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ON THE RECORD
RECORDED FROM TRANSMISSION BBC-1 DATE: 18.7.93
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JONATHAN DIMBELBY: Good afternoon and welcome to ON THE
RECORD. This week the Prime Minister will face the greatest test of what has
already been an exceptionally testing leadership.
On Thursday Parliament will vote on the
government's opt out from the Social Chapter of the Maastricht Treaty. If that
vote goes against him then John Major's future as leader of a Party at war with
itself over Europe will be even more in question than it is already.
The Tory victory at the last election
fifteen months ago, was a personal triumph for the man whom his colleagues had
chosen as their leader after they'd dumped Margaret Thatcher. Today though he
is more unpopular in the polls than any Prime Minister of modern times, his
backbenchers say he is now on probation and he has also been deserted by a Tory
press which now reviles him routinely as incompetent, indecisive, and adrift.
By any objective measure John Major HAS
had a pretty dreadful year. He had promised "vote Tory and the recovery starts
tomorrow" - but the pain of recession went on for month after month. There was
the debacle of Black Wednesday, the budget which extended VAT to gas and
electricity, and the prospect of worse to come.
There were the pit closures, the
interminable conflict with the teachers and the unresolved scourge of rising
crime. There were the resignations - Lamont, Mellor and Mates, Asil Nadir's
contribution to Conservative funds, and a host of lesser embarrassments which
have all combined to leave John Major looking distinctly beleaguered, defeated
at Newbury and threatend at Christchurch.
It was against that background that I
went to interview the Prime Minister yesterday at Number 10, Downing Street.
Prime Minister, you will hardly need
reminding that you are now the most unpopular Prime Minister for virtually as
long as anyone can remember. How do you explain such a remarkable fall from
grace?
JOHN MAJOR: Jonathan, I'm much less concerned with
what people think of me than what I'm actually able to achieve for them. What
I think people might wisely concentrate on is what has actually happened in the
last year. It has been a year, I freely admit, of unprecedented problems,
difficulties crowding in from abroad and the domestic problems of the recession
and a very bitter dispute to be frank, over European policy. But what has
actually emerged at the end of that year in terms of economic policy and other
things, that's actually what matters. If you and I had had this discussion a
year or so ago, would we have imagined we'd have inflation at one-point-two
per cent, the lowest level for twenty-nine years? Would we have anticipated
interest rates at six per cent? Would you have really thought we'd have had
exports growing more rapidly than anyone else in the European Community? Would
it have been people's expectation that we were leading Europe out of recession,
with growth this year and growth next year larger than everyone else. I doubt
most people would have imagined that. That is the reality that has come out of
the tough decisions that we've taken over the last year, and it isn't frankly
just in the economic sphere.
We've tilted, I believe, quite
significantly European policy towards the British agenda. We've tried to do
that for thirty years, we haven't succeeded, we have now. We've dealt with
other issues. We've carried through the health reforms, we've carried forward
the education reforms, vital I believe for our future and our competitiveness
in every conceivable way. Many other countries have faced great problems with
asylum and immigration. We saw those problems, we dealt with those problems,
they've gone. When we spoke a year ago, you referred to the problems we might
have with the introduction of the Council Tax. It's been introduced, it's been
a success. That is the reality that underlies much of what has happened in the
past year so I accept the problems that have occurred and the difficulties that
have come from them, but the things that have gone right are the things that
really matter.
DIMBLEBY: Now that's a long list and I want to
explore many parts of it, but the fact remains that you are exceptionally
unpopular and people blame, not so much the Government for what has gone wrong
or the difficulties that they've faced, they pin the blame on you personally as
John Major.
MAJOR: Politics are personalised, I think
that's part of the baggage we accept as Prime Minister, I don't complain about
that. No doubt as we move back into a clear and recognisable recovery, we're
back in recovery, it's getting bigger every day. No doubt people will observe
that in due course as it occurs. I don't complain. I expect leaders to
attract unpopularity. It's not a phenomenon here, of course. It's a
phenomenon you can see in every one of the industrialised countries.
DIMBLEBY: But there has been a sustained critique
which you, I expect at the receiving end of it, will regard as an onslaught
from the Press that is frequently called the Tory press. Is that critique, has
that critique of your leadership, of your style of leadership, of the way
you've led the party had validity or not in your judgement?
MAJOR: Well I don't frankly believe it has. I
mean I'm not here to talk about what the newspapers say, the newspapers are
there to write, I'm here to do. I'll get on with what I think is right for the
country and I'm not going to change my agenda on the basis of external
criticism.
But what are the things that really
matter to me? What are the things that I would like to be judged on, both now
and in the future? The first thing that I said on the day I became Chancellor,
long before I became Prime Minister was that I regarded inflation as public
enemy number one. I was in no doubt about the difficulties of getting
inflation down, the unpopularity of getting it down, the problems that that
would cause, but I believed it was essential to get it down; as Chancellor and
as Prime Minister, I've consistently pursued policies that will do that. The
success of that is evident. The lowest inflation rate for thirty odd years,
but there are other things as well if I may say so.
European policy has created a great
schism in British politics, it's not new, it's been there for thirty
years or so. When I became Prime Minister, there was a crack in the ground,
and I had one foot on either side of a widening crack about the problems on the
European policy.
DIMBLEBY: In your own party.
MAJOR: In all parties, I think really across
the country. But the reality is that we need to play a leading role in how the
European Community develops. I don't accept the argument that many people do,
that we lose the arguments in Europe. We patently don't. We win the arguments
in Europe. The single market was started by Margaret Thatcher, completed by
me, one of the most vital things in the European Community. Enlargement
occured because I pushed for it. We are winning the arguments in Europe and
our economic interest depends upon us having a leading voice.
DIMBLEBY: I will return to those things, but the
public will want to know what your reaction is to those newspapers who've been
hitherto supportive of Conservative Governments, that are regarded as serious
newspapers, the Financial Times, Sunday Times for instance that have
consistently said that your government is despite what you are telling me now,
rudderless - I'm quoting, driverless, lost. A Prime Minister, says the Sunday
Times, tested and repeatedly found wanting. Do you regard that as completely
getting it wrong or do you recognise some truth in it?
