N o t e o f a M e e t i n g o f M i n i s t e r s h e l d a t Chequers
a t ^ . 3 0 . ; . p . m.
on JRXDAY, 19TH
. A U G P S T T : 1949.
!: :
FRSSENT?-
Prime
Minister
Secretary of State for Foreign Affairs
C h a n c e l l o r o f t h e Exchequer
P r e s i d e n t o f the Board o f T r a d e
M i n i s t e r o f F u e l and Powex"
S i r Edward B r i d g e s
1.
DEVALUATION
The m e e t i n g had "been a r r a n g e d f o r
the purpose o f
the t i m i n g o f d e v a l u a t i o n w i t h t h e C h a n c e l l o r
landed a t N o r t h o l t A i r p o r t e a r l i e r
month's a b s e n c e i n S w i t z e r l a n d ,
discussing
o f t h e E x c h e q u e r , who had
t h a t a f t e r n o o n , on r e t u r n i n g a f t e r
a
The m e e t i n g l a s t e d t h r e e hours and c o v e r e d
much ground b y way o f r e c a p i t u l a t i o n
o f arguments adduced i n
previous
M i n i s t e r i a l d i s c u s s i o n s d u r i n g t h e p a s t month.
The immediate p o i n t d i s c u s s e d was w h e t h e r d e v a l u a t i o n
should
"be c a r r i e d i n t o e f f e c t
on August 28th o r September 4-th, i . e.
the
feasible
o p e r a t i o n b e f o r e t h e Vfashington
started,
dates f o r
the
talks
A t the o u t s e t the C h a n c e l l o r expressed h i m s e l f
w h o l l y c o n v i n c e d t h a t we s h o u l d b e n e f i t
as s t i l l
i n the i n t e r e s t
arrangements t o be made i n t h e Washington
It
the d i s c u s s i o n s
or a f t e r
opened were as
of
United S t a t e s
the
was n o t e d t h a t we i n t e n d e d n o t t o g i v e
the utmost i m p o r t a n c e
Y/ashington
against
follows
the
M o n e t a r y Fund t h e n o t i c e r e q u i r e d under the C o n s t i t u t i o n .
therefore
other
discussions.
t h e t h r e e p o i n t s w h i c h w e i g h e d most w i t h M i n i s t e r s
devaluation before
(a)
colleagues
o f t h i s c o u n t r y as p a r t o f
On t h e i s s u e w h e t h e r t o d e v a l u e b e f o r e
discussions,
not
on b a l a n c e f r o m d e v a l u a t i o n .
But in t h e c o u r s e o f d i s c u s s i o n he a c c e p t e d t h e v i e w o f h i s
t h a t d e v a l u a t i o n would be
two
International
I t was
t o make sure t h a t we c a r r i e d
the
and Canadian G-overnmeniswith u s , and t h i s meant due
consultation,
(b)
devalue i f
The. C h a n c e l l o r had n o t made up h i s m i n d . t o what r a t e we
we d i d d e v a l u e .
He w o u l d be most r e l u c t a n t
t o go below
should
$3* 0 ( t h e F o r e i g n S e c r e t a r y f a v o u r e d $3. 2) , and wanted t o be sure
that
t h e Americans w e r e s a t i s f i e d t h a t t h e d e g r e e o f d e v a l u a t i o n e f f e c t e d was
sufficient
(c)
t o e n s u r e t h a t we d i d n o t have t o r e p e a t t h e o p e r a t i o n
again,
I t was important t o make sure t h a t t h e Americans d i d n o t
r e g a r d the d e g r e e
o f d e v a l u a t i o n w h i c h we w e r e c a r r y i n g out as e x c e s s i v e
and e n t i t l i n g them t o t a k e c o u n t e r - a c t i o n w h i c h w o u l d f r u s t r a t e
our
devaluation.
On t h e p o i n t t h a t
f o r the operation i f
i t would be d i f f i c u l t
c a r r i e d o u t i n Washington,
t o obtain, s e c u r i t y
the C h a n c e l l o r o f
Exchequer t h o u g h t t h a t t h i s w o u l d n o t p r e s e n t d i f f i c u l t i e s
was d i s c u s s e d w i t h Mr. Acheson and Mr. Snyder
As f o r
the
matter
alone.
t h e argument t h a t we d i d n o t want d e v a l u a t i o n t o appear
as something done a t t h e d i c t a t i o n
Chancellor s a i d that i f
o f t h e U n i t e d S t a t e s Government,
the
i t was p l a n n e d t o d e v a l u e on 18th September he
would f l y back about 16th S e p t e m b e r , on t h e c o n c l u s i o n
and t h a t he would n o t f e e l
as p a r t o f
if
the
any d i f f i c u l t y
o f the
talksj
in p u t t i n g d e v a l u a t i o n
across
o t h e r arrangements made w i t h t h e Americans and Canadians.
I n d e e d , he f e l t
that, i f
d e v a l u a t i o n was t o b e c a r r i e d o u t , s a y ,
28th A u g u s t , he d i d n o t know on what ground he c o u l d d e f e n d i t .
on
It
would
b e asked what change o f c i r c u m s t a n c e s had occur/red s i n c e he made h i s
l a s t pronouncement on the s u b j e c t ,
t h a t we were d o i n g t h i s
Americans -
and t h e r e c o u l d be n o answer e x c e p t
i n t h e hopes o f g e t t i n g something out o f
the
w h i c h he t h o u g h t would be f a r more damaging p o l i t i c a l l y
than
i f we d e v a l u e d on 18th September.,
The P r i m e M i n i s t e r
(1)
summed up the c o n c l u s i o n s as
M i n i s t e r s agreed in p r i n c i p l e
to devaluation,
which t h e y w o u l d do i n t h e c o u r s e o f September as p a r t o f
follows
as s o m e t h i n g
the
general
arrangements w h i c h would emerge f r o m t h e Washington t a l k s , and t h a t
s h o u l d be s o p r e s e n t e d t o t h e
(2)
public.
The l e v e l t o w h i c h we should d e v a l u e was a m a t t e r which we
would d i s c u s s i n Washington as p a r t o f
there.
it
the o t h e r arrangements t o be made
(3)
P r o v i s i o n a l l y we s h o u l d aim a t c a r r y i n g o u t d e v a l u a t i o n
18th S e p t e m b e r ,
i n which event t h e C h a n c e l l o r would p r o b a b l y
on
leave
?/ashingtan on 16th September.
r
(4)
I n the l i g h t o f
t h i s time f a c t o r ,
the F o r e i g n S e c r e t a r y
and
t h e C h a n c e l l o r o f t h e Exchequer s h o u l d b o t h l e a v e on t h e M a u r e t a n i a
on 3 1 s t August.
(5)
Thursday,
2*
The m e e t i n g o f M i n i s t e r s p r o v i s i o n a l l y
arranged
for
25th A u g u s t , should b e p o s t p o n e d u n t i l Monday, 29th August.
MEASURES TO ACCOMPANY DEVALUATION
A s h o r t d i s c u s s i o n t o o k p l a c e on t h i s
Government e x p e n d i t u r e .
subject.
The C h a n c e l l o r o f t h e Exchequer s a i d t h a t ,
while
i n h i s v i e w i t w o u l d be n e c e s s a r y t h a t f u r t h e r measures s h o u l d be
taken
t o check i n f l a t i o n ,
such
t h e s e should n o t be o f
the " o r t h o d o x " v a r i e t y
as would b e a s s o c i a t e d w i t h a Geddes a x e .
e x p e n d i t u r e must n o t s u b s t a n t i a l l y
social services.
affect
R e d u c t i o n i n Government
t h e f o o d s u b s i d i e s o r the
I t was a g r e e d , h o w e v e r , t h a t t h e r e was advantage
pursuing a d m i n i s t r a t i v e
in
economies v i g o r o u s l y on the l i n e s s e t out i n the
Prime M i n i s t e r *s d i r e c t i v e .
The p o s s i b i l i t y was a l s o mentioned o f a b o l i s h i n g one o r two
Ministries
in order t o save
costs.
I t was a l s o g e n e r a l l y a g r e e d t h a t r e d u c t i o n s
expenditure,
investment,
and c r e d i t p o l i c y ,
in public
s h o u l d a l l be
t o g e t h e r and p r e s e n t e d t o g e t h e r i n any p u b l i c h a n d l i n g o f
3.
considered
this
matter.
DEFENCE
The F o r e i g n S e c r e t a r y s a i d t h a t ,
appropriation
as the U n i t e d S t a t e s
f o r d e f e n c e a i d t o t h e A t l a n t i c Powers had.been c u t b y
h a l f , we s h o u l d a l s o c u t b y h a l f t h e second i n s t a l m e n t o f
p r o d u c t i o n f o r Western Union d e f e n c e ,
had a g r e e d t o u n d e r t a k e
extra
t o t a l l i n g £50 m i l l i o n s , which we
i n t h e American f i n a n c i a l y e a r 1950/1.
He
p r o p o s e d t o speak i n t h e s e terms t o the M i n i s t e r o f D e f e n c e e a r l y i n the
f o l l o w i n g week.
I n p r e s e n t i n g t h i s d e c i s i o n we s h o u l d b e a r i n mind t h a t
i t was n o t so much a q u e s t i o n o f A m e r i c a d e f e n d i n g u s , as o f our
t o d e f e n d America,
helping
The F o r e i g n S e c r e t a r y s a i d t h a t he had now had an
o f c o n s i d e r i n g t h e q u e s t i o n o f wages i n the d i s t r i b u t i v e
"been d i s c u s s e d a t t h e l a s t m e e t i n g o f t h e C a b i n e t .
opportunity
t r a d e s which had
He thought t h a t
r e f e r hack t h e d e c i s i o n o f t h e Wages C o u n c i l would g i v e r i s e t o
difficulties
and might r e s u l t
t h e ToUeC. "breaking down.
between £15
to
great
i n t h e p r e s e n t wages p o l i c y v i s a v i s
He a l s o t h o u g h t t h a t t h e c o s t w o u l d n o t he
and £20 m i l l i o n s , as s u g g e s t e d , but £5 m i l l i o n s o r £6 m i l l i o n s
s i n c e most o f the f i r m s c o n c e r n e d w e r e a l r e a d y p a y i n g more than the
minimum,
He t h o u g h t t h e b e s t way t o h a n d l e i t w o u l d b e , n o t t o w r i t e
a l e t t e r , b u t t h a t a M i n i s t e r s h o u l d see t h e P r e s i d e n t and S e c r e t a r y
o f each o f
the Unions c o n c e r n e d and s h o u l d s a y t h a t t h e Government
did not reject
the c l a i m s , b u t t h a t t h e p r e s e n t moment was
inconvenient
and t h e y t h o u g h t t h e m a t t e r s h o u l d b e b r o u g h t up a g a i n i n O c t o b e r ,
I t was a g r e e d t h a t
the Minister
the F o r e i g n S e c r e t a r y s h o u l d c o n s u l t
o f Labour" and t h e o t h e r M i n i s t e r s concex-ned and t a k e
on t h e s e l i n e s e a r l y i n the f o l l o w i n g week.
This a c t i o n would
s e e i n g Mr. Tews on and s p e a k i n g t o him on the l i n e s
proposed,
with
action
include
HO OlROuLATTCW BBOCBP
B e f o r e t h e i r f o r m a l m e e t i n g on 1.3th
t h e members o f t h e C a b i n e t met a t 10.30
October
a. m, t o
consider
"whether a G e n e r a l E l e c t i o n s h o u l d b e h e l d i n t h e autumn
o r p o s t p o n e d u n t i l the s p r i n g o f 1950.
T h i s m e e t i n g was
a t t e n d e d b y a l l members o f t h e C a b i n e t e x c e p t the M i n i s t e r
o f Defence
(who was abroad)
(who was i n d i s p o s e d ) .
and t h e M i n i s t e r o f
The C h i e f Whip a l s o
Agriculture
attended.
No S e c r e t a r y was p r e s e n t .
A t the c o n c l u s i o n o f
u n t i l n o o n , t h e Prime M i n i s t e r
t h i s m e e t i n g , which
lasted
gave i n s t r u c t i o n s f o r
the
f o l l o w i n g communique t o be i s s t i e d t o the P r e s s t­
" H a v i n g r e g a r d t o the
effects
disturbing
on t r a d e and. i n d u s t r y and on t h e
national effort
by t h e c o n t i n u a n c e
of
s p e c u l a t i o n s as t o an e a r l y G e n e r a l E l e c t i o n ,
t h e Prime M i n i s t e r t h i n k s i t r i g h t
to
inform the country of h i s d e c i s i o n n o t
advise His Majesty t o d i s s o l v e
this year. "
to
Parliament
As I t bag not yet feHtt deoMed nfym pat&lo
refereaee should lie made t o the p m s i M i i t y o f an e a r l y
Eleotioa, 1 have ijhm&lb i t r i ^ x t t o esslttde £roa tiae Miawtes
of this moraSag^s Cabinet any sysaaary o f t i e d t s c o s s i m afeeaft
a further appeal t o the electorate,
I r e a l i s e that t h i s
mkaa the Minutes sosaewhat unreal, ana say g l w soiaa Ministers
the imjrossicstt that you h a w decided to c a r r y em f o r a iaKfc
longer period than you h&m In f o o t i n stfad,
If,
hosse^er.
