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THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT

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CABINET

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CONCLUSIONS of a Meeting of the Cabinet

h e l d a t 10 Downing S t r e e t on

THURSDAY 6 OCTOBER 1983

at 11.00 am

P R E S E N T

S h ^ R t Hon Margaret Thatcher MP Prime M i n i s t e r ^f^^W |

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^ Hon Viscount Whitelaw ^H-V President of the Council

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^ Hon Norman Tebbit MP t a r y f State f o r Employment

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The Rt Hon Peter Rees QC MP

Chief S e c r e t a r y , Treasury

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Mr John Gummer MP

Parliamentary Under S e c r e t a r y of S t a t e , Department of Employment SECRETARIAT S i r Robert Armstrong Mr A D S Goodall (Items 1 and 2) (Items 1 and 2) Mr D F Williamson

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C O N T E N T S

FOREIGN

AFFAIR^^.

United Natio^TG#\eral Assembly

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Disarmament a n d ^ M I ^ X o n t r o l

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Lebanon

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Kenya Prime M i n i s t e r ' s V i s i t s to Canada and Washington

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I n t e r n a t i o n a l Monetary Fund

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COMMUNITY AFFAIRS

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1. THE FOREIGN AND COMMONWEALTH SECRETARY s a i d that he had attended the — f^yy\ General Assembly of the United Nations i n New York from 25-30 September.

^ted^vTxS ^ P ^ general debate on 28 September had enabled him to put Nati ' B r i t i s h view on major world i s s u e s i n c l u d i n g the r e l a t i o n s h i p of

General * British French n u c l e a r d e t e r r e n t s to c u r r e n t arms c o n t r o l

embl x^y) 8 i i ° F a l k l a n d I s l a n d s . He had c a l l e d on the S e c r e t a r y ^ o h e n e r a l of the United Nations, Senor Perez de C u e l l a r , and had made a \ 0 \ y ^ r i e t y of other u s e f u l c o n t a c t s i n c l u d i n g b i l a t e r a l meetings with X^tt'/Foreign M i n i s t e r s and with P r e s i d e n t Kyprianou of Cyprus. I t had been r/j^hlkfor the Prime M i n i s t e r to have a separate meeting with the Prime m^nLarj^r of I n d i a , Mrs Gandhi, r a t h e r than to be among the small number of
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AN COMMONWEACJH)SECRETARY s a i d that the new American proposals i n the S t r a t e g ^ ^ y ^ v s Reductions T a l k s announced by P r e s i d e n t Reagan on 4 Oct^tfej/(centred on the " b u i l d down" concept whereby l °l warhead o r ™ « ^ r would be removed f o r every new

s t r a t e g i c m i s s i l e warhead o r \ ^ t ^ r e g i c bomber deployed. T h i s was a

s e n s i b l e concept, c o n s i s t e n t w^w/xhe trend away from land-based s t r a t e g i c m i s s i l e s with m u l t i p l e warheads fl^ayowards small single-warhead mobile m i s s i l e s . Following c l o s e l y on C W H ^ American proposals about intermediate range n u c l e a r f o r c e s Sarmtfunced on 26 September, t h i s l a t e s t move would a l s o enable the w£kfc-23^ maintain the i n i t i a t i v e on the arms c o n t r o l f r o n t . yO THE SECRETARY OF STATE FOR DEFENCE saidN^hat the r e d u c t i o n i n the North A t l a n t i c T r e a t y O r g a n i s a t i o n ' s t a c t i c a l n u c l e a r a r s e n a l , on which agreement was about to be reached w i t h i n the A l l i a n c e , would be a f u r t h e r p o s i t i v e f a c t o r i n t h i s connection. The p u b l i c / ^ l a t i o n s aspect of the d e c i s i o n would need c a r e f u l handling to ensuref(thatjz i t made the maximum impact on world opinion. ^~(^^) t

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THE FOREIGN AND COMMONWEALTH SECRETARY s a i d that the c ^ ^ C r % r e i n the

