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SECRET
U M E N T IS T H E P R O P E R T Y O F H E R B R I T A N N I C
MAJESTY'3 GOVERNMENT
COPY
!0th ions
NO
80
CABINET
CONCLUSIONS
of a M e e t i n g of the
Cabinet
h e l d a t 10 D o w n i n g S t r e e t o n
T H U R S D A Y 8 N O V E M B E R 1979
a t 10 .30 a m
P R E S E N T
The
Rt Hon Margaret Prime
Hon W i l l i a m W h i t e l a w
The
MP
ry of S t a t e f o r t h e H o m e
Department
and
mwealth A f f a i r s
1-3)
(Items
Hon S i r K e i t h J o s e p h o f State f o r Hon L o r d
M P
Rt Hon L o r d Hail sham
Lord The
Hon L o r d C a r r i n g t o n ry o f State f o r F o r e i g n
Thatcher
Minister
Chancellor
Rt Hon Sir Geoffrey
C h a n c e l l o r of the
MP
The
Rt Hon F r a n c i s P y m
S e c r e t a r y of State for
Industry
The
Soames
S e c r e t a r y of State for
Hon S i r I a n G i i m o u r
The
M P
1-4)
MP
MP
Defence
Rt Hon J a m e s P r i o r
r e s i d e n t of the C o u n c i l
rivy Seal ( I t e m s
Howe Q C
Exchequer
MP
Employment
Rt Hon Peter Walker
M i n i s t e r of A g r i c u l t u r e ,
MP
Fisheries
and F o o d
Hon M i c h a e l H e s e l t i n e
M P
The
Rt Hon George Younger
tty of State f o r t h e E n v i r o n m e n t
S e c r e t a r y of State for
Hon N i c h o l a s E d w a r d s
The
l r
Y of S t a t e f o r
M P
Wales
Hon P a t r i c k J e n k i n
M P
The
j y of S t a t e f o r i r
Ireland
R t H o n N o r m a n St J o h n - S t e v a s
MP
The
Trade
S e c r e t a r y of State for
SECRET
M P
Northern
C h a n c e l l o r of the D u c h y of
r
fHon John Nott
Rt Hon Humphrey Atkins
S e c r e t a r y of State for
f y of State f o r S o c i a l S e r v i c e s
MP
Scotland
Rt Hon David Howell
MP
Lancaster MP
Energy
253
SECRET
ion M a r k C a r l i s l e Q C
T h e Kt Hon John Biffen
MP
Chief Secretary,
of State f o r E d u c a t i o n a n d
The Rt Hon Angus Paymaster THE
FOLLOWING
Hon N o r m a n F o w l e r
Maude
MP
Treasury
MP
General WERE ALSO
M P
PRESENT
The Rt Hon Michael Jopling
r of T r a n s p o r t
Parliamentary Secretary,
MP
Treasury
SECRETARIAT Sir Robert
Armstrong
Mr M D M Franklin
(Items 2 and
Mr
(Items
P Le
Cheminant
Mr P J
Harrop
( I t e m 1)
Mr R L
Wade-Gery
(Items 2 and
Mr P
MountfieJd
Mr D E R
Faulkner
3)
4-8)
(Items
3)
4-8)
( I t e m 1)
C O N T E N T S Subj ect PARLIAMENTARY Business
1
Page
AFFAIRS
i n the H o u s e of C o m m o n s
1
Southern Rhodesia B i l l
1
Northern Ireland
2
FOREIGN AFFAIRS Rhodesia
3
Iran
3
COMMUNITY
AFFAIRS
A g r i c u l t u r e C o u n c i l 12-13 N o v e m b e r PUBLIC
4
E X P E N D I T U R E 1981-82 T O 1 9 8 3 - 8 4
NATIONALISED
INDUSTRIES'
INVESTMENT AND
6 FINANCING
8
ii
SECRET
254
SECRET
Subject PRESENTATION O F NEWS A N D
CURRENT EVENTS
ROLLS-ROYCE OIL
PRICES
iii
SECRET
CONFIDENTIAL
v
jTARY
1.
T h e C a b i n e t w e r e i n f o r m e d o f t h e b u s i n e s s t o be t a k e n i n t h e
H o u s e of C o m m o n s d u r i n g the f o l l o w i n g agreement the
was
week.
r e a c h e d by which p r o c e e d i n g s
It w a s
B i l l w e r e t a k e n i n p l a c e of the P r i v a t e M e m b e r s for F r i d a y 9 November, week;
t h e r e w o u l d be
T h u r s d a y 15
THE
that b u s i n e s s
noted that, i f an
o n the S o u t h e r n R h o d e s i a 1
Business
scheduled
w o u l d n e e d t o be r e i n s t a t e d n e x t
some advantage
i f i t c o u l d be r e i n s t a t e d o n
November.
LORD PRESIDENT OF THE COUNCIL
s a i d t h a t he w a s
concerned
about a s u g g e s t i o n that p r o c e e d i n g s i n the H o u s e of C o m m o n s o n the S o u t h e r n R h o d e s i a B i l l m i g h t e x t e n d u n t i l M o n d a y 12 N o v e m b e r ,
with
che r e s u l t t h a t t h e B i l l w o u l d n o t r e a c h t h e H o u s e o f L o r d s u n t i l l a t e that day.
