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THIS DOCUMENT I S THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT

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CABINET

CONCLUSIONS of a Meeting of the Cabinet

held a t 10 Downing S t r e e t on

THURSDAY 10 FEBRUARY 1983

at 10.30

am



P R E S E N T

The Rt Hon Margaret Thatcher MP

Prime M i n i s t e r

The Rt Hon Lord Hailsham Lord Chancellor

The Rt Hon F r a n c i s Pym MP

S e c r e t a r y of S t a t e f o r Foreign and

Commonwealth A f f a i r s

The Rt Hon S i r K e i t h Joseph MP Secretary of State f o r Education and Science

The Rt Hon James P r i o r MP

S e c r e t a r y of S t a t e f o r Northern I r e l a n d

The R Hon Peter Walker MP Minister of A g r i c u l t u r e , F i s h e r i e s and Food

The Rt Hon Michael H e s e l t i n e MP

S e c r e t a r y of S t a t e f o r Defence

The Rt Hon George Younger MP Secretary of S t a t e f o r Scotland

The Rt Hon Nicholas Edwards MP

S e c r e t a r y of S t a t e f o r Wales

The Rt Hon P a t r i c k Jenkin MP Secretary of S t a t e f o r I n d u s t r y

The Rt Hon John B i f f e n MP

Lord P r e s i d e n t of the Council

The Rt- u -A u ™ , * n m p >e Rt Hon David Howell MP Secretary of State f o r Transport

The Rt Hon Norman Fowler MP •" -' c ,; , o

S e c r e t a r y of S t a t e f o r S o c i a l S e r v i c e s

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The Rt Hon Leon B r i t t a n QC MP Chief S e c r e t a r y , Treasury

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The Rt Hon Nigel Lawson MP Secretary of I t a t e f o r Energy

The Rt Hon Norman Tebbit MP

S e c r e t a r y of S t a t e f o r Employment

The Rt Hon C e c i l Parkinson MP Chancellor of the Duchy of L a n c a s t e r and Paymaster General

The Rt Hon Lord C o c k f i e l d

S e c r e t a r y of S t a t e f o r Trade

The Rt Hon Tom King

S e c r e t a r y of State for the Environment

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ALSO PRESENT The Rt Hon Michael J o p l i n g MP Parliamentary S e c r e t a r y , Treasury

SECRETARIAT S i r Robert Armstrong Mr P L Gregson (Item 4) Mr A D S Goodall (Items 2 - 4 ) Mr D H J H i l a r y (Item 1) Mr G Stapleton (Items 2 and 3) (Item 1) Mr L J H a r r i s C O N T E N T S I t e m

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PARLIAMENTARY AFFAIRS

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Ordnance Survey Trading Fund 2 >

FOREIGN AFFAIRS Middle E a s t

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Brandt Report

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Nigeria

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V i s i t of the V i c e - P r e s i d e n t of the United 3

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COMMUNITY AFFAIRS Community Budget:

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1982 Refunds

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U l t r a - h e a t - t r e a t e d Milk Imports

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INDUSTRIAL AFFAIRS Water I n d u s t r y Pay Negotiations

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FJL^'NTARY

•• The Cabinet were informed of the b u s i n e s s to be taken i n the House of

Commons during the f o l l o w i n g week.

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THE LORD PRIVY SEAL s a i d that the Government had been defeated by 33 votes i n a d i v i s i o n i n the House of Lords the previous evening on a motion by

Lord Shackleton r e g r e t t i n g the Government's d e c i s i o n to move towards the

c o m m e r c i a l i s a t i o n of the Ordnance Survey, and c a l l i n g on them to r e f e r the

i s s u e to the new Ordnance Survey Advisory Board before l a y i n g the r e l e v a n t

order. The motion had been supported by a l l the Opposition p a r t i e s , and

only one cross-bench Peer had voted a g a i n s t i t . A two-line whip had r e s u l t e d

in the attendance of a l a r g e number of C o n s e r v a t i v e P e e r s , but i n the event

many of them had a b s t a i n e d , and 10, i n c l u d i n g some former Conservative

M i n i s t e r s , had voted a g a i n s t the Government. The M i n i s t e r of S t a t e ,

Department of the Environment, Lord B e l l w i n , had taken g r e a t pains to inform

h i m s e l f on the very t e c h n i c a l s u b j e c t under debate, and had made two powerful

speeches; but a number of the Peers supporting the motion had been able to

speak w i t h d e t a i l e d and a u t h o r i t a t i v e knowledge of the Ordnance Survey.

