secret secret

---

SECRET

HIS D O C U M E N T

IS T H E P R O P E R T Y

O T H E R

BRITANNIC

MAJESTY'S

GOVERNMENT

CC(81)4l.t Conclusions

COPY

NO

HQ

( y

CABINET

C O N C L U S I O N S o f a M e e t i n g o f the h e l d at

10 D o w n i n g S t r e e t

THURSDAY

17 D E C E M B E R

a t 10„ 30

Cabinet

on 1981

am

PRESENT Rt Hon Margaret Thatcher

The

Prime

The

Rt H o n W i l l i a m Whitelaw

Secretary The

Rt Hon Sir Keith Joseph

Secretary The

of State for

The

The

The

The

M P

of State f o r

The

Rt Hon N o r m a n Fowler of State for S o c i a l

Rt Hon Baroness

The

M P

The

Young

D u c h y of

The

of State f o r

SECRET

M P

Wales

of State f o r

Industry

of State f o r

M P

Transport

Rt Hon Leon Brittan Q C M P Treasury

Rt Hon Nigel Lawson of State f o r

MP

Energy

Rt Hon Cecil Parkinson M P

Paymaster

Employment

M P

Environment

Edwards

o f State f o r

Rt Hon David Howell

Secretary

Lancaster

Rt Hon N o r m a n Tebbit M P

Secretary

o f S t a t e f o r the

Chief Secretary,

Services

Defence

Rt Hon Patrick Jenkin M P

Secretary

Trade

M P

of State f o r

Rt Hon Nicholas

Secretary

M P

M P

Council

Rt Hon Michael Heseltine

Secretary

Secretary

Seal

C h a n c e l l o r o f the The

Food

Scotland

Rt Hon John Biffen

Secretary

and

M P

Rt Hon Humphrey Atkins

Secretary

The

M P Fisheries

o f the

Rt H o n John Nott

Secretary

Ireland

Exchequer

Rt Hon F r a n c i s P y m

Lord President The

Rt Hon George-Younger

Lord> P r i v y The

Science

Rt H o n Sir Geoffrey Howe Q C M P

C h a n c e l l o r o f the The

M P

of State f o r N o r t h e r n

Rt Hon Peter Walker

Secretary The

Department

of State f o r E d u c a t i o n a n d

M i n i s t e r of A g r i c u l t u r e , The

The

Rt Hon James P r i o r M P

Secretary The

Minister

M P

o f S t a t e f o r the H o m e

M P

General



SECRET

AI SO

PRESENT

Rt Hon Michael Jopling

The

Parliamentary

Secretary,

MP Treasury

SECRETARIAT Sir

Robert

Mr

M D M Franklin

Armstrong (Items 2 and

3)

Mr

R L Wade-Gery

(Items 2 and

3)

Mr

D H J Hilary

(Item

1)

Mr

L J Hax-ris

(Item

1)

C O N T E N T S Item

1.

2.

Subject

PARLIAMENTARY AFFAIRS

Page

1

London Transport Fares

1

C o n t r o l of L o c a l A u t h o r i t y E x p e n d i t u r e

2

FOREIGN

AFFAIRS

Poland Arab/

3 Israel

East/West United COMMUNITY 30 M a y

Relations

Nations AFFAIRS Mandate

ii

SECRET

CONFIDENTIAL

PARLIAMENTARY

1.

T h e C a b i n e t w e r s i n f o r m e d o f th«e b u s i n e a *

,!• J- ^ 11< S

House

week.

o f C o m m o n s d u r i u g the f o l l o w i n g

SECRETARY

O F STATE

,ondon

THE

fr&nspo • i

j u d g m e n t d e l i v e r e d that m o r n i n g the five

F O R TRANSPORT

( G L C ) o n the p a y m e n t o f s u b s i d i e s

u n a n i m o u s l y u p h e l d the d e c i s i o n o f the

ione.lu n i o n i i ,

unlawful,

vlinule

the p a y m e n t o f r e a s o n a b l e

1

the G r e a t e r L o n d o n

C o u r t of A p p e a l .

the f u l l t e x t o f the j u d g m e n t .

payment of any subsidies

If t h e

He had

ruling was

unlawful

subsidies

to a w h o l l y u n a c c e p t a b l e

l i k u l y ) the d e c i s i o n w a s hut. t h a t t h e

immediate

that

(', I / ;

legislation

that

the

b y the G L C t o L o n d o n T r a n s p o r t w a s

e a r l y l e g i s l a t i o n warild p r o b a b l y be n e c e s s a r y

increased

been Council

to L o n d o n T r a n e p o r t h a d

'revioun Inference: ;<;(Hl) 40,:,

y e t to s e e

s a i d that i n a

L a w L o r d s who had

h e a r i n g the c a g e of B r o m l e y C o i n c i l v.