I t i s agrees, at the Party meeting saext wee!t, that s o w
e a r l y statement should he saade to the e f f e c t feat an e a r l y
B&setien this year i s i n e v i t a b l e , X can than substitisSje
f o r this record a rather f o l l e r Minute nfeieh r e f l e c t s aero
aoour&tely the tc&e o f t h i s smttBjg's diseusa&icKU
(Sgd)
NORlvIAN BROOK
C M . (50)
5th
Conclusions
Record o f t h e C a b i n e t ' s Meeting
on 25th F e b r u a r y , 1950.
The f o l l o w i n g
is
a fuller
a t t h e i r f i r s t meeting a f t e r
M i n u t e s i n c l u d e d no r e f e r e n c e
Minister
should l e t i t
record o f the C a b i n e t ' s
the General E l e c t i o n .
The
discussion
circulated
to the p o s s i b i l i t y t h a t t h e Prime
be known t h a t he t h o u g h t i t
inevitable
a n o t h e r G e n e r a l E l e c t i o n s h o u l d be h e l d b e f o r e t h e end o f
that
the
year.
I t was t h o u g h t a t t h e t i m e t h a t t h e P r i m e M i n i s t e r might g i v e
indication
to that e f f e c t
and t h e f u l l e r
i n h i s speech i n t h e d e b a t e on t h e Address^
t h e C a b i n e t s d i s c u s s i o n , which i s
record of
some
9
b e l o w , was p r e p a r e d i n t h e e x p e c t a t i o n t h a t i t would become
set
out
possible
t o p r i n t t h i s i n s u b s t i t u t i o n f o r t h e s h o r t e r v e r s i o n which had been
c i r c u l a t e d on t h e day f o l l o w i n g
the meeting.
In the e v e n t ,
Prime M i n i s t e r d e c i d e d n o t t o make any r e f e r e n c e t o t h e
o f an e a r l y E l e c t i o n .
This f u l l e r
possibility
account o f the C a b i n e t ' s
c u s s i o n was n o t t h e r e f o r e g i v e n any c i r c u l a t i o n ^
but i t
h e r e f o r t h e purpose o f
record.
completing
The C a b i n e t met t o
General E l e c t i o n .
the h i s t o r i c a l
the
is
dis­
reproduced
c o n s i d e r t h e s i t u a t i o n r e s u l t i n g from
With s i x r e t u r n s s t i l l
outstanding,
the
314 s e a t s had
been won by L a b o u r , 294 by C o n s e r v a t i v e s and t h e i r s u p p o r t e r s , 8 by
L i b e r a l s and 2 by I r i s h N a t i o n a l i s t s .
Speaker's.
The r e m a i n i n g s e a t was t h e
Thus, w h a t e v e r t h e r e s u l t s i n t h e s i x
outstanding
c o n s t i t u e n c i e s , Labour would have a m a j o r i t y o v e r a l l o t h e r P a r t i e s
t h e new House o f
in
Commons.
THE PRIME MINISTER s a i d t h a t t h e K i n g ' s Government must be
c a r r i e d on a n d , as Labour would have a m a j o r i t y ,
the proper
was f o r a Labour A d m i n i s t r a t i o n t o remain i n o f f i c e
W i t h so s m a l l a m a j o r i t y ,
weak p o s i t i o n :
for
course
the time
h o w e v e r , t h e Government would b e i n a v e r y
t h e y would h a v e g r e a t d i f f i c u l t y
in
transacting
Government b u s i n e s s i n t h e House o f Commons, and would b e u n a b l e
c a r r y t h r o u g h any o f
being.
t h e major l e g i s l a t i o n
foreshadowed i n t h e
to
Party's
Election Manifesto.
those c o n d i t i o n s ;
No Government c o u l d c a r r y on f o r l o n g under
and he h i m s e l f
believed that, after
the
necessary
Supply b u s i n e s s had been g o t through and t h e F i n a n c e B i l l had been
p a s s e d , t h e r e must be a f u r t h e r
appeal to the e l e c t o r a t e .
It
was
f o r c o n s i d e r a t i o n w h e t h e r , i n announcing h i s i n t e n t i o n t o c a r r y on
f o r t h e t i m e b e i n g , he should l e t i t b e known t h a t he t h o u g h t
it
i n e v i t a b l e t h a t a n o t h e r G e n e r a l E l e c t i o n s h o u l d be h e l d b e f o r e
end o f t h e
year.
M e a n w h i l e , some r e c o n s t r u c t i o n o f
necessary;
t h e Government would be
and he asked t h a t , i n o r d e r t o f a c i l i t a t e
M i n i s t e r s should p l a c e t h e i r o f f i c e s
should, o f
the
this,
at his disposal.
course, continue to supervise the current
all
Ministers
administration
o f t h e i r Departments u n t i l h i s w i s h e s were made known t o
them.
The C a b i n e t a g r e e d t h a t a Labour A d m i n i s t r a t i o n must remain
in o f f i c e
for
the time b e i n g .
D i s c u s s i o n turrfed on t h e
question
whether any e a r l y i n t i m a t i o n s h o u l d be g i v e n t h a t a f u r t h e r
Election
must be h e l d b e f o r e l o n g .
would be
It
was g e n e r a l l y a g r e e d t h a t i t
i n e x p e d i e n t t o make a n y announcement t o t h i s e f f e c t
been an o p p o r t u n i t y o f
before
t h e r e had
consultation with the National Executive
t h e Labour P a r t y and w i t h t h e P a r l i a m e n t a r y Labour P a r t y .
t o t h e s e c o n s u l t a t i o n s , h o w e v e r , most M i n i s t e r s f e l t
would be g a i n e d by a t t e m p t i n g
to conceal t h e i r b e l i e f
that
of
Subject
nothing
t h a t an
early
E l e c t i o n was i n e v i t a b l e and t h a t t h e r e m i g h t even be some a d v a n t a g e
in
letting
In
t h i s be known i n t h e c o u r s e o f
support o f
t h e d e b a t e on t h e A d d r e s s .
t h i s v i e w i t was a r g u e d t h a t t h e c o u n t r y ' s g r e a t e s t need a t
t h e p r e s e n t t i m e was f o r a s t r o n g and s t a b l e Government a b l e t o
d e c i s i o n s which might b e t e m p o r a r i l y u n p o p u l a r - e . g .
take
in relation
to
t h e l e v e l o f Government e x p e n d i t u r e , t h e i n v e s t m e n t programme, wage
increases e t c .
R e c e n t e x p e r i e n c e had shown t h e d i f f i c u l t y
such d e c i s i o n s under t h e shadow o f an a p p r o a c h i n g E l e c t i o n ;
of
and from
t h i s p o i n t o f v i e w t h e r e was e v e r y t h i n g t o be s a i d f o r h o l d i n g
f u r t h e r E l e c t i o n b e f o r e t h e end o f
the. y e a r .
taking
a
Some M i n i s t e r s t h o u g h t i t would h a v e been p r e f e r a b l e i f
n e x t G e n e r a l E l e c t i o n c o u l d h a v e been d e f e r r e d u n t i l t h e
i n t r o d u c e d b y t h e Government d u r i n g t h e i r f i r s t
1945
t o 1950
had borne f r u i t .
the
policies
period of o f f i c e
from
A t t h e r e c e n t E l e c t i o n many Labour
c a n d i d a t e s had been embarrassed by c o m p l a i n t s a b o u t t h e w o r k i n g o f
n a t i o n a l i s e d i n d u s t r i e s , t h e h i g h c o s t o f l i v i n g and t h e s h o r t a g e
houses.
It
would be a d v a n t a g e o u s i f ,
before the next E l e c t i o n ,
A l o n g e r i n t e r v a l would a l s o be u s e f u l f o r
of
the
Government c o u l d have had t i m e t o remove some o f t h e grounds f o r
complaints.
these
t h e purpose
o f p e r s u a d i n g t h o s e who had v o t e d on t h i s o c c a s i o n f o r t h e
Liberal
P a r t y t h a t t h e y were more l i k e l y i n p r a c t i c e t o be a b l e t o
secure
t h e i r fundamental o b j e c t i v e s b y s u p p o r t i n g
I t was, however,
difficulties
of
the general view o f
Party.
the cabinet that
and t h e c o u n t r y ' s u r g e n t need o f
s t r o n g and s t a b l e g o v e r n m e n t , would make i t i n e v i t a b l e
a f u r t h e r G e n e r a l E l e c t i o n should be h e l d b e f o r e t h e end o f t h e
The q u e s t i o n whether some i n d i c a t i o n t o t h i s e f f e c t
in the course of
l i g h t of
the
t r a n s a c t i n g Government b u s i n e s s i n t h e House o f
Commons w i t h so s m a l l a m a j o r i t y ,
period of
t h e Labour
the
a
that
year.
should be g i v e n
the d e b a t e on t h e A d d r e s s c o u l d be d e t e r m i n e d i n
t h e c o n s u l t a t i o n s which would be h e l d , d u r i n g t h e
the
following
week, w i t h t h e N a t i o n a l E x e c u t i v e o f t h e Labour P a r t y and w i t h t h e
P a r l i a m e n t a r y Labour
In further
be u s e f u l
if
Party.
d i s c u s s i o n t h e s u g g e s t i o n was made t h a t i t
would
t h e C a b i n e t c o u l d g i v e some p r e l i m i n a r y c o n s i d e r a t i o n
the country's financial
s i t u a t i o n before the Chancellor o f
Exchequer f o r m u l a t e d h i s f i n a l
Budget p r o p o s a l s .
This
to
the
suggestion
was a p p r o v e d .
The C a b i n e t ' s c o n c l u s i o n s w e r e a s
(1)
It
was t h e d u t y o f a Labour A d m i n i s t r a t i o n t o c o n t i n u e
office,
in
i n o r d e r t h a t t h e K i n g ' s Government m i g h t be
carried on.
(2)
follows:­
­
A p u b l i c announcement t o t h i s e f f e c t
forthwith:
members o f
should b e i s s u e d
t o t h i s t h e r e s h o u l d be added a c a l l
to
all
t h e community t o t u r n t h e i r e f f o r t s , now t h a t
t h e E l e c t i o n was o v e r , t o c a r r y i n g on t h e n e c e s s a r y
work o f
(3)
the nation.
A l l M i n i s t e r s should place t h e i r o f f i c e s
Minister's
disposal i n order to f a c i l i t a t e
reconstruction of
( 4 )
his
t h e Government.
A t t h e i r m e e t i n g on 2nd March t h e C a b i n e t s h o u l d
t h e terms o f
t h e K i n g ' s Speech and a d r a f t o f
Defence White
(5)
a t t h e Prime
A t a meeting o f
consider
the
Paper.
t h e C a b i n e t on 3rd
March t h e C h a n c e l l o r
t h e Exchequer s h o u l d g i v e h i s c o l l e a g u e s a b r o a d
o f t h e f i n a n c i a l
position of
t h e c o u n t r y and o f
if
necessary,
following
( 6 )
this
in
statement
could,
be c o n t i n u e d a t a f u r t h e r m e e t i n g i n
the
week.
The Prime M i n i s t e r
Brown was w i l l i n g
Speaker.
discussion of
picture
t h e main
f a c t o r s which he would h a v e t o t a k e i n t o a c c o u n t
framing h i s B u d g e t :
If
should a s c e r t a i n whether C o l o n e l
t o be nominated f o r r e - e l e c t i o n
Clifton
as
s o , t h e C h i e f Whip s h o u l d s u g g e s t t o him
t h a t Mr. D a v i d Kirkwood m i g h t p r o p o s e h i s e l e c t i o n ,
t h a t a member o f
that
( 7 )
of
t h e O p p o s i t i o n m i g h t be a s k e d t o
and
second
proposal.
As t h e s t r e n g t h o f
t h e two main P a r t i e s i n t h e House o f
Commons was so n e a r l y e q u a l , t h e C h i e f Whip s h o u l d
ascertain
the o f f i c e
whether i t would be p o s s i b l e t o a r r a n g e
of
by a member o f
Cabinet O f f i c e ,
S.W.1,
25TH FEBRUARY,
1950.
Deputy Chairman o f Committees t o be
the Opposition.
for
filled
BUCKINGHAM
PALACE
TOP SECRET
15th
March,
1950.
A t t h e i r m e e t i n g on t h e 9 t h March t h e C a b i n e t had
some p r e l i m i n a r y d i s c u s s i o n about t h e a d v i c e which t h e
P r i i a e M i n i s t e r s h o u l d t e n d e r t o Hin M a j e s t y i f t h e G o v e r n ­
ment were d e f e a t e d i n t h e d e b a t e on t h e A d o r e s s .