She did not t h i n k that more could have been done to a v e r t d e f e a t . The

Opposition i n the House of Lords were now much b e t t e r organised under t h e i r

new Leader, and she f e a r e d that there might be f u r t h e r Government d e f e a t s ,

for example on the p r o v i s i o n s of the Housing and B u i l d i n g C o n t r o l B i l l

a f f e c t i n g c h a r i t a b l e housing t r u s t s .

THE SECRETARY OF STATE FOR THE ENVIRONMENT s a i d that he had addressed

Conservative Peers before the debate i n an attempt to gain t h e i r support,

though he had not spoken to Lord Shackleton. The supporters of the motion

appeared to have misunderstood the Government's i n t e n t i o n , which was to put

the Ordnance Survey on a more b u s i n e s s l i k e f o o t i n g and to provide g r e a t e r

motivation f o r i t s s t a f f . Many of those who had spoken had chosen to

misrepresent t h i s as an a t t a c k on a f i n e and r e s p e c t e d s e r v i c e . Although

the. Lords motion was not b i n d i n g , i t would be o f f e n s i v e to the upper House

to t a b l e the r e l e v a n t Order i n the Commons a t once. He had asked the

Parliamentary Under-Secretary of S t a t e , Department of the Environment,

Mr Shaw, to see whether some modest concessions could be o f f e r e d . He would

then speak to the main opponents of any change before proposing any f u r t h e r

a c t i o n . He had a l r e a d y s t r e s s e d to the M i n i s t e r f o r Housing and

C o n s t r u c t i o n the importance of preparing the ground i n advance before the

Housing and B u i l d i n g Control B i l l reached the House of L o r d s .

THE PRIME MINISTER, summing up a short d i s c u s s i o n , s a i d that although the

achievements of the Ordnance Survey were not i n doubt, i t was unacceptable

for i t to continue to operate with an open-ended subsidy. The c o n t r o l of

supply was a matter f o r the House of Commons, and i t was f o r c o n s i d e r a t i o n

whether steps might e v e n t u a l l y have to be taken to r e s t r i c t the power of

the House of Lords to take a c t i o n which l e d to i n c r e a s e d p u b l i c expenditure.

The Cabinet -

Took note.

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COMMONWEALTH SECRETARY s a i d that the p u b l i c a t i o n i n

T e l Aviv of the report of the j u d i c i a l i n q u i r y into the B e i r u t massacre was

having s e r i o u s repercussions on I s r a e l i domestic p o l i t i c s . The s i t u a t i o n

was very u n c e r t a i n . I t was doubtful whether the Defence M i n i s t e r , Mr Sharon,

would e i t h e r r e s i g n or be dismissed, but there might be an e a r l y general

e l e c t i o n . Meanwhile, d e s p i t e hopes placed by the Americans on Mr Habib,

there was no s i g n of progress towards agreement on the withdrawal of f o r e i g n

troops from the Lebanon. U n f o r t u n a t e l y , as d i s c u s s i o n with the United S t a t e s

V i c e - P r e s i d e n t , Mr George Bush, i n London the previous day had confirmed, the

United S t a t e s Administration remained r e l u c t a n t to put e f f e c t i v e pressure on

the I s r a e l i Government to show greater f l e x i b i l i t y . This was a cause of

i n c r e a s i n g concern to moderate Arab Governments, as had been made c l e a r by

President Mubarak of Egypt on h i s recent v i s i t to London. The main body of

the B r i t i s h contingent f o r the m u l t i n a t i o n a l f o r c e i n the Lebanon had

a r r i v e d i n B e i r u t on 8 February and had taken over p o s i t i o n s p r e v i o u s l y

occupied by the I s r a e l i s i n the face of some I s r a e l i r e l u c t a n c e .

