(c) crown copyright
Catalogue Reference:CAB/128/53/18
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COPY NO
C M ( 7 3 ) 57th
Conclusions
Q
!
0
CABINET
C O N C L U S I O N S of a Meeting of the Cabinet
held a t 10 Downing Street on
T H U R S D A Y 22 N O V E M B E R 1973
at 11. 00 am
PRESENT
The Rt Hon E d w a r d Heath M P
P r i m e Minister
The Rt Hon Sir 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 A f f a i r s
The RtHon L o r d H a i l s h a m of StMarylebone
Lord Chancellor
The Rt Hon Antbony B a r b e r M P
Chancellor of the Exchequer
The Rt Hon W i l l i a m Whitelaw M P
S e c r e t a r y of State for Northern Ireland
The Rt Hon L o r d C a r ring ton
S e c r e t a r y of State for Defence
The Rt Hon R o b e r t C a r r M P
S e c r e t a r y of State for the Home Department
The Rt Hon James P r i o r M P
L o r d President of the Council
The Rt Hon Sir Keith Joseph M P
S e c r e t a r y of State for Social S e r v i c e s
The Rt Hon Geoffrey Rippon QC M P
S e c r e t a r y of State for the Environment
The Rt Hon M a r g a r e t Thatcher M P
S e c r e t a r y of State for Education and Science
The Rt Hon Gordon Campbell M P
S e c r e t a r y of State for Scotland
The Rt Hon P e t e r Walker M P
Secretary of State for T r a d e and Industry
The Rt Hon John Davies M P
Chancellor of the Duchy of Lancaster
The Rt Hon P e t e r Thomas QC M P
Secretary of State for W a l e s
The Rt Hon M a u r i c e M a c m i l l a n M P
S e c r e t a r y of State for Employment
The Rt 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
Food
The Rt Hon Sir Geoffrey Howe Q C M P
M i n i s t e r for T r a d e and Consumer
Affairs
The Rt Hon L o r d Windlesham
L o r d P r i v y Seal ,
*
t
THE FOLLOWING WERE A L S O PRESENT
. M r T o m Boardman M P
M i n i s t e r f o r Industry ( I t e m s 5 and 6)
T h e R t Hon P a t r i c k Jenkin M P
Chief S e c r e t a r y , T r e a s u r y ( I t e m 7)
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
Mr
Mr
Mr
John Hunt P D N a i r n e ( I t e m 3) H F T Smith ( I t e m s 1-4) P B e n n e r ( I t e m s 1 and 7) J A H a m i l t o n ( I t e m s 5 and 6) I T L a w m a n ( I t e m 6) H F E l l i s - R e e s ( I t e m 2) R B S Johnston ( I t e m 5) CONTENTS
Item
Subject
1.
P A R L I A M E N T A R Y A F F A I R S
2 .
FOREIGN AFFAIRS
Page
1
Greece
2
E u r o p e a n Summit M e e t i n g
2
V i s i t of the P r e s i d e n t of F r a n c e
2
3,
E U R O P E A N C O M M U N I T Y A F F A I R S
3
4.
N O R T H E R N I R E L A N D
4
5.
INDUSTRIAL AFFAIRS
T h e C o a l Industry and E l e c t r i c i t y Supply Industry
6.
O I L S U P P L I E S
7.
R A T E S U P P O R T G R A N T
6
7
11
**
11
.' ,Rb r
PARLIAMENTARY
AFFAIRS
1
T h e Cabinet w e r e i n f o r m a l of the b u s i n e s s to be t a k e n in the
House of C o m m o n s during the f o l l o w i n g w e e k .
0
It was noted that further i m p e t u s w a s u r g e n t l y needed f o r the public
p r e s e n t a t i o n of the G o v e r n m e n t s E u r o p e a n p o l i c i e s and that It was
intended that m a t e r i a l f o r this p u r p o s e should e m e r g e f r o m the
s p e e c h e s to be made by the G o v e r n m e n t s p o k e s m e n during the debate
on E u r o p e a n Community a f f a i r s which would be taking place on
27 N o v e m b e r .
T h e Cabinet w e r e i n f o r m e d that t h e r e was c o n s i d e r a b l e concern,,
which was s h a r e d by m a n y G o v e r n m e n t s u p p o r t e r s , on the question
of t e a c h e r s ' p e n s i o n s , w h i c h w a s the subject of an O p p o s i t i o n Motion
due to b e d i s c u s s e d on 28 N o v e m b e r ,
T h e S e c r e t a r y of State f o r
Education and Science w a s c o n s i d e r i n g what s t e p s could be taken
and announced in the debate to a l l a y this c o n c e r n ; and it would be
helpful i f in advance of the d e b a t e she could have i n f o r m a l
d i s c u s s i o n s with G o v e r n m e n t s u p p o r t e r s i n the House of C o m m o n s ,
1
2,
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 said
that the r e c e n t d i s t u r b a n c e s in G r e e c e , in w h i c h the A r m y had been
used and t h e r e had been a number of d e a t h s , r e p r e s e n t e d a s e r i o u s
setback t o the attempts that v/ere being m a d e t o r e s t o r e a g r e a t e r
m e a s u r e of democracy,,
T h e r e would no doubt be r e n e w e d
c r i t i c i s m of the G r e e k r e g i m e on the p a r t of s o m e m e m b e r s
of the A l l i a n c e ,
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 said that
the F o r e i g n M i n i s t e r s o f the N i n e had h e l d useful d i s c u s s i o n s in
Copenhagen on 20 N o v e m b e r in p r e p a r a t i o n f o r the m e e t i n g of the
H e a d s of State and G o v e r n m e n t which w a s t o be held t h e r e on
14 and 15 D e c e m b e r ,
I t had b e e n a g r e e d that in the m a i n the
m e e t i n g s would not be attended by the F o r e i g n M i n i s t e r s who
w o u l d , h o w e v e r , be p r e s e n t in Copenhagen and would take p a r t
as n e c e s s a r y ,
A p r o v i s i o n a l agenda had b e e n a g r e e d .