MAJOR: I am not going to waste my time talking
about the comments by commentators. They have to commentate, I have to do.
(INTERRUPTION) I am prepared to be judged by the results of what occured. I
wonder how many of those critics would have anticipated the fact that we would
be leading Europe out of recession into recovery in the way we are. None of
them. How many of them thought that we'd probably got the Council Tax wrong?
quite a few of them. We were right, they were wrong. How many of them would
actually have been able to tilt European policy in the way that we've actually
achieved over the last couple of years? It is the reality of what has
happened, not miscellaneous comment that I need to concern myself with, and
that is what I am going to concern myself with.
DIMBLEBY: I understand that. The reason why I put
it to you is because you said in a speech in quite tough language, 'I'm tired
and weary of gossip dressed up as news, malice dressed up as comment'. Well
there's ... Do you think that's malice?
MAJOR: No I'll tell you why I'm concerned about
that. This country, every country in Europe - every industrial country in the
world, but this country is the one I'm concerned about, faces some strategic
problems, they've been there for a long time and the recession has stripped the
masking tape from them and they're more evident. We do need to expand, widen
and deepen the industrial base in this country and improve competitiveness. We
do need to look at the long term difficulties we face in funding all the social
expenditure we want to carry out. Year in, year out, good years and bad years,
we're finding expenditure on social matters exceeds inflation by about three
per cent a year. We have to look at that problem and address it. We have to
address the problem that parts of our education system is less good than it
ought to be. I want a genuine public dialogue about how we take the long term
decisions to get those things right, and the frustration if I have one is the
difficulty of engaging the public in a long term dialogue about these long term
issues, and I passionately believe we have to solve.
DIMBLEBY: The context in which these criticisms
occur which is frustrating to that degree as you describe it is one in which
people have said, you will regard unjustly for certain, said that the man is
indecisive and they cite again and again the sackings. This was a man who
could not bring himself to make tough decisions and get rid of ministers when
they were damaging his administration. He left it until the chorus of the
press said 'They've got to go.'
MAJOR: Well I frankly don't think the Ministers
would see it that way, I really don't think the Ministers would see it that way
and I'm bound to say, if the chorus of the press had been answered immediately,
the press chorused and I got rid of a minister, then I think the press would
have a case, but that isn't the position. I will determine who's in the
Government and nobody else, and I have to make a judgement, about not what is
approved of by the press or other people, but about what is right for the
Government and the conduct of public business, and those are the bases upon
which I'll make those judgements.
DIMBLEBY: But was it right, when there was a
clamour to get rid of your Chancellor, Norman Lamont, after Black Wednesday to
hold onto him for another eight months and then get rid of him?
MAJOR: I think it was right to act precisely as
I did. It's always a tough decision to decide to get - to change the
Chancellor of Exchequor. I wanted Norman to serve elsewhere in the Cabinet.
One has to put the people you have in the positions that you think are most
appropriate at a particular time. I thought Ken Clarke was the right
Chancellor to lead us into recovery. I think Norman Lamont did a remarkable
job during extremely difficult circumstances and I've said that publicly before
and I'll repeat it again. I asked Norman to serve elsewhere in the Cabinet.
DIMBLEBY: And he refused that. The charge though
was that by holding on to Norman Lamont during that period, not only was
confidence in Britain continually undermined in itself, but that you only held
onto him because you were fearful that if you didn't, the flak would be
directed at you personally.
MAJOR: Well, any Prime Minister is open to
charges of that sort. I could spend my life defending myself against silly
charges like that, I've no intention of doing so, I have better things to do.
The things I have to do are to get on with the business that needs to be done
and I think in terms of the economic changes and the social matters I set out
earlier, that is precisely what we're doing. We've been in a silly period, a
frenetic period. Politics has been pretty silly, there have been all sorts of
funny stories that have appeared, they've run for a while, they've gone away,
it's been a sleazy period in that sense but I hope we are through that and we
can concentrate on the long-term problems that are vital to this country's
prosperity.
DIMBLEBY: You say it's been a sleazy period. Has
not trust in your government and in your Party been undermined by the
impression that you aren't too scrupulous about your own act, by which I mean
that you appear to be ready to accept donations to your Party from somewhat
dubious sources.
MAJOR: Everyone who works in the Conservative
Party and there will doubtless be millions of them watching this programme
Jonathan, know how we raise our money. We raise most of our money in the
constituencies, from businesses who actually support us, who believe in our
philosphy, who believe we create the right framework for this country. There
are other donors who believe in us, believe in our policies, have an interest
in this country, they have a right to remain anonymous if they wish.
DIMBLEBY: Like Asil Nadir?
MAJOR: There is...
DIMBLEBY: Like Asil Nadir Prime Minister?
MAJOR: Well let us deal with Asil Nadir. Asil
Nadir made donations to a whole series of charities right the way across this
country and he also made donations to the Conservative Party in the 1980s when
he was seen by everyone as a respectable businessman who was running a very
large company. What happened recently when he subsequently ran into great
difficulties, we've had a really rather frantic affair, everyone who seems to
have had some connection with Asil Nadir perhaps ten years ago has been
pursued. I know a man who knew a man, who's mother danced with Asil Nadir.
Good gracious, another Tory link with Asil Nadir, it was a very silly period
and what has happened to all those revelations that were going to come from Mr.
Nadir about the Conservative Party? They've disappeared off the map; they
haven't appeared.
DIMBLEBY: But then how can - however, people have
confidence in the funding of the governing party when they only know the names
of those individuals who are on the run.
MAJOR: The overwhelming majority of
Conservative Party donations come from the constituency parties and from
companies who report those donations in their company accounts, that's the fact
of the matter. We're a democratic party funded by democratic means and what is
the alternative? Is the alternative to be State funding? Is the taxpayer to
be ransacked compulsorily in order to support the political parties? I don't
believe that is an attractive posture at all. I do see a case reluctantly but
I see a case for supporting opposition parties so that they can do their job
and oppose the government, there is a case for that but I do not wish to see us
move in this country to a position where the taxpayer is the main supporter of
all the political parties, that is not what I wish to see in British politics.