T h e H o u s e of L o r d s d i d not have the m e a n s
l e n g t h o f a deb?.te w h i c h w e r e a v a i l a b l e i n t h e H o u s e o f C o m m o n s , it was i m p o r t a n t that p r o c e e d i n g s s,
i n that H o u s e
n o r m a l t i m e or. M o n d a y 12 N o v e m b e r w e r e to be
H o u s e of C o m m o n s
i f R o y a l A s s e n t b y 14
general
agreement
s h o u l d be c o m p l e t e d a s
soon as possible,
o v e r the w e e k e n d .
O n the o t h e r h a n d a l a r g e n a m b e r
that i t m i g h t be p r e f e r a b l e
u n t i l M o n d a y 12 N o v e m b e r
i t w o u l d h e l p to p r e s e r v e
A l t h o u g h the
g o o d w i l l i f the for
such an arrangement
s u m m i n g up the d i s c u s s i o n ,
s a i d that the a i m
sitting starting on T h u r s d a y
and continuing through F r i d a y 9 November
for as long as n e c e s s a r y ,
and
so that the debate i n the H o u s e of
thereafter Lords
c o u l d s t a r t n o l a t e r t h a n 2 , 3 0 p m o n M o n d a y 12 N o v e m b e r . C h a n c e l l o r of the D u c h y of L a n c a s t e r , P r e s i d e n t of the C o u n c i l , to d o
to be
the S o u t h e r n R h o d e s i a B i l l t h r o u g h a l l i t s stages i n
the H o u s e of C o m m o n s i n a s i n g l e
herself,
back
Governments
were unduly delayed.
PRIME MINISTER,
8 November
postponed would
the c o - o p e r a t i o n of t h e i r
p o s i t i o n c o u l d be k e p t s u f f i c i e n t l y f l e x i b l e
s h o u l d be to t a k e
amendments
f o r T h i r d R e a d i n g to be
c o u l d not guarantee
considered if progress
of
The Opposition had
on the u n d e r s t a n d i n g that the B i l l
r e c e i v e a T h i r d R e a d i n g b y 7. 00 p m o n t h a t d a y . Opposition leaders
both to
a n d to a v o i d u n c e r t a i n t y
had already been tabled and others were expected.
THE
November
that p r o c e e d i n g s i n the
e n s u r e t h e p a s s a g e o f t h e B i l l b y 14 N o v e m b e r
benchers,
and
s h o u l d s t a r t at the
assured.
In d i s c u s s i o n t h e r e w a s
suggested
on
of c o n t r o l l i n g the
the
i n c o n s u l t a t i o n w i t h the
L o r d P r i v y Seal,
the C h i e f W h i p
w o u l d r e v i e w the p o s i t i o n i f u n t o w a r d e v e n t s m a d e i t
so.
1
CONFIDENTIAL
The Lord and necessary
CONFIDENTIAL
The Cabinet 1.
T o o k note,
Minister
THE
1
with approval,
of the
Prime
s s u m m i n g up of t h e i r d i s c u s s i o n .
SECRETARY
OF STATE FOR NORTHERN IRELAND
s a i d that h i s
s t a t e m e n t i n the H o u s e of C o m m o n s on 25 O c t o b e r h a d f o r e s h a d o w e d p r e s e n t a t i o n to P a r l i a m e n t of a consultative d o c u m e n t w h i c h would a basis
f o r d i s c u s s i o n at a c o n f e r e n c e
leaders.
with N o r t h e r n Ireland
the form
political
A draft had been p r e p a r e d by a M i n i s t e r i a l G r o u p c h a i r e d by
the H o m e S e c r e t a r y ( M I S C 24) a n d i t h a d s u b s e q u e n t l y b e e n a p p r o v e d the D e f e n c a
and O v e r s e a
T h e d o c u m e n t was
now
P o l i c y C o m m i t t e e on M o n d a y 5
November.
b e i n g p r i n t e d a n d w o u l d be c i r c u l a t e d to
M i n i s t e r s f o r i n f o r m a t i o n d u r i n g the f o l l o w i n g
week;
it would
p u b l i s h e d e a r l y i n t h e w e e k b e g i n n i n g M o n d a y 19 N o v e m b e r , i n the H o u s e of C o m m o n s The Cabinet 2.
by
would no doubt
be
and
a debate
follow.
T o o k note.
2
CONFIDENTIAL
257
CONFIDENTIAL
2.
T H E FOREIGN AND
that i t was
COMMONWEALTH SECRETARY
s t i l l u n c l e a r w h e t h e r t h e P a t r i o t i c F r o n t w o u l d a g r e e to
the t r a n s i t i o n a l a r r a n g e m e n t s delicate.
A
break
he had p r o p o s e d .
The timing
with the F r o n t would be u n d e s i r a b l e
Bishop Muzorewa's
delegation was
But
becoming impatient.
If
strong
w e r e put o n the F r o n t by P r e s i d e n t K a u n d a of Z a m b i a ,
had just a r r i v e d on a s e l f - i m p o s e d that they m i g h t a g r e e .
Mr
M r Mugabe would probably a h e a d without the F r o n t , earlier than otherwise, 19 D e c e m b e r .
v i s i t to L o n d o n ,
Nkomo
it was
be r e l u c t a n t .
