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(UMENT 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 th

C O P Y NO

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C O N C L U S I O N S of a Meeting of the Cabinet h e l d at 10 Downing Street o n T H U R S D A Y 6 M A R C H 1980 at 10. 30 a m

PRESENT T h e R t Hon Margaret Thatcher M P P r i m e Minister H o n William Whitelaw M P ry of State for the H o m e D e p a r t m e n t

T h e R t Hon L o r d H a i l s h a m L o r d Chancellor

Hon Sir Geoffrey Howe Q C M P l o r o f the E x c h e q u e r

T h e R t Hon S i r K e i t h J o s e p h M P S e c r e t a r y of State f o r Industry

|Hon Francis P y m M P r y o f State for Defence

T h e R t Hon J a m e s P r i o r 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

Hon Sir Ian G i l m o u r M P ffivy Seal

T h e R t Hon M i c h a e l H e s e l t i n e 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

[Hon George Younger M P r y of State for Scotland

T h e R t Hon N i c h o l a s E d w a r d s M P S e c r e t a r y of State f o r W a l e s

Hon Humphrey A t k i n s M P r y of State for N o r t h e r n Ireland

T h e R t Hon P a t r i c k J e n k i n M P 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

Hon Norman St J o h n - S t e v a s M P Uor of the Duchy of L a n c a s t e r

T h e R t Hon J o h n Nott M P S e c r e t a r y of State f o r T r a d e

Hon David Howell M P r y of State for E n e r g y

T h e R t Hon M a r k C a r l i s l e Q C M P S e c r e t a r y of State for E d u c a t i o n and Science

Hon John Biffen M P ecretary, T r e a s u r y

T h e R t H o n A n g u s Maude M P Paymaster General

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T H E FOLLOWING WERE ALSO PRESENT

t

: Hon Norman F o w l e r M P er of T r a n s p o r t

T h e Rt Hon Michael Jopling M P

Parliamentary Secretary, Earl Ferrer8 M i n i s t e r of State, M i n i s t r y of A g r i c u l t u r e , F i s h e r i e s and F o o d

Treasury

SECRETARIAT Sir Mr Mr Mr Mr

Robert A r m s t r o n g M D M F r a n k l i n (Items 2 a n d 3) P J H a r r o p (Item 1) R L W a d e - G e r y (Items 2 - 4 ) W N H y d e (Item 1) C O N T E N T S Subject

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PARLIAMENTARY AFFAIRS Immigration Rules

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Supplementary E s t i m a t e s

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C h i l d Maintenance O r d e r s (Annual U p r a t i n g and E x e m p t i o n ) B i l l and A b o r t i o n (Amendment) B i l l

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Employment B i l l

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E d u c a t i o n (No 2) B i l l

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P a r l i a m e n t a r y P a y and A l l o w a n c e s

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FOREIGN A F F A I R S Rhodesia

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Iran

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Afghani stan

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Olympic Games

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COMMUNITY A F F A I R S

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NORTHERN I R E L A N D

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A Y R E S E A R C H A N D C A S H LIMITS

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ECONOMIC A N D I N D U S T R I A L A F F A I R S Steel

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Interest Rates

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National E c o n o m i c Development C o u n c i l

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[MENTARY

1. T h e C a b i n e t w e r e i n f o r m e d of the b u s i n e s s to be t a k e n i n the H o u s e o f C o m m o n s d u r i n g the f o l l o w i n g week.

T H E H O M E S E C R E T A R Y s a i d that t h e O p p o s i t i o n would be p r o v i d i n g m o s t o f the t i m e f o r t h e debate o n I m m i g r a t i o n o n M o n d a y , 10 M a r c h w h i c h w o u l d l a s t f r o m 7 p m to 11. 30 p m . T h e y could therefore d e t e r m i n e t h e f o r m o f the d e b a t e . It was p o s s i b l e that t h e y w o u l d t a b l e a M o t i o n r e f e r r i n g to t h e R e p o r t f r o m the H o m e A f f a i r s S e l e c t C o m m i t t e e o n the p r o p o s e d n e w i m m i g r a t i o n r u l e s a n d t h e European Convention on Human Rights. If s o , the A t t o r n e y G e n e r a l m i g h t h a v e t o speak d u r i n g t h e d e b a t e : i t w o u l d be p r e f e r a b l e to a v o i d t h i s , but t h e r e m i g h t be no c h o i c e i n the m a t t e r .

In d i s c u s s i o n , r e f e r e n c e was m a d e to t h e vote o n outstanding s u p p l e m e n t a r y e s t i m a t e s to be t a k e n at 10 p m o n M o n d a y . There w o u l d be n o o p p o r t u n i t y f o r debate a n d t h e D i v i s i o n s h o u l d i n t e r r u p t the I m m i g r a t i o n R u l e s debate o n l y b r i e f l y . Backbench M e m b e r s m i g h t seek, h o w e v e r , by r a i s i n g p o i n t s o f o r d e r , to r e g i s t e r a p r o t e s t that the H o u s e w a s e x p e c t e d to p a s s the s u p p l e m e n t a r y e s t i m a t e s without d e b a t e . T H E P R I M E M I N I S T E R , s u m m i n g up t h e d i s c u s s i o n , s a i d that depending o n the f o r m of the debate o n t h e I m m i g r a t i o n R u l e s d e t e r m i n e d by t h e O p p o s i t i o n , i t m i g h t be n e c e s s a r y f o r t h e A t t o r n e y G e n e r a l to s p e a k . T h e 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 should c o n s i d e r t h e p r e c e d e n t s f o r the r a i s i n g o f p o i n t s of o r d e r o n t h e M o t i o n a p p r o v i n g s u p p l e m e n t a r y e s t i m a t e s . T h e Cabinet 1. Invited the C h a n c e l l o r of the D u c h y o f L a n c a s t e r to e x a m i n e t h e p r e c e d e n t s f o r r a i s i n g p o i n t s o f o r d e r about S u p p l e m e n t a r y E s t i m a t e s a n d the o p p o r t u n i t i e s f o r l i m i t i n g the i n t e r r u p t i o n of b u s i n e s s .

