secret secret

---

SECRET

IS

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 M A J E S T Y ' S G O V E R N M E N T

( g l ) 32nd onclusions

COPY NO

C

CABINET

C O N C L U S I O N S of a M e e t i n g of the C a b i n e t h e l d at 10 D o w n i n g S t r e e t on T H U R S D A Y 24 S E P T E M B E R

1981

at 10. 30 a m PRESENT The

Rt Hon Margaret Thatcher M P Prime

Minister

he Rt H o n W i l l i a m W h i t e law M P

ecretary o f State f o r the H o m e D e p a r t m e n t

The

he Rt H o n S i r K e i t h J o s e p h M P

ecretary of State f o r E d u c a t i o n and S c i e n c e

The Rt Hon F r a n c i s P y m M P L o r d P r e s i d e n t of the C o u n c i l

Lord

Rt H o n L o r d H a i l sham Chancellor

he Rt H o n J a m e s F r i o r M P Secretary of State f o r N o r t h e r n I r e l a n d

The Rt Hon Michael Heseltine M P

S e c r e t a r y of State f o r the E n v i r o n m e n t

The Rt H o n G e o r g e Y o u n g e r M P

The Rt Hon Nicholas Edwards M P

Secretary of State f o r

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

Scotland

The Rt H o n P a t r i c k Jenkin M P S e c r e t a r y of State f o r I n d u s t r y

The Rt H o n H u m p h r e y A t k i n s M P Lord P r i v y S e a l

The Rt H o n N o r m a n F o w l e r M P S e c r e t a r y o f State f o r S o c i a l S e r v i c e s

The Rt H o n D a v i d H o w e l l M P Secretary o f State f o r T r a n s p o r t

The Rt H o n B a r o n e s s Young C h a n c e l l o r o f the D u c h y o f L a n c a s t e r

The Rt H o n L e o n B r i t t a n Q C M P Chief S e c r e t a r y ,

Wales

Treasury

The Rt Hon Norman Tebbit M P S e c r e t a r y of State f o r E m p l o y m e n t

The Rt H o n N i g e l L a w s o n M P Secretary of State f o r E n e r g y

i

SECRET

SECRET

THE

e

FOLLOWING W E R E ALSO The

R t Hon C e c i l P a r k i n s o n M P

PRESENT

R t Hon Michael Jopling M P

Parliamentary Secretary,

ymaster G e n e r a l

Treasury

SECRETARIAT Sir Robert Mr

Armstrong

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

1-3)

M r R L W a d e - G e r y ( I t e m s 1-3) Mr

P L G r e g s o n (Item 4)

M r D J L M o o r e (Item 4) Mr

D H J H i l a r y ( I t e m 5)

Mr

L J H a r r i s ( I t e m 5) C O N T

E N T S

Subject

WEDDING

PRESENT

FOREIGN

AFFAIRS

T O T H E

PRINCE A N D PRINCESS

Page

O FW A L E S

1

East-West Relations

1

Poland

1

India

1

Belize

2

COMMUNITY

AFFAIRS

European Political Union

2

17 S e p t e m b e r C o u n c i l o f E c o n o m i c a n d F i n a n c e M i n i s t e r s

2

L O C A L A U T H O R I T Y C U R R E N T E X P E N D I T U R E 1982-83 T H E QUEEN'S OPENING

SPEECHES

O NT H E P R O R O G A T I O N A N D

O FP A R L I A M E N T

Legislative

2

4

P r o g r a m m e 1981-82

ii

SECRET

i

CONFIDENTIAL

blNG [SENT

1.

T H E PRIME MINISTER

s a i d that

she

had received a letter

( w h i c h s h e r e a d to the C a b i n e t ) f r o m the P r i n c e of W a l e s ,

THE

h i s a n d the P r i n c e s s ' s

*CE A N D

present.

expressing

w a r m g r a t i t u d e to the C a b i n e t f o r t h e i r

wedding

«JCESS VALES

LEIGN

[AIRS

2.

T H ELORD

PRIVY SEAL

s a i d that the F o r e i g n a n d C o m m o n ­

wealth S e c r e t a r y was i n N e w Y o r k for the United Nations G e n e r a l Assembly.

H i s many contacts there had included a meeting

-West

Soviet F o r e i g n M i n i s t e r , M r G r o m y k o ,

tions

factory atmosphere.

with

which had been held in a

the satis­

T h e F o r e i g n and Commonwealth Secretary had

m a d e c l e a r that the p r i n c i p a l o b s t a c l e to i m p r o v e d A n g l o - S o v i e t rious

relations

was

the p r e s e n t

S o v i e t m i l i t a r y o c c u p a t i o n of A f g h a n i s t a n ,

irence:

M r G r o m y k o ' s m a i n c o n c e r n at the t i m e h a d b e e n the p r o s p e c t of h i s

II) 27th

first meeting

:lusions,

U n c e r t a i n t y about h o w this w o u l d go h a d c h a r a c t e r i s t i c a l l y l e d

ite 2

R u s s i a n s to adopt a tough s t a n c e on E a s t - W e s t i s s u e s . meeting

w i t h the U n i t e d S t a t e s S e c r e t a r y of State,

M r Haig. In t h e e v e n t

b e t w e e n M r G r o m y k o a n d M r H a i g a p p e a r e d to h a v e

reasonably

successful,

two F o r e i g n M i n i s t e r s h a d d i s c u s s e d

long-range 28

and

the

been

t h a n k s p a r t l y to t h e s k i l f u l l y c o n c i l i a t o r y

m e s s a g e which P r e s i d e n t R e a g a n had just sent P r e s i d e n t The

the

theatre nuclear forces

Brezhnev.

a r m s c o n t r o l i n the c o n t e x t of

a n d w e r e d u e to m e e t a g a i n

on

September.

