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BTIS
D O C U M E N T
I S
T H E 'P R O P E R T Y
Printed
O F
H I S
B R I T A N N I C
for the Cabinet.
July
M A J E S T Y ' S
G O V E R N M E N T
1947
Copy N o .
SECRET
C M . (17)
64th Conclusions
C A B I N E T 64 (47)
CONCLUSIONS
of a Meeting of the Cabinet held at 1 0 Downing
on Thursday,
2Ath July, 1 9 4 7 , at 1 0 a.m.
Street,
S.W. 1,
Present:
T h e R i g h t H o n . C. R . A T T L E E , M . P . , P r i m e M i n i s t e r (in the
The Right Hon. HERBERT MORRISON,
M . P . , Lord P r e s i d e n t of t h e Council.
1
;
Chair).
T h e Right Hon. ERNEST BEVIN, M . P .
S e c r e t a r y of S t a t e for F o r e i g n
Affairs.
The R i g h t H o n . A R T H U R GREENWOOD, T h e R i g h t H o n . H U G H DALTON, M . P . ,
M.P., Minister without Portfolio.
Chancellor of t h e E x c h e q u e r .
The R i g h t H o n . S i r STAFFORD C R I P P S , The R i g h t H o n . VISCOUNT J O W I T T ,
K.C., M . P . , P r e s i d e n t of t h e B o a r d of
L o r d Chancellor.
Trade.
The R i g h t H o n . J . CHUTER E D E , M . P . , The R i g h t H o n . VISCOUNT ADDISON,
Secretary of S t a t e f o r Commonwealth
S e c r e t a r y of S t a t e f o r t h e H o m e
Relations.
D e p a r t m e n t (Items 2 - 5 ) .
The Right Hon. J . WESTWOOD, M.P., The Right H o n . A . CREECH JONES,
M . P . , S e c r e t a r y of S t a t e for t h e
S e c r e t a r y of S t a t e f o r S c o t l a n d .
Colonies.
j-iie
1 tig nt
JLJ.OI1.
XXXiL
JLL/A.RL
UJE!
T
he Right Hon. E . SHINWELL, M.P.,
M i n i s t e r of F u e l a n d P o w e r . LlSTOWEL,
S e c r e t a r y of S t a t e f o r
I n d i a a n d S e c r e t a r y of S t a t e f o r
Burma.
The Right H o n . ANEURIN BEVAN, M.P.,
M i n i s t e r of H e a l t h .
T h e R i g h t H o n . T. W I L L I A M S , M . P . ,
of
Minister
and
Agriculture
Fisheries.
The R i g h t H o n . GEORGE TOMLINSON,
M . P . , M i n i s t e r of E d u c a t i o n .
T h e following w e r e also p r e s e n t :
The Right Hon. J O H N WILMOT,
M.P.,
T h e R i g h t H o n . J O H N STRACHEY, M . P . ,
M i n i s t e r of Food.
M i n i s t e r of S u p p l y (Item 2).
The Right Hon. WILLIAM WHITELEY,
M.P.,
Parliamentary
Secretary,
T r e a s u r y (Item 1 ) .
Secretariat
:
M r . W . S. M U R R I E .
Mr.
S. E . V . L U K E . :
C A B I N E T 64 (47)
CONTENTS
Minute
No.
1
Subject
Parliament
B u s i n e s s i n t h e H o u s e of C o m m o n s .
P r o r o g a t i o n of P a r l i a m e n t .
B u s i n e s s i n t h e H o u s e of L o r d s .
2
Iron and Steel I n d u s t r y Bill....
3
Petrol Rationing
4
Statute L a w Reform
5
P a p e r for a F a s c i s t P e r i o d i c a l
....
1. T h e C a b i n e t w e r e i n f o r m e d of t h e business to be t a k e n i n
t h e H o u s e of Commons i n t h e following week.
JrariiamoAiu.
Business
in
O n 2 8 t h J u l y t h e r e w o u l d be a d e b a t e o n Housing.
The
O p p o s i t i o n w o u l d be i n f o r m e d t h a t i t w o u l d be for t h e m t o open t h e
d e b a t e a n d t h e M i n i s t e r of H e a l t h w o u l d consider w h e t h e r t h e
M i n i s t e r of W o r k s should i n t e r v e n e in it.
On 2 9 t h J u l y t h e r e w o u l d be a d e b a t e on Colonial Affairs,
and
t h e C o m m i t t e e a n d r e m a i n i n g S t a g e s of t h e Acquisition
of Land
(Authorisation
Procedure) (Scotland,) Bill a n d t h e Local
Government
(Scotland) Bill would be t a k e n .
On 30th J u l y t h e r e w o u l d be a d e b a t e o n t h e Army u n t i l 7 p.m.
a n d t h e r e a f t e r a debate on t h e allocation of t h e Grantham
factories.
T h e proposed Government
of India and Burma Orders would be
c o n s i d e r e d ; t h e r e w o u l d be a M o t i o n t o a p p r o v e the
Electoral
Registration
Regulations,
a n d the L o r d s ' a m e n d m e n t s t o the Fire
Services Bill w o u l d be considered.
On 31st J u l y t h e r e w o u l d be a d e b a t e on Education,
and at
9 - 3 0 p.m. the q u e s t i o n s on all o u t s t a n d i n g V o t e s would be p u t from
t h e C h a i r . T h e Second R e a d i n g of the Isle of Man Customs
Bill
w o u l d also be t a k e n .