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T H E H O M E S E C R E T A R Y s a i d that the r e m a i n i n g stages o f the C h i l d M a i n t e n a n c e O r d e r s (Annual U p r a t i n g a n d E x e m p t i o n ) B i l l , s p o n s o r e d b y M r R o b e r t T a y l o r , would take p l a c e o n F r i d a y 14 M a r c h . T h e B i l l was not a c c e p t a b l e to the G o v e r n m e n t and, f o l l o w i n g d i s c u s s i o n at L e g i s l a t i o n C o m m i t t e e the p r e v i o u s day, he and the C h a n c e l l o r o f the D u c h y of L a n c a s t e r h a d both s e e n M r T a y l o r i n the hope that h e m i g h t a g r e e t o w i t h d r a w the B i l l . It s e e m e d u n l i k e l y that he would do s o . It would t h e r e f o r e be n e c e s s a r y to t r y to t a l k out the r e p o r t stage o f the B i l l , even though o v e r t a t t e m p t s b y the G o v e r n m e n t to p r o l o n g p r o c e e d i n g s o n the B i l l would be s e e n b y s u p p o r t e r s o f the A b o r t i o n ( A m e n d m e n t ) B i l l , which was the next B i l l down f o r debate, a s a n attempt to b l o c k p r o g r e s s o n that B i l l . H e was a r r a n g i n g f o r a m e n d m e n t s to be p r e p a r e d w h i c h G o v e r n m e n t s u p p o r t e r s m i g h t table f o r the R e p o r t Stage o f the B i l l . In d i s c u s s i o n i t was p o i n t e d out that M r T a y l o r b e l i e v e d that he had m a d e a m e n d m e n t s to the B i l l w h i c h m e t the objections p r e v i o u s l y seen b y the G o v e r n m e n t . T h e p r i n c i p l e of the a u t o m a t i c u p r a t i n g of m a i n t e n a n c e p a y m e n t s had support a m o n g G o v e r n m e n t b a c k b e n c h e r s . O n th 3 o t h e r h a n d , i t was s t r o n g l y a r g u e d that the p r o v i s i o n s o f the B i l l w e r e u n a c c e p t a b l e because they would c r e a t e g r e a t e r i n j u s t i c e i n the o p e r a t i o n o f the d i v o r c e l a w s . A u t o m a t i c uprating of m a i n t e n a n c e would w o r s e n the p o s i t i o n o f the h u s b a n d and s e c o n d wife a s a g a i n s t that o f f o r m e r w i v e s , a n d a d d to the c r i t i c i s m a l r e a d y m a d e o f the p r e s e n t l a w . T h e B i l l would a l s o c a l l f o r i n c r e a s e s i n staff and a d d to t l e work o f the c o u r t s . In d i s c u s s i o n o f the P a r l i a m e n t a r y h a n d l i n g of the debate, i t was pointed out that i t m i g h t be d i f f i c u l t to f i n d G o v e r n m e n t s u p p o r t e r s w i l l i n g to p r o l o n g debate o n M r T a y l o r ' s B i l l i n v i e w o f the l a r g e n u m b e r s o f M P s i n t e r e s t e d i n the p r o g r e s s of the A b o r t i o n (Amendment) B i l l . O n the o t h e r h a n d , the opponents o f the A b o r t i o n ( A m e n d m e n t ) B i l l m i g h t seek to p r o l o n g the debate. It was i n any event u n l i k e l y that the R e p o r t Stage of the A b o r t i o n (Amendment) B i l l c o u l d be c o m p l e t e d i n anything l e s s than a f a l l day. T H E P R I M E M I N I S T E R , 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 Cabinet a g r e e d that the C h i l d M a i n t e n a n c e O r d e r s (Annual U p r a t i n g and E x e m p t i o n ) B i l l s h o u l d not be a l l o w e d to m a k e p r o g r e s s i f i t c o u l d be p r e v e n t e d . No f u r t h e r p r e s s u r e s h o u l d be put o n M r T a y l o r to withdraw the B i l l , but the a r g u m e n t s o f p r i n c i p l e against i t s p r o v i s i o n s s h o u l d be d e p l o y e d i n the debate. E v e r y effort should be m a d e b y way o f the t a b l i n g and d i s c u s s i o n o f a m e n d m e n t s to e n s u r e that the R e p o r t Stage o f the B i l l was t a l k e d out. If n e c e s s a r y , h o w e v e r , t h e C h i e f W h i p should seek to e n s u r e that i t was defeated at T h i r d R e a d i n g .

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T h e Cabinet 2. Invited the C h i e f Whip, i n consultation with the H o m e S e c r e t a r y , to a r r a n g e that the C h i l d Maintenance O r d e r s (Annual Up r a t i n g and Exemption) B i l l should be p r e v e n t e d f r o m m a k i n g further p r o g r e s s .

T H E S E C R E T A R Y O F S T A T E F O R E M P L O Y M E N T s a i d that a g r e e m e n t had been r e a c h e d through the u s u a l channels f o r the C o m m i t t e e Stage of the E m p l o y m e n t B i l l to be completed before E a s t e r and f o r the G o v e r n m e n t ' s new c l a u s e s on i m m u n i t i e s to be d i s c u s s e d d u r i n g an extended R e p o r t Stage. It would be helpful i f the p u b l i c a t i o n of the S o c i a l S e c u r i t y (No 2) B i l l could be d e f e r r e d until after the C o m m i t t e e Stage of the E m p l o y m e n t B i l l had been completed; o t h e r w i s e the t i m e t a b l e a g r e e d with the O p p o s i t i o n might be put at r i s k . Subject to that point, he hoped that the a r r a n g e m e n t s would enable the B i l l to be sent to the House of L o r d s i n t i m e f o r i t to complete i t s p a s s a g e t h e r e and r e c e i v e R o y a l A s s e n t by the beginning of J u l y . The Cabinet 3.

T o o k note.

