
It brings up the question of can they change the system sufficiently to a market economy?
Prime Minister
They are trying to do that and that is why we are helping them with management. We will try to help them with joint ventures and when they have got the IMF - and the IMF will teach them a good deal of this - then there should be quite a good deal of help, I believe, going in grants through the World Bank to help them to get things into place because it is important - and we all feel this - that this great change that is taking place in Poland from a Communist-led government to a Solidarity-led government should succeed and I think they are being very wise. They know that it is difficult to turn from a movement which has constantly criticised and protested with justification against all the oppression, now to turn round to be constructive and has to turn round to create the wealth before you can make extra demands upon it and that is a very big change and that is why we are doing immediate help: the food to raise morale, the management training, the rescheduling of debt and a five-year period of grace is quite important to them. Then they will want and I think get more help from us all after the IMF programme is in place. The IMF programme is important to make certain that things get on a sound footing. [end p14]
Nick Lloyd, Daily Express
Presumably you hope to persuade Mr. Gorbachev to give them his blessing, which he has up to a point anyway, but as far as he can?
Prime Minister
I think that Mikhail Gorbachevhe has indicated that if the government involves some Communists apart from that it is a kind of internal matter and I think that President Jaruzelski has also handled it very well. He totally accepted the result of the elections and he agreed that he would stand as President and I think that was right and he was elected with the right number of votes and I think, therefore, that they are all roped in so that they cannot internally start criticising one another - they have all got to find now the right way through and serve the Communists in the government and Solidarity too.
Nick Lloyd, Daily Express
In some ways, if Poland is successful it would act as something for everybody else to try and emulate in the Eastern Bloc probably? [end p15]
Prime Minister
Yes - and Hungary too, because Hungary is running an almost plural system, a partially plural system, in politics. Hungary has been able to produce more food than Poland. She just has. There was more food when I went to Poland, much more food, but she is still having some economic difficulties for the same reason: that people who have always taken instructions as to what to do cannot suddenly turn round and know what to do and quite naturally they are fearful of making the wrong decisions, so you get a gap between changing your system and getting the benefits, you always do. Do not forget that on a very different scale, it was very difficult for us when we first came in because you had to stop a lot of what was going wrong. It is like running a great big ship: it takes time to stop it and then to start to turn it round. You have got to keep up the morale of your people while you do that, but of course, the increased freedom of speech must be such a joy to them, although they were pretty forthright in Poland and of course in Hungary they had much more freedom of speech. But they are going to encounter the difficulties and they have got to find a way of keeping up the morale and that is why we hope we can help.
I will tell you another thing we are helping with in both Poland and Hungary: they cannot pull their own socks up without being able to export. The European Community has had quota restrictions on how much and what they can export to us. Now you cannot say: “Pull up your socks but we are not going to take your exports!” and again, we led on taking away some of the quota [end p16] restrictions with Hungary. I think all the others are agreeing that we must take away some of the quota restrictions for Poland because that is now they have got to get more prosperous. Unfortunately, you know, they always want to export the things that we have in plenty. That is the difficulty, but it is important for all of us that Poland succeeds so that is another way of helping. People want not only aid - they want free access to your markets as well.
Nick Lloyd, Daily Express
Yes. So we have go give them more opportunity to bring new business in.
Prime Minister
Yes, that is right!. All of those four things are happening immediately quite apart from IMF.
Bernard Ingham
We are urging the Allies to do more.
Prime Minister
Yes, we are. I said that we would urge the European Community, and we have and are. I enquired recently because it came to me just a few days ago that some of the meat and the food help that we had thought we had sorted out is not really getting to Poland quickly enough and I think most of us want it to go to Poland. [end p17]
It is very ironic that we have got rid of quite a lot of the European surpluses now - you know we had them all stacked up which was really rather ridiculous - we still have some but we have got rid of quite a lot so some of it will have to be bought on the open market.
They are practical ways to help. Poland has many friends and there are many Polish minorities the world over: here, in the United States and throughout Europe, all busy seeing what they can do to help.
Nick Lloyd, Daily Express
Russia has exactly the same problems - or the USSR - of course in many ways.
Prime Minister
On a very very much bigger scale. Poland is not a small country by any means but so much smaller than the Soviet Union. You are able to get people together in a country the size of most of our West European countries and about the size of Poland and there is an intense nationalism and of course, sometimes I think that their Roman Catholic faith must have kept them going through many many difficult days. [end p18]
Nick Lloyd, Daily Express
Yes, because the State rests on two pillars of the Catholic Church and the Party itself and they practise Catholicism probably more zealously than anybody else in Europe at the moment.