If a r r a n g e m e n t s
w o u l d n e e d t o go t o
would support us,
h a d to
of any o t h e r p o l i c y would be
FOREIGN AND
outlook i n Iran was
about
but we w e r e l i k e l y to Security
disturbing.
s a i d that the
A l t h o u g h the o c c u p a t i o n of the
that of the U n i t e d States
continued;
a n d f o l l o w i n g the f a l l of the B a z a r g a n
were fears
not o n l y for the h o s t a g e s
Embassy
Government
i n the United States
r e f u s i n g to l e a v e t h e F o r e i g n M i n i s t r y .
If t h e I r a n i a n s
a p p l i e d o i l sanctions against the U n i t e d States, generally, THE
a new o i l c r i s i s might
SECRETARY
States v e s s e l s become
who now
o r a g a i n s t the W e s t
develop.
OF STATE FOR ENERGY
s a i d that,
if United
w e r e n o t a l l o w e d to l o a d I r a n i a n o i l , w h i c h
clear within hours,
there
Embassy
but a l s o f o r the s a f e t y o f the U n i t e d S t a t e s C h a r g e d ' A f f a i r e s , was
but
greater.
COMMONWEALTH SECRETARY
B r i t i s h E m b a s s y had now ended,
go
prospects
T h e r e w o u l d be r i s k s i n v o l v e d f o r B r i t i s h i n t e r e s t s ;
the dangers
but
Rhodesia
and elections would take place by
In that s i t u a t i o n t h e r e w e r e r e a s o n a b l e
h a v e to v e t o a h o s t i l e r e s o l u t i o n i n t h e U n i t e d N a t i o n s Council.
who
possible
w o u l d p r o b a b l y l i k e to do so,
a Governor
that f r i e n d l y G o v e r n m e n t s
THE
was
during the
E n a b l i n g B i l l ' s p a s s a g e t h r o u g h the H o u s e of C o m m o n s pressure
said
the i m m e d i a t e effects
on w o r l d
should
supplies
a n d p r i c e s w o u l d be l i m i t e d s i n c e o n l y a s m a l l p r o p o r t i o n of t o t a l
United States o i l supplies were i n v o l v e d and stocks w e r e high.
B u t the p o s i t i o n would d e t e r i o r a t e i f the o i l thus withheld w e r e not
If B r i t i s h s h i p s w e r e n o t a l l o w e d t o l o a d ,
m a d e a v a i l a b l e to o t h e r s .
t h e r e w o u l d be a s h o r t f a l l of about supplies.
The Cabinet Took
-
note.
3 CONFIDENTIAL
5 per
cent i n United K i n g d o m
CONFIDENTIAL
;1ITY
S
3, in
T H E LORD PRESIDENT OF T H E COUNCIL the day the Defence
on
and O v e r s e a
s a i d that
Policy Committee,
E u r o p e a n Q u e s t i o n s h a d m e t u n d e r h i s c h a i r m a n s l d p to
consider
lture
the l i n e w h i c h the M i n i s t e r of A g r i c u l t u r e s h o u l d take at the
I
f o r t h c o m i n g m e e t i n g o n 12-13 N o v e m b e r
ovember
(Agriculture).
as
structure.
slice:
in
of the C o u n c i l of M i n i s t e r s
T h e S u b - C o m m i t t e e had a g r e e d on the
l i n e for the d i s c u s s i o n about
sheepmeat
however,
T h e y had not,
and about
Minister's
agricultural
b e e n a b l e to a g r e e o n
whether,
v i e w of the c o n t i n u i n g r e f u s a l o f F r a n c e to a l l o w i m p o r t s
)19th
sheepmeat
sions,
proposals
f r o m the U n i t e d K i n g d o m , d e a l i n g with the wine
earlier
Sub-Committee
of
he s h o u l d b l o c k a g r e e m e n t
to
sector.
4 THE
MINISTER
OF AGRICULTURE,
FISHERIES AND
FOOD
said
t h e C o m m u n i t y h a d b e e n d i s c u s s i n g i m p r o v e m e n t s to t h e C o m m u n i t y s 1
wine r e g i m e for m o r e t h a n two y e a r s . the p r i n c i p a l b e n e f i c i a r i e s .
It w a s
F r a n c e and Italy would
A g r i c u l t u r e C o u n c i l f o r M i n i s t e r s to m a k e for
securing satisfaction on issues
G o v e r n m e n t was
concessions only i n return
of c o n c e r n to t h e m .
coming under increasing pressure
C o m m i s s i o n over its illegal actions on sheepmeat Community partners package i n these colleague
The French
from
the
and our
w o u l d n o t e x p e c t u s to a g r e e to the w i n e
circumstances.
He was
confident that h i s
Italian
w o u l d f u l l y u n d e r s t a n d a n d w o u l d i n d e e d do t h e s a m e i f h e
were i n a s i m i l a r situation.