T H E S E C R E T A R Y O F S T A T E F O R E D U C A T I O N A N D S C I E N C E said that he had been a d v i s e d that the G o v e r n m e n t w e r e l i k e l y to l o s e the c l a u s e i n the E d u c a t i o n (No 2) B i l l which would enable l o c a l education a u t h o r i t i e s to m a k e charges for school t r a n s p o r t . It was opposed by C a t h o l i c P e e r s o f a l l P a r t i e s , by L a b o u r , L i b e r a l and c r o s s - b e n c h P e e r s , and even by some G o v e r n m e n t s u p p o r t e r s . If the c l a u s e w e r e l o s t i n the H o u s e o f L o r d s i t would be v e r y difficult to r e s t o r e i t i n the H o u s e of C o m m o n s ; and, even i f that attempt were s u c c e s s f u l , the H o u s e of L o r d s might well throw out the clause again, thus j e o p a r d i s i n g the p r o s p e c t s of the B i l l b e c o m i n g l a w before E a s t e r . T h e G o v e r n m e n t had estimated that the i n t r o d u c t i o n of school t r a n s p o r t c h a r g e s might save £20 m i l l i o n i n 1980-81, a n d i n c r e a s e d sums i n future y e a r s . T h e savings to be m a d e by those l o c a l authorities who had d e c i d e d to charge were, i n fact, l i k e l y to r e a c h £20 m i l l i o n i n the c o m i n g y e a r . T h e best chance of getting the school t r a n s p o r t c l a u s e through the House of L o r d s would be to make a further amendment l i m i t i n g i t s o p e r a t i o n to two c h i l d r e n i n a family. T h e r e c o u l d be no guarantee that this would s e c u r e i t s 3

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passage, but some G o v e r n m e n t s u p p o r t e r s and c r o s s - b e n c h e r s would accept the clause o n that b a s i s . Such a n amendment would be popular i n the House o f C o m m o n s where s i m i l a r amendments had been tabled at R e p o r t Stage, but not been r e a c h e d u n d e r the timetable M o t i o n . H e sought the a g r e e m e n t o f the Cabinet to putting down the amendment he h a d d e s c r i b e d . T H E P R I M E M I N I S T E R , s u m m i n g up a b r i e f 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 i n the c i r c u m s t a n c e s the S e c r e t a r y of State should seek to a m e n d the s c h o o l t r a n s p o r t c l a u s e , l i m i t i n g the c h a r g i n g p o w e r s of l o c a l education authorities to two c h i l d r e n i n a family. T h e Cabinet 4. Invited the S e c r e t a r y of State f o r E d u c a t i o n and S c i e n c e to a r r a n g e f o r the n e c e s s a r y amendment to be tabled to the E d u c a t i o n (No Z) B i l l before d i s c u s s i o n of the s c h o o l t r a n s p o r t c l a u s e i n C o m m i t t e e of the H o u s e of L o r d s .

T H E C H A N C E L L O R 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 on 4 M a r c h the H o u s e of C o m m o n s had debated the M o t i o n s he h a d tabled following the C a b i n e t ' s d e c i s i o n s on the r e c o m m e n d a t i o n s of the T o p S a l a r i e s R e v i e w Body ( T S R B ) on P a r l i a m e n t a r y P a y and Allowances. T h e r e had been f r e e votes on the M o t i o n s , and the outcome had not been altogether s a t i s f a c t o r y . A n amendment supporting some f o r m of linkage o f the pay of M e m b e r s of P a r l i a m e n t ( M P s ) with that o f outside groups had not been p r e s s e d , and a n amendment that would have i n c r e a s e d the allowance f o r s e c r e t a r i a l and r e s e a r c h a s s i s t a n c e to"£11, 000, r a t h e r than £6,750 as p r o p o s e d , had been defeated. T h e H o u s e had, however, p a s s e d three amendments against his a d v i c e : f i r s t , there had been a l a r g e m a j o r i t y i n favour of an additional allowance of £675 to M P s for payment into an approved p e n s i o n s c h e m e for t h e i r s e c r e t a r i e s ; second, the H o u s e had voted to double the s e v e r a n c e payments p r o p o s e d by the T S R B f o r M e m b e r s who l o s t t h e i r seats at a G e n e r a l E l e c t i o n after s e r v i n g for ten y e a r s o r m o r e and who were aged 50 or o v e r ; t h i r d , the House had voted to i m p l e m e n t the T S R B r e c o m m e n d a t i o n that t r a v e l allowances should be available for t r a v e l o n P a r l i a m e n t a r y b u s i n e s s i n any p a r t of the United K i n g d o m . T h e i n c r e a s e s p r o p o s e d i n the amended Motions would not take effect unless the G o v e r n m e n t i n d i c a t e d t h e i r support for t h e m . H e had indicated d u r i n g the debate that the G o v e r n m e n t would accept the d e c i s i o n s of the House i n p r i n c i p l e , while r e s e r v i n g t h e i r p o s i t i o n on