T h e L o r d s a m e n d m e n t s to t h e Town and, Country Planning
Bill
w o u l d be considered on 1st A u g u s t a n d on t h e same d a y f u r t h e r
c o n s i d e r a t i o n w o u l d be g i v e n to the Government
of India and Burma
Orders.
t h e H o u s e of
Commons.
The Lord President,
s a i d t h a t i n a n n o u n c i n g the business for
t h e following week he p r o p o s e d to s t a t e t h a t the G o v e r n m e n t h o p e d
t h a t all necessary business w o u l d be completed by 8th or, at latest,
9 t h A u g u s t a n d t o a s k for the c o - o p e r a t i o n . of all M e m b e r s in
s e c u r i n g t h i s . T h e q u e s t i o n w h e t h e r P a r l i a m e n t should be
p r o r o g u e d on 8 t h or 9 t h A u g u s t h a d been considered. I t w a s t r u e
t h a t t h e r e would be no difficulty in r e c a l l i n g P a r l i a m e n t a f t e r
p r o r o g a t i o n in a t most t h r e e days, b u t i n t h e p r e s e n t s t a t e of affairs
a p r o p o s a l t h a t P a r l i a m e n t should be p r o r o g u e d would lead to
o p p o s i t i o n a n d m i s u n d e r s t a n d i n g . I t t h e r e f o r e seemed preferable
t h a t P a r l i a m e n t should s t a n d a d j o u r n e d u n t i l 2 0 t h October, w h e n
t h e r e w o u l d be a f o r m a l m e e t i n g for p r o r o g a t i o n , followed by the
o p e n i n g of t h e n e w Session on 21st October.
P r o r o g a t i o n of
Parliament.
T h e Cabinet—E n d o r s e d the view t h a t on the completion of t h e business
of t h e Session P a r l i a m e n t should be a d j o u r n e d u n t i l
2 0 t h October.
Business
in
the House
of
Lords.
Iron and Steel
Industry Bill.
(Previous
Reference:
C M . (47) 58th Conclusions, Minute
3.)
The Secretary
of State for Commonwealth
Relations
said t h a t
h e h o p e d t h a t by 31st J u l y t h e H o u s e of L o r d s would h a v e disposed
of all t h e Bills before them. H e would see w h e t h e r i t would be
possible t o t a k e t h e R e p o r t S t a g e of t h e A g r i c u l t u r e B i l l on
2 9 t h J u l y , leaving the R e p o r t S t a g e of t h e E l e c t r i c i t y Bill to be
t a k e n on 30th J u l y . T h i s w o u l d allow a longer i n t e r v a l a f t e r the
conclusion of t h e C o m m i t t e e S t a g e of the E l e c t r i c i t y Bill a n d would
also give t h e H o u s e of Commons more t i m e to consider the L o r d s '
a m e n d m e n t s to t h e A g r i c u l t u r e Bill. I t h a d been a g r e e d t h a t on
2 8 t h J u l y he should move a M o t i o n t h a t G o v e r n m e n t business should
t a k e precedence d u r i n g t h e r e m a i n i n g s i t t i n g s . A n y discussion of
L o r d L a y t o n ' s M o t i o n about n e w s p r i n t s u p p l i e s would t a k e place
o n 6th A u g u s t .
2. T h e C a b i n e t considered a m e m o r a n d u m by the L o r d
P r e s i d e n t a n d t h e M i n i s t e r of S u p p l y ( C P . (47) 212) r e p o r t i n g t h e
r e s u l t s of the f u r t h e r discussions w h i c h they h a d h a d w i t h r e p r e ­
s e n t a t i v e s of t h e I r o n a n d Steel F e d e r a t i o n .
The Lord President
s a i d t h a t , in accordance w i t h t h e C a b i n e t s
decision of 2 6 t h J u n e ( C M . (47) 5 7 t h Conclusions, M i n u t e 5), t h e
M i n i s t e r of S u p p l y a n d he, while m a k i n g it clear t h a t i t w a s still
t h e G o v e r n m e n t s policy t o b r i n g a p p r o p r i a t e sections of the iron
a n d steel i n d u s t r y u n d e r full p u b l i c o w n e r s h i p , h a d sought to
a s c e r t a i n from the r e p r e s e n t a t i v e s of t h e I r o n a n d Steel Federation
f u r t h e r d e t a i l s of the possible a l t e r n a t i v e a r r a n g e m e n t s tentatively
s u g g e s t e d in t h e discussion w i t h the P r i m e M i n i s t e r on 21st May.
