(1) MT speaking notes:

Thank you - Mr. Onslow - Tim Renton

Chief Whip & Whips - Those who have stayed late

Executive - & groups - come in to talk.

I. Community Charge

a) If more money in - limit L.A. expend.

S-a. - SSA + 12.5 percent

Large increase year on year - many more authorities who are high spenders

b) About £3bn - priority in spending.

c) Transitional relief.

£3→ £2 - 11m people relieved [end p1]

Safety net payments go - real basis of comparison.

SPENDING and efficient management now focus of attention

DON'T let Labour councils get away with high spending.

NOT CREDIBLE to say more everywhere.

II. Economy a) - success = inflation and interest rates down Must accept necessary action

b) Control of public expenditure.

Surplus - isn't revenue surplus

Slower growth [end p2]

Slower income coming in Danger - entitlements expand more rapidly than efforts & outputs on which they depend

COUNTING COSTS is NOT UNCARING - ONLY WAY you can pay the bills AND CONTINUE to COMMAND RESPECT & CONFIDENCE.

c) PRIVATISATION & ENTERPRISE - could never have been attempted in Eastern Europe unless had succeeded here Long-term policy.

d) SHORT TERMISM - LONG TERM [end p3]

In politics LONG term policies that produce the long term success but short term difficulty.

Record jobs.

Less conflict under Conservatives than at height of Labour T.Un.

Fewer strikes than at any time since 1933 [end p4]

Dublin. NATO. Houston.

FAMILY - Homelessness - Local govt. [?reconstruction] - Road building in London.

III. Overseas & Summitry - remarkable year

Havel

Assess & go forward from changes

Changes which we had helped to bring out.

A real FLIGHT from SOCIALISM.

U.S.S.R. - Watched anxiously seeing one of greatest changes in history.

Party Congress

People leaving party

Both realising enormity of task [end p5]

In last few days [following text struck out] may be through the worst [end of struck out text] believe politically more grounds for optimism.

Still vast ec. problems - but know no soft solns.

N.A.T.O. - United Germany in N.A.T.O. - without Germany - no NATO.

Problems now being solved

USSR. - Wish to be included in wider dialogue as in NATO communique.

Mr. G very pleased with - increasing importance of Helsinki countries [end p6]

N.A.T.O. - keep sure defence review strategy & weaponry needed for that strategy - nuclear deterrence.

E.E.C. - What kind of Europe.

Still a battle to keep or get bureaucracy down

Not thinking of a bloc of 12 countries but of ultimate enlargement with East Europe

Political Union - unwisdom of single currency

gaining support

Houston Summit - struck a blow for freer trade [end p7]

IV. Everyone wants to be involved in creating the next steps forward.

Record - long term approach towards enlarging prop-ownership & responsibility - that entitles us to ask for a fourth term.

[following text struck out] Today written to all departmental Ministers Officers backbench committees names for groups to incl outsiders START in A [end of struck out text] [end p8]

MAY BE PREPARED TO CHANGE THE PACE BUT NEVER THE DIRECTION

IV.

Next step forward Study groups.

Does not signal early election

Prepared with worked out policies.

Wider share ownership, home ownership, more choice stronger families

Framework of free enterprise economy inflation beaten - tax rates going down.

MAY change pace - never the direction [end p9]

Finally - thank you - good holiday with your families - when you return we shall have work to do

(2) BBC Radio News Report 2400 19 July 1990

Bailey

Mrs Thatcher told MPs she'd instructed Cabinet ministers to set up policy groups for each government department to prepare ideas for the manifesto. Officers of backbench committees, as well as other unspecified people from outside, will take part, from the autumn. The Prime Minister emphasised, though, that she would only call an election when she thought it could be won. If it couldn't, she said, then “we must go on; we will never run out of steam”. She told the MPs the election would be won or lost on the issue of inflation. “When interest rates come down”, she said, “there can be nothing that will stop us.” Many of the problems the government faced, according to Mrs Thatcher, were short term ones. In the long term the government was entitled to ask for a 4th term - on its record. Although Mrs Thatcher's 25 minute speech was greeted with traditional desk-banging in the crowded committee room, and many of her supporters described her as on good form - despite the trauma of Mr Ridley's resignation - others, privately, said afterwards her tone was downbeat. It's the second time this week the Prime Minister has recognised that a Labour victory is a real possibility. She told peers, at a similar meeting, the government risked losing everything if it didn't get the economy right.