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I n d i s c u s s i o n the point was made that i t was i n c r e a s i n g l y d i f f i c u l t f o r

B r i t i s h p u b l i c opinion to take a sympathetic view of I s r a e l i p o l i c i e s as

long as Mr Begin, with h i s t e r r o r i s t background and a t t i t u d e s , remained a t

the head of the I s r a e l i Government. But the j u d i c i a l i n q u i r y into the B e i r u t massacre had been exemplary; and i t was p o s s i b l e t h a t the pressure of world

opinion, which had induced Mr Begin to set up the i n q u i r y i n the f i r s t p l a c e , would a l s o b r i n g about Mr Sharon's r e s i g n a t i o n .

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THE FOREIGN AND COMMONWEALTH SECRETARY s a i d that the exodus of about one

m i l l i o n i l l e g a l migrant workers from N i g e r i a had now ended. Ghana and Chad

faced immense d i f f i c u l t i e s i n a s s i m i l a t i n g the refugees. N i g e r i a had paid

l i t t l e or no a t t e n t i o n to i n t e r n a t i o n a l p r o t e s t s , i n c l u d i n g those from the

B r i t i s h Government. B r i t i s h a s s i s t a n c e to the refugees had so f a r been

l i m i t e d : the United Kingdom had contributed to the European Community a i d

programme and made an a d d i t i o n a l £150,000 a v a i l a b l e b i l a t e r a l l y . But requests

f o r f u r t h e r f i n a n c i a l a i d were l i k e l y to be forthcoming.

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e p o r t THE FOREIGN AND COMMONWEALTH SECRETARY s a i d that the Brandt Commission had

now produced i t s second r e p o r t , which was more t e c h n i c a l than the f i r s t .

C a r e f u l c o n s i d e r a t i o n would need to be given to the B r i t i s h Government's

reaction.

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PRIME MINISTER s a i d that the recent round of v i s i t s to European c a p i t a l s

°y the V i c e - P r e s i d e n t of the United S t a t e s , Mr George Bush, had gone w e l l .

H i s v i s i t to London, which was concluding that morning, had been outstandingly

s u c c e s s f u l . Mr Bush had addressed a l a r g e and i n f l u e n t i a l audience a t

G u i l d h a l l and had handled questions w e l l . I n h i s p r i v a t e t a l k s with h e r and

the Foreign and Cormionwealth S e c r e t a r y , which had concentrated on defence

i s s u e s , he had been expert, reasonable and f l e x i b l e . He had made i t c l e a r

that the United S t a t e s would continue to t r e a t the zero option as the long-term I

o b j e c t i v e of the c u r r e n t n e g o t i a t i o n s with the Soviet Union on Intermediate

Range Nuclear Forces (INF) but were ready i f p o s s i b l e to conclude i n t e r •

mediate agreements on a b a s i s of p a r i t y : they d i d not regard the zero

option as a "take i t or leave i t " p o s i t i o n . T h i s was e n t i r e l y i n l i n e with

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the views of the West German C h a n c e l l o r , Dr Kohl. The United S t a t e s would

probably not, however, be making s p e c i f i c new proposals i n the INF n e g o t i a ­

t i o n s u n t i l a f t e r the F e d e r a l German e l e c t i o n s on 6 March. Mr Bush had

been accompanied by Mr F e l d s t e i n , the new Chairman of the Council of Economic I

A d v i s e r s , who had announced that the f i r s t signs of economic recovery were

becoming apparent i n the United S t a t e s , notably i n the c o n s t r u c t i o n and

motor c a r i n d u s t r i e s . I t was to be hoped that these p o s i t i v e and welcome

trends would be s u s t a i n e d .

