Thatcher Note to Reagan Encourages Deficit Action

Prime Minister Margaret Thatcher, intervening in the U.S. budget crisis, has sent a personal message to President Reagan “encouraging” efforts to cut the deficit, British officials said today.

“The prime minister sent a supportive and encouraging message on efforts to cut the U.S. deficit,” said an official, who spoke on condition he was not identified.

The contents of the message, sent Wednesday evening, were not disclosed. But the official said the Conservative Party leader, Reagan’s closest foreign ally, avoided suggesting specific amounts of budget cuts or tax increases.

The message was the first direct intervention by Thatcher in the crisis and came as the U.S. dollar plunged to new lows and the London Stock Exchange headed lower.

Thatcher’s action coincided with the toughest speech yet by her chief Treasury official, Chancellor of the Exchequer Nigel Lawson, demanding a cut in the deficit of more than the $23 billion required under U.S. law and an increase in taxes.

News of Thatcher’s intervention was splashed by the British media after today’s announcement. The British Broadcasting Corp. said Thatcher has told Reagan to “sort out his finances.”

“Yankee Doodle Ditherers,” said the London Evening Standard in a front-page headline on Lawson’s Wednesday night address to businessmen in which he blamed the U.S. deficit for the weak dollar and stock market chaos.