An Interview with Thatcher

The Prime Minister argues for strong doctrines at home and abroad

In the world outside, her policies and her government were being buffeted by bleak statistics and sour skepticism. But in her quietly elegant office at No. 10 Downing Street, Prime Minister Margaret Thatcher was a study in controlled serenity nearing the end of another demanding day. Wearing a sleek black and gold-lame dinner gown she had chosen for an earlier portrait sitting, she talked animatedly with London Bureau Chief Bonnie Angelo and TIME'S Frank Melville. On economic issues she was the patient teacher, with some pointers for the new occupant of the White House. On world affairs she was "the Iron Lady," standing up to the Soviet Union. Excerpts:

On views shared with President Reagan.

We believe the same things as a broad strategy: you've got to have sound money --and sound money is a much better phrase than monetarism. All monetarism is, is to try to keep the supply of money in line with the supply of goods and services. If you go away from that, you lose confidence in your money, you lose confidence in the future.

We both believe that the free society produces a very much higher standard of living and produces the dignity and freedom that are a fundamental part of our belief. And if you start to circumscribe the free society, you'll lose both the dignity and the result, the higher standard of living. If you compare Western societies with the Soviet system, the Soviet societies don't provide the goods.

Never let it be said that a person of my political beliefs--or President Reagan's, I assume--does not want strong government. We do, strong in the things that government, and only government, can do. The government has to be strong in defense, strong in upholding and enforcing the rule of law, strong to maintain the value of the currency, strong to protect the integrity of the nation, the individual and his freedom. Only governments can do those things, but it must not intrude too much on the things which the people do better than government.

On lessons Britain's experience holds for Reagan's own economic plans. I'm afraid that in the early stages bringing down inflation means that you have increasing unemployment, and I don't know any other way of doing it. Unemployment is much worse if your work force demands larger pay than is warranted by productivity. I have the impression that in the United States your pay increases are very much more modest, much more in step with productivity. You also do not have the same number of public-sector industries that we have. I think President Reagan is more likely to be able to reduce inflation and still have not as much increased unemployment as ours.

Never, never, never, I beg of you, go the way of incomes policies [wage and price guidelines] in the sense that you say, "You can only have X percent." You build in all sorts of rigidities. Never go that way, because you'll spend the next two years unwinding the distortions. And they always unwind upward.

On the criticism that she has failed to cut public spending. We all wish we had cut it earlier and deeper. The problem is that everyone in your political party is very keen on cutting public spending as long as you don't touch their own particular hobbyhorse. We would have been able to cut it much faster and sharper if we hadn't honored the Clegg tribunal [to raise salaries of public service employees to make them comparable with the private sector]. That was an enormous increase. This year the pay to civil servants, local government, nurses is 50% above what it was two years ago. Now they are as advantageously treated as the private sector. In some cases, more so, because it is the private sector that is taking the unemployment, not the public sector.

On dealing with the trade unions. The number of strikes is the lowest in 40 years. Not bad for a Conservative government! It's our realistic policy of saying, "You're responsible for what goes on in your factory, and if you get it wrong, you can carry the can. Don't come to government to bail you out." [The unions] are now getting rid of some of their own militants.

On the possibility of social unrest if unemployment rises to 3 million. I don't think there will be unrest. We have got this large figure of unemployment, which causes great distress. We try to alleviate it by every method possible. What we do is called selective help. Where areas are absolutely at their worst, we give special help. That's much better than just saying we'll flood the economy with printed money. The moment you pump in bad money it debases the value of good money. Before the end of this year there should be an improvement as companies start to build up their stocks again.

On Britain's participation in the European Community. We've had our quarrels with Europe. They were justifiable. I believe we are through them. Who would rejoice if Britain came out? The Warsaw Pact countries. They would have their tight alliance and would see that the democracies could not work together in peace. We can and we do. Of course, there will be difficult times--the closer the family is, the more virulent the quarrels.

On the need for closer cooperation between Washington and Europe. We have to find a method of closer, regular consultation. We were very conscious that after Afghanistan it took a little time to spring into action. On the other hand, we don't want to burden you with too many visits across the Atlantic.

On Reagan's hawkish statements about the Soviet Union. I certainly agree. I make a dispassionate assessment of my potential enemy, his objectives, his methods--and I don't believe the Soviet Union changes its objectives, it merely changes its methods. I may not know its motives, but I know the fantastic proportion of its gross national product that it puts into armaments. I know that being in a substantially landlocked country, with most of its supplies coming across land, it does not need such a big, big navy. It does not need so many submarines. Why then, is it doing these things? I know that although it growls at Europe for stationing cruise missiles, it's got the most modern-theater nuclear weapons in the S520. I know that they marched into Afghanistan, I know they are in Hungary, Czechoslovakia. They've got Cuban surrogates in Angola. I know that they've given help to both Somalia and Ethiopia. I know that there have been problems in the Caribbean, problems in Central America. Why? It is actually culpable if a leader does not make an assessment of that. That's not hawkish--I hate those jargon things. That's doing your duty by your countrymen.

On the Camp David peace process. Camp David has demonstrated that peace between Israel and an Arab neighbor, involving Israeli withdrawal from territory, is possible, and its achievements must be preserved. If it can make further progress, so much the better, but there is also room for a fresh look at the situation. Of course, the efforts of the U.S. and of Europe must be coordinated. We share the aim of a comprehensive peace settlement.

On proposals for expanding NATO's role. I do think that it is time to see whether NATO should extend its sphere of influence. You can see what's happening: the balance of deterrence--or the balance of terror if you like--between the Soviet Union and the U.S. and Europe is holding the line across Europe. But you are getting troubles almost girdling the world below the NATO belt. Viet Nam and Cambodia, Iran and Iraq, Ethiopia, Somalia and Angola, Central America and the Caribbean. There are times when your front line may be way beyond NATO. I do think that is something we need to look at, because raw materials lines are absolutely vital to the capability to defend yourself.

On stationing U.S. cruise missiles in Britain. So long as those fantastic S520s in the Soviet Union are targeted on Europeans, so long must I have a deterrent to them. We are very fortunate to have someone else's weapons stationed on our soil, to fight those targeted on us.

On demands by Labor leftists for unilateral nuclear disarmament. Look, it's my total objective to stop [Labor Party Leader] Michael Foot or anyone who shares that kind of view from ever getting in power. And I believe I'll succeed. I believe that this country knows that it must defend itself by all possible means. If we weren't prepared to, it would be an enormous victory for a potential enemy, without his ever having fired a shot. Whenever freedom was in doubt, we were prepared to stand and fight. If ever we weren't, there would be such a fundamental change in Britain, it would be a Britain I could not recognize--and do not foresee. Britain will stand firm. qed

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