(1) Thatcher Archive: CCOPR 51/89:
The Conservative Party has shown in this election that we are the Party of Europe. We took Britain into Europe and we made a success of it by following the very policies we pursued here.
We set out a detailed positive programme in our manifesto and we argued for it. And we have not hesitated to tackle the great issues which must be faced as the Community looks forward to the 1990s and beyond. We have taken the lead in Europe.
We got a much fairer financial deal for Britain than the one Labour left us with. Indeed, since 1985 alone, we've got back five billion pounds for Britain. But for that, we would be paying nearly twice as much as we are.
We led the way in getting down the food surpluses and in sorting out the Common Agricultural Policy. Now the surpluses are shrinking fast. That's good news for the consumer, good news for the taxpayer and good news for the British farmer too.
He now has a sounder basis for the future. [end p1]
We held out against attempts to impose VAT on our children's clothes, on the food we eat and on the fuel which heats our homes.
We stopped attempts by other countries to impose a new European tax on savings. It took a time. We fought. And in the end we won.
We fight Britain's corner for a strong Britain in a strong Europe.
These elections matter because Britain's future lies in Europe.
And, in Europe, the Parliament's powers to influence our lives are greater.
The opportunities for prosperity and jobs in Europe in the 1990s are potentially very large indeed.
But they cannot be taken for granted.
A stronger Europe committed to free enterprise will lead to more prosperity, higher living standards and lower unemployment.
We understand that to trade with a country you don't need to govern all its actions. That's why we don't need a Social Charter for Europe as a whole. We've got our own—employee share ownership is better than trade unionists in the boardroom.
A socialist Europe would add enormous burdens to industry by restrictions and regulations which would drive the jobs from Europe to South East Asia. We would lose the great wave of investment from abroad which we Conservatives have won for Britain just because we have cut the burdens on business, cut taxes and got rid of trade union domination.
The Conservatives and our allies in the European Parliament have the smallest of majorities. All those who want a Conservative Europe, who recognise our record and share our vision have the chance to shape our [final words missing]. [end p2]
(2) Thatcher Archive: transcript:Q
Could I ask the Prime Minister by how many points she now thinks her party is behind the Labour Party?
Prime Minister
We believe we are now neck and neck, absolutely neck and neck, and that is why we want all our supporters out to vote. We have a good chance of winning some seats.
Q
Yesterday you were said to be four or five points behind the Labour Party.
Prime Minister
We are coming up very fast as we always do. We have this argument with you every last week. I remember the last Thursday before the last election you were just as exactly predictable as you were this time. Absolutely predictable, and yet we came cantering up to a fast finish and won by a hundred majority. The Thursday before the Thursday of the last election, you are always the same. Do you want some quotes? I can give you some. Listen to this. June 5 1987, remember it vividly, “Tory confidence over the last twenty-four hours has been jolted by the latest Gallup poll” then “the occasionally faltering character of the Tory campaign has prompted considerable soul searching at Conservative Central Office” . I remember a number of you out with me that Thursday, and I remember you saying it was down hill all the way. Well, it went down hill to a hundred majority. You're very predictable. We come up very fast in the last week, and that is exactly what has happened. Some of you have been out with me, I thought some of you were quite chirpy by the time I had finished with you, when we went out on the campaign trail. [end p3]
Q
Prime Minister, do you think that your fulsome endorsement of the Chancellor yesterday will allow you to avoid the election being married by the horror of rising interest rates?
Prime Minister
I fully, gladly, joyfully, unequivocally, generously support the Nigel LawsonChancellor. I thought the speech that he made in detail about the whole position in the economic debate was absolutely superb, it was measured, it set out his policy in detail. I fully support. And set out absolutely clearly that the overriding policy is to get inflation down, that I repeated in the House yesterday, and I'll repeat it today. That is and will remain our overriding policy, to get inflation down. Now I can read that speech out too if you would like it, it would take rather a long time.
Q
Is it enough to show sufficient unity to avoid another rise in interest rates?
Prime Minister
We have absolute unity in the government on financial policy, and I repeat what the Nigel LawsonChancellor said, because we are all behind it, “our overriding objective is to bring inflation back down” and I add that we shall not be out voted from that course. The Chancellor went on to say in that speech, “the policies that have successfully brought inflation down in the past will do so again” . Those are the Chancellor's policies, they are the government's policies, we fully and unequivocally support the Chancellor, and it is due to the Chancellor, and this previous Geoffrey HoweChancellor, that we have had the fantastic record in Britain that we have in last ten years, that we have a higher standard of living than we've ever known before and a higher standing of social services than we [end p4] have ever known before and a higher standard of social services than we have ever known before, and when we have created since 1983 three million jobs, which is a record that no other country of comparable size in Europe can touch.