DIMBLEBY: Do you - on the question of your
leadership still, do you recognise at all that the public feels let down, feels
that promises haven't been fulfilled, feels that commitments haven't been
honoured and therefore, you and your government now are not to be trusted?
MAJOR: Which commitments? I gave a clear
commitment that we'd bring inflation down, we have done. I gave a clear
commitment that I thought it was right for us to carry though the Maastricht
Treaty, that is all but done. I gave a clear commitment that we'd tackle
unemployment, unemployment is starting to fall. I gave a clear commitment we'd
carry through the health reforms, we have done. I gave a clear commitment we'd
carry through education reforms, we are doing. I gave a clear commitment we'd
deal with the problems of asylum, we have done. I gave a clear commitment that
we'd satisfactorily introduce the Council Tax, we have done. What about the
things that have happened and have happened successfully but are so often swept
aside?
DIMBLEBY: So you have no sense that the public
rightly or wrongly, you've given a long list there that suggests that if they
do feel it, it's wrong, you don't have a sense that they do feel let down by
you?
MAJOR: What I think the public are concerned
about is the way in which much political debate these days is conducted and
frankly I share that. There are very complex issues that I would very much
like as Prime Minister to be able to get over in a mature way to the electorate
at large. It is astonishingly difficult; what do the electorate see of
politics? They see Prime Minister's Question Time, the Prime Minister and the
leader of the Opposition exchanging harsh words on a regular basis, I don't
think that actually is the most edifying sight in British politics and I don't
believe that John Smith does or that Neil Kinnock did before him. What do they
see beyond that? Prime Ministers, members of the government make long speeches
on a whole range of matters, they get a minute or two on the news, followed by
a minute of opposition parties criticising them. We have interviews, we discuss
the sort of things we're into, we've been discussing in the last few minutes,
not the long term structural problems, so infrequently do we discuss those.
Yet out there in the country people are
concerned, they want to know what their future is, they want to know are we
going to get people back in employment, are we going to improve the education
system, is the improvement in the economy going to be sustained, what is the
position we are going to have in Europe? What is our position as far as the
rest of the Commonwealth are concerned? What is the likely outcome in Bosnia?
How do we view the problems in the Soviet Union? It is extraordinarily
difficult in an age where the media moves at such pace, I make no particular
criticism of it, I simply observe it, where the media moves at such a pace to
stop, consider and seriously address matters that I believe concern people in
every part of the country.
DIMBLEBY: That's tantamount to saying, I can't get
the message across, leaders can't be leaders.
MAJOR: No, it isn't tantamount to saying that,
it's tantamount to saying there are great difficulties in engaging in long term
debate. I want to engage in long term debate, not silly, trivial short term
issues.
DIMBLEBY: Let's look at something which is by no
means silly and trivial, and about the trust that the electorate may or may not
have in this government. Just before the election as you will recall, you
promised: Vote Tory on Thursday and the recovery will start on Friday. The
public were entitled to feel very let down by what must be regarded by them as
an extremely misleading statement.
MAJOR: Well, was it misleading? Was it really
misleading? If you actually look at the statistics that always become available
historically this economy started growing in June of last year. There was
growth in the economy between June and September, between September and
October.
DIMBLEBY: Much higher - much higher from September
- after September, after Black Wednesday ....
MAJOR No, it accelerated a little, it didn't
accelerate a great deal. It had started in June, there was growth from June to
September, September to December, December to March and March onwards. It did
start growing then and it is becoming increasingly apparent that that is the
case and I .....
DIMBLEBY: Well I will come to that ....
MAJOR: Just let me finish the point.
DIMBLEBY: Okay.
MAJOR: And as far as the statistics over that
period are concerned, as more information becomes available it becomes more
apparent that the growth was actually starting then before Black Wednesday,
shortly after the general election, just as I indicated it would during the
general election campaign.
DIMBLEBY: But, if you are a voter in an election
and you're told the recovery starts on Friday and you discover that for the
next nine months unemployment continues to rise, three hundred thousand more on
the dole, if there are still repossessions, still bankruptcies, you're liable
to think, "I've been misled".
MAJOR: But Jonathan, after the 1981 recession
there was a tail of unemployment that ran for four years. Not very many months
ago it was the fashionable view that unemployment would go up to
three-and-a-half million, that it would go on for another two years even though
we're clearly now going back into recovery - but no, just a second - it
hasn't happened. Who would have forecast in January that we would have had
five successive falls in unemployment, that our long term unemployment would be
a smaller proportion than almost anywhere else in Europe, and similarly the
same with youth unemployment. Very few people would have forecast it, but it
has actually happened and it is certainly in tune with what we were saying in
the election.
DIMBLEBY: But I wonder, Prime Minister, whether
the electorate aren't still right to have felt that they were misled with that
promise in the election, and I say it partly on the basis of what you yourself
said in an interview not very long ago, when you said, "Immediately after the
election, immediately after, I said to quite a few people, within the course of
the next twelve months I will be one of the most unpopular people in Britain".
Clear foresight and you added Prime Minister, "because I could see the way the
economic cycle was going". People were going to feel worse, not better.
MAJOR: No, no, I'm afraid you've misunderstood
the point. I certainly expected there'd be very great difficulty because I
knew we would have to deal with many of the long term problems that are
becoming apparent, the problems we are dealing with. I was in no doubt about
the impact that would be felt right the way across Europe by the problems that
actually existed in some continental countries.
DIMBLEBY: .....should they vote Tory, life is
going to be very difficult still.
MAJOR: Life is getting better. The economy is
recovering, unemployment stabilised and has started to come down, investment is
recovering, growth is recovering. It does take a while for that to work
through from the workplace into people's pockets. What is now beginning to
happen is not only that unemployment has fallen over the past five months,
albeit by modest amounts, I don't make too much of that, I'm delighted it's
fallen but I don't make too much of that, but also the fact that those people
in work are starting to work overtime again to a larger extent. Now that is
the classic sign of an economy that's moving back into recovery as we said it
would, and we need to sustain that.
DIMBLEBY: Let us then see how confident you are
that it can be sustained. Let me ask you first of all, is the pound now at the
right kind of level for sustained recovery?
