(c) crown copyright
Catalogue Reference:CAB/128/55/7
Image Reference:0001
PHIS D O C U M E N T XC T H E P R O P E R T Y
OF H E R B R I T A N N I C M A J E S T Y S G O V E R N M E N T
5
CC(74) 32nd
COPY NO
J A
Conclusions
CABINET
C O N C L U S I O N S of a M e e t i n g o£ the C a b i n e t h e l d at 10 D o w n i n g S t r e e t o n F R I D A Y 2 A U G U S T 1974 at 9,30 a m PRESENT
T h e Rt Hon H a r o l d Wilson M P P r i m e Minister The R t H o n E d w a r d S h o r t M P
Lord P r e s i d e n t of t h e C o u n c i l
(In the C h a i r f o r p a r t of I t e m 4 )
The Rt Hon J a m e s Callaghan M P S e c r e t a r y o f State f o r F o r e i g n and Commonwealth Affairs The Rt H o n L o r d E l w y n - J o n e s
I Lord C h a n c e l l o r
T h e R t H o n R o y Jenkins M P S e c r e t a r y of State f o r the H o m e Department The R t H o n D e n i s H e a l e y M P
Chancellor o f the E x c h e q u e r
The Rt Hon Anthony Crosland M P
S e c r e t a r y of State f o r the E n v i r o n m e n t
( I t e m s 1-3)
The Rt H o n M i c h a e l F o o t M P
Secretary of State f o r E m p l o y m e n t
The Rt Hon E r i c V a r l e y M P
S e c r e t a r y of State f o r E n e r g y
The R t H o n S h i r l e y W i l H a m s M P
Secretary o f State f o r P r i c e s and
Consumer P r o t e c t i o n
The Rt Hon B a r b a r a Castle M P
S e c r e t a r y of State f o r S o c i a l S e r v i c e s
( I t e m s 2 and 3)
The R t Hon A n t h o n y V/edgwood B e n n M P
Secretary o f State f o r I n d u s t r y
The Rt Hon R o y Mason M P S e c r e t a r y of State f o r D e f e n c e ( I t e m s 1-3) The Rt Hon R e g i n a l d P r e n t i c e M P
Secretary o f State f o r E d u c a t i o n and S c i e n c e
The Rt Hon W i l l i a m R o s s M P
S e c r e t a r y o f State f o r S c o t l a n d
The Rt Hon John M o r r i s Q C M P
Secretary of State f o r W a l e s
T h e Rt Hon F r e d P e a r t 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
i
The R t H o n H a r o l d L e v e r M P
C h a n c e l l o r o f the Duchy of L a n c a s t e r
T h e R t H o n L o r d Shepherd
Lord P r i v y Seal
The Rt Hon Robert Mellish M P
Parliamentary Secretary, Treasury
THE FOLLOWING WERE A L S O PRESENT
Mr R o b e r t S h e l d o n M P
M i n i s t e r of S t a t e , C i v i l S e r v i c e D e p a r t m e n t
(Item 1)
M r Roland M o y l e M P
M i n i s t e r of S t a t e , N o r t h e r n I r e l a n d
Office- ( I t e m s 1-3)
SECRETARIAT
Sir
Mr
Mr
Mr
Mr
Mr
Mr
John Hunt P Benner (Item 2) J A H a m i l t o n ( I t e m s 1 and 3) J Anson (Item 4) H F E l l i s - R e e s (Item 4) R L B a x t e r ( I t e m 1) R G S Johnston ( I t e m 3) II ; ' I.' '
C ONTENTS
Item
Subject
Page
1.
UNITED KINGDOM CIVIL SERVANTS IN N O R T H E R N IRELAND
1
2,
DEVOLUTION
3
3.
P L A N N I N G A G R E E M E N T S A N D THE N A T I O N A L
BOARD
4.
ENTERPRISE
5
Planning A g r e e m e n t s
5
National E n t e r p r i s e Board
6
T h e Introduction
7
ASSISTED AREA BOUNDARIES
9
UNITED
KINGDOM
CIVIL
SERVANTS
IN N O R T H E R N
IRELAND
1.
T h e C a b i n e t c o n s i d e r e d a m e m o r a n d u m 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 ( 7 4 ) 87) on U n i t e d K i n g d o m c i v i l s e r v a n t s i n N o r t h e r n
Ireland.
T H E L O R D P R E S I D E N T said that i n M a y h e had r e c e i v e d a deputation
f r o m the N a t i o n a l Staff S i d e who had a r g u e d s t r o n g l y i n f a v o u r of a
l o n g - s t a n d i n g c l a i m f o r an a d d i t i o n a l one w e e k ' s annual l e a v e and a
s p e c i a l a l l o w a n c e o f £150 a y e a r f o r a l l U n i t e d K i n g d o m n o n - i n d u s t r i a l
c i v i l servants serving in N o r t h e r n I r e l a n d .
T h e Staff S i d e had s a i d
that o t h e r g o o d e m p l o y e r s i n the P r o v i n c e g a v e t h e i r staff a d d i t i o n a l
l e a v e , cash b o n u s e s o r f r e e h o l i d a y s a b r o a d ; that G o v e r n m e n t
e m p l o y e e s w e r e s u b j e c t to m o r e s t r e s s than o t h e r p e o p l e i n U l s t e r ;
and that m o r a l e w a s at a l o w e b b .
H e did not a g r e e t h a t c i v i l
s e r v a n t s w e r e i n f a c t u n d e r g r e a t e r s t r e s s than the r e s t of the
N o r t h e r n I r e l a n d p o p u l a t i o n , but i t w a s c e r t a i n l y t r u e that t h e i r
c o n d i t i o n s w e r e w o r s e than t h o s e of c i v i l s e r v a n t s i n o t h e r p a r t s
of the U n i t e d K i n g d o m and t h e r e w a s s o m e t a l k o f i n d u s t r i a l a c t i o n .
H e h a d p r o m i s e d t h e m that t h e i r c a s e w o u l d b e c o n s i d e r e d b y
Ministers collectively.
