1

---

S E C R E T

D O C 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'S GOVERNMENT

HIS

4

t

h

C(81) l jnclusiioas

COP /

NO

78

CABINET

C O N C L U S I O N S o f a M e e t i n g of the h e l d i n the P r i m e M i n i s t e r ' s H o u s e of C o m m o n s , THURSDAY

on

2 APRIL

at 10. 30

Cabinet

Rcom,

1981

am

P R E S E N T The

Rt Hon Margaret Thatcher Prime

heRt H o n W i l l i a m W h i t e l a w etary o f S t a t e f o r t h e

The

M P

Home

Department

ndPaymaster

The

M P

hancellor o f t h e D u c h y o f

Rt Hon L o r d Hail sham Chancellor Rt Hon Sir Keith Joseph

Secretary

Exchequer

heRt H o n F r a n c i s P y m

Lord The

he Rt H o n S i r G e o f f r e y H o w e Q C M P hancellor o f t h e

M P

Minister

of State for

Rt Hon L o r d

Lord President

Lancaster

M P

Industry

Soames

of the

Council

General

he Rt H o n J a m e s P r i o r ecretary o f S t a t e f o r

The

M P

P t H o n J o h n Nott

Secretary

Employment

The

he Rt H o n S i r I a n G i l m o u r M P

of State f o r

Rt Hon Peter

M P Defence

Walker M P

Minister of A g r i c u l t u r e ,

rd P r i v y S e a l

Fisheries

and F o o d

heRt H o n M i c h a e l H e s e l t i n e ecretary o f S t a t e f o r t h e h e

e

e

Rt H o n J o h n B i f f e n

cretary o f S t a t e f o r

h e

e

Rt H o n H u m p h r e y A t k i n s

Rt Hon M a r k

Rt Hon George Younger

Secretary

Environment

The

M P

«etary of State for N o r t h e r n

h e

The

M P

The

M P

The

Carlisle Q C M P

«etary of State f o r E d u c a t i o n a n d S c i e n c e

S E C R E T

of State for Social

Services

Rt Hon David Howell M P

Secretary

Trade

M P

Scotland

Rt Hon Patrick Jenkin M P

Secretary

Ireland

of State f o r

of State f o r

Ei.ergy

Rt Hon N o r m a n Fowler

Secretary

of State f o r

M P

Transport

S E C R E T

T h e Rt Hon L e o n Brittan Q C Chief Secretary, ALSO

Treasury

PRESENT

T h e Rt Hon Michael Jopling Parliamentary

M P

Secretary,

M P Treasury

SECRETARIAT S? r R o b e r t Mr

Armstrong

M D M F r a n k l i n (Items 2 and

M r R M Hastie-Smith

3)

(Items 2 and

3)

M r W N H y d e ( I t e m 1) Mr

L J H a r r i s ( I t e m 1)

C O N T E N T S Subject

PARLIAMENTARY

AFFAIRS

British Telecommunications Bill

FOREIGN

Page

1

AFFAIRS

Poland

1

Canadian Constitution

2

Belize

2

Thailand

2

Zimbabwe

2 3

Iran

3

United States COMMUNITY

AFFAIRS

Common Agricultural Policy

4

Fisheries

5

Common

Policy

Transport

^ 5

Steel

S E C R E T

C O N F I D E N T I A L

LIAMENTARY A I

RS

1.

T H ECHANCELLOR

PAYMASTER. G E N E R A L Telecommunications

[h

previous afternoon,

communica~

agreed

, gill

Bill

S

OF T H EDUCHY OF LANCASTER AND

s a i d that the R e p o r t S t a g e of the B r i t i s h

B i l l i n the H o u s e of C o m m o n s h a d begun and was

still continuing.

through the usual channels

would be completed

that R e p o r t a n d T h i r d R e a d i n g of

within a single day,

d e t e r m i n e d to d e l a y the p r o g r e s s

Government's

communications. had agreed

on the i n t e r c e p t i o n of p o s t a l o r

The closure

should continue until

successfully

a n d w o u l d c o n t i n u e to b e m o v e d a s

would collapse that day's

It w a s

shortly before

b u s i n e s s would be lost.

about a d d i n g the

c a r r i e d at 9. 30

appropriate throughout

T h e r e s h o u l d be no g r e a t

t h e n i n f o r m e d the C a b i n e t of the b u s i n e s s w h i c h it w a s i n t e n d e d

T H EL O R D PRIVY

81

committee

M r Walesa,

to c a l l off the p r o p o s e d g e n e r a l

strike

The

had come under considerable

significant

but t h e P o l i s h G o v e r n m e n t a p p e a r e d to h a v e

concessions.