,, r e s

to b e t a k o n i n t h e

to

a n d to p r e v e n t f a r e s level.

subsidies

If ( a s

seemed

w e r e not i n

h a d gone f u r t h e r

w o u l d be n e e d e d ,

than

permit

being more

themselves

wan

reasonable,

though an urgent

no

review

cf L o n d o n T r a n s p o r t ' s financial position would have

to b e p u t i n h a n d ,

a n d s h a r p f a r o i n c r e a s e s w o u l d s t i l l be i n e v i t a b l e .

The position

the

s u p p l e m e n t a r y rate

clarified, fares,

subsidies. depend

T h e e f f e c t o f the

on

the

recognised

rnroini

judgment l o r the

Law

Lord:;'

.should a v o i d

s u m m i n g u p the d i s c u s s i o n , a major

payer-it against

the

concerned

and should

concentrate

t h a t t h e y w e r e p r e p a r e d to p r o t e c t

irresponsible

the

vindication of

the e s s e n t i a l p o i n t that i n a n i m p o r t a n t a r e a

C o u r t s had demonstrated

authorities.

would

s a i d that

In t h e i r f i r s t p u b l i c r e s p o n s e to i t ,

b e i n g d r a w n into t e c h n i c a l i t i e s ,

across

subsidies

de< i ; . i o n .

S e c r e t a r y of S t a t e f o r T r a n s p o r t a n d o t h e r M i n i s t e r s

on getting

subsidise

future

On the p a y m e n t o f

t h a t the j u d g m e n t w a s

policy.

be to

to p a s s e n g e r t r a n s p o r t e x e c u t i v e s

detailed ground;;

PRIME MINISTER,

Cabinet (iuvi

have to

with a further proportion being e a r m a r k e d for

by other local authorities

T H E

by t h e G L C w o u l d

levied

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

and unlawful expenditure

the

rate­

by local

T h e S e c r e t a r y of State f o r T r a n s p o r t s h o u l d m a k e

G o v e i Ciment's p o s i t i o n c l e a r i n h i s

on

r e p l y to t h e P r i v a t e

the

Notice

Question which had been tabled by M r N i g e l Spearing M P for answer

that afternoon.

He

.should a l s o ,

in consultation with

the

S e c r e t a r y o f S t a t e f o r t h e E n v i r o n m e n t a n d the A t t o r n e y G e n e r a l , urgently prepare an analysis the i m p l i c a t i o n s

o f the

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

judgment.

The Cabinet ­ 1.

I n v i t e d the S e c r e t a r y o f S t a t e f o r T r a n s p o r t ­ i.

to r e p l y to the P r i v a t e N o t i c e Q u e s t i o n

tabled

b y M r N i g e l S p e a r i n g M P o n the l i n e s i n d i c a t e d b y the P r i m e

Minister in her

discussion; 1

CONFIDENTIAL

s u m m i n g up of

their

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

ii,

i n c o n s u l t a t i o n w i t h the S e c r e t a r y

for

the

State

. E n v i r o n m e n t a n d the A t t o r n e y G e n e r a l ,

circulate a note

oi

u r g e n t l y i o r the i n f o r m a t i o n o f the

o n the

i m p l i c a t i o n s of the H o u s e

of

to

Cabinet

Lort3s

judgment.

Control of

Local

T H E

S E C R E T A R Y

Authority

that the

Expenditure

agreement

level

o f the

reached

authorities. previous Reference: CC(01)

36th

Conclusions, Minute

5

O F S T A T E

In a n u m b e r

responsible

was

major

associationc Local

off against

that a l l M i n i s t e r s

authorities

as

c o u l d be

expenditure

targets.

T H E

MINISTER,

P R I M E

Cabinet recognised rather

on their

regarded

to p l a y

officials

to e n s u r e guidance

that the

total was

detail any proposed

The 2.

the n e e d they

or prayed in aid by

should,

Secretary

Local

w o u l d be

Cabinet

of State

authorities

expenditure made

however,

and

local overall

and

f o r the

was

authorities global utmost

should heed

the

Environment in

s h o u l d be a s k e d to j u s t i f y i n

on individual items which

a n d tc e x p l a i n w h a t

to o t h e r

went

compensating

programmes.