THE

LORD

tense.

PRIVY SEAL

s a i d that the s i t u a t i o n i n P o l a n d r e m a i n e d

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

nous

P o l i t b u r o f r o m the C e n t r a l C o m m i t t e e of the Soviet C o m m u n i s t P a r t y h a d

prence:

been v e r y toughly worded,

81) 31st

strong p r e s s u r e

[elusions, lite 1

a n d the Soviet

on P o l a n d by e c o n o m i c

U n i o n m i g h t w e l l s e e k to a p p l y

means.

be no s i g n s of S o v i e t m i l i t a r y p r e p a r a t i o n s . counsels had gained movement, of

But there appeared

Within Poland,

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

to

moderate union

p a r t i c u l a r l y i n r e l a t i o n to the i s s u e of the w o r k e r s '

control

management.

THE

LORD

PRIVY SEAL

s a i d that after

several years

of

negotiations,

in which the P r i m e M i n i s t e r had been involved a m o n g m a n y others,

the

B r i t i s h - l e d c o n s o r t i u m u n d e r D a v y M c K e e L t d h a d w o n a £1 b i l l i o n c o n t r a c t f o r t h e c o n s t r u c t i o n of a m a j o r s t e e l p l a n t i n I n d i a . the v a l u e of the c o n t r a c t was

O v e r half

l i k e l y to a c c r u e to t h e U n i t e d K i n g d o m .

CONFIDENTIAL

CONFIDENTIAL

THE

LORD

PRIVY

successfully jious pence: 1) 31st lusions, hi

threatening THE

SEAL

noises,

PRIME

as

expected,

MINISTER

w a r m congratulations and

s a i d that the i n d e p e n d e n c e

a c h i e v e d o n 21 S e p t e m b e r .

patience

of B e l i z e h a d

Guatemala had

but h a d t a k e n no

been

made

action.

s a i d that the C a b i n e t w o u l d w i s h to extend

to the F i n a n c i a l S e c r e t a r y ,

their

T r e a s u r y , for the

skill

with w h i c h a s M i n i s t e r of State i n the F o r e i g n a n d

C o m m o n w e a l t h O f f i c e h e h a d c o n d u c t e d t h e n e g o t i a t i o n s l e a d i n g u p to Belizean

independence.

The

Cabinet -

T o o k note.

IMUNITY lAIRS

3.

T H ELORD

Herr Genscher, bpean

PRIVY

Government had recently

SEAL

s a i d that the F e d e r a l G e r m a n

e n d o r s e d the p r o p o s a l s

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

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

of E u r o p e a n p o l i t i c a l u n i o n ,

but w e r e n o w t h i n k i n g of a d e c l a r a t i o n r a t h e r t h a n a f o r m a l T r e a t y .

Leal

feptember

THE

CHIEF SECRETARY,

TREASURY,

s a i d that the E c o n o m i c and

kcil of

F i n a n c e M i n i s t e r s C o u n c i l c h a i r e d b y the C h a n c e l l o r of the E x c h e q u e r o n

fiomic

17 S e p t e m b e r

"inane e

C o m m u n i t y ' s n e w f i n a n c i a l i n s t r u m e n t (the

Isters

The

h a d b e e n a b l e to r e s o l v e

outstanding i s s u e s on the so-called

Ortoli

facility).

p r o p o s a l w o u l d n o w b e r e f e r r e d to the E u r o p e a n P a r l i a m e n t .

Italian G o v e r n m e n t had sought authorisation for a s i x - m o n t h their import deposit

s c h e m e but a g r e e m e n t

out o v e r f i v e m o n t h s

a n d to e x c l u d e c e r t a i n p r o d u c t s f r o m i t s

The

Cabinet

Took

PAL

IHORITY •RENT 'ENDITURE •83

4. for

h a d b e e n r e a c h e d to p h a s e it scope.

-

note.

T h e C a b i n e t c o n s i d e r e d a m e m o r a n d u m by the S e c r e t a r y of State the E n v i r o n m e n t (C(81) 48) o n l o c a l a u t h o r i t y c u r r e n t e x p e n d i t u r e

in

1982-83. THE

SECRETARY O F STATE F O R T H E ENVIRONMENT

c o n f o r m with p r e s e n t

public expenditure plans,

s a i d that,

authorities

Nnce:

w o u l d h a v e to cut t h e i r c u r r e n t e x p e n d i t u r e in 1982-83 b y at

l e a s t 7 p e r c e n t f r o m the l i k e l y o u t t u r n f o r 1981-82:

3 j p e r c e n t to

* ) 31st

e l i m i n a t e l i k e l y v o l u m e o v e r s p e n d i n 1981-82;

fusions, ate 4

p a y a n d p r i c e i n c r e a s e s i n 1981-82 w e r e h i g h e r t h a n the c a s h factors

f o r that y e a r ;

assumed

to

the E n g l i s h l o c a l

Kous l

The

e x t e n s i o n of

and j

3 per cent because

p e r c e n t to a c h i e v e f u r t h e r

i n t h e 1981 P u b l i c E x p e n d i t u r e W h i t e P a p e r .