I t n o w seemed clear t h a t t h e F e d e r a t i o n would accept far-reaching
s t a t u t o r y control of t h e i n d u s t r y by t h e G o v e r n m e n t t h r o u g h the
t r a n s l a t i o n i n t o p e r m a n e n t s t a t u t o r y form of emergency powers such
a s t h o s e i n Defence R e g u l a t i o n 55. I t w a s also agreed t h a t these
p o w e r s of control should be exercised directly by a n I r o n and Steel
B o a r d , a n d t h a t , to enable the B o a r d to exercise these powers
effectively, t h e necessary e x p e r t staff should be m a d e available from
S t e e l H o u s e . T h i s w o u l d m e a n t h a t t h e F e d e r a t i o n would become
a n o r d i n a r y t r a d e a s s o c i a t i o n ; a n d t h e r e p r e s e n t a t i v e s of the Federa­
t i o n h a d s t a t e d t h a t i n such a n event t h e y w o u l d not seek to build
u p a fresh controlling o r g a n i s a t i o n alongside the I r o n a n d Steel
B o a r d , t h o u g h they w o u l d expect t h a t t h e F e d e r a t i o n would be
given such i n f o r m a t i o n a b o u t costs a n d other m a t t e r s as it required
to f a c i l i t a t e its o p e r a t i o n as a t r a d e association. W i t h regard to
t h e a c q u i s i t i o n of p a r t i c u l a r u n d e r t a k i n g s , t h e representatives had
a t first a r g u e d t h a t t h e p o w e r to a c q u i r e should be exercisable only
w h e r e justified by defence c o n s i d e r a t i o n s or by default on the p a r t
of p r i v a t e i n d u s t r y . Subsequently, however, they h a d agreed t h a t
t h e p r o p o s e d Bill should give p o w e r s of a c q u i s i t i o n in a n y case where
t h i s w a s r e p o r t e d by t h e B o a r d to be e x p e d i e n t in the public interest.
T h e y h a d suggested t h a t the power should not be exercisable except
on t h e r e c o m m e n d a t i o n of the B o a r d , a n d , w h e n it h a d been pointed
o u t t h a t t h e G o v e r n m e n t could n o t be expected to r e f r a i n from the
exercise of the powers merely because t h e B o a r d ' s report was
a d v e r s e or n o n - c o m m i t t a l , they h a d i n d i c a t e d t h a t their diffi­
culties m i g h t be m e t if the G o v e r n m e n t w e r e p r e p a r e d to
a g r e e t h a t in all oases t h e M i n i s t e r s h o u l d be obliged to publish
the Board's report.
T h e F e d e r a t i o n w o u l d not agree t h a t the
p r o p o s e d Bill should itself b r i n g p a r t i c u l a r u n d e r t a k i n g s under
p u b l i c o w n e r s h i p or t h a t , a s soon a s i t h a d been passed, orders
b r i n g i n g such u n d e r t a k i n g s u n d e r public o w n e r s h i p should be
m a d e . If, therefore, t h e G o v e r n m e n t w e r e to proceed on lines
a c c e p t a b l e to t h e F e d e r a t i o n , t h e r e w o u l d be l i t t l e or no public
a c q u i s i t i o n of iron a n d steel u n d e r t a k i n g s d u r i n g the lifetime
of t h e p r e s e n t P a r l i a m e n t . T h i s w o u l d a d m i t t e d l y be a departure
from t h e C a b i n e f s p r e v i o u s decision a n d from the announced
i n t e n t i o n s of t h e Government, b u t i n p r e s e n t circumstances, when
i t w a s of v i t a l i m p o r t a n c e to secure the m a x i m u m o u t p u t of steel,
i t seemed to h i m to be t h e d u t y of t h e C a b i n e t to r e f r a i n from any
step w h i c h would j e o p a r d i s e steel p r o d u c t i o n . T h e r e was no
evidence t h a t steel p r o d u c e r s w e r e a t p r e s e n t showing lack of
co-operation, n o r d i d h e suggest t h a t t h e r e would be deliberate
sabotage by p r o d u c e r s if t h e G o v e r n m e n t c a r r i e d out the scheme
a l r e a d y a p p r o v e d by t h e Cabinet. I t w a s inevitable, however, t h a t
firms w h i c h expected to be b r o u g h t u n d e r public o w n e r s h i p should
lose t h e incentive to c a r r y out desirable developments, a n d there
w a s t h u s a real d a n g e r t h a t in t h e c r i t i c a l y e a r or t w o which lay
i m m e d i a t e l y a h e a d t h e n a t i o n a l economy would be c r i p p l e d through
a s h o r t a g e of steel. H e believed t h a t t h e proposals in C P . (47) 212
w o u l d lay t h e f o u n d a t i o n for b r i n g i n g t h e steel i n d u s t r y into public
o w n e r s h i p i n a much more o r d e r l y m a n n e r t h a n would be possible
u n d e r t h e scheme a l r e a d y a p p r o v e d a n d t h a t if they were properly
p r e s e n t e d t o G o v e r n m e n t s u p p o r t e r s t h e y would receive general
a p p r o v a l . I f the C a b i n e t endorsed these proposals, t h e next step
w o u l d be to send a c o m m u n i c a t i o n to t h e I r o n a n d Steel Federation
s e t t i n g o u t precisely w h a t t h e G o v e r n m e n t h a d in m i n d .