A l t h o u g h the N a t i o n a l Staff S i d e s p o k e
o n l y f o r the 4 , 000 n o n - i n d u s t r i a l U n i t e d K i n g d o m c i v i l s e r v a n t s
s e r v i n g i n N o r t h e r n I r e l a n d , it would be n e c e s s a r y to extend any
c o n c e s s i o n s t o the 5, 000 i n d u s t r i a l c i v i l s e r v a n t s ; t h e c o s t of an
e x g r a t i a p a y m e n t o f £100 e a c h w o u l d b e about £ 9 0 0 , 0 0 0 and the
n o t i o n a l c o s t o f an e x t r a w e e k ' s l e a v e w o u l d b e about £ 3 5 0 , 0 0 0 .
T h e S e c r e t a r y o f State f o r N o r t h e r n I r e l a n d w a s c o n c e r n e d about
the p o s s i b l e r e p e r c u s s i o n s , but i f the G o v e r n m e n t d i d not g i v e s o m e
such c o n c e s s i o n i t w o u l d stand out a s o n e of the f e w e m p l o y e r s that
had f a i l e d t o d o s o .
T h e r e w a s a l s o a D e p a r t m e n t a l c l a i m o n the
C u s t o m s and E x c i s e D e p a r t m e n t f o r an a l l o w a n c e o f £ 3 0 0 a y e a r
f o r the 200 staff e m p l o y e d at t h e land b o u n d a r y p o s t s .
T h e s e staff
w e r e e x p o s e d t o p a r t i c u l a r d a n g e r and d i s c o m f o r t , but i f a g e n e r a l
c o n c e s s i o n w e r e m a d e on the l i n e s that h e had s u g g e s t e d , h e w o u l d
p r o p o s e to r e j e c t any s p e c i a l c o n c e s s i o n t o the land b o u n d a r y m e n .
T H E M I N I S T E R O F S T A T E , N O R T H E R N I R E L A N D O F F I C E , said
that h i s S e c r e t a r y o f State w a s a g a i n s t a n y c o n c e s s i o n t o the U n i t e d
K i n g d o m c i v i l s e r v a n t s i n the P r o v i n c e b e c a u s e o f the r e p e r c u s s i o n s .
M o s t of t h e c i v i l s e r v a n t s in q u e s t i o n w e r e I r i s h and w o u l d e x p e c t to
spend t h e i r w h o l e c a r e e r s in the P r o v i n c e .
M a n y of t h e m w e r e not
u n d e r any p a r t i c u l a r s t r e s s .
I f t h e y r e c e i v e d any s p e c i a l
c o n c e s s i o n i t w o u l d b e n e c e s s a r y at o n c e to d i s c u s s t h e s i m i l a r
t r e a t m e n t o f the 3 0 , 000 staff of the N o r t h e r n I r e l a n d C i v i l S e r v i c e .
T h e r e w o u l d then b e a c a s e f o r s p e c i a l t r e a t m e n t f o r the a m b u l a n c e ­
m e n and t h e f i r e m e n , w h o f a c e d g r e a t e r d a n g e r s than t h e c i v i l
s e r v a n t s , and f o r the staffs of m a n y of t h e o t h e r p u b l i c s e r v i c e s
i n the P r o v i n c e .
B e c a u s e of under-staffing It m i g h t p r o v e
i m p o s s i b l e to g i v e l e a v e concessions to the N o r t h e r n Ireland
p u b l i c s e r v i c e so that a f u r t h e r c a s h c o n c e s s i o n m i g h t h a v e to
be offered in lieu.
F i n a l l y t h e p r e s s u r e would c o m e on the
i n d u s t r i a l f i r m s in the P r o v i n c e , w h o had not s o f a r f o l l o w e d t h e
c o m m e r c i a l f i r m s in o f f e r i n g s p e c i a l c o n c e s s i o n s to t h e i r staff.
T h e t o t a l c o s t to N o r t h e r n I r e l a n d m i g h t amount to about £ 5 0 m i l l i o n
a year.
In d i s c u s s i o n i t w a s a r g u e d that the C a b i n e t should b e g u i d e d b y the
S e c r e t a r y o f State f o r N o r t h e r n I r e l a n d , w h o w a s i n a p o s i t i o n t o
j u d g e t h e r e p e r c u s s i o n s in t h e P r o v i n c e ,
T h e r e could m o r e o v e r
b e r e p e r c u s s i o n s i n o t h e r p a r t s o f t h e U n i t e d K i n g d o m if, f o r
i n s t a n c e , a t e r r o r i s t c a m p a i g n w e r e m o u n t e d a g a i n s t the p o l i c e .
T h e p r o p o s a l would l o w e r the v a l u e o f t h e e x i s t i n g c o n c e s s i o n s t o
the A r m y and P o s t O f f i c e in N o r t h e r n I r e l a n d .
On the o t h e r hand
i t w a s a r g u e d that the United K i n g d o m c i v i l s e r v a n t s in N o r t h e r n
I r e l a n d had w o r k e d w e l l throughout t h e r e c e n t d i s t u r b a n c e s .
Unlike
m a n y o f t h e staff o f t h e N o r t h e r n I r e l a n d p u b l i c s e r v i c e s , t h e y had not
j o i n e d i n any p o l i t i c a l s t r i k e .
Good management practice required
the G o v e r n m e n t to f o l l o w the o t h e r e m p l o y e r s o f c o m p a r a b l e staff in
o f f e r i n g s i m i l a r c o n c e s s i o n s , the r e p e r c u s s i v e e f f e c t s of w h i c h had
been g r e a t l y exaggerated.
It w a s s u g g e s t e d that i f e x t r a l e a v e o r
c a s h a l l o w a n c e s w e r e r u l e d out it w o u l d b e w o r t h c o n s i d e r i n g
c o n c e s s i o n s on t r a v e l , and that i f t h e r e c o u l d b e no g e n e r a l
c o n c e s s i o n i t would b e r i g h t t o d o s o m e t h i n g f o r the land b o u n d a r y
m e n , w h o s e c a s e w a s r e c o g n i s e d b y t h e t r a d e unions a s e x c e p t i o n a l ,
and f o r the r e s i d e n t m a g i s t r a t e s , w h o e a r n e d l e s s than t h e i r
equivalents in Great Britain.