Coming back to our own economy if I may, you are 8 percent behind in the polls at the moment. In Scotland there is an awful poll which shows you have only got 16 percent support in Scotland at the moment, and millions I think are slightly puzzled and worried that after ten years of your government with the number one objective to squeeze inflation out of the economy, to get inflation down, we have got 8 percent inflation although it is steady and coming down a little now and high interest rates of 14 percent and they are asking: “What went wrong?”
Prime Minister
What went wrong was that we did get it growing too quickly following the 1987 October Stock Exchange crash. As you know, our unemployment was coming down very well and after that Stock Exchange crash we thought that many people, whether it be through their own shares or through shares which they knew pension funds held and Insurance funds held - which is practically everyone - would somehow feel: “Oh! We must pull in our horns! We must not spend so much!” and therefore that we would get a sudden downturn. None of us wanted that and I think that we overcompensated. We did not get a recession; we went on growing a bit too fast and I am afraid we [end p19] actually paid ourselves more than we were earning and the moment we discovered it we started to take corrective measures, but again, like a ship, it takes quite a long time to correct inflation - it goes on a good deal after you have taken the corrective measures.
We have to remember that in the lifetime of the Labour Government 8 percent was a target to which they tried to get down and only held it for a few months. To us, it is something which is much too high.
Most people do not like high interest rates. Where companies have good profits - and they have had good profits because they have been doing very well - it does not affect them very much because they do use their profits to invest, so they have not got to borrow the money, so it does not affect those companies and as you know, the investment is going on very well indeed which augurs well for the future.
It is sometimes your constructors which borrow heavily and some of your small companies and of course also people on mortgages and for those, yes, I am afraid it is those who were badly affected and one does not like having to put up the interest rate, but if you are living beyond your means you have got to have a way of cutting down the amount of money and to cut down the amount of money you have to put up the price of money. There is not any other way of doing it. [end p20]
Had we risked the other, we felt we might be risking a recession. Now we have got this, we just have to go on until it brings inflation down, is seen to be bringing the inflation down and once it is seen to be bringing the inflation down, then I think that we shall go up once again in the popularity stakes because we shall be seen to be doing what people expected us to do. But by definition, inflation is that the money is more than you can match with the goods and so they are using the money to buy goods from overseas so it gives you two problems.
The danger is that people will take wages that are too high in relation to what they can produce. I can only say that if they do that our prices will go too high. If our prices go too high, we shall not sell the goods - people will buy others instead - and then you get unemployment. So in a democracy, you have got to say to people: “Look! This is what will happen if you take too much out! If you take too much out we shall get unemployment again! Please do not get it!” Just look at the amount of goods that people are buying in this country. Now just let us turn our hand to the plough and make those goods here because there is a market for them!
Nick Lloyd, Daily Express
There are various areas are there not, like electrical goods, washing machines, dishwashers and fridges? Fridges are tin boxes with a compressor in. [end p21]
Prime Minister
They are not hi-tech, you are quite right.
Nick Lloyd, Daily Express
And yet we import 50 percent of them.
Prime Minister
Yes, we import. A lot of the stuff we import, a lot of the building stuff we import …
Nick Lloyd, Daily Express
Surely Arnold Weinstock could make a few fridges for us?
Prime Minister
… a lot of the building, some of the cladding that we import is not hi-tech, it is low-tech. [end p22]
Nick Lloyd, Daily Express
Yes, and we really need to produce these low-tech consumer goods.
Prime Minister
We could do a substantial amount on our balance of payments by companies here looking to see what is imported and saying: “We could produce that here, we could produce it more quickly, it will not have to go through the transport to come here”. It really means the companies that are in this kind of business really getting down to it and doing import substitution.
The other thing that we are trying to correct by investment from overseas as you know is cars.
Nick Lloyd, Daily Express
We import 55 percent still at the moment do we not?
Prime Minister
Still. In cars the post-war period is a tragedy when you think of some of the marvellous names that we used to have that were wonderful names, world known names, and they all amalgamated together which was a great mistake, it became too big, became too big. It was a terrible mistake and so we are now trying to pull ourselves up. [end p23]
The things that we were fantastically good at, Land Rover, Range Rover, they were always rather proud of their waiting list instead of getting the production up.
Nick Lloyd, Daily Express
They are doing rather better now.
Prime Minister
They are doing rather better now. We are back up now to producing over one million but then the demand has gone up.
Now the investment that is coming in here to make Japanese-designed cars here will in fact I hope within a few years put our production up to 1.5 million so we will be satisfying both more of our demand here and exporting.
Nick Lloyd, Daily Express
And we will be exporting to the Common Market and elsewhere?