T h e Cabinet ­
1,
T o o k note o f the statements b y the F o r e i g n
and C o m m o n w e a l t h S e c r e t a r y ,
T H E P R I M E M I N I S T E R said that he had h e l d eight hours of useful
d i s c u s s i o n with the P r e s i d e n t of F r a n c e when M P o m p i d o u v i s i t e d
h i m at C h e q u e r s on 16 and 17 N o v e m b e r ,
T h e d i s c u s s i o n s had
ranged o v e r a w i d e f i e l d and the P r e s i d e n t had made a m o r e
i n t e r e s t i n g contribution than at t h e i r l a s t m e e t i n g in P a r i s in
May,
T h e y a g r e e d about the w a y in which the f o r t h c o m i n g Summit
of the N i n e should be h e l d .
A s r e g a r d s C o m m u n i t y a f f a i r s the
P r e s i d e n t w i s h e d to m a k e p r o g r e s s t o w a r d s the second stage of
the E c o n o m i c and M o n e t a r y Union and did not m a k e this conditional
upon a r e t u r n to the snake; he had u n d e r t a k e n to do his u t m o s t to be
helpful o v e r the R e g i o n a l D e v e l o p m e n t F u n d , although h e w a s not at
this stage p r e p a r e d to c o m m i t h i m s e l f t o a f i g u r e ; as r e g a r d s
P r o t o c o l 22 he did not i n s i s t that a c c e p t a n c e of r e v e r s e p r e f e r e n c e s
should b e a condition o f a s s o c i a t i o n , and would b e s a t i s f i e d if i n d i ­
v i d u a l c o u n t r i e s w e r e a l l o w e d f r e e d o m to c h o o s e w h e t h e r to a c c e p t
reverse preferences.
P r e s i d e n t P o m p i d o u a g r e e d that i m p r o v e m e n t s
w e r e n e c e s s a r y in the f i n a n c i a l c o n t r o l of C o m m u n i t y e x p e n d i t u r e .
H e a g r e e d that t h e r e should b e a C o m m u n i t y A u d i t B o a r d but he did
not a g r e e that r e s p o n s i b i l i t y f o r financial c o n t r o l should be p l a c e d
in the hands of a single C o m m i s s i o n e r .
T h e P r i m e M i n i s t e r had
e x p l a i n e d the d i f f i c u l t i e s w e w e r e e n c o u n t e r i n g in our r e l a t i o n s with
Spain a s a r e s u l t of o u r d i f f e r e n c e s o v e r G i b r a l t a r and, in p a r t i c u l a r ,
SECRE ' the indications that the SpaMsh G o v e r n m e n t intended t o d i s c r i m i n a t e
against B r i t i s h t r a d e and I n v e s t m e n t .
W e had asked f o r a s s u r a n c e s
that t h e r e would b e no such d i s c r i m i n a t i o n and this question had a
b e a r i n g on the n e g o t i a t i o n s which w e r e taking p l a c e b e t w e e n Spain
and the C o m m u n i t y .
H e had e x p r e s s e d the hope that F r e n c h
influence would be used to persuade the Spaniards to undertake
not to d i s c r i m i n a t e against u s .
He had a l s o t o l d P r e s i d e n t Pompidou
that our s o l e d e s i r e within the f r a m e w o r k of the C o m m o n A g r i c u l t u r a l
P o l i c y w a s to ensure that as much a s p o s s i b l e was done t o h e l p
G o v e r n m e n t s attack i n f l a t i o n ; this meant action on the p r i c e s f r o n t
and the r e f u s a l to a l l o w the accumulation of u n n e c e s s a r y s u r p l u s e s .
T h e P r i m e M i n i s t e r said that he and P r e s i d e n t P o m p i d o u had
d i s c u s s e d defence questions at some length.
The F r e n c h w e r e
e v i d e n t l y engaged i n r e v i e w i n g t h e i r p o l i c y ; but they had not r e a c h e d
any f i r m conclusions about the extent to which it m i g h t be n e c e s s a r y
t o change l t
T h e r e had b e e n a useful d i s c u s s i o n on the situation in
the M i d d l e E a s t and the p r o b l e m of o i l s u p p l i e s , in which they found
t h e m s e l v e s v e r y l a r g e l y in a g r e e m e n t .
H e had r e f e r r e d t o the
d i f f e r e n c e s which e x i s t e d between us and the F r e n c h on the d i v i s i o n
of the Continental Shelf in the W e s t e r n A p p r o a c h e s and the Channel.
P r e s i d e n t P o m p i d o u had said that he was not f a m i l i a r with the d e t a i l s
o f the o f f i c i a l d i s c u s s i o n but would i n f o r m h i m s e l f on his r e t u r n to
Paris.
0
T h e Cabinet ­
2,
T o o k note of the statement by the P r i m e Minister. 3,
T H E C H A N C E L L O R OF T H E D U C H Y OF L A N C A S T E R said
that the d e c i s i o n s on the support of h i l l f a r m i n g taken at the m e e t i n g
o f the A g r i c u l t u r a l M i n i s t e r s on 20 N o v e m b e r w e r e on balance
f a v o u r a b l e to xt&*
T h e Cabinet T o o k note of the statement b y the C h a n c e l l o r o f the
Duchy of L a n c a s t e r .
