(c) crown copyright
Catalogue Reference:CAB/128/10
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Printed
S
E
C
E
E
for the Cabinet.
August
1947
T
Copy N o . 4 g
C M . (47)
71st Conclusions
CABINET
CONCLUSIONS
of a Meeting
o??, Sunday,
71 (47)
of the Cabinet held at 10 Downing
17th August,
1947, at 5 p.m.
Street,
S.W. 1,
Present:
T h e E 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
Chair).
The R i g h t Hon. HERBERT MORRISON
M . P . , L o r d P r e s i d e n t of tlhe Council
The Bight 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 G R E E N W O O D
M.P., Minister without Portfolio.
T h e R i g h t H o n . S i r STAFFORD C R I P P S
K . C . , M . P . , P r e s i d e n t of t h e B o a r d of
Trade.
The R i g h t Hon. VISCOUNT J O W I T T
L o r d Chancellor.
The R i g h t H o n . H U G H DALTON, M . P . ,
The R i g h t H o n . J . W E S T W O O D , M . P .
Chancellor of t h e E x c h e q u e r .
The R i g h t H o n . A . V . ALEXANDER,
M . P . , M i n i s t e r of Defence.
The Right Hon. J . CHUTER E D E , M.P.,
S e c r e t a r y of S t a t e for t h e H o m e
Department.
The
Right
Hon.
LISTOWEL,
Burma.
Secretary of S t a t e for Scotland.
The R i g h t Hon. G . A . ISAACS, M . P .
M i n i s t e r of L a b o u r a n d N a t i o n a l
Service.
The R i g h t H o n . A N E U R I N S E V A N , M P .
M i n i s t e r of H e a l t h .
THE
Secretary
EARL
OF
of S t a t e for
The R i g h t Hon. E. SHINWELL, M.P.,
M i n i s t e r of Fuel a n d P o w e r .
The Right Hon. T. WILLIAMS, M.P.,
of
Minister
Fisheries.
Agriculture
and
T h e 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 :
T h e R i g h t H o n . J O H N STRACHEY, M . P . ,
Sir
EDWARD
Permanent
BRIDGES,
Secretary, T r e a s u r y .
M i n i s t e r of Food.
Secretariat:
S i r N O R M A N BROOK.
M r . S. E . V . L U K E .
CONTENTS
Minute
No.
1
2
Balance of P a y m e n t s
Coal
...
Subject
...
H o u r s of W o r k i n t h e C o a l m i n i n g
...
Industry.
...
. ..
...
Page
222
226
Balance
of
Payments.
(Previous
Reference:
C.M.(47)70th
Conclusions,
Minute
1.)
1. T h e Cabinet considered a m e m o r a n d u m by the Chancellor
of the E x c h e q u e r ( C P . (47) 233) r e p o r t i n g an acceleration in the
d r a i n on t h e U n i t e d K i n g d o m dollar resources a n d recommending
f u r t h e r measures to meet this s i t u a t i o n .
The Chancellor of the Exchequer
recalled t h a t , by the end of
J u l y last, $2,750 million h a d been d r a w n of the total U n i t e d States
C r e d i t of $3,750 million. A f u r t h e r $150 million h a d been drawn
on 11th A u g u s t a n d he h a d hoped t h a t it would n o t be necessary to
d r a w more t h a n a f u r t h e r $150 million for the r e m a i n d e r of August.
A very serious s i t u a t i o n had, however, developed d u r i n g the past
few days.
D r a w i n g s in the five days u p to 15th A u g u s t had
amounted to $ 1 7 5 - 9 million, as compared w i t h a n average of
$115 million a week in the previous six weeks a n d $77 million
a week in the second q u a r t e r of 1947.