I d i d n o t think i t r i g h t t o include i n the
C a b i n e t M i n u t e s a n y t h i n g more than t h e b r i e f e s t r e f e r e n c e t o
thisj
but I have made a p r i v a t e r e c o r d o f what was s a i d o n
this point.
A copy o f t h i s i s e n c l o s e d .
I have sent a
c o p y t o R i c k e t t , b u t h a v e s u g g e s t e d t h a t ho need n o t show i t
t o t h e Prime M i n i s t e r a t the p r e s e n t s t a g e .
The o r i g i n a l
w i l l be bound u p , i n due c o u r s e , w i t h a y p e r s o n a l volume o f
the Cabinet Minutes.
No j o t h e r c o p i e s have been made.
(Signed) NORMAN
CROOK.
10, Maiming $$tr&tl,
Thank you for your minute of 15th March enclosing for my personal information a copy of a no-circulation record which you have made of the Cabinet s discussion on 9th jjarch about the situation which would have arisen if the Government had been defeated in the Debate on the Address. J
I am very glad to have this which may well,
as you say, be needed on some future occasion in
this Par1iame n t.
15th March, 1950 TOP SECRET
MR. KICKETf
-
I
tion,
t h i n k y o u should h a v e , f o r y o u r p e r s o n a l
informa­
t h e e n c l o s e d c o p y o f a "?lo G i r c u l a t i O E ' " r e c o r d which
h a v e made o f
I
t h e C a b i n e t ' s d i s c u s s i o n on 9th March about t h e
s i t u a t i o n which would h a v e a r i s e n i f
t h e Government had been
d e f e a t e d i n t h e d e V - t e on t h e A d d r e s s .
I
doubt i f
you w i l l
t o the Prime M i n i s t e r .
t h i n k i t n e c e s s a r y t o show t h i s
But y o u may l i k e
t o h a v e i t by you i n
case a s i m i l a r s i t u a t i o n should a r i s e a t a l a t e r
stage in
Parliament.
(Signed) NORMAN BROOK.
1 5 t h M a r c h . 19*50
this
NO CIRCULATION RECORD
TOP
SECRET
CM,(50)
(9th
9th Conclusions. Minute 1
M a r c h , 1950
-
9.30
a.m.)
THE PRIMJ;; MINISTER s a i d t h a t t h e two C o n s e r v a t i v e amendments
t o t h e A d d r e s s , b o t h t h a t on t h e I r o n and S t e e l A c t and t h a t on
H o u s i n g , would b e p r e s s e d t o a d i v i s i o n ;
and he had been
what a d v i c e he s h o u l d t e n d e r t o H i s M a j e s t y i f
defeated in either of
these d i v i s i o n s .
considering
t h e Government w e r e
He d i d n o t t h i n k i t
r i g h t t o ask f o r a D i s s o l u t i o n so soon a f t e r
the General
would b e
Election,
and h e was i n c l i n e d t o t h i n k t h a t h i s p r o p e r c o u r s e would b e t o
a d v i s e t h e King t o send f o r M r . C h u r c h i l l .
The r e s u l t i n g
P a r l i a m e n t a r y s i t u a t i o n would b e v e r y u n s a t i s f a c t o r y ,
for
the
C o n s e r v a t i v e s , b e i n g i n a m i n o r i t y , would f i n d i t
e v e n more
difficult
t o c a r r y o n " t h e e s s e n t i a l b u s i n e s s o f Government!
but t h i s
situation
would h a v e been c r e a t e d b y t h e C o n s e r v a t i v e s and h e t h o u g h t t h e y
s h o u l d b e f o r c e d t o assume t h e r e s p o n s i b i l i t y f o r h a n d l i n g
I n d i s c u s s i o n emphasis was l a i d upon t h e
which t h e Labour P a r t y would f a c e i f
it.
embarrassments
t h e y went i n t o O p p o s i t i o n i n
present Parliament.
The C o n s e r v a t i v e s , i f
would h a v e t o p r e s e n t
some k i n d o f programme t o t h e Hoiise, and t h e
L a b o u r P a r t y would f i n d i t
some o f
the features of
be i n g r e a t e r d i f f i c u l t y
with t h e i r majority,
difficult
t h e y assumed
office,
to avoid challenging at
t h a t programme.
least
But t h e Labour P a r t y would
than t h e C o n s e r v a t i v e s were a t p r e s e n t
t h e y would b e i n a p o s i t i o n t o d e f e a t
t o make was l i k e l y t o l e a d t o a Government d e f e a t .
necessary
T h e y would t h u s
b e f a c e d w i t h t h e u n p l e a s a n t dilemma o f assuming r e s p o n s i b i l i t y
refraining
supporters.
a period of
for,
the
Government a t any t i m e and any c h a l l e n g e which t h e y f o u n d i t
t u r n i n g t h e Government o u t and f o r c i n g
a Dissolution or,
for
alternatively,
from c h a l l e n g i n g p o l i c i e s which w e r e d i s t a s t e f u l
to
their
A t t h e p r e s e n t t i m e t h e c o u n t r y ' s g r e a t e s t n e e d was
political
stability;
the
a n d , as t h e s t r e n g t h o f t h e two
main P a r t i e s i n t h e House o f
duty o f
for
Commons was so e v e n l y b a l a n c e d , i t
b o t h t o p r a c t i s e m o d e r a t i o n and a v o i d u n n e c e s s a r y
t h e t i m e b e i n g - a t any r a t e u n t i l t h e e s s e n t i a l
was t h e
controversy
financial
b u s i n e s s o f t h e s p r i n g and summer had been c o m p l e t e d .
T h e r e was
some r e a s o n t o b e l i e v e t h a t M r . C h u r c h i l l * s a c t i o n i n making an
immediate c h a l l e n g e t o t h e Government i n t h e d e b a t e on t h e A d d r e s s
m i g h t b e r e g a r d e d as i r r e s p o n s i b l e by a s u b s t a n t i a l
section of
public
o p i n i o n , which r e c o g n i s e d t h a t t h e Labour a d m i n i s t r a t i o n were
right
i n d e c i d i n g t h a t , d e s p i t e t h e i r narrow m a j o r i t y ,
duty
t o c a r r y on t h e K i n g * s Government.
for
i t was t h e i r
I t might t h e r e f o r e be
expedient
t h e P r i m e M i n i s t e r t o g i v e a w a r n i n g , d u r i n g t h e d e b a t e on t h e
Address, that i f
t h e Labour P a r t y w e r e p r e v e n t e d , by f a c t i o u s
i r r e s p o n s i b l e a c t i o n on t h e p a r t o f
t h e i r duty o f
t h e O p p o s i t i o n , from
discharging
c a r r y i n g on t h e X i n g ' s Government, a f u r t h e r
t h e p e o p l e m i g h t have t o be made.
and
appeal
T h i s would h a v e t h e e f f e c t
to
of
b r i n g i n g home t o t h e House t h e s e r i o u s r i s k s t h a t w e r e b e i n g r u n .
W h i l e t h e s e n t i m e n t u n d e r l y i n g t h i s v i e w commanded g e n e r a l
s u p p o r t , i t was p o i n t e d o u t t h a t an e a r l y D i s s o l u t i o n was h a r d l y
practicable,
in view of
the necessity f o r
making t h e o t h e r f i n a n c i a l
p a s s i n g t h e Budget and
p r o v i s i o n w i t h o u t which t h e
b u s i n e s s o f a d m i n i s t r a t i o n c o u l d n o t be c a r r i e d
ordinary
on.
THE PRIME MINISTER, i n c o n c l u s i o n , s a i d t h a t he was
grateful
t o h i s c o l l e a g u e s f o r t h i s e x p r e s s i o n o f t h e i r v i e w s , which he
would b e a r i n mind.
A t t h e moment t h i s q u e s t i o n was o n l y
f o r he had no r e a s o n t o f e a r
hypothetical,
t h a t t h e Government would i n f a c t
d e f e a t e d i n t h e d i v i s i o n s i n t h e d e b a t e on t h e A d d r e s s .
be
And t h e
issues
i n v o l v e d w e r e so g r a v e t h a t he would w i s h t o have an o p p o r t u n i t y o f
considering
them a g a i n , and p o s s i b l y h o l d i n g f u r t h e r d i s c u s s i o n s
with
some o f h i s c o l l e a g u e s , b e f o r e he f i n a l l y made up h i s mind what
a d v i c e h e would t e n d e r t o H i s M a j e s t y i f
e v e n t be
defeated.
Cabinet O f f i c e ,
S.W.I.
t h e Government s h o u l d i n
the
PEKSUNAL
21st
June,
1950.
A t t h e i r m e e t i n g on i ^ t h June the G a b i a a t c o n ­
s i d e r e d w h e t h e r , i f F i e l d Marshal Smuts d i e d , t r i b u t e s t o
h i s memory s h o u l d be made i n both Houses o f P a r l i a m e n t .
A s t h e F i e l d Marshal was s t i l l a l i v e , i t s c a r c e l y
seemed d e c e n t t o r e c o r d t h i s d i s c u s s i o n i n t h e C a b i n e t
minutes.
I h a v s , h o w e v e r , made a "No C i r c u l a t i o n R e c o r d " ;
and I t h i n k you s h o u l d have a copy o f t h i s f o r r e f e r e n c e
when t h e F i e l d M a r s h a l d i e s , whether t h i s o c c u r s i n t h e
n e a r e r o r t h e more d i s t a a t f u t u r e .
I therefore attach a
copy.
I
have a l s o
s e n t a copy o f
the record
to (Signad)
NORMAN
iSKQt^
Kickett. S i r P e r c i v a l e L i e s c h i n g , K.C.B., K.C.M.G.,
Coramon w e a l t h R e l a t i o n s O f f i c e .
HP.. KICKEIT
A t t h e i r meeting on 15th June t h e C a b i n e t c o n ­
s i d e r e d w h e t h e r , i f F i e l d Marshal Saiuts d i e d ,
h i s memory s h o u l d be made i n both Houses o f
As the F i e l d Marshal was s t i l l
tributes
to
parliament.
alive,
it
s c a r c e l y seemed d e c e n t t o r e c o r d t h i s d i s c u s s i o n i n t h e
Cabinet minutes.
Record";
I h a v e , h o w e v e r , made a "No Circulation
and I think you should h a v e a c o p y o f t h i s
r e f e r e n c e when t h e F i e l d Marshal d i a s , whether t h i s
i n t h e n e a r e r o r t h e more d i s t a n t f u t u r e .
I
for
occurs
therefore
attach a copy.
I
have a l s o
s e n t a copy o f t h e r e c o r d t o t h e
Commonwealth U e l & t i o n s O f f i c e
1 2 1 s t J u n e . 1950
(Liesching).
i\iO CIRCULATION RECORD
C M . ( 5 0 ) ^6th
(15th
FIELD
MARSHAL
SMUTS
conclusions
J u n e , 1950
- 10.0
a.m.)
THE PRIME MINISTER s a i d t h a t t h e l a t e s t r e p o r t s on t h e
course o f
F i e l d M a r s h a l Smuts' i l l n e s s w e r e d i s q u i e t i n g ;
had been c o n s i d e r i n g w h e t h e r , i f
and he
t h e F i e l d Marshal d i e d , i t
would be
a p p r o p r i a t e t h a t t r i b u t e s t o h i s memory s h o u l d be made i n b o t h Houses
of Parliament.
The p r a c t i c e i n t h e House o f Commons was t o pay
such t r i b u t e s o n l y on t h e d e a t h o f R o y a l P e r s o n a g e s , Heads o f
f o r m e r P r i m e M i n i s t e r s o r P a r t y L e a d e r s , and M i n i s t e r s d y i n g
in o f f i c e .
I t was a r g u a b l e t h a t , on t h i s p r a c t i c e ,
while
such
P a r l i a m e n t a r y s t a t e m e n t s s h o u l d n o t b e made on t h e d e a t h
F i e l d M a r s h a l Smuts.
state,
of
On t h e o t h e r hand, a s t h e F i e l d M a r s h a l was
an o u t s t a n d i n g c o n t e m p o r a r y f i g u r e ,
such a mark o f r e s p e c t t o h i s
memory would be welcomed b y l a r g e numbers o f p e o p l e t h r o u g h o u t
Commonwealth, and i t
c o u l d be b r o u g h t w i t h i n t h e
the
recognised
p r a c t i c e o f t h e House o f Commons on t h e ground t h a t i n t h e
First
World War he had been a member o f t h e War C a b i n e t .
I n d i s c u s s i o n t h e p o i n t was made t h a t , i f
t h i s w e r e done
on t h e d e a t h o f F i e l d M a r s h a l Smuts, an awkward p r e c e d e n t m i g h t be
established.
If
t h i s w e r e d o n e , and i f
s t i l l holding o f f i c e
Andi i f
while
a s P r i m e M i n i s t e r o f South A f r i c a , m i g h t i t
seem i n v i d i o u s t o r e f r a i n
same way?