4.
THE S E C R E T A R Y OF S T A T E FOR N O R T H E R N I R E L A N D
said that he had r e a c h e d a g r e e m e n t the p r e v i o u s day with the
Unionist P a r t y , the S o c i a l D e m o c r a t i c and L a b o u r P a r t y ( S B L P ) ,
and the A l l i a n c e P a r t y on t h e b a s i s f o r the f o r m a t i o n of an E x e c u t i v e .
H e would b e m a k i n g a r e p o r t to P a r l i a m e n t i n the c o u r s e of the d e b a t e
l a t e r that d a y .
T h e c e n t r a l p r o b l e m had p r o v e d to be the c o m p o s i t i o n
of the E x e c u t i v e .
It w a s e s s e n t i a l that M r F a u l k n e r and M s
s u p p o r t e r s should have an absolute m a j o r i t y on the E x e c u t i v e
i t s e l f , f o r without this they would not h a v e p a r t i c i p a t e d and the
E x e c u t i v e could not h a v e been f o r m e d .
But M r F a u l k n e r ' s strength
in the A s s e m b l y w a s s c a r c e l y g r e a t e r than that of the S D L P and in
o r d e r to m e e t the c l a i m s of the S D L P and the A l l i a n c e Passty i t had
b e e n n e c e s s a r y t o p r o v i d e additional p o s t s within an A d m i n i s t r a t i o n
which included the E x e c u t i v e m e m b e r s and s o m e o t h e r s .
On the
E x e c u t i v e i t s e l f the Unionists would h a v e six p l a c e s , the S D L P four,
and the A l l i a n c e P a r t y one p l a c e .
M r F a u l k n e r would b e the C h i e f
E x e c u t i v e j M r F i t t the S D L P l e a d e r ^ would b e the Deputy Chief
E x e c u M v e ; and M r N a p i e r l e a d e r of the A l l i a n c e P a r t y , would b e
the L e g a l M e m b e r and in c h a r g e of an Office f o r L a w R e f o r m .
The
additional appointment of o n e Unionist., two S D L P m e m b e r s and one
A l l i a n c e P a r t y m e m b e r to n o n - E x e c u t i v e p o s t s r e s u l t e d in an
A d m i n i s t r a t i o n c o n s i s t i n g of s e v e n U n i o n i s t s , s i x S D L P and t w o
Alliance members.
In addition a m e m b e r of the A l l i a n c e P a r t y
w a s to be appointed Deputy C h i e f W h i p , outside the A d m i n i s t r a t i o n .
Under the Constitution A c t p r o v i s i o n w a s m a d e f o r 12 p o s t s .
It
would t h e r e f o r e be n e c e s s a r y t o m a k e an a m e n d m e n t to the A c t
and he would p r o p o s e that this should p r o v i d e f o r 11 p o s t s on the
E x e c u t i v e and up t o four posts outside the E x e c u t i v e , but c a r r y i n g
m e m b e r s h i p of the A d m i n i s t r a t i o n .
The a g r e e m e n t on the c o m p o s i t i o n
of the E x e c u t i v e w a s subject to the o u t c o m e of a m e e t i n g , to b e held
e a r l y in D e c e m b e r , b e t w e e n t h o s e who would be m e m b e r s of the
E x e c u t i v e , r e p r e s e n t a t i v e s of t h e I r i s h G o v e r n m e n t and r e p r e s e n ­
t a t i v e s of H e r M a j e s t y S G o v e r n m e n t ,
T h i s c o n f e r e n c e would d i s c u s s
the p r o p o s a l f o r a Council of I r e l a n d ,
The P a r t i e s in the N o r t h e r n
I r e l a n d A s s e m b l y who had r e f u s e d to p a r t i c i p a t e in the E x e c u t i v e
would not be r e p r e s e n t e d at the c o n f e r e n c e , but t h e i r l e a d e r s would
be i n v i t e d t o d i s c u s s t h e i r v i e w s with h i m so that t h e s e would be known
at the t i m e of the c o n f e r e n c e .
If the c o n f e r e n c e c a m e to a s a t i s f a c t o r y
conclusion P a r l i a m e n t would b e a s k e d to a p p r o v e the O r d e r f o r the
devolution of p o w e r s to the N o r t h e r n I r e l a n d E x e c u t i v e and A s s e m b l y .
In the m e a n t i m e the g r o u p who would then b e c o m e the E x e c u t i v e would
be known a s the E x e c u t i v e D e s i g n a t e .
Once p o w e r s had b e e n
d e v o l v e d a r r a n g e m e n t s would b e m a d e to hold a f o r m a l c o n f e r e n c e
b e t w e e n H e r M a j e s t y S G o v e r n m e n t , the G o v e r n m e n t of the R e p u b l i c
and the N o r t h e r n I r e l a n d E x e c u t i v e on the f o r m a t i o n of a Council of
Ireland.