CONFIDENTIAL

their

limit

reductions T h e r e was

general

CONFIDENTIAL

agreement The

t h a t i t w o u l d b e u n r e a l i s t i c to e x p e c t r e d u c t i o n s of 7 p e r

maximum year-on-year

authorities and

o v e r a l l was

reductions

3 per cent;

some local authorities

7 p e r cent was

an average

figure,

w o u l d h a v e to s a v e s u b s t a n t i a l l y m o r e ;

c e n t of l o c a l a u t h o r i t y c u r r e n t c o s t s w e r e f o r m a n p o w e r , cut would i m p l y a m a n p o w e r

however,

with the l o c a l a u t h o r i t y l e a d e r s

Before

he w i s h e d to c o n t i n u e about the p r o s p e c t s

reductions i n c u r r e n t expenditure i n 1982-83.

the b a s i s

of the p r e s e n t target of 7 p e r cent but,

his

for

H e w o u l d do so

by suggesting

that

m i g h t b e s o m e s c o p e f o r a d j u s t i n g t h i s t a r g e t to a m o r e r e a l i s t i c h e w o u l d s e e k to s e c u r e t h e i r c o l l e c t i v e aggregate figure.

which w e r e i n the m a j o r i t y ,

b e a r on the m i n o r i t y of h i g h s p e n d e r s reductions.

endorsement

of an

In the m e a n t i m e ,

on

there

level,

alternative

H e h o p e d that u n d e r this p r o c e d u r e the

moderate councils,

cent

r e d u c t i o n of a b o u t 150, 000 i n a y e a r

r e a c h i n g a final d e c i s i o n on t h i s , further

70 p e r

and a 7 per

c o m p a r e d with the p r e s e n t a n n u a l r a t e of r e d u c t i o n of 4 0 , 0 0 0 . discussions

cent.

ever achieved by English local

more

would bring p r e s s u r e

to

to a g r e e to n e w t a r g e t s f o r

and for internal purposes,

the f u r t h e r

w o r k i n p r e p a r a t i o n for the 1982-83 R a t e Support G r a n t ( R S G ) settlement should be based on three alternative assumptions and

3 p e r vent.

any i n c r e a s e

4

O f f i c i a l s s h o u l d b e i n s t r u c t e d to a d v i s e u r g e n t l y on h o w

i n the c a s h p r o v i s i o n for 1982-83 should be a p p o r t i o n e d

between p r o g r a m m e s . by

of r e d u c t i o n s of 7,

Decisions

on this a p p o r t i o n m e n t should be

m i d - O c t o b e r to e n a b l e the R S G s e t t l e m e n t to b e m a d e

taken

before

Christmas.

T H E

CHIEF SECRETARY,

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

TREASURY,

s a i d that he s u p p o r t e d

they r e c o g n i s e d the r e a l i t y of the situation. i m p o r t a n t to e s t a b l i s h ,

It w o u l d ,

i n p r e s e n t i n g the o u t c o m e

that a n i n c r e a s e i n the p r e s e n t

the l o c a l authorities

would not r e p r e s e n t

increase public expenditure,

that be

cash provision for

a substantive

decision

to

and it would not p r o v i d e any g r o u n d s

in other p r o g r a m m e s .

T h e f i n a l d e c i s i o n on the

c o u l d be t a k e n i n the light of the f u r t h e r d i s c u s s i o n s authorities,

however,

of the S e c r e t a r y of

State's discussions,

increases

the

E n v i r o n m e n t ' s p r o p o s a l s on the g r o u n d s

a n d as p a r t of the C a b i n e t ' s d e c i s i o n s

E x p e n d i t u r e S u r v e y as a whole;

for

increases

with the l o c a l

o n t h e 1981

Public

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

i n t i m e f o r t h e R S G s e t t l e m e n t to b e m a d e b e f o r e

total

C h r i s t m a s and with

the

implications for other p r o g r a m m e s in mind. T H E

PRIME

MINISTER,

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 C a b i n e t

a g r e e d w i t h the S e c r e t a r y of State f o r the E n v i r o n m e n t ' s p r o p o s a l s f o r

the

next steps in dealing with l o c a l authority c u r r e n t expenditure in 1982-83. A f i n a l d e c i s i o n on the total a d d i t i o n a l c a s h p r o v i s i o n w o u l d be taken t h e y c o n s i d e r e d t h e 1981 P u b l i c E x p e n d i t u r e S u r v e y .

In the

separate

of m a k i n g

c o n s i d e r a t i o n s h o u l d be g i v e n to the m e t h o d s

adjustments

f o r the S c o t t i s h and W e l s h l o c a l a u t h o r i t i e s

Northern Ireland programme.

It w a s

essential

that,

a n d to

3

CONFIDENTIAL

similar

the

when the

on l o c a l a u t h o r i t y c u r r e n t e x p e n d i t u r e w e r e a n n o u n c e d i n due

when

meantime,

decisions

course,

CONFIDENTIAL

they should be

explained in terms

with no r e f e r e n c e

of a g e n e r a l

additional cash

provision

to " v a l i d a t i o n " o f e x c e s s i v e p a y i n c r e a s e s i n 1981-82;

o t h e r w i s e future pay negotiations would be p r e j u d i c e d ,

particularly those

of

lower

the N a t i o n a l H e a l t h S e r v i c e g r o u p s

who h a d a c c e p t e d

ments this year than had l o c a l authority w o r k e r s . p r o v i s i o n should also be presented the G o v e r n m e n t was

The

i n the context of the l e g i s l a t i o n

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

f r o m imposing high rate increases. on l o c a l authority expenditure,

settle­

increased

It w a s

i m p o r t a n t that f u r t h e r

and d e c i s i o n s on it,

should be

Christmas;

the b a s i s f o r the t h r e s h o l d s

u n d e r the n e w l e g i s l a t i v e

to b e set

The

Cabinet

1.

through

be

measures Parliament.