Prime Minister
Yes. So what we are saying to people is: “Look, this is a very good place in which to invest” and it is. British people work extremely well in these new organisations, new equipment, new machinery and new management. Then you can start off with only one union, new management, new equipment and it is a fresh start and we respond and we do well. [end p24]
Nick Lloyd, Daily Express
And we are attractive to people wanting to do this.
Prime Minister
We are very much attractive and we are a very free country, a very free country, and they like the way of life here.
Nick Lloyd, Daily Express
But you are talking about the last ten years of deregulation in some ways that you brought in which has helped?
Prime Minister
Yes I am, and it is working, it is working. We have still not got quite the productivity that Germany has but we can come up if we do not let our costs get out of hand.
Nick Lloyd, Daily Express
We want their inflation rate too do we not?
Prime Minister
Yes, we want the inflation rate down, that is a matter of personal discipline and productivity.
Nick Lloyd, Daily Express
What about pay rises, can the public sector help too by not dealing in pay rises of 8 percent, 9 percent, etc? [end p25]
Prime Minister
Yes, because the pay rises you are getting now are the pay rises for the future and we hope that inflation will be coming down and it will not be long at that height. But the critical thing is for anyone who is selling goods, whether goods or services, it is how much you produce for what you are paid. Do not look just at your pay, it is what you produce for what you are paid.
Now if in Germany they are getting higher pay but they are producing far more than the extra pay, their costs are going down, they will beat us in world markets. It is very interesting that Germany is quite a high pay country but she is a very high productivity country. Her people get a lot out of every hour's production. Now that is our lesson, that is our lesson. It is not even the number of hours that you put in, it is what you put into each hour. And so you get the higher pay provided you get your higher productivity and higher sales at the same time and we really have got to get our productivity over and above our pay increases for the time being. We need greater productivity than we have pay increases because we have got to compete with Germany and Japan.
Nick Lloyd, Daily Express
Do you think that the examples set by our captains of industry, after having rather large, you might say me if you like, having rather large tax cuts, also having rather large pay rises which are difficult to justify, it is not exactly helpful is it in the current economic climate? [end p26]
Prime Minister
When they know that we have got a problem of inflation and that they are going to have to negotiate and it matters that their productivity is higher than their pay increases, I really do think that they should lead by example, I really do, there is only way to do it and that is to lead by example.
Nick Lloyd, Daily Express
You have always led by example.
Prime Minister
Yes. When you have got inflation, you have got to get it down. Leadership is leading by example and they must take that into account. Yes, everyone has done better out of lower taxes and that is why we have had bigger production and why we were growing fast. We have got to make certain that the growth is sound and that, as you know, means keeping your costs down so that you can sell to the world at the prices which still give you a good enough profit to invest, to give a return to all those shares in pension funds, in insurance funds, and that people hold in order to give them an income in retirement, in order to give them an income because not everyone works at a big machine, not everyone can get the productivity, people work by their hands, by their crafts. They want some share in the profit from big machines so the only way they can get it is taking shares in big business and they have got to have a return too. [end p27]
Nick Lloyd, Daily Express
So the message, if you like, to the voters is …
Prime Minister
It is working, it has just got a little bit out …
Nick Lloyd, Daily Express
… and there is a light at the end of the tunnel anyway?
Prime Minister
Yes there is, there are always the tricky two years that you have to get through when things have gone, when you have got inflation …
Nick Lloyd, Daily Express
Some analysts were saying at the weekend, Prime Minister, that it might take three years to squeeze, I think Phillips and Drew said that it might take three years to squeeze inflation …
Prime Minister
We do an analysis of what everyone has said and what everyone has forecast and the astonishing thing is that the average comes out at the Treasury forecast. It is extraordinary, you do this on the scatter of forecasts, very interesting. I am sure your City Editors do it too. [end p28]
But if we have in fact been spending more than we have been earning well you have got to bring your spending down to your earning or you have got to put your earning up. There are always two ways: put your earning up or you bring down your spending. What we want is to put your earning up.
Nick Lloyd, Daily Express
I know it is crystal ball gazing slightly, but do you expect things to get better in the spring?
Prime Minister
I would expect things steadily to improve, yes, as far as the inflation is concerned.
Nick Lloyd, Daily Express
And what about the tax cuts now?
Prime Minister
But you cannot just leave it only to Government. If we get full cooperation then it will happen more quickly.
Nick Lloyd, Daily Express
Are tax cuts going to have to be put on hold for the time being? [end p29]
Prime Minister
We look at each budget as it comes up. Do not forget, people say that we are using the interest weapon only. We are not. We have not got a budget deficit. There are lots of countries in Europe that would like to say that. We have not got a budget deficit, we have actually got a budget surplus and that is helping us to redeem our debt and when you do that what you have to spend on interest actually goes down.