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t i m i n g a n d o n the d e t a i l o f the p r o p o s a l s . H e thought a r r a n g e m e n t s c o u l d be m a d e to m e e t s o m e of the m i s g i v i n g s that h a d b e e n e x p r e s s e d about the l a c k o f a c c o u n t a b i l i t y f o r the a l l o w a n c e s , a n d he h a d i t i n m i n d , i f the C a b i n e t a g r e e d , to w o r k out d e t a i l e d p r o p o s a l s i n c o n s u l t a t i o n with the H o u s e a u t h o r i t i e s and to b r i n g t h e m to the C a b i n e t b e f o r e E a s t e r . In d i s c u s s i o n o f the p r o p o s e d a l l o w a n c e f o r p e n s i o n s f o r s e c r e t a r i e s , i t was s a i d that t h e A c c o u n t a n t o f the H o u s e would be able to e n s u r e that the a d d i t i o n a l a l l o w a n c e of £675 was p a i d d i r e c t to a n a p p r o v e d p e n s i o n fund. It would be n e c e s s a r y to e n s u r e that o n l y one p e n s i o n a l l o w a n c e was p a i d f o r e a c h s e c r e t a r y even though s o m e s e c r e t a r i e s w o r k e d f o r two o r t h r e e M P s . T h e severance pay p r o p o s e d b y the T S R B m i g h t m o r e p r o p e r l y be c a l l e d a r e d u n d a n c y p a y m e n t , s i n c e i t w a s not p a i d to M P s who r e s i g n e d o r d i d not stand f o r r e - e l e c t i o n , but o n l y t o t h o s e who w e r e defeated a t a n e l e c t i o n . T h e i n c r e a s e d a m o u n t s , although b e t t e r than the State s c h e m e , w e r e not e s p e c i a l l y g e n e r o u s when j u d g e d b y the r e d u n d a n c y p a y a v a i l a b l e u n d e r s o m e p r i v a t e o r p u b l i c s c h e m e s ; the c o s t to p u b l i c funds would not a r i s e f o r four y e a r s and would be s m a l l . T h e position of t h j s e M P s whose seats d i s a p p e a r e d b e c a u s e o f a r e d i s t r i b u t i o n of c o n s t i t u e n c i e s o r whose c o n s t i t u e n c i e s w e r e affected b y b o u n d a r y changes n e e d e d c l a r i f i c a t i o n . C o n c e r n was e x p r e s s e d about the l a c k of accountability for c l a i m s f o r t r a v e l allowances. It would be n e c e s s a r y to c o n s i d e r a r r a n g e m e n t s w h e r e b y M e m b e r s gave a d v a n c e n o t i c e to the A c c o u n t a n t o f j o u r n e y s o n P a r l i a m e n t a r y b u s i n e s s o u t s i d e t h e i r c o n s t i t u e n c i e s f o r w h i c h they intended to c l a i m the a l l o w a n c e , a s w e l l a s h a v i n g t o give s t r i c t a c c o u n t o f t h e i r j o u r n e y s after the event. T H E P R I M E M I N I S T E R , 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 c c e p t e d that i t would be i n a d v i s a b l e to seek to go a g a i n s t the d e c i s i o n s t a k e n by a f r e e vote o f the H o u s e . In w o r k i n g out detailed p r o p o s a l s the C h a n c e l l o r of the Duchy of L a n c a s t e r should take a c c o u n t o f the p o i n t s m a d e i n d i s c u s s i o n , p a r t i c u l a r l y a s r e g a r d s the p o s i t i o n of s e c r e t a r i e s w o r k i n g f o r m o r e than one M P and the n e e d to p r e v e n t a b u s e o f the i n c r e a s e d scope f o r c l a i m i n g travel allowances. H e s h o u l d b r i n g h i s p r o p o s a l s t o the C a b i n e t i n due c o u r s e . The Cabinet 5. A g r e e d to a c c e p t , i n p r i n c i p l e , the a m e n d e d M o t i o n s p a s s e d by the H o u s e d u r i n g the debate o n the r e p o r t o f the T o p S a l a r i e s R e v i e w B o d y o n P a r l i a m e n t a r y P a y and Allowances. 5

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6. Invited the C h a n c e l l o r o f the D u c h y of L a n c a s t e r to b r i n g f o r w a r d d e t a i l e d p r o p o s a l s f o r i m p l e m e n t i n g the M o t i o n s , t a k i n g account o f the p o i n t s m a d e i n d i s c u s s i o n a n d of the o u t c o m e o f the d i s c u s s i o n s w h i c h h e p r o p o s e d to have with the H o u s e a u t h o r i t i e s .

2. T H E L O R D P R I V Y S E A L s a i d that the R h o d e s i a n e l e c t i o n s h a d p a s s e d off q u i e t l y . T h e r e s u l t was u n e x p e c t e d , but M r M u g a b e ' s r e a c t i o n to h i s v i c t o r y s e e m e d so f a r to have b e e n r e s p o n s i b l e a n d mod-rate. H e would be f o r m i n g a c o a l i t i o n g o v e r n m e n t with M r N k o m o , and m i g h t i n c l u d e M r D a v i d S m i t h o r another white representative. G e n e r a l W a l l s would b e s t a y i n g o n to o v e r s e e the i n t e g r a t i o n o f the t h r e e a r m i e s . T h e G o v e r n o r would be m a k i n g r e c o m m e n d a t i o n s about the t i m i n g o f i n d e p e n d e n c e and of h i s o w n departure. T h e two w o u l d be s i m u l t a n e o u s , a n d s h o u l d not be l o n g delayed. B u t t h e r e was a c a s e f o r a v o i d i n g p r e c i p i t a t e a c t i o n , w h i c h w o u l d not be w e l c o m e to M r M u g a b e and would d a m a g e the m o r a l e o f the white c o m m u n i t y . T h e r e s h o u l d now be n o p r o b l e m over international recognition. T h e r e a c t i o n s o f the l e a d e r s o f the F r o n t L i n e States h a d v a r i e d c o n s i d e r a b l y . President Machel of M o z a m b i q u e h a d behaved h e l p f u l l y a n d w o u l d be c o n g r a t u l a t i n g the P r i m e M i n i s t e r on her Government's achievement. T h e President of B o t s w a n a , S i r S e r e t s e K h a m a , h a d a l s o o f f e r e d h i s c o n g r a t u l a t i o n s . P r e s i d e n t K a u n d 1 o f Z a m b i a and P r e s i d e n t N y e r e r e o f T a n z a n i a h a d p r e f e r r e d to give c r e d i t f o r the o u t c o m e to, r e s p e c t i v e l y , t h e R u s s i a n s and the C h i n e s e . T h e r e a c t i o n o f the South A f r i c a n s h a d so f a r b e e n r e s t r a i n e d . B u t i t s e e m e d l i k e l y that t h e p r o b l e m o f N a m i b i a would now b e c o m e m o r e d i f f i c u l t to r e s o l v e . T h e Cabinet 1.

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T o o k note.