H i s d i s c u s s i o n s with the t h r e e P a r t i e s had p r o d u c e d a f i r m
understanding that the R o y a l U l s t e r C o n s t a b u l a r y would continue t o
p r o v i d e the p o l i c e s e r v i c e f o r N o r t h e r n I r e l a n d ,
In o r d e r to r e a c h
s
SECRET
a g r e e m e n t he had found i t n e c e s s a r y to m a k e some l i m i t e d c o n c e s s i o n s
in the m a t t e r of detention,,
H e had stated h i s intention, i f the s e c u r i t y
situation p e r m i t t e d , to b r i n g into use his statutory p o w e r s of s e l e c t i v e
r e l e a s e and to r e l e a s e a number of d e t a i n e e s b e f o r e Christmas,,
It
would be i m p o r t a n t t o d o something i n this d i r e c t i o n , but i t would be
u n w i s e to assume that the a g r e e m e n t s he had now r e a c h e d would lead
t o an e a r l y r e d u c t i o n of v i o l e n c a .
T h e i m m e d i a t e result m i g h t b e
that e x t r e m i s t s on both s i d e s would seek to i n c r e a s e v i o l e n c e and
t h e r e m i g h t a l s o be i n d u s t r i a l action by s o m e sections of e x t r e m e
P r o t e s t a n t opinion.
He would in p a r t i c u l a r be c o n c e r n e d t o p r o t e c t
t h o s e who would be m e m b e r s of the n e w N o r t h e r n I r e l a n d A d m i n i s t r a ­
t i o n , a number of w h o m had a l r e a d y b e e n subjected to t h r e a t s .
8
T H E P R I M E M I N I S T E R said that the a g r e e m e n t that had b e e n r e a c h e d
w a s the o u t c o m e of a long p e r i o d of d i f f i c u l t negotiation.
T h e Cabinet
would wish to c o n g r a t u l a t e the 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
on a r e m a r k a b l e a c h i e v e m e n t .
It w a s i m p o r t a n t that the extent of
t h i s a c h i e v e m e n t and i t s s i g n i f i c a n c e f o r N o r t h e r n I r e l a n d and the
United K i n g d o m should b e understood in P a r l i a m e n t and the country.
W e should not, h o w e v e r , g i v e the i m p r e s s i o n that this was the end of
the p r o b l e m
^ in particular^ we should a v o i d any s u g g e s t i o n that
v i o l e n c e w a s l i k e l y to c o m e t o a v e r y e a r l y end.
T h e a g r e e m e n t did
not affect the a s s e s s m e n t that the P r o v i s i o n a l Wing of the I r i s h
R e p u b l i c a n A r m y m i g h t attempt further c a m p a i g n s of v i o l e n c e in
t h i s country, and h i s c o l l e a g u e s should e n s u r e that t h e r e w a s no
r e l a x a t i o n of the p r e c a u t i o n s that w e r e taken against t h i c .
s
a n
T h e Cabinet T o o k note, with a p p r o v a l , of the statements b y the
P r i m e M i n i s t e r and the S e c r e t a r y of State f o r
Northern Ireland,
5.
T H E S E C R E T A R Y O F S T A T E F O R E M P L O Y M E N T said that
he had c i r c u l a t e d on the p r e v i o u s evening notes about the state o£ the
i n d u s t r i a l disputes in the c o a l and e l e c t r i c i t y supply i n d u s t r i e s .
The
E x e c u t i v e of the N a t i o n a l Union of M i n e w o r k e r s had m e t the p r e v i o u s
day and had d e c i d e d to r e j e c t the i m p r o v e d o f f e r put to t h e m b y the
National C o a l B o a r d .
Although the m o d e r a t e e l e m e n t s in the
E x e c u t i v e had hoped f o r a d e c i s i o n in f a v o u r of a b a l l o t t h e y had
been o v e r r i d d e n .
H e c o n s i d e r e d that the o n l y p l a u s i b l e c o u r s e
of action b e t w e e n now and the next m e e t i n g of the E x e c u t i v e on
13 D e c e m b e r w a s to maintain e f f o r t s to i n f l u e n c e opinion a m o n g s t
the m i n e r s and the public in f a v o u r of the o f f e r .
One b r i g h t spot
was the situation in H u l l d o c k s w h e r e the dock w o r k e r s had now
a c c e p t e d an o f f e r of an 8 p e r cent i n c r e a s e c o m p a r e d with t h e i r
o r i g i n a l c l a i m f o r 20 p e r cent: this w a s l i k e l y t o be t h e f i r s t m a j o r
pay a w a r d to be s e t t l e d within the t e r m s of Stage 3.
T H E P R I M E M I N I S T E R , summing up a b r i e f d i s c u s s i o n , said that the
Cabinet would w i s h to d i s c u s s the m a t t e r again at t h e i r next m e e t i n g .
In the m e a n t i m e , the S e c r e t a r y of State f o r E m p l o y m e n t , i n
consultation with the L o r d P r e s i d e n t , should a r r a n g e f o r the
c o u r s e s of a c t i o n on the disputes in both the c o a l industry and
e l e c t r i c a l supply industry to be further e x a m i n e d , and f o r r e v i s e d
guidance on publicity t o be c i r c u l a t e d to M i n i s t e r s ,
T h e Cabinet ­
1.
T o o k n o t e , with a p p r o v a l , of the summing
up b y the P r i m e M i n i s t e r of t h e i r d i s c u s s i o n .
2.
I n v i t e d the S e c r e t a r y of S t a t e f o r E m p l o y m e n t ,
i n 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 further e x a m i n a t i o n of the c o u r s e s of
a c t i o n a s outlined in the summing up of t h e i r
d i s c u s s i o n by the P r i m e M i n i s t e r , and to c i r c u l a t e
a p a p e r f o r the Cabinet t o d i s c u s s at t h e i r next
meeting.
OIL
SUPPLIES
6.
T h e Cabinet c o n s i d e r e d a m e m o r a n d u m by the S e c r e t a r y of
State f o r T r a d e and Industry ( C P ( 7 3 ) 128) about o i l s u p p l i e s .