MAJOR: I don't think anyone's ever going to
talk to you about, for obvious market reasons, about whether the pound is at
precisely the right level. What I will say is that as a whole British industry
is very competitive, that's not just the exchange rate of the pound, it's
productivity. The productivity growth in manufacturing industry has been
astounding. Some figures released recently actually indicate that. For the
first time in thirty years relative to the Japanese and the Germans, we are
becoming more competitive. Now in our adult life you and I can't remember
that. It's one of the reasons, even when so much of the European market, our
traditional market is depressed, and also other parts of the world. Our
exports are still increasing and we're taking a larger share of smaller markets
and that isn't just the exchange rate, a sterling change, it's also the
increased fact that we are more competitive.
DIMBLEBY: Now, given though that the exchange rate
plays a part - and I understand that you're not going to start playing the
markets on television - is it your intention to ensure that the pound remains
competitive?
MAJOR: No, I'm not going remotely into that,
and I think you know very well that I'm not. What I am concerned about is to
make sure that British industry is competitive and increasingly it is, it's
taking the right sort of decisions in terms of wage increases. I know low wage
increases aren't popular with the people in work, but they ought to be popular
with the people out of work because they make it more likely that those people
will be priced back into jobs and they also make it more likely that we'll
sustain our exports and sustain the growth in our economy.
DIMBLEBY: Given the fact that we are relatively
competitive, but also the fact that Europe is now going deeper into recession,
particularly Germany and France, our principle partners and competitors in
Europe, it is inevitable that people are going to feel extremely sceptical
about a sustained recovery when the markets, the export markets upon which that
recovery heavily depends are declining in size.
MAJOR: Yes, there's some validity in that and
I've made that point myself in the past. I mean we export around the world and
are doing so increasingly in the United States, the Far East, all the way
around the world, but we have very substantial exports to Europe, one of the
important reasons for us taking a high profile in the European Community, and
there is a collapse particularly in the German, the French and the Spanish
markets and that is a worry. It is being offset as far as we're concerned by
the fact that we are more competitive. What it means is that we are getting a
larger share in Europe of a smaller market in Europe and it does emphasise very
clearly the absolute imperative for us to remain competitive and that means
relatively low wage increases, it means that we have to contain our costs and
keep inflation low..
DIMBLEBY: But aren't people also going to be
extremely sceptical when they hear this new talk about partnership and
intervention and what they know is the reality of pits that have closed and
shipyards that have closed or closing?
MAJOR: No, not intervention, partnership and
working together most certainly. I do think there's a case for a different
sort of partnership with industry and commerce, but let me try and indicate to
you what I actually mean by that. There are a range of things that have - that
perhaps illustrate this. We've improved ECGD coverage for example so that
British firms no longer operate at a disadvantage.
DIMBLEBY: Can you just for the benefit of those
who aren't acquainted with ECGD coverage ....
MAJOR: I'm sorry - it's export credit cover to
enable our firms to export more competitively abroad. Our embassies abroad
are working much more efficiently, the government is increasingly taking
missions of British businessmen abroad to use our political muscle to sell
British goods abroad. In a whole range of other areas we're looking at a whole
series of projects such as joint finance between the government and industry.
What we are not doing is looking at artificial intervention and subsidy to
sustain industry. The other great change that I think is necessary that we
have in hand at the moment is deregulation, taking red tape away from
businesses. There's still far too much of it from Europe and in Whitehall, and
often Whitehall adds to the European regulations and makes them more difficult.
DIMBLEBY: So when you use this phrase .....
MAJOR: We have to deregulate so that business
can do the job it's there for.
DIMBLEBY: So when you use the phrase that in the
eighties there was a cold bath too far, what you're talking about is a bit of
red tape removed, a bit more help for exporters abroad but nothing more
substantial than that.
MAJOR: Oh, well I think you understate it, and
you miss one ingredient. Certainly making sure that export credit remains
competitive is a vital point as any businessman will say to you. The
government using its political muscle is an important difference. Deregulation
is a big matter, not a little matter, for business and exporters and I think
the general climate of ensuring that we work with business to promote their
interests and consequently the country's interests abroad is a very important
matter indeed.
DIMBLEBY: Prime Minister, you go on a great deal
too about the importance of education for a sustained recovery because you need
the quality of people in that economy. People are going to extraordinarily
sceptical when they say, "Well it's all very well for him to bang on like that,
but for fourteen years this government's been in power. Why on earth haven't
they got it right?".
MAJOR: Well, I think a great deal has been done
in education. that doesn't mean there isn't more to do, A great deal has to
be done, but what I have to look at now is what is the position going to be in
the next few years. Are we going to be producing from our education system
young qualified people who are the equal or better than the Japanese, the
Germans, the French, the Americans and others. I need to make sure that we
are. Now the top percentage of the young people coming out of our schools are
very high quality indeed, we need fear competition with no one in the world,
but beyond that there are a large number of youngsters who I do not think
emerge from our education system with the same qualifications as they do in
some other countries and we want to improve that.
DIMBLEBY: So you end up in a slanging match with
the teachers that you lose.
MAJOR: Well I don't think it is a slanging
match, I certainly don't want a slanging match with the teachers. I'll tell you
exactly what I want with the teachers, I want to work with the teachers to
improve our education system and I mean that right the way through the
education system from when they enter school to when they go onto further
education. We've said for example, that we wanted about one in three of our
youngsters to go into further education by the turn of the century, we're well
ahead of schedule on that, we're very nearly there. But one of the reasons we
are so concerned about testing in schools, there are two reasons effectively to
be frank, one is that if you test youngsters you find out what they do not know
and you can then put it right and secondly, I think parents have a right to
know right the way through school precisely how their child is doing at school
- those are the two things that underline testing and I believe most good
teachers agree with us about that...where the difference is is that they think
the tests are too bureaucratic, we'll look at that.
DIMBLEBY: But if they still don't like it, do you
give way again and have the fiasco of this summer or do you say I am sorry
folks, I am a leader who feels so strongly about this I am prepared to
legislate to ensure that you do do it.
MAJOR: I'm not going to permit you to talk me
into confrontation with the teachers today.
DIMBLEBY: Well you've been pretty confrontational
in everything you say.
MAJOR: Just one moment, the teachers themselves
want to improve the quality of education, they don't object to testing per se.