T H E P R I M E M I N I S T E R , s u m m i n g u p t h e d i s c u s s i o n , s a i d that
although m a n y m e m b e r s of the C a b i n e t c l e a r l y had doubts about
the p r o p o s a l s they ought to b e e x a m i n e d o n t h e i r m e r i t s b y the
Official C o m m i t t e e on Pay N e g o t i a t i o n s .
A l t h o u g h it m i g h t b e c o m e
r e l e v a n t t o c o n s i d e r the s p e c i a l c l a i m s of p a r t i c u l a r g r o u p s l i k e t h o s e
that had b e e n m e n t i o n e d , the C o m m i t t e e should f i r s t c o n s i d e r the
g e n e r a l q u e s t i o n of the p r o p o s e d c o n c e s s i o n s t o a l l United K i n g d o m
c i v i l s e r v a n t s in N o r t h e r n I r e l a n d w i t h a v i e w t o a s s e s s i n g a s
a c c u r a t e l y a s p o s s i b l e what t h e i r r e p e r c u s s i o n s would b e .
The
O f f i c i a l C o m m i t t e e should r e p o r t t o t h e S u b - C o m m i t t e e o n P a y
N e g o t i a t i o n s of 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 P o l i c y ,
and t h e q u e s t i o n should be b r o u g h t b a c k t o the C a b i n e t at t h e
b e g i n n i n g of S e p t e m b e r .
T h e Cabinet ­
1.
T o o k n o t e , w i t h a p p r o v a l , of the s u m m i n g
u p o f t h e i r d i s c u s s i o n b y the P r i m e M i n i s t e r .
2.
I n v i t e d the O f f i c i a l C o m m i t t e e on P a y Negotiations to proceed accordingly. 2
2.
T H E P R I M E M I N I S T E R said that, f o l l o w i n g the i s s u e in earlyJune of t h e G o v e r n m e n t s C o n s u l t a t i o n D o c u m e n t o n D e v o l u t i o n ,
d i s c u s s i o n s with the i n t e r e s t e d b o d i e s had b e e n taking p l a c e in
Scotland and "Wales, and t h e i r o u t c o m e had b e e n c o n s i d e r e d by
a s m a l l M i n i s t e r i a l G r o u p under his c h a i r m a n s h i p .
The Group
had then c o n s i d e r e d what should b e t h e content of t h e W h i t e P a p e r
w h i c h the G o v e r n m e n t w e r e c o m m i t t e d t o i s s u e in the autumn.
V e r y m a j o r i s s u e s w e r e at stake - i n d e e d , m i s h a n d l i n g o f t h e
s i t u a t i o n could a r g u a b l y l e a d i n the l o n g run t o the b r e a k - u p of
the U n i t e d K i n g d o m : and t h e M i n i s t e r s c o n c e r n e d had b e e n v e r y
c o n s c i o u s o f this d a n g e r and o f t h e p o s s i b l e r i s k o f e m b a r k i n g on
a p r o c e s s of c h a n g e w h i c h , o n c e s t a r t e d , could n o t b e h a l t e d .
The Government w e r e publicly committed against s e p a r a t i s m
and f e d e r a l i s m , but on p o l i t i c a l g r o u n d s s o m e m o v e t o w a r d s
devolution was n e c e s s a r y .
T h e M i n i s t e r i a l G r o u p had r e j e c t e d
f u l l l e g i s l a t i v e d e v o l u t i o n on the l i n e s p r o p o s e d in the m a j o r i t y
Kilbrandon Report.
T h e y had then c o n s i d e r e d the p o s s i b i l i t y o f
s o m e f o r m of m o d i f i e d l e g i s l a t i v e d e v o l u t i o n , but t h i s r a i s e d
s u b s t a n t i a l p r o b l e m s and t h e m a j o r i t y of the M i n i s t e r i a l G r o u p
w e r e a g a i n s t any c o m m i t m e n t to i t .
T h e y had t h e r e f o r e c o n c l u d e d
that at t h i s s t a g e the G o v e r n m e n t should c o m m i t t h e m s e l v e s o n l y t o
p r o p o s i n g e l e c t e d a s s e m b l i e s i n S c o t l a n d and W a l e s , the f o r m e r with
s o m e l e g i s l a t i v e p o w e r s and the l a t t e r with m a i n l y e x e c u t i v e p o w e r s .
T h i s d i f f e r e n t t r e a t m e n t of t h e t w o c o u n t r i e s could be j u s t i f i e d on
s e v e r a l g r o u n d s - the e x i s t e n c e of a s e p a r a t e S c o t t i s h l e g a l s y s t e m
and of s e p a r a t e S c o t t i s h statutes w a s o n e ; and the d i f f e r i n g w i s h e s
and e x p e c t a t i o n s i n the t w o c o u n t r i e s w a s a n o t h e r .
A c c o r d i n g l y the
M i n i s t e r i a l G r o u p had c o m m i s s i o n e d the p r e p a r a t i o n of t w o d r a f t
W h i t e P a p e r s , one v e r y s h o r t and d o i n g l i t t l e m o r e than announce
the d e c i s i o n about the e s t a b l i s h m e n t of e l e c t e d a s s e m b l i e s , t h e
other going into r a t h e r m o r e d e t a i l .