­

A p p r o v e d the r e c o m m e n d a t i o n s

m e m o r a n d u m C(81)

48. Treasury:

T o a r r a n g e for officials

Departments increase

i n p a r a g r a p h 22

Environment's

Invited the C h i e f S e c r e t a r y , i.

the s e t t l e m e n t would

stage still be passing

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

2.

work

completed

in time for an R S G settlement before o n t h e r a t e s w h i c h w o u l d at that

which

authorities

of

the

c o n c e r n e d to e x a m i n e

how

in cash provision for local

current expenditure

any

authority

might be apportioned

between

programmes. ii.

T o a g r e e with the S e c r e t a r i e s

Scotland,

for Wales and for Northern Ireland

how s i m i l a r adjustments for

of State f o r

the p r o g r a m m e s

should be

for which they

calculated were

responsible.

QUEEN'S

5.

ECHES

for

THE

The

ROGATION

The Cabinet considered

a m e m o r a n d u m b y the S e c r e t a r y of State

the H o m e D e p a r t m e n t (C(81) 47),

to w h i c h w e r e a t t e c h e d d r a f t s

of

Q u e e n ' s S p e e c h e s on the p r o r o g a t i o n of the 1980-81 S e s s i o n of

P a r l i a m e n t a n d t h e o p e n i n g o f t h e 1981-82

Session.

OPENING PARLIAMENT

T H E HOME SECRETARY

s a i d that the d r a f t S p e e c h e s a t t a c h e d

C(81) 47 h a d b e e n p r e p a r e d b y T h e Q u e e n ' s vious

Legislation Committee

erence­

Departments.

( Q L ) o n the b a s i s of s u g g e s t i o n s m a d e

T h e draft Opening Speech

to

Speeches and Future reflected

the

by

legislative

fl) 30th

p r o g r a m m e f o r the 1981-82 S e s s i o n a p p r o v e d b y the C a b i n e t i n J u l y ,

fusions,

took no a c c o u n t of a n y a d j u s t m e n t s

ut 5

b e m a d e i n t h e l i g h t o f t h e d e c i s i o n to a c c e l e r a t e the p a s s a g e of the

e

Government Finance Bill.

Prorogation Speeches generally

CONFIDENTIAL

but

to the p r o g r a m m e w h i c h m i g h t h a v e

to

Local

attracted

CONFIDENTIAL

little

P a r l i a m e n t a r y or public attention,

circulated had been

and the draft which he h a d

shortened by m o r e than a t h i r d c o m p a r e d with

previous Session's Speech.

The reference

i n the d r a f t O p e n i n g

to the c l o s e r e l a t i o n s h i p w i t h the R e p u b l i c of I r e l a n d h a d b e e n

the

Speech

suggested

b y t h e F o r e i g n a n d C o m m o n w e a l t h O f f i c e to m e e t Q L ' s c o n c e r n a b o u t reference

i n e a r l i e r d r a f t s to a " u n i q u e " r e l a t i o n s h i p .

T h e new

m i g h t b e h e l p f u l i n the c o n t e x t o f the A n g l o - I r i s h S u m m i t d u e to b e on 6 N o v e m b e r ,

but t h e r e w a s a d a n g e r that o n c e the r e f e r e n c e

i n c l u d e d it w o u l d b e d i f f i c u l t to o m i t i t f r o m f u t u r e S p e e c h e s . reference

to u n e m p l o y m e n t

i n the

economic

affairs

h a d b e e n a d d e d b y the T r e a s u r y at Q L ' s r e q u e s t .

section

the

text held

had

been

The

of the

The revised

Speech

passage

on N o r t h e r n I r e l a n d p r o v i d e d by the S e c r e t a r y of State for N o r t h e r n Ireland included a reference be better

to t h e p r o p o s e d A d v i s o r y C o u n c i l ;

o m i t t e d b e c a u s e of the u n e n t h u s i a s t i c

proposals had received.

S u b j e c t to t h e s e p o i n t s ,

changes which might be needed alterations

to the l e g i s l a t i v e

this

response which

a n d to a n y f u r t h e r

i n the l i g h t of l a t e r d e v e l o p m e n t s

programme,

might

the o r of

h e i n v i t e d t h e C a b i n e t to

a p p r o v e t h e t w o d r a f t S p e e c h e s a t t a c h e d to C(81) 4 7 .

In d i s c u s s i o n made

of the d r a f t O p e n i n g S p e e c h ,

were

the following m a i n points

­ a.

The reference

Ireland was towards

to t h e c l o s e r e l a t i o n s h i p w i t h the R e p u b l i c of

i n t e n d e d to r e f l e c t

the R e p u b l i c .

an important change in policy

It w o u l d ,

however,

b y c e r t a i n s e c t o r s of p o l i t i c a l o p i n i o n , G o v e r n m e n t ' s own supporters, b.

T h e specific

reference

be found

provocative

i n c l u d i n g s o m e of

a n d it w o u l d be s a f e r

to the p r o p o s e d

s o u g h t to the p r i s o n s p r o t e s t s s h o u l d b e

c.

The reference

d.

s h o u l d be

In t h e

e.

to t h e W h i t e P a p e r o n E f f i c i e n c y i n the

affairs

by a reference

to i t s

reference

efficiency,

to l e g i s l a t i o n

was

5

CONFIDENTIAL

adaptability

a n d to a d d a

to p a t r i a t e t h e C a n a d i a n

received f r o m Canada before

delivered.

to t h e

industry.

