(c) crown copyright
Catalogue Reference:CAB/128/53/8
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C M ( 7 3 ) 47th
Conclusions
COPY NO
CABINET
C O N C L U S I O N S of a M e e t i n g of the Cabinet
held at 10 Downing S t r e e t on
T U E S D A Y 16 O C T O B E R 1973
a t 5.30 pm
PRESENT
T h e R t H o n E d w a r d Heath M P
Prime Minister
T h e R t Hon S i r A l e c D o u g l a s - H o m e M P
S e c r e t a r y of State for F o r e i g n and
Commonwealth Affairs
T h e R t H o n L o r d H a i l s h a m of St M a r y l e b o n e
L o r d Chancellor
T h e R t Hon Anthony B a r b e r M P
C h a n c e l l o r of the E x c h e q u e r
T h e R t Hon L o r d C a r r i n g t o n
S e c r e t a r y of State f o r D e f e n c e
T h e R t Hon R o b e r t C a r r M P
S e c r e t a r y of State f o r the H o m e
Department
The Rt Hon James P r i o r M P
L o r d P r e s i d e n t of the Council
T h e R t Hon S i r K e i t h Joseph M P
S e c r e t a r y of State for S o c i a l S e r v i c e s
T h e R t H o n G e o f f r e y R i p p o n QC M P
S e c r e t a r y of State for the E n v i r o n m e n t
T h e R t Hon M a r g a r e t T h a t c h e r M P
S e c r e t a r y of State f o r Education and
Science
The R t Hon Gordon Campbell M P
S e c r e t a r y of State for Scotland
T h e R t Hon P e t e r W a l k e r M P
S e c r e t a r y of State for T r a d e and Industry
T h e R t H o n John Dav&ea M P
C h a n c e l l o r of the Duchy of L a n c a s t e r
T h e Rt Hon P e t e r T h o m a s QC M P
S e c r e t a r y of State for W a l e s
T h e R t Hon Joseph Godber M P
M i n i s t e r 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
T h e Rt Hon S i r G e o f f r e y H o w e Q C M P
M i n i s t e r f o r T r a d e and C o n s u m e r A f f a i r s
T h e R t Hon L o r d W i n d l e s h a m
L o r d P r i v y Seal
ALSO PRESENT
T h e R t Hon F r a n c i s P y m M P
Parliamentary Secretary, Treasury
SECRETARIAT
Sir
Mr
Mr
Mr
Mr
John Hunt
H F T Smith
P Benner
H Ellis -Rees
J B W Robins
A
C O N T E N T S
Subject
Item
Page
1.
THE QUEEN'S S P E E C H ON THE P R O R O G A T I O N OF
PARLIAMENT
1
Z.
OIL SUPPLIES
1
3.
FOREIGN AFFAIRS
4
Middle East
ii
::;v;RET
THE
QUEEN S
SPEECH
ON THE
PROROGATION
OF
PARLIAMENT
1,
T h e Cabinet had b e f o r e them n o t e s b y the L o r d P r e s i d e n t of
the C o u n c i l ( C P ( 7 3 ) 100 and 101) to which we/?e U N M ^ . a d r a f t of
T h e Q u e e n ' s Speech on the P r o r o g a t i o n of P a r l i a m e n t ; ,
!
T h e Cabinet c o n s i d e r e d the draft Speech p a r a g r a p h by p a r a g r a p h ,
T H E P R I M E MINISTER^, summing up the d i s c u s s i o n said that the
Cabinet a p p r o v e d the d r a f t subject t o c e r t a i n amendments which had
been suggested.
It m i g h t , however^ be n e c e s s a r y to r e c o n s i d e r
p a r a g r a p h 7 when m o r e w a s known about the r e a c t i o n of the I c e l a n d i c
G o v e r n m e n t to the d i s c u s s i o n s on f i s h e r i e s which had just taken p l a c e
in London and to add a p a r a g r a p h about the fighting in the M i d d l e
East.