Previous
Reference:
C M ( 7 3 ) 56th
Conclusions,
Minute 7
T H E S E C R E T A R Y OF S T A T E F O R T R A D E A N D I N D U S T R Y said
that total stocks o f m o t o r s p i r i t at 18 N o v e m b e r amounted to 65 d a y s
supply, a d r o p of f i v e d a y s since the end of O c t o b e r .
If this r a t e of
f a l l continued, the 4 5 - d a y stock l e v e l , when distribution d i f f i c u l t i e s
would s t a r t to b e c o m e a c u t e , would be r e a c h e d by the end of
January.
T h e o i l c o m p a n i e s e s t i m a t e d that m o t o r s p i r i t supplies
would f a l l short o f demand f r o m n o w on b y about 25 p e r c e n t , i f not
more.
Although the o i l c o m p a n i e s had a l r e a d y been t o l d to cut
supplies t o d e a l e r s by 10 p e r cent, the e s t i m a t e d r e d u c t i o n in the
intake of o i l into the country in D e c e m b e r , coupled with the
continuing uncertainty o v e r future supplies of o i l f r o m the M i d d l e
E a s t , i n d i c a t e d that i t would not be p o s s i b l e to avoid the introduction
of p e t r o l rationings
If a situation a r o s e in which rationing w a s
n e c e s s a r y at short n o t i c e t h e r e would be v a l i d c r i t i c i s m of the
G o v e r n m e n t if it then e m e r g e d that i t would take b e t w e e n t h r e e
and f i v e w e e k s to i n t r o d u c e r a t i o n i n g .
H e did not c o n s i d e r that
the p r e s e n t cuts in d e l i v e r i e s could be sustained f o r m o r e than
t h r e e w e e k s without causing abuse of the a r r a n g e m e n t s and
discontent a m o n g s t t h e p u b l i c .
It w a s i m p o r t a n t that the G o v e r n m e n t
should be in a p o s i t i o n t o i n t r o d u c e rationing quickly, should this
p r o v e n e c e s s a r y , by starting the i s s u e of ration books a s soon as
possible.
H e sought a u t h o r i t y to announce, in the d e b a t e on the
Second R e a d i n g o f the F u e l and E l e c t r i c i t y ( C o n t r o l ) B i l l on the
f o l l o w i n g Monday, that the i s s u e of r a t i o n books would n o w s t a r t ,
in o r d e r that the G o v e r n m e n t might h a v e the ability t o i n t r o d u c e
rationing quickly, should it b e c o m e n e c e s s a r y to do s o .
1
In d i s c u s s i o n it w a s a r g u e d that it w a s difficult to r e c o n c i l e the
e s t i m a t e s of the s h o r t f a l l in o i l supplies with the a s s u r a n c e s which
had been g i v e n by the A r a b o i l producing c o u n t r i e s - r e p e a t e d again
o n l y the day b e f o r e - that t h e y w e r e w i l l i n g to m e e t our r e q u i r e m e n t s
in f u l l .
I f the G o v e r n m e n t n o w announced the issue o f r a t i o n books,
public opinion at h o m e and a b r o a d would conclude that this w a s being
done b e c a u s e we f o r e s a w the n e c e s s i t y f o r rationing.
N o other
country i n E u r o p e had taken such an e x t r e m e step; and the A r a b
o i l producing c o u n t r i e s would conclude that this was n e c e s s a r y only
b e c a u s e w e w e r e r e - e x p o r t i n g o i l t o other c o u n t r i e s , and thus
c o n s p i r i n g to f r u s t r a t e t h e i r p o l i c i e s .
With a Summit m e e t i n g
of t h e s e c o u n t r i e s due t o be held at the weekend the i m p a c t of an
announcement that day would be p a r t i c u l a r l y a d v e r s e .
Instead of
being at the top o f the l i s t of countries r e g a r d e d as f r i e n d l y to the
A r a b S t a t e s , we m i g h t find our supplies substantially r e d u c e d .
M o r e i n f o r m a t i o n on the o i l supply situation should b e m a d e
a v a i l a b l e b e f o r e a d e c i s i o n of this magnitude was taken.
On the other hand, i t w a s a r g u e d that although p r e c i s e i n f o r m a t i o n
about future o i l supplies w a s difficult to obtain, t h e r e w a s l i k e l y to
be a s h o r t f a l l in d e l i v e r i e s of o i l of 16 o r 17 p e r cent in D e c e m b e r ,
d e s p i t e the a s s u r a n c e s g i v e n b y the A r a b o i l p r o d u c i n g c o u n t r i e s .
Saudi A r a b i a w a s s t i l l basing d e l i v e r i e s on the a v e r a g e of the
p r e v i o u s nine m o n t h s , r a t h e r than the monthly amount r e q u i r e d
during the c o m i n g w i n t e r j and many of the s m a l l e r o i l c o m p a n i e s ,
e s p e c i a l l y those w h o s e parent c o m p a n i e s w e r e in the United States,
w e r e supplying l e s s than t h e i r share of our n e e d s .
These facts,
combined with the known stock p o s i t i o n , p r o v i d e d strong e v i d e n c e
that the G o v e r n m e n t must take e a r l y steps to c o n s e r v e our stocks
and such supplies a s we r e c e i v e d .
W e had a l r e a d y taken m o r e
r u t h l e s s s t e p s than other c o u n t r i e s to r e d u c e our e x p o r t s of o i l ,
but our i m p o r t s of m o t o r s p i r i t f r o m r e f i n e r s i n E u r o p e had b e e n
v e r y s e v e r e l y cut.