What they are saying is that the tests were too complicated, well we're looking
at that, what we want is simple pencil and paper tests that can actually
identify what the child doesn't know, we have a report by someone, Ron Dearing
who is widely respected in the teaching profession, that I hope we'll get in
the next few weeks.
DIMBLEBY: And if they don't like it?
MAJOR: Well you presume they won't, they may be
very keen on it.
DIMBLEBY: And if they aren't?
MAJOR: We'll face that problem when and if it
comes...I so no reason..I see no reason to suppose they are not going to
welcome the changes that Ron Dearing makes.
DIMBLEBY: Now all these things are part of the
longer term that we've discussed. Let me ask you about the immediate
difficulties that you still face as a consequence of the recession - a deficit
of some fifty billion. The public, therefore, feels itself to be facing a
pretty unpalatable possibility. You've let them down already on VAT - they'll
want to know are you ready to do it again?
MAJOR: We're certainly going to see the deficit
close. We've taken a good deal of action to close the deficit. I think it's
fair exorcising for a moment why the deficit rose. A very large part of the
deficit - people argue about how much - but a very large part beyond dispute is
cyclical. That is to say it is the result of the recession. In a recession
there are more social expenditures to protect people and incomes fall.
DIMBLEBY: You said it's two-thirds. It's a bit of
a guess isn't it?
MAJOR: Nobody can be precisely sure what it is
but it's a very large sum. It's a very large proportion of it. Some people
would say a hundred per cent; some economists have said a hundred per cent.
I'd say two-thirds, others have said less. But we can agree it's a very
substantial part of it. It's because expenditure goes up to protect people and
income falls for a raft of reasons - fewer houses sold, no stamp duty; fewer
expenditure, less VAT; fewer in work, less tax. So you get a gap. That
reverses itself as the economy recovers.
We've taken a certain amount of action
already on public expenditure and I've made no secret that it will be a tough
public expenditure round again this year and neither has the Chancellor or the
Chief Secretary. We have tax increases that we have announced to come into
effect. So they will go a long way towards clearing what the deficit is. We
will certainly look in the public expenditure round at what more needs to be
done and it is necessary for it to be done, because if you have a long.. a
large deficit for a long period it will push up interest rates - that would be
very damaging.
But I think there are two other points
worth making. We are not alone in this problem. This problem exists in every
one of the countries gathered round the G-7 table, with the exception of Japan.
They all have this problem. But the final point, if I may Jonathan on this
point, is when we were in the recession I heard no-one saying to me "Don't
protect people in the recession". I heard no-one saying to me "Don't protect
firms in the recession, because of the impact of it". We were right to do
so, and if we hadn't done so we'd have faced a bigger problem today.
DIMBLEBY: But during that recession, you said in
the run-up to the election, I've made the pledge in the past, you said, for
VAT, and I have made the point before - we have no need, no plans to extend the
scope of Value Added Tax. People, as you well know, feel very let down by
your reversal of that pledge.
MAJOR: Nor had we Jonathan. If we had I would
have said so.
DIMBLEBY: But I thought you said you knew exactly
what was happening to the economy. So you got it wrong?
MAJOR: Let me respond to you in full. We had
no expectation that that would be necessary. You've seen what has happened in
the economy - we are not wholly an island, except geographically. We have to
reflect what happens in the world economy. Is there anybody watching this
problem who doubts that the economy changed quite dramatically last year? You
yourself referred to what happened in Germany, what happened in France, what's
happened in Spain, what's happened in Japan, what's happened in the United
States. They all have an impact upon us. If we had any plans to do that, we
would have set those plans out.
DIMBLEBY: But was it not, in truth, misleading to
say to the public "Don't worry" - this was the General Election - this was the
general message "Don't worry - vote for us" you said.... Just let me make the
point I was suggesting you were seeking to make in that campaign to the public
- as I'm sure you may feel you'll agree with it. What you were saying was
"Vote for us, vote Tory - taxes go down. Let me reassure you we ain't going to
do anything about VAT - trust us". The result of what happened is that people
do not trust you.
MAJOR: We faced at that stage not just the
single extension of VAT to which you've just referred. We were facing
accusations, day after day, from our political opponents at the time, without
any foundation whatsoever that we were planning to increase the rate of Value
Added Tax from seventeen and a half per cent to twenty-two and a half per cent.
Not only were we not planning to do it, we saw no need to do it, it hadn't
been considered, it hadn't been discussed, it wasn't remotely on the agenda;
and yet day after day my colleagues in interviews like this and in the
newspapers and elsewhere were facing charges that that was the case. It wasn't
the case.
DIMBLEBY: All right. Now then can I ask you - are
you able to reassure the public who are wondering whether or not this recovery
is going to be sustained in their own pockets, whether you can give them the
same undertaking as you gave them so happily in the election that you don't
have need or plans to extend VAT beyond where you have already extended it?
MAJOR: Well, I dealt with that point a moment
ago when I said we were seeking to control public expenditure.
DIMBLEBY: Does that mean that you can give them
the guarantee on children's food, on food, children's clothes?
MAJOR: Just one moment and I will come on to
those points. We need to examine exactly how much we can save in public
expenditure. Exactly how much growth will eat away the deficit. The answer is
we don't have plans. I don't know exactly what the circumstances will be in
the future and for precisely the reasons you've just put to me at the moment,
that we were forced to change our mind by circumstances, it would be unwise for
me to rule anything absolutely definitively in or absolutely definitively out.
What I can say to you is we have taken action on the tax front, we have taken
action already on the public expenditure front, we are seeing growth and we are
certainly planning to take more action on the public expenditure front. When
we have done that we will have to look and see.
DIMBLEBY: But at the moment you say, in all
conscience, we have no plans... at the moment we have no plans, is the word
used, we have no plans, and at the moment so far as you judge it, no need to
extend the scope of VAT beyond energy into food, into children's clothes, into
shoes.
MAJOR: You mustn't put words into my mouth. I
set out the position precisely as it was and I've nothing to add to that
particular point. The Chancellor of the Exchequer will have to look at things
as we run up to the Budget.