I t w a s evident t h a t a
d a n g e r o u s r u n on t r a n s f e r a b l e s t e r l i n g h a d s t a r t e d a n d t h a t , unless
p r o m p t action w a s taken, the r a t e of d r a w i n g would continue
to accelerate a n d the C r e d i t would be r a p i d l y exhausted. H e pro­
posed, therefore, t h a t immediate action should be taken, as set out
in C P . (47) 233, to l i m i t the convertibility of sterling. T h e effect
of his proposal would be to allow convertibility for any country only
u p to the a m o u n t of a r a t i o n t o be fixed by the B r i t i s h Government.
T h i s would a p p l y to all non-sterling area c o u n t r i e s : different
measures would be a d o p t e d for t h e countries of the sterling area
since i t would be undesirable to take u n i l a t e r a l action a g a i n s t them.
T h e action proposed would involve a breach of the Anglo-American
F i n a n c i a l A g r e e m e n t a n d of the p a y m e n t s agreements w h i c h we had
signed, b u t it w a s the only way of checking the present d r a i n of
dollars, w h i c h w a s f a r g r e a t e r t h a n a n y t h i n g t h a t could possibly
be a t t r i b u t e d to the n o r m a l flow of c u r r e n t t r a n s a c t i o n s . If the
Cabinet accepted his recommendations, he suggested
that
Sir W i l f r i d E a d y (who h a d left for W a s h i n g t o n on the previous
day) should e x p l a i n to the U n i t e d S t a t e s Government the nature
of the action proposed by H i s M a j e s t y ' s Government, a n d the
reasons for it, a t t h e opening of his discussions i n W a s h i n g t o n on
18th A u g u s t . T h e r e w a s a risk t h a t , if we acted w i t h o u t consulta­
tion w i t h t h e U n i t e d S t a t e s Govrenment, they m i g h t stop further
d r a w i n g s on the C r e d i t . The C a n a d i a n Government should also be
informed, since t h e i r position would be seriously affected. O u r action
would have w o r l d - w i d e effects, b u t there h a d been a general expecta­
tion t h a t something of the k i n d m i g h t h a p p e n a n d it could not in
any event have been avoided when t h e C r e d i t w a s exhausted. There
was a n undoubted risk t h a t there m i g h t be an i n t e r r u p t i o n of sup­
plies, w h i c h m i g h t involve some c u t in rations, b u t t h a t would
depend u p o n the outcome of t h e negotiations w i t h supplying
countries which would have to be u n d e r t a k e n a t once.
T h e Cabinet first discussed t h e n a t u r e of the s i t u a t i o n and the
measures proposed for dealing w i t h it.
The Foreign Secretary said t h a t he was in general agreement
w i t h the measures proposed in C P . (47) 233. H e t h o u g h t it impor­
t a n t , however, t h a t we should make it clear to the U n i t e d States
G o v e r n m e n t t h a t it w a s not our i n t e n t i o n to r e p u d i a t e the terms of
the A n g l o - A m e r i c a n F i n a n c i a l A g r e e m e n t , but t h a t we were com­
pelled to t a k e t h i s emergency action, as a t e m p o r a r y precautionary
m e a s u r e u n d e r force majeure.
W e were confident t h a t t h e United
S t a t e s Government would share our view t h a t i t w a s essential to
t h e well-being of the whole world t h a t sterling should be maintained
as a s t r o n g and reliable currency.
The Lord President
also agreed t h a t immediate steps must be
t a k e n to l i m i t the convertibility of sterling, on the lines proposed by
the Chancellor of t h e Exchequer. H e thought, however, t h a t the
distinction d r a w n in p a r a g r a p h 5 of C P . (47) 233 between the
t r e a t m e n t to be accorded to s t e r l i n g a r e a a n d non-sterling area
countries m i g h t have dangerous consequences; h e believed that,
unless t h e same degree of control w a s imposed f o r t h w i t h on all
countries, there w a s a serious risk of a f u r t h e r heavy d r a i n on
our r e m a i n i n g dollar resources t h r o u g h the s t e r l i n g area countries
before the special a r r a n g e m e n t s c o n t e m p l a t e d h a d been m a d e w i t h
them. H e feared t h a t t h e Government would be criticised for h a v i n g
failed to t a k e d r a s t i c measures on these lines a t a n earlier s t a g e ;
a n d it. would be a r g u e d t h a t the need for such action should h a v e
been foreseen before P a r l i a m e n t a d j o u r n e d for t h e Summer Recess.
