................................................................................ ON THE RECORD RECORDED FROM TRANSMISSION BBC-1 DATE: 25.6.95 ................................................................................ JOHN HUMPHRYS: On The Record today, the Prime Minister in an interview here in Downing Street. Mr Major's first extended interview since his campaign really began to win back the leadership of the Conservative Party. That's after the news read by Moira Stuart. NEWS HUMPHRYS: In today's programme an interview with the Prime Minister in Downing Street. How will he convince the wavering MPs who hold his fate in their hands that they should vote for him on Tuesday week? I shall be putting that to him. And who might stop him? We've a report on the people who this weekend are trying to decide which horse to back and why. We'll also be looking at past leadership campaigns and the dirty dealings that go in the background. But first, the Prime Minister. I spoke to Mr. Major earlier this morning. Prime Minister, it does now seem certain that you are going to be challenged for the leadership by a significant figure, is that a bit of a blow? JOHN MAJOR: Well I've no idea whether that's so or not, certainly one never sets out the possibility of an election without expecting there might be one, whether there will be we'll have to wait and see. HUMPHRYS: That's a bit of a change though isn't it because your team, your election team had been hoping that you'd be unchallenged. MAJOR: Really? I don't know why you say that, my expectation from the outset is that we may well have been challenged now there may be, if there is a challenge so be it, that's what elections are for. HUMPHRYS: Is there a significant chance do you think that Mr. Redwood will run against you, resign from the cabinet? MAJOR: Well I must say I am very surprised at what I hear over the last day or so, John and I were talking in mid week, we were looking forward to policy, John had some ideas about how we might develop, so I would be very surprised. HUMPHRYS: Have you spoken to him? MAJOR: I haven't spoken to him no. HUMPHRYS: Why not? MAJOR: I see no reason why I should. John and I spoke in the middle of last week, we spoke about future policy, we spoke about the development of policy, we spoke about how we might move from where we are now, I see no reason to speak to my Cabinet colleagues on the basis of newspaper speculation, so the answer is no. HUMPHRYS: We've been given to understand that your Cabinet was four square behind you, sworn to a man and woman. MAJOR: Well you've no reason to suppose that they aren't. All my Cabinet have been told that we're having this election, you've seen how many of my Cabinet are active and working during the midst of this election, you've seen how many of them have been out there making perfectly clear what their position is, so that's the position until somebody says differently. HUMPHRYS: Isn't his silence a little odd? MAJOR: Well I think you'd better ask John. What you are asking me to do is to comment on a Cabinet colleague with whom I'd worked very closely, with whom I had long discussions as recently as last Wednesday about the development of policy, and you are asking me to approach him on the basis of third party newspaper reports, I would have thought if John had any proposal of standing against me he would have told me and he hasn't done. HUMPHRYS: When you spoke to him last Wednesday, did you tell him what your plans were? MAJOR: I didn't tell any of my colleagues until Thursday, there were various things that needed to be concluded, I spoke to my colleagues on Thursday. HUMPHRYS: Perhaps if you'd told him then, this problem wouldn't have arisen. MAJOR: Well I don't know that there is a problem, you're telling me there is a problem, you perhaps have different information than we, but I don't know yet whethere there is a problem, I suggest we wait and see. HUMPHRYS: But it would have helped you greatly would it not, if like other members of the Cabinet, as you say, Mr. Redwood had just stepped in front of the camera for thirty seconds and said the Prime Minister has my full support. MAJOR: I understand and you're raising these great shibboleths about John, I suggest you wait and see. HUMPHRYS: Not me just alone of course... MAJOR: Well these great shibboleths about John are being raised he did put out a statement last week, Now I suggest we just wait and see and not waste our time in speculation. HUMPHRYS: You must feel threatened though at the possibility, even if it is only a possibility, that a member of your Cabinet.. MAJOR: Look John, I don't feel threatened about that or about anything else. I have decided to have this election, there's been a lot of talk, a lot of speculation, a lot of media comment, the same people appearing time after time over the last few weeks and over a longer period, now I think that is not good for good government, it's not good for the country, it's not good for the Conservative Party. Now I don't think that..I frankly was not prepared to let that go on until November, in nobody's interest, not the country's, not the Party's, not anybody's and so I've taken the opportunity of saying let us have an election now, let us do that, let us clear the air and then let us get on with the policy matters that are important. What I find frustrating is that so much of modern politics, just as you've started this interview, is on the basis of speculation about what people might do, what people might think... HUMPHRYS: But you expect that during a leadership election wouldn't you. MAJOR: Well it isn't just doing a leadership election, I mean this has been happening for the last two or three years John. What people ought to be talking about are policies, policies on the economy,