H e was
resisting strong pressure
t h e U n i t e d K i n g d o m to t a k e i l l e g a l a c t i o n a g a i n s t i m p o r t s France,
THE
for
from
but he w o u l d be i m p o s s i b l e to e x p l a i n d o m e s t i c a l l y why
h a d a g r e e d to a s e t t l e m e n t o n w i n e o f b e n e f i t t o F r a n c e w h i l e was
be
c o m m o n p r a c t i c e i n the
still acting illegally on LORD PRIVY
SEAL
sheepmeat.
s a i d that the wine p r o p o s a l s
w o u l d h e l p to
r e d u c e the s u r p l u s of w i n e a n d t h u s to cut t h e c o s t o f t h e Agricultural Policy. Government
T h i s was
supported.
an objective
T o veto the package
w o u l d be n e e d e d i n the f o r t h c o m i n g b u d g e t a r y
would therefore
be
support
d i s c u s s i o n s at the
A t the m o m e n t the r e s t of the C o m m u n i t y
u n a n i m o u s i n c o n d e m n i n g the F r e n c h a c t i o n o v e r
sheepmeat:
w o u l d be a m i s t a k e to r u n t h e r i s k of t u r n i n g t h i s i n t o a A n g l o - F r e n c h battle,
Common
which the B r i t i s h
against B r i t i s h i n t e r e s t s as well as those of Italy whose European Council.
we
France
was it
purely
and the U n i t e d K i n g d o m would l o s e a
great
deal of sympathy f r o m her other C o m m u n i t y p a r t n e r s i f the M i n i s t e r of A g r i c u l t u r e e x e r c i s e d a veto on the wine
package.
What happened i n the A g r i c u l t u r e C o u n c i l would affect the atmosphere
w i t h i n the C o m m u n i t y at a
time
i n t e r e s t s w e r e at stake o v e r the C o m m u n i t y In a b r i e f d i s c u s s i o n i t was
suggested
f o r u s to p r o l o n g the d i s c u s s i o n , veto,
when m a j o r
general
British
Budget.
that the best t a c t i c s would
but to a v o i d h a v i n g to e x e r c i s e
be a
so a s n o t to a l i e n a t e t h e g o o d w i l l o f t h e r e s t o f t h e C o m m u n i t y .
CONFIDENTIAL
259
CONFIDENTIAL
T h e M i n i s t e r of A g r i c u l t u r e but s h o u l d i f n e c e s s a r y
should not a g r e e to the wine
back b e f o r e any d e c i s i o n was t a k e n .
If t h e F r e n c h w e r e t o
w a y o n s h e e p m e a t i t w o u l d be m o r e d i f f i c u l t to w i t h h o l d on wine,
proposals,
s a y that he w a s u n d e r i n s t r u c t i o n s to
refer give
agreement
but e v e n i n t h e s e c i r c u m s t a n c e s i t m i g h t s e r v e a s a
q u i d p r o quo for
useful
some m o v e m e n t by the F r e n c h o n the C o m m u n i t y
Budget. THE
PRIME MINISTER,
s u m m i n g up,
s a i d that the M i n i s t e r of
A g r i c u l t u r e s h o u l d not a g r e e to the p r o p o s a l s A g r i c u l t u r e C o u n c i l o n 12-13 N o v e m b e r .
on wine at the
He should m a k e it
clear
that h e was u n d e r i n s t r u c t i o n s to r e p o r t b a c k to h i s
colleagues
before the United K i n g d o m c o u l d give its a g r e e m e n t .
In the
of the F r e n c h abandoning their i l l e g a l a c t i o n o n sheepmeat,
event she
w o u l d be w i l l i n g to c o n s i d e r u r g e n t l y w i t h t h e M i n i s t e r s p r i n c i p a l l y c o n c e r n e d v/hat t h e G o v e r n m e n t s should then
The Cabinet 1.
attitude t o w a r d s the wine
package
be.
T o o k note,
with a p p r o v a l ,
of the
Prime
M i n i s t e r ' s s u m m i n g up of their d i s c u s s i o n . 2.
Invited the M i n i s t e r of A g r i c u l t u r e ,
a n d F o o d to be g u i d e d
accordingly.
5
CONFIDENTIAL
Fisheries
CONFIDENTIAL
4. NDlTURE jO I
The Cabinet considered a m e m o r a n d u m
Secretary,
Treasury,
C(79)
54,
by the C h i e f
r e p o r t i n g the r e s u l t s of h i s
d i s c u s s i o n s with other M i n i s t e r s on outstanding public i s s u e s following
the C a b i n e t
1
also had before t h e m a minute dated 6 November j
g
a c e :
Secretary, housing,
Treasury,
to the P r i m e
Treasury,
ions
expenditure on education.
6
They
f r o m the C h i e f
M i n i s t e r about expenditure
a n d a l e t t e r d a t e d 31 O c t o b e r f r o m t h e C h i e f
jgth
expenditure
s l a s t d i s c u s s i o n on this subject.
on
Secretary,
to t h e S e c r e t a r y o f S t a t e f o r E d u c a t i o n a n d S c i e n c e
about
4
THE
CHIEF SECRETARY,
the Cabinet,
TREASURY,
he h a d h e l d s e p a r a t e
s a i d that,
as requested
State for the E n v i r o n m e n t a n d the S e c r e t a r y of State for and Science,
about t h e i r spending p r o g r a m m e s
of the S u r v e y p e r i o d . agreement
As
a result,
on modified figures
set out i n h i s p a p e r . early in December
i n the l a s t t h r e e
h e h a d b e e n a b l e to
for their p i o g r a m m e s
the l e v e l of a g r i c u l t u r a l support (which on the b a s i s
which
Cabinet would
were were
consider
of a r e p o r t f r o m an O f f i c i a l C o r p o r a t i o n (which would
for
Civil Service manpower,
week),
Group),
be
and the p r o v i s i o n to be
the f i g u r e s
Education programmes case,
to t h e C a b i n e t
It w a s
noted that i n each
the D e p a r t m e n t a l M i n i s t e r s h a d d i s c r e t i o n to m a k e It w a s
expenditure,
54,
K i n g d o m c o n t r i b u t i o n to the B u d g e t of t h e E u r o p e a n It w a s ,
however,
a s s u m p t i o n to m a k e at t h i s s t a g e .