It had b e e n d e c i d e d that the
s h o r t v e r s i o n w a s p r e f e r a b l e , but that i t should b e s o m e w h a t
e x p a n d e d , i n p a r t i c u l a r t o i n d i c a t e what had a l r e a d y b e e n done
o r w a s being done within the existing constitutional f r a m e w o r k
i n o r d e r t o i n c r e a s e the e x t e n t to w h i c h d e c i s i o n s a f f e c t i n g S c o t l a n d
and W a l e s w e r e t a k e n i n S c o t l a n d and W a l e s , w h i l e at the s a m e t i m e
s t r e s s i n g the i m p o r t a n c e of p r e s e r v i n g both the unity of t h e U n i t e d
K i n g d o m and the p r i n c i p l e that the e c o n o m y m u s t b e m a n a g e d on a
United Kingdom b a s i s ,
It w o u l d p r o b a b l y a l s o b e d e s i r a b l e to r e f e r
t o the continuance of the t w o S e c r e t a r i e s of State and t o t h e r e t e n t i o n
o f S c o t t i s h and W e l s h r e p r t s e n t a t i o n in the U n i t e d K i n g d o m
P a r l i a m e n t at i t s p r e s e n t l e v e l .
A short White P a p e r giving
a g e n e r a l s t a t e m e n t o f p r i n c i p l e o n t h e s e l i n e s should be s u f f i c i e n t
t o m e e t t h e i m m e d i a t e p o l i t i c a l r e q u i r e m e n t w h i l e l e a v i n g the
G o v e r n m e n t the m a x i m u m r o o m f o r m a n o e u v r e a f t e r the E l e c t i o n .
In d i s c u s s i o n i t w a s a r g u e d that the G o v e r n m e n t should h a v e m o r e
t i m e t o w e i g h a d e c i s i o n of such h i s t o r i c a l i m p o r t a n c e and that i t
w a s r e g r e t t a b l e that t h e i r hand had t o s o m e e x t e n t b e e n f o r c e d b y
el
external political pressures.
In the c i r c u m s t a n c e s they had t o b e
a l i v e t o p o l i t i c a l r e a l i t i e s : but i t would b e i m p o r t a n t f o r the
p r o p o s e d W h i t e P a p e r to a s s e r t the p o s i t i v e a r g u m e n t f o r t h e
i n t e g r i t y of t h e United K i n g d o m and t o r e l a t e the c a s e f o r e l e c t e d
a s s e m b l i e s i n Scotland and W a l e s to the p r o b l e m s which would b e
involved,
T H E P R I M E M I N I S T E R , s u m m i n g up the d i s c u s s i o n , s a i d that t h e
C a b i n e t n e e d t a k e n o f i n a l d e c i s i o n at t h i s s t a g e .
Further work
should h o w e v e r p r o c e e d on the b a s i s of a s h o r t W h i t e P a p e r
containing a g e n a r a l s t a t e m e n t of intent t o e s t a b l i s h e l e c t e d
a s s e m b l i e s i n Scotland and W a l e s , t h e f o r m e r w i t h s o m e
l e g i s l a t i v e p o w e r s and the l a t t e r w i t h m a i n l y e x e c u t i v e p o w e r s .
It should e m p h a s i s e the i m p o r t a n c e o f p r e s e r v i n g the unity o f t h e
U n i t e d K i n g d o m and should a l s o b r i n g out what w a s s e p a r a t e l y b e i n g
done t o b e n e f i t Scotland and W a l e s .
T h e t w o S e c r e t a r i e s o f State
w e r e a l r e a d y r e v i s i n g the s e c t i o n s o f p r i m e c o n c e r n to t h e m : t h e y
should do so in the l i g h t of the C a b i n e t ' s d i s c u s s i o n and should a l s o
c o n s u l t the C h a n c e l l o r of the E x c h e q u e r .
A r e v i s e d v e r s i o n of the
d r a f t W h i t e P a p e r w o u l d b e c o n s i d e r e d b y the M i n i s t e r i a l G r o u p at
t h e end of A u g u s t w h i c h would e n a b l e account t o b e taken of
d i s c u s s i o n a t the S c o t t i s h L a b o u r P a r t y C o n f e r e n c e in m i d - A u g u s t .
F o l l o w i n g t h a t the m a t t e r w o u l d c o m e b e f o r e the C a b i n e t f o r a f i n a l
d e c i s i o n w i t h a v i e w to p u b l i c a t i o n o f the W h i t e P a p e r i n the f i r s t
p a r t of S e p t e m b e r .
The Cabinet T o o k n o t e , w i t h a p p r o v a l , of the P r i m e M i n i s t e r *s
s u m m i n g up of t h e i r d i s c u s s i o n .
JLANNING
ig-REEMENTS
ND' T H E
jUTIONAL
INTERPRISE
IDARD
3.
T h e C a b i n e t c o n s i d e r e d t w o n o t e s b y the S e c r e t a r y o f the
C a b i n e t , C ( 7 4 ) 88, t o w h i c h w e r e a t t a c h e d d r a f t s e c t i o n s of a W h i t e
P a p e r on P l a n n i n g A g r e e m e n t s and the N a t i o n a l E n t e r p r i s e B o a r d
( N E B ) , and C ( 7 4 ) 8 9 , to w h i c h w e r e a t t a c h e d d r a f t i n t r o d u c t o r y
p a r a g r a p h s f o r the W h i t e P a p e r , p r e p a r e d b y t h e S e c r e t a r y o f State
for Industry,
T H E P R I M E M I N I S T E R said that a f i r s t d r a f t of the W h i t e P a p e r h a d
c o m e b e f o r e the M i n i s t e r i a l C o m m i t t e e on I n d u s t r i a l D e v e l o p m e n t
( I D V ) on 28 June,
In the l i g h t of t h e i r d i s c u s s i o n h e h a d p r e p a r e d a
f r e s h o u t l i n e which had b e e n agrec-d b y I D V on 9 July and g i v e n to
o f f i c i a l s a s a g u i d e l i n e in p r e p a r i n g a f u r t h e r c o m p l e t e d r a f t .
A
s m a l l g r o u p of M i n i s t e r s under h i s c h a i r m a n s h i p , c o m p r i s i n g the
C h a n c e l l o r o f the E x c h e q u e r , 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 ,
the S e c r e t a r y of State f o r I n d u s t r y and the S e c r e t a r y of State f o r
P r i c e s and C o n s u m e r P r o t e c t i o n had d i s c u s s e d t h i s d r a f t o n 29 J u l y
and a f u r t h e r d r a f t , r e f l e c t i n g t h e i r d e c i s i o n s , had b e e n c o n s i d e r e d
at I D V on 31 J u l y .