DIMBLEBY: The Chancellor of the Exchequer, only
this weekend, has said that he has it in mind - I'm not quoting him exactly -
he has it in mind that VAT in itself, an extension of VAT, is a perfectly valid
way of raising more money.
MAJOR: He has refused to rule anything out or
anything in, and I think on the background of what has happened in the world
economy in the last few years that must be a wise thing for a Chancellor to do.
The moment you invite me to rule one thing out, you'll move on to another.
DIMBLEBY: I didn't ask you to rule anything out.
You used the word - Prime Minister, with great respect - you used the word we
have no "plans" in respect of VAT.
MAJOR: Once one begins to rule in or out any
individual thing - we have learned from experience - the caravan rolls on to
something else. It is better not to get involved in that.
DIMBLEBY: Just one more thing and it's just to
clarify what I know that you.. and you know you've actually said in this
interview: you are not ruling in or ruling out, I understand that, because of
the change in circumstances that might occur. But at the moment you have no
plans on VAT to extend it?
MAJOR: That's certainly the case.
DIMBLEBY: Now can I put further to you that if you
do raise taxes - personal taxes, direct taxes or extend VAT further - then
regardless of whether it's necessary or not in your judgement, your credibility
will be in tatters, given the pitch that you've always made to the public.
MAJOR: Well, you're predicating this on an "if"
basis. I'd rather talk about what we are doing and what our plans are in areas
where we can make proper plans rather than predicate "if" questions. I'm not
going to get involved in those questions.
DIMBLEBY: Can you be confident under the
circumstances that you will honour all your electoral commitments on spending?
MAJOR: We set out some very precise areas where
we have specific election commitments and we have made it clear - the
Chancellor's made it clear again in the last few days - we will honour those
specific commitments.
DIMBLEBY: Child benefits, pensions and so on.
And, and... so when my.. go on.
MAJOR: Let me make it clear. There are some
areas where we think it is attractive, where we can afford it, to spend money.
We don't instinctively and ideologically want to cut spending in every area.
There are some areas where it is attractive and it is necessary.
DIMBLEBY: Including single parents?
MAJOR: There are demographic areas just a
minute.. there are demographic areas where it is necessary to increase
expenditure. There are going to be more people of retirement age, they're going
to be living longer, doctors and surgeons are continually going to find more
ways of treating people. We want to improve that. We will need to look for
resources to cover those areas of expenditure by making savings elsewhere. But
what we do say is - like every individual household - we have to bring our
expenditure as a whole into what we can afford, and that means we have to pick
priorities. Don't ask me before the patchwork is complete to pick out each and
every one of those priorities, for I can't. What I can say is there are
certain areas with evident priorities, but we will have to wait until the whole
patchwork becomes clear.
DIMBLEBY: But the manifesto commitments you will
stick to. When Michael Heseltine said earlier - and it happened on this
programme - said that if you rule out options because they're manifesto
commitments, he added, well, you won't then just have a fifty billion deficit,
it will be higher.
MAJOR: Well, I think we'll have to wait and see
about that. The borrowing requirement yesterday was a good deal lower than
many people imagined in terms of the fifty billion deficit. I think people
have to take into account the revenue from growth, the revenue from the tax
increases already announced, and the savings from the public expenditure we've
already announced.
DIMBLEBY: You are saying in effect, given these
problems of spending that you face and the demographic changes, that down the
road, even if we have a sustained recovery, Britain is going to be too poor to
pay itself the kind of benefits that we believe now, across the board, are
appropriate?
MAJOR: What I'm saying is in every single
country, industrial country in the world - it was clear at Copenhagen amongst
the whole of the European Community and clear right the way across the G-7, the
most powerful nations in the world - that in order to cope with the demographic
and other increases in expenditure that will be necessary, we will have to look
for savings elsewhere. The alternative to that is an ever growing tax burden
upon everyone, large incomes and small, that would damage us in a raft of
ways. Now that isn't a sensible way in which to deal with it.
DIMBLEBY: I understand that argument...
MAJOR: Let me finish because it is vitally
important. This is a long-term problem. It's not just a short-term problem
for this year or next year. There have been two things that have been
happening over the last twenty years or so that is now crystal clear. No just
in this country, I emphasise, but right the way across the industrialised
world. First is that unemployment has been on an underlying rising trend
throughout the whole of that period and in many countries the levels of
long-term unemployed is a good deal worse, are a good deal worse than they are
here. We need to look at structural economic changes to cope with that. And,
secondly, is that the growth in the whole levels of social cost expenditure
have outstripped what even the most powerful economy can afford, and if you
look across Europe - the Germans have just made Draconian changes, the Dutch
have, the French have, the Spanish have - every country is doing it. It's not
a unique problem to hear - it is sensible and prudent housekeeping in changing
circumstances.
DIMBLEBY: On the matter of Europe, Prime Minister,
you face a not insignificant test of leadership this Thursday when the House
votes on the Social Chapter. It is clearly going to be a very close call.
How vital for you is victory in that vote?
MAJOR: Let me touch upon the issue of the
Social Chapter. I have opposed the Social Chapter very vigorously. Let me
tell you why - there are several reasons why. Firstly, because I believe it
will add to costs on employers and it will, therefore, cost jobs. I want to
see less people out of work not more people out of work, so I oppose it for
that reason. The second reason is that it is a most massive extension of
authority to Brussels. It would give them power across a whole range to
produce directives that would add further and further costs to British industry
and commerce. I do not believe that is the right thing to do and I don't
believe any Conservative Member of Parliament believes it's the right thing to
do. I can understand why Labour like it - because it does effectively
introduce Socialism by the back door. I am baffled as to why the Liberals do
it, except that they are by instinct Federalists, they do believe in
transferring more power to Brussels.
DIMBLEBY: Now given your passionate commitment on
that matter, you have always said that you would not ratify the Treaty with the
Social Chapter. Is that still your position?