T h e S e c r e t a r y of State f o r N o r t h e r n I r e l a n d would a l s o need
t o r e v i e w the p a r a g r a p h s on N o r t h e r n I r e l a n d in the light of the
latest developments.
r
s
T h e Cabinet T o o k note,, with a p p r o v a l , of the P r i m e M i n i s t e r s
summing up of t h e i r d i s c u s s i o n .
s
OIL
SUPPLIES
m
2
t
T H E P R I M E M I N I S T E R informed- .the.. Cabinet, that the Organisaf
'o£ Petroleum: Sxporting"'Countries-(OPEC)- had met in Vienna the
p r e v i o u s week^and^presentecftne^ail c o m p a n i e s with a demand
t o double the p o s t e d p r i c e of o i l f r o m $3 to $6 a b a r r e l ^ r e q u e s t i n g
a r e p l y within a f e w d a y s .
T h e o i l c o m p a n i e s w e r e not p r e p a r e d to
a c c e p t an i n c r e a s e of this s i z e , but t h e y b e l i e v e d that any counter
o f f e r which they would c o n s i d e r r e a l i s t i c might lead to a b r e a k d o w n
of the n e g o t i a t i o n s ; in these c i r c u m s t a n c e s t h e y had r e p r e s e n t e d
that t h e y needed to consult t h e i r G o v e r n m e n t s about the O P E C
proposals.
T h e c o n f e r e n c e had a c c o r d i n g l y been adjourned f o r
two w e e k s .
If p r i c e i n c r e a s e s of t h i s o r d e r w e r e c o n c e d e d , it
would i n c r e a s e the c o s t of o i l supplies t o the E u r o p e a n E c o n o m i c
C o m m u n i t y by about $10, 000 m i l l i o n a y e a r .
The M i n i s t e r s m o s t
c l o s e l y c o n c e r n e d had been consulted by the o i l c o m p a n i e s about the
t a c t i c s t h e y should f o l l o w ; m e s s a g e s had been sent to the
G o v e r n m e n t s of the m a j o r o i l consuming p o w e r s ; and an attempt
would a l s o be m a d e to g a m the support of the Shah of I r a n f o r
m o d e r a t i n g the d e m a n d s of O P E C .
:
T H E S E C R E T A R Y O F S T A T E F O R D E F E N C E said that the w a r
b e t w e e n the A r a b States and I s r a e l w a s a l r e a d y interrupting supplies
of o i l t o W e s t e r n Europe,, though the e f f e c t so f a r on the United
Kingdom was s m a l l .
T h e A r a b m e m b e r s of O P E C w e r e h o w e v e r
due to m e e t in K u w a i t the following d a y t o d i s c u s s use of the o i l
w e a p o n a s a m e a n s of b r i n g i n g p r e s s u r e on the United States to
d r o p h e r support of I s r a e l , p o s s i b l y b y p r e v e n t i n g the sale of o i l
to United States o i l c o m p a n i e s .
T h e y w e l l r e c o g n i s e d that such a
m o v e could i n c i d e n t a l l y be v e r y damaging to E u r o p e a n s u p p l i e s , and
indeed had warned us on this account t o use our influence with the
United S t a t e s ,
A c t i o n w a s a l r e a d y i n hand to b r i n g into f o r c e the
o i l sharing a r r a n g e m e n t s of the O r g a n i s a t i o n for E c o n o m i c
C o - o p e r a t i o n and D e v e l o p m e n t ,
A g a i n s t this background the
T a s k F o r c e on Oil Supplies had r e v i e w e d the state of c o n t i n g e n c y
planning in the United K i n g d o m and c o n s i d e r e d the m e a s u r e s that
needed to be taken i m m e d i a t e l y .
Stocks of o i l stood at s o m e 75 d a y s
f o r w a r d consumption, with about 30 d a y s ' supply in t r a n s i t by sea at
any t i m e .
But distribution d i f f i c u l t i e s would a r i s e when stocks f e l l
b e l o w the l e v e l of 30 d a y s ' consumption.
A n i n t e r r u p t i o n in the
supply of A r a b o i l would cut our i m p o r t s by n e a r l y half, and
i m m e d i a t e action would b e needed to c o n s e r v e s t o c k s .