In d i s c u s s i o n i t was agreed that Mr Bush had presented the arguments f o r the

United S t a t e s p o s i t i o n on arms c o n t r o l and d e t e r r e n c e e f f e c t i v e l y . A

s u s t a i n e d campaign was needed to present the case f o r n u c l e a r deterrence to

B r i t i s h opinion, which was b a s i c a l l y sympathetic to i t . A M i n i s t e r i a l

group had been e s t a b l i s h e d f o r t h i s purpose under the chairmanship of the

S e c r e t a r y of S t a t e f o r Defence. The i n c r e a s i n g l y i r r e s p o n s i b l e p o s i t i o n s

being adopted by the Opposition P a r t i e s on defence i s s u e s were not

n e c e s s a r i l y u n h e l p f u l to the Government's c a s e . The development of a

dialogue w i t h the S o v i e t Union on i s s u e s other than arms c o n t r o l would help

to r e a s s u r e p u b l i c opinion, and the F o r e i g n and Commonwealth O f f i c e was

already working to b r i n g about a gradual i n c r e a s e i n o f f i c i a l c o n t a c t s w i t h

the Soviet Union to the extent that t h i s could be done without implying a

n o r m a l i s a t i o n of r e l a t i o n s .

The Cabinet -

Took note.

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3. THE FOREIGN AND COMMONWEALTH SECRETARY s a i d that the European

Parliament was expected to approve the 1983 Supplementary and Amending Budget

before t h e i r plenary s e s s i o n ended on 11 February. The Commission had

published t h e i r Green Paper on the f u t u r e f i n a n c i n g of the Community. I n

p a r t i t could be h e l p f u l to the United Kingdom, s i n c e some of i t s ideas were

i n l i n e with the p o s s i b i l i t i e s suggested by the C h a n c e l l o r of the Exchequer

h i s statement i n B r u s s e l s on 7 February.

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I n d i s c u s s i o n i t was noted that the proposal f o r a new source of revenue

r e l a t e d t o shares of a g r i c u l t u r a l production was p o t e n t i a l l y h e l p f u l to the

United Kingdom, although the agreement of other member s t a t e s might be

d i f f i c u l t to o b t a i n , but that the proposals f o r i n c r e a s i n g the budget were

unwelcome.

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THE MINISTER OF AGRICULTURE, FISHERIES AND FOOD s a i d that the European Court's I

judgment on 8 February r u l i n g a g a i n s t the United Kingdom's procedures f o r

r e s t r i c t i n g milk imports had made i t c l e a r that the United Kingdom was

e n t i t l e d to l a y down hygiene requirements f o r milk imports to p r o t e c t the

h e a l t h of the consumer. I t had however implied that t h i s should be done on

b a s i s of c e r t i f i c a t i o n by the exporting member s t a t e . The French

system i n p a r t i c u l a r was untrustworthy; he had r e c e n t l y seen a report of a n a n a l y s i s of p a s t e u r i z e d milk i n France i n which a t h i r d of the samples were

u n s a t i s f a c t o r y . Time would be needed to agree acceptable arrangements with

the Commission and other member s t a t e s , which would i n c l u d e r e g u l a r

i n s p e c t i o n s a t the p o r t s , and primary l e g i s l a t i o n would be r e q u i r e d . The

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p r i c e of imports should not be as low as some Press reports had suggested

u n l e s s France r e s o r t e d to s u b s i d i s i n g i t by such means as r e g i o n a l a i d

through C r e d i t A g r i c o l e .

I n d i s c u s s i o n i t was noted that the c u r r e n t temporary arrangements could not

be maintained f o r any great length of time and that i t was t h e r e f o r e

important that the Government should a c t q u i c k l y to put permanent and

acceptable arrangements i n p l a c e . Once these had been implemented, there

would be advantage i n some s u c c e s s f u l p r o s e c u t i o n s i n respect of milk which

f a i l e d to meet the new requirements.

The Cabinet -

Took note.

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* STATE FOR THE ENVIRONMENT s a i d that i n t e r r u p t i o n s i n the I water supply r e s u l t i n g from the water workers' s t r i k e were i n c r e a s i n g

s t e a d i l y but g r a d u a l l y . The c u r r e n t s p e l l of c o l d weather would make the

s i t u a t i o n worse; and the p l i g h t of old people dependent on f r o z e n s t a n d ­ pipes was p a r t i c u l a r l y d i s t r e s s i n g . There had, however, been a number of

r e c o n n e c t i o n s , and i n general the system was c o n t i n u i n g to f u n c t i o n f a r

more e f f e c t i v e l y than had been expected. Some 37,000 p r o p e r t i e s were now

without water and some 7 m i l l i o n people were being advised to b o i l t h e i r

d r i n k i n g water. The n e g o t i a t i o n s which the A r b i t r a t i o n and C o n c i l i a t i o n