C o n s t i t u t i o n m i g h t n e e d to b e a d d e d at a l a t e r request

Civil

s e c t i o n of the d r a f t O p e n i n g S p e e c h ,

to the n e e d to s t r e n g t h e n

A specific

solution

deleted.

economic

economy

reference

last be

omitted.

i t w o u l d b e p r e f e r a b l e to r e p l a c e t h e r e f e r e n c e of the

should also

T h e w o r d " h u m a n i t a r i a n " i n r e l a t i o n to t h e

being

Service

The

s e n t e n c e i n the d r a f t P r o r o g a t i o n S p e e c h (the

s e n t e n c e of the p a r a g r a p h o n N o r t h e r n Ireland) deleted.

it.

representative

N o r t h e r n I r e l a n d A d v i s o r y C o u n c i l should be deleted. corresponding

the

to o m i t

stage if a f o r m a l

the S p e e c h

was

CONFIDENTIAL

THE

PRIME MINISTER,

s u m m i n g up t h i s p a r t of the d i s c u s s i o n ,

said

that the C a b i n e t a g r e e d that the r e f e r e n c e to the p r o p o s e d N o r t h e r n Ireland A d v i s o r y C o u n c i l i n both draft Speeches,

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

R e p u b l i c of I r e l a n d and e f f i c i e n c y i n the C i v i l S e r v i c e i n the d r a f t O p e n i n g S p e e c h should be deleted as p r o p o s e d i n d i s c u s s i o n . a c c e p t e d the further a m e n d m e n t s Ireland and economic affairs,

which had been

They

suggested on N o r t h e r n

a n d noted the p o s s i b l e n e e d for the a d d i t i o n

of a r e f e r e n c e to t h e C a n a d i a n C o n s t i t u t i o n at a l a t e r s t a g e . any

T h e text of

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

should be

s e n t to the H o m e S e c r e t a r y i m m e d i a t e l y .

slative

T H E H O M E S E C R E T A R Y said that,

ramme

S p e e c h e s a t t a c h e d to C(81) 4 7 ,

82

S t r a t e g y h a d a g r e e d that the p r o p o s e d l e g i s l a t i o n to m a k e l o c a l

since Q L had p r e p a r e d the draft

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

a u t h o r i t i e s m o r e a c c o u n t a b l e f o r the l e v e l of t h e i r r a t e s i° r

e

n

u s

c

s h o u l d be

given

p r i o r i t y o v e r t h e r e s t o f t h e l e g i s l a t i v e p r o g r a m m e f o r the 1981-82 e

:

1) 30th elusions,

Session,

w i t h the a i m of s e c u r i n g R o y a l A s s e n t b y F e b r u a r y o r

M a r c h 1982. legislative

p r o g r a m m e with the b u s i n e s s m a n a g e r s a n d

Parliamentary Counsel. specific

H e r e m i n d e d the C a b i n e t that a r e f e r e n c e to a

G o v e r n m e n t to i n t r o d u c i n g that m e a s u r e ; reference

d i d n o t p r e c l u d e t h e i n t r o d u c t i o n of the m e a s u r e , but a v o i d e d a c o m m i t m e n t .

the

the o m i s s i o n of s u c h a if time

It w o u l d b e v e r y u n w i s e i n t h e

n e w s i t u a t i o n to e n t e r i n t o a f i r m c o m m i t m e n t to c a r r y the w h o l e legislative that t h e r e

the

First

m e a s u r e in T h e Queen's Speech virtually committed

permitted,

early

H e h a d d i s c u s s e d the i m p l i c a t i o n s of this d e c i s i o n f o r

p r o g r a m m e approved by Cabinet.

of the

He had already agreed

s h o u l d be no r e f e r e n c e to p o s s i b l e l e g i s l a t i o n on p u b l i c o r d e r

in the draft Opening Speech,

a n d h e n o w r e c o m m e n d e d that r e f e r e n c e s

at l e a s t two other m a i n p r o g r a m m e B i l l s

should be omitted,

u n d e r s t a n d i n g that this would not n e c e s s a r i l y p r e v e n t the

to

on the

relevant

l e g i s l a t i o n being brought f o r w a r d l a t e r if the P a r l i a m e n t a r y situation next S e s s i o n p r o v e d l e s s d i f f i c u l t t h a n was at p r e s e n t f e a r e d .

The main

c a n d i d a t e s f o r d e l e t i o n a p p e a r e d to b e t h e S o c i a l S e c u r i t y B i l l ,

the

Housing and Building Control Bill,

a n d the p r o p o s e d l e g i s l a t i o n on the

r e t a i l i n g of gas a p p l i a n c e s b y the B r i t i s h G a s C o r p o r a t i o n ( B G C ) . a l s o p o s s i b l e that t h e r e w o u l d be s o m e d e l a y i n i n t r o d u c i n g the Health A c t (Amendment) Bill, serious Session.

but this w a s u n l i k e l y to be

to p r e j u d i c e t h e B i l l ' s c h a n c e s There were

was

Mental

sufficiently

of s e c u r i n g R o y a l A s s e n t

clear political and economic objections

d r o p p i n g a n y of n e x t S e s s i o n ' s B i l l s ,

It

but t h i s n o w a p p e a r e d to

to

next



be

i n e v i t a b l e i f the r e m a i n d e r of the p r o g r a m m e w e r e to be c a r r i e d i n a n

orderly fashion.