­

Invited all Ministers

c o n c e r n e d to e n s u r e

did nothing which might appear b y the

targets agreed

authorities b y the

2

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

the

expenditure

do t h e i r

in their discussions with local authorities, failure

to

said

s a i d that

and that i n d i v i d u a l

not exceeded,

b e y o n d the i n d i c a t i v e t a r g e t s , adjustments

important

t h e i r o w n p r i o r i t i e s w i t h i n the

and officials

said.

programmes,,

Expenditure White Papers

than prescriptive,

g i v e n b y the

w h a t he h a d

it authority

one

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

in that

under

on particular

s u m m i n g u p the d i s c u s s i o n ,

h a d d i s c r e t i o n to d e t e r m i n e Ministers

targets,

f o r f a i l u r e to s t a y w i t h i n t h e i r

as published i n successive indicative

it clear

and it was extremely

should impress

an excuse

Ministers

c a s e s put t h e m

e x p e c t e d to a t t e m p t

another,

incurred

and local

that i n their dealings with l o c a l authorities

did nothing which

total.

agreed

of local authorities

had in some

c o u l d be

had made

to e x c e e d the

to m a i n t a i n e x i s t i n g e x p e n d i t u r e

Department

expenditure

Although Ministers

spending Departments

that officials

authorities

ensure

the

the

of local

influenced or determined by

resist any attempt

said

1982-83 reflected

total expenditure

of c r u c i a l areas

had been alleged by a number pressure

grant for

for functional p r o g r a m m e s .

o f the

they would

support

i n C a b i n e t o n the

by local authorities charge

rate

F O R T H E E N V I R O N M E N T

to e n c o u r a g e

to o b s e r v e

Cabinet,

the

that,

officials or

condone

expenditure

JronEIGN

2.

T H E L O R D

IFFAJRS

impossible

PRIVY

S E A L

s a i d that l a c k of i n f o r m a t i o n m a d e

to be c l e a r w h a t w a s h a p p e n i n g i n P o l a n d ,

m i l i t a r y c l a m p - d o w n o n 13 D e c e m b e r . of the it

Roland

Solidarity trades

seemed

Previous Reference:

eg

union movement,

l i k e l y that he w a s not

resisting pressure

from

folly

by appearing on television.

t h e i r f a c t o r i e s h a d b e e n e v i c t e d b y the A r m y no c o n f i r m e d r e p o r t s

Conclusions,

were

c o n f i n e d to t h e i r b a r r a c k s ;

iVlinute

military intervention. would

of casualties.

s i m p l y a c c e p t the p r e s e n t

of further

with members

of Solidarity,

maintain control i f there stances

a n d the p o l i c e ,

situation;

and there

taking place

heavil/

assistance

widespread unrest.

There were

some

was

A r m y family

i n t e n t i o n to r e - o p e n Poland't! official months

earlier,

s i g n e d f o r the

to

circum­

largely complete.

time being.

these payments to h a v e

precipitate

to the

o f the that

A s regards w e r e due

member

economic

w o u l d be m a d e ;

stopped

but

Current deliveries

T h e r e w a s no

present

on re-scheduling

for

signed

some

1982 w o u l d not

Poland's non-official under agreed

o n 28 D e c e m b e r ,

defaulted i f they were

for

i n Poland,,

communications

which had been

interest payments

be

debts

clear

nor whether Poland would not.

Public

to

re­

It w a s n o t default

o f a b r i e f d i s c u s s i o n it w a s noted that there

b o t h f o r a n d a g a i n s t the

of a s s i s t a n c e . s h o r t l y be

Wet>t,

resume

be

might

Soviet intervention.

the c o a r s e

present

subjects

Local

1982.

bu.t t h e e q u i v a l e n t a g r e e m e n t

scheduling arrangements declared

about

the m u l t i l a t e r a l a g r e e m e n t

400 W e s t e r n banks,

whether

down.

The Foreign Ministers

1981 debts

ties

f e e l o b l i g e d to c a l l

to P o l a n d a l r e a d y i n the p i p e l i n e s h o u l d not be

of B r i t i s h food a i d w e r e

ments

risk

whicb

In s u c h

600 B r i t i s h

European Community had agreed

that no d e c i s i o n s c o u l d yet be m a d e

In

people

a n d c o u l d n o t be e x p e c t e d to be able

were

restricted.