D r . Malan should d i e
not
from p a y i n g r e s p e c t t o h i s memory i n t h e
t h i s were j u s t i f i e d
on t h e b a s i s t h a t
M a r s h a l Smuts had b e e n a member o f a War C a b i n e t ,
Field
should i t n o t b e
b o r n e i n mind t h a t M r . R . G . C a s e y , who was now a member o f
the
A u s t r a l i a n Government, had a l s o been a member o f t h e War C a b i n e t
d u r i n g t h e . S e c o n d W o r l d War?
I t was, however,
the general view o f
t h e C a b i n e t t h a t p u b l i c o p i n i o n would f i n d no d i f f i c u l t y
i n drawing
a d i s t i n c t i o n b e t w e e n F i e l d M a r s h a l smuts and e i t h e r D r . Malan o r
Mr. Casey.
I t was a l s o p o i n t e d o u t t h a t M r . o & s e y ' s membership
o f t h e War C a b i n e t had been on q u i t e a d i f f e r e n t
o f F i e l d M a r s h a l Smuts:
been a member o f
b a s i s from
i n p a r t i c u l a r , h e had n o t a t t h e
that
time
t h e A u s t r a l i a n Government.
The p o i n t was a l s o made t h a t much would t u r n on t h e
g e n e r a l w i s h e s o f t h e House o f Commons a t t h e t i m e .
I t would b e
most u n d e s i r a b l e f o r t h e Prime M i n i s t e r t o f i n d h i m s e l f i n
position of rejecting
the
a r e q u e s t t h a t P a r l i a m e n t should show t h i s
mark o f r e s p e c t t o t h e F i e l d M a r s h a l ' s memory.
a g r e e d t h a t i t must be l e f t
The C a b i n e t
t o the Prime M i n i s t e r ' s d i s c r e t i o n
determine t h i s question, i n the l i g h t of
such i n f o r m a l
soundings
as he m i g h t b e a b l e t o make t o a s c e r t a i n t h e g e n e r a l f e e l i n g
t h e House o f
Commons.
to
in
I t was t h e p r o v i s i o n a l v i e w o f "the
C a b i n e t t h a t , h a v i n g r e g a r d t o t h e o u t s t a n d i n g c o n t r i b u t i o n which
F i e l d M a r s h a l Smuts had made t o commonwealth a f f a i r s
and t o
f a c t t h a t he had been a member o f t h e War C a b i n e t i n t h e
W o r l d War, t h e Prime M i n i s t e r would be f u l l y j u s t i f i e d
p r o p o s i n g t h a t on t h e o c c a s i o n o f h i s d e a t h t r i b u t e s t o
First
in
his
memory s h o u l d be made i n b o t h Houses o f P a r l i a m e n t by t h e
of
the p r i n c i p a l p o l i t i c a l
Cabinet O f f i c e ,
S.W.I.
Parties.
the
leaders
NO CIRCULATION RECORD
C M . ( 5 0 ) 65th Conclusions ( 1 9 t h O c t o b e r , 1950 - 1 0 . 0
a.m.) THE PRIME MINISTER s a i d t h a t , l e a v i n g
out o f
account
t h e s p e c i a l m e e t i n g h e l d i n t h e s p r i n g o f 194-9 t o d i s c u s s
con­
s t i t u t i o n a l d e v e l o p m e n t s i n I n d i a , t h e r e had been no meeting
Commonwealth P r i m e M i n i s t e r s s i n c e t h e autumn o f 194&.
of the c r i t i c a l
of-
In view
s t a t e o f i n t e r n a t i o n a l r e l a t i o n s , he thought
it
a d v i s a b l e t h a t an attempt s h o u l d be made t o h o l d a f u r t h e r m e e t i n g p
o f P r i m e M i n i s t e r s a t an e a r l y d a t e .
From t h e
Commonwealth
p o i n t o f v i e w i t would c e r t a i n l y be v a l u a b l e t o have a
full
exchange o f v i e w s on t h e c u r r e n t i n t e r n a t i o n a l s i t u a t i o n ;
and
t h e m e e t i n g m i g h t a l s o h a v e a s t e a d y i n g i n f l u e n c e on w o r l d
affairs!
The m e e t i n g would b e c o n c e r n e d p r i m a r i l y w i t h m a t t e r s o f
policy,
but i t
would p r o v i d e a v a l u a b l e o p p o r t u n i t y f o r
foreign
discussion
o f defence problems w i t h a t any r a t e t h e Prime M i n i s t e r s o f
o l d e r Commonwealth c o u n t r i e s .
Subject t h e r e f o r e t o the
c o n c u r r e n c e h e now p r o p o s e d t o i n v i t e a l l
the
Cabinet's
Commonwealth P r i m e
M i n i s t e r s t o a m e e t i n g t o be h e l d i n London i n t h e e a r l y p a r t
of
December.
T h e r e was g e n e r a l a g r e e m e n t w i t h t h e P r i m e M i n i s t e r ' s
views.
The C a b i n e t
-
Took n o t e t h a t t h e P r i m e M i n i s t e r would now
t a k e steps t o arrange f o r a meeting
of
Commonwealth P r i m e M i n i s t e r s t o be h e l d
London i n December.
in
hi v . !
NO CIRCULATION RECORD
0. M* ( 50)
71s t C one l a s i o n s (6th November, 1950 - 11.0 a. m.) THE MINISTER OF FUEL MD POWER s a i d t h a t i n v i e w
o f t h e d a n g e r t h a t , n o t w i t h s t a n d i n g o t h e r s h o r t - t e r m measures
which might be taken, t h e r e would be a s e r i o u s shortage o f c o a l
for
i n l a n d consumption b e f o r e
t h e end o f the w i n t e r , t h e
N a t i o n a l C o a l B o a r d were a n x i o u s t o have a u t h o r i t y t o purchase
i m m e d i a t e l y b e t w e e n 500,000 a n d 750,000 t o n s o f c o a l ,
from the United States,
mainly
The c o s t would b e b e t w e e n $6 and 8
m i l l i o n s and t h e l o s s i n s e l l i n g t h i s c o a l a t c u r r e n t
prices
i n t h i s c o u n t r y w o u l d amount t o £1^ m i l l i o n s .
S i n c e i t would
t a k e t h r e e months f o r t h e c o a l t o b e a v a i l a b l e
in this
country,
purchase would have t o b e made f o r t h w i t h and i t would b e
essential
t o p r e s e r v e complete s e c r e c y u n t i l the c o n t r a c t s
had been p l a c e d , s i n c e o t h e r w i s e t h e p r i c e o f t h e c o a l and
t h e c o s t o f f r e i g h t might move a g a i n s t t h e C o a l Board,
The C a b i n e t saw s e r i o u s o b j e c t i o n t o t h i s
purchase o f c o a l f r o m t h e U n i t e d S t a t e s ,
proposed
The p o l i t i c a l
conse­
quences o f h a v i n g t o i m p o r t c o a l w e r e l i k e l y t o b e s o s e r i o u s
that a l l other possible
s t e p s t o e q u a t e demand and s u p p l y i n
t h e coming w i n t e r s h o u l d b e t a k e n b e f o r e t h e q u e s t i o n o f
i m p o r t i n g c o a l was f u r t h e r c o n s i d e r e d .
I t would b e p r e f e r a b l e
t h a t U n i t e d S t a t e s and o t h e r f o r e i g n c o a l should b e used f o r
m e e t i n g some o f t h e r e q u i r e m e n t s f o r B r i t i s h c o a l a b r o a d ,
r a t h e r than t h a t f o r e i g n c o a l s h o u l d b e b r o u g h t t o t h i s
The C a b i n e t
country.
-
Agreed t h a t , pending urgent c o n s i d e r a t i o n o f the
c o a l s i t u a t i o n b y the o f f i c i a l
committee t o
b e s e t up under t h e c h a i r m a n s h i p o f t h e
Chief Planning O f f i c e r ,
n o s t e p s should be
t a k e n t o n e g o t i a t e t h e import o f f o r e i g n
to this
country.
coal.
ITS DOCUMENT IS IIIE PROPERTY OF HIS BRITANNIC .iMESTY'S
GOVERNMENT
)P SECRET
COPY NO.
Id
,h November, 1950
CABINET
j*[EASURE5 TO PREVENT A EuEL OulSIS DURING TFIE WINTER OF
1950 - 1951
Note by the m i n i s t e r of Fuel and Power
In view oi the current l e v e l o f coal output, and of
Lock p o s i t i o n
5
the
i t has been necessary to consider what f u r t h e r
jasures can be taken to prevent a ' f u e l
c r i s i s during the coming
Inter months.
Output Campaign
I have arranged to have a Conference w i t h the National
Dnsultative Council of
the Coal Industry
(i.e,
the National
aal Board and the National Union of M i n e r s ) , to l a y b e f o r e
lem the f a c t s of the present s i t u a t i o n ;
and to i n v i t e them
) make renewed e f f o r t s f o r i n c r e a s e d c o a l output,
Gas O i l f o r Gas Works
As a r e s u l t o f a s e r i e s o f Conferences held since
illy, the Gas Boards have used more gas o i l
last
than I then hoped
ight be p o s s i b l e , ana they have arranged t o use s t i l l more
wring the coming winter,,
They have indeed reached the l i m i t
tiicti the supply of coke makes p o s s i b l e .
Retarding Exports
The Production Committee have agreed that exports must
e retarded by 50,000 tons a month u n t i l the end of the y e a r ,
hope the Cabinet w i l l
endorse t h i s d e c i s i o n .
/5.
Double
,
Double Bunkering of Merchant Ships
The M i n i s t e r of Transport has undertaken t o s e e how much
yal can be saved by "double bunkering", of merchant ships, and
f supplying overseas bunker depots with overseas c o a l .
This
i l l mean a use o f d o l l a r s , but i t might save ^00,000 - 300,000
jns of coal during ohu coming w i n t e r .
.
The Purchase of Coal f o r Eventual Import
I t may happen that the present f a l l
lecked, or that output w i l l r i s e ,
i n man-power w i l l be
But, i f the most r e c e n t
fends continued, and i f we had increased coal consumption
Bcause of a severe w i n t e r ,
Dt s u f f i c e
the measures mentioned above would
to close the gap in the winter budget
The N.C.B.
i e anxious to be allowed to buy some coal abroad, and. I
:
think
e should immediately authorise them to do so
I f t h i s i s to be done:
( a )
The decision must be taken immediately - only instant
action w i l l secure coal f o r d e l i v e r y i n February;
( b )
Permission must be g i v e n to the N.C.B. to spend, the
necessary d o l l a r s ,
( c )
The g r e a t e s t secrecy must be maintained, to prevent
a r i s e in p r i c e s .
I t i s improbable that we could purchase more than h a l f a
i l l i o n tons in the united S t a t e s ,
There may be some smaller
uch smaller - q u a n t i t i e s a v a i l a b l e elsewhere, but t h i s
poblematical.,
is
This help might be of g r e a t importance, i f
i n t e r i n February or March i s hard,
P . J .
i n i s t r y of Fuel and Power,
', m i l bank,
.W.1.
K-Bo
the
­
33
(5 . L"-icc/
NO CIRCULATION
RECORD
C.M.(51) 25TH CONCLUSIONS, M I N U T E
2
( 9 t h A p r i l , 1951 - 1 0 . 3 0 a . m . )
A f t e r the C h a n c e l l o r of the E x c h e q u e r had e x p l a i n e d his
Budget p r o p o s a l s the Cabinet r e v e r t e d to the q u e s t i o n , which t h e y
h a d d i s c u s s e d a t t h e i r m e e t i n g o n 22nd M a r c h , o f t h e l e v e l o f
G o v e r n m e n t e x p e n d i t u r e on the s o c i a l s e r v i c e s .
One o f the
a s s u m p t i o n s on w h i c h t h e C h a n c e l l o r h a d c o n s t r u c t e d h i s B u d g e t
w a s t h a t , i n p u r s u a n c e o f t h e C a b i n e f s d e c i s i o n o f 22nd M a r c h ,
e x p e n d i t u r e on t h e N a t i o n a l H e a l t h S e r v i c e w o u l d b e s u b j e c t f o r the
t i m e b e i n g t o an u p p e r l i m i t of £400 m i l l i o n s .
B e f o r e that d e c i s i o n
w a s taken expenditure on the H e a l t h S e r v i c e in the f i n a n c i a l y e a r
1951/52 had b e e n e s t i m a t e d at £ 4 2 3 m i l l i o n s ;
and, in o r d e r to
k e e p it within the u p p e r l i m i t a p p r o v e d b y the C a b i n e t , the H e a l t h
M i n i s t e r s had a g r e e d to e f f e c t e c o n o m i e s in hospital a d m i n i s t r a t i o n
t o t a l l i n g £ 1 0 m i l l i o n s and to i n t r o d u c e c h a r g e s f o r d e n t u r e s and
s p e c t a c l e s w h i c h , in the c o m i n g y e a r , w o u l d p r o d u c e £13 m i l l i o n s .