The Minister of Supply said t h a t t h e G o v e r n m e n t h a d h i t h e r t o
been h a m p e r e d by t h e fact t h a t t h e real control over the iron and
steel i n d u s t r y h a d been exercised t h r o u g h Steel House a n d t h a t
t h e willingness of t h e F e d e r a t i o n to t r a n s f e r to the I r o n a n d Steel
B o a r d the e x p e r t staff now a t Steel H o u s e represented a very
s u b s t a n t i a l c h a n g e in t h e i r f o r m e r a t t i t u d e . Steel o u t p u t at present
w a s a t t h e r a t e of 1 2 - 5 m i l l i o n i n g o t t o n s a year, which, after
p r i o r i t y d e m a n d s h a d been met, b a r e l y satisfied 5 0 per cent, of other
r e q u i r e m e n t s . I f t h e fullest possible co-operation w e r e obtained
from t h e i n d u s t r y , o u t p u t m i g h t be r a i s e d to 13f million ingot tons
i n the n e x t 12 m o n t h s , b u t t h i s could be achieved only if i n d i v i d u a l
firms w e r e w i l l i n g to sacrifice t h e i r o w n i n t e r e s t s . H e could n o t
h o p e to secure t h e necessary w h o l e - h e a r t e d co-operation if con­
t r o v e r s i a l legislation w a s b e i n g forced t h r o u g h P a r l i a m e n t a n d
i n d i v i d u a l firms w e r e faced w i t h the p r o s p e c t t h a t they might.,
w i t h i n a y e a r or e i g h t e e n m o n t h s , be b r o k e n u p t h r o u g h the
severance of those p a r t s of t h e i r a c t i v i t i e s w h i c h t h e Government
would n o t w i s h to r e t a i n u n d e r public o w n e r s h i p . T h e loss of half
a million i n g o t tons of steel w h i c h m i g h t have gone i n t o t h e p r o ­
d u c t i o n of m a c h i n e r y for e x p o r t w o u l d be e q u i v a l e n t to a loss of
a b o u t £ 1 0 0 millions of foreign e x c h a n g e . E v e n t h o u g h legislation
a u t h o r i s i n g t h e G o v e r n m e n t to a c q u i r e t h e s h a r e s of i r o n a n d steel
u n d e r t a k i n g s w e r e to be passed in t h e 1 9 4 7 - 4 8 Session, t h e r e would
i n fact be l i t t l e p h y s i c a l c h a n g e in these u n d e r t a k i n g s . d u r i n g the
l i f e t i m e of t h e p r e s e n t P a r l i a m e n t . T h i s b e i n g so, i t seemed to him
t h a t the r i g h t course w a s to proceed on the lines recommended in
C P . (47) 212, w h i c h would c a r r y t h e G o v e r n m e n t a long w a y
t o w a r d s public o w n e r s h i p of the i n d u s t r y a n d leave t h e w a y clear
for the completion of t h e process d u r i n g the n e x t P a r l i a m e n t .
The Prime Minister said t h a t i n t h e p r e s e n t economic s i t u a t i o n
i t w o u l d be i n e x p e d i e n t to proceed w i t h l e g i s l a t i o n b r i n g i n g the
i r o n a n d steel i n d u s t r y u n d e r public o w n e r s h i p in the 1947-48
Session. T h e G o v e r n m e n t would be j u d g e d by t h e i r h a n d l i n g of
t h e difficult economic problems w h i c h they w o u l d h a v e to face in
t h e n e x t y e a r or t w o a n d they could n o t afford to expose themselves
t o the c h a r g e of h a v i n g a g g r a v a t e d these problems by a d o p t i n g a
m e a s u r e w h i c h m i g h t m a k e it impossible to secure the m a x i m u m
o u t p u t of such a v i t a l commodity as steel.
The Minister
of Health said t h a t he w a s s t r o n g l y opposed t o
t h e c o m p r o m i s e p r o p o s a l s o u t l i n e d in C P . (47) 212. Steel H o u s e
h a d been able t o exercise effective control over the i r o n a n d steel
i n d u s t r y only because of its o r g a n i c connection w i t h ,the o p e r a t i n g
u n i t s of t h a t i n d u s t r y . W h e n the c o n t r o l l i n g staff w e r e t r a n s f e r r e d
f r o m Steel H o u s e to t h e I r o n a n d Steel B o a r d t h e i r effectiveness
w o u l d r a p i d l y d i m i n i s h a n d t h e real p o w e r w o u l d c o n t i n u e t o reside
i n the F e d e r a t i o n . A decision not to proceed w i t h t h e socialisation
of t h e i r o n a n d steel i n d u s t r y in the 1947-48 Session w o u l d dis­
h e a r t e n a n d d i v i d e G o v e r n m e n t s u p p o r t e r s . H e d i d not accept the
view t h a t t h e G o v e r n m e n t s p r o g r a m m e of n a t i o n a l i s a t i o n should
be b r o u g h t t o a s t a n d s t i l l because t h e economic s i t u a t i o n w a s difficult
a n d he believed t h a t , if t h e G o v e r n m e n t , i n s t e a d of s t r e n g t h e n i n g
t h e h a n d s of t h e I r o n a n d Steel F e d e r a t i o n by i n d i c a t i n g t h a t they
m i g h t be p r e p a r e d to compromise, w e r e to p r e s s on w i t h legislation
t o i m p l e m e n t t h e scheme w h i c h they h a d a l r e a d y approved, t h e
o u t p u t of steel w o u l d not suffer. H e also p o i n t e d o u t t h a t i t would
be impossible t o reconcile a decision n o t t o proceed w i t h t h e
n a t i o n a l i s a t i o n of t h e U n i t e d K i n g d o m i r o n a n d steel i n d u s t r y w i t h
t h e p r o p o s a l s for t h e n a t i o n a l i s a t i o n of t h e R u h r iron a n d steel
industry.