Legislation
would be r e q u i r e d to p r o v i d e p o w e r s to introduce m o t o r fuel
rationing and to e n f o r c e the a l l o c a t i o n of supplies to industry,
a s w e l l as to p r o t e c t the o i l c o m p a n i e s against being sued f o r
b r e a c h of contract b y t h e i r c u s t o m e r s ; and a B i l l could be r e a d y
f o r introduction at the beginning of the n e w S e s s i o n of Parlia.ment;
if a c r i s i s o c c u r r e d b e f o r e then it m i g h t be n e c e s s a r y to r e l y on
e m e r g e n c y powers,,
P r e p a r a t i o n s f o r the rationing of m o t o r fuel
could be c o m p l e t e d in t h r e e to four w e e k s ; h i t h e r t o t h e s e had been
h a m p e r e d b y the n e e d f o r s e c u r i t y , but in p r e s e n t c i r c u m s t a n c e s
public opinion was l i k e l y to a c c e p t the need f o r p r e c a u t i o n a r y
m e a s u r e s , and action need not be inhibited by the r i s k of the
G o v e r n m e n t ^ plans b e c o m i n g k n o w n
It would
be n e c e s s a r y
t o p r e p a r e the r e c r u i t m e n t of some 2 000 staff t o a d m i n i s t e r the
rationing s c h e m e .
T h e Cabinet m i g h t c o n s i d e r it a d v i s a b l e f o r
the C i v i l C o n t i n g e n c i e s Unit n o w to take o v e r the d i r e c t i o n of these
preparations.
C o n s i d e r a t i o n would a l s o need to be g i v e n to the way
in which cuts i n the consumption of o i l by industry should be i m p o s e d ,
and to the p o s s i b i l i t y of i n c r e a s i n g the use of c o a l at p o w e r s t a t i o n s .
T h e l a t t e r m e a s u r e could s a v e up to 6 m i l l i o n tons of o i l o v e r a
p e r i o d of six m o n t h s ; but account m u s t also be taken of the r i s k
t o c o a l supplies in c a s e of i n d u s t r i a l a c t i o n ,
The T a s k F o r c e would
be putting p r o p o s a l s on t h e s e questions to the M i n i s t e r i a l C o m m i t t e e
on E c o n o m i c S t r a t e g y ,
1
n
S
In d i s c u s s i o n t h e r e w a s g e n e r a l r e c o g n i t i o n of the u r g e n t need for
precautionary measures.
C o n s i d e r a t i o n would n e e d to b e g i v e n to
the p o s s i b i l i t y of i m p o r t i n g c o a l ; though this could have an a d v e r s e
e f f e c t on i n d u s t r i a l r e l a t i o n s in the c o a l m i n i n g i n d u s t r y .
Motor
fuel rationing would not of i t s e l f s a v e a l a r g e p r o p o r t i o n of the
c o u n t r y ' s o i l supplies - p e r h a p s s o m e 3 m i l l i o n tons a y e a r ; and
further study would need to be g i v e n to i t s i m p l i c a t i o n s f o r public
transport.
P l a n s w e r e in hand f o r the a d m i n i s t r a t i o n of the s c h e m e
from seven regional centres.
This complex administrative system
and the r e l a t i v e l y s m a l l benefit s u g g e s t e d that p e t r o l r a t i o n i n g
should be v e r y much a l a s t r e s o r t ; n o n e t h e l e s s , it would have
a m a r k e d effect on public opinion, and would underline the g r a v i t y
of the c r i s i s with which the country m i g h t b e f a c e d .
This might
a l s o a r g u e in f a v o u r of d e c l a r i n g a state of e m e r g e n c y at an
a p p r o p r i a t e m o m e n t : though it would be i m p o r t a n t to e m p h a s i s e
the l i m i t s of e m e r g e n c y p o w e r s .