T H E

LORD PRESIDENT

O F T H EC O U N C I L

c o n s i d e r e d that the p r o p o s e d l e g i s l a t i v e

s a i d that he h a d

p r o g r a m m e was too h e a v y and

too c o n t r o v e r s i a l a n d w o u l d put the G o v e r n m e n t a n d its o w n

6

CONFIDENTIAL

always

supporters

CONFIDENTIAL

in both H o u s e s Session. further

of P a r l i a m e n t under unacceptable

S i n c e it h a d b e e n d r a w n u p , B i l l on banking m e r g e r s

strain throughout

it h a d been

should be added.

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

T i m e would

almost

o n the C a n a d i a n C o n s t i t u t i o n ,

a n d t h e a d d i t i o n of r a t i n g p r o p o s a l s to t h e L o c a l G o v e r n m e n t Bill

the

s u g g e s t e d that a

(Scotland)

w o u l d p r o b a b l y m e a n t h a t S e c o n d R e a d i n g w o u l d h a v e to b e t a k e n

the F l o o r of the H o u s e r a t h e r than i n Scottish G r a n d C o m m i t t e e . O p p o s i t i o n w e r e i n a n y c a s e l i k e l y to a d o p t d i s r u p t i v e t a c t i c s against

on

The

next

Session

in protest

attempt

t o f o r c e t h r o u g h h i g h l y c o n t r o v e r s i a l l e g i s l a t i o n o n r a t e s to a

v e r y tight t i m e t a b l e

the continuing r i s e i n u n e m p l o y m e n t ,

would encourage

t h e m to w i t h d r a w the

and

the

co-operation

w h i c h t h e y w e r e n o r m a l l y p r e p a r e d to g i v e to e n a b l e the G o v e r n m e n t to secure

their business.

It w o u l d b e d i s a s t r o u s

i n the p r e s e n t

political

c l i m a t e i f the G o v e r n m e n t w e r e to b e s e e n to b e u n a b l e to c a r r y legislative

p r o g r a m m e announced in T h e Queen's

p r u d e n t to d e l e t e t h e r e f e r e n c e s

Speech.

to t h r e e of the e x i s t i n g

the

It w o u l d

p r o g r a m m e B i l l s f r o m the d r a f t Speech.

E v e n i f the p r e s s u r e s

p r o g r a m m e w e r e to b e e a s e d i n t h i s w a y ,

he c o u l d not g u a r a n t e e

B i l l s which h a d been identified as delivered on T H E

requiring early Royal Assent

on the that

could

C H A N C E L L O R

with the O p p o s i t i o n .

rapid

c o u l d be s e c u r e d o n l y t h r o u g h T h e L o r d s w o u l d n e e d at l e a s t a s

t i m e a s the C o m m o n s to d e a l w i t h the L o c a l G o v e r n m e n t F i n a n c e chance of the B i l l being passed

T h e L o r d s h a d a l r e a d y sat f o r f i v e w e e k s i n the c u r r e n t

when the C o m m o n s had not,

and the t w o - a n d - a - h a l f - w e e k

acknowledgment

of the p r e s s u r e s

on the

t h e a u t u m n o f 1982. against Peers

to a v o i d a n e x t e n d e d

A l t h o u g h it was

objections,

to b e s u p p o r t e d b y t h e G o v e r n m e n t , possibility

Some essential,

Government

spillover period in

u n l i k e l y that the L o r d s w o u l d v o t e

the p r i n c i p l e of the r a t i n g l e g i s l a t i o n had strong constitutional

against

at S e c o n d R e a d i n g ,

S h e a g r e e d that T h e Q u e e n ' s

many

w h i c h i n the past h a d

seemed

the u s e

and

of r e f e r e n d a ,

of G o v e r n m e n t d e f e a t s on this a s p e c t of the p r o p o s a l s

be r u l e d out.

Session

Christmas

Upper House seemed

s h e h o p e d to b e a b l e to g i v e s o m e i n d i c a t i o n t h a t t h e

would use their best endeavours

in

by F e b r u a r y

R e c e s s now p r o p o s e d w o u l d be one of the s h o r t e s t e v e r . and

much

Bill,

w o u l d n e e d to h a v e S e c o n d R e a d i n g b e f o r e the C h r i s t m a s R e c e s s

o r d e r f o r t h e r e to b e a n y 1982.

be

O F T H E D U C H Y O F L A N C A S T E R s a i d that i n the

p a s s a g e of G o v e r n m e n t l e g i s l a t i o n

and

the

time.

a b s e n c e of a n y g u i l l o t i n e p r o c e d u r e i n the H o u s e of L o r d s the negotiation

be

main

Speech

should leave

the

c o u l d not the

G o v e r n m e n t f r e e to d r o p two o r m o r e of t h e m a i n p r o g r a m m e B i l l s to which the existing

The

draft referred.

following points at.

were m a d e in discussion

­

A g r e e m e n t h a d now been r e a c h e d b e t w e e n the

c o n c e r n e d on the unified housing benefit

( U H B ) p r o v i s i o n s to

i n c l u d e d in the H o u s i n g and B u i l d i n g C o n t r o l B i l l .

7

CONFIDENTIAL

Departments The

be

CONFIDENTIAL

C o n f e d e r a t i o n of B r i t i s h I n d u s t r y h a d a c c e p t e d the latest proposals

i n t r o d u c t i o n of a n e m p l o y e r s ' and

statutory

l i k e l y to b e m u c h l e s s

at l e a s t a m o n g the G o v e r n m e n t ' s o w n

than o r i g i n a l l y feared.

the

sick pay ( E S S P ) scheme,

it now s e e m e d that this p r o p o s a l was

controversial,

Government's

for l e g i s l a t i o n i n the S o c i a l S e c u r i t y B i l l on

supporters,

T h e s e two p r o v i s i o n s t a k e n t o g e t h e r

w o u l d enable the D e p a r t m e n t of H e a l t h a n d S o c i a l S e c u r i t y to s o m e 7, 500

staff.