T h e Soviet a r m e d forces

state of m i l i t a r y r e a d i n e s s .

Elusions,

Committee

2

of

criticism

e x t r e m i s t s i n S o l i d a r i t y for the way i n w h i c h he h a d condjeted

negotiations,

l ) 13th n u t e

the

loss

S E A L s a i d that the d e c i s i o n by the S o l i d a r i t y

b r o u g h t P o l a n d b a c k f r o m the b r i n k of a m a j o r c r i s i s .

from feren.ee:

including

a s a r e s u l t of the p o s s i b l e

note.

Solidarity leader,

°us

to

Cabinet -

national co-ordinsting had

concerned.

business.

Took

2.

and

business

He

The

evi

high,

b e i n g d o n e to G o v e r n m e n t

a r e s u l t of the o b s t r u c t i o n by the O p p o s i t i o n M e m b e r s

that d a y ' s

an<

following

as

additions w h i c h m i g h t be n e c e s s a r y

that

difficulty

T h e m o r a l e of the G o v e r n m e n t ' s o w n s u p p o r t e r s w a s

t a k e i n the 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 w e e k ,

the

3ill

but it s e e m e d m o r e l i k e l y

e s s e n t i a l i t e m s to t h e b u s i n e s s p l a n n e d f o r t h e

he d i d not f o r e s e e any m a j o r d a m a g e

' *

might

that

p o s s i b l e that o p p o s i t i o n to the

2 . 30 p m ,

P l e n u m o n 29 M a r c h

r e m a i n e d at a h i g h

that an e x t r a o r d i n a r y p a r t y

Central congress

resulted from pressure

by

a n d w o u l d b e a f u r t h e r c a u s e o f c o n c e r n t o che S o v i e t

M e a n w h i l e the g r o u p of r e p r e s e n t a t i v e s

of P o l a n d ' s

creditors

c o n t i n u i n g to m e e t to c o n s i d e r the b e s t w a y of d e a l i n g w i t h financial difficulties. food aid available,

Union.

were

Poland's

T h e E u r o p e a n C o m m u n i t y had already made

which had included a B r i t i s h contribution. 1

CONFIDENTIAL

the

made

T h e d e c i s i o n of the C o m m u n i s t

s h o u l d m e e t b y 20 J u l y s e e m e d to h a v e reformists,

he

the

T h e r e were still a

to b e c o n s i d e r e d o n w h i c h d i v i s i o n s

had been

r e m a i n d e r of the debate.

week.

sitting

telephone

f r o m the O p p o s i t i o n ,

s t a g e s of the B i l l h a d b e e n c o m p l e t e d .

be f o r c e d .

were

r e v e r s i n g the i n s e r t i o n i n

In s p i t e of v a r i o u s o v e r t u r e s

with the C h i e f W h i p that the

remaining

morning,

of the B i l l b e c a u s e of the

and where necessary

l a r g e n u m b e r of a m e n d m e n t s

^AIRS

the

but the O p p o s i t i o n W h i p s

who

the B i l l cf p r o v i s i o n s

GN



been

a p p e a r e d u n a b l e to c o n t r o l a n u m b e r of t h e i r b a c k b e n c h e r s i n s i s t e n c e on resisting

P E I

the

It h a d o r i g i n a l l y

some

C O N F I D E N T I A L

iadian istitution

>vious erence: 1) 13th fusions, wte 1

THE

LORD

PRIVY

SEAL

ments in Canada.

s a i d that t h e r e h a d b e e n

significant

develop­

T h e S u p r e m e C o u r t o f C a n a d a h a d a g r e e d to b e g i n

on

28 A p r i l i t s h e a r i n g of a P r o v i n c i a l a p p e a l a g a i n s t the j u d g m e n t by

the

M a n i t o b a C o u r t o f A p p e a l w h i c h f o u n d b y a m a j o r i t y of t h r e e to two

in

f a v o u r of the F e d e r a l p o s i t i o n .

O n 1 A p r i l the N e w f o u n d l a n d C o u r t of

A p p e a l h a d found u n a n i m o u s l y that the

F e d e r a l p l a n to b r i n g h o m e

the

constitution f r o m B r i t a i n without P r o v i n c i a l consent was l e g a l l y i n v a l i d b e c a u s e it affected

P r o v i n c i a l rights and privileges.