2, Invited the L o r d P r i v y S e a l to p r e p a r e m e s s a g e s o f c o n g r a t u l a t i o n w h i c h c o u l d be sent by the P r i m e M i n i s t e r , o n behalf o f the C a b i n e t , to the G o v e r n o r , t h e C o m m a n d e r o f the m o n i t o r i n g f o r c e s , t h e E l e c t i o n C o m m i s s i o n a n d the B r i t i s h p o l i c e contingent.

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T H E L O R D P R I V Y S E A L s a i d that the U n i t e d N a t i o n s C o m m i s s i o n h a d not so f a r s u c c e e d e d i n s e c u r i n g the r e l e a s e o f t h e U n i t e d States h o s t a g e s i n T e h r a n , o r e v e n a c c e s s to t h e m . It s e e m e d l i k e l y that the P r e s i d e n t o f I r a n , M r B a n i S a d r , h a d been o v e r r u l e d i n the m a t t e r by A y a t o l l a h K h o m e i n i . If the C o m m i s s i o n r e t u r n e d e m p t y handed, t h e r e would be s t r o n g d o m e s t i c p r e s s u r e o n P r e s i d e n t C a r t e r to take new m e a s u r e s , w h i c h c o u l d w e l l m a k e the s i t u a t i o n e v e n m o r e dangerous.

T H E L O R D P R I V Y S E A L s a i d that the B r i t i s h p r o p o s a l f o r t h e n e u t r a l i t y o f A f g h a n i s t a n had now b e e n put to the Soviet A m b a s s a d o r i n L o n d o n and b y the B r i t i s h A m b a s s a d o r i n M o s c o w to the S o v i e t Deputy F o r e i g n M i n i s t e r . Other Western governments were s u p p o r t i n g t h i s o n a n i n d i v i d u a l b a s i s , s i n c e i t h a d not p r o v e d p o s s i b l e to a r r a n g e a c o l l e c t i v e i n i t i a t i v e b y the m e m b e r c o u n t r i e s of the E u r o p e a n C o m m u n i t y . T h e R u s s i a n s h a d not r e j e c t e d the i d e a , though they w e r e i n s i s t i n g upon g u a r a n t e e s o f " n o n - i n t e r f e r e n c e " a s a p r i o r subject f o r d i s c u s s i o n . W h e t h e r they would a g r e e to i t was l i k e l y to depend o n h o w d i f f i c u l t t h e i r s i t u a t i o n b e c a m e , both internally i n Afghanistan and internationally. T h e Cabinet 3.

T o o k note.

T H E L O R D P R I V Y S E A L s a i d that the B r i t i s h O l y m p i c A s s o c i a t i o n had o n 4 M a r c h p o s t p o n e d f o r t h r e e weeks a d e c i s i o n o n whether to take p a r t i n t h e M o s c o w O l y m p i c s . The Association's Chairman h a d a p p e a r e d b e f o r e the F o r e i g n A f f a i r s C o m m i t t e e of the H o u s e of C o m m o n s and i n r e s p o n s e to c r i t i c i s m t h e r e h a d i n d i c a t e d that t h e i r d e c i s i o n was l i k e l y to be i n f l u e n c e d i f a r e s o l u t i o n o n the subject w e r e to be adopted b y P a r l i a m e n t . M e a n w h i l e , the U n i t e d States G o v e r n m e n t w e r e anxious to p r e s s ahead with p l a n s f o r a l t e r n a t i v e g a m e s , w h i c h would be d i s c u s s e d at a m e e t i n g o f l i k e - m i n d e d g o v e r n m e n t s i n G e n e v a o n 12-13 M a r c h , T H E 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 s a i d that, i f there were alternative games, the rowing, equestrian and diving events c o u l d p r o b a b l y be h e l d i n B r i t a i n . T h e r e m i g h t be c o s t s o f up to S.j m i l l i o n i n v o l v e d i n B r i t a i n ' s p a r t i c i p a t i o n i n s u c h g a m e s .

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T H E P R I M E M I N I S T E R , s u m m i n g up a s h o r t d i s c u s s i o n , s a i d that she would g i v e f u r t h e r c o n s i d e r a t i o n to t h e p o s s i b i l i t y o f a P a r l i a m e n t a r y v o t e , a n d to the b a s i s o n w h i c h i t m i g h t be h e l d , i n c o n s u l t a t i o n with the H o m e S e c r e t a r y , t h e L o r d P r i v y S e a l , t h e S e c r e t a r y o f State f o r the E n v i r o n m e n t , t h e 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 a n d the C h i e f W h i p . In o r d e r to give p o l i t i c a l i m p e t u s to the d i s c u s s i o n s at G e n e v a , t h e G o v e r n m e n t should be r e p r e s e n t e d at M i n i s t e r i a l l e v e l , a s the A u s t r a l i a n G o v e r n m e n t a l s o p r o p o s e d to b e . E x p e n d i t u r e of up to £7 m i l l i o n c o u l d be a u t h o r i s e d to support a l t e r n a t i v e g a m e s and B r i t i s h p a r t i c i p a t i o n t h e r e i n ; but t h e r e c o u l d b e n o q u e s t i o n o f the G o v e r n m e n t c o m p e n s a t i n g t h o s e who m i g h t suffer f i n a n c i a l l y a s a r e s u l t o f c a n c e l l i n g p l a n s to attend the M o s c o w O l y m p i c s . T h e Cabinet 4. T o o k note, with a p p r o v a l , o f t h e P r i m e M i n i s t e r ' s s u m m i n g up of t h e i r d i s c u s s i o n . 5. I n v i t e d the L o r d P r i v y S e a l , i n c o n s u l t a t i o n with the S e c r e t a r y o f State f o r the E n v i r o n m e n t , to a r r a n g e f o r a M i n i s t e r to attend the p r o p o s e d i n t e r n a t i o n a l m e e t i n g i n G e n e v a . 6. A g r e e d that, i n the event o f the S e c r e t a r y o f State f o r the E n v i r o n m e n t b e i n g u n a b l e to find the n e c e s s a r y m o n e y f r o m within h i s e x i s t i n g d e p a r t m e n t a l v o t e , u p to S.f m i l l i o n m i g h t be m a d e a v a i l a b l e f r o m the C o n t i n g e n c y R e s e r v e to s u p p o r t a l t e r n a t i v e g a m e s .