So we are doing everything we can to help and it just means that in a democracy you do say to people: “Now look, you have freedom but you must also rise to your responsibilities”. And sometimes when I went over, and I am always asking in Europe: “Tell me, how much have your wages gone up?” and they will tell you, “And how much has your productivity gone up?”, and where their productivity has gone up more than their wages they are gaining.
Now I am afraid our wage costs have gone up more than our productivity and that is one reason why we are not getting the exports. And also it means that people can export their goods to us at a cheaper price than we can produce.
So we do our part but everyone must do their bit to keep their job and to give a better future. And as I say, there are plenty of people wanting things that we can make.
Nick Lloyd, Daily Express
And we should make more of them too, more of the things that we import. Now the Community Charge? [end p30]
Prime Minister
Yes the Community charge, it, in other words, is that what you vote for, you pay a proportion to it, not all, what you vote for you pay a proportion to it, not the whole lot.
Nick Lloyd, Daily Express
Some of your backbench MPs are criticising the safety-net scheme, they have called it immoral and politically suicidal.
Prime Minister
Look, let us just take it from the beginning. The rating system, which is what we are replacing, it has been grossly unfair, that is why we are replacing it, but one of its features has been that there has been quite a considerable subsidy through various equalisation funds from the south, which has high rateable values, to the north, which had paid lower rates.
Now that subsidy has been going on at the order of about £1 billion a year for quite a long time but it was hidden, people did not know about it. Now it is wrong for a subsidy to be hidden, it should be right out in the open. So in the new system where what you vote for you pay a proportion of, and I say it is only a proportion because a Community Charge in England will only pay about 25 percent of local authority expenditure, in Scotland only 14 percent and in Wales only 18 percent. [end p31]
But now we have got the system such that for a standard rate of service you should all pay a standard Community Charge. People say: “That is what we have been saying”. So you can judge, if I am paying more than the standard charge it is because the Council is badly run or it is spending too much.
Now we have all said that to our constituents but now we cannot suddenly go from the old system where there was a £1 billion subsidy, to the new system in one leap. And now they have said: “But we cannot say that to our people because in addition they are going to have to pay this subsidy called safety net for four years, coming down, and we do not like it”.
You can see the argument because you could get someone who is quite prepared to accept this argument, “Yes, we pay a proportion, what we vote for we pay for”. If you cannot afford it, and nine million people cannot afford it, they get a subsidy and the tax-payer pays fully for that.
But then some of them will say: “But I am not only paying for what I voted for, my proper share, I am going to have to pay up to about £75, or £50 or £60 to that authority over there who is more extravagent and I am paying for their extravagence and I am not getting anything”. It is going to mean bitter and large resentments and that is what we are now trying to cope with. [end p32]
Nick Lloyd, Daily Express
Are the Treasury going to ease the pain? [end p33]
Prime Minister
We are just going to have to look at it.
We came forward with a modified safety net, but do not forget the basic thing is that people should be accountable.
Nick Lloyd, Daily Express
Well, that is one of the problems.
Prime Minister
Local authorities should be accountable to their local Community Charge payers and if you make the accountability so small they will not have any control on them and do not forget, about 25 percent comes from business and the other 50 percent, on average, comes from the taxpayer and the subsidy to the nine million that cannot afford to pay the Community Charge also comes from the taxpayer, so your taxpayer is paying quite a lot.
We are just having a look at this to see if we can deal with it in another way. [end p34]
Nick Lloyd, Daily Express
Because I think that people accept the philosophy probably - or a lot of people do - but think that the safety net actually is against the philosophy.
Prime Minister
That is the trouble with it and yet at the same time, you know, sometimes you have had people say; “Well, we are doing quite well in the South, maybe we should help the North more!” It so happens the North is now doing very well, thank goodness, and so you say: “But we have given you the opportunity to do more!” and they say: “But, ah, there are some councils in the North who are in the same position as we are!” They are saying: “There are the more expensive ones that we have to finance and that is what we do not like.”
We could, in fact, have gone about it a different way, but we are just going to have to have a look at it because there is something in this argument, but the local authority has got to be accountable.
You are right - the transition period is flatly contrary to the basic philosophy, so we have got to find a way through.
Nick Lloyd, Daily Express
So presumably this Autumn you will be looking at it? [end p35]
Prime Minister
There are one or two ways in which we can tackle it. We had a go at tackling it for the very low rateable values like in Lancashire for which we put out an extra £100 million and for the ILEA. People who have been under ILEA, as you know, have the highest education costs but not matched, I am afraid, by the education results, and so we did a subsidy to those and it is a question of where the money comes from. You cannot just pile it on to the taxpayer indefinitely because the taxpayer is the same chap who is a Community Charge payer in some respects and he is already paying the lion's share of local authority expenditure - or a very big share if you take in all the business as well.