The U n i t e d S t a t e s Government m i g h t also complain t h a t we h a d
delayed too long our a p p r o a c h t o them. T h e M i n i s t e r s concerned
should be asked to keep the C a b i n e t informed of the effects on our
i m p o r t p r o g r a m m e of t h e restrictions to be imposed on the conver­
tibility of sterling. I n view of the difficult negotiations w h i c h would
have to be u n d e r t a k e n w i t h the s u p p l y i n g countries, m i g h t it not
be advisable to recall a n y directors of i m p o r t a n t commodity or r a w
m a t e r i a l divisions who m i g h t be on leave, a n d possibly to a r r a n g e
for t h e t e m p o r a r y r e t u r n to G o v e r n m e n t service of some of the men
who filled these posts d u r i n g the w a r ?
The Minister
of Health said t h a t the a p p r o a c h to the U n i t e d
S t a t e s A d m i n i s t r a t i o n should be m a d e on w i d e r g r o u n d s t h a n the
i m m e d i a t e difficulties of our balance of p a y m e n t s s i t u a t i o n . Our
own problems should be set a g a i n s t the b a c k g r o u n d of t h e steady
contraction of w o r l d t r a d e caused by t h e s h o r t a g e of dollars. I t
should be b r o u g h t home to the U n i t e d S t a t e s Government t h a t ,
unless the B r i t i s h Government took steps now to protect the r e s i d u a l
s t e r l i n g position, world t r a d e would break down completely w i t h i n
a short p e r i o d w i t h results w h i c h would cause serious h a r m to the
U n i t e d S t a t e s economy. For t h i s reason the U n i t e d States w e r e
equally interested in t h e m a i n t e n a n c e of s t e r l i n g as a s t r o n g
currency. T h e U n i t e d K i n g d o m Delegation should avoid discussing
the p r i n c i p l e s of m u l t i l a t e r a l a n d b i l a t e r a l t r a d i n g systems; it w a s
p r e f e r a b l e t h a t , w h e r e w e h a d t o resort to b i l a t e r a l a r r a n g e m e n t s ,
we should be free to do so as a m a t t e r of p r a c t i c a l necessity w i t h o u t
r e p u d i a t i n g the m u l t i l a t e r a l p r i n c i p l e .
The C a b i n e t n e x t discussed the p r o c e d u r e to be followed in
g i v i n g effect to the proposals contained in C P . (47) 233.
The Chancellor of the Exchequer
proposed t h a t Sir W i l f r i d
E a d y should, a t the outset of his discussions in W a s h i n g t o n on
18th A u g u s t , e x p l a i n to the U n i t e d S t a t e s representatives the n a t u r e
of the action proposed by the B r i t i s h Government a n d the reasons
why such action h a d become necessary. H e should m a k e it clear
to the U n i t e d S t a t e s Government t h a t , in view of t h e s i t u a t i o n
which h a d developed, H i s M a j e s t y ' s Government h a d decided w i t h
r e g r e t t h a t they h a d no option, in the interests of securing m u l t i ­
l a t e r a l w o r l d t r a d e , b u t to m a k e t e m p o r a r y a r r a n g e m e n t s to stop
t h e r u n on the conversion of s t e r l i n g into dollars by r a t i o n i n g con­
v e r t i b i l i t y for t h e time being. H e should a d d t h a t H i s M a j e s t y ' s
Government w e r e r e a d y to e n t e r into f u r t h e r n e g o t i a t i o n s in the
m a t t e r a t the highest level in w h a t e v e r w a y m i g h t prove most con­
venient to the two Governments. S i r W i l f r i d E a d y should m a k e
i t clear t h a t he w a s not a s k i n g for the p r i o r a g r e e m e n t of the U n i t e d
S t a t e s Government to the course of action p r o p o s e d ; he w a s g i v i n g
them advance i n f o r m a t i o n as a m a t t e r of courtesy b u t H i s M a j e s t y ' s
Government h a d no o p t i o n b u t t o i n i t i a t e the measures proposed on
t h e evening of Tuesday, 19th A u g u s t .