(3) The Times, 20 July 1990

Conservatives start laying manifesto foundations

Margaret Thatcher raised the political tempo yesterday by asking each of her cabinet ministers to set up a policy group attached to his department to begin preparing policy ideas for the Conservative election manifesto.

The groups will be set up in the autumn and will be expected to complete their work by early next year.

Mrs Thatcher was not intending to put her MPs on a war footing, but she wishes to keep open the option of an election next summer, despite the expectation of Kenneth Baker, the party chairman, that the contest will be in 1992. If the policy-making process had been started any later, it would have been too late for detailed plans to be ready for a manifesto next summer.

Giving her traditional address to Conservative MPs at last night's end-of-term meeting of the backbench 1922 committee, Mrs Thatcher said that the ministers would be co-opting MPs, notably chairmen and officers of specialist backbench committees, for the policy groups. Ministers have been asked to think about who should join the advisory teams and report to Downing Street in the autumn.

She told MPs that the Conservatives would probably win the next election on their ability to get inflation down and she repeated the need for high interest rates to reduce it. She added: “We will never run out of steam. When interest rates come down, there can be nothing that will stop us.”

Mrs Thatcher teased her backbenchers by reminding them that July 9, 1992, was the last possible date by which the next general election must be held. “We know the direction we are going in. We have never doubted our direction, although the pace may vary.

“I am entitled to ask for a fourth term on our record. But we must look at each possible date and ask ourselves ‘Are we going to win?’. If not, we must go on.”

In her 20-minute address to MPs, Mrs Thatcher portrayed herself as a listening prime minister but she made no allusion to the controversy caused by last week's interview in The Spectator with Nicholas Ridley and his subsequent resignation from the government.

She listed a number of issues that MPs had raised with her and her cabinet colleagues, including the community charge, interest rates, the family and the international scene. She also compared “short-termism” in the City with that in politics.

She said that many MPs thought the Treasury was a pot of gold, adding: “I can tell you it isn't”.

Mrs Thatcher, whose speech in a Commons committee room was greeted with the traditional banging of desks, left them in no doubt that the government's economic difficulties would mean a financially tight year. She indicated that the package of measures aimed at relieving the poll tax burden had left limited resources for other areas.

Her address was described by one MP as a more measured and substantive one than others in the past that had sounded more like Henry V's rallying cry on the eve of Agincourt. Another MP, Anthony Beaumont-Dark, said: “She doesn't lose her touch”.

Mrs Thatcher will take charge personally of shaping the party's electoral appeal, chairing the manifesto committee. But efforts by some to exclude Sir Geoffrey Howe, the deputy prime minister, from the manifesto process have been thwarted.

Sir Geoffrey, who was also confirmed yesterday as the chairman of the “star chamber”, should that body be required to adjudicate in spending disputes between the Treasury and other ministries, is to be the deputy chairman of the policy group.

Final membership will not be settled until the autumn, but will definitely include John Major, the Chancellor of the Exchequer, Douglas Hurd, the foreign secretary, Kenneth Baker, David Waddington, the home secretary, and John Wakeham, the energy secretary.

The secretariat of the manifesto committee will be provided in Downing Street by Robin Harris, the former director of the Conservative research department now in the policy unit, and by John Whittingdale, the prime minister's political secretary.

Mrs Thatcher has been inviting in groups of backbenchers over the past few months for general policy discussions and she has in recent weeks entertained most of the Conservative-inclined think tanks such as the Centre for Policy Studies, the Institute of Economic Affairs and the Adam Smith Institute.