Nick Lloyd, Daily Express
What about the other thorny subject which always comes up on polls and it comes up never-endingly and it must irritate you that it does in many ways, the Health Service, because despite Ken Clarke's reforms, it seems that the public up to a point … the doctors argue their own case for their own reasons … but the public up to a point still distrust the Government on the Health Service. I think that they believe that the reforms, if they understand them at all, are back-door privatisation.
Prime Minister
That is nonsense! You simply cannot privatise a service which you do not pay for at the point of use - of course you cannot! [end p36]
What you can do and what you must do and have a bounden duty to do is to make certain that you get good value for every pound spent and that is good stewardship. You have to do that in business - get good value for every pound spent - and what you find now is enormous differences between some of your local health authorities as to what they can do in terms of health, in terms of the number of operations, in terms of preventive medicine for every pound spent and why some have waiting lists and why others on a similar amount of money can manage it well. This is good house-keeping. We have a bounden duty to do this.
But there is something else as well which is really right up the street of everything we believe in - it is bringing the decisions nearer to the point where they should be made, so you do not have to wait for decisions, you can make them in the hospital itself. The general practitioner can have his full budget and he can make his decisions and that is very much better. This is value for money and this is looking at why some hospitals have not been able to do so much with the money, have they not got good management? There is something not right.
Nick Lloyd, Daily Express
Why they are not responsive to the patient! [end p37]
Prime Minister
And why sometimes patients will have to go to hospital and there will be called to “out-patients”. You know, you get quite a lot of complaints from people: “Look! I was told to be there at 9.30 but I was not seen until four o'clock in the afternoon! That was a whole day I lost from work and you would have thought that they could have said to me: ‘Look! I am not sure whether I can see you at 9.30 but if you are there from 8.30 I can pretty well guarantee that short of some terrible emergency, I will see you between 8.30 and 10.30’ something like that!” and this is only good management and thinking about the patients, and I am interested in the polls because the polls have said: “We would not mind going to a hospital perhaps in the next-door authority or my daughter lives in an area where there is a good teaching hospital, what we want, please, is to get rid of the pain and get our operations done. It is a good hospital, a good doctor. It is value for money!” Indeed, you heard what I said: by the time we have got everything through - and no-one is compelling a hospital to be self-governing but the teaching hospitals used to be self-governing - “If you wish to take this in your own hands with your own budget and if you in fact find that with your consultants and your nurses and your operating theatres you can do more operations and you could in fact relieve someone else of their waiting list, you shall be paid for that, so the more you do the bigger pay and if you find that you can do more preventive medicine - that is what it is about - then you shall be paid for that!” so it means that the more doctors do the more they [end p38] are going to be paid and it is not the cheapest and the cheapest is not necessarily the best. You are dealing with professionals. You have got to do it the right way and everyone understands. All of a sudden, you are examining someone and they have got something which you did not expect. That is all taken into account, so it is good stewardship and good housekeeping and not having too many decisions taken from the centre or from the region, but getting it down - you know your local hospital - getting it down so that they can take the decisions and I have not the slightest shadow of doubt that if they then want maybe an extra piece of equipment, why should they not go to the Friends of the Hospital and say: “Look! We can do wonders!”?
Nick Lloyd, Daily Express
Part of this, again, though, getting this message across, is continually selling it, isn't it, so your Cabinet reshuffle in some ways comes down to this: not that Ken Clarke was moved, but you moved Ken Baker into Central Office.
Prime Minister
We have got such a good story to tell on health, such a good story, but the interesting thing is that, if you look at some of the BMA advertising, there have been things in that - I mentioned something in my Women's Conference speech that said until now everyone has been able to have the treatment they needed and I said: [end p39] “Yes, indeed! What you are saying is that the Health Service has been working very well! Of course there is room for improvement but bearing in mind we have had new treatments, new possibilities, I do not like waiting lists any more than you do. What you are saying is the Health Service has been working very well and that is what some of you are now saying! Isn't it a pity you have not said that during the ten years I have been in power because we have given you more doctors, we have given you more nurses; the numbers on any general practitioner's lists have gone down. We have given you more money. We have given you more hospitals. We have given you more equipment!”
Nick Lloyd, Daily Express
One of the problems is that doctors blame what they call the “cuts” - they are not cuts of course - but they actually end up by blaming the Government or the funding.
Prime Minister
The average family now will soon be paying £34 every week through their taxation to run the Health Service, whether they use it or not, whether they have need of it or not, but if we have an emergency, which can either be a personal emergency or a disaster, we all use the Health Service. [end p40]
Nick Lloyd, Daily Express
We all have to because it works and it works effectively.