Prime Minister, M r Trudeau, C o m m o n s that, at p r e s e n t

h a d n o w o f f e r e d i n t h e C a n a d i a n H o u s e of

i f the C a n a d i a n C o n s e r v a t i v e s

w o u l d a l l o w the

b e f o r e t h e C a n a d i a n P a r l i a m e n t to c o m e to a v o t e ,

u n d e r t a k e n o t to f o r w a r d the p r o p o s e d r e q u e s t for

The Canadian resolution he

would

to the B r i t i s h G o v e r n m e n t

a c t i o n u n t i l t h e S u p r e m e C o u r t of C a n a d a h a d r e a c h e d a d e c i s i o n

the M a n i t o b a appeal. Canada,

Although this offer

if accepted,

it would represent

was

on

still under discusssion

a very considerable

the p o l i t i c a l p r o b l e m w h i c h the B r i t i s h G o v e r n m e n t was

in

easement in

facing on this

issxie.

Iize evious [erence: (81) 11th

THE

LORD

Belize,

PRIVY

SEAL

arrangements

going ahead.

said that,

despite considerable violence

in

for the C o n s t i t u t i o n a l C o n f e r e n c e i n L o n d o n

T h e r e was

a p o s s i b i l i t y that the

Opposition might

were

not

attend.

Delusions,

mite 2

piland

THE

LORD

PRIVY

the T h a i G o v e r n m e n t was General

Prem,

obscure.

It s e e m e d p o s s i b l e

THE

PRESIDENT

LOPD

conference Minister, asking,

T h e existing

coup

well

that the a t t e m p t e d

O F T H ECOUNCIL

satisfied

coup would

which was

political difficulties,

The Prime

h a d got the a m o u n t of a i d f o r w h i c h h e

probably m o r e than he had been

W i t h i n the next y e a r he

was

expecting.

building up confidence

i n the

s e e m e d m o r e l i k e l y to e n c o u n t e r

although the attitude of P r e s i d e n t

A d m i n i s t r a t i o n to the p r o b l e m s c r i t i c a l i m p o r t a n c e to h i m .

fail.

of the a i d d o n o r s '

in S a l i s b u r y which he had just attended.

r e c o r d of f i r m g o v e r n m e n t

the armed

s a i d that the G o v e r n m e n t of

with the o u t c o m e

M r Robert Mugabe,

against

Prime Minister,

a n d s t i l l c l a i m e d the m a j o r i t y s u p p o r t of the T h a i

services.

Z i m b a b w e was

evious ference181) 7th' "elusions, "Me 2

s a i d that the c a u s e of the a t t e m p t e d

h a d w i t h d r a w n to the N o r t h E a s t of the c o u n t r y with

King and Queen,

ibabwe

SEAL

His country.

economic

than

Reagan's

of N a m i b i a and South A f r i c a would be

The maintenance

C O N F I D E N T I A L

was

of l a w and o r d e r i n

of

C O N F I D E N T I A L

Z i m b a b w e d e p e n d e d o n b r i n g i n g t h e t h r e e a r m i e s w h i c h at existed

into a new integrated national a r m y .

assistance

of B r i t i s h o f f i c e r s

process.

Without them,

and other r a n k s was

T H E

LORD

PRIVY

SEAL

essential

and to

this

there would almost certainly have been a

breakdown in law and order in Zimbabwe.

d r o p p e d the

present

The presence

T h e y w e r e doing a fine job.

s a i d that the Iranian. G o v e r n m e n t h a d n o w

spying charges against M r A n d r e w Pyke,

Ivious

businessman imprisoned in Tehran.

Lrence:

with charges

181) 11th

seemed

relatively trivial,

[elusions,

release

of M r P y k e .

the

British

Although they were going

r e l a t i n g to the f i n a n c i a l a f f a i r s of h i s c o m p a n y , and efforts

were

ahead

these

c o n t i n u i n g to o b t a i n the

lute 2

led S t a t e s

T H E

LORD

PRIVY

SEAL

s a i d that,

although t h e r e was

think that P r e s i d e n t R e a g a n had suffered m o r e

some reason

severe injury from

nous

assassination

irence:

the U n i t e d S t a t e s a n d that of V i c e - P r e s i d e n t B u s a h a d been

1

attempt than had been r e p o r t e d , his political position in

81) 9th

by

the incident.

elusions,

perhaps unfairly

lite 2

on

T h e standing of the S e c r e t a r y of State, suffered

Took

Cabinet note.