public
s t i l l a s s u m e d that the U n i t e d
w o u l d i n c r e a s e b e y o n d the l e v e l i m p l i e d by a 1 p e r
the figures
further
Secretary,
a l s o p o i n t e d out that the r e v i s e d totals for
annexed to C(79)
Value Added Tax.
shortly.
a g r e e d f o r the E n v i r o n m e n t a n d
were confirmed.
r e d i s p o s i t i o n s within the totals a g r e e d with the C h i e f Treasury.
at
made
on w h i c h the L o r d P r e s i d e n t of the
C o u n c i l w o u l d be b r i n g i n g f u r t h e r p r o p o s a l s In d i s c u s s i o n ,
years
reach
c o n s i d e r e d by the M i n i s t e r i a l C o m m i t t e e on E c o n o m i c Strategy i t s next m e e t i n g the f o l l o w i n g
of
Education
T h e only r e m a i n i n g outstanding issues
the finances of the B r i t i s h G a s
by
d i s c u s s i o n s with the S e c r e t a r y
Communities cent c e i l i n g on
a r g u e d that t h i s was
a
prudent
T h e r e w o u l d be t i m e to a l t e r
i n the P u b l i c E x p e n d i t u r e White P a p e r
i n the light of
any d e c i s i o n s on the C o m m u n i t y B u d g e t t a k e n at t h e m e e t i n g of the E u r o p e a n C o u n c i l i n D u b l i n at the end of In f u r t h e r
discussion,
it was
took decisions on m a j o r examination.
suggested that the way i n w h i c h
public expenditure issues needed
At present many
bilaterally between T r e a s u r y This
November. Cabinet
further
such decisions were rightly taken
M i n i s t e r s and spending
Ministers.
saved m u c h unnecessary and prolonged discussion i n Cabinet.
But as a result politically sensitive matters, i n p r e s c r i p t i o n c h a r g e s i n 1980-81,
w e r e not always
collectively despite their obvious importance. perhaps
s u c h as the
CONFIDENTIAL
considered
T h i s point
be r e c o n s i d e r e d b e f o r e the f o l l o w i n g y e a r ' s 6
increase should
Survey.
CONFIDENTIAL
THE
P R I M E MINISTER,
s u m m i n g up the d i s c u s s i o n ,
the exception of outstanding i s s u e s Civil Service numbers,
on a g r i c u l t u r e ,
said that with
gas p r i c e s
and
the Cabinet had now c o m p l e t e d i t s
c o n s i d e r a t i o n of p u b l i c e x p e n d i t u r e i n the y e a r s to 1983-84. The Cabinet 1.
T o o k note of the figures
public expenditure p r o g r a m m e s , to C(79) 2.
as
set out i n the A n n e x
54. N o t e d that the outstanding i s s u e s on
agriculture, resolved,
gas,
and on C i v i l S e r v i c e manpower would
a n d d e c i s i o n s o n the E u r o p e a n B u d g e t
w i t h i n the next few 3.
now a g r e e d f o r a l l the
weeks.
I n v i t e d the C h i e f S e c r e t a r y ,
p r e p a r e a draft of a W h i t e i n these years, December,
for
be
taken,
Treasury,
P a p e r on Public
to
Expenditure
c i r c u l a t i o n to the C a b i n e t i n
and publication i n January.
7
CONFIDENTIAL
CONFIDENTIAL
JSED
5.
Eg'
Chief Secretary,
SNT A N D
T h e Cabinet considered a m e m o r a n d u m , Treasury,
C(79)
56,
by the
setting out the p o s i t i o n r e a c h e d i n
d i s c u s s i o n with the M i n i s t e r s c o n c e r n e d about the f i n a n c i a l requirements
of the n a t i o n a l i s e d i n d u s t r i e s i n the y e a r s 1981-82 to
1983-84. THE th
CHIEF SECRETARY,
TREASURY,
s a i d that h i s
set out b r i e f l y the f i n a l p o s i t i o n r e a c h e d i n b i l a t e r a l w i t h the M i n i s t e r s c o n c e r n e d , figures
and i n an annex
for a l l the industries concerned,
memorandum discussions
set out the a g r e e d
w i t h the e x c e p t i o n of
o n w h i c h (as t h e C a b i n e t h a d j u s t n o t e d ) t h e r e w e r e s o m e
gas,
outstanding
i s s u e s to be c o n s i d e r e d by the M i n i s t e r i a l C o m m i t t e e o n E c o n o m i c S t r a t e g y at t h e i r n e x t m e e t i n g . borrowing
The figures
c o v e r e d the net
by the n a t i o n a l i s e d i n d u s t r i e s f r o m a l l s o u r c e s .
were n e c e s s a r i l y tentative,
l a r g e r flows on current and capital account. shipbuilding and railways
T h e figures
for
steel,
m i g h t p r o v e to be o p t i m i s t i c , i n v i e w o f
the trading prospects
of those i n d u s t r i e s .
in discussion,
noted that the f i g u r e s
i t was
They
s i n c e they w e r e the net r e s u l t of m u c h
O i l C o r p o r a t i o n and the B r i t i s h G a s by m o v e m e n t s i n the w o r l d o i l p r i c e .
for the B r i t i s h National
C o r p o r a t i o n m i g h t be It w a s
affected
a l s o p o i n t e d out that
the c h a n g e s n o w a g r e e d h a d the effect of i n c r e a s i n g the net l e n d i n g to t h e n a t i o n a l i s e d i n d u s t r i e s i n 1981-82, until later years.