policies on education, policies on health, policies on defence, that's what actually matters to people up and down the country, what the Government does and I have to say to you I think they are much more interested in the fox and goose up and down the country about what the Government actually does than in these personality points that have so dominated politics for so much of the last two or three years. Now I want to get back to politics, and I'll tell you
why. There is a very sharp difference in policy between the Conservative Party, between the Government, and the principle opposition policy, very much the case in politics that any Government in office has forensic examination of his policies by the public at large but as we move into two years short of a General Election, it's about time we had a proper debate about the Opposition's policies as well. We had a look at what the alternatives are, now I want real politics to resume and that means getting rid of this nonsense we've had in the past, hence my actions last week. HUMPHRYS: But the reason I suggested you might feel threatened at the possibility of Mr. Redwood running against you is precisely that. Because he represents a large body of people who are not satisfied with your policies, who don't like many of the things that you've been doing. And that is true, isn't it? Those people do exist... MAJOR: Well, let's actually deal with what the dissatisfaction is and what the concern is. This country has been through a recession that was very painful - not unique. So has France, so has Germany, so has Spain. So, has the United States, so has Japan. The knock-on effect of that has been quite painful for many people. What has happened after that recession? We have come out of that recession this country earlier than other countries and better than other countries. If you actually look at the circumstances that exist today and the prospects that lie immediately ahead, then, you get a rather different picture. Which country at the moment is doing perhaps best economically across Europe? This one is. Low inflation of a sort we haven't had for a very long time. I remember you and I talking years ago about the dangers of rising prices. We have unemployment falling faster in this country than it's fallen anywhere in Europe. We've had exports hitting record levels in eight or nine months out of the last thirteen or fourteen months. We've got a growth in manufacturing employment for the first time since you and I were at school. Now, they are fundamental changes. They didn't magically happen. They happened because we took painful, difficult decisions that were uncomfortable for people. Now, because we took those decisions we are now better placed for the future than we have been at any stage for very many years and we've set a clear objective. A clear objective of doubling living standards in the next twenty years. And the policy we have now and the prospects we have now show that we might be able to achieve that. Now, I would ask just one question of my critics. Is it right to have taken those painful decisions in the short term, in order to ensure two things; one: that we don't have the problems that we've had in the past ever again; and secondly that we can improve and double living standards over the years ahead. Was it right to take those decisions, or not? And my answer unequivocally is that it was right to take those decisions. I did take them and I am prefectly prepared to defend them in this leadership election, beyond this leadership election in the next General Election and thereafter. HUMPHRYS: But your critics, as you describe them, know all the things that you've just been telling me, they're intelligent people, they're aware of what's been going on but they are still not satisfied. They still want other things, different things from you and even.. MAJOR: You say that everyone knows - I just wonder, across the country as a whole, how much what has changed has really taken route. HUMPHRYS: But I'm not talking about what's happening, I'm talking about your own MPs. If I may just persue this thought. MAJOR: I suggest we wait until the end of this leadership election before we make judges about them. HUMPHRYS: Absolutely, but we are going to see you challenged if not by Mr Redwood then by Mr Lamont. He too represents a body of opinion in the party that understands the kinds of things you've been doing but don't think they go far enough in many cases. MAJOR: Well that's a prefectly legitimate political argument. I'm prefectly prepared to take that argument on. But let us wait and see whether anyone is prepared to bring that argument forward. HUMPHRYS: Mr Lamont's going to. MAJOR: They may be prepared to. They haven't yet. They may be prepared to, let us discuss that when and if they do. HUMPHRYS: Mr Lamont, what was it he said: "I made him and I can break him" MAJOR: Well I'm not going to comment on reported words of Norman's that I haven't myself heard him say. I'm not going to get into that business. If there