MAJOR: We're going to win the vote on Thursday,
I believe, and I'm not entering into ifs and buts, but let me just come back to
the question of the Social Charter again. I found something quite interesting
the other day - I think it is a fairly unprincipled series of opponents that we
have across the floor of the House on this Chapter - let me read something to
you, and if you'll forgive me I'll read you a quote: "I believe what is now
being put forward in the Social Chapter may well lead to a form of
Euro-sclerosis. The Social Chapter in the Maastricht Agreement it seems to me
is a really worrying attempt by Europe to try and rebuild in Britain the things
that we have dismantled over the last twelve or fifteen years". I agree with
that, absolutely. Who said it? Chancellor of the Exchequer? Me? Douglas
Hurd? It was Paddy Ashdown. What on earth are the Liberal Party doing if
they believe that, supporting the Social Chapter?
DIMBLEBY: Now if I may say given that it leads in
your view to a form of Euro-sclerosis...
MAJOR: No, no, no, no. That it his view.
DIMBLEBY: And you share the view. Given that it
has all these qualities, I have to take it that you, under no circumstances,
would allow yourself to ratify a Treaty with the Social Chapter.
MAJOR: The situation Jonathan is purely
hypothetical because I cannot believe, given the damage of the Social Chapter,
that it is not going to be defeated. Let us consider...
DIMBLEBY: Prime Minister, as Leader of your Party,
on a great matter of principle..
MAJOR: I have told you... you are dealing with
hypothetical matters. I'm telling you the situation isn't going to arise. On
Tuesday of next week, unless something quite extraordinary happens, the Bill
approving the Maastricht Treaty - the European Community's Amendment Bill -
will complete its passage in the House of Lords. It will be law, it will get
Royal Assent. Here is a free-standing debate on the Social Chapter and I
don't believe - given the nature of the Social Chapter - that Conservative MPs
when they consider what it means and what it can do are going to do other than
support the Government in that division and I am simply not.. we are wasting
our time if we go further. I am not going to get drawn on what tactics might
occur if something else happens.
DIMBLEBY: I don't seek to ask you about tactics.
I'm asking you about principles. If it was hypothetical just now whether or
not you would support, it was hypothetical on the previous occasions when you
have said, unambiguously: "I would not sign a Treaty with the Social Chapter".
MAJOR: I don't think I can make it any clearer.
I don't believe the circumstance is going to arise. I do believe on Thursday
that people will examine the issue on its merits. The issue is the Social
Chapter. Is it good for this country or bad for this country? I believe it's
bad for this country. I don't know of anyone in the Conservative Party who
doesn't believe that it's bad for this country and perhaps more important in
the eyes of many of your viewers, I don't know of a single employer, large or
small, who does not believe that we would be unwise to have the Social Chapter.
It is a Charter for unemployment not Employment. Now I don't see how anyone
can support that and, given what they have said themselves, I don't understand
how the Liberals can.
DIMBLEBY: Now given that this is an important
matter of principle for you and you are asserting your confidence in the
matter, let's get clear, however, what the constitutional position is. I'm
not asking about what happens if you lose the vote. If you WIN the vote, as
you say you will do, I presume that that gives you the authority to go ahead
and ratify. Is that correct?
MAJOR: Well, we now face a Court case, and I
think the Court case.. the Court case may inhibit ratification, but that would
be the only inhibition...
DIMBLEBY: If you get the approval you can ratify?
MAJOR: If we get the approval we can ratify.
DIMBLEBY: Now that suggests if you DON'T get the
approval you can't ratify, as a matter of constitutional logic.
MAJOR: With great respect to you Jonathan, I
have indicated that I am not going to get involved in "what ifs". I believe we
are going to win and we will be able to go ahead and ratify, subject only to
the difficulty that may arise over the Court case.
DIMBLEBY: What you've said is that if you get the
vote in favour you then can go - subject to the Court case - to ratify. Now
the Clause in the Bill which you approve - which is why you're having this
Debate, this Motion, on Thursday - says the Act shall come into force only when
the House of Commons has come to a resolution on the Motion. What does
resolution mean there?
MAJOR: Oh well, we're going to debate it, we're
going to reach a conclusion on it, we are going to defeat it, that's a
resolution.
DIMBLEBY: But the resolution can mean several
things. It can mean a vote that goes in favour of your position or it can mean
simply that a vote was taken.
MAJOR: We have spent a long time dancing on the
head of a pin with legal advice on a whole series of occasions during the
process of this Bill and I think you know and I know and probably most people
watching this interview know. I'm not going to get drawn down legal niceties.
I think most of this is going to turn out to be irrelevant. We will have
agreement ...
(TALKING TOGETHER)
MAJOR: We will have the debate on Thursday. We
will reach a conclusion of the resolution because we will win the vote on
Thursday.
DIMBLEBY: Now that suggests that a resolution does
mean that we have to win the vote in order to go ahead.
MAJOR: Well I've indicated that we are going to
win the vote in my judgement. I cannot conceive that Conservative MPs
concerned about unemployment are not going to vote against something that they
believe will damage employment and hand massive powers from the United Kingdom
to Brussels in a whole stream of directives that will add costs to British
industry and British commerce. It defies logic that they would do so.
DIMBLEBY: Now if it's the case that ratification
depends upon a vote in favour in this motion on Thursday which is a position
that is the correct position to take?
MAJOR: Well I've just indicated to you Jonathan
that I'm not going to get involved in the legal niceties of this. I believe we
will win the vote on Thursday and then subject to whatever may be the outcome
of the court case, and I've only just heard about that a day or so ago, we will
then be able to go ahead and ratify, and I expect to be able to do that.
DIMBLEBY: Just one more thing, because people
watching this programme, individuals who may want to speak about this to their
Member of Parliament, Members of Parliament who say he's the leader and I want
a lead from him, will want to know whether or not the outcome of that vote
determines whether or not ...
MAJOR: The lead is quite clear, the lead is
quite clear Jonathan, let me leave nobody in any doubt about the lead. I
believe in the wider European interest for us to ratify the Maastricht Treaty
is very important. That is why, though on a number of occasions I could
perhaps have ditched it, I've been under heaven knows enough pressure to do so,
I believe it is right in the long-term interests of this country, and its
influence in Europe to approve this treaty. If we're to build in Europe the
sort of open market, free trading, wider Europe that I want, we must have that
influence in Europe and that is why I feel so passionately about this
particular bill, I equally feel that the Social Chapter would be very damaging
to this country and I shall be advising my party to vote against it, I expect
my party to vote against it, I expect them subject to the court case to be able
to ratify the Treaty and I then propose to move onto the wider European issues
of importance to me, widening the Community and making sure that the Community
operates in a more democratic matter with a completely open and free market.