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3. T H E L O R D P R I V Y S E A L s a i d that, at a m e e t i n g e a r l i e r i n the week, the I r i s h F o r e i g n M i n i s t e r h a d shown a r e a d i n e s s to be r e a s o n a b l y h e l p f u l o v e r a s o l u t i o n to the p r o b l e m o f the B r i t i s h c o n t r i b u t i o n t o t h e C o m m u n i t y budget, although t h e I r i s h w o u l d not t h e m s e l v e s expect to be l e f t f i n a n c i a l l y w o r s e off. O f f i c i a l s h a d m e t the C o m m i s s i o n staff i n B r u s s e l s a n d p r o v i d e d i n f o r m a t i o n w h i c h d e m o n s t r a t e d that t h e r e w a s no s h o r t a g e o f p r o g r a m m e s a n d p r o j e c t s o n w h i c h a d d i t i o n a l C o m m u n i t y m o n e y c o u l d be spent i n the U n i t e d K i n g d o m . T h e C o m m i s s i o n staff w e r e r e a s o n a b l y r e l a x e d about the q u e s t i o n o f a d d i t i o n a l i t y , but a s l i t t l e a s p o s s i b l e s h o u l d be oaid i n p u b l i c about the n e e d f o r a d d i t i o n a l C o m m u n i t y funds to be a p p l i e d to r e d u c i n g o u r p u b l i c e x p e n d i t u r e . A t 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 ) o n 3 - 4 M a r c h no d e c i s i o n s h a d been t a k e n on a g r i c u l t u r a l p r i c e s f o r 1980-81 and the F r e n c h h a d been m a n o e u v r e d i n t o a m i n o r i t y i n r e f u s i n g i n t e r i m a r r a n g e m e n t s on sheepmeat. F r o m the point o f v i e w o f negotiations o n the budget p r o b l e m , i t was s a t i s f a c t o r y that F r a n c e r e m a i n e d i n a p o s i t i o n o f i l l e g a l i t y a n d t h e C o m m i s s i o n w e r e now l i k e l y t o a p p l y to the E u r o p e a n C o u r t f o r a n i n t e r i m i n j u n c t i o n a g a i n s t t h e m . O n the p o s s i b i l i t i e s o f a d d i t i o n a l C o m m u n i t y e x p e n d i t u r e f o r the U n i t e ! K i n g d o m s t e e l i n d u s t r y , the C o m m i s s i o n now acknowledged that the U n i t e d K i n g d o m h a d a p p l i e d f o r a l l the m o n i e s a v a i l a b l e to her. D i s c u s s i o n s were s t i l l continuing f r o m which i t might p r o v e p o s s i b l e to s e c u r e a m o d e s t a m o u n t o f f u r t h e r f i n a n c i a l a i d . T h e Cabinet T o o k note.

4. T H E SECRETARY O FSTATE FOR NORTHERN IRELAND s a i d that the C o n f e r e n c e o n the future* g o v e r n m e n t o f N o r t h e r n I r e l a n d was now a d d r e s s i n g the c e n t r a l i s s u e s of how a d e v o l v e d e x e c u t i v e would a c t u a l l y f u n c t i o n and what was to be the r o l e o f the m i n o r i t y c o m m u n i t y a n d i t s e l e c t e d r e p r e s e n t a t i v e s . Each of t h e p a r t i e s was n a t u r a l l y e m p h a s i s i n g the m e r i t s o f i t s o w n c a s e and the w e a k n e s s e s of o t h e r s . B u t some interesting s i m i l a r i t i e s of a p p r o a c h h a d e m e r g e d o n a n u m b e r of d e t a i l e d i s s u e s . T h e p a r t i e s w e r e a l s o i n c r e a s i n g l y a w a r e o f the n e e d to e v o l v e a r r a n g e m e n t s a c c e p t a b l e to e a c h o t h e r a n d w e r e l e s s i n c l i n e d to , see the B r i t i s h G o v e r n m e n t a s the m a i n o b s t a c l e to p r o g r e s s , though m e m o r i e s o f p a s t f a i l u r e s m i g h t i n the end p r e v e n t t h e m f r o m v o l u n t e e r i n g the n e c e s s a r y c o n c e s s i o n s . The Government would t h e r e f o r e a l m o s t c e r t a i n l y h a v e to table t h e i r own p r o p o s a l s i n due c o u r s e . T h e C o n f e r e n c e was l i k e l y to adjourn j u s t b e f o r e o r after E a s t e r , h a v i n g been once t h r o u g h i t s full agenda. H e would

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at that stage r e p o r t to c o l l e a g u e s o n the p o s i t i o n and o n the next steps, a n d woulo conduct b i l a t e r a l d i s c u s s i o n s with e a c h o f the p a r t i e s i n c l u d i n g the O f f i c i a l U n i o n i s t s . T h e r e a f t e r h e would a i m to r e c o n v e n e t h e Conference, i f p o s s i b l e w i t h t h e O f f i c i a l U n i o n i s t s p r e s e n t , and i f n e c e s s a r y put f o r w a r d B r i t i s h p r o p o s a l s . T h e p u b l i c would n e e d to be k e p t i n f o r m e d a n d a debate i n P a r l i a m e n t would p r o b a b l y b e n e e d e d . M e a n w h i l e , h e had been i n t e r e s t e d to note the i d e a s w h i c h M r B r i a n M a w h i n n e y M P h a d put f o r w a r d i n a P r e s s a r t i c l e a n d subsequently i n a p a p e r c i r c u l a t e d to the C o n f e r e n c e . T h e Cabinet T o o k note.

5. T h e C a b i n e t r e s u m e d t h e i r d i s c u s s i o n u p o n the m e a n s to be adopted to e n s u r e c o m p l i a n c e with the c a s h l i m i t o n the C i v i l S e r v i c e vote. T h e C a b i n e t ' s d i s c u s s i o n and c o n c l u s i o n s a r e s e p a r a t e l y r e c o r d e d .