T h e d r a f t a t t a c h e d t o C ( 7 4 ) 88 r e f l e c t e d t h e w e i g h t
of o p i n i o n in I D V on the m a i n i s s u e s a r i s i n g f r o m P l a n n i n g A g r e e m e n t s
and the N E B .
T h e i n t r o d u c t o r y p a r a g r a p h s w o u l d b e c o n s e q u e n t i a l on
the d e c i s i o n s r e a c h e d on the m a i n t e x t ; h e s u g g e s t e d t h e r e f o r e that
the C a b i n e t should f i r s t d i s c u s s P l a n n i n g A g r e e m e n t s and t h e N E B .
lanning
greements
In d i s c u s s i o n the f o l l o w i n g m a i n p o i n t s w e r e m a d e
­
a.
In the a b s e n c e o f a s t a t u t o r y r e q u i r e m e n t s o m e o t h e r
l e v e r a g e w a s n e e d e d to e n s u r e that f i r m s e n t e r e d i n t o
P l a n n i n g A g r e e m e n t s w i t h the G o v e r n m e n t .
F o r these
f i r m s , s o m e p r o p o r t i o n of the g r a n t s n o r m a l l y p a y a b l e
u n d e r the a u t h o r i t y o f the I n d u s t r y A c t 1972 should b e m a d e
negotiable.
In r e t u r n , the c o m p a n y c o u l d b e a s s u r e d that
t h e r a t e of g r a n t f o r p r o j e c t s e m b a r k e d on u n d e r the A g r e e m e n t
w o u l d not f a l l b e l o w the r a t e s in f o r c e a t the t i m e of t h e
Agreement.
L a b o u r ' s P r o g r a m m e 1973 had s p e c i f i c a l l y
s t a t e d that a l l i n c e n t i v e s and a i d t o c o m p a n i e s should be
c h a n n e l l e d t h r o u g h the P l a n n i n g A g r e e m e n t s s y s t e m ; the
p r o d i g a l i t y of the p r e s e n t s y s t e m has b e e n s h a r p l y c r i t i c i s e d
b y t h e S e l e c t C o m m i t t e e on T r a d e and I n d u s t r y ,
If the White
P a p e r f a i l e d t o put f o r w a r d any p r o p o s a l t o c o n t r o l t h i s
m a s s i v e o u t f l o w of p u b l i c funds, p e o p l e in the r e g i o n s w o u l d
s e e i t a s a totally m i s s e d o p p o r t u n i t y o n the p a r t o f t h e
Government.
On the o t h e r hand, i t w a s s t r o n g l y a r g u e d
that b u s i n e s s c o n f i d e n c e w o u l d b e s e v e r e l y d a m a g e d b y the
i m p l i c a t i o n that i n v e s t m e n t g r a n t s and o t h e r a u t o m a t i c
p a y m e n t s w o u l d d e p e n d , f o r f i r m s i n the P l a n n i n g
A g r e e m e n t s s y s t e m , on t h e d i s c r e t i o n of a M i n i s t e r
r a t h e r than, b e i n g r e c e i v e d a s a r i g h t d e r i v e d f r o m an
A c t of P a r l i a m e n t .
T h e G o v e r n m e n t should r e c o g n i s e
that c o n d i t i o n s had c o m p l e t e l y changed s i n c e L a b o u r ' s
P r o g r a m m e 1973 had b e e n p r e p a r e d ; b u s i n e s s c o n f i d e n c e
had d e c l i n e d to ah a l a r m i n g d e g r e e and f u r t h e r chopping and
changing i n G o v e r n m e n t p o l i c y w o u l d b e d i s a s t r o u s .
The
d r a f t should t h e r e f o r e m a k e i t c l e a r that i n v e s t m e n t g r a n t s ,
r e g i o n a l d e v e l o p m e n t aid and R e g i o n a l E m p l o y m e n t P r e m i u m
( R E P ) w e r e not at i s s u e , but that the G o v e r n m e n t would
a s s e s s with the c o m p a n y i t s n e e d s f o r a s s i s t a n c e t o support
company plans, with particular r e f e r e n c e to s e l e c t i v e
assistance for new e m p l o y m e n t p r o j e c t s in the r e g i o n s .
b.
T h e n e e d f o r a f a r - r a n g i n g r e v i e w of r e g i o n a l a i d
w a s g e n e r a l l y a g r e e d , but i t w a s pointed out that t o announce
t h i s would c r e a t e u n c e r t a i n t y "and b e d e t r i m e n t a l t o b u s i n e s s
confidence.
N o s t a t e m e n t about t h e r e v i e w should b e m a d e
u n t i l an a l t e r n a t i v e s y s t e m had b e e n thought o u t ,
c.
A s s i s t a n c e f o r s m a l l b u s i n e s s e s should b e g i v e n
g r e a t e r p r o m i n e n c e , and t h e G o v e r n m e n t s c o n s i d e r a t i o n
of t h e i r p r o b l e m s should b e s p e c i f i c a l l y m e n t i o n e d .
A n u m b e r o f o t h e r a m e n d m e n t s w e r e d i s c u s s e d and a g r e e d .
In d i s c u s s i o n t h e f o l l o w i n g m a i n p o i n t s w e r e m a d e ­
d.
T h e d e g r e e t o w h i c h the N E B would b e subject t o
P a r l i a m e n t a r y and G o v e r n m e n t a l c o n t r o l should b e g i v e n
greater emphasis.
e.
I t should be e m p h a s i s e d that the intention w a s that
a l l h o l d i n g s i n c o m p a n i e s , w h e t h e r 100 p e r c e n t o r in p a r t ,
would b e a c q u i r e d b y a g r e e m e n t ; the d r a f t i n g of p a r a g r a p h 20
should b e a m e n d e d t o a v o i d a m b i g u i t y on t h i s .
f.