The President
of the Board of Trade s a i d t h a t the proposals
o u t l i n e d in C P . (47) 212 would n o t i n p r a c t i c e achieve t h e object
of s e c u r i n g a h i g h e r o u t p u t of steel in t h e n e x t t w o or three critical
y e a r s . So long as t h e G o v e r n m e n t s i n t e n t i o n t o b r i n g the i n d u s t r y
u n d e r public o w n e r s h i p r e m a i n e d , t h e i n d u s t r y w o u l d continue i n
a s t a t e of u n c e r t a i n t y and, in o r d e r to d i s c r e d i t the p l a n for
n a t i o n a l i s a t i o n , w o u l d p u t obstacles in the w a y of t h e successful
o p e r a t i o n of t h e scheme of control. H e t h e r e f o r e felt t h a t t h e
G o v e r n m e n t m u s t e i t h e r proceed w i t h t h e scheme a l r e a d y a p p r o v e d
o r s t a t e t h a t they d i d n o t i n t e n d t o proceed w i t h legislation to
n a t i o n a l i s e t h e i n d u s t r y in t h e 1 9 4 7 - 4 8 Session.
The Minister of A griculture
said t h a t t h e o v e r r i d i n g need w a s
t o m a i n t a i n a n d , if possible, to i n c r e a s e t h e / o u t p u t of steel during'
[34133--4]
B 3
t h e n e x t year or t w o . H e believed t h a t the proposals in C P . (47) 212
w e r e the best m e a n s of a c h i e v i n g t h i s a n d t h a t Government
s u p p o r t e r s w o u l d recognise t h a t in the n a t i o n a l interest they should
be adopted.
The Minister
of Food said t h a t , difficult as it would be to
a b a n d o n any a t t e m p t to deal w i t h the iron a n d steel industry in
t h e 1947-48 Session, it would, in his view, be better to do this
t h a n t o a d o p t t h e p r o p o s a l s in C P . (47) 212. I t w a s clear that
u n d e r these p r o p o s a l s t h e F e d e r a t i o n , t h o u g h nominally yielding
t h e i r powers of c o n t r o l to the I r o n a n d Steel B o a r d , would continue
t o exercise effective control over the i n d u s t r y . Moreover, individual
firms i n the i n d u s t r y w o u l d o p e r a t e u n d e r the t h r e a t of public
a c q u i s i t i o n a n d would inevitably lack the necessary incentives to
e n t e r p r i s e . H e accordingly felt t h a t t h e r i g h t course w a s to proceed
w i t h the scheme a l r e a d y a p p r o v e d by t h e Cabinet.
The Foreign Secretary s a i d t h a t he w a s clear t h a t the original
p r o p o s a l t h a t t h e i r o n a n d steel i n d u s t r y should be nationalised by
t h e a c q u i s i t i o n of t h e physical assets w a s unworkable. I n the time
w h i c h he h a d h a d to e x a m i n e the proposals in C P . (47) 212, he
h a d n o t been able to consider all t h e i r implications, and he would
p r e f e r to see t h e m w o r k e d o u t more fully before being called upon
t o m a k e a choice between t h e m a n d the scheme for acquiring the
s h a r e s of iron a n d steel u n d e r t a k i n g s . W o u l d it not be possible
t o defer a decision u n t i l t h e a u t u m n , w h e n the i n t e r n a t i o n a l economic
s i t u a t i o n m i g h t be clearer ? I f the Cabinet were to d e p a r t from
t h e scheme w h i c h they h a d a l r e a d y approved, i t would be important
to avoid g i v i n g the i m p r e s s i o n t h a t t h i s change h a d taken place
as a r e s u l t of p r e s s u r e from t h e U n i t e d S t a t e s .
The Chancellor of the Exchequer
said t h a t when the Cabinet
h a d considered t h e p r o v i s i o n a l L e g i s l a t i v e P r o g r a m m e for the
1947-48 Session ( C M . (47) 3 7 t h Conclusions, M i n u t e 8) he had
u r g e d t h a t a n I r o n a n d Steel I n d u s t r y Bill should be included in
t h e P r o g r a m m e in preference to a G a s I n d u s t r y Bill. Since then,
however, the i n t e r n a t i o n a l economic s i t u a t i o n h a d deteriorated and
the country w o u l d have to face a n extremely difficult situation in
t h e a u t u m n . H e believed t h a t , at a t i m e w h e n public attention
w o u l d be focussed on the problem of our balance of payments, it
w o u l d be u n w i s e to i n t r o d u c e controversial legislation for bringing
t h e iron a n d steel i n d u s t r y u n d e r public o w n e r s h i p . On the other
h a n d , he w a s not satisfied t h a t t h e a l t e r n a t i v e proposals in
C P . (47) 212 w e r e p r e f e r a b l e to the scheme a l r e a d y approved by
t h e C a b i n e t a n d h e felt t h a t t h e r i g h t course w a s to abandon the
i d e a of i n t r o d u c i n g a n I r o n a n d Steel I n d u s t r y Bill early in the
1947-48 Session. H e realised t h a t t h i s w a s v i r t u a l l y equivalent
to a decision n o t t o proceed w i t h the B i l l u n t i l a later Session, and
he suggested t h a t it m i g h t be possible to revive the proposal to
i n t r o d u c e a G a s I n d u s t r y B i l l in 1947-48.
The Minister
of Fuel and Power said t h a t he h a d always
believed t h a t i t would have been feasible to n a t i o n a l i s e the iron and
steel i n d u s t r y by t h e a c q u i s i t i o n of t h e physical assets broadly on
t h e lines a d o p t e d for t h e n a t i o n a l i s a t i o n of the coalmining industry.