is a contest I will contest it very strongly but as yet there is not. HUMPHRYS: There is this large group of MPs, as we've discussed, who don't think that you have been 'Conservative' enough, to use the sort of language that Lady Thatcher used and don't think that you will be Conservative enough. Can you win them over - or have you written them off? MAJOR: Well, I wonder whether we might examine that thought for the moment, about whether one has been Conservative enough, I think we have privatised a number of industries that weren't privatised in the 1980s, that's classically Conservative, putting something out of the public sector into the private sector. Industries that people didn't image could be privatised in the 1980s have been privatised since I became Prime Minister. I suppose stopping rising prices and getting inflation down is typically Conservative, has been for a very long time. I wonder whether you or anyone else can tell me of a time when we had inflation under a more secure lock and key than we have had it over the past two or three years. I suppose stopping huge wage inflation undermining the problems that the country then has with inflationary knock-one. I suppose that's typically Conservative. Even during the recession of 1980-1983, wage demands never fell below seven and a half per cent, those granted never fell below seven and a half per cent. Here we are, three years after a recession, with wage increases working at three and a half per cent and as a result the economy becoming stronger, even though there has been a political price to pay for the government and that's the point I will argue. We have been prepared to pay a political price in the short term because I believe quite passionately that what we are doing is right for the medium-term and the long-term. I have grown up in the last forty odd years watching this country face economic buffeting of one sort or another almost invariably caused by the on-set of inflation. Now I don't like inflation, I don't think it's any good for people, it damages their savings, it damages our economic prospects, it damages the number of people who are employed in this country. Now, when I came into government, I wanted to stop it. On the first day I was Chancellor of the Exchequer I said that was top of my priorities, it's never changed and I don't think that is anything other than classically Conservative. HUMPHRYS: But, again I come back to this fundamental point that they know that. As you say you've argued it for a long time and they're well aware of it and they are still not satisfied with it. MAJOR: What you are saying is something quite different John, what you are talking about is perceptions, not realities. HUMPHRYS: Well it's their preceptions, isn't it and that's what matters when it comes to a leadership election or any sort of election. MAJOR: I'm talking about realities. Well now we are in the position to turn the realities into the perceptions as well and that is what I'd like to do. And what would help us talk..turn the perceptions into realities would be a whole series of interviews in which people ask about the realities rather than the perceptions. HUMPHRYS: Well alright, well reality is as opposed to perceptions. Europe is a reality, now that is something on which a lot of people are deeply dissatisfied and I'm not just talking now about the Teresa Gormans of this world, I'm talking about all sorts of mainstream if you prefer that phrase, mainstream MPs who are deeply worried about the way things have been going and they want you to give them more than you have given them yet. Are you prepared to do that, to win them over because I myself have spoken to many MPs over the last forty-eight hours who say he hasn't done enough for us, yet. MAJOR: There is a great debate on Europe, not just in our party, let us put the point in context first, there is a great debate on Europe, right across the parties, anyone who believes the other political parties are united in Europe hasn't looked at them, the Labour Commonmarket Safeguards Committee has reappeared. HUMPHRYS: Yeah but they don't have to vote for a Labour... MAJOR: I'm just putting it in context and then I'll turn directly to your point, the Labour Party had more of its members actually voting against its own whip on Europe than we had during the Maastricht debate so let's firstly kill the notion that this is just a Conservative dispute now let me turn to the question of European policy. We are in the European Community, we've been in it for a very long time, it's responsible for a huge amount of inward investment or partly responsible, not wholly responsible. Partly responsible for a huge amount of inward investment that's produced a massive amount of jobs in Scotland, the north east, the north west, the Midlands and Wales in particular. It sustains a large number of jobs in this country. Very few people accept that the very fringes of argument argue that we should leave the European Union. Now, let us clear that point firstly. The second question is where is the European Union going? Now, that is where the point of problem arises for many people. Are we going to go into what they see as a wholly federalist Europe? And my point about that has been perfectly clear. No we are not going into a wholly federalist Europe. That is why I pragmatically reserved our position in a number of areas where I think it would be