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

over

that day,

m a n y of w h o m would have

h a d b e e n a d v i s e d to k e e p t h e i r h e a d s

were

there

was a clear

The Polish

negotiations with Solidarity and might therefore who

but

Poland

the P o l i s h G o v e r n m e n t w o u l d be e x t r e m e l y r e l u c t a n t to

Soviet military help.

them

in

w a s no sign of e x t e r n a l

1970 r i o t s i n G d a n s k .

consisted l a r g e l y of conscripts,

with

sit-in protests

i m p r o b a b l e that the P o l i s h

strikes and disturbances

the a n n i v e r s a r y o f the

known;

was

Soviet troops in

and there

But it was

leader

not

and that he

W o r k e r s holding

were

3

M r Walesa, v ere

at l i b e r t y ,

the

o f the

the P o l i s h a u t h o r i t i e s to c o - o p e r a t e

33rd

fC(81)

following

The whereabouts

it

were

argu­

continuation of food a i d and other

The F o r e i g n and Commonwealth Secretary

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

situation for Departments'

the S e c r e t a r y o f the

3

the

economic dealings with Poland;

Cabinet would arrange

c o - o r d i n a t i o n needed i n that

forme

would

context.

for any

and

interdepartmental

CONFIDENTIAL

ab/Israel

T H E

LORD

PRIVY

SEAL

s a i d that the I s r a e l i s

international preoccupations

had taken advantage

w i t h P o l a n d to e x t e n d

t h e i r l a w to

previous

G o l a n H e i g h t s a r e a of S y r i a w h i c h they had o c c u p i e d

Reference:

This move was

C C ( 8 1 ) 40th

i n t e r n a t i o n a l l a w a n d t o t h e U n i t e d N a t i o n s ' R e s o l u t i o n 242

Conclusions,

a t t r a c t e d the

minute 2

United States.

t a n t a m o u n t , to a n n e x a t i o n a n d w a s

since

T h i s d r a f t c a l l e d o n the I s r a e l i s

The

Government's

East/West

T H E

Relations

the

LORD

Previous

unsatisfactory

review

PRIVY

sent.

M e a n w h i l e the S y r i a n s

but h a d net attempted

SEAL

Minute 2

to

were

to t a k e

military

effectively.

s a i d that l i t t l e p r o g r e s s h a d b e e n m a d e

at

m e e t i n g i n M a d r i d o f the C o n f e r e n c e o n S e c u r i t y a n d

Co-operation in Europe, governments

end before

It h a d b e e n i n d a n g e r o f c o m i n g to a n C h r i s t m a s , b u t the n e u t r a l a n d n o n - a l i g n e d

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

to b e r e c o n v e n e d i n F e b r u a r y 1 9 8 2 . possible,

Israeli

t o the F o r e i g n a n d C o m m o n w e a l t h S e c r e t a r y ,

a c t i o n a n d w e r e p r o b a b l y i n c a p a b l e o f d o i n g so

Conclusions,

and

the S e c r e t a r y G e n e r a l w o u l d r e p o r t o n t h e i r r e s p o n s e .

adopting a t h r e a t e n i n g attitude

38th

sanctions.

to r e s c i n d t h e i r d e c i s i o n

o f the C o u n c i l i n a w e e k ' s t i m e at w h i c h

w h i c h no r e p l y h a d yet b e e n

CC(81)

Syrian

F o r e i g n M i n i s t e r , M r S h a m i r , h a d s o u g h t to j u s t i f y h i s behaviour in a letter

Reference:

i n c l u d i n g the

<~n t h e b a s i s o f a n a c c e p t a b l e

d r a f t r e s o l u t i o n w h i c h d i d n o t d e m a n d the i m p o s i t i o n o f a further meeting

It h a d

c u r r e n t l y b e i n g c o n s i d e r e d b y the

United Nations Security Council,

envisaged

1967.

c o n t r a r y b o t h to

c o n d e m n a t i o n of m o s t other G o v e r n m e n t s , T h e matter was

of

the

If t h i s w e r e a d o p t e d ,

the W e s t e r n A l l i a n c e w o u l d c o n t i n u e

C o n f e r e n c e as a m e a n s of exposing

meeting

as

seemed

to b e a b l e t o u s e

th~ i n a d e q u a t e h u m a n

the

rights

r e c o r d o f the S o v i e t U n i o n a n d o t h e r C o m m u n i s t s t a t e s .

United

Nations

THE

LORD

candidate, He

PRIVY

S E A L welcomed

Senor Cuellar,

t h e a p p o i n t m e n t o f the

Peruvian

a s S e c r e t a r y G e n e r a l o f the U n i t e d N a t i o n s .

already had considerable

experience

of U n i t e d Nations w o r k .

c a n d i d a c y o f the C o m m o n w e a l t h S e c r e t a r y G e n e r a l , M r S h r i d a t h Rrmphal,

had attracted little

The Took

support.

Cabinet note.

4

CONFIDENTIAL

The

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

IMMUNITY

UFFAJLRS

3.