T h e proposals in C P . (47) 212 would merely expose the Government
t o blame for the s h o r t c o m i n g s of the i n d u s t r y w i t h o u t giving any
of t h e a d v a n t a g e s of n a t i o n a l i s a t i o n . T h e a r g u m e n t t h a t output
w o u l d suffer because of t h e d i s t u r b a n c e a r i s i n g from b r i n g i n g the
i n d u s t r y u n d e r n a t i o n a l o w n e r s h i p w a s unconvincing a n d he was
satisfied t h a t the r i g h t course w a s to r e v e r t t o the o r i g i n a l proposal
for a c q u i r i n g t h e p h y s i c a l assets of selected u n d e r t a k i n g s . If this
suggestion were accepted, it would be possible to defer immediate
a c t i o n a n d e x p l a i n to G o v e r n m e n t s u p p o r t e r s t h a t the detailed
provisions of the n a t i o n a l i s a t i o n p l a n were still being worked out.
The Secretary of State for Commonwealth
Relations said that
h e h a d always doubted w h e t h e r any r e a l g a i n would come from the
n a t i o n a l i s a t i o n of the i r o n a n d steel i n d u s t r y . I t seemed clear to
h i m t h a t a n y scheme for a c q u i r i n g t h e p h y s i c a l assets of the
i n d u s t r y w o u l d m e e t w i t h i n s u p e r a b l e difficulties, a n d he d i d n o t
believe t h a t t h e a l t e r n a t i v e of a c q u i r i n g t h e s h a r e s of selected
u n d e r t a k i n g s w o u l d o p e r a t e s a t i s f a c t o r i l y . H e felt t h a t , in p r e s e n t
circumstances, i t w o u l d be b e t t e r for t h e G o v e r n m e n t t o r e f r a i n
from a n y l e g i s l a t i o n affecting t h e i r o n a n d steel i n d u s t r y . F a i l i n g
t h i s , h e would s u p p o r t t h e p r o p o s a l s set out in C P . (47) 212.
The Lord Chancellor
said t h a t i n the n e x t few m o n t h s t h e
c o u n t r y w o u l d have to face a v e r y g r a v e economic s i t u a t i o n . T h i s
being so, i t seemed i n e x p e d i e n t to e m b a r k o n controversial legis­
l a t i o n w h i c h would b r i n g no i m m e d i a t e results. If a n y t h i n g h a d
to be done h e w o u l d p r e f e r t h e proposals in C P . (47) 212 a n d h e
felt t h a t the G o v e r n m e n t could p r o p e r l y t a k e t h e line t h a t , in view
of t h e economic s i t u a t i o n , t h e y h a d decided n o t t o proceed w i t h
any scheme for the n a t i o n a l i s a t i o n of t h e iron a n d steel i n d u s t r y i n
the lifetime of the p r e s e n t P a r l i a m e n t .
The Lord President
said t h a t , w h i l e he would n o t p r e s s for a n
i m m e d i a t e decision on t h e proposals i n C P . (47) 212, he felt t h a t
the C a b i n e t m u s t come to some conclusion before t h e S u m m e r Recess.
T o defer a decision u n t i l t h e a u t u m n would delay u n d u l y t h e
p r e p a r a t i o n of the necessary legislation, a n d it should be borne i n
m i n d t h a t , if the p r o p o s a l s in C P . (47) 212 w e r e approved, f u r t h e r
n e g o t i a t i o n s w i t h t h e I r o n a n d Steel F e d e r a t i o n would have to be
c a r r i e d out. H e d i d not believe it would be possible to avoid legis­
l a t i o n on t h e subject of the i r o n a n d steel i n d u s t r y d u r i n g t h e
1947-48 Session, a n d he r e m a i n e d convinced t h a t a Bill on the lines
i n d i c a t e d i n C P . (47) 212 w o u l d be p r e f e r a b l e t o legislation based
on t h e scheme w h i c h the C a b i n e t h a d a p p r o v e d a t a n earlier d a t e .
The
CabinetA g r e e d to resume c o n s i d e r a t i o n of C P .
m e e t i n g t o be held in t h e following week.
(47) 212 a t
a
3. A t t h e i r m e e t i n g on 2 4 t h J u n e the C a b i n e t h a d decided
t h a t t h e r e should be a r e d u c t i o n of 500,000 tons i n the i m p o r t of
motor s p i r i t in 1 9 4 7 - 4 8 . T h e C a b i n e t n o w h a d before them :—
(i) a m e m o r a n d u m by t h e M i n i s t e r of F u e l a n d P o w e r ( C P .
(47) 206) p r o p o s i n g a r e d u c t i o n of 33^- per cent, in the basic r a t i o n
for p r i v a t e cars a n d a n effective cut of 5 p e r cent, in the s u p p l e ­
m e n t a r y allowances given for p r i v a t e vehicles, t a x i s , h i r e cars a n d
commercial vehicles;
(ii) a m e m o r a n d u m by the M i n i s t e r of T r a n s p o r t ( C P . (47)
207) on t h e possibility of s e c u r i n g a r e d u c t i o n i n t h e c o n s u m p t i o n
of p e t r o l by public service a n d goods vehicles.
The Minister of Fuel and Power said t h a t the s a v i n g r e q u i r e d
could be achieved only by a r e d u c t i o n in civilian consumption, since
stocks of motor s p i r i t , i n c l u d i n g Service stocks, h a d fallen to u n d e r
six weeks' c o n s u m p t i o n a n d there w a s l i t t l e p r o s p e c t t h a t l a r g e
economies would be m a d e by the Services or t h e C o n t r o l Commission.