The Minister
of Defence doubted w h e t h e r i t was wise, in the
circumstances disclosed in C P . (47) 233, to defer t h e action proposed
u n t i l 19th A u g u s t . I n t h e two weeks e n d i n g 9th A u g u s t , the r a t e
of d r a w i n g s on our dollar resources h a d averaged only about
$ 1 9 million a d a y ; b u t in the week e n d i n g 15th A u g u s t the average
daily r a t e of d r a w i n g s h a d risen to $ 2 5 million. There h a d t h u s
been a s u b s t a n t i a l acceleration in t h e r a t e of d r a w i n g s , a n d t h e r e
seemed good reason to believe t h a t t h i s acceleration would continue.
If, therefore, we intended to l i m i t t h e convertibility of sterling, the
34236-1
B 2
sooner we acted the better. I f action were delayed for two or three
days while conversations continued in W a s h i n g t o n , we might con­
t i n u e to lose dollars at t h e r a t e of 130 million a day or more. Would
i t n o t be preferable therefore, to p u t into operation a t once the
m e a s u r e s proposed in C P . (47) 233, a n d to e x p l a i n to the United
S t a t e s a u t h o r i t i e s t h a t circumstances h a d forced us to take this
action w i t h o u t p r i o r consultation %
The Chancellor of the Exchequer said t h a t all the members of
o u r Mission in W a s h i n g t o n were most anxious not to have to con­
f r o n t t h e U n i t e d S t a t e s a u t h o r i t i e s w i t h a fait accompli; for they
felt t h a t this would s u b s t a n t i a l l y increase the difficulties of their
subsequent negotiations. I t m u s t be remembered t h a t , if we took
u n i l a t e r a l action, the U n i t e d States Government m i g h t well retaliate
by d e n y i n g us the r e m a i n d e r of t h e Credit. T h e choice therefore
lay between r i s k i n g a d a i l y loss of 125 million for two or three
d a y s or, on t h e other h a n d , r i s k i n g t h e whole of the remaining
$ 5 0 0 million of t h e C r e d i t . H e strongly recommended t h a t action
should be deferred u n t i l 19th A u g u s t so t h a t t h e U n i t e d States
G o v e r n m e n t m i g h t be informed in advance of the action which we
p r o p o s e d to take.
T h e Cabinet endorsed the recommendation m a d e by the Chan­
cellor of the Exchequer.
The Foreign Secretary said t h a t , i n his view, it would not be
enough to inform the U n i t e d States Government alone of our inten­
t i o n s . There were other countries which h a d s t r o n g claims to be
s i m i l a r l y informed. H e proposed to see, not only the U n i t e d States
A m b a s s a d o r , b u t also the A r g e n t i n e A m b a s s a d o r , a n d he would
i n s t r u c t H i s M a j e s t y ' s A m b a s s a d o r in P a r i s to give full informa­
t i o n to the F r e n c h Government. S i m i l a r a r r a n g e m e n t s should be
m a d e to inform the A c t i n g H i g h Commissioner for C a n a d a in
L o n d o n . T h e t i m i n g of these interviews would be concerted with
t h e Chancellor of the Exchequer.