In a f u l l y e a r t h e s e c h a r g e s w o u l d p r o d u c e a m u c h l a r g e r r e v e n u e ;
but t h e s a v i n g o n t h e h o s p i t a l s s e r v i c e w a s n o n - r e c u r r e n t a n d t h e
r e v e n u e f r o m c h a r g e s w o u l d be n e e d e d in future y e a r s , if the t o t a l
e x p e n d i t u r e w a s t o b e kept b e l o w t h e u p p e r l i m i t o f £400 m i l l i o n s ,
in o r d e r to o f f s e t i n c r e a s i n g c o s t s in a l l p a r t s of the S e r v i c e .
T H E M I N I S T E R O F L A B O U R s a i d that he had a l w a y s b e e n
o p p o s e d to the i n t r o d u c t i o n of c h a r g e s f o r d e n t u r e s and s p e c t a c l e s .
In h i s v i e w i t w o u l d b e u n d e s i r a b l e i n p r i n c i p l e , a n d p o l i t i c a l l y
d a n g e r o u s , f o r t h e L a b o u r P a r t y thus t o a b a n d o n the c o n c e p t i o n of
a free Health S e r v i c e .
N o w that he w a s a w a r e o f the d e t a i l s o f
the B u d g e t a r y p o s i t i o n he w a s a b l e to add the further a r g u m e n t that
this step w a s not f i n a n c i a l l y n e c e s s a r y .
In a B u d g e t o f o v e r £ 4 , 0 0 0
m i l l i o n s it should not b e d i f f i c u l t t o find s o s m a l l a s u m a s £ 1 3
m i l l i o n s in s o m e o t h e r w a y w h i c h w o u l d not b r e a c h the p r i n c i p l e of
a free Health Service.
H e w a s s p e c i a l l y d i s t u r b e d at the p r o s p e c t
that t h i s i n r o a d on the H e a l t h S e r v i c e would b e j u s t i f i e d b y the a r g u ­
m e n t that the m o n e y to be s a v e d w a s n e e d e d f o r the i n c r e a s e d d e f e n c e
programme.
H e h i m s e l f b e l i e v e d that s h o r t a g e s of r a w m a t e r i a l s
and m a c h i n e t o o l s w o u l d m a k e it i m p o s s i b l e in p r a c t i c e t o spend
e f f e c t i v e l y a l l the m o n e y which w a s to be a l l o c a t e d under this Budget
t o the d e f e n c e p r o g r a m m e ; and in this v i e w he had the s u p p o r t of the
P r e s i d e n t o f the B o a r d of T r a d e and the M i n i s t e r of Supply.
The
D e f e n c e E s t i m a t e s f o r the c o m i n g f i n a n c i a l y e a r t o t a l l e d £1,250
millions;
and of this the e s t i m a t e d c o s t of d e f e n c e p r o d u c t i o n
amounted to £510 m i l l i o n s .
T h e s e w e r e l a r g e f i g u r e s and m u s t
be subject to a substantial m a r g i n of e r r o r .
He b e l i e v e d t h a t ,
w i t h i n that m a r g i n , the C h a n c e l l o r could h a v e found the s a v i n g s
w h i c h he p r o p o s e d t o s e c u r e b y i n t r o d u c i n g c h a r g e s u n d e r the H e a l t h
Service.
T h e M i n i s t e r r e m i n d e d the C a b i n e t that such c h a r g e s
could not b e i m p o s e d w i t h o u t f r e s h l e g i s l a t i o n .
B e l i e v i n g , as he
d i d , that such c h a r g e s w o u l d i n v o l v e a s e r i o u s b r e a c h o f S o c i a l i s t
p r i n c i p l e s , a n d h a v i n g o n n u m e r o u s o c c a s i o n s p r o c l a i m e d in
public s p e e c h e s his o p p o s i t i o n to such a c o u r s e , he d i d not s e e h o w
he could be e x p e c t e d to v o t e in f a v o u r o f such a B i l l .
If the Cabinet
r e a f f i r m e d t h e i r d e c i s i o n that t h e s e c h a r g e s should b e i m p o s e d , he
would be obliged to r e s i g n f r o m the G o v e r n m e n t .
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 it w a s
h i s s p e c i a l d u t y , in f r a m i n g the B u d g e t , t o d e t e r m i n e h o w the
n e c e s s a r y revenues should be r a i s e d to m e e t essential G o v e r n m e n t
e x p e n d i t u r e and a l s o , in p r e s e n t c i r c u m s t a n c e s , to f o r m a j u d g m e n t
o n t h e f i g u r e of t h e B u d g e t s u r p l u s a t w h i c h t h e G o v e r n m e n t s h o u l d
a i m in o r d e r to k e e p i n f l a t i o n a r y t e n d e n c i e s in check;
The Budget
w h i c h h e had o u t l i n e d t o t h e C a b i n e t w a s a c a r e f u l l y c o n s t r u c t e d a n d
i n t e g r a t e d plan f o r r e g u l a t i n g the national finances o v e r the
coming
year;
and it w o u l d be difficult f o r h i m t o m o d i f y at the l a s t m o m e n t
any e s s e n t i a l f e a t u r e of that p l a n .
T h e Cabinet should, in p a r t i c u ­
l a r , be content to l e a v e it to h i s j u d g m e n t to d e t e r m i n e the s i z e of
the Budget s u r p l u s at w h i c h he should a i m .
He b e l i e v e d that the
e s t i m a t e s of d e f e n c e e x p e n d i t u r e w e r e a s r e l i a b l e a s any such
e s t i m a t e s c o u l d b e : he c o u l d not a c c e p t the s u g g e s t i o n that he
should f r a m e his B u d g e t on the as s u m p t i o n that the o u t - t u r n of this
e x p e n d i t u r e w o u l d b e s o m e t h i n g l e s s than the e s t i m a t e .
He had
t a k e n t h e v i e w f r o m t h e o u t s e t t h a t s o m e p a r t of t h e r i s i n g c o s t o f
the defence p r o g r a m m e m u s t b e m e t b y r e d u c t i o n s in other G o v e r n "
m e n t e x p e n d i t u r e : m a n y of his efforts to s e c u r e such reductions
had b e e n f r u s t r a t e d : and he h a d n o w r e a c h e d a p o i n t at w h i c h he
could not make any further c o n c e s s i o n s .
T h e Cabinet had a g r e e d ,
o n 22nd M a r c h , t h a t e x p e n d i t u r e o n t h e H e a l t h S e r v i c e s h o u l d b e
s u b j e c t f o r t h e t i m e b e i n g t o a n u p p e r l i m i t o f £400 m i l l i o n s : h e
w a s s a t i s f i e d , f r o m his consultations w i t h the Health M i n i s t e r s ,
t h a t t h e c o s t o f t h e S e r v i c e c o u l d n o t b e kept w i t h i n t h a t l i m i t w i t h o u t
t h e i m p o s i t i o n o f c h a r g e s : h e b e l i e v e d t h a t , o f the v a r i o u s c h a r g e s
w h i c h m i g h t b e m a d e , t h e s e w o u l d b e the l e a s t u n p a l a t a b l e p o l i t i c a l l y :
and in a l l the c i r c u m s t a n c e s he f e l t o b l i g e d t o ask t h e C a b i n e t to
maintain their earlier decision.
A long d i s c u s s i o n ensued.
the m a i n points m a d e in i t : ­
The following is a s u m m a r y of
(a)
T H E M I N I S T E R O F L A B O U R and T H E P R E S I D E N T O F T H E
B O A R D O F T R A D E thought that the G o v e r n m e n t would find g r e a t
d i f f i c u l t y in p e r s u a d i n g t h e i r s u p p o r t e r s i n the H o u s e of C o m m o n s
to a c c e p t this departure f r o m the p r i n c i p l e of a f r e e Health S e r v i c e .
T h e y c o n s i d e r e d that s o m e G o v e r n m e n t s u p p o r t e r s w o u l d a b s t a i n
f r o m voting i n favour of the l e g i s l a t i o n a u t h o r i s i n g the i m p o s i t i o n of
t h e s e c h a r g e s ; and t h e y pointed out t h a t , if only a f e w G o v e r n m e n t
supporters a b s t a i n e d , the C o n s e r v a t i v e Opposition)by voting a g a i n s t
the B i l l , c o u l d b r i n g about a m a j o r G o v e r n m e n t d e f e a t .
In t h a t
e v e n t the G o v e r n m e n t would f a c e a G e n e r a l E l e c t i o n in c i r c u m s t a n c e s
which would enable the C o n s e r v a t i v e P a r t y to pose a s the champions
of a free Health S e r v i c e .
T H E H O M E S E C R E T A R Y a l s o f e a r e d that
t h e r e m i g h t b e c o n s i d e r a b l e P a r l i a m e n t a r y d i f f i c u l t y in s e c u r i n g the
passage of this l e g i s l a t i o n .
On t h e o t h e r s i d e i t w a s p o i n t e d o u t t h a t , s o f a r a s c o n ­
c e r n e d l e g i s l a t i o n , the p r i n c i p l e o f a f r e e H e a l t h , S e r v i c e had a l r e a d y
b e e n b r e a c h e d b y the B i l l i n t r o d u c e d a f t e r the H S & B u d g e t a u t h o r i ­
s i n g the i m p o s i t i o n o f a c h a r g e f o r p r e s c r i p t i o n s .
This Bill, which
the p r e s e n t M i n i s t e r o f L a b o u r had h i m s e l f i n t r o d u c e d , had
encountered no substantial opposition f r o m G o v e r n m e n t s u p p o r t e r s
and had in fact p a s s e d into l a w .
It w a s n o t u n t i l a f t e r t h e B i l l h a d
r e a c h e d the Statute B o o k that the G o v e r n m e n t had d e c i d e d not to
p r o c e e d with their plan for making a c h a r g e for p r e s c r i p t i o n s ,
T h e p r e p o n d e r a n t v i e w in the C a b i n e t w a s that the
G o v e r n m e n t , i f t h e y r e m a i n e d u n i t e d on t h i s i s s u e , w o u l d h a v e n o
substantial difficulty in p e r s u a d i n g the P a r l i a m e n t a r y L a b o u r P a r t y
t o support l e g i s l a t i o n a u t h o r i s i n g c h a r g e s for d e n t u r e s and s p e c t a c l e s
supplied under the N a t i o n a l Health S e r v i c e .
(b)
T H E M I N I S T E R O F L A B O U R s a i d t h a t , in a B u d g e t t o t a l ­
l i n g o v e r £4,000 m i l l i o n s , t h e r e m u s t b e t o l e r a n c e s w h i c h w o u l d
a l l o w the C h a n c e l l o r , if he w i s h e d , to f o r e g o his i n s i s t e n c e on a
s a v i n g of o n l y £13 m i l l i o n s on the H e a l t h S e r v i c e .
B y the e x e r c i s e
o f i n g e n u i t y , m e a n s c o u l d s u r e l y b e found to a v o i d h a v i n g to i m p o s e
these charges.
T h u s , f o r the c o m i n g financial y e a r , the r e l a t i v e l y
s m a l l amount r e q u i r e d m i g h t be obtained by i n c r e a s i n g the c o n t r i ­
bution m a d e to the Health S e r v i c e b y the N a t i o n a l I n s u r a n c e Fund.
A l t e r n a t i v e l y , the C h a n c e l l o r m i g h t r e d u c e b y £13 m i l l i o n s the
Budget surplus at which he w a s a i m i n g .
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 said that he w a s
not p r e p a r e d to adopt e i t h e r of the c o u r s e s s u g g e s t e d b y the M i n i s t e r
of L a b o u r .
T h e y would both be inflationary in e f f e c t .
Moreover,
i f he had such a s u m a t h i s d i s p o s a l , he w o u l d c e r t a i n l y w i s h to
c o n s i d e r t o w h a t p u r p o s e it c o u l d m o s t u s e f u l l y b e a p p l i e d .
He was
b y no m e a n s satisfied that, e v e n within the s o c i a l s e r v i c e s , the
H e a l t h S e r v i c e h a d t h e f i r s t c l a i m s on a n y a d d i t i o n a l m o n e y t h a t
might be available,
(c)
S e v e r a l M i n i s t e r s e x p r e s s e d the v i e w t h a t , if the M i n i s t e r
of L a b o u r r e s i g n e d f r o m the G o v e r n m e n t on t h i s i s s u e , an a c u t e
p o l i t i c a l c r i s i s would d e v e l o p .
With their present Parliamentary
m a j o r i t y the G o v e r n m e n t could not a f f o r d any d i m i n u t i o n in t h e i r
v o t i n g s t r e n g t h i n the H o u s e o f C o m m o n s .
A n d , if the G o v e r n m e n t
f e l l , as a r e s u l t of d i v i d e d counsels within the Cabinet, the L a b o u r
P a r t y ' s p r o s p e c t s at the f o l l o w i n g G e n e r a l E l e c t i o n w o u l d be v e r y
gravely prejudiced.
After a prolonged discussion THE FOREIGN S E C R E T A R Y
s a i d that it s e e m e d c l e a r that the C a b i n e t w o u l d not be a b l e t o r e a c h
an a g r e e d conclusion at that m e e t i n g .