T H E LORD

PRIVY

SEAL

s a i d the m e e t i n g

of F o r e i g n

M i n i s t e r s o n 14 a a d 15 D e c e m b e r h a d n o t b e e n a b l e to s o l v e

the

f o u r o u t s t a n d i n g p o i n t s o n t h e M a n d a t e o f 30 M a y 1 9 8 0 w h i c h h a d b e e n r e f e r r e d to t h e m b y the E u r o p e a n C o u n c i l . (0 M a y M a n d a t e

that a g r e e m e n t

t u r e a n d the c o n t r o l o f a g r i c u l t u r a l e x p e n d i t u r e ^rovious Reference: ;C(81)

40th

Conclusions, minute 3

There were

budget but d i f f e r e n c e s p r o b l e m itself.

w i t h i n the C o m m u n i t y

s t i l l e x i s t e d o n m i l k a n d o n the

A t a restricted

budget

s e s s i o n of F o r e i g n M i n i s t e r s

the F o r e i g n a n d C o m m o n w e a l t h S e c r e t a r y h a d g a i n e d the i m p r e s s i o n that there

was

prepare

of m o v e m e n t

after

T h e P r e s i d e n t of the C o m m i s s i o n h a d b e e n i n v i t e d

revised

suggestions,

S e c r e t a r y w o u l d be ensure

alone,

firm

n o w m o r e u n d e r s t a n d i n g o f the B r i t i s h

p o s i t i o n o n the b u d g e t i s s u e a n d s o m e c h a n c e Christmas.

sigw?,.

could have been r e a c h e d on M e d i t e r r a n e a n a g r i c u l ­

that he w a s

to

a n d the F o r e i g n a n d C o m m o n w e a l t h

s e e i n g h i m i n S t r a s b o u r g t h a t d a y i n o r d e r to aware

of the B r i t i s h G o v e r n m e n t ' s

minimum

requirements. In a b r i e f d i s c u s s i o n i t w a s n o t e d that the P r i m e M i n i s t e r h a d r e p o r t e d to the E u r o p e a n P a r l i a m e n t i n S t r a s b o u r g o n the o f the r e c e n t Ministers agreed,

meeting

(ECOF.TN)

o f the E u r o p e a n C o u n c i l . o n 14 D e c e m b e r

but no a g r e e m e n t to c o n s i d e r

h a d b e e n r e a c h e d o n the whether,

British insurance industry,

subsidiary bodies Monetary System

The E C O F I N

to e x a m i n e

o r a b a n d o n the e f f o r t s

the f u r t h e r d e v e l o p m e n t

m e m b e r s h i p o f the e x c h a n g e r a t e m e c h a n i s m w o u l d be then.

before

C h r i s t m a s w o u l d p r o b a b l y be n e c e s s a r y

had

achieved

1982

i n the

v e r y little.

meeting British

necessary

The meeting

(Budget)

l i g h t of

the

C o m m u n i t y Budget.

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 ) o n 15

December

o f the C o u n c i l o f M i n i s t e r s

^Agriculture) on 1 5 D e c e m b e r had been notable criticism,

o f the E u r o p e a n

o f the C o u n c i l o f M i n i s t e r s

v o t i n g i n the E u r o p e a n P a r l i a m e n t o n the meeting

secure its

Collective d i s c u s s i o n of possible

A further meeting

now

its to

Council had instructed

before

The

It w o u l d

i n s p i t e o f the w i s h e s o f the

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

o f the E u r o p e a n C o u n c i l .

of

been

Directive

services.

the G o v e r n m e n t s h o u l d m o d i f y

position on notification procedures an a g r e e d D i r e c t i v e .

A t the C o u n c i l

some minor issues had

p r o v i d i n g f o r f r e e d o m to s u p p l y i n s u r a n c e be n e c e s s a r y

outcome

f o r the

widespread

i n c l u d i n g t h a t o f the F e d e r a l R e p u b l i c o f G e r m a n y , o f

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

The Council

further

of

M i n i s t e r s (Social A f f a i r s ) on 8 D e c e m b e r had reached agreement a regulation extending employed.

T h i s was

given publicity.

reciprocal social

s e c u r i t y r i g h t s to t h e

an i m p o r t a n t step f o r w a r d w h i c h should

T h e r e was

a l s o a p r o s p e c t that a g r e e m e n t

r e a c h e d o n the D i r e c t i v e to c o n t r o l the e x p o s u r e i n the l e a d

The

industry.

Cabinet -

T o o k note. Cabinet

Office

17 D e c e m b e r

l?8l

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

to l e a d o f

the

on

self­ be

c o u l d be workers