Lebanon was holding a s w e l l as could be expected. The Sepd&ity Committee

e s t a b l i s h e d to strengthen the c e a s e f i r e had made some us&w£Vy :ogress, i n c l u d i n g the reopening of the a i r p o r t . But there was noNXg^einent y e t on o b s e r v e r s , without which the" ceasef i r e was u n l i k e l y to la^The S y r i a n s , with S o v i e t backing, were o b j e c t i n g to United NatioNk^w^ervers, and v a r i o u s a l t e r n a t i v e s were being explored. At the United R^t^Lfors,

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the United Kingdom was p l a y i n g a leading part i n seeking to promote a r e s o l u t i o n i n favour of United Nations observers which would command the r e q u i s i t e nine votes i n the S e c u r i t y C o u n c i l , i n the hope that the Soviet Union (and the S y r i a n s ) would back down i f faced with the need to 'Cyyss. veto such a r e s o l u t i o n . Meanwhile the B r i t i s h contingent i n the \ w ) m u l t i n a t i o n a l f o r c e (MNF) was providing a standing guard for the meetings ^^VW the S e c u r i t y Committee and winning golden opinions from a l l s i d e s . \OoCt2\would however be d e s i r a b l e f o r t h i s r e s p o n s i b i l i t y to be shared by the M^Wer MNF contingents on a r o t a t i o n a l b a s i s . f l f f i ^ i ^ M E MINISTER commended the s k i l l with which the United Kingdom

Viiarsiary^to the United Nations was working to secure a S e c u r i t y Council r e s o ^ i - j f i f t which would oblige the S y r i a n s to accept observers from the

UniteOYrati^ns Truce Supervisory O r g a n i s a t i o n , which alone could provide

a d i s c i p l i n e d and e f f e c t i v e observer f o r c e . The problem was to

outmanoeuvre the S y r i a n s , who did not want to be dislodged from the strong

p o s i t i o n which they had now e s t a b l i s h e d f o r themselves i n the Lebanon-.

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THE FOREIGN AND^)MM^WEALTH SECRETARY s a i d that the general e l e c t i o n i n Kenya on 26 Septefa^ejTAjad passed o f f p e a c e f u l l y . Within the one party system there had b e e ^ i / w i d e choice of candidates, but turn-out had been low. P r e s i d e n t M o i ^ A i e w > « C a b i n e t appeared to represent a reasonable balance of i n t e r e s t s the Kikuyu and the other t r i b e s ; and the new M i n i s t e r of Finance, iMr/Saitoti, was s a i d to be a w e l l q u a l i f i e d technocrat. Mr C h a r l e s the former M i n i s t e r f o r C o n s t i t u t i o n a l A f f a i r s , was s t i l l i n 1 imb^axmXting the j u d i c i a l i n q u i r y into a l l e g a t i o n s that he had sougti^<£>c\ undermine the p o s i t i o n of the P r e s i d e n t . The Queen would be v i s i t i n g Kenya/from 10 to 14 November.

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M E MINISTER s a i d that h e r recpj£r v i s i t s to Canada and the United

S t a t e s had gone w e l l . She had b e e n ^ m 5 * £ ^ s e d by Canada's enormous

p o t e n t i a l and a l s o by i t s r e l a t i v e i s o l a x i ^ n : f o r example, the Canadian

Prime M i n i s t e r , Mr Trudeau, had t o l d h e ^ t h a t t h e i r exchange a t

Williamsburg had been the f i r s t thoroughydiscussion of n u c l e a r deterrence and i t s i m p l i c a t i o n s which he had ever had with another Head of Government. Canada needed to be encouraged to play a f u l l e r part i n the A l l i a n c e and i n the Western community of na^ralas. Contacts between the United Kingdom and Canada should be i n t e n s ( ^ e < d a n d there should be more M i n i s t e r i a l v i s i t s between the two countri5-s^~B\iring her own v i s i t she had focused a t t e n t i o n on the damage which C a n M i a j k ^ o l i c i e s on inward investment were doing to B r i t i s h companies a^Prttfad been instrumental i n s e c u r i n g a d e c i s i o n by the Canadian ua&jtfj&t to o v e r r i d e a recommendation by the Foreign Investment Review Age^^S^d allow Ultrama to purchase two Canadian petroleum r e t a i l i n g chaiR<&% Mr Trudeau had a l s o s a i d that Canada would a b s t a i n on the Argentine^^kov^ption about the F a l k l a n d I s l a n d s at the United Nations. x~>><\ <

