Downing Street Years - Margaret Thatcher [39]
The round of international summits makes a prime minister’s life nowadays very different from what it was in the time of Anthony Eden, Harold Macmillan or Alec Douglas-Home. While in Opposition I had been sceptical of the value of much of this activity. In government I still worried that summits took up too much time and energy, particularly when there was so much to do at home: within a few months of taking office I had been to Strasbourg to represent Britain in Community matters, I was at Tokyo to represent her in the wider economic forum, and I would soon be going to Lusaka for the meeting of the Commonwealth heads of government.
The G7 had its roots in international action to counter the economic crisis of the mid-1970s. The first meeting was held in 1975 at Rambouillet in France. Since then the numbers attending and the formality of proceedings have increased year by year, and the result has not been an improvement. The principal advantages and disadvantages were well summed up by Chancellor Schmidt. The G7 summits had, he believed, helped the West to avoid what he called ‘beggar my neighbour’ policies — the competitive devaluations and protectionism which had inflicted such economic and political harm during the 1930s. On the other hand, he thought that too often the summits had been tempted to enter into undertakings which could not be kept; I agreed. There was always pressure, to which some governments were all too ready to bend, to come up with forms of words and ambitious commitments which everyone could accept and no one took seriously.
However, the soaring price of oil gave the 1979 Tokyo economic summit more than usual significance. Indeed, the Organization of Petroleum Exporting Countries (OPEC, the cartel of major oil producers) was meeting at the same time as the G7, its principal customers.* While we were in Tokyo the price of a barrel of Saudi oil rose from $14.54 to $18, with many OPEC crudes going higher still. Consequently, all the talk was of how to limit western dependency on oil and of deceptively specific targets to be met by particular dates. But I knew that the main way of reducing consumption was to allow the price mechanism to do its job. The danger, if we did not, was that countries would seek to accommodate higher oil prices by printing money, leading to inflation, in the hope of staving off recession and unemployment. We had seen in Britain that inflation was a cause of unemployment rather than an alternative to it, but not everyone had learned that lesson.
The previous summit had been held in Bonn in 1978 when the doctrine of ‘fine tuning demand’ had still been fashionable. Germany had then been expected to act, as the jargon had it, as the ‘locomotive’ for growth, pulling the world out of recession. As Chancellor Schmidt was to tell the summit leaders at Tokyo, the main result had been to put up German inflation: he would not go down that path again. At Bonn there had been no new heads of government present and the old nostrums prevailed. At Tokyo, by contrast, there were three newcomers — the Japanese Prime Minister and Conference Chairman, Mr Ohira, the new Prime Minister of Canada, Joe Clark, and myself. Apart from me, the strongest advocates of free market economics were Helmut Schmidt and, to an even greater extent, Count Otto von Lambsdorff, his Finance minister.
On leaving the plane at Tokyo airport, I stepped into a huge crowd of reporters (some two thousand reporters attended these summits then, and more now). They had turned out to see that extraordinary, almost unprecedented, phenomenon — a woman prime minister. The weather was extremely hot and