Prime Minister
And if you have an enormous operation, you all do that. The small things like prescription charges and I think sight tests in a prosperous economy we can afford to pay for ourselves and I think should be prepared to pay for. It is the big things that you cannot possibly pay for. Everyone must have the assurance that it is there, but in fact, the Health Service is very much better than it was. I do wish we had had the credit for it. By the time our reforms are through, it will be even better. Of course people resist change. They do. The doctors resisted bringing in the Health Service. They resisted it when we said: “You do not have to prescribe the most expensive branded medicine when you can get the same drug in bulk! It is the chemical in the drug that cures the patient, not the brand name on the outside.” They resisted that and their patients said: “Oh we shall not be able to get that medicine!” We said: “Yes, you will!” They saved over £75 million and that went straight back into the Health Service and that means that you can do a lot of operations with that money. [end p41]
Nick Lloyd, Daily Express
One of the problems, just to end that, is that doctors are perceived as upright citizens who look after patients and politicians are politicians and one of your battles …
Prime Minister
Look, it is quite simple, the doctors who do the most work and who do their own night visits and so on, who do the most work and do the most preventive medicine will get most income and that I think is what people will say.
Nick Lloyd, Daily Express
Can I go on to the reshuffle, Prime Minister? [end p42]
Prime Minister
Yes you can. It is not a thing which I like, reshuffles I do not like, you know.
Nick Lloyd, Daily Express
Do you think with hindsight that it could have been handled in a slightly better way?
Prime Minister
No, I do not. I did what I felt had to be done in the reshuffle to get some young people into top jobs and the press the following morning was extremely good, extremely good, that was on the merit, extremely good.
Now reshuffles are not things which you look forward to. I am afraid anyone in my position has to do them and some people are overjoyed at the new jobs they have, other people who have to leave the Government or have to move are not always overjoyed. I am afraid that is inherent in politics but I think you would be criticising me very strongly indeed if I had not had a reshuffle. And if I had not done it before the recess then all of you would have been discussing the chances of everyone and it would have caused far more personal hurt to them and their families. [end p43]
Nick Lloyd, Daily Express
You cannot have a reshuffle without hurting people's egos and prides and career prospects.
Prime Minister
Yes. And however much I thanked them for what they have done I am afraid your headlines are: “So and so sacked” and it is very unfair to them.
Nick Lloyd, Daily Express
Do you think that there will be a leadership challenge to you this autumn?
Prime Minister
I have no idea.
Nick Lloyd, Daily Express
It would be unfortunate if there was from a pure public unity perception would it not?
Prime Minister
I, as you know, am in politics because I believe passionately in doing things a certain way, that is to say in freeing up things and people accepting the responsibilities with the freedom, on getting the decisions and the power dispersed, enterprise with property-owning democracy, responsibility, giving incentives to create more wealth and helping, out of that wealth, helping the [end p44] needy and above all giving opportunity for those who would otherwise never have had it. It has worked fantastically well.
Nick Lloyd, Daily Express
You have done so enormously well yourself and you have probably done very well for Britain …
Prime Minister
I have enabled Britain to do very well for itself.
Nick Lloyd, Daily Express
… but do you sometimes think, when the Government is unpopular and everybody is identifying, making it rather personal and identifying you, and some critics say it is your manner or your style or your abrasiveness, do you sometimes think, “Well, I will go and see my grandchild more or put my feet up, or …”?
Prime Minister
My Michael Thatchergrandchild is lovely, he is absolutely lovely. But you see when people have, as they have now, some of them higher mortgages or something is not going right or you have a planning problem, the world is full of contrasts, people want more houses or they want more roads but they do not want them in a certain place, then of course you take it out on the Government, particularly at a time when there is not a General Election. [end p45]
When it comes up to a General Election I think you look at what has been done and you look and say, well, do you want to put it all at risk, then it is very different and it is not a question of being popular. If your only wish in life is to be popular, do not come into politics because you will never have the guts, the courage or the resolve to do what has to be done. Come in believing things, knowing that it will not be easy to do them but have the courage to stick to what has to be done, and the sense to know that if you put yourself in the front line, you are going to be shot at and do not be too resentful about it.
Nick Lloyd, Daily Express
You seem to not be resentful actually.
Prime Minister
No, I am not resentful about it. People who criticise I know have done, many of them, it is not that I have done it for them or that the Government which I have the privilege to lead, it is that we have created the atmosphere, the environment, the taxation system, the opportunities system, which gave them the chance to do it for themselves and that is a strong nation. Not one that has to be instructed but one that uses its own initiative and does things, not because they have to but does things voluntarily. [end p46]
Yes they are becoming prosperous. I am told that some people feel guilty about being prosperous. I do not notice that when they pay the Community Charge and talk about a safety net and contributing to that, but you should never feel guilty about being prosperous by your own efforts. You should only feel guilty if you are selfish with the way you use your money.