It had a l w a y s been e n v i s a g e d that i t would not
be p o s s i b l e t o o p e r a t e an a l l o c a t i o n s c h e m e based on a 10 p e r cent
cut by the o i l c o m p a n i e s for m o r e than t w o o r t h r e e w e e k s b e f o r e
s e v e r e i n e q u i t i e s r o s e and public c r i t i c i s m r e s u l t e d .
A c c o u n t must
a l s o be taken of the e f f e c t on our c o a l , and so our t o t a l f u e l , stocks
of the m i n e r s o v e r t i m e ban.
1
T h e d i f f i c u l t y of explaining why t h e r e w a s a s h o r t a g e of o i l when we
had s e c u r e d p r o m i s e s of f a v o u r a b l e t r e a t m e n t f r o m the A r a b
c o u n t r i e s a r o s e b e c a u s e of the r e f u s a l b y the o i l c o m p a n i e s to
g u a r a n t e e to d e l i v e r a l l the p r o m i s e d supplies t o this c o u n t r y .
It w a s e s s e n t i a l , in the p r e s e n t state of our f u e l s u p p l i e s , that
w e should r e c e i v e the full amounts which the A r a b c o u n t r i e s intended
us to r e c e i v e , and that we should b r i n g p r e s s u r e to b e a r on the o i l
c o m p a n i e s a c c o r d i n g l y , e v e n i f t h i s upset o t h e r c o u n t r i e s .
There
w a s no point in negotiating with the A r a b c o u n t r i e s to s e c u r e enough
o i l to m e e t o u r full r e q u i r e m e n t s if i t w a s then d i v e r t e d e l s e w h e r e
b y the o i l c o m p a n i e s .
On the other hand the p r o b l e m of e x e r c i s i n g
c o n t r o l o v e r the o i l c o m p a n i e s was c o n s i d e r a b l e .
E v e n though i t
m i g h t be p o s s i b l e f o r the G o v e r n m e n t to g i v e d i r e c t i o n s to B P , this
could not be done t o c o m p a n i e s owned in other c o u n t r i e s .
Strong
r e p r e s e n t a t i o n s had a l r e a d y been m a d e .
Further p r e s s u r e might
l e a d to r e t a l i a t o r y action by o t h e r c o u n t r i e s and a p r i c e w a r , in
which we should be the l o s e r s on the balance of p a y m e n t s .
Already
t h e r e w e r e r e p o r t s that N i g e r i a had been o f f e r e d v e r y inflated p r i c e s
b y the United S t a t e s .
No a g r e e d action had p r o v e d p o s s i b l e within
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 o r the O r g a n i s a t i o n f o r
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 ,
Consideration might,
h o w e v e r , be g i v e n to asking the A r a b o i l producing c o u n t r i e s to
b r i n g h o m e t o the o i l c o m p a n i e s that they must d e l i v e r A r a b o i l
t o the c o u n t r i e s and in the quantities which the p r o d u c e r s intended.
In further d i s c u s s i o n it w a s e m p h a s i s e d that, i r r e s p e c t i v e of why our
o i l stocks w e r e d i m i n i s h i n g , it would b e m o s t u n w i s e not to be r e a d y
to introduce r a t i o n i n g , if n e c e s s a r y , at short n o t i c e .
U n l e s s this
w e r e done, c r i t i c i s m of the G o v e r n m e n t w a s l i a b l e to b e much m o r e
s e v e r e than the c r i t i c i s m of the d e c i s i o n to i s s u e r a t i o n b o o k s .
Indeed i t w a s a r g u a b l e that p e o p l e would p r e f e r rationing t o the
u n f a i r n e s s of d i s t r i b u t i o n which would i n e v i t a b l y i n c r e a s e under
the a l l o c a t i o n s c h e m e as t i m e went o n .
T h e introduction o f m e a s u r e s
such as p r o h i b i t i n g d r i v i n g on Sundays would save only a c o m p a r a ­
t i v e l y s m a l l amount o f p e t r o l and would be unlikely to be a c c e p t a b l e
in this c o u n t r y on s o c i a l g r o u n d s .
T h e p e r i o d r e q u i r e d to i s s u e the
b a s i c and b u s i n e s s r a t i o n books had a l r e a d y been cut t o t h r e e w e e k s ,
which w a s at l e a s t a w e e k l e s s than w a s d e s i r a b l e , and any d e l a y
would c a u s e the i s s u e to s t r e t c h into the C h r i s t m a s p e r i o d .
There
would then be d e l a y s at P o s t Office c o u n t e r s and in p o s t a l s e r v i c e s
which w o u l d , with the c l o s u r e of P o s t O f f i c e s at C h r i s t m a s , i n c r e a s e
the t i m e n e e d e d f o r i s s u i n g books to f i v e w e e k s .
A l l o w i n g t i m e for
a d v e r t i s i n g the start of the i s s u e , it w a s d e s i r a b l e that an
announcement should be m a d e that d a y .
It w a s a l s o n e c e s s a r y
t o a d v e r t i s e f o r staff f o r the r e g i o n a l p e t r o l e u m o f f i c e s , so that
they would be r e a d y t o i s s u e s u p p l e m e n t a r y r a t i o n s i f and when
rationing started.
On the other hand, it w a s a r g u e d that i f it w a s
e s s e n t i a l t o start i s s u i n g r a t i o n books it would be b e t t e r t o await
the debate on the f o l l o w i n g Monday t o announce t h i s , so that the
A r a b S u m m i t C o n f e r e n c e would be o v e r and the publicity f o r
rationing would not d e t r a c t f r o m the announcement of the setting
up of the E x e c u t i v e i n N o r t h e r n I r e l a n d .