It w a s
while postponing
a l s o r e p o r t e d that the f i g u r e s
reductions
for
the
Scottish E l e c t r i c i t y B o a r d s had not been finally a g r e e d and m i g h t need later
adjustment.
The Cabinet 1.
T o o k note of the p o s i t i o n r e a c h e d o n the
financing forecasts
for the nationalised industries
i n the y e a r s up to 1 9 8 3 - 8 4 . 2.
Invited the S e c r e t a r y of State f o r
to d i s c u s s with the C h i e f S e c r e t a r y , the f i g u r e s 3.
for the Scottish E l e c t r i c i t y
Invited the C h i e f S e c r e t a r y ,
to i n c l u d e t h e a g r e e d f i g u r e s
Scotland
Treasury, Boards.
Treasury,
for the n a t i o n a l i s e d
i n d u s t r i e s i n the f o r t h c o m i n g White P a p e r Public Expenditure,
1981-82 to 1 9 8 3 - 8 4 .
8
CONFIDENTIAL
on
CONFIDENTIAL
"j^TION
6.
SAND
c o r r e c t the t e n d e n c y of n e w s p a p e r s a n d b r o a d c a s t i n g a u t h o r i t i e s
T h e C a b i n e t ' s a t t e n t i o n was
T EVENTS
not l e a s t the B r i t i s h B r o a d c a s t i n g C o r p o r a t i o n ( B B C ) observe acceptable
d r a w n to t h e n e e d to t r y to
standards of a c c u r a c y and balance i n their
r e p o r t i n g of news and c u r r e n t events.
Recent examples
t h e B B C r e p o r t t h a t m o r n i n g t h a t g a s p r i c e s w e r e to be b y 40 p e r
cent;
expenditure;
THE
included increased
t e l e v i s i o n r e p o r t s of p r o t e s t s about cuts i n p u b l i c
and a story i n T h e G u a r d i a n of 7 N o v e m b e r
c l o s u r e plans for b r a n c h r a i l w a y P R I M E MINISTER,
there was
-
- to f a i l to
about
lines.
s u m m i n g up the d i s c u s s i o n ,
s a i d that
g e n e r a l a g r e e m e n t that the r i g h t a p p r o a c h was not for
t h e G o v e r n m e n t to m o u n t a g e n e r a l i s e d a t t a c k o n s t a n d a r d s
of
a c c u r a c y a n d i m p a r t i a l i t y i n r e p o r t i n g but f o r D e p a r t m e n t s to d e a l c a s e by c a s e with each s p e c i f i c i n s t a n c e of i n a c c u r a t e o r r e p o r t i n g as q u i c k l y as p o s s i b l e after it o c c u r r e d .
unbalanced
Ministers
should satisfy t h e m s e l v e s that t h e i r D e p a r t m e n t s had adequate arrangemerts media's for
for v i g i l a n t m o n i t o r i n g of the P r e s s
and
broadcasting
coverage of m a t t e r s for which they w e r e responsible,
e n s u r i n g that the a p p r o p r i a t e
each case.
and
c o r r e c t i v e action was taken i n
T h e c u m u l a t i v e e f f e c t o f s u c h a c t i o n w o u l d b e to a p p l y
c o n s t a n t p r e s s u r e u p o n t h e m e d i a to o b s e r v e a c c e p t a b l e of a c c u r a c y and balance.
standards
T h i s was p a r t i c u l a r l y i m p o r t a n t i n the
c a s e of the b r o a d c a s t i n g a u t h o r i t i e s ,
not o n l y b e c a u s e of the
i m m e d i a c y of the r e p o r t i n g but a l s o b e c a u s e t h e y w e r e u n d e r b i n d i n g f o r m a l o b l i g a t i o n s to c o m p l y w i t h c e r t a i n r e q u i r e m e n t s to b a l a n c e a n d i m p a r t i a l i t y .
corrective action were available; circumstances i n each case. the G o v e r n m e n t s
as
V a r i o u s methods and techniques of the c h o i c e would depend on
It w a s
also worth r e m e m b e r i n g
that
s u p p o r t e r s i n P a r l i a m e n t w e r e k e e n to be k e p t
f u l l y i n f o r m e d o n G o v e r n m e n t p o l i c i e s a n d a c t i o n s a n d to h e l p i n p r e s e n t i n g t h e m to the p u b l i c .
M i n i s t e r s should therefore keep i n
t o u c h with the C h a i r m e n a n d m e m b e r s in their fields,
of P a r t y C o m m i t t e e s
and should give w h i c h e v e r a s s i s t a n c e was
working
appropriate
to t h e P a r t y o r g a n i s a t i o n to e n a b l e i t to p r o v i d e h e l p f u l a n d t i m e l y b r i e f i n g m a t e r i a l to G o v e r n m e n t The Cabinet 1.