C O N F I D E N T I A L

shot.

strengthened

M r Haig,

s o m e d i m i n u t i o n as a resu?t of h i s

t e l e v i s i o n i m m e d i a t e l y a f t e r the P r e s i d e n t was

The

to

the

had

observations

C O N F I D E N T I A L

jMMUNITY

3.

rFAlRS

reported had

T H EMINISTER O F AGRICULTURE, chat,

FISHERIES A N D FOOD

after t h r e e d a y s of negotiation,

been violent demonstrations by f a r m e r s f r o m certain C o m m u n i t y

countries,

the C o u n c i l o f M i n i s t e r s ( A g r i c u l t u r e ) h a d a g r e e d

agricultural p r i c e s and economy m e a s u r e s . , icultural r

ilicy

during which there

i n c r e a s e w o u l d be 8 , 9

p e r cent,

l e v e l of target p r i c e s .

T h e effective

on average

o r 9. 5 p e r cent i f m e a s u r e d b y

These would increase

the

the f o o d p r i c e i n d e x i n

t h e U n i t e d K i n g d o m b y 1. 0 p e r c e n t a n d t h e r e t a i l p r i c e i n d e x b y

, vious .ference:

h e h a d s e c u r e d a g r e e m e n t to c o n t i n u a t i o n o f the C o m m u n i t y - f i n a n c e d

f(8l)13th

b u t t e r s u b s i d y a n d the b e e f p r e m i a s c h e m e .

Inclusions, linute 3

w i t h i n the C o m m u n i t y had b e e n i m p r o v e d .

e

0.2

p e r cent.

T h e r e w o u l d b e n o r e v a l u a t i o n of the g r e e n p o u n d ,

a r r a n g e m e n t s on exports of sheepmeat for

The premium claw-back

b o t h to t h i r d c o u n t r i e s a n d The additional aid

d e c i s i o n to m a i n t a i n the l e v e l of s u b s i d i e s

on s t a r c h p r o d u c t i o n

w o u l d h e l p to p r e s e r v e j o b s i n the U n i t e d K i n g d o m . f i n a l l y b e e n r e a c h e d o n the r e t r o s p e c t i v e exports.

Zealand butter and

w h i c h h a d p r e v i o u s l y b e e n b l o c k e d b y the

w o u l d now be i m p l e m e n t e d . and

A g r e e m e n t had

p a y m e n t of refunds on w h i s k y

Decisions on continued access for New

A u s t r a l i a n beef,

Italians,

C h a n g e s i n the a r r a n g e m e n t s f o r

fruit and vegetables would produce substantial savings, administrative reasons

year.

its a p p l i c a t i o n w o u l d be d e f e r r e d u n t i l

b u d g e t a r y c o s t of s u r p l u s e s statement

1981

exceed

i n the m i l k s e c t o r

Budget.

rose above

were

next

i f the

the



consistent with ensuring

that

of a g r i c u l t u r a l g u a r a n t e e e x p e n d i t u r e w o u l d not

the r a t e o f i n c r e a s e

i n the C o m m u n i t y ' s o w n r e s o u r c e s .

U n i t e d K i n g d o m d e c l a r a t i o n that the r a t e of i n c r e a s e

A



i n s u c h e x p e n d i ­

s h o u l d b e m a r k e d l y l o w e r t h a n the r a t e o f i n c r e a s e i n o w n

r e s o u r c e s h a d b e e n e n d o r s e d b y the G e r m a n s a n d the

In d i s c u s s i o n i t w a s

noted that the

improvement in farm incomes, benefits

Dutch.

settlement would bring a

e s p e c i a l l y i n the l i v e s t o c k

i n the c o - r e s p o n s i b i l i t y l e v y o n m i l k ,

significant sector.

o f t h i s to the c o u n t r y s i d e s h o u l d b e s t r e s s e d .

of a s m a l l i n c r e a s e

In

products.

This

s h o u l d h e l p to s e c u r e

p r i c e of liquid m i l k .

The figures

greater

q u o t e d i n the P r e s s f o r the

d i f f i c u l t to e s t i m a t e

correct.

dairy

It w a s

the p r e c i s e e f f e c t o n i n d i v i d u a l

effect

tendentious

It w o u l d b e i m p o r t a n t f o r t h e G o v e r n m e n t t o m a k e

whether o r not th«se figures were

would

s t a b i l i t y i n the r e t a i l

on p r i c e s of i n d i v i d u a l c o m m o d i t i e s w e r e u n o f f i c i a l and estimates.

spite

there

b e a s i g n i f i c a n t n e t i n c r e a s e i n t h e p r i c e p a i d to p r o d u c e r s f o r

The



It h a d a l s o e n d o r s e d a C o m m i s s i o n

that the p r i c e d e c i s i o n s

the r a t e o f i n c r e a s e

ture

although

T h e C o u n c i l h a d a g r e e d to t a k e a d d i t i o n a l m e a s u r e s

p r o v i s i o n i n the

beef

a n d the

p r i n c i p l e of c o - r e s p o n s i b i l i t y for c e r e a l s had been agreed,

The

measures

t h e I r i s h R e p u b l i c w o u l d b e e x t e n d e d i n f u l l to N o r t h e r n I r e l a n d .