In i t s e x i s t i n g f o r m , p a r a g r a p h 23 w o u l d c a u s e
u n c e r t a i n t y o v e r the c i r c u m s t a n c e s i n w h i c h t h e G o v e r n m e n t
m i g h t c h o o s e t o e x e r c i s e c o m p u l s o r y a c q u i s i t i o n , and what
P a r l i a m e n t a r y a u t h o r i t y w o u l d b e sought.
It would be
p r e f e r a b l e t o say t h a t , if i n any c a s e c o m p u l s o r y a c q u i s i t i o n
p r o v e d t o b e n e c e s s a r y , t h i s would n o r m a l l y b e a u t h o r i s e d b y
s p e c i f i c A c t of P a r l i a m e n t .
T h e r i g h t s of p r i v a t e i n t e r e s t s
t o r e p r e s e n t t h e i r c a s e a g a i n s t c o m p u l s o r y a c q u i s i t i o n must
be strenuously safeguarded.
1
g.
P a r a g r a p h 32 should b e e x p a n d e d t o c o v e r the s p e c i a l
c i r c u m s t a n c e s of N o r t h e r n I r e l a n d , and t o a l l o w f o r s i m i l a r
a r r a n g e m e n t s to t h o s e in S c o t l a n d t o b e m a d e f o r W a l e s , on
the a n a l o g y o f the r e f e r e n c e to W a l e s in the S e c r e t a r y of State
f o r E n e r g y ' s r e p o r t to P a r l i a m e n t on United K i n g d o m o f f s h o r e
o i l and g a s .
A n u m b e r of o t h e r a m e n d m e n t s w e r e d i s c u s s e d and a g r e e d .
h.
A r e v i s i o n o f the p a r a g r a p h s c o v e r e d in C ( 7 4 ) 8 9 was
c i r c u l a t e d b y the P r i m e M i n i s t e r and a g r e e d , subject t o m i n o r
changes
' V'
II
'
T H E P R I M E M I N I S T E R , s u m m i n g up the d i s c u s s i o n , s a i d that the
Cabinet a g r e e d that i n v e s t m e n t g r a n t s , r e g i o n a l a i d and R E P should
not be m a d e c o n d i t i o n a l f o r f i r m s i n the P l a n n i n g A g r e e m e n t s s y s t e m .
T h e G o v e r n m e n t w o u l d a s s e s s w i t h c o m p a n i e s t h e i r n e e d f o r any
f u r t h e r a s s i s t a n c e t o t h e i r p l a n s with p a r t i c u l a r r e f e r e n c e t o n e w
e m p l o y m e n t p r o j e c t s in t h e r e g i o n s .
T h e G o v e r n m e n t should
u n d e r t a k e a r e v i e w o f a u t o m a t i c g r a n t s t o i n d u s t r y , but this should
not b e m e n t i o n e d in the W h i t e P a p e r .
F u r t h e r c o n s i d e r a t i o n should
b e g i v e n t o h e l p i n g s m a l l b u s i n e s s e s , and a c l e a r r e f e r e n c e to this
should b e m a d e .
T h e S e c r e t a r y of State f o r I n d u s t r y w o u l d of c o u r s e
a l s o b e f r e e t o r e p o r t t o the C a b i n e t on the w o r k i n g o f the s c h e m e in
the l i g h t of e x p e r i e n c e , but it w o u l d b e i m p o r t a n t not t o i m p l y in
public that m o d i f i c a t i o n s m i g h t b e c o n t e m p l a t e d .
ii
"'
T h e N E B should o p e r a t e in p u r s u i t o f i t s o b j e c t i v e s , a s d e f i n e d
and expanded i n d i s c u s s i o n .
If c o m p u l s o r y a c q u i s i t i o n p r o v e d
to b e n e c e s s a r y , it w o u l d n o r m a l l y b e b y s p e c i f i c A c t of P a r l i a m e n t .
T h e S e c r e t a r y of State f o r I n d u s t r y should a r r a n g e f o r h i s o f f i c i a l s to
c o n s i d e r f u r t h e r , in c o n s u l t a t i o n w i t h the F i r s t P a r l i a m e n t a r y
C o u n s e l , the p r o c e d u r e t o b e a d o p t e d in c a s e s o f e x t r e m e u r g e n c y .
T h e a r r a n g e m e n t s f o r N o r t h e r n I r e l a n d and W a l e s should b e stated
in g r e a t e r d e t a i l .
T h e S e c r e t a r y of the C a b i n e t should a r r a n g e f o r a f u r t h e r d r a f t ,
i n c o r p o r a t i n g t h e r e v i s i o n s a g r e e d at t h e m e e t i n g , to b e p r e p a r e d
and c i r c u l a t e d t o the C a b i n e t on 5 A u g u s t .
If n e c e s s a r y , the s m a l l
d r a f t i n g g r o u p of M i n i s t e r s w o u l d m e e t on 6 A u g u s t t o c o n s i d e r any
outstanding t e x t u a l i s s u e s .
Subject to such c l e a r a n c e , the S e c r e t a r y
of State f o r I n d u s t r y should a r r a n g e f o r the W h i t e P a p e r t o b e
published.
It w a s i m p o r t a n t that M i n i s t e r s should a d h e r e t o the
p o l i c i e s n o w a g r e e d f o r P l a n n i n g A g r e e m e n t s and the M E B i n public
speeches.
T h e S e c r e t a r y of State f o r I n d u s t r y should c o n s i d e r , in
c o n s u l t a t i o n w i t h 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 , w h e t h e r
a p o p u l a r v e r s i o n of the White P a p e r m i g h t b e p u b l i s h e d b y the L a b o u r
P a r t y ; i t should not h o w e v e r b e i s s u e d a s a G o v e r n m e n t d o c u m e n t n o r
should t h e c o s t of p r o d u c i n g it f a l l on p u b l i c f u n d s .
It w o u l d b e
n e c e s s a r y h o w e v e r f o r the t e x t o f any p o p u l a r v e r s i o n to b e c l e a r e d
with h i m s e l f and o t h e r M i n i s t e r s c o n c e r n e d .