He t h e r e f o r e p r o p o s e d that
the d i s c u s s i o n should be r e s u m e d at a further, m e e t i n g l a t e r in the
day.
In t h e i n t e r v a l h e w o u l d s e e t h e P r i m e M i n i s t e r ( w h o w a s i n
h o s p i t a l ) and w o u l d r e p o r t t o h i m the c o u r s e w h i c h the d i s c u s s i o n
had so far taten.
The Cabinet
-
A g r e e d to r e s u m e t h e i r d i s c u s s i o n at a m e e t i n g
in the day.
later
UsJi o_.il;
P. (H
NO CIRCULATION
C.M.(51) 26TH
RECORD
CONCLUSIONS
( 9 t h A p r i l , 1951 - 6. 30 p . m . )
SS
)I­
is
c e :
) 25th
ions,
l)
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 of the l e v e l of
G o v e r n m e n t e x p e n d i t u r e on the s o c i a l s e r v i c e s .
T H E F O R E I G N S E C R E T A R Y said that during the a f t e r n o o n
he and the C h i e f W h i p had s e e n the P r i m e M i n i s t e r in h o s p i t a l and
had g i v e n h i m a full a c c o u n t of the C a b i n e f s d i s c u s s i o n at t h e i r
m e e t i n g that m o r n i n g .
The P r i m e M i n i s t e r had asked h i m to c o n ­
v e y t o the C a b i n e t the f o l l o w i n g e x p r e s s i o n of h i s v i e w s .
First,
h e h a d p o i n t e d out t h a t i n a l l C a b i n e t d i s c u s s i o n s o f B u d g e t p r o p o s a l s
t h e r e m u s t b e a substantial m e a s u r e of g i v e and take b e t w e e n
Ministers.
T h e C h a n c e l l o r of the E x c h e q u e r had p a r t i c u l a r
r e s p o n s i b i l i t y f o r the n a t i o n a l f i n a n c e s ; and no other M i n i s t e r
ought to c l a i m that any p a r t i c u l a r e s t i m a t e should be t r e a t e d as
sacrosanct.
It w o u l d b e a m o s t u n u s u a l t h i n g f o r a M i n i s t e r t o
r e s i g n o n a B u d g e t i s s u e : s o f a r a s he w a s a w a r e , t h e o n l y
M i n i s t e r w h o had e v e r t a k e n this s t e p w a s L o r d R a n d o l p h
C h u r c h i l l , w h o s e p o l i t i c a l f o r t u n e s had n e v e r r e c o v e r e d t h e r e a f t e r .
S e c o n d l y , a M i n i s t e r w h o found h i m s e l f in d i s a g r e e m e n t w i t h a
p a r t i c u l a r p a r t of the p r e s e n t B u d g e t p r o p o s a l s s h o u l d c o n s i d e r ,
n o t o n l y his p e r s o n a l p o s i t i o n , but the e f f e c t w h i c h h i s r e s i g n a t i o n
w o u l d h a v e on the p r e s e n t and future f o r t u n e s of the L a b o u r P a r t y .
T h i r d l y , the P r i m e M i n i s t e r had s a i d that it w o u l d be s t a r k f o l l y
f o r any M i n i s t e r to provoke a p o l i t i c a l c r i s i s at the p r e s e n t t i m e .
H e c o u l d not i m a g i n e a w o r s e m o m e n t f o r a G e n e r a l E l e c t i o n .
T h e r e w a s s o m e r e a s o n to hope t h a t , as the s u m m e r went on, the
conditions would b e c o m e m o r e f a v o u r a b l e f o r an e l e c t i o n - the m e a t
r a t i o n m i g h t be i n c r e a s e d , the w e a t h e r m i g h t i m p r o v e and t h e r e
m i g h t be s o m e change in the i n t e r n a t i o n a l s i t u a t i o n .
But a G e n e r a l
E l e c t i o n at t h e p r e s e n t t i m e , w i t h a L a b o u r P a r t y t o r n b y d i v i d e d
c o u n s e l s , w o u l d p r e j u d i c e the f o r t u n e s of the L a b o u r m o v e m e n t f o r
y e a r s to c o m e .
F o u r t h l y , if the G o v e r n m e n t w e r e f o r c e d t o f a c e
the e l e c t o r s in t h e s e c i r c u m s t a n c e s , t h e y w o u l d i n e v i t a b l y w e a r the
a p p e a r a n c e of being i n c o m p e t e n t to g o v e r n .
T h e y could not hope to
w i n such an e l e c t i o n ; a n d , a f t e r such a d e b a c l e , the C o n s e r v a t i v e s
m i g h t be e x p e c t e d to r e m a i n in office f o r a long p e r i o d .
The
r e s p o n s i b i l i t y for p r o v o k i n g this s i t u a t i o n would r e s t with any
M i n i s t e r s who r e s i g n e d f r o m the G o v e r n m e n t at the p r e s e n t
juncture.
F i n a l l y , and f o r the f o r e g o i n g r e a s o n s , the P r i m e
M i n i s t e r u r g e d his C a b i n e t c o l l e a g u e s t o g i v e s o l i d support t o the
B u d g e t p r o p o s a l s put f o r w a r 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 ;
a n d , in p a r t i c u l a r , t o a d h e r e t o the d e c i s i o n s w h i c h t h e y had t a k e n ,
a s a C a b i n e t , on 22nd M a r c h r e g a r d i n g the future l e v e l o f e x p e n d i ­
t u r e o n the N a t i o n a l H e a l t h S e r v i c e .
T H E M I N I S T E R O F L A B O U R s a i d that he w a s not s u r p r i s e d
t o h e a r that the P r i m e M i n i s t e r t o o k t h i s v i e w .
He had, h o w e v e r ,
d i s c u s s e d the m a t t e r w i t h the P r i m e M i n i s t e r b e f o r e 22nd M a r c h ;
and he had then m a d e i t c l e a r that he w o u l d not b e a b l e t o s h a r e
c o l l e c t i v e r e s p o n s i b i l i t y f o r a d e c i s i o n t o abandon the conception of
a free Health Service.
This was
for h i m , a question of p r i n c i p l e .
H e h a d g i v e n f i v e y e a r s t o b u i l d i n g ,up t h e HieaLth-Servjice^, h e h a d
p r o c l a i m e d i t o n m a n y p u b l i c p l a t f o r m s "as o n e o f t h e o u t s t a n d i n g
a c h i e v e m e n t s o f the L a b o u r P a r t y in o f f i c e : he h a d , i n p a r t i c u l a r ,
upheld the c o n c e p t i o n o f a f r e e S e r v i c e a s the e m b o d i m e n t o f
Socialist principles.
It'was too much to ask h i m now to go into
the d i v i s i o n l o b b y in support of a m e a s u r e a u t h o r i s i n g the i m p o s i t i o n
of c h a r g e s for dentures and s p e c t a c l e s p r o v i d e d under this S e r v i c e . .
In s a y i n g t h a t h e m u s t r e s i g n f r o m t h e G o v e r n m e n t i f t h e C a b i n e t
p e r s i s t e d in this d e c i s i o n , he w a s not s p e a k i n g l i g h t l y o r w i t h o u t
c o n s i d e r a t i o n of the p o s s i b l e c o n s e q u e n c e s w h i c h the P r i m e M i n i s t e r
envisaged.
But a M i n i s t e r m u s t be f r e e to r e s i g n if he f e l t that he
could not c o n s c i e n t i o u s l y share c o l l e c t i v e r e s p o n s i b i l i t y for
d e c i s i o n s which his Cabinet c o l l e a g u e s w i s h e d to t a k e .
This
C a b i n e t had t a k e n m a n y d e c i s i o n s w h i c h he had not w h o l l y a p p r o v e d ;
but, w h e n it b e c a m e c l e a r that t h e s e r e p r e s e n t e d a p r e p o n d e r a n t
v i e w i n the C a b i n e t , he had b e e n p r e p a r e d t o take his s h a r e of
responsibility for them.
But, l a t t e r l y , he had c o m e to f e e l that he
c o u l d b r i n g m o r e influence to b e a r on G o v e r n m e n t p o l i c y f r o m o u t ­
s i d e the C a b i n e t than he could e v e r h o p e to e x e r c i s e w i t h i n it;
and, when a M i n i s t e r r e a c h e d that p o s i t i o n , it was t i m e for h i m to go,
T H E P R E S I D E N T O F T H E B O A R D O F T R A D E said that he
w i s h e d at t h i s s t a g e t o m a k e h i s o w n p o s i t i o n c l e a r .
In the
C a b i n e t ' s e a r l i e r d i s c u s s i o n that m o r n i n g he had s a i d that he
s u p p o r t e d the v i e w of the M i n i s t e r of L a b o u r that it w o u l d not b e
p o s s i b l e t o p e r s u a d e a l l G o v e r n m e n t s u p p o r t e r s t o v o t e in f a v o u r o f
l e g i s l a t i o n a u t h o r i s i n g the i n t r o d u c t i o n of c h a r g e s u n d e r the H e a l t h
Service.
H e n o w w i s h e d t o m a k e it c l e a r t h a t , if the C a b i n e t m a i n ­
t a i n e d their d e c i s i o n to introduce these c h a r g e s , he would feel
unable to s h a r e c o l l e c t i v e r e s p o n s i b i l i t y f o r that d e c i s i o n a n d , l i k e
the M i n i s t e r of L a b o u r , w o u l d f e e l o b l i g e d to r e s i g n f r o m the G o v e r n ­
ment.
In t h e c o u r s e o f a l o n g d i s c u s s i o n M i n i s t e r s d w e l t u p o n t h e
g r a v e c o n s e q u e n c e s which would f o l l o w if r e s i g n a t i o n s f r o m the
C a b i n e t c a u s e d a d i v i s i o n in the ranks of the L a b o u r P a r t y .
T h i s would a l m o s t c e r t a i n l y p r e c i p i t a t e a G e n e r a l E l e c t i o n , at a
m o m e n t m o s t u n f a v o u r a b l e t o the f o r t u n e s o f the P a r t y and in c i r c u m ­
stances in which the P a r t y s chances of s u c c e s s m u s t be r a t e d v e r y
low.
But, w o r s e than that, it m i g h t u n d e r m i n e the a u t h o r i t y of the
P a r t y ' s l e a d e r s and w e a k e n the e l e c t o r a l p r o s p e c t s of the P a r t y f o r
many y e a r s to c o m e .
F r o m a w i d e r point of v i e w it w a s a l s o a r g u e d
that the L a b o u r P a r t y had g i v e n an e x a m p l e to the w o r l d of s t a b l e
and p r o g r e s s i v e G o v e r n m e n t in t h e d i f f i c u l t p e r i o d of t r a n s i t i o n
a f t e r the end of the w a r and in the d a n g e r o u s p e r i o d o f i n t e r n a t i o n a l
t e n s i o n w h i c h had f o l l o w e d it; and it w o u l d be a t r a g e d y if at this
j u n c t u r e the inspiration of its l e a d e r s h i p in w o r l d a f f a i r s w e r e
cast away.
1
T H E M I N I S T E R O F L A B O U R s a i d that he c o u l d not a c c e p t
r e s p o n s i b i l i t y f o r t h e s e c o n s e q u e n c e s , e v e n if t h e y t u r n e d out to b e
as s e r i o u s a s s o m e of his c o l l e a g u e s had f e a r e d .
It w a s not he w h o
had t a k e n the i n i t i a t i v e in p r o p o s i n g c h a r g e s under the H e a l t h
Service.
T h e p o l i t i c a l c r i s i s , i f one d e v e l o p e d , would have b e e n
p r o v o k e d b y t h o s e w h o had m a d e this p r o p o s a l .
O t h e r M i n i s t e r s , on
the o t h e r hand, held that any M i n i s t e r s who r e s i g n e d f r o m the
G o v e r n m e n t at the p r e s e n t t i m e w o u l d b e r e s p o n s i b l e f o r the
p o l i t i c a l c o n s e q u e n c e s w h i c h w e r e l i k e l y to f o l l o w ; a n d , in t h e i r
v i e w , this was a v e r y h e a v y r e s p o n s i b i l i t y .
B e s i d e these g r a v e c o n s e q u e n c e s , the i s s u e w h i c h n o w
divided the Cabinet s e e m e d r e l a t i v e l y s m a l l .
W a s t h e r e not s o m e
c o m p r o m i s e on the b a s i s of w h i c h a g r e e m e n t m i g h t s t i l l b e
reached?
The Cabinet then d i s c u s s e d v a r i o u s p o s s i b i l i t i e s .
T h u s , would it be p o s s i b l e to postpone f o r six months the
i n t r o d u c t i o n o f c h a r g e s u n d e r the N a t i o n a l H e a l t h S e r v i c e ?