The

for

and

clear

in practice commodities.

G e r m a n M i n i s t e r o f A g r i c u l t u r e h a d d o n e v e r y l i t t l e to

support

the U n i t e d K i n g d o m i n s e c u r i n g r e s t r i c t i o n s o n the g r o w t h of agricultural expenditure.

It w a s n o t p o s s i b l e

to p r e d i c t w h a t

the

p r o v i s i o n f o r a g r i c u l t u r a l e x p e n d i t u r e i n the 1932 b u d g e t w o u l d b e , the B r i t i s h G o v e r n m e n t w o u l d b e i n a p o s i t i o n to p r e s s economies

at t h a t t i m e .

for further

T h e p r i c e s e t t l e m e n t h a d n o t c o n t r i b u t e d to

r e s t r u c t u r i n g the C o m m u n i t y b u d g e t a n d the G o v e r n m e n t w o u l d n e e d continue its efforts

but

in this d i r e c t i o n .

C O N F I D E N T I A L

to

C O N F I D E N T I A L

ccnmon , L .-to g



olicy

THE

M I N I S T E R O F A G R I C U L T U R E ,

FISHERIES A N D FOOD

said

that,

a t t h e C o u n c i l o f M i n i s t e r s ( F i s h e r i e s ) o n 27 M a r c h t h e

French

M i n i s t e r of F i s h e r i e s h a d m a d e no s e c r e t o f h i s u n w i l l i n g n e s s

to

s e t t l e the q u e s t i o n o f a c c e s s b e f o r e the P r e s i d e n t i a l e l e c t i o n s ,

in

ievious

spite of P r e s i d e n t G i s c a r d ' s

statement

to the P r i m e

M i n i s t e r a t the

eference:

E u r o p e a n C o u n c i l i n M a a s t r i c h t t h a t the e l e c t i o n s

1(81) 13th

obstacle

(inclusions,

the G e r m a n s a n d the D u t c h P r e s i d e n c y that the F r e n c h w o u l d be

nute 3

t o early

settlement.

g e n u i n e l y r e a d y to n e g o t i a t e

w e r e not a n

A s s u r a n c e s h a d h o w e v e r b e e n g i v e n to after their elections.

s e e n w h e t h e r they w o u l d do so,

It r e m a i n e d t o b e

o r w o u l d s e e k e i t h e r to l i n k a

o n f i s h e r i e s w i t h d i s c u s s i o n s o n r e s t r u c t u r i n g o f the

settlement

Common

A g r i c u l t u r a l P o l i c y a n d o f t h e B u d g e t o r to p o s t p o n e d e c i s i o n s

until

the e n d o f 1982 w h e n the p r e s e n t a c c e s s a r r a n g e m e n t s c a m e to a n e n d .

ransport

T H E

MINISTER O F TRANSPORT

r e p o r t e d that,

at a r e c e n t

meeting

o f t h e C o u n c i l o f M i n i s t e r s ( T r a n s p o r t ) , the G e r m a n s h a d o n c e b l o c k e d the a t t e m p t s b e i n g m a d e b y h i s D e p a r t m e n t to s e c u r e

again more

p e r m i t s f o r r o a d h a u l a g e o n the C o n t i n e n t .

lei

THE

SECRETARY

secuie

O F S T A T E F O R INDUSTRY

evious

d e l i v e r i e s w i t h i n the C o m m u n i t y h a d m a d e

ference:

yet been completed.

(81) 9th

on

the o n e G e r m a n c o m p a n y w h i c h w a s

The

Cabinet -

Took

note.

Cabinet

Office

2 April

1981

to

steel

s o m e p r o g r e s s but h a d not

T h e F e d e r a l G o v e r n m e n t was putting p r e s s u r e

nclusions, mute 3

s a i d that efforts

a voluntary a g r e e m e n t on continued restrictions on

5

C O N F I D E N T I A L

making difficulty.