It w a s further a c c e p t e d that
e x t e n s i v e p r e p a r a t i o n s of this kind m u s t c o m e to public n o t i c e ;
but public opinion would e x p e c t the G o v e r n m e n t to take v i g o r o u s
m e a s u r e s to s a f e g u a r d s u p p l i e s
A w e l l - d i r e c t e d publicity
campaign could s e c u r e significant e c o n o m i e s , and it would b e
i m p o r t a n t to take e v e r y advantage of the c l i m a t e o f opinion to s e c u r e
a c c e p t a n c e f o r the G o v e r n m e n t s m e a s u r e s ,
s
T H E P R I M E M I N I S T E R , summing up the d i s c u s s i o n said that the
Cabinet a g r e e d that contingency planning against an i n t e r r u p t i o n to
our o i l supplies should be c a r r i e d f o r w a r d with the u t m o s t v i g o u r .
If a s e r i o u s c r i s i s a r o s e , public opinion would e x p e c t the G o v e r n m e n t
to be r e a d y with a p p r o p r i a t e m e a s u r e s ; and t h e r e would be w i d e ­
s p r e a d c r i t i c i s m if they f a i l e d to m a t c h the p r e s s u r e of e v e n t s .
Both the T a s k F o r c e on Oil Supplies and the C i v i l C o n t i n g e n c i e s
Unit would h a v e a r o l e to p l a y and t h e r e would need to be c l o s e
co-ordination between them.
In g e n e r a l h o w e v e r the T a s k F o r c e
in addition to any m a t t e r s c o n c e r n i n g o i l p o l i c y g e n e r a l l y , should
c o n c e r n i t s e l f with the m a i n t e n a n c e of our o i l s u p p l i e s to the m a x i m u m
extent; w h e r e a s the C i v i l C o n t i n g e n c i e s Unit would be r e s p o n s i b l e f o r
a l l m a t t e r s affecting our a b i l i t y t o endure in a situation w h e r e o i l
supplie3 had been r e d u c e d .
In p a r t i c u l a r the C i v i l C o n t i n g e n c i e s Unit
should u r g e n t l y e x a m i n e the p r o p o s a l s for l e g i s l a t i o n , the p o s s i b l e
use of the E m e r g e n c y P o w e r s A c t , the p r e p a r a t i o n s f o r m o t o r fuel;
r a t i o n i n g , and the m e a s u r e s that should be adopted f o r a l l o c a t i n g cuts
in i n d u s t r i a l use of oily as w e l l as any o t h e r s t e p s that m i g h t be taken
t o m i n i m i s e the e f f e c t of an i n t e r r u p t i o n including a suitable
publicity campaign.
A c t i o n on a contingency b a s i s should be
p r e s s e d ahead a s r a p i d l y as p o s s i b l e under the g e n e r a l s u p e r v i s i o n
of the C i v i l C o n t i n g e n c i e s U n i t ,
Collective Ministerial approval
would of c o u r s e b e n e c e s s a r y b e f o r e any steps w e r e taken by us to
r e d u c e c o n s u m p t i o n : and it would a l s o be n e c e s s a r y f o r the
E c o n o m i c S t r a t e g y C o m m i t t e e to c o n s i d e r at an e a r l y date the
p r i o r i t i e s f o r the a l l o c a t i o n of o i l t o industry and other v i t a l s e c t o r s
after t h e s e had been e x a m i n e d by the C i v i l C o n t i n g e n c i e s Unit,
?
?
The Cabinet ­
1.
A g r e e d that c o n t i n g e n c y p r e p a r a t i o n s against
any i n t e r r u p t i o n in the United K i n g d o m ' s supplies of
o i l should be c o m p l e t e d as a m a t t e r of u r g e n c y .
i.
T h e S e c r e t a r y of State f o r T r a d e and
Industry, in consultation with the L o r d
P r e s i d e n t of the C o u n c i l , to a r r a n g e f o r
l e g i s l a t i o n c o n t r o l l i n g the supply of liquid
f u e l s to be p r e p a r e d
0
ii.
T h e L o r d P r e s i d e n t of the C o u n c i l ,
i n consultation with the S e c r e t a r y of State f o r
T r a d e and Industry t o a r r a n g e f o r the C i v i l
C o n t i n g e n c i e s Unit to e x a m i n e a l l the
p r e p a r a t i o n s f o r reducing d o m e s t i c o i l
consumption in this country a s i n d i c a t e d
i n the P r i m e M i n i s t e r 's summing u p .
s
Hi.