Now you will find that many many people in this new prosperous society have been more generous with their money to good causes than ever before. Look at the NSPCC, the amount of money they have to raise a year, £12 - £15 million. I went to the Royal Society for the Protection of Birds the other day, they raise £15 million a year because people are interested in ecology, their habitat.
Nick Lloyd, Daily Express
There is an enormous upsurge in charitable bequests.
Prime Minister
Yes, for Cancer Research, for Multiple Sclerosis, and so on. The prosperous society is becoming the generous society. People are not selfish, a few are, but the majority of them are not selfish. Out of their resources they are helping others. [end p47]
Nick Lloyd, Daily Express
But you want to go on seeing Thatcherism into the mid-'90s?
Prime Minister
This is much more important than Thatcherism, this is a whole way of life. I did not start it, I merely rediscovered it. The British people have been enterprising and have been able to use their initiative for years. I did not start it, I merely uncovered it again.
Nick Lloyd, Daily Express
Right. What about quality of life, the green issues?
Prime Minister
Of course. Look and see who does the most pollution, it is the East European countries because they cannot afford to take the pollution and treat it. Industry produces toxic waste, you have got to have a scientifically sound way of rendering those toxic wastes harmless. You have enormous populations. Look, Elizabeth I, 2.5 million people in this country. Elizabeth II, 55 million. Of course we are going to have problems with slurry from animals and sewage and so on. It is only the greater prosperity which enables us to deal with and treat this. [end p48]
Out of greater prosperity we have better rivers, they are 95 percent good or fair, the fair have got to be good and the ones that are not good, the ones that are bad, have got to come up to be fair.
But it is when you have got the extra money you are able to cope with it and it is absolutely vital that we do. Mind you, I do sometimes remind people that we got on very well with life before we had aerosols.
Nick Lloyd, Daily Express
Yes, that is right. But it does come back, Prime Minister, to things like traffic jams and bad roads and bad public transport systems and these need attention too.
Prime Minister
Yes I know, I said life is full of contrasts, we try to build roads and look at the Planning Enquiries, look at the opposition to them! I know and every constituency member knows about it and so it takes a long time, it should not take so long. People say they want more houses for young people, you get planning permission to build a housing estate and look at that, so life is a series of contrasts.
Nick Lloyd, Daily Express
Do you think these things can be done without, there is enormous public investment but you have tended to want to do them with private money? [end p49]
Prime Minister
No, look, investment in hospitals has gone up because we are richer than we were under Thatcherism. Investment in roads has gone up because we are richer than we were. Investment in water has gone up because we are richer than we were, and so on, hospitals, water, with so many things, because we have the resources.
Nick Lloyd, Daily Express
You have got to make the money before we can actually cure the problem?
Prime Minister
Yes.
Nick Lloyd, Daily Express
What about litter?
Prime Minister
If people did not throw it down we would not have litter.
Nick Lloyd, Daily Express
I know, I absolutely agree with you and if you go and look at other European cities and some cities in America, we are awful by comparison. [end p50]
Prime Minister
We shall start to do things about it as far as penalties are concered in the new Control of Pollution Bill which will be coming up and I am afraid we shall have to introduce penalties and a duty, not merely saying to people all right someone will come and collect it from the local authority, we shall have to have a duty of care and so people will be liable if they do not in fact exercise that duty of care.
Nick Lloyd, Daily Express
So the Councils will be liable on the one hand and the individuals on the other?
Prime Minister
The Councils will be liable or some people in business might be liable if they do not dispose of their waste.
Nick Lloyd, Daily Express
Because it is a matter of actually sorting it out yourself, some of it, is it not?
Prime Minister
It is, and I must say the schools are doing very well about this, some of my own primary schools have been having lessons and I get letters from children about recycled paper, bottle banks, and they have been having campaigns not to throw litter down and to pick it up. [end p51]
This is the start of it. It is a matter of personal pride in your community, a sense of community.
Nick Lloyd, Daily Express
But the Council has also got to have enough people to actually sweep up the gutters and take the bin bags away.
Prime Minister
But just look and see how they spend their money and what they spend it on. The first duty of a Council is to keep the place clean and hygienic.
Nick Lloyd, Daily Express
And they do not, some of them, do they?
Prime Minister
Just look at some of the people who are the most grievous offenders are some of the biggest spenders. [end p52]
Nick Lloyd, Daily Express
Ken Baker's reforms are afoot.