That has always been my ambitions for the Community and I don't propose to be
pushed off them.
DIMBLEBY: But given that passionate commitment,
Prime Minister, it will seem remarkable to people, not least in your own party
that you are not willing to say what you've said so many times in the past 'I
will only ratify a Treaty which excludes the opt-out'.
MAJOR: We are facing a vote on Thursday that
we're going to win. What you're inviting me to do repeatedly, and I decline to
do, is to get involved in what happens if.
DIMBLEBY: That's not a what happens if, that's a
statement of principle, Prime Minister.
MAJOR: I'm not going to get involved in it
because I can tell you what will happen. Conservative MPs will realise that
the Social Chapter is damaging to this country, damaging to employment, hands
powers to Brussels and the Government will win the division on Thursday and we
will then ratify the Treaty. Now I hope that is quite clear.
DIMBLEBY: It's up to a point clear, it's as clear
to this extent, as you say if you get the approval then you'll be able to,
subject to the court case, go ahead and ratify which suggests to me that you
need the approval in your own minds eye. Let me put this to you, are you a man
who is willing to defy majority will or not in Parliament?
MAJOR: Well again you are asking what if.
DIMBLEBY: A matter of principle.
MAJOR: Let us consider Parliamentary will then
Jonathan. Parliamentary will, by Thursday will have approved the Maastricht
Treaty. We are discussing discreetly the Social Chapter. We will win on the
Social Chapter. We will then go ahead and we will ratify, subject to the court
problems, the Treaty.
DIMBLEBY: Prime Minister, is this a vote of
confidence in you on Thursday.
MAJOR: It's a vote on the Social Chapter. The
motion is quite clear. It is a vote on the Social Chapter and it is a vote
that the Government are going to win on the Social Chapter.
DIMBLEBY: Is it a matter of confidence in you.
MAJOR: To vote on the Social Chapter, Jonathan,
it's perfectly clear what the vote is about. It couldn't be clearer.
DIMBLEBY: So your job's not on the line over this.
MAJOR: It's a vote on the Social Chapter. A
vote that's important that we will win and will enable us then to proceed with
a Treaty that I believe is essential for us to maintain our authority in Europe
and build the new Europe.
DIMBLEBY: And in your view has no implication
about whether you remain or do not remain Prime Minister.
MAJOR: I've indicated to you quite clearly
Jonathan, it is a vote about the Social Chapter.
DIMBLEBY: We've explored that relatively
thoroughly. You've got another old test coming up in a few days time which is
much more immediate in terms of the local political situation. Can you afford
to lose Christchurch?
MAJOR: We have a very good candidate in
Christchurch and I very much hope we're going to win Christchurch.
By-elections are always difficult for the Government of the day, that's been
the case for twenty or twenty five years, not just in this country. I think
President Clinton lost one or two rather serious by-elections just after he
became President. It is a fact of modern political life, but I very much hope
we're going to win in Christchurch, I'm sure we have the best candidate, very
experienced candidate, Robert Hayward (phon) I think he's going to win, I look
forward to welcoming him to the House of Commons.
DIMBLEBY: Peter Brooke, your colleague issued a
pretty clear warning that the defeat of Christchurch, because of the small
majority that you have would increase the risk of an early general election
with the possibility that Labour might ...
MAJOR: No, no, no that's not remotely what
Peter had in mind...
DIMBLEBY: Let's clarify what he had in mind for
him.
MAJOR: Well I'll tell you perfectly clear. If
you have a majority in the teens and you lose your majority by one, then
clearly that's very unattractive. If you go on losing your majority by one, in
due course you don't have a majority. But I don't expect that to happen and
neither does Peter expect that to happen. He was pointing out logically that
if your majority goes down by one, life is more difficult, there's nothing very
newsworthy about that.
DIMBLEBY: Well it would be of course if that's
what happened, if the outcome is what he warned, a Labour government might be
elected in a general election as a consequence.
MAJOR: I must say I think that's extremely
unlikely. Labour are in a political Jurassic Park (phon) as far as I can see.
DIMBLEBY: Prime Minister do you accept what many
in your party have said openly, and rather more say privately, that you are now
as Prime Minister on probation?
MAJOR: No I don't. I'm not going to waste my
time with this extraneous often anonymous chat. What I am going to do is to
concentrate on the things that matter to me. I'm not in politics just to be
Prime Minister, I'm in politics because there are things I want to do. I want
a low inflation economy, I want this country back in growth, I want wider
manufacturing industry, I want to see our health reforms carried through, our
education reforms carried through. I want to see what we can do over time,
over the general standards of life in this country, I think there is a greater
intolerance from one citizen against another citizen. I think these are things
that it's legitimate for a Tory government to address and perhaps above all, in
the minds of the public at the moment, we are currently engaged in one of the
most serious attacks on the problems of crime and law and order that we've had
for a long time. There's been a series of legislation gone through in the last
year, we've taken decisions to take previous convictions into account which I
think will be welcomed by the public. We've decided to crack down much harder
on people who offend while on bail. The centre piece of next year's
parliamentary programme will be Home Office bills and in particular a very
large Criminal Justice Bill that will deal with squatters, raiders, new age
travellers and a whole range of other issues like that, so these are matters
that are important to me and I propose to continue with those and not worry
about extraneous chatter.
DIMBLEBY: Given that you must be extremely hopeful
that that extraneous chatter doesn't turn into a leadership challenge.
MAJOR: Well I don't think that that is remotely
likely. When one looks at what has happened over the past twelve months
look at the economic circumstances we were in twelve months ago, look at the
economic prospects as we move increasingly into recovery day after day, there
is a lag between reality and perception and I understand that, people are still
smarting from the difficulties of the recession, but we've come out of that,
we're coming back into growth, people are getting back into overtime, they are
getting back into work - I believe we can reignite the confidence that this
country wants to move ahead and I passionately want to see that through.
DIMBLEBY: Prime Minister, thank you very much for
sharing those thoughts with us.
MAJOR: Thank you.
...oooOOOooo...
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