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 s u m m i n g up o f t h e i r d i s c u s s i o n .
1
2.
I n v i t e d the S e c r e t a r y of State f o r I n d u s t r y ­
i.
T o a r r a n g e f o r the F i r s t
P a r l i a m e n t a r y Counsel to be consulted
on P a r l i a m e n t a r y a r r a n g e m e n t s for
c o m p u l s o r y acquisition- i n c i r c u m s t a n c e s
of c o m p e l l i n g u r g e n c y .
ii.
Subject t o f i n a l c l e a r a n c e of the t e x t
by M i n i s t e r s , to a r r a n g e 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 f o r the
W h i t e P a p e r on P l a n n i n g A g r e e m e n t s and
the N a t i o n a l E n t e r p r i s e B o a r d to be p u b l i s h e d .
iii.
In c o n s u l t a t i o n w i t h t h e F o r e i g n and
Commonwealth S e c r e t a r y to consider whether
a p o p u l a r v e r s i o n of t h e W h i t e P a p e r m i g h t b e
p u b l i s h e d u n d e r the a u s p i c e s of the L a b o u r
Party.
3,
I n s t r u c t e d the S e c r e t a r y of the C a b i n e t t o
a r r a n g e f o r a r e v i s e d t e x t o f the W h i t e P a p e r ,
i n c o r p o r a t i n g the a m e n d m e n t s a g r e e d at t h e i r
m e e t i n g , t o be p r e p a r e d and c i r c u l a t e d on 5 A u g u s t .
4,
T h e C a b i n e t c o n s i d e r e d a m e m o r a n d u m b y the S e c r e t a r y of
State f o r I n d u s t r y ( C ( 7 4 ) 86) about p o s s i b l e c h a n g e s to a s s i s t e d a r e a
boundaries.
T H E S E C R E T A R Y O F S T A T E F O R I N D U S T R Y r e c a l l e d that at t h e i r
d i s c u s s i o n on 11 J u l y , the C a b i n e t had d e c i d e d not t o p u r s u e f o r the
t i m e b e i n g any c h a n g e s i n a s s i s t e d a r e a b o u n d a r i e s , but had
r e c o g n i s e d that t h e q u e s t i o n m i g h t n e e d t o b e r e o p e n e d i n the
l i g h t of t h e e c o n o m i c m e a s u r e s -which the C h a n c e l l o r o f the E x c h e q u e r
had then b e e n p r e p a r i n g .
In t h e e v e n t , t h e s e m e a s u r e s had
s i g n i f i c a n t l y s t r e n g t h e n e d the c a s e f o r m a k i n g s o m e i m m e d i a t e
c h a n g e s i n a s s i s t e d a r e a b o u n d a r i e s ; p a r t i c u l a r l y the doubling
o f the R e g i o n a l E m p l o y m e n t P r e m i u m ( R E P ) , w h i c h had i n c r e a s e d
s u b s t a n t i a l l y t h e f i n a n c i a l a d v a n t a g e to m a n u f a c t u r i n g i n d u s t r y of the
d e v e l o p m e n t a r e a s ( D A s ) o v e r the i n t e r m e d i a t e a r e a s ( I A s ) , and had
a l r e a d y b r o u g h t s t r o n g r e p r e s e n t a t i o n s f r o m E d i n b u r g h and to a
l e s s e r e x t e n t f r o m C a r d i f f and N e w p o r t .
H e b e l i e v e d that the c a s e
f o r u p g r a d i n g E d i n b u r g h , L e i t h and P o r t o b e l l o w a s n o w o v e r w h e l m i n g ,
and the c a s e f o r C a r d i f f w a s c l o s e l y l i n k e d p o l i t i c a l l y w i t h that f o r
Edinburgh.
M e r s e y s i d e and N o r t h W e s t W a l e s would both g a i n f r o m
the doubling o f R E P , but t h e i r p o s i t i o n r e l a t i v e t o the r e s t of t h e D A s
w a s u n c h a n g e d , and the u r g e n t n e e d f o r f u r t h e r a c t i o n r e m a i n e d .
T h e p o s i t i o n o f C h e s t e r f i e l d w a s a m a j o r a n o m a l y , and i t w a s
g e n e r a l l y a c c e p t e d that i f any a r e a s w e r e t o b e u p g r a d e d then
C h e s t e r f i e l d should b e g i v e n I A status at t h e s a m e t i m e .
The
c o s t of t h e s e m e a s u r e s would n o w b e s o m e £ 2 5 m i l l i o n a y e a r ;
they c o u l d b e m a d e b y S t a t u t o r y I n s t r u m e n t , w h i c h c o u l d b e l a i d
and b r o u g h t i n t o f o r c e i n the R e c e s s ,
There were already
i n d i c a t i o n s that f u r t h e r m e a s u r e s m i g h t b e n e e d e d t o a s s i s t
the r e g i o n s o v e r the p r o b l e m s o f the c o m i n g w i n t e r .
These
p r o p o s a l s w e r e a m e a n s b y w h i c h s o m e r e a l g o o d could b e done
i m m e d i a t e l y t o a r e a s in n e e d .
H e t h e r e f o r e i n v i t e d the C a b i n e t
t o a g r e e t o t h e i m m e d i a t e u p g r a d i n g of M e r s e y s i d e , N o r t h W e s t
W a l e s , the S c o t t i s h I A , the C a r d i f f t r a v e l - t o - w o r k a r e a , and
Chesterfield.
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 t h e p r o p o s e d
c h a n g e s w o u l d f u r t h e r d i l u t e t h e e f f e c t i v e n e s s of r e g i o n a l b e n e f i t s
and w o u l d s t i m u l a t e n e w d e m a n d s f o r u p g r a d i n g s e l s e w h e r e .
Indeed,
such c h a n g e s w o u l d b e an e x t e n s i o n of the i n d i s c r i m i n a t e and
u n s e l e c t i v e a i d w h i c h had b e e n c r i t i c i s e d d u r i n g the C a b i n e t ' s
d i s c u s s i o n e a r l i e r that m o r n i n g .