A f u r t h e r 1, 3 5 0

staff i n the D e p a r t m e n t

E m p l o y m e n t g r o u p would be s a v e d by the v o l u n t a r y proposals

i n the S o c i a l S e c u r i t y B i l l .

not p r o c e e d e d with,

commitment

C i v i l S e r v i c e to 6 3 0 , 000 b y 1984. c o m b i n e the

of the

to r e d u c e t h e

Government

s i z e of

the

O n e p o s s i b i l i t y would be

to d r o p the r e m a i n i n g p r o v i s i o n s

which had

put f o r w a r d f o r i n c l u s i o n i n the H o u s i n g a n d B u i l d i n g Bill;

were

a n d to r e v i e w the o t h e r p r o v i s i o n s

the S o c i a l S e c u r i t y B i l l

Control

which had been

proposed

w i t h a v i e w to o m i t t i n g t h e m .

This

t h e r i g h t to b u y to t h e 7 0 , 000 p e o p l e o c c u p y i n g

hold council houses, equity m o r t g a g e incomes

b.

s c h e m e s d e s i g n e d to benefit

of a m o r e c o h e r e n t

T h e G o v e r n m e n t was

Session

people on

low

the

p u b l i c l y c o m m i t t e d to l e g i s l a t i n g

next

appliance retailing interests

T h e B G C a n d the t r a d e s

mounted a massive

and for

and

s y s t e m of building control.

o n the d i s p o s a l of the gas

the B G C .

for lease­

for the i n t r o d u c t i o n of s h a r e d o w n e r s h i p

who w i s h e d to o w n t h e i r o w n h o m e s ,

development

in

been

would m e a n postponing the p o l i t i c a l l y d e s i r a b l e p r o p o s a l s extending

to

U H B , E S S P and voluntary registration proposals

a single Bill;

for

of

registration

If t h e s e p r o p o s a l s

there would be no p r o s p e c t

b e i n g a b l e to h o n o u r i t s

save

unions

concerned

campaign against these proposals,

and

f a i l u r e to p r o c e e d w i t h t h e l e g i s l a t i o n w o u l d b e w i d e l y s e e n a s h u m i l i a t i n g defeat for the G o v e r n m e n t , fundamentally affect industries.

with the

a

could

nationalised

O n the o t h e r h a n d t h e r e w e r e s i g n s that a n u m b e r of

Government the

and one which

their future relations

of

had

supporters

proposals

w e r e b e g i n n i n g to h a v e m i s g i v i n g s

f o r d i s p o s a l of the g a s

appliance retailing

about

interests

of t h e B G C , a n d t h e i r P a r l i a m e n t a r y h a n d l i n g c o u l d w e l l p r o v e be m o r e difficult than had e a r l i e r been

expected.

s o l u t i o n w o u l d b e to i n t r o d u c e l e g i s l a t i o n

A

e n a b l i n g the G o v e r n m e n t

to d i r e c t the B G C to d i s p o s e of p a r t i c u l a r i n t e r e s t s , its

m o n o p s o n y i n the p u r c h a s e of N o r t h S e a g a s .

w o u l d be of g r e a t p o l i t i c a l i m p o r t a n c e .

powers

w o u l d h a v e to be d e f e r r e d u n t i l t i m e further legislation

8

CONFIDENTIAL

adequate

appliance

retailing

purpose

c o u l d be taken for

on i m p r o v e d safety r e q u i r e m e n t s .

would

oil

a n d would in p r i n c i p l e give the G o v e r n m e n t t h o u g h the e x e r c i s e of t h i s p o w e r f o r that

break

Bill

Such legislation

to d i r e c t t h e B G C to d i s p o s e of i t s g a s

interests,

a n d to

This

e n a b l e t h e G o v e r n m e n t t o c o m p e l t h e B G C to s e l l i t s interests,

to

possible

passing It m i g h t

be

CONFIDENTIAL

possible

to a m a l g a m a t e

these provisions

with t h o s e i n the

P e t r o l e u m and C o n t i n e n t a l Shelf B i l l postponed f r o m the Session,

i n t r o d u c t i o n of a c o m b i n e d C

current

though the d r a f t i n g of the new p r o v i s i o n s m i g h t d e l a y

The proposed legislation

on the

" p r i v a t i s a t i o n " of p a r t of

a s s e t s o f B r i t i s h S h i p b u i l d e r s m i g h t b e p o s t p o n e d (at t h e of p o s s i b l e

c r i t i c i s m b y s o m e of the G o v e r n m e n t ' s

the

expense

own

though a s h o r t a n d u n c o n t r o v e r s i a l B i l l to

supporters),

the

Bill.

increase

the b o r r o w i n g l i m i t s of B r i t i s h S h i p b u i l d e r s w o u l d s t i l l be required. d.

It m i g h t b e p o s s i b l e

at p r e s e n t T H E

i n c l u d e d i n the

PRIME MINISTER,

to a m a l g a m a t e

the two T r a n s p o r t B i l l s

programme.