Q
Are you in that case prepared to reassure the financial markets that you are not going to change the Chancellor at the Cabinet reshuffle?
Prime Minister
I have reassured the financial markets on the policy and on the Nigel LawsonChancellor. I fully and unequivocally back the Chancellor.
Q
Does that mean you are not going to move him?
No replyQ
Do you feel that next year when more countries will have lifted exchange controls it will be easier for Britain to join the Exchange Rate Mechanism?
Prime Minister
Well, I think there are far more controls in Europe at the moment than there are here. You've mentioned one but there are many others which inhibit capital movement, and a number of controls which again the Nigel LawsonChancellor mentioned some of them in one of his pieces of evidence yesterday. And our whole approach to 1992 is to get the necessary barriers down. Unfortunately some people in Europe are trying to use 1992 as an excuse to put some barriers up.
Q
So do I understand you correctly that that particular point may not make that much difference? [end p5]
Prime Minister
Well, we have to look at everything. That is one point which has to be looked at, it is not the only one when you're considering whether the time is right to join the ERM, as you know we belong to the EMS, but not to the ERM, you have to look at all of the points at the time. But at the moment the overriding priority is to get inflation down, and I can't stress that too much. And I will not be diverted from that course.
Q
A. Bevins
If you say that your policies and the Chancellor's policies are indivisible, and you are both in love with each other on the economy, why do you need Professor Walters?
Prime Minister
But why not? We had Professor Walters during this Geoffrey HoweChancellor's time.
Q
He is pinpointed as the cause of the differences between you and No 11.
Prime Minister
Absolute nonsense.
Q
A. Bevins So you are keeping him?
Prime Minister
You come along if we don't have any outside contacts and say that we are absolutely in a prison of civil service advice, so if we don't keep our outside contacts you criticise us, when we do, you criticise us. Of course, we discuss these things fully, and when we discuss them fully we take as much advice as we possibly can in coming to our decisions. That is a proper and good way to run government business, it is the way we have run it over the last ten years, and it is one of the ways which has had one of the splendid results whereby the newspaper industry is much [end p6] more prosperous than it was ten years ago, much more profitable, capable of making many more investments, and all the people who work in it alone are better off, and it is a much cleaner industry as far as the printing is concerned.
Q
A. Bevins It seems you have given us a much more robust answer about Professor Walters than you have about Mr Lawson.
Prime Minister
I did not answer about Alan Walters in the House yesterday. I have been most robust about the Nigel LawsonChancellor, I can't be more robust. What would you like me to say that is even more robust, I am totally and utterly robust about the Chancellor and I am fully, fully and fully behind him. Fully.
Q
Prime Minister, you've said a lot in this campaign about the areas which you don't consider it appropriate for Brussels to get involved in. Can you say any areas in which you see greater co-operation in Europe?
Prime Minister
Well, there are many barriers still to be knocked down, for example, we can't set up any financial services in Europe in the same way as some of their financial services have been set up in the City of London. Only a part of insurance has been dealt with, you will find that there are considerable controls in Germany, for example, about whether their insurance and their pension companies can invest outside Germany. I think you'll find if you look at it there are compelled to invest in German securities. They've nothing like the kind of freedom we have. There are about another hundred directives, I think, on actually getting the barriers down. We've just done one on lorry loads. Until the one page missing
Christopher Prout
I just like to add Prime Minister that the legislative programme that you and the Foreign Secretary have outlined is an immense one, you're talking about two hundred individual measures between now and 1992, which is going to take up everybody's time in the European Parliament, it is a massive programme.
Q
Are there no areas to which you see the solutions being European rather than domestic?