T h i s would a l s o g i v e t i m e
t o c o n s i d e r how the m a t t e r should be p r e s e n t e d to the A r a b c o u n t r i e s .
M o r e o v e r , the p u b l i c i t y c a m p a i g n f o r v o l u n t a r y s a v i n g s i n fuel had
not c o m p l e t e d its f i r s t w e e k and it would be u n d e s i r a b l e t o cause
confusion and c r i t i c i s m o f the G o v e r n m e n t b y too e a r l y and too
h u r r i e d an announcement of the i s s u e of r a t i o n b o o k s .
I n this
context it could be p o i n t e d out that an e f f e c t i v e c a m p a i g n f o r
v o l u n t a r y savings would d e c r e a s e the r i s k of having to i n t r o d u c e
rationing.
I n f o r m a t i o n would be n e e d e d on how e f f e c t i v e the
campaign had been s o f a r ,
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 i t would n e w be prudent, i n the l i g h t of
the f o r e c a s t d e t e r i o r a t i o n in our o i l stocks in the n e x t f e w m o n t h s ,
to t a k e the steps n e c e s s a r y to enable p e t r o l rationing to b e
i n t r o d u c e d at short n o t i c e , if need b e .
T h e S e c r e t a r y of State
f o r T r a d e and Industry should announce in the debate on the F u e l
and E l e c t r i c i t y ( C o n t r o l ) B i l l on the f o l l o w i n g Monday that p e t r o l
and d e r v r a t i o n b o o k s would n o w be i s s u e d .
T h e t e r m s of the
announcement, and a l l r e l a t e d p u b l i c i t y , should be c a r e f u l l y w o r d e d
to a v o i d any i m p r e s s i o n that a d e c i s i o n had been taken to introduce
rationings o r that i t w a s i n e v i t a b l e .
It would a l s o be i m p o r t a n t to
seek t o a v o i d g i v i n g the A r a b o i l producing c o u n t r i e s any cause for
b e l i e v i n g that we w e r e taking this action because w e w e r e r e - e x p o r t i n g ,
o r w e r e p r o p o s i n g to r e - e x p o r t , the o i l which they sent us as a
f a v o u r e d nation t o other c o u n t r i e s not so f a v o u r e d .
N o r should
the n e e d to i s s u e the r a t i o n books be linked d i r e c t l y with the i n d u s t r i a l
a c t i o n by the m i n e r s .
T h e announcement should m a k e i t c l e a r that
the n e e d f o r v o l u n t a r y s a v i n g s in fuel o i l and p e t r o l w a s not in any
w a y l e s s e n e d by the d e c i s i o n to i s s u e the ration books;, both
m e a s u r e s a r i s i n g f r o m the e s s e n t i a l r e q u i r e m e n t to c o n s e r v e
our energy supplies.
T h e S e c r e t a r y o f State should consult the
F o r e i g n and C o m m o n w e a l t h S e c r e t a r y , the H o m e S e c r e t a r y , the
L o r d P r e s i d e n t , and the S e c r e t a r y of State f o r E m p l o y m e n t about
the t e r m s of his announcement and the a s s o c i a t e d p u b l i c i t y , as
appropriate^
T h e Cabinet ­
1.
T o o k n o t e , 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 . 2
I n v i t e d the S e c r e t a r y of State f o r T r a d e
and I n d u s t r y , f o l l o w i n g consultation with the
F o r e i g n and C o m m o n w e a l t h S e c r e t a r y , the H o m e
S e c r e t a r y , the L o r d P r e s i d e n t of the C o u n c i l , and
the S e c r e t a r y of State for E m p l o y m e n t , to announce
the d e c i s i o n to i s s u e p e t r o l and d e r v r a t i o n books to
the public on the l i n e s indicated in the P r i m e
M i n i s t e r s summing up.
8
RATE
SUPPORT
pRANT
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 of r a t e support
1o
grant.
T h e y had b e f o r e t h e m a m e m o r a n d u m b y the S e c r e t a r y of
State f o r the E n v i r o n m e n t ( C P ( 7 3 ) 127).
Previous
Reference:
C M ( 7 3 ) 54th
Conclusions.
Minute 2
T H E S E C R E T A R Y O F S T A T E F O R T H E E N V I R O N M E N T s a i d that
o f f i c i a l s had j u s t had a m e e t i n g with r e p r e s e n t a t i v e s of the l o c a l
a u t h o r i t i e s and that he would have t o n e g o t i a t e the final statutory
s e t t l e m e n t with the a u t h o r i t i e s on 27 N o v e m b e r .
A t the m e e t i n g
with o f f i c i a l s , the l o c a l a u t h o r i t i e s had p r e s s e d hard f o r s o m e
r e d u c t i o n in the p r o p o s e d cut of £81 m i l l i o n in t o t a l r e l e v a n t
e x p e n d i t u r e f o r 1974-75; but o f f i c i a l s had stood f i r m .
The basis
of the W e s t M i d l a n d s f a c t o r in the needs e l e m e n t had been questioned,
but it had been a r g u e d that a l l o w a n c e should b e m a d e f o r the s p e c i a l
p r o b l e m s of o t h e r a r e a s , in p a r t i c u l a r W a l e s .
T h e r e did indeed
a p p e a r to be a c a s e f o r introducing a s p a r s i t y f a c t o r into the
calculation of the needs e l e m e n t .