Prime Minister
Yes, Kenneth Bakerhe is afoot and he has done wonders and it is to try to bring opportunity to youngsters in particular who would not otherwise have had it - particularly with his city technology colleges and also with the chance of being able to opt out of the local authority and run your own school.
Bernard Ingham
He is incorporating Skegness School today.
Prime Minister
Inaugurating the first grant-maintained school today at Skegness and like most things, it will start slowly but it will gather pace. Again, we set the standards and it is giving people the opportunity to come up to them. [end p53]
Do not forget Keith Joseph started the reform of the GCSE and I think some of the results have been very good. They are starting to repay this opportunity.
Nick Lloyd, Daily Express
The National Curriculum I think is an absolute step in the right direction.
Prime Minister
They were not being taught, some of the youngsters, about some technical things so do not forget it was David Young, with money from the Training Scheme from Manpower Services Commission, who started the technical and vocational education from fourteen to eighteen. We started that and that is coming up because if we are to recover our great engineering industries in full power and might because we import so much investment from abroad, we do need more engineers, more chemists, ... ...
Nick Lloyd, Daily Express
What about teachers? We have got this problem the ILEA of course, but ... ...
Prime Minister
You cannot have a good education without good teachers. [end p54]
Nick Lloyd, Daily Express
… we are importing teachers from abroad and I do not think that is something we ought to be doing, do you?
Prime Minister
Except to teach languages.
Nick Lloyd, Daily Express
Yes, but we are importing teachers just to fill up the vacant places.
Prime Minister
We have a bigger proportion of teachers compared to pupils than we have ever had and again and we have so many more teaching aids - they can do teaching by video. I think that where the teaching is good, where the schools are good, they are very good.
Nick Lloyd, Daily Express
And they can get the teachers, but it is in some other areas that they have problems. [end p55]
Prime Minister
I think, again, it is a case of looking to start to analyse success.
Now, of course, there are teachers who have immense problems in problem areas because the children come from homes where they are not necessarily taught before they get to school. You learn a lot from your surroundings before you get to school and you cannot always expect teachers to take the place of a good parent.
Nick Lloyd, Daily Express
On Europe, Prime Minister, briefly, are you going to take the initiative now? Instead of being rather defensive, faced with …
Prime Minister
Take the initiative! Take the initiative! Who took the initiative to get the Common Agricultural Policy right?
Nick Lloyd, Daily Express
Correct!
Prime Minister
Who took the initiative to get the budget right?
Nick Lloyd, Daily Express
I will rephrase that! [end p56]
Prime Minister
Who took the initiative to have a common market because we said it is about time we joined Europe for a common market? During our presidency, we did the first forty-two sets of regulations. Who took the initiative on abolishing foreign exchange control and having free movement of capital?
Nick Lloyd, Daily Express
What about the Social Contract? Are you going to produce the Thatcher version of the Social Contract?
Prime Minister
I have done! I took it over to Madrid with me - let Nick LloydNick have one! I said: “Do not accuse me of not doing anything. This is what we do!” They were amazed! This is what we do, but we do it as everyone else does it, according to your own history, according to the rights you have built up under your own national insurance scheme which people have paid into for over forty years; according to the way by history we have founded our National Health Scheme and financed it by taxation. France taxes it by a tax on the payroll - she does it differently. I am not trying to change hers.
You have got to take into account the way in which we done it. [end p57]
Nick Lloyd, Daily Express
You cannot harmonise everything, can you?
Prime Minister
No, of course you cannot. You cannot even in the United States of America.
As a matter of fact, they have a principle called the “principle of subsidiarity” - do not do through the Community what the individual states can do themselves.
What is more, we have signed up on the wider European Council of Europe Social Charter because it is not too detailed, it is not too rigid. That is the twenty-one nations. We have signed up but not everyone has done that.
Nick Lloyd, Daily Express
But do you think you can convert Delors and President Mitterrand who you saw last week?
Prime Minister
I started to say to them: “Look! Have you looked at this Social Charter? Do you know what it says? Do you realise that it says that if, for example, people in Portugal or any other country get a construction contract in Germany because they have quoted and tendered for it, they will have to pay for the work they do in Germany the same rates of pay as the Germans, the same hours of [end p58] work, the same public holidays, the same length of holidays, the same payroll tax, the same national insurance contribution? How are they to pull up their socks that way?” I said: “That is not opportunity! That is Germany's protection of the German worker - and that is what you put in a Social Charter!” Some of them looked at me in amazement and said: “That is absurd!”
Nick Lloyd, Daily Express
Had they read it?
Prime Minister
“That is absurd, isn't it?” I said: “Yes, and you relied on me to vote against it!
We will get a reasonable Social Charter like the one of the Council of Europe.