T o o k note with a p p r o v a l of the
Minister's 2.
backbenchers.
Prime
s u m m i n g up of t h e i r d i s c u s s i o n .
Invited a l l M i n i s t e r s i n c h a r g e of
to satisfy t h e m s e l v e s that a p p r o p r i a t e w e r e m a d e to m o n i t o r P r e s s , c o v e r a g e of the a f f a i r s
Departments
arrangements
radio and television
of their Departments,
and to
t a k e i m m e d i a t e s t e p s to c o r r e c t a n y c a s e s o f i n a c c u r a c y or imbalance i n reporting as they o c c u r r e d , the P a y m a s t e r
General i n each
informing
case.
9 CONFIDENTIAL
264
CONFIDENTIAL
3.
A g r e e d u p o n the i m p o r t a n c e of k e e p i n g the
Government's
supporters i n Parliament,
and
p a r t i c u l a r l y the C h a i r m e n of C o n s e r v a t i v e Subject C o m m i t t e e s ,
fully briefed
developments i n Government
ROYCE
T H E SECRETARY
7.
following
Party
about
policies.
OF STATE
FOR INDUSTRY
s a i d that,
d i s c u s s i o n s i n a M i n i s t e r i a l G r o u p under the
Ministers
Prime
c h a i r m a n s h i p ( M I S C 22) h e h a d i n f o r m e d the
E n t e r p r i s e B o a r d of c e r t a i n changes
w h i c h the
p r o p o s e d to m a k e i n t h e i r r e l a t i o n s with R o l l s - R o y c e , a n d as r e p o r t e d i n the P r e s s
that m o r n i n g ,
National
Government As
a
members
of the N a t i o n a l E n t e r p r i s e B o a r d h a d t h r e a t e n e d to
en b l o c .
Such a move
and i t would o n the whole
be p r e f e r a b l e to a v o i d t h i s o u t c o m e i f p o s s i b l e , consideration.
i n f o r m e d of
resign
c o u l d be d a m a g i n g to i n d u s t r i a l r e l a t i o n s ,
both i n R o l l s - R o y c e a n d at B r i t i s h L e y l a n d , were under
result,
the C h a i r m a n a n d
W a y s of doing
H e w o u l d c o n t i n u e to k e e p t h e
so
Cabinet
developments.
The Cabinet
-
T o o k note.
CES
8.
T H E SECRETARY
OF STATE
oil prices were increasing rapidly,
FOR ENERGY
even i n advance
s a i d that of the
f o r t h c o m i n g m e e t i n g of the O r g a n i s a t i o n of P e t r o l e u m Countries (OPEC) in Caracas in December. major
world
Exporting
A n u m b e r of other
producing countries had already announced increases,
and
the B r i t i s h National O i l C o r p o r a t i o n ( 3 N O C ) had i n c r e a s e d its p r i c e s i n o r d e r to m a i n t a i n p r e v i o u s
relativities,
a v o i d m a k i n g a l o s s c n o i l which it bought u n d e r T h e r e was
no g r o u n d for
and i n order
c o m p l a i n i n g of o r c r i t i c i s i n g that d e c i s i o n ,
which had been taken i n a c c o r d a n c e with a g r e e d p r a c t i c e ; unfortunate,
but u n a v o i d a b l e ,
b l a m e d by other c o n s u m e r The Cabinet
to
existing contracts. it
was
that the B r i t i s h G o v e r n m e n t would
c o u n t r i e s for the a c t i o n s of
be
BNOC.
-
T o o k note.
Cabinet
Office
8 N o v e m b e r 1979 10
CONFIDENTIAL
265
CONFIDENTIAL
CAEINET OFFICE
a M
'3
- 6NOV1979 FILING INSTRUCTIONS j
Iffi MINISTER
JjjfM, '
FILE No.
LlC E X P E N D I T U R E FOR
Jinet on
18
fironment
October
and
THE
invited
myself
to
Sings s o m e w h e r e b e t w e e n fretary o f Itiave met
twice,
and
agree
on
on
S t a t e has
programme
C
a
jve
previously
course D
and rents
and
to
deliver
.benefit) the
1982-83
1983-84
285
395
525
efly
from
and rent
siders t h a t h e hin t he
D
related
to
increases. should
achieve
e each y e a r
the
described i n
the
(C(79)^)-
subsidies does
achieve
the
(net
increases i n
of
so.
in
reductions
(over
and
The
have
as
these
We
i n housing
Secretary of
need of
survey
prices
subsidies,
State, as
t h e r e f o r e proposes
savings
composition
1979
1,205
much f l e x i b i l i t y
He
shall
million
Total
without
ticular l e v e l s o f r e n t i n c r e a s e ( o r er years, o r t o a n y p r e c i s e d i v i s i o n rent e x p e n d i t u r e .
expenditure
f o l l o w i n g amounts
savings
h i s f u t u r e programme. should
public
the
agreed):
1981-82
C
for
which
£
Options
State
of
as
course
agreed
which w i l l
supplementary
a
HOUSING
Secretary of
Options
agreed
jates and those
the
S t a t e 's memorandum o n
The S e c r e t a r y o f housing
LATER YEARS:
the
possible -
and
commitment
subsidy between
to
however,
settle
programme
I
at
the
to
reduction) i n capital
agree
the
and
appropriate
f o r the f o l l o w i n g
r.