damaging for us - the Social Chapter and the opt-out on the Single Currency. HUMPHRYS: But, well alright. Let's pick up the Single Currency because hat's where they want you to be much more specific and much more sceptical. They want you to rule it out for the next Parliament. Now, you said yesterday you wouldn't do that. MAJOR: Look, I'll tell you why I decided firstly not to rule it in. I think, firstly, there are many economic uncertainties about it. There are political uncertainties about it and there are constitutional uncertainties about it. For that reason, I was unprepared for us to accept in the Maastricht Treaty that we - like the others - should be Treaty bound to go into a Single Currency. HUMPHRYS: Indeed. They know why you rule it in. They want to know why you rule it out. MAJOR: The background is important, if you wish to see why I take the position I do. So I have decided that we will maintain that option to decide, at a later stage. Would it be wise to decide now? We don't know the circumstances now. What is my primary aim? My primary aim is to have a Europe reflecting what the British think is right for Europe and for us. To achieve that, I need influence in the argument. Standing on the sidelines of the argument, splitting in the middle, saying I'm not going to have any part of that discussion. I'm going to decide now to do absolutely something wholly different. What sort of influence am I going to have in the middle of the debate? Just a minute. There are some people who say: but you'll just be dragged along. Well, will we? Of course not, if we don't wish to be dragged along, we won't. Britain has changed the European Union in the last few years. That is what the people should realise. We've made changes. Not far enough yet in agricultural policy that nobody else was able to make. We've made changes in enlargement. Would we have had the EFTA nations in Europe, but for British pressure? Not yet, no. Would we have the Central and East Europeans promise to come in but for British pressure? No. Would we have had subsidiarity but for British pressure? No. Would we be embarking on deregulation now but for British pressure? No. And, so, the point is the British influence matters in Europe. It can change Europe. Now, what some people are asking me to do is to say, at this stage, that I am going to remove that British pressure from an area of acute importance to the future development of Europe. I'm going to say now: we aren't going to put in the British arguments. We aren't going to argue for the way the European Union develop. We're going to pick up the ball, move to the sidelines and say: at this stage, just a minute, we're going to have nothing to do with that argument. What I am saying is: we wish to try and influence that argument. We don't want Europe to make a bad mistake and that means we must be in the middle of the argument fighting for the sort of Europe that we want and we do so, against the uniquely favourable back cloth, that if Europe decides to go in a direction that we don't approve of, we are not under a Treaty obligation to go with them, as other people are. HUMPHRYS: So you're not persuadable on this? MAJOR: That is high politics. It's important politics but, above all, it is politics that is in the interest of the future of the United Kingdom. HUMPHRYS: So, when they say... MAJOR: And, on that point, I am unshiftable. HUMPHRYS: Unshiftable, unpersuadable, not persuadable. MAJOR: On the point of looking after the interests of the United Kingdom I am unshiftable. HUMPHRYS: No but specifically on this question of ruling out... MAJOR: That is what I've said, I am unshiftable on the importance of looking after the interests of the United Kingdom. HUMPHRYS: And, you interpret that as not ruling out a Single European Currency? MAJOR: I will interpret it, if you may, John. Don't interpret it for me. HUMPHRYS: I'm trying to help you. MAJOR: Well, I don't think you are doing. I set out perfectly clearly what I meant and what I intended to say, a moment or so ago. I wish Britain to have a key role in influencing how Europe develops. HUMPHRYS: Indeed. MAJOR: If it develops in a way that we don't like, we won't join it and I am no Federalist. HUMHRYS: Right. Well, let me try and help the audience then, if..... MAJOR: You asked me to clarify it, I'm clarifying it. I want help Britain...Europe develop in a way we think is right. I am no Federalist. But, for Britain not to influence that debate is to help - almost invite - Europe to take decisions without Britain's influence that may be wrong. Is that wise? Is that in Britain's interests? HUMPHRYS: Well, let me be clear, if I may that I fully understand what you're saying. You are saying that you will not - because of Britain's interest - you will not rule out a Single European Currency membership for Britain during the next Parliament? MAJOR: I have.... HUMPHRYS: That's quite clear, is it? MAJOR: You're pushing me into time scales that nobody yet knows about. HUMPHRYS: Well, it's what your people want to hear isn't it? Some of your people want to hear MAJOR: I must deal with the realities of what the debate may be. And so far I think I've been pretty accurate about the realities. I said there would be no Single European Currency in 1997. Lots of my critics say differently. The whole of Europe has accepted there won't be. 1999? I've always been sceptical about whether we would