Advisory S e r v i c e (ACAS) had been conducting between the employers and the

union s i d e had broken down f o l l o w i n g the unions' r e f u s a l to accept the

binding a r b i t r a t i o n sought by the employers i n accordance with the terms

of the agreement which both s i d e s had signed, under the a u s p i c e s of ACAS,

a t the outset of the mediation p r o c e s s . There was evidence of workers

• . . . .

wanting to r e t u r n to work, but being i n h i b i t e d from doing so by the c l o s e d

shop agreement between the employers and the unions; and the employers

were under some p r e s s u r e to abrogate that agreement on the ground that the

unions were not honouring t h e i r o b l i g a t i o n under i t to maintain emergency

cover. Emergency cover was, however, being maintained i n most c a s e s ; and

the most urgent requirement was to get a c r o s s to the p u b l i c the extent of

the union s i d e ' s f a i l u r e to honour the agreements i t had entered i n t o . He

would t h e r e f o r e be d i s c o u r a g i n g the employers from premature a c t i o n to

abrogate the c l o s e d shop agreement, and he would be making a statement to

Parliament that afternoon which would emphasise the passage from the l a t e s t

ACAS statement which s t r e s s e d the need to r e f e r the d i s p u t e " e i t h e r to

a r b i t r a t i o n or to some other t h i r d p a r t y , f o r a f i n a l d e c i s i o n " .

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THE SECRETARY OF STATE FOR EMPLOYMENT s a i d that the statement by ACAS

commenting on the breakdown of the n e g o t i a t i o n s had been i n j u d i c i o u s and

u n h e l p f u l i n c r i t i c i s i n g the employers w h i l e f a i l i n g to make i t c l e a r that

the unions had broken t h e i r agreements. I n p u b l i c p r e s e n t a t i o n of the i s s u e s

i t would be important to d i r e c t c r i t i c i s m away from the workforce and on to

the union l e a d e r s h i p , which was prolonging the d i s p u t e by i t s r e f u s a l to

honour the agreements p r o v i d i n g f o r binding a r b i t r a t i o n and thereby c a u s i n g

hardship both to the p u b l i c and the unions' membership.

THE SECRETARY OF STATE FOR ENERGY s a i d that r e p o r t s i n the P r e s s that the

e l e c t r i c i t y workers were contemplating sympathetic a c t i o n were l a r g e l y ' s a b r e - r a t t l i n g a t t h i s s t a g e : i t appeared that the union l e a d e r s h i p was

e x p l o r i n g the r e a d i n e s s of i t s members to take m i l i t a n t a c t i o n . Pay

n e g o t i a t i o n s with the manual workers i n the gas and e l e c t r i c i t y i n d u s t r i e s

were going ahead s l o w l y , and no f u r t h e r meetings were planned u n t i l the week

a f t e r next. But there were f e a r s of eventual i n d u s t r i a l a c t i o n i n the gas

industry. ,

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THE SECRETARY OF STATE FOR SOCIAL SERVICES s a i d that there was a l s o some

cause f o r concern i n the National Health S e r v i c e where the water i n d u s t r y

unions were t h r e a t e n i n g to withdraw emergency cover from h o s p i t a l s which

did not have emergency and a c c i d e n t Departments.

THE PRIME MINISTER, summing up the d i s c u s s i o n , s a i d that i t was important

not to j e o p a r d i s e the maintenance of emergency cover, which i t appeared was

being g e n e r a l l y maintained d e s p i t e union r h e t o r i c to the c o n t r a r y . I f

emergency cover were i n f a c t w i t h h e l d , f i r m a c t i o n would be n e c e s s a r y .

For the moment, however, the r i g h t course was to focus p u b l i c c r i t i c i s m

on the unions f o r f a i l u r e to honour t h e i r agreements.

The Cabinet -

Took note.

Cabinet O f f i c e

10 February

1983



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