6. T H E S E C R E T A R Y O F S T A T E F O R E M P L O Y M E N T said that the u n i o n s r e p r e s e n t e d i n the s t e e l i n d u s t r y h a d now j o i n e d f o r c e s , f o l l o w i n g a l e a d g i v e n b y the T r a d e s U n i o n C o n g r e s s ( T U C ) . It was s a i d that the p u r p o s e o f t h i s a l l i a n c e was t w o - f o l d : to strengthen the hands o f the u n i o n s i n negotiations with the B r i t i s h S t e e l C o r p o r a t i o n ( B S C ) , a n d to i m p r o v e t h e e f f e c t i v e n e s s o f i n d u s t r i a l a c t i o n ; i t w a s doubtful, h o w e v e r , whether i t would have any s i g n i f i c a n t effect o n the l e v e l o f i n d u s t r i a l a c t i o n o r o n t h e movement of supplies. M r S i r s , the G e n e r a l S e c r e t a r y o f the I r o n a n d S t e e l T r a d e s C o n f e d e r a t i o n , h a d e x p r e s s e d the hope that the B S C , w h i c h h a d a l w a y s w i s h e d f o r m o r e j o i n t negotiation a t n a t i o n a l (as o p p o s e d to l o c a l ) l e v e l , w o u l d p r e s s the u n i o n s , as p a r t o f any settlement, to a g r e e to m o r e j o i n t n e g o t i a t i o n at n a t i o n a l l e v e l i n future. O n p a y i t s e l f , t h e r e w a s s t i l l a l a r g e gap between the two s i d e s , and i t would be o p t i m i s t i c to hope f o r a n e a r l y c o n c l u s i o n to the n e g o t i a t i o n s which w e r e e x p e c t e d to b e r e s u m e d s h o r t l y . T h e p r e s s u r e s on the t r a d e u n i o n side w e r e , h o w e v e r , i n c r e a s i n g , a n d they would p r o b a b l y not w i s h to b r e a k negotiations off, even i f a n

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e a r l y settlement was not c o n c l u d e d . T o a c h i e v e a s e t t l e m e n t the B S C would p r o b a b l y have to i m p r o v e a l i t t l e o n t h e i r p r e s e n t o f f e r ; i t was r e a s o n a b l e to hope, h o w e v e r , that they would not need to m o v e too f a r , even though M r S i r s was s t i l l t a l k i n g about 20 p e r cent. T H E H O M E S E C R E T A R Y s a i d that p i c k e t i n g h a d b e c o m e f o r the m o s t p a r t v e r y quiet, a n d the p i c k e t s w e r e r e p o r t e d to be d i s m a l and d i s p i r i t e d , A t i r e s o m e d i s p u t e h a d a r i s e n between H a d f i e l d s and the South Y o r k s h i r e P o l i c e , i n which H a d f i e l d s w e r e suing the South Y o r k s h i r e P o l i c e A u t h o r i t y f o r d a m a g e to p r o p e r t y , while the South Y o r k s h i r e P o l i c e A u t h o r i t y w e r e s u i n g H a d f i e l d s f o r the c o s t of p o l i c i n g o u t s i d e H a d f i e l d s . T h e a c t i o n t a k e n b y the m a n a g i n g d i r e c t o r o f H a d f i e l d s was not w e l c o m e to h i s p r o p r i e t o r s , a n d n e i t h e r a c t i o n s e e m e d to have g r e a t p r o s p e c t s o f s u c c e s s . It was to be hoped that the d i s p u t e would be s e t t l e d without c o m i n g to c o u r t . T h e Cabinet 1.

Rates

T o o k note.

T H E C H A N C E L L O R O F T H E E X C H E Q U E R d r e w the attention o f the C a b i n e t to t h e fact that i n f l a t i o n a r y p r e s s u r e s a c r o s s the w o r l d w e r e b r i n g i n g about a g e n e r a l r i s e i n the l e v e l o f i n t e r e s t r a t e s . E v e n i n 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 the equivalent o f the p r i m e r a t e h a d r i s e n to 9 i p e r cent, a n d the c o r r e s p o n d i n g r a t e s i n other l e a d i n g i n d u s t r i a l i s e d c o u n t r i e s w e r e 11 p e r cent i n J a p a n , 14 p e r cent i n F r a n c e , 17% p e r cent i n the U n i t e d States and 20 p e r cent i n Italy. T h e s e i n t e r n a t i o n a l t r e n d s h e l p e d to put the r i s e i n d o m e s t i c i n t e r e s t rates into p e r s p e c t i v e . T h e Cabinet T o o k note.

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T H E C H A N C E L L O R O F T H E E X C H E Q U E R s a i d that there had been a m e e t i n g of the National E c o n o m i c Development C o u n c i l ( N E D C ) the p r e v i o u s day. In a g e n e r a l d i s c u s s i o n of the e c o n o m i c situation and p r o s p e c t the a t m o s p h e r e h a d been r e a l i s t i c and c o n s t r u c t i v e , without any attempt to p r o v o k e confrontation. The General S e c r e t a r y of the T r a d e s U n i o n C o n g r e s s ( T U C ) had s a i d that the m e e t i n g was v e r y useful, and that the T U C hoped to continue to d i s c u s s c e r t a i n a s p e c t s of the m a t t e r . T h e T U C were beginning to acknowledge the i m p o r t a n c e of pay b a r g a i n i n g . Both S i r R a y m o n d Pennock, f o r the C o n f e d e r a t i o n of B r i t i s h Industry, and the G o v e r n o r of the Bank of E n g l a n d (the l a t t e r attending N E D C for the f i r s t t i m e ) h a d m a d e effective c o n t r i b u t i o n s . T h e Cabinet 3.

T o o k note.