be there in 1999. What is very apparent is that the original idea - that the whole of the European Union would move to a Single Currency in 1999 - is not remotely tenable. There's not a cat in Hell's chance that anything like that would remotely happen. What is possible but no more than possible is that some members may be in a position to move forward in 1999. Now, I am sceptical about that but what I am being invited to do step by step, salami slice by salami slice, is step back from a position of influence in determining in how the whole of Europe goes forward. HUMPHRYS: And you won't do that... MAJOR: And the whole of Europe is important to Britain's future and we have our position absolutely preserved. If Europe went ahead with a Single Currency, Britain would have to decide what it would do. And how would it do that? Firstly, the Cabinet would make a decision. Does it want to go into a Single Currency, or not? If the Cabinet says no, then I have no doubt that Cabinet would...the country and Parliament would support it. If the Cabinet said yes, it would have to go to the House of Commons and we would keep open the option of a referendum as well. HUMPHRYS: That's all. You'd keep it open? MAJOR: Well, the first decision is...there's no point in saying: we're going to have one, until we know we're going to go ahead. HUMPHRYS: Why not? Well, people think that that's what you should do. That you should say that this is such a fundamental... MAJOR: And, a lot of people.... HUMPHRYS: Let me think back to the question. A lot of people think that this is such a fundamental question for Britain that it's going to determine the way the United Kingdom goes for the rest of time. That you should not even contemplate it without assuring the people of Britain that there is an absolute commitment to a referendum. Now, that would help you. MAJOR: Well, I've just made the point clearly. The first decision is for the Cabinet to decide whether it goes ahead. If the Cabinet decides it is going to go ahead, then, it will need to consider whether it wishes to have a referendum or not. I have expressly stated not just now, not just for the purposes of this election that over the last two years or so that I'm not going to rule that out. HUMPHRYS: What's your own personal feeling? MAJOR: It might be right. It might be right. HUMPHRYS: What's your view, at this stage? MAJOR: Well, answer me some questions and I'll tell you. HUMPHRYS: Well, alright. Do you believe ... a straightforward question... MAJOR: No, no, no.. HUMPHRYS: Do you believe that there...we should not - you asked me to ask you a question and I'm doing it. MAJOR: No, I'm going to tell you the questions you should be asking. HUMPHRYS: That's a novel way of conducting an interview, Prime Minister. MAJOR: Well, I think, it would be very helpful for you because it will help you understand. You're asking me to take a decision now in unknown circumstances. Do you know what the currency markets will be like at the time? HUMPHRYS: No. But, that isn't what I'm asking you. MAJOR: But it is relevant to what decision is taken. It's acutely relevant to what decision is taken and how the matter is handled. Nobody knows the circumstances of the day. HUMPHRYS: But to many of your supporters... that is not to do with circumstances, it's a matter of fundamental principle. MAJOR: You don't need to tell me what my supporters say and think, I know that. I also have to look at what the realities of the situation would be, and I agree with many. This a very fundamental decision. I've never been in doubt, I've said so in the House of Commons, the most important political, economic and potentially constitutional question we have faced for generations.... HUMPHRYS: Precisely, therefore the economic circumstances may not be relevant to that because it is such a profoundly important political... MAJOR: The economic circumstances are central to that. As you said earlier and as I said earlier, they are central to that. HUMPHRYS: It is a profoundly important decision for political reasons, then ... MAJOR: With great respect you're missing the point. The economic conditions are absolutely fundamental. If the Cabinet decides to go ahead it will consider whether it should have a referendum, parliament will have its views at this time. We'll have to go to parliament, we may have to have a referendum. I don't think I am prepared to rule that out. It may very well be necessary, nothing new in me saying that, I've said that for a long time, but I do not yet know all the circumstances. Do not try and pin us down, we will deal with what is right for the country at the time. HUMPHRYS: Something else that will have worried I assume, many of your supporters, or potential supporters, or the waverers in the last couple of days is what your potential challenger Norman Lamont wrote in the Times when he said that at the time of the Maastricht negotiations you wanted to make membership of the ERM a legally binding obligation on them. MAJOR: Well, I'm not sure that that's what the notes of the meetings at the time recall. But let us deal, Norman was talking in terms of the general opt-out. Let me tell you something about the opt-out. I was determined from the outset that we would not commit ourselves by treaty to a single currency, that we would opt out of a single currency. That was my policy, cabinet policy, Downing Street policy right from the