During the i n t e r v a l M i n i s t e r s should be able to r e s o l v e their
doubts on the q u e s t i o n w h e t h e r the m o n e y a l l o c a t e d t o the i n c r e a s e d
defence p r o g r a m m e could in fact be profitably spent; and they
would then be able to s e e m o r e c l e a r l y w h e t h e r the p r o p o s e d
e c o n o m i e s on the H e a l t h S e r v i c e w e r e in f a c t e s s e n t i a l .
P o s t p o n e m e n t would a l s o h a v e the a d v a n t a g e that the d i s c u s s i o n
c o u l d b e r e s u m e d at g r e a t e r l e i s u r e u n d e r the C h a i r m a n s h i p
o f the P r i m e M i n i s t e r h i m s e l f . A l t e r n a t i v e l y w o u l d it s u f f i c e
f o r the C h a n c e l l o r i n h i s B u d g e t s p e e c h t o s a y m e r e l y t h a t
e x p e n d i t u r e o n t h e H e a l t h S e r v i c e w o u l d b e kept f o r t h e t i m e
b e i n g w i t h i n an upper l i m i t of £400 m i l l i o n s , and that the G o v e r n "
m e n t w e r e c o n s i d e r i n g what steps would be n e c e s s a r y to ensure
that this l i m i t w a s not e x c e e d e d ?
Would it not be p o s s i b l e to
s e c u r e e c o n o m i e s in t h e a d m i n i s t r a t i o n o f t h e S e r v i c e w i t h o u t
r e s o r t i n g to c h a r g e s ?
O r could the n e c e s s a r y s a v i n g s b e
s e c u r e d b y i m p o s i n g a c h a r g e f o r p r e s c r i p t i o n s , and abandoning
the p r o p o s e d c h a r g e s f o r dentures and s p e c t a c l e s ?
This would
h a v e the a d v a n t a g e that no f r e s h l e g i s l a t i o n w o u l d be r e q u i r e d .
A n d i n 1950 t h e p r e s e n t M i n i s t e r o f L a b o u r h a d a c c e p t e d t h e
v i e w that a c h a r g e f o r p r e s c r i p t i o n s w o u l d not i n v o l v e a b r e a c h
o f the p r i n c i p l e o f a f r e e S e r v i c e .
THE CHANCELLOR OF THE
E X C H E Q U E R pointed out that none of t h e s e a l t e r n a t i v e c o u r s e s
w o u l d g i v e h i m a s u f f i c i e n t a s s u r a n c e that the n e c e s s a r y s a v i n g s
w o u l d in fact be s e c u r e d .
O t h e r M i n i s t e r s t e s t i f i e d that the
Cabinet C o m m i t t e e on the N a t i o n a l Health S e r v i c e had
exhaustively considered all practicable alternative methods
of r e d u c i n g e x p e n d i t u r e on the S e r v i c e , and had s a t i s f i e d t h e m ­
s e l v e s that t h i s e x p e n d i t u r e c o u l d not b e kept w i t h i n an upper
l i m i t o f £400 m i l l i o n s w i t h o u t r e c o u r s e t o c h a r g e s .
They were also
s a t i s f i e d that the c h a r g e s n o w p r o p o s e d , f o r d e n t u r e s and s p e c t a c l e s
w e r e the m o s t p r a c t i c a l and the l e a s t unpalatable of any w h i c h
could be introduced.
T h e C a b i n e t r e l u c t a n t l y c a m e to the
c o n c l u s i o n that n o c o m p r o m i s e s o l u t i o n c o u l d be found a l o n g t h e s e
line s.
In the c o u r s e of f u r t h e r d i s c u s s i o n T H E M I N I S T E R O F
L A B O U R i n d i c a t e d that, if he r e s i g n e d f r o m the G o v e r n m e n t , he
w o u l d f e e l o b l i g e d to make it c l e a r that his d i f f e r e n c e s w i t h his
c o l l e a g u e s had not b e e n r e s t r i c t e d t o t h i s q u e s t i o n of c h a n g e s
under the N a t i o n a l H e a l t h S e r v i c e . H e w a s a l s o g r a v e l y
c o n c e r n e d about the e c o n o m i c c o n s e q u e n c e s of the i n c r e a s e d
defence p r o g r a m m e .
W h i l e he s u p p o r t e d the p o l i c y of r e b u i l d i n g
the a r m e d s t r e n g t h of the w e s t e r n d e m o c r a c i e s , he w a s c o n c e r n e d
about the pace and v o l u m e of t h e i r r e a r m a m e n t p r o g r a m m e s .
H e b e l i e v e d that, by t r y i n g to do t o o m u c h t o o quickly in r e s p o n s e t o
U n i t e d S t a t e s p r e s s u r e , the w e s t e r n d e m o c r a c i e s w e r e in g r a v e
d a n g e r of u n d e r m i n i n g t h e i r e c o n o m i c s t r e n g t h .
The United
K i n g d o m G o v e r n m e n t w o u l d in his v i e w m a k e a double mistake if
t h e y a l l o w e d the i n c r e a s e d d e f e n c e p r o g r a m m e , not o n l y t o d i s t o r t
the n a t i o n a l e c o n o m y , but a l s o t o d o t h i s a t the e x p e n s e of the
social services.
Further appeal s w e r e then m a d e by a number of
M i n i s t e r s that the s o l i d a r i t y o f the G o v e r n m e n t and the L a b o u r
P a r t y should not b e b r e a c h e d b y r e s i g n a t i o n s on this i s s u e .
T H E M I N I S T E R O F E D U C A T I O N , in p a r t i c u l a r , m a d e it c l e a r
that in h i s v i e w M i n i s t e r i a l r e s i g n a t i o n s w e r e t o o h i g h a p r i c e
t o p a y f o r a n e c o n o m y o f £13 m i l l i o n s o n t h e H e a l t h S e r v i c e ,
He felt sure that it m u s t be p o s s i b l e to r e s o l v e the d i f f e r e n c e s
within the C a b i n e t b y s o m e m e a n s w h i c h would not i n v o l v e
M i n i s t e r i a l r e s i g n a t i o n s ; and he hoped that the m a j o r i t y w o u l d n o t
p r e s s t h e i r v i e w t o a point w h i c h w o u l d m a k e t h e s e r e s i g n a t i o n s
inevitable.
A f t e r further discussion T H E F O R E I G N S E C R E T A R Y
s a i d that he m u s t b r i n g the i s s u e t o a d e c i s i o n .
H e r e a d out t h e
c o n c l u s i o n s r e a c h e d b y t h e C a b i n e t a t t h e i r m e e t i n g on 22nd M a r c h ,
v i z , that f o r the t i m e b e i n g e x p e n d i t u r e on the N a t i o n a l H e a l t h
S e r v i c e s h o u l d b e s u b j e c t t o a n u p p e r l i m i t o f £400 m i l l i o n s ;
t h a t c h a r g e s s h o u l d b e i m p o s e d f o r t h e s u p p l y o f d e n t u r e s and
s p e c t a c l e s under the H e a l t h S e r v i c e ; and that the H e a l t h
M i n i s t e r s should d r a f t the n e c e s s a r y l e g i s l a t i o n and m a k e such
advance p r e p a r a t i o n s a s w e r e r e q u i r e d t o b r i n g the s c h e m e of
c h a r g e s i n t o o p e r a t i o n o n 12th A p r i l ,
He asked each m e m b e r of
the Cabinet t o state w h e t h e r he w a s s t i l l p r e p a r e d to a d h e r e t o
those d e c i s i o n s . T H E M I N I S T E R O F L A B O U R , T H E P R E S I D E N T
O F T H E B O A R D O F T R A D E and T H E M I N I S T E R O F E D U C A T I O N
s a i d t h a t , f o r the r e a s o n s w h i c h t h e y had i n d i c a t e d i n the c o u r s e
of the C a b i n e f s d i s c u s s i o n , they w e r e not in f a v o u r of r e - a f f i r m i n g
those conclusions.
T h e r e m a i n i n g m e m b e r s of the Cabinet a l l
i n d i c a t e d that t h e y f a v o u r e d r e - a f f i r m i n g t h o s e c o n c l u s i o n s ,
T H E M I N I S T E R O F L A B O U R said that in these c i r c u m ­
s t a n c e s he would h a v e t o r e s i gn f r o m the G o v e r n m e n t ,
He would
s u b m i t his r e s i g n a t i o n t o the P r i m e M i n i s t e r in the c o u r s e of the
f o l l o w i n g d a y ; and he p r e s u m e d t h a t he w o u l d t h e r e a f t e r m a k e a
p e r s o n a l s t a t e m e n t in t h e H o u s e o f C o m m o n s , p o s s i b l y o n
11th A p r i l ,
The Cabinet
­
( l )
R e a f f i r m e d t h e i r d e c i s i o n s o f 22nd M a r c h r e g a r d i n g
the l i m i t a t i o n of e x p e n d i t u r e on the N a t i o n a l H e a l t h
S e r v i c e and the i n t r o d u c t i o n of c h a r g e s f o r d e n t u r e s
and s p e c t a c l e s s u p p l i e d under that S e r v i c e ,
( 2 )
A u t h o r i s e d the C h a n c e l l o r of the E x c h e q u e r to announce
t h e s e d e c i s i o n s in the c o u r s e o f his B u d g e t speech.
( 3 )
Invited the M i n i s t e r of L a b o u r to r e c o n s i d e r his p o s i t i o n ,
a n d e x p r e s s e d the e a r n e s t h o p e that he w o u l d not find
it n e c e s s a r y t o r e s i g n f r o m the G o v e r n m e n t on this i s s u e .
NO CIRCULATION RECORD
C.M.(5l) 27TH CONCLUSIONS, M I N U T E
( 1 2 t h A p r i l , 1951 - 1 1 . 0
IT
LA T I O N
ous
nee:
1) 2 6 t h
sions)
2
a.m.)
W h e n the H o m e S e c r e t a r y p r o p o s e d that the N a t i o n a l
H e a l t h S e r v i c e B i l l s h o u l d b e i n t r o d u c e d o n 17th A p r i l a n d t h a t t h e
m o t i o n f o r its S e c o n d R e a d i n g should b e d e b a t e d in the w e e k
beginning 23rd A p r i l , T H E M I N I S T E R O F L A B O U R at once said
t h a t , i f t h e r e w e r e a d i v i s i o n , he w o u l d n o t f e e l a b l e t o v o t e i n
favour of this B i l l .
T H E P R E S I D E N T O F THE BOARD O F T R A D E suggested
that, in v i e w of the d i v i s i o n of o p i n i o n w i t h i n the C a b i n e t on t h i s
q u e s t i o n , it w o u l d b e p r e f e r a b l e that f u r t h e r C a b i n e t d i s c u s s i o n of
it should b e p o s t p o n e d until the P r i m e M i n i s t e r ( w h o w a s s t i l l in
hospital) w a s able to p r e s i d e .
M e a n w h i l e he s u g g e s t e d that the
i n t r o d u c t i o n of t h e B i l l s h o u l d b e d e l a y e d .
T H E F O R E I G N S E C R E T A R Y s a i d that the C a b i n e t had
d e c i d e d t o i m p o s e c h a r g e s f o r d e n t u r e s and s p e c t a c l e s s u p p l i e d . .
under the N a t i o n a l H e a l t h S e r v i c e , and had a u t h o r i s e d the C h a n c e l l o r
o f the E x c h e q u e r t o announce that d e c i s i o n in his B u d g e t s t a t e m e n t .
T h e d e c i s i o n had p r o v e d a c c e p t a b l e to a s u b s t a n t i a l m a j o r i t y of t h o s e
a t t e n d i n g t h e m e e t i n g o f t h e P a r l i a m e n t a r y L a b o u r P a r t y at w h i c h
the B u d g e t s t a t e m e n t had b e e n d i s c u s s e d .
F r o m the point o f v i e w
of P a r l i a m e n t a r y t a c t i c s the w i s e s t c o u r s e w a s t o p r o c e e d w i t h o u t
d e l a y w i t h the l e g i s l a t i o n a u t h o r i s i n g the i m p o s i t i o n of t h e s e
charges.
If the i n t r o d u c t i o n o f the l e g i s l a t i o n w e r e d e l a y e d , the
G o v e r n m e n t w o u l d be thought to b e w a v e r i n g ; and, o n c e this
i m p r e s s i o n w a s g i v e n , the P a r l i a m e n t a r y d i f f i c u l t i e s of p a s s i n g
this l e g i s l a t i o n would be g r e a t l y
T H E P R E S I D E N T O F T H E B O A R D O F T R A D E said that he
w a s n o t s u r e w h e t h e r t h i s p r o p o s a l w o u l d in f a c t p r o v e a c c e p t a b l e
to a substantial m a j o r i t y of G o v e r n m e n t s u p p o r t e r s .
Of t h o s e w h o
had spoken at the m e e t i n g of the P a r l i a m e n t a r y L a b o u r P a r t y , a
m a j o r i t y had b e e n c r i t i c a l of this p r o p o s a l .