Prime Minister
Yes, of course, the environment is one. We had the agreement the other day, on car exhausts, it was a difficult one to reach, yes, we argued our own corner because we are keen to keep the lean burn engine in. The system we have agreed, in fact, I am afraid puts more carbon dioxide into the atmosphere. You take the three way catalyst they have agreed, in fact requires 10%; more petrol to run a car with that three way catalyst. So you get rid of some of the emissions, but at the same time you are putting up more carbon dioxide into the atmosphere. We were anxious, because we will have six car manufacturers here, to have it in keeping with the needs of our own car manufacturers. Some of the countries that vote on it have absolutely no car manufacturers at all, when we have Toyota here we will have six. We have to have it reasonable for them to get a line by the time. We were also concerned that we were solving one problem by making another one worse. So we've go two riders to that directive, one that we should go ahead with lean burn engines, two that we should come forward with some measures to reduce the amount of carbon dioxide. There is an obvious method, one is to reduce the speed limit in some countries, some countries in Europe have a speed limit of up to hundred, but they are resisting bringing that down, now that is an [end p7] absolutely classic example of twelve countries arguing about environmental issues. I think they argued for two whole days, certainly one night to my knowledge. We got a directive which was a compromise, we agreed it, two other countries voted against it for different reasons. Now that is a very, very good example, it is a compromise one, it is not perfect in every way. When it comes to the water agreements the Community has in fact set very high standards for water, as you know as far as our rivers are concerned 95%; of our rivers on European standards are classified as good or fair, that is the highest record of any country in Europe. As far as our bathing beaches are concerned, there is a directive, which stems from 1975, when the then governments were then told to identify the beaches that were below standard, and given two years to do it. The Labour government did not do it, it was left to us to identify the beaches in 1979, we acted quickly we identified those beaches, two thirds of them haven now been identified, and the other one third we are dealing with. So all of these are things we are dealing with, the acid rain directive, again we have over a £2 billion programme, up to the year 2006, again it is a problem because our coal has a lot more sulphur dioxide in, and we have to new a lot of limestone out of rather nice areas, carried either by diesel, petrol or electricity up to the power stations, which again gives you a carbon dioxide problem, then we finish up with a load gypsum which we don't yet know what to do with. So they are not easy problems to sort out, sometimes you have to get a compromise, the environment is a typical thing where you get a compromise.
Q
Why is it, do you think, that the Conservatives are still coming from behind as we approach Thursday? [end p8]
Prime Minister
I think the critical thing is the number of our supporters which we get out. One would have hoped that people would have been more anxious to exercise their right to vote. It is still quite difficult to get supporters out in the Euro Election campaign, I would have thought again that it would have been easier for us as our members are actually members for constituencies, whereas in other countries of course it is just a list, and they can't have the detailed contact with the constituencies we do. But the critical thing in this election is the proportion of your supporters that you get out. I think that more and more of our supporters are becoming aware of the issues, this is what I have found very much, and that is why we are running neck and neck on the proportion who are prepared to come out.
Q
Anything to do with Tory splits with Mr Heath?
Prime Minister
Look, we have got by far the best manifesto, it's all positive, all constructive, all practical, which doesn't always make the news, but it is what has got Britain a far better standing in Europe and the world, and a far better standard of living, and a far better standard of investment in industry, and a far better future than ever before. Positive, constructive, and a colossal amount of inward investment, and three million jobs since 1983, that's pretty effective social charter, much better social services than we have ever had before.
Q
There is a perception, Prime Minister, that things are going pretty badly for your government on the economy at the moment, some people suspect that you may be waiting until after the election before raising the mortgage rate. Isn't the truth of the matter that these Euro elections [end p9] could scarcely come at a worse time for your government?
Prime Minister
No, the truth of the matter is that there is a higher standard of living in this country at all income levels than ever before. There is a higher standard of social services than ever before. The day I walked into 10 Downing Street £8 billion was being spent on the National Health Service, today it is £25.55 billion. Way up in real terms from what it was. On social security it was £16.5 billion, today it is £50 billion. The social services are well up, the standard of living is well up, the manufacturing industry last year had an all-time record in investment. Business investment which includes far more than manufacturing is at an all time record, as you saw the latest survey yesterday, and it is expected to go up be another 15%; this coming year. This is a good standard of living, very high standard of investments overseas, that is where a good deal of the North Sea money was able to go, into investments overseas that will give us an income long after the North Sea oil has gone, and very high standard of investment, and the lower level of rates of taxation and income tax than we have had for a very long time. That is why we have got the incentives. So that is a very good record whichever way you like to play it, it is a superb record, and if our opponents had it they would be shouting from the house tops, and every single newspaper in this country has profited from it.
Q
That doesn't help my neighbours who are worried about their mortgage rates.
Prime Minister
Of course, no one like having increased interest rates, but inflation of the kind and level that we had at the time of Labour [end p10] would have been infinitely worse. I can remember years ago when the rate of inflation was 21.5%;, the time came to raise the level of pensions, the theory was it was the higher of inflation or earnings. Inflation at 21.5%; they couldn't afford; earnings at 19%; they couldn't afford, so they only gave a 15%; increase on pensions; that was Labour in action, you don't have that now. We, in fact, we give whatever is RPI on a particular month. So every way you look at it, incomes, investment, social services, and although none of us like paying higher mortgages I can only point out that the value of houses for which you are paying a mortgage has gone up enormously and has in fact turned out to be a very good investment for all those three million extra people who've become owner occupiers, three million more than there were in 1979.