outset, and Norman was in no doubt about the fact. Norman negotiated many of the details of that, I made it perfectly clear to the other heads of government that we were not going to sign a treaty obligation with Britain being obligated like others to go into a single currency. The other heads of government knew from me personally that no opt-out, no Maastricht Treaty - that was the position, Norman knew it was the position, he agreed that that was the position and within that Norman negotiated the details but I don't think one should be mistaken about whose policy it was or how the policy was formulated. HUMPHRYS: So Mr. Lamont is not telling the truth when he says... MAJOR: I don't know precisely what Norman has in mind, I'm bound to say... HUMPHRYS: You made it pretty clear in that answer... MAJOR: Well I am very surprised at what I read and so were other people who saw it at the time. HUMPHRYS: So it isn't true, what he said is not true, categorically not true. MAJOR: I have just said what I propose to say about that, it's not my recollection. HUMPHRYS: At the end of the day MPs are going to
choose a leader who they believe will lead them to victory in the next election and keep their seats for them, I mean, that's a pretty basic political instinct isn't it and what their constituents are telling them, what many of their
constituents are telling them on the doorstep is you've got to do more to help us, home owners in particular, existing home owners, we need help, the sort of help that we're not getting at the moment, and we need a commitment on that. Can you give them that commitment? MAJOR: Well, examine that point for a moment if we may. Home owners need help, certainly home owners want to pay the minimum amount necessary to fund their mortgages. Because of the policies we've followed mortgage costs have dropped over the last three years or so, four years or so by about a hundred and thirty pound a month for the average mortgage holder. What will keep those costs low in the future? What will keep those costs low in the future is low inflation meaning low interest rates, being low mortgage rates, and that is precisely what we're delivering, and if I may I will turn the point round. If you and I had been speaking in the late
nineteen-eighties I'll tell you the question you'd have asked me about housing, you would have said, "Prices are going up so fast, how are young people ever going to get on the housing ladder"? That's what you would have said to me, and at the moment because inflation is low, interest rates are low. That nexus, that mixture of the cost of mortgages, incomes and the cost of houses is more favourable for home ownership than anything we have seen for twenty or thirty years. Later this week, in the middle of the week, we will publish a White Paper on housing. It will reinforce our determination to expand still further the home owning democracy that is instinctive to the Conservative Party. We will be aiming over the next ten years at another million and a half home owners. Now to deliver that we need to keep the costs of home ownership within what people can afford, and that, to achieve that the low inflation economy is essential. HUMPHRYS: But again I come back to the point I've made a number of times during this interview: they know that, they know that that is what's on offer at the moment, but if one of these troubled MPs rings you up or you ring them up, and they say to you, "Look Prime Minister, you've got my support, if you can promise for instance returning MIRAS to twenty-five per cent, positive help for people when they've negative equity". What do you say to them? MAJOR: Well, I'm bound to say I've just set out to you what the answer is upon that matter. I'm not..... HUMPHRYS: The answer's no really isn't it? MAJOR: I'm not going to discuss with you John the future development of Cabinet policy and budgetary matters, and you and I both know that. HUMPHRYS: But you can't do .... MAJOR: The principle of it I will discuss with you, and the principle of it is that we are the party of home ownership, we're the only party of home ownership, and most of the ways that we've sought to build home ownership in the last ten years have by and large been opposed by our political opponents. We're proposing to expand home ownership. We will look at the right and most effective mechanisms to expand home ownership. HUMPHRYS: Are you sympathetic to the ... MAJOR: But don't expect me to bargain with you in this interview over individual ... HUMPHRYS: I wondered if you might bargain with them.... bargain with me... MAJOR: .... because I've no intention of doing so. HUMPHRYS: I wondered whether you might bargain with them though, because you need their help don't you - their support? MAJOR: I believe I have their support, and I believe they understand what we need to do to achieve long term growth in home ownership. HUMPHRYS: Are you sympathetic though to those points, returning MIRAS to twenty-five per cent, help with positive equity? MAJOR: Those are decisions we've had to make over the last couple of days. Well as far as negative equity is concerned I think many people wonder precisely what might be done, I mean if you look at the size of the housing market it's seventy billion - maybe well over a hundred odd billion. I don't think that those people who themselves have already accepted a loss of negative equity would regard it