T h e r e was a good deal
o f f e e l i n g about t h i s in the P a r t y , and he thought it w o u l d b e w i s e r o n
that a c c o u n t not t o r u s h the i n t r o d u c t i o n of the l e g i s l a t i o n ,
T H E M I N I S T E R O F D E F E N C E said that t h e r e had b e e n w i d e ­
s p r e a d r e l i e f in the P a r l i a m e n t a r y L a b o u r P a r t y w h e n it b e c a m e
known on the p r e v i o u s day that t h e r e w e r e t o b e no M i n i s t e r i a l
resignations o v e r this i s s u e .
M o r e o v e r , the Budget had m e t w i t h
a s u b s t a n t i a l m e a s u r e of s u p p o r t throughout the P a r t y ,
If this
c o n t r o v e r s y within the Cabinet w e r e n o w r e n e w e d , a v e r y s e r i o u s
P a r l i a m e n t a r y situation would a r i s e .
T h e f a c t w a s that the C a b i n e t
had d e c i d e d to i m p o s e t h e s e c h a r g e s , and had a u t h o r i s e d the
C h a n c e l l o r of the E x c h e q u e r to announce that d e c i s i o n .
The
l e g i s l a t i o n now p r o p o s e d did no m o r e than g i v e e f f e c t to that
decision.
If i t s i n t r o d u c t i o n w e r e d e l a y e d , f o r the r e a s o n s put
f o r w a r d b y the P r e s i d e n t o f t h e B o a r d o f T r a d e , t h e r e w a s b o u n d
t o b e c a n v a s s i n g and a g i t a t i o n a m o n g G o v e r n m e n t s u p p o r t e r s ; and
the d i v i s i o n of o p i n i o n w i t h i n t h e C a b i n e t w o u l d s o o n b e r e f l e c t e d
in the P a r t y ,
T h i s would c a u s e a split in the L a b o u r P a r t y - with
a l l the g r a v e c o n s e q u e n c e s w h i c h the C a b i n e t had d i s c u s s e d at t h e i r
t w o m e e t i n g s o n 9th A p r i l .
S o m e M i n i s t e r s had s a i d that t h e y
w o u l d r e s i g n i f the C a b i n e t d e c i d e d t o i m p o s e t h e s e c h a r g e s ;
but the C a b i n e t had s o d e c i d e d , and the M i n i s t e r s had not r e s i g n e d .
It w a s n o w t h e d u t y o f t h o s e M i n i s t e r s t o s u p p o r t t h e C a b i n e t ' s
decision.
If, a f t e r a l l t h a t h a d h a p p e n e d , t h e C a b i n e t w e r e n o w
t o r e v e r s e the d e c i s i o n w h i c h had b e e n a n n o u n c e d , s o m e o t h e r
M i n i s t e r s m i g h t find t h e m s e l v e s unable to d e f e n d such v a c i l l a t i o n
and m i g h t f e e l o b l i g e d t h e m s e l v e s t o r e s i g n f r o m the G o v e r n m e n t .
A t this point, at the F o r e i g n S e c r e t a r y ' s s u g g e s t i o n , the
m e m b e r s of the S e c r e t a r i a t w i t h d r e w .
On t h e i r r e t u r n , half an
hour l a t e r , T H E F O R E I G N S E C R E T A R Y said that the C a b i n e t had
r e a c h e d the d e c i s i o n s r e c o r d e d in t h e M i n u t e s , v i z . that t h e
N a t i o n a l H e a l t h S e r v i c e B i l l s h o u l d b e i n t r o d u c e d o n 17th A p r i l
and that the S e c o n d R e a d i n g should b e taken in the w e e k b e g i n n i n g
23rd A p r i l ,
NO CIRCULATION
C,M.(5l) 29TH CONCLUSIONS, M I N U T E
( 1 9 t h A p r i l , 1951 ­ 1 0 . 0
NAL
H
CE B I L L
ous
nee:
1) 27th
sions,
2)
RECORD
2
a.m.)
A f t e r the Cabinet had b e e n i n f o r m e d that the S e c o n d R e a d i n g
o f t h e N a t i o n a l H e a l t h S e r v i c e B i l l w o u l d b e taken on 2 4 t h A p r i l , T H E
M I N I S T E R O F L A B O U R said that, if t h e r e w e r e a d i v i s i o n , he would
n o t b e a b l e t o v o t e in f a v o u r o f t h e B i l l a n d t h a t i f i t w e r e c a r r i e d o n
T h i r d R e a d i n g , he would r e s i g n f r o m the G o v e r n m e n t ,
He thought
it r i g h t to w a r n his Cabinet c o l l e a g u e s that t h e s e w e r e his i n t e n t i o n s ,
and he w i s h e d t o have t h e m p l a c e d on r e c o r d ,
T H E F O R E I G N S E C R E T A R Y suggested that it would be m o r e
a p p r o p r i a t e f o r the M i n i s t e r t o put t h i s on r e c o r d in a l e t t e r to the
P r i m e M i n i s t e r , and h e s t i l l t h o u g h t t h i s s h o u l d b e d o n e .
He hoped
that the M i n i s t e r would not now s e e k , b y t h r e a t s of r e s i g n a t i o n , t o
c a u s e the C a b i n e t to m o d i f y the d e c i s i o n s w h i c h t h e y had a u t h o r i s e d
t h e C h a n c e l l o r o f the E x c h e q u e r t o a n n o u n c e in h i s B u d g e t s t a t e m e n t .
T H E M I N I S T E R O F L A B O U R said that he w o u l d w r i t e to the
Prime Minister.
But he had thought it o n l y f a i r to h i s C a b i n e t
c o l l e a g u e s that he should make h i s p o s i t i o n p l a i n to t h e m a l s o .
T h e C a b i n e t then p r o c e e d e d t o the d i s c u s s i o n ( r e c o r d e d in
the M i n u t e s ) r e g a r d i n g the p o s s i b i l i t y t h a t , on the S e c o n d R e a d i n g of
t h i s B i l l , s o m e s t a t e m e n t m i g H b e m a d e on the G o v e r n m e n t ^ b e h a l f
w h i c h w o u l d a l l a y the f e a r s o f s o m e G o v e r n m e n t s u p p o r t e r s that the
l i m i t upon e x p e n d i t u r e on the N a t i o n a l H e a l t h S e r v i c e and the c h a r g e s
i m p o s e d b y the B i l l would b e c o m e a p e r m a n e n t feature of the S e r v i c e
and w o u l d l e a d t o the i m p o s i t i o n of c h a r g e s f o r o t h e r f a c i l i t i e s p r o ­
v i d e d under it.
In t h e c o u r s e o f t h i s d i s c u s s i o n T H E M I N I S T E R O F
L A B O U R said that h i s d i f f i c u l t i e s m i g h t b e m e t if a s t a t e m e n t could
be m a d e to the e f f e c t that the c h a r g e s a u t h o r i s e d by t h i s B i l l w e r e o f
a t e m p o r a r y nature and that no f u r t h e r c h a r g e s w e r e c o n t e m p l a t e d .
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 i n d i c a t e d , h o w e v e r , that
a s t a t e m e n t in such t e r m s as t h o s e could not b e r e g a r d e d a s c o n s i s ­
t e n t w i t h w h a t he had s a i d on the p o i n t in h i s B u d g e t s p e e c h .
NO CIRCULATION RECORD
CM.(51)
52HD CONCLUSIONS. MINUTE 1
(16th
J u l y , 1951
- 11.0
a.m.)
THE CHANCELLOR OF THE EXCHEQUER s a i d t h a t , as h e had been
in
P a r i s a t t h e end o f t h e p r e v i o u s week on b u s i n e s s c o n n e c t e d w i t h t h e
O r g a n i s a t i o n f o r European Economic C o - o p e r a t i o n , h e had had t h e
t u n i t y o f a p r i v a t e m e e t i n g w i t h M r . H a r r i m a n , who was p a s s i n g
P a r i s on h i s way t o P e r s i a .
and t h e F o r e i g n S e c r e t a r y ,
oppor­
through
With t h e c o n c u r r e n c e o f t h e P r i m e
Minister
he had s e e n M r . H a r r i m a n , under c o n d i t i o n s
e x t r e m e s e c r e c y , and had had a f u l l
and f r a n k d i s c u s s i o n w i t h h i m .
Mr. Harriman had shown h i m s e l f f r i e n d l y and s y m p a t h e t i c t o w a r d s t h e
Kingdom Government, and seemed t o h a v e a c l e a r u n d e r s t a n d i n g o f
point of view.
their
s i d e , he was i n c l i n e d t o t h i n k t h a t t h e y went t o o f a r .
p r e s e n t p o l i c y , and t h a t P e r s i a n o i l
the
and, on t h e
H i s aim
was t o c o n v i n c e D r . Mussadiq t h a t he c o u l d n o t hope t o s u c c e e d i n
help.
United
,He u n d e r s t o o d t h a t t h e p r o p o s a l s which we had put t o
P e r s i a n Government c o n t a i n e d no m a r g i n f o r b a r g a i n i n g ;
financial
of
c o u l d n o t be s o l d w i t h o u t
his
British
M r . Harriman had s a i d t h a t we n e e d h a v e no f e a r t h a t he would
r e p r e s e n t h i m s e l f a s a m e d i a t o r between t h e P e r s i a n Government and o u r ­
selves.
He must a v o i d t h i s , , i f
f o r no o t h e r r e a s o n , because h i s
a c t i v i t i e s w e r e b e i n g j e a l o u s l y w a t c h e d by t h e American o i l
M r . Harriman had r a i s e d t w o p o i n t s o f d e t a i l .
companies.
F i r s t , h e had
e x p r e s s e d some doubts a b o u t our a t t i t u d e r e g a r d i n g t h e r e c e i p t s which t h e
P e r s i a n s had t r i e d t o
extract for o i l
s h i p p e d from Abadan.
The
Chancellor
had e x p l a i n e d t h a t o u r w h o l e c a s e would have been p r e j u d i c e d i f
we had
a c q u i e s c e d i n a form o f r e c e i p t i m p l y i n g t h a t the A n g l o - I r a n i a n
Oil
Company had no c l a i m t o p r o p e r t y i n t h e o i l .
S e c o n d l y , h e had s u g g e s t e d
t h a t t h e A . I . O . C . m i s s i o n n e e d n o t h a v e broken o f f
t h e P e r s i a n s so a b r u p t l y ,
when t h e i r f i r s t
t h e i r discussions
p r o p o s a l s were
rejected,
with
without t r y i n g t o f i n d out
the area o f disagreement.
The
^ C h a n c e l l o r had e x p l a i n e d t o Mr. Harriman why t h i s c o u r s e had
been t a k e n .
The
C h a n c e l l o r had a l s o r e f e r r e d t o t h e r i s k o f
disorders,
i n which t h e Tudeh P a r t y , might s e i z e p o w e r , and had m e n t i o n e d t h e
p o s s i b i l i t y t h a t i n such an e v e n t m i l i t a r y i n t e r v e n t i o n
become i n e v i t a b l e .
might
M r . Harriman had seemed t o be p r e p a r e d t o
m i l i t a r y i n t e r v e n t i o n i n such c i r c u m s t a n c e s , p r o v i d e d t h a t
t o o k p l a c e a t t h e i n v i t a t i o n o f t h e Shah.
accept
it
Mr. Harriman a l s o
seemed t o be i m p r e s s e d w i t h t h e need t o p r e v e n t t h e R u s s i a n s .
from g a i n i n g c o n t r o l o f t h e o i l a r e a i n N o r t h P e r s i a ,
and t h i s
c o n s i d e r a t i o n seemed l i k e l y t o i n f l u e n c e h i s w h o l e a t t i t u d e
this
towards
problem.
M r . Harriman was a n x i o u s t o k e e p i n c l o s e t o u c h w i t h
H.M. Ambassador i n T e h e r a n .
And he t h o u g h t t h a t t h e r e m i g h t be
. d e v e l o p m e n t s which might make i t
senior o f f i c i a l
he
desirable that a Minister or a
s h o u l d go o u t t o Teheran from t h e U n i t e d Kingdom b e f o r e
left.
On more g e n e r a l i s s u e s , Mr. Harriman e v i d e n t l y r e g r e t t e d
t h e Western Powers had n o t been a b l e t o do more t o
that
promote
economic development i n t h e M i d d l e E a s t , and he was much c o n c e r n e d
about t h i s .
He had h o t , hoviever, d i s c u s s e d i n d e t a i l t h e
of United States f i n a n c i a l assistance t o Persiaj
r e c o g n i s e d t h a t t h e r e was l i t t l e
prospect
and he
possibility
evidently
of furthering the
economic
d e v e l o p m e n t o f P e r s i a so l o n g as D r . Mussadiq remained i n p o w e r .
THE LORD PRIVY SEAL p o i n t e d o u t t h a t i f
t h e Russians gained a
f o o t h o l d i n H o r t h P e r s i a t h e y w o u l d , a p a r t from g a i n i n g a c c e s s t o
oil
supplies there, acquire
effective
c o n t r o l o v e r t h e whole
since the grain producing areas l a y in the north.
The C a b i n e t t o o k n o t e o f t h e s e
statements.
the
country