T h e S e c r e t a r y of State f o r D e f e n c e
t o a r r a n g e f o r the T a s k F o r c e on O i l Supplies
t o continue to e x a m i n e a l l p o s s i b l e w a y s of
ensuring the maintenance of o i l supplies to
this country to the m a x i m u m extent p o s s i b l e .
FOREIGN
AFFAIRS
3.
T h e Cabinet r e s u m e d t h e i r c o n s i d e r a t i o n o f the latest
d e v e l o p m e n t s in the M i d d l e E a s t .
T h e i r d i s c u s s i o n and the
c o n c l u s i o n s r e a c h e d a r e r e c o r d e d separately,,
Middle
East
Previous
Reference:
C M ( 7 3 ) 46th
Conclusions,
Minute 2
Cabinet Office
17 O c t o b e r 1973
C O P Y NO
CABINET
CONFIDENTIAL ANNEX
C M ( 7 3 ) 47th C o n c l u s i o n s , M i n u t e 3
T u e s d a y 16 O c t o b e r 1973 at 5. 30 pm
T H E F O R E I G N A N D C O M M O N W E A L T H S E C R E T A R Y r e p o r t e d that
when he had m a d e his statement on the M i d d l e E a s t fighting that
a f t e r n o o n , the m o o d of the H o u s e of C o m m o n s s e e m e d to be r a t h e r
c a l m e r than m i g h t h a v e been e x p e c t e d .
H e had s t r e s s e d the e v e n ­
handed nature of c u r e m b a r g o on a r m s supplies and the d i s t i n c t i o n
b e t w e e n supplies sought by the d i r e c t combatants and those intended
f o r the d e f e n c e of the P e r s i a n Gulf,
H e hoped a l s o that he had
d i s p o s e d of the c o n c e r n r e g a r d i n g the t r a i n i n g being g i v e n t o E g y p t i a n
h e l i c o p t e r p i l o t s and the supply of tanks to Dubai.
In a short d i s c u s s i o n it w a s noted that the r e c e p t i o n g i v e n t o a
s i m i l a r statement in the H o u s e of L o r d s had been m a r k e d l y m o r e
c r i t i c a l ; and it w a s a r g u e d that the d i s t i n c t i o n which the G o v e r n m e n t
had d r a w n in connection with the continued supply of a r m s t o the Gulf
States w a s l i k e l y to c o m e under i n c r e a s i n g c r i t i c i s m .
In p a r t i c u l a r
t h e r e would b e opposition to supplies going to Saudi A r a b i a .
It was
a l s o c l e a r that in m a n y q u a r t e r s t h e r e w a s unease about the
G o v e r n m e n t ^ r e f u s a l to state p u b l i c l y that the A r a b s w e r e r e s p o n s i b l e
f o r b r e a k i n g the c e a s e f i r e e v e n i f this stopped short of condemnation.
On the other hand no convincing a r g u m e n t s had b e e n put f o r w a r d to
show that the G o v e r n m e n t s p r e s e n t p o l i c y was w r o n g , and the
Cabinet w e r e i n f o r m e d that the I r i s h F o r e i g n M i n i s t e r w a s anxious
that the C o m m u n i t y c o u n t r i e s should m a k e a j o i n t d e m a r c h e to the
United States and the S o v i e t Union about the a r m s shipments t h e y
w e r e making.
On the other hand it w a s a r g u e d that i f the O r g a n i s a t i o n
o f P e t r o l e u m E x p o r t i n g C o u n t r i e s m e e t i n g r e s u l t e d anyhow in the
r e d u c t i o n of supplies of o i l to us we should h a v e g r e a t e r f r e e d o m
of m a n o e u v r e to a s s i s t I s r a e l .
E v e n t s w e r e m o v i n g fast and the
C a b i n e t would need to continue t o ke-op t h e m under c l o s e r e v i e w .
T h e Cabinet Took note.
Cabinet Office
17 O c t o b e r 1973