In r e l a t i o n t o the total amount
o f g r a n t , the l o c a l a u t h o r i t i e s had a r g u e d that the G o v e r n m e n t s
p r o p o s a l s should a l l o w f o r a 13 p e r cent inflation of l o c a l a u t h o r i t y
c o s t s during the y e a r - the o r i g i n a l p r o p o s a l s had a s s u m e d 9 p e r
cent - and had a l s o been c o n c e r n e d about the c o s t of the l i k e l y pay
s e t t l e m e n t with t h e i r manual w o r k e r s , which would p r o b a b l y r e s u l t
i n additional e x p e n d i t u r e during the y e a r of s o m e £30 m i l l i o n .
T a k i n g account o f t h e s e c o n s i d e r a t i o n s and of the fact that it n o w
s e e m e d l i k e l y that the v a r i a b l e d o m e s t i c e l e m e n t would c o s t s o m e
£30 m i l l i o n m o r e than had b e e n p r e v i o u s l y e s t i m a t e d , he c o n s i d e r e d
that he would n e e d to be a l l o w e d s o m e latitude in conducting the
n e g o t i a t i o n s , i n r e l a t i o n both t o the d i s t r i b u t i o n and the amount
of grant.
On the l a t t e r , it would c l e a r l y be u n r e a s o n a b l e to p r o p o s e
a r a t e e x c e e d i n g 61 p e r cent w h i c h , assuming inflation at 13 p e r c e n t ,
would e n a b l e the i n c r e a s e in the d o m e s t i c r a t e burden to be kept to
7 p e r cent and in the n o n - d o m e s t i c r a t e b u r d e n to 20 p e r c e n t ; but
the p r e c i s e p r o p o s a l put to the l o c a l a u t h o r i t i e s , which he would k e e p
a s l o w as p o s s i b l e and would of c o u r s e a g r e e with the C h a n c e l l o r of
the E x c h e q u e r , could o n l y b e s e t t l e d f i n a l l y in the context of the
actual n e g o t i a t i o n s .
In d i s c u s s i o n i t w a s a r g u e d that it would be r i g h t f o r the s e t t l e m e n t
t o r e f l e c t the l i k e l y c o s t of any p a y s e t t l e m e n t with the manual
workers.
But it would be quite u n a c c e p t a b l e to assume a r a t e
o f inflation in e x c e s s of the 9 p e r cent which the Cabinet had a g r e e d
e a r l i e r ; and on that b a s i s i t would b e p o s s i b l e to l i m i t the i n c r e a s e
in the d o m e s t i c r a t e burden to 7 p e r cent i f the n o n - d o m e s t i c r a t e
burden i n c r e a s e d by 22 p e r cent r a t h e r than b y 20. 3 p e r c e n t as
originally envisaged.
If l o c a l authority e x p e n d i t u r e i n c r e a s e d
m o r e r a p i d l y than this - and it m u s t be b o r n e in mind that e v e n
the cuts o f £81 m i l l i o n did not f u l l y r e s t o r e t o t a l expenditure to
the l e v e l o r i g i n a l l y a g r e e d f o r 1974-75 - i t m i g h t be n e c e s s a r y
to i m p o s e absolute cash l i m i t s on t h e i r spending.
To increase
the r a t e o f g r a n t would i n c r e a s e the public b o r r o w i n g r e q u i r e m e n t ,
and this m u s t b e a v o i d e d in p r e s e n t c i r c u m s t a n c e s .
T H E P R I M E M I N I S T E R ^ s u m m i n g up ths d i s c u s s i o n , said that the
Cabinet a g r e e d that the s e t t l e m e n t must not a s s u m e a r a t e of Inflation
of l o c a l a u t h o r i t i e s costs of m o r e than 9 p e r cent.
It w a s r i g h t t o
a l l o w f o r additional costs i m p o s e d by the l i k e l y pay s e t t l e m e n t with
the l o c a l a u t h o r i t i e s ' manual w o r k e r s ; but t o t a l r e l e v a n t e x p e n d i t u r e
by l o c a l a u t h o r i t i e s must not be a l l o w e d t o e x c e e d the a g r e e d l e v e l ,
and it was e q u a l l y i m p o r t a n t t o r e s t r a i n the public b o r r o w i n g
requirement.
A s r e g a r d s the d i s t r i b u t i o n o f g r a n t , the Cabinet
a g r e e d that s o m e f l e x i b i l i t y m i g h t be d e s i r a b l e and in p a r t i c u l a r
that t h e r e m i g h t be a c a s e for introducing a s p a r s i t y f a c t o r into
the calculation of the n e e d s e l e m e n t .
T h e S e c r e t a r y of State f o r
the E n v i r o n m e n t should conduct the statutory n e g o t i a t i o n s with the
l o c a l a u t h o r i t i e s on the b a s i s of t h e s e g e n e r a l p r i n c i p l e s , but should
s e c u r e the a g r e e m e n t of the C h a n c e l l o r of the E x c h e q u e r to the d e t a i l
of any d e p a r t u r e s which i t was p r o p o s e d to m a k e f r o m the
a r r a n g e m e n t s which the Cabinet had a p p r o v e d at t h e i r m e e t i n g
on 8 N o v e m b e r .
1
T h e Cabinet T o o k n o t e , with approval^, 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 and i n v i t e d the
S e c r e t a r y of State for the E n v i r o n m e n t , in
consultation with the C h a n c e l l o r o f the E x c h e q u e r ,
to p r o c e e d a c c o r d i n g l y .
Cabinet Office
22 N o v e m b e r 1973