The Home Secretary a g r e e d t h a t the A c t i n g H i g h Commissioner
for C a n a d a o u g h t to be informed of the position. C a n a d a would
be seriously affected by a n y action t a k e n to l i m i t the convertibility
of s t e r l i n g a n d a r r a n g e m e n t s h a d been made for the Governor of
t h e B a n k of C a n a d a to meet S i r W i l f r i d E a d y i n W a s h i n g t o n . The
U n i t e d K i n g d o m H i g h Commissioner in C a n a d a would also be
i n s t r u c t e d to inform t h e C a n a d i a n Government. I t would also be
necessary to inform t h e P r i m e M i n i s t e r s of A u s t r a l i a and New
Z e a l a n d . The U n i t e d K i n g d o m r e p r e s e n t a t i v e in Dublin would
be i n s t r u c t e d to inform M r . D e V a l e r a a s soon as possible after the
public announcement h a d been made. The position in regard to
S o u t h A f r i c a presented special difficulties. T h e r e was a possibility
t h a t our action m i g h t r e s u l t in the breakdown of the current loan
n e g o t i a t i o n s w i t h t h a t D o m i n i o n ; a n d also t h a t i t m i g h t force South
A f r i c a to leave the s t e r l i n g area. I t was proposed t h a t FieldM a r s h a l Smuts should be informed of our intentions by personal
t e l e g r a m ; at the same t i m e it should be m a d e clear to him that
w e were s t u d y i n g the implications of these developments on the
loan negotiations.
T h e Dominions of I n d i a a n d P a k i s t a n were
d e p e n d e n t on dollars for the m a i n t e n a n c e of t h e i r food supplies, and
a r r a n g e m e n t s would h a v e to be m a d e to inform them of our inten­
t i o n s a n d of the a r r a n g e m e n t s contemplated for providing them
w i t h dollars.
T h e Cabinet next discussed the a r r a n g e m e n t s to be made for
g i v i n g publicity to these measures a n d to the reasons for the Govern­
m e n t ' s decision.
I t w a s agreed t h a t the announcement of the decision should be
m a d e in a broadcast by t h e Chancellor of the Exchequer after the
9 p.m. news bulletin on Tuesday, 19th A u g u s t . The Chancellor
would consult w i t h the P r i m e M i n i s t e r and the L o r d P r e s i d e n t on
t h e terms of the announcement.
O t h e r p o i n t s made in discussion were :—
(a) The Lord President
said t h a t in his v i e w the Cabinet h a d
been h a n d i c a p p e d by lack of u p - t o - d a t e s t a t i s t i c a l i n f o r m a t i o n on
t h e balance of p a y m e n t s . H e recommended t h a t a n e n q u i r y should
be held i n t o the possibility of i m p r o v i n g t h e m a c h i n e r y for p r o v i d i n g
s t a t i c t i c s b e a r i n g on t h i s m a t t e r , a n d he suggested t h a t t h e Secretary
for Overseas T r a d e should be invited to conduct t h e e n q u i r y .
of the Exchequer
e x p l a i n e d t h e difficulties of
The Chancellor
o b t a i n i n g a full s t a t i s t i c a l p i c t u r e of the c u r r e n t claims on sterling.
H e would, however, be only too g l a d if means could be found of
i m p r o v i n g the existing m a c h i n e r y for this p u r p o s e , a n d he w a s
w i l l i n g t h a t t h e Secretary for Overseas T r a d e should conduct an
e n q u i r y into' t h i s point.
(b) The Lairl President
also suggested t h a t t h e r e w a s need for
s t r e n g t h e n i n g the existing B a l a n c e of P a y m e n t s W o r k i n g P a r t y .
H e t h o u g h t it would be a d v a n t a g e o u s to establish a j o i n t staff on
t h e balance of p a y m e n t s c o m p r i s i n g r e p r e s e n t a t i v e s of t h e T r e a s u r y ,
B o a r d of T r a d e , B a n k of E n g l a n d a n d Economic Section of t h e
Cabinet S e c r e t a r i a t : a n d he asked t h a t , if such a staff were estab­
lished, h i s office should be represented on it. I t m i g h t be useful
if the S e c r e t a r y for Overseas T r a d e acted as C h a i r m a n of t h i s body.