H e proposed t h a t rhe basic r a t i o n for p r i v a t e c a r s should be r e d u c e d
from 1st October t o the level from which it h a d been increased i n
J u l y 1946. T h i s should effect a saving of 300,000 tons in a full
year. A f u r t h e r s a v i n g of about 200,000 tons should be possible
by a n effective cut of 5 p e r cent, in t h e s u p p l e m e n t a r y allowances
(which would save 100,000 tons) a n d by the r e d u c t i o n s in c o n s u m p ­
tion by goods vehicles suggested by the M i n i s t e r of T r a n s p o r t in
C P . (47) 207. T h e C a b i n e t should realise t h a t t h e r e would be very
s t r o n g criticism of t h e r e d u c t i o n s in the basic r a t i o n a n d t h e s u p ­
p l e m e n t a r y allowances. H e h a d discussed w i t h the M i n i s t e r of
T r a n s p o r t m e a s u r e s for r e d u c i n g t h e black m a r k e t traffic i n com­
m e r e i a l coupons a n d h e proposed to p u t these measures into effect.
H i s p r o p o s a l s w o u l d n o t p r e j u d i c e t h e g r a d u a l reduction of the staff
employed on p e t r o l r a t i o n i n g .
The Chancellor
of the Exchequer
s u p p o r t e d t h e recommenda­
t i o n s m a d e in C P . (47) 206 a n d C P . (47) 207. H e pointed out that,
even so, t h e r e w o u l d be no r e d u c t i o n i n t h e t o t a l q u a n t i t y of petrol
i m p o r t e d in 1 9 4 7 - 4 8 as c o m p a r e d w i t h 1946-47.
I n discussion, t h e following p o i n t s w e r e m a d e —
(a) Some d o u b t w a s expressed about t h e wisdom of announ­
c i n g t h e p r o p o s e d r e d u c t i o n s i n p e t r o l r a t i o n s in isolation from
o t h e r m e a s u r e s to redress t h e a d v e r s e b a l a n c e of p a y m e n t s .
A s a g a i n s t this, it w a s p o i n t e d o u t t h a t if these reductions,
w h i c h w e r e consequential on decisions a l r e a d y t a k e n by the Cabinet,
w e r e to be b r o u g h t into force from 1st October, it would be
impossible to delay t h e i r a n n o u n c e m e n t u n t i l t h e Cabinet had been
able to r e a c h conclusions on o t h e r r e d u c t i o n s in t h e import pro­
g r a m m e w h i c h m i g h t be proposed later.
(b) The Lord President
asked w h e t h e r it would not be better
to reduce s u p p l e m e n t a r y allowances by 10 p e r cent, n e t rather than
t o impose a c u t on s u p p l i e s to goods vehicles.
The Minister
af Fuel and power said t h a t it would be inex­
p e d i e n t to a t t e m p t to obtain more t h a n a reduction of about 5 per
cent, in t h e s u p p l e m e n t a r y allowances a n d t h a t some reduction in
s u p p l i e s to goods vehicles w a s inevitable if the necessary saving
w a s to be achieved.
(c) The Prime Minister
said t h a t special a t t e n t i o n should be
p a i d to t h e t e r m s of t h e a n n o u n c e m e n t , w h i c h should explain fully
the reasons w h i c h h a d m a d e it necessary to reduce imports of petrol
H e d i d not t h i n k t h e a n n o u n c e m e n t need be m a d e in Parliament.
(d) The Prime Minister said t h a t he w o u l d p u r s u e the question
of s e c u r i n g r e d u c t i o n s in t h e c o n s u m p t i o n of p e t r o l by the Services.
The C a b i n e t ­
(1) E n d o r s e d t h e r e c o m m e n d a t i o n s m a d e in C P . (47) 206 and
C P . (47) 207 for t h e r e d u c t i o n of petrol consumption.
(2) I n v i t e d t h e M i n i s t e r of F u e l a n d P o w e r to ensure t h a t the
a n n o u n c e m e n t of t h e proposed reductions indicated
clearly t h e g r o u n d s on w h i c h they h a d been made.
Statute Law
Reform.
4. T h e C a b i n e t h a d before t h e m a m e m o r a n d u m by the Lord
Chancellor ( C P . (47) 205) on t h e subject of s t a t u t e law reform.
The Lord Chancellor said t h a t t h e present chaotic condition of
t h e S t a t u t e Book w a s a public s c a n d a l a n d it w a s urgently necessary
to i n s t i t u t e a systematic p r o g r a m m e of consolidation and codifi­
cation. P r o p o s a l s for t h i s h a d been p r e p a r e d u n d e r h i s direction
a n d were set o u t in C P . (47) 205. T h e i r most i m p o r t a n t features
w e r e :—
(i) a s e p a r a t e consolidation b r a n c h should be established in the
Office of P a r l i a m e n t a r y Counsel;
(ii) t h e S t a t u t e L a w C o m m i t t e e should be reconstituted on the
lines i n d i c a t e d i n A n n e x I I to C P . (47) 205 a n d charged with the
g e n e r a l s u p e r i n t e n d e n c e of consolidation a n d codification; a n d
(iii) a r r a n g e m e n t s should be m a d e for t h e recommendations of
t h e C o m m i t t e e t o be considered i n connection w i t h t h e Legislative
P r o g r a m m e for each Session.
The L e g i s l a t i o n Committee h a d accepted t h i s scheme in
p r i n c i p l e a n d a n u m b e r of consolidation Bills would be ready for
i n t r o d u c t i o n in t h e 1 9 4 7 - 4 8 Session. I f h i s p r o p o s a l s w e r e
a p p r o v e d h e would w i s h to a n n o u n c e t h e m before t h e S u m m e r
Recess.