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^ the United S t a t e s , before a meeting i n New York w i t h the S e c r e t a r y

General of the United Nations, she had had t a l k s i n Washington with P r e s i d e n t Reagan, the S e c r e t a r y o f the T r e a s u r y , the Chairman of the F e d e r a l Reserve Board and Senate Foreign R e l a t i o n s Committee. P r e s i d e n t Reagan had shown a f i r m grasp of a l l the main i s s u e s and her p r i v a t e W^j) t a l k with him had been frank, f r i e n d l y and v a l u a b l e . Both w i t h the \ r ^ / P r e s i d e n t and with the S e c r e t a r y of the Treasury, she had made i t c l e a r w ^ c h j a t the American p o s i t i o n on unitary, t a x a t i o n was unacceptable \>y$fv would i n the long run damage United S t a t e s i n t e r e s t s . She had ^ m p h ^ s i s e d European a n x i e t i e s about the United S t a t e s d e f i c i t and the d(aitiaglng e f f e c t s of American e x t r a - t e r r i t o r i a l l e g i s l a t i o n . The Foreign and^€ommpnwealth S e c r e t a r y had a l s o made these p o i n t s to the United Statejt^gjisxetary of S t a t e , Mr S h u l t z . On the Middle E a s t , she had impre^sk^/on P r e s i d e n t Reagan the importance of not undermining Jordan and K i n g / m S s e i n , who was a good f r i e n d of both the West and I s r a e l . She had xdTso been able to e x p l a i n to the V i c e - P r e s i d e n t , Mr Bush, the p o s i t i o n reached i n the n e g o t i a t i o n s with the Chinese Government on the future of Hong Kong. On East-West re/LaTions, i t was apparent that the United S t a t e s maintained I r e g u l a r contacc^-wifehvthe Soviet Union, d e s p i t e the a c t i o n they had taken - and had efyecthd t h e i r a l l i e s to take - to show d i s a p p r o v a l of the Soviet i n v a s i o n orv7*flwwf^nistan and the shooting down of the Korean a i r l i n e r . Once ind ig^M>i>n over the Korean a i r l i n e r had subsided, i t would be d e s i r a b l e f o £ ^ £ n ^ U n i t e d Kingdom a l s o to resume working c o n t a c t s with the S o v i e t admin iwfr^t)£en and seek i f p o s s i b l e to i n f l u e n c e the r i s i n g generation of SovierJ^x^aders• On arms c o n t r o l , i t was c l e a r that the remarks by the V i c e - P r a S i a a n t about the i n c l u s i o n of the B r i t i s h and French n u c l e a r d e t e r r e n t s rn—«ia\Geneva n e g o t i a t i o n s had been m i s i n t e r ­ p r e t e d . The argument t h a t B f ^ ^ s t L a n d French weapons should be included i n the S t r a t e g i c Arms R e d u c t i o u ^ ^ l k s (START) i f they were excluded from the intermediate n u c l e a r f o r c e A/!fe^x\jegotiations was misconceived: the United S t a t e s was precluded by tnre J ^ k s o n amendment from e n t e r i n g into any arms c o n t r o l agreement with the^'Sotflet Union except on a b a s i s of p a r i t y . I t would be i n c o n s i s t e n t wifitC^jjis f o r the United S t a t e s to agree to an equation which made allowance f - O ^ ^ r i t i s h and French weapons a t United S t a t e s expense: such an approac&'xpald l e a d to p r e s s u r e on B r i t a i n and France to s c a l e down t h e i r d e t e r r e n s X o r abandon them a l t o g e t h e r . The French had made i t c l e a r that they would not a l l o w the s i z e of t h e i r d e t e r r e n t to be determined by the United S t a t e s ; nor could the United S t a t e s a l l o w the s i z e of t h e i r c a p a b i l i t y to be^-djipendent on France or the United Kingdom. The r i g h t p o s i t i o n f o r t h e / ^ r i ^ i s h Government was that the B r i t i s h n a t i o n a l d e t e r r e n t was a red h^jsr^S&v i n the c u r r e n t n e g o t i a t i o n s , s i n c e B r i t a i n disposed of only 1 2 8 h ^ r ^ i e g i c warheads as a g a i n s t 9,000 Soviet warheads: i f however the W*^^ S t a t e s and the Soviet Union could reach agreement through the INF anyd/^ART n e g o t i a t i o n s d r a s t i c a l l y to reduce t h e i r r e s p e c t i v e n u c l e a r arsenaijKYfcfoe time would then come f o r the United Kingdom to c o n s i d e r what contrfibto>£on i t could make to the n u c l e a r arms c o n t r o l p r o c e s s . ^vv^Vi The Cabinet 1.