1
CONFIDENTIAL
266
CONFIDENTIAL
The t o t a l
net savings thus
agreed
f o r the Housing
Programme
e as f o l l o w s : £ 1981-82
1982-83
1983-8fr
1,^122
1,798
2,038
I am Cabinet
sending copies
of this
and t o S i r Robert
minute
Armstrong.
million . Total 5,258
t o t h e o t h e r members
U P
6
November
1979
CONFIDENTIAL
267
J
Treasury
Chambers.
Rt Hon M a r k C a r l i s l e QC Secretary o f State Department o f E d u c a t i o n and S c i e n c e E l i z a b e t h House York R o a d London S E l 7PH
Parliament
S t r e e t . SW'1P
3AG
MP ( CABINFfc^^T''I I " IA ^ffcTl^b
" ^,
u c
a PUBLIC E X P E N D I T U R E
198I-82
/o
198^-84:
EDUCATION
Thank y o u f o r y o u r l e t t e r o f JTX O c t o b e r a b o u t t h e outstanding
issues on t h e e d u c a t i o n programme f o r t h e l a t e r y e a r s . This
morning y o u a n d I a n d t h e F i n a n c i a l S e c r e t a r y d i s c u s s e d t h e s e
matters and t h e n a s k e d o u r o f f i c i a l s t o work o u t a d e t a i l e d
proposal. I am g l a d t o s a y t h a t I c a n now accept the proposal
which i s s e t o u t b e l o w a n d I u n d e r s t a n d t h a t i t w i l l a l s o be
acceptable to you.
The T r e a s u r y p o s i t i o n i s t h a t , w h i l e we w o u l d q u e s t i o n some o f the a r g u m e n t s i n p a r a g r a p h 2 o f y o u r l e t t e r , we r e c o g n i s e t h a t -an o p e r a t i n g m a r g i n o f £ 1 3 0 m i l l i o n a y e a r ( w i t h u n i t c o s t s a t the 1 9 7 8 - 7 9 l e v e l ) may n o t b e a d e q u a t e t o c o v e r t h e non t r a n s i t i o n a l c o s t s which are l i k e l y to e x i s t i n I98I-82 to 1 9 8 3 - 8 ^ , when p u p i l and t e a c h e r numbers a r e f a l l i n g . Therefore i t might be t o o d i f f i c u l t t o a c h i e v e the w h o l e o f t h e r e d u c t i o n i n c u r r e n t ' e x p e n d i t u r e on s c h o o l s w h i c h I p r o p o s e d t o C a b i n e t (in Annex G o f C ( 7 9 ) ^ 2 ) . A t t h e same t i m e i t may b e p o s s i b l e to s l o w d o w n t h e i n c r e a s e s i n e x p e n d i t u r e o n n o n - a d v a n c e d f u r t h e r e d u c a t i o n o r ( i n 1 9 8 3 - 8 4 o n l y ) on h i g h e r education which a r e s h o w n i n t h e r u n o f f i g u r e s i n p a r a g r a p h 3 ? your l e t t e r , t h a t i s t o s u b s t i t u t e s a v i n g s on t h o s e sub-programmes m p l a c e o f p a r t o f t h e s a v i n g s on s c h o o l s . To e a s e t h e P o s i t i o n g e n e r a l l y , I am p r e p a r e d t o r e d u c e t h e t o t a l savings which t h e T r e a s u r y w e r e s e e k i n g o n e d u c a t i o n b y f u r t h e r sums of S a
£ 1981-82
million,
you
to
SP
1982-83
ko leaving
1979
30 decide
on
their
distribution
Programmes.
1. CONFIDENTIAL
1983-84 30 between
sub-
IThus, s t a r l i n g f r o m Cmnd 7 ^ 3 9 r e v a l u e d , t h e p o s i t i o n o n t h e ifurthcr r e d u c t i o n s " p r o p o s e d i n Annex G o f C ( 7 9 ) ^ 2 i s a s Ifollows: £
million,
1981-82 Savings p r o p o s e d Allowance
i n C(79)42
on a c c o u n t
Further a l l o w a n c e deduced l e v e l
now
of savings
"further
reductions"
1983-8*1
-210
-295
70
75
ho
30
30
-k5
-110
-190
-34
-
-79
-150
o f NAFE
savings f r o m r e d u c i n g A s s i s t e d P l a c e s Scheme otal
1982-83
-125
offered
1979 SP
ko
-
31
-221
lith r e f e r e n c e t o p a r a g r a p h 6 o f y o u r l e t t e r , I c o n f i r m t h a t l o u a r e f r e e t o make a n y a d j u s t m e n t s y o u wish, w i t h i n t h e t o t a l Jhich i s now a g r e e d f o r your- p r o g r a m m e i n e a c h y e a r . am s e n d i n g c o p i e s o f t h i s l e t t e r Jther members o f C a b i n e t i n c l u d i n g id t o S i r R o b e r t A r m s t r o n g .
t o t h e Prime M i n i s t e r , the
the M i n i s t e r o f Transport,
JOHN
BIFFEN
CONFIDENTIAL
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