fair if we actually made further action for those who haven't to protect them. Equally, if you're going to protect people in the housing market from losses, the question arises do you tax them on gains. Of course, we're not going to tax them on gains. So, I think, the question of negative equity is one that is easy to state in the abstract than to see why any Government at any time could ever deal with it. What we're concerned with is creating the right conditions to encourage home ownership. And, the right conditions to encourage home ownership are to have a stable housing market, to have a housing market, when mortgage costs are low and to have confidence. And, one of the reasons of getting this leadership election out of the way is that so people can see the direction of policy. And that they can deal with the details of policy, without the distractions that have been provided such a fog in the last two years or so, on personalities, rather than policy. HUMPHRYS: But, it does sound as if you're not terribly sympathetic to those people I talked about with those particular problems. MAJOR: It does sound that I'm not going to debate with you on this issue the future development on budgetary policy and I'm sure you'll understand that. HUMPHRYS: But what it means is that I've listed a number of problems that some of your supporters, potential or real might have and you've not been able to offer a great deal of reassurance on any of the specific concerns that I've raised. That's why I've raised them in the way that I have. MAJOR: Well, I know, well you've put that in a very prejudicial way. I have tried to correct some of the misapprehensions that I think you have. HUMPHRYS: But don't you think they knew all that? MAJOR: Well, I don't think that's what they hear day by day, when they hear you interviewing people. I think, what they hear is one side of the question. They hear some of the problems that exist. They don't hear the alternative news of what has actually happened. I wonder how many people how many new homeowners there were last year. Not very many, I would imagine. I wonder how many people were actually aware that mortgage costs have fallen by a hundred and thirty pound a month for the average mortgage holder some time ago. HUMPHRYS: Well, I suspect they do, if they're paying their mortgage, don't they? MAJOR: Do they? Is that what they hear, day after day? Is that what they hear day after day? HUMPHRYS: They see it when they get their bills in, don't they? MAJOR: How about an alternative? Dealing with some of the things that are going right? We have in this country, at the moment, the best economic recovery, the best classical economic recovery - and, I see you don't deny it. You're nodding in agreement, it is the case. HUMPHRYS: You told me that earlier. MAJOR: Well, I noticed you nodding in agreement. HUMPHRYS: I was just agreeing that you had told me that earlier. MAJOR: Well, I'm pleased to hear you supporting it and I've no doubt you've put it to people. Now, we need to build on that, give people the confidence that they can see we have produced a stable environment and we can build on it and you begin to change the climate. That is what is necessary. HUMPHRYS: If you do not win on the first ballot, will you go through to the second one. Will you as a previous leader said: fight, and fight to win. MAJOR: John, you're being very tempting, but you do know very well that I'm not going to enter into 'if' questions with you. I'm in this election to win this election. I expect to win this election. Don't start encouraging me down the road... I expect to win this election, I expect to be Leader of the Conservative Party after this election. I expect to go up to the General Election and I expect to win it and I'm not going into detailed bits of speculation, however much time you spend asking me about them. HUMPHRYS: But, the only reason I try to tempt you is because if you leave that option open, then they will think you're doing it deliberately, won't they? So, it might be to your own advantage. Well, you know, they'll say: he's not answering questions. Therefore, he wants to leave the option open. MAJOR: And, of course, if I proceed, you will put the point precisely the other way around: ah, you'll say: so you do think it is going to go to a second ballot. I'm not entering into that speculation, John. I'm in this election to win this election and that is all I propose to say to you. HUMPHRYS: If - let me just try one more question on this, then. And then we'll have run out of time, anyway. If you fail to score a truly convincing victory in the first round - however you define that - your authority will be weakened, won't it? You'll have to resign. MAJOR: I don't accept your premise. Let us wait for the result of this election. What is intolerable is to have the continued speculation that we've had over recent weeks. The complete blanketing out of the real world of politics and policy. Now, I believe, it is in the national interest, the Party interest and, probably, my interest that we, actually, get back to the details of policy. That's what I came into politics for. It's what I care about. It's what I'm going to do and when I've won this election, it's where we're going to be. HUMPHRYS: Prime Minister, thank you very much. MAJOR: Thank you. HUMPHRYS: The Prime Minister talking to me in Downing Street earlier this morning. ...oooOooo...