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' °^^r?° EXCHEQUER said that he had r e c e n t l y attended the vytffoind annual meeting of the I n t e r n a t i o n a l Monetary Fund (IMF) and the Pr £ C^^\ I n t e r n a t i o n a l Bank f o r Reconstruction and Development. There had been

Refer ^ \ general endorsement of the need to maintain a n t i - i n f l a t i o n a r y p o l i c i e s

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AGRICULTUR^/p&HERIES AND FOOD reported that a t the

meeting of the Council of M i n i s t W s ^ X ^ g r i c u l t u r e ) on 26-27 September

no agreement had been reached on ts^e reform of the arrangements f o r c e r t a i n

Mediterranean products. The questi<$K°Ti--f r u i t and vegetables could not

be s e t t l e d without a c l e a r e r i n d i c a t ^ o ^ C ^ r the s i t u a t i o n f o r o l i v e o i l

in an enlarged Community. On the Unit^dV^Cngdom's own request f o r an

extension of the l e s s favoured areas there was almost no d i f f i c u l t y of

substance. The d e c i s i o n had been d e f e r r e d because the Commission was

about to present proposals on the renewal of the scheme i t s e l f .

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THE MINISTER OF AGRICULTURE, FISHERIES AND FOOD ^{idjthat the C o u n c i l of M i n i s t e r s ( F i s h e r i e s ) on 3-4 October had agreed t N a T ^ O c o n s e r v a t i o n measures and to the s t r u c t u r a l programme. I t had a ^ l ^ ^ f c r e e d to a United Kingdom i n i t i a t i v e t h a t , i n f u t u r e n e g o t i a t i o n j s ^ R h Norway, any compensation would not be given i n the form of herring<\A&eement had not been reached on the quotas of h e r r i n g ; i t had been h e l p f j £ £ ^ o w e v e r ,

that the Commission's compromise proposal had include a h i ^ l i M i g u r e ,

commencing a t 28 per cent and d e c l i n i n g to 23 per cent of f c 6 £ / ^ t a l , f o r

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THE SECRETARY OF STATE FOR EMPLOYMENT reported that he had s u c c e s s f u l l y

r e s i s t e d i n the Council of M i n i s t e r on 29-30 September a number of

proposals f o r a c t i o n , f o r example on part-time work and working time,

which were not s u i t a b l e areas f o r Community l e g i s l a t i o n .

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El . vOvsportly to h i s c o l l e a g u e s about maintaining c o n s i s t e n c y between the

^^^Pgramme of the European Democratic Group f o r the forthcoming e l e c t i o n s

y*/tt^e European Parliament and the p o l i c y of the United Kingdom

TOy&p^ent. In a d d i t i o n , he would be taking a d v i c e , i n c l u d i n g l e g a l

advace-^about the d i s t r i b u t i o n of Community funds which were being made

avail^b-JfiXfor the support of p a r t i e s i n the e l e c t i o n s .

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