Q
You've stressed much about the social services, at home you said we're all better off even in the newspaper industry, yet the Labour Party seems, in this campaign to have managed to have succeeded in promising domestic discontent, mortgages, water privatisation and the economy, turning those mid-term discontents, if you like, by promising that things are better in Europe, and I think that all of us would agree that public transport or cleanliness is much better in Paris than in London, and our German friends are puzzled by the state of public education. How do you explain Labour's apparent success in selling this comparative disadvantage as far as Britain in concerned after your ten years?
Prime Minister
Yes, they have run a destructive campaign, they have said the same thing in the House of Commons, we've put the figures back, and I do ask you to look at the figures, look not at what people say, not at the attacks, and just remember, yes they attack very loudly, and empty [end p11] vessels always make the biggest noise.
Q
But you're not saying that London is at the moment a more agreeable city to live and work in than Paris, by your own high standards?
Prime Minister
London is getting very much better, if you just go out and look around here, and in Parliament Square, you'll find that many of the buildings are being cleaned, and it is much better than it was. We are taking more action and will continue to do so. Yes, we would like to spend a good deal more on many things, but as I say to everyone, if you want a German standard of living you must have a German standard of work and production per head. We are steadily improving, improving quite fast as you know our productivity has gone up fast in the last ten years, and I hope that it will go up still faster. But if you want a German standard of living you must have a German standard of work.
Q
You say in your advertisement this morning that not voting Conservative will let Labour in by the back door. Would you therefore accept that if Labour does get a higher share of the vote in these elections, the elector has given a mandate for socialist social policies?
Prime Minister
No, I think that the acid test is the proportion of our supporters we can get out, that is why in a way this election is different from others. It is the proportion of our supporters we can get out. It will be more difficult for us if we have a socialist European parliament because the European parliament now has more influence since the Single European Act, and it will be more difficult for us to fight some things down in the Council of Ministers, and we shall still of course continue [end p12] to do it.
Christopher Prout
It will certainly be much more difficult if the left gain a majority in the European parliament to defend the policies that we are putting before the electorate in our manifesto, and that is particularly true in respect of the social charter, because the social charter is not just a question of socialism through the back door, there is much more involved, a massive switch of competencies from national governments to the European community in a way that the community was never intended to deal with, and that in turn will imply huge budgetary responsibilities that the Community will have to take on, for example Mr Delors seems to want to set minimum wages at or minimum pensions at the Community level. Imagine the budgetary consequences for a country like this.
Q
Since you say that the parties are now neck and neck and the Conservatives are now ahead in the final days, would you predict in the way they couldn't yesterday the net gain of seats on Thursday? In supplement to that, may I ask Mr Brooke when the polling was taken and whether neck and neck and means literally neck and neck or with in the margin of error?
Prime Minister
We are neck and neck, one can't go more precisely than that. The intention of our supporters to vote is coming up very fast, as I expected it would in this last week, as they come closer to the election, and realise more what is at stake. I believe we shall win some seats we did not hold before. I am not going to predict when we shall have the final result so soon. Never prophesy, especially about the future! [end p13] Peter BrookeChairman. The answer to the second question was the polling had actually been on Friday and Saturday of last week.
Q
At the summit at the end of this month, whatever the result, will you make clear that Britain will veto the Delors report calling for European monetary union, and would you be prepared to attend an intergovernmental conference which the French government may call on July 1?
Prime Minister
The Nigel LawsonChancellor set out our views on the Delors report, I said that we just reject it. Its central contention and, what is more, you know that in paragraph 39 of that report it says that any step you take must be deemed to be in pursuit of the final goal, and that I think has bothered many countries. I expect though that we will have discussion about that report. That report will mean handing over fiscal policy, economic policy, monetary policy, to a body which as it happens is ill defined. The powers we would have to hand over are not well set out in that report, you can't imagine me going to Westminster parliament and saying we are handing over fiscal policy to another parliament, monetary and economic policy to another parliament in which you are not going to have any say. To have those determined by another parliament without the consent of the national parliament would be utterly contrary to everything for which our Westminster parliament stands. So I expect that we shall discuss that report, then have one version and one only of a European monetary union. We believe in taking practical steps of which we have set out plenty, and as you know we are ahead of Europe in many practical steps we've taken. [end p14]
Q
… monetary union. That is not Ted Heath 's view is it?
Prime Minister
European Monetary Union has never specifically been defined. Mr Delors has put one definition in his report, a definition which, as the Nigel LawsonChancellor said, we reject.