T h e m e a s u r e s he had r e c e n t l y
announced had m a d e a s i g n i f i c a n t I m p r o v e m e n t i n the p o s i t i o n of
M e r s e y s i d e and N o r t h W e s t W a l e s : f o r e x a m p l e , the doubling of
R E P w o u l d b r i n g an e x t r a £ 2 0 m i l l i o n a y e a r t o M e r s e y s i d e ,
c o m p a r e d with about £ 2 m i l l i o n w h i c h w o u l d c o m e f r o m u p g r a d i n g
it to a s p e c i a l d e v e l o p m e n t a r e a ( S D A ) ,
I t w o u l d b e p r e f e r a b l e to
r e v i e w the m a t t e r a g a i n at a l a t e r s t a g e w h e n t h e p o s s i b i l i t y o f
compensating downgradings could be c o n s i d e r e d .
In the m e a n t i m e ,
he u r g e d the C a b i n e t t o r e a f f i r m t h e i r , e a r l i e r d e c i s i o n not to m a k e
a n y c h a n g e s at p r e s e n t .
T H E S E C R E T A R Y O F S T A T E F O R S C O T L A N D said that the
p r o b l e m s of E d i n b u r g h had begun i n 1963, and had b e e n accentuated
b y the p r e v i o u s A d m i n i s t r a t i o n ^ d e c i s i o n not to p r o c e e d with the
plans to site a l a r g e tax office t h e r e .
T h e d o u b l i n g of R E P had
n o w put i n d u s t r y in the E d i n b u r g h a r e a at a s e v e r e c o m p e t i t i v e
d i s a d v a n t a g e c o m p a r e d with the w h o l e of the r e s t o f Scotland and
the N o r t h of E n g l a n d .
M a l e u n e m p l o y m e n t in E d i n b u r g h w a s
h i g h e r than t h e a v e r a g e r a t e f o r the w h o l e of S c o t l a n d , and double
that f o r the United K i n g d o m .
M e r s e y s i d e and C a r d i f f w e r e due to
b e n e f i t f r o m the d i s p e r a l of G o v e r n m e n t j o b s .
T h e r e w a s an
o v e r w h e l m i n g c a s e on m e r i t s , t h e r e f o r e , f o r the u p g r a d i n g of
Edinburgh.
T H E S E C R E T A R Y O F S T A T E F O R W A L E S said that although
h e had m o d i f i e d h i s o r i g i n a l p r o p o s a l s f o r c h a n g e s i n W a l e s ,
he m u s t continue to p r e s s f o r the u p g r a d i n g of N o r t h W e s t W a l e s
N o r t h W e s t W a l e s w a s i n d e e d an outstanding a n o m a l y ,
and C a r d i f f .
w h e r e u n e m p l o y m e n t now r a n g e d b e t w e e n 8 . 5 and 9 . 5 p e r c e n t ; and
though the a b s o l u t e c o s t of c o n f e r r i n g S D A status w o u l d b e s m a l l , the
e f f e c t i n p s y c h o l o g i c a l t e r m s would be v e r y m a r k e d .
Like
E d i n b u r g h , the p o s i t i o n of C a r d i f f i n r e l a t i o n t o the surrounding
a r e a had b e e n s i g n i f i c a n t l y w o r s e n e d as a r e s u l t of the doubling
of R E P , and the high r a t e of m a l e u n e m p l o y m e n t t h e r e w a s not
l i k e l y t o b e i m p r o v e d by the j o b s a v a i l a b l e f r o m the d i s p e r s a l o f
Government offices.
N o r would i t b e f e a s i b l e , on b r o a d p o l i t i c a l
g r o u n d s , t o d i s c r i m i n a t e b e t w e e n the t r e a t m e n t of C a r d i f f and
Edinburgh.
T H E L O R D P R E S I D E N T , s u m m i n g up the d i s c u s s i o n , said that
w h i l e t h e y r e c o g n i s e d the n e e d , i n the l o n g e r t e r m , f o r a m o r e
t h o r o u g h r e v i e w of a s s i s t e d a r e a b o u n d a r i e s , the C a b i n e t a g r e e d
on b a l a n c e that the doubling of R E P m a d e s o m e i m m e d i a t e changes
n e c e s s a r y ; and t h e y a c c e p t e d that the p r o p o s e d p a c k a g e had t o be
considered as a whole.
T h e y t h e r e f o r e a p p r o v e d the c h a n g e s now
p r o p o s e d b y t h e S e c r e t a r y of State f o r I n d u s t r y ,
T h e S e c r e t a r y of
State f o r I n d u s t r y should a g r e e t h e t e r m s of a s u i t a b l e announcement
with t h e C h a n c e l l o r of the E x c h e q u e r and the o t h e r M i n i s t e r s
c o n c e r n e d , and consult h i m about i t s t i m i n g .
T h e Cabinet ­
1.
A g r e e d that M e r s e y s i d e and N o r t h W e s t W a l e s
should b e c o m e s p e c i a l d e v e l o p m e n t a r e a s , that
E d i n b u r g h , L e i t h and P o r t o b e l l o and the C a r d i f f
t r a v e l - t o - w o r k a r e a should b e c o m e d e v e l o p m e n t
a r e a s , and that C h e s t e r f i e l d should b e c o m e an
intermediate area.
10
CONFIDENTIAL
2.
I n v i t e d the S e c r e t a r y of State f o r I n d u s t r y ,
i n c o n s u l t a t i o n w i t h the C h a n c e l l o r of t h e E x c h e q u e r ,
and t h e S e c r e t a r i e s of State f o r E m p l o y m e n t , f o r
S c o t l a n d and f o r W a l e s , t o p r e p a r e a s u i t a b l e
a n n o u n c e m e n t , and consult t h e L o r d P r e s i d e n t
o f the C o u n c i l about i t s t i m i n g .
Cabinet
Office
2 A u g u s t 1974
11