I n discussion, t h e following p o i n t s were m a d e —
(a) The Rome Secretary
asked t h a t the proposed composition
of t h e S t a t u t e L a w C o m m i t t e e should be a m e n d e d to p e r m i t t h e
P e r m a n e n t U n d e r - S e c r e t a r y of S t a t e , H o m e Office, to n o m i n a t e a
r e p r e s e n t a t i v e to serve in h i s place, if he so desired.
(b) The Secretary
of State for Scotland
said t h e p r o p o s e d
a n n o u n c e m e n t should cover Scotland. Lie also s u g g e s t e d t h a t t h e r e
should be an a d d i t i o n a l r e p r e s e n t a t i v e of Scotland on t h e
reconstituted S t a t u t e L a w Committee.
(c) N o a n n o u n c e m e n t of t h e proposals need be m a d e in t h e
H o u s e of Commons.
The C a b i n e t ­
(1) E n d o r s e d t h e r e c o m m e n d a t i o n s m a d e by t h e L o r d
Chancellor in C P . (47) 205.
(2) I n v i t e d t h e L o r d Chancellor to discuss w i t h the S e c r e t a r y
of S t a t e for S c o t l a n d the form of t h e a n n o u n c e m e n t
w h i c h he p r o p o s e d to m a k e a n d t h e q u e s t i o n of t h e
r e p r e s e n t a t i o n of S c o t l a n d on t h e r e c o n s t i t u t e d S t a t u t e
L a w Committee.
5. A t t h e i r m e e t i n g on 15th M a y t h e C a b i n e t h a d invited
the H o m e S e c r e t a r y to consider f u r t h e r w h e t h e r m e a n s o t h e r t h a n
those o u t l i n e d i n C P . (47) 135 could not be devised for p r e v e n t i n g
the p u b l i c a t i o n of
Action.
T h e C a b i n e t now h a d before t h e m a m e m o r a n d u m by t h e
H o m e S e c r e t a r y ( C P . (47) 201) r e p o r t i n g t h a t the P r e s i d e n t of the
B o a r d of T r a d e w a s of the o p i n i o n t h a t h i s p o w e r s u n d e r the
P a p e r C o n t r o l O r d e r s w ere w i d e enough to e n a b l e h i m to refuse
to license the delivery of a n y p a p e r for t h e p u b l i c a t i o n of
Action
b u t t h a t , even if h e exercised his p o w e r s i n this way, t h e p a p e r
m i g h t still be able to a p p e a r because the p u b l i s h e r s m i g h t obtain,
considerable q u a n t i t i e s of p a p e r from m e r c h a n t s ' a n d p r i n t e r s '
stocks. T h e P r e s i d e n t of the B o a r d of T r a d e h a d p o i n t e d o u t t h a t
i t w o u l d be possible so to a m e n d the O r d e r s as to m a k e it an offence
to p u b l i s h any p e r i o d i c a l unless it h a d been p u b l i s h e d both before
16th A u g u s t , 1940, a n d also in, say, t h e m o n t h of M a y 1947. T h i s
w o u l d effectively b a r t h e p u b l i c a t i o n of Action,
b u t t h e r e were
s t r o n g objections to the i m p o s i t i o n of a p o l i t i c a l censorship in any
form, a n d t h e r e could be n o justification for e m p l o y i n g for t h i s
p u r p o s e a Defence R e g u l a t i o n the object of w h i c h w a s t h e s a v i n g
of p a p e r .
r
The Home Secretary s a i d t h a t t h e objections t o t a k i n g positive
m e a s u r e s for p r e v e n t i n g the p u b l i c a t i o n of A ction were, i n his view,
i n s u p e r a b l e unless F a s c i s t activities as such w e r e t o be declared
illegal.
A M i n i s t e r i a l Committee, w h i c h h a d i n v e s t i g a t e d the
problem of Fascism, h a d reached t h e conclusion t h a t it would not
be p r a c t i c a b l e to find a s a t i s f a c t o r y definition of F a s c i s t activities
w h i c h would n o t a t the same t i m e place d i s a b i l i t i e s on t h e advocacy
of o t h e r political, a n d even religious, o p i n i o n s .
The President
of the Board of Trade said t h a t t h e suggested
a m e n d m e n t of the P a p e r C o n t r o l O r d e r s would r e n d e r illegal the
a p p e a r a n c e of c e r t a i n p e r i o d i c a l s w h i c h t h e r e w as no good ground,
for b a n n i n g . H e would t h u s be d r i v e n to establish a licensing
system a n d t h i s would m e a n t h r o w i n g on t h e officials of the P a p e r
C o n t r o l responsibility for o p e r a t i n g a k i n d of p o l i t i c a l censorship.
T
The Foreign Secretary s a i d t h a t t h e r e s u m p t i o n of the publica­
t i o n of A ction w o u l d h a v e a d e p l o r a b l e effect o n o p i n i o n abroad.
The Cabinet—
A g r e e d to a d j o u r n c o n s i d e r a t i o n of t h e question whether
tihe P r e s i d e n t of t h e B o a r d of T r a d e should g r a n t the
a p p l i c a t i o n of t h e p r o p r i e t o r s of A ction for a supply f
paper.
0
Cabinet Of/ice, S.W. 1,
24:th July, 1947.