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

C a b i n e t a g r e e d that the a i m s h o u l d be f o r the L o c a l G o v e r n m e n t F i n a n c e B i l l to r e c e i v e R o y a l A s s e n t b y a b o u t the e n d of F e b r u a r y 1982,

though

t h e y n o t e d that i n t h e l i g h t of the l a t e s t a d v i c e f r o m the L a w O f f i c e r s a n d the L o r d C h a n c e l l o r s o m e extension of this timetable

would

be

acceptable.

T h e S e c r e t a r y of State f o r the E n v i r o n m e n t s h o u l d

discus^

the timetable

f u r t h e r with the L o r d P r e s i d e n t of the C o u n c i l and

the

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 . legislative form.

T h e C a b i n e t a c c e p t e d that

p r o g r a m m e a g r e e d i n J u l y c o u l d not be c a r r i e d i n its

The proposed U H B , ESSP,

and voluntary registration

should now be c o m b i n e d i n a single B i l l . The

No reference

necessarily measure

would be m a d e

Parliamentary timetable

appliances

permitted.

w o u l d b e c o n f i n e d to a s h o r t B i l l to i n c r e a s e

l i m i t s of B r i t i s h S h i p b u i l d e r s . would be deleted

The reference

f r o m T h e Queen's

to the r e t a i l i n g of Speech,

but

gas

legislation of the B G C ,

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

with the P e t r o l e u m and C o n t i n e n t a l S h e l f B i l l .

separate

Shipbuilding

t o e n a b l e t h e G o v e r n m e n t to d i r e c t t h e C o r p o r a t i o n to m a k e

of a s s e t s .

inclusion

the b o r r o w i n g

w o u l d b e b r o u g h t f o r w a r d to b r e a k the m o n o p s o n y p o w e r s and

disposals

provisions

Consideration should

a l s o b e g i v e n to the p o s s i b i l i t y of c o m b i n i n g the t w o T r a n s p o r t B i l l s . The

Home Secretary

r e v i s e d as n e c e s s a r y

s h o u l d a r r a n g e f o r the d r a f t O p e n i n g S p e e c h to i n the l i g h t of t h e s e d e c i s i o n s ,

s u b m i t it to T h e Q u e e n f o r a p p r o v a l .

9

CONFIDENTIAL

in

though t h i s w o u l d not

p r e v e n t at l e a s t s o m e of t h e m b e i n g i n t r o d u c e d i n a

l a t e r if the

legislation

original

provisions

Q u e e n ' s S p e e c h to the r e m a i n i n g p r o v i s i o n s put f o r w a r d f o r

in the H o u s i n g a n d B u i l d i n g C o n t r o l B i l l s ,

the

and she would

be then

CONFIDENTIAL

The

Cabinet

­

I n v i t e d t h e S e c r e t a r y of S t a t e f o r the E n v i r o n m e n t ,

1.

in consultation and

with the L o r d P r e s i d e n t

of the

Council

t h e C h a n c e l l o r of t h e D u c h y of L a n c a s t e r ,

consider

f u r t h e r the t i m i n g of the L o c a l

Finance

Bill.

2.

Government

A g r e e d that the p r o p o s e d S o c i a l S e c u r i t y a n d

H o u s i n g and B u i l d i n g C o n t r o l B i l l s should be

replaced

by a single B i l l dealing with unified housing the

employers'

statutory

and and invited

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

necessary

3.

legislation

Agreed

in

of State f o r the

tation with the S e c r e t a r i e s for Employment,

benefit,

sick pay scheme,

v o l u n t a r y r e g i s t r a t i o n of the u n e m p l o y e d ,

and

to

consul­

Environment

to a r r a n g e the d r a f t i n g of

the

accordingly.

that p o w e r s

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

B r i t i s h G a s C o r p o r a t i o n to d i s p o s e of s p e c i f i e d and

to a b o l i s h the C o r p o r a t i o n ' s gas

and

i n v i t e d the S e c r e t a r y of State f o r E n e r g y ,

c o n s u l t a t i o n with the L o r d to c o n s i d e r

whether

a d d e d to t h e 4.

purchase

P r e s i d e n t of the

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

s h o u l d b e l i m i t e d to a B i l l to r a i s e t h e

interests monopsony, in

Council, c o u l d be Bill.

P e t r o l e u m and Continental Shelf

A g r e e d that the p r o p o s e d s h i p b u i l d i n g

the

legislation

borrowing

l i m i t of B r i t i s h S h i p b u i l d e r s . 5.

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

consultation to c o n s i d e r should be 6.

with the L o r d whether

P r e s i d e n t of the

the two p r o p o s e d T r a n s p o r t B i l l s

amalgamated.

I n v i t e d the M i n i s t e r s c o n c e r n e d to s e n d to

Home Secretary immediately amendments

any proposed

the

drafting

to t h e d r a f t Q u e e n ' s S p e e c h e s o n

P r o r o g a t i o n a n d O p e n i n g of 7.

Council,

the

Parliament.

I n v i t e d t h e H o m e S e c r e t a r y to r e v i s e the

draft

Q u e e n ' s S p e e c h e s i n the light of t h e i r d i s c u s s i o n , of a n y f u r t h e r a m e n d m e n t s 8.

S u b j e c t t o 7,

amendments, C(81) 47,

he

and

received.

a n d to a n y s u b s e q u e n t

essential

a p p r o v e d the d r a f t S p e e c h e s a t t a c h e d

s u b m i t t h e r e v i s e d t e x t s to T h e Q u e e n f o r a p p r o v a l .

Cabinet

Office

25 S e p t e m b e r

to

a n d took note that the P r i m e M i n i s t e r would

1981

CONFIDENTIAL