Cabinet Office 6 M a r c h 1980

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MENT 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

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LIMITED CIRCULATION ANNEX C C ( 8 0 ) 9th C o n c l u s i o n s , M i n u t e 5 T h u r s d a y 6 M a r c h 1980 at 10. 30 a m

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T H E P R I M E M I N I S T E R r e c a l l e d that at t h e i r d i s c u s s i o n the p r e v i o u s week u p o n a c a s h l i m i t f o r the C i v i l S e r v i c e v o t e the C a b i n e t h a d a g r e e d that, i n so f a r as the p r o v i s i o n i n the v o t e so c a s h l i m i t e d was not enough t o f i n a n c e the p a y s e t t l e m e n t r e s u l t i n g f r o m t h e negotiations w h i c h the M i n i s t e r of State, C i v i l S e r v i c e D e p a r t m e n t , had been a u t h o r i s e d to u n d e r t a k e , the balance would h a v e to be found by f u r t h e r r e d u c t i o n s o f m a n p o w e r . M i n i s t e r s i n c h a r g e of D e p a r t m e n t s h a d been i n v i t e d to g i v e i m m e d i a t e c o n s i d e r a t i o n to the m e a n s o f r e d u c i n g the c o s t s o f m a n p o w e r i n t h e i r D e p a r t m e n t s b y Z-2j p e r cent i n 1980-81. T h e p r e l i m i n a r y soundings that h a d been taken o n the p r o s p e c t s f o r the p a y negotiations n o w c o n f i r m e d that i t would be e s s e n t i a l to a c h i e v e a n o v e r a l l s a v i n g of m a n p o w e r at the u p p e r end of that r a n g e . She would be sending out a m i n u t e a s k i n g that e v e r y M i n i s t e r i n c h a r g e o f a D e p a r t m e n t s h o u l d f i n d at l e a s t Z\ p e r cent i n 1980-81. E x c e p t i o n s would h a v e to be v e r y l i m i t e d i n d e e d , a n d confined to p r i s o n o f f i c e r s a n d a few v e r y s m a l l D e p a r t m e n t s w h i c h would be u n a b l e to a c c o m m o d a t e a cut o f a s m u c h a s 2 j p e r cent. If t h e r e w e r e to b e any q u e s t i o n o f g r e a t e r f l e x i b i l i t y , i t would h a v e t o b e f l e x i b i l i t y both w a y s : i f s o m e M i n i s t e r s wanted to find l e s s than 2$ p e r cent, o t h e r s w o u l d have to be a s k e d to f i n d m o r e , so that the o v e r a l l a v e r a g e was a s n e a r 2 j p e r cent a s p o s s i b l e . T h e M i n i s t e r of State, C i v i l S e r v i c e D e p a r t m e n t , would be getting i n t o u c h with M i n i s t e r s i n c h a r g e o f D e p a r t m e n t s to c o n f i r m t h e n e c e s s a r y r e d u c t i o n s . In d i s c u s s i o n the f o l l o w i n g p o i n t s w e r e m a d e a. It would help i n a c h i e v i n g the r e d u c t i o n s p r o p o s e d i f t h e r e c o u l d be g r e a t e r s c o p e f o r p r e m a t u r e r e t i r e m e n t . It would be h e l p f u l i f the C i v i l S e r v i c e D e p a r t m e n t c o u l d c o n s i d e r a m o d i f i c a t i o n o f the p r e s e n t v e r y l i m i t e d possibilities.

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b. T h e p r o s p e c t s f o r Staff Side a c q u i e s c e n c e i n m a n p o w e r r e d u c t i o n s would be d i m i n i s h e d i f i t b e c a m e n e c e s s a r y to r e s o r t to c o m p u l s o r y r e d u n d a n c i e s . It h a d so f a r been p o s s i b l e to a v o i d c o m p u l s o r y r e d u n d a n c i e s , and i n s o m e D e p a r t m e n t s a p o l i c y d e c i s i o n h a d been t a k e n not to r e s o r t to t h e m . A n o r m a l r a t e of wastage should m a k e that p o s s i b l e . c. It would be h e l p f u l f o r M i n i s t e r s to be g i v e n guidance o n what s h o u l d be s a i d to D e p a r t m e n t a l Staff S i d e s about the new r o u n d o f m a n p o w e r r e d u c t i o n s . T H E P R I M E M I N I S T E R , s u m m i n g u p 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 i t should be an object o f p o l i c y to a v o i d c o m p u l s o r y r e d u n d a n c i e s i f at a l l p o s s i b l e , a n d that i m p r o v e m e n t s i n the a r r a n g e m e n t s f o r p r e m a t u r e r e t i r e m e n t w e r e to be r e g a r d e d as p r e f e r a b l e . T h e Cabinet 1. T o o k note that the P r i m e M i n i s t e r would be i s s u i n g a m i n u t e o n the n e e d f o r m a n p o w e r r e d u c t i o n s i n the C i v i l S e r v i c e a v e r a g i n g a s n e a r 2-f p e r cent a s p o s s i b l e i n 1980-81. 2. T o o k note that the M i n i s t e r o f State, C i v i l S e r v i c e D e p a r t m e n t , would be getting i n t o u c h with M i n i s t e r s i n c h a r g e of D e p a r t m e n t s to c o n f i r m the n e c e s s a r y r e d u c t i o n s . 3. A g r e e d that o n l y a s a l a s t r e s o r t s h o u l d c o m p u l s o r y r e d u n d a n c i e s be adopted a s a m e a n s of a c h i e v i n g m a n p o w e r r e d u c t i o n s i n the C i v i l Service. 4. Invited the M i n i s t e r of State, C i v i l S e r v i c e D e p a r t m e n t , to c o n s i d e r , i n c o n s u l t a t i o n with o t h e r M i n i s t e r s a s a p p r o p r i a t e , the p o s s i b i l i t y o f i m p r o v e d t e r m s f o r p r e m a t u r e r e t i r e m e n t f r o m the C i v i l S e r v i c e . 5. Invited the M i n i s t e r of State, C i v i l S e r v i c e D e p a r t m e n t , to a r r a n g e f o r M i n i s t e r s t o b e g i v e n suitable guidance o n what s h o u l d be s a i d to D e p a r t m e n t a l Staff S i d e s about the n e w r o u n d of manpower reductions. Cabinet O f f i c e

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