(c) W h e n limits were set to the convertibility of sterling, our
prospects of o b t a i n i n g i m p o r t s from such countries as the A r g e n t i n e
would d e p e n d more t h a n ever before on our power to s u p p l y t h e m
w i t h t h e k i n d of goods t h a t they most u r g e n t l y needed. W e should
have to r e l a t e our e x p o r t p r o g r a m m e more precisely to our i m p o r t
needs; a n d i t followed t h a t a more detailed d i r e c t i o n of exports
would become necessary.
I t w a s suggested t h a t f u r t h e r i n t e r - D e p a r t m e n t a l machinery
would be required for t h i s purpose.
T h i s m i g h t p e r h a p s be
established u n d e r the auspices of the C e n t r a l Economic P l a n n i n g
Staff. I t s detailed w o r k would, of course, have t o be closely r e l a t e d
w i t h t h a t of the W o r k i n g P a r t y on t h e B a l a n c e of P a y m e n t s .
(d) The Lord President
said t h a t the G o v e r n m e n t m i g h t be
pressed to ask for the recall of P a r l i a m e n t : if t h i s would in a n y
event be necessary, it m i g h t be advisable to t a k e the i n i t i a t i v e in t h e
m a t t e r r a t h e r t h a n to a p p e a r to be yielding to p r e s s u r e .
T h e g e n e r a l view of the Cabinet w a s t h a t it would be p r e m a t u r e
at t h i s s t a g e to reach a n y decision r e g a r d i n g the summoning of
Parliament.
The C a b i n e t ­
(1) A u t h o r i s e d the Chancellor of the E x c h e q u e r to take the
measures o u t l i n e d i n A n n e x I I to C P . (47) 233 for
l i m i t i n g the convertibility of s t e r l i n g ;
(2) E n d o r s e d the i n s t r u c t i o n s a l r e a d y given to the leader of our
mission to W a s h i n g t o n , as s u m m a r i s e d in t h e memo­
r a n d u m a n n e x e d to C P . (47) 2 3 3 ; a n d agreed t h a t a t
the outset of h i s negotiations he should, inform the
U n i t e d S t a t e s r e p r e s e n t a t i v e s t h a t i n view of the r a p i d
acceleration of the d r a i n of dollars H i s M a j e s t y ' s
Government h a d come to the conclusion t h a t they h a d
no option b u t to make t e m p o r a r y a r r a n g e m e n t s (on t h e
lines i n d i c a t e d in A n n e x I I to C P . (47) 233) to l i m i t
for the t i m e being t h e convertibility of sterling i n t o
dollars by a system of r a t i o n i n g ;
(3) A g r e e d t h a t t h e action outlined i n A n n e x I I to C P . (47) 233
should be t a k e n at 9 p.m. on T u e s d a y , 19th A u g u s t ; a n d
t h a t the recent developments in our balance of p a y m e n t s
position, a n d the measures w h i c h H i s M a j e s t y ' s
Government were t a k i n g to meet the s i t u a t i o n , should
be explained in a broadcast to be m a d e by t h e Chancellor
of the Jixchequer a f t e r the 9 o'clock news t h a t e v e n i n g ;
(4) Took note t h a t the F o r e i g n Secretary would see the United
States A m b a s s a d o r in London d u r i n g 18th A u g u s t and
give h i m a full e x p l a n a t i o n of the situation and an
indication of t h e m e a s u r e s which were being taken to
meet i t ;
(5) Took note t h a t special a r r a n g e m e n t s would be m a d e for the
A c t i n g H i g h Commissioner for C a n a d a to be seen, and
the position explained to him, before action w a s taken;
(6) I n s t r u c t e d the Commonwealth R e l a t i o n s Office to arrange,
in consultation w i t h t h e T r e a s u r y , for a p p r o p r i a t e com­
m u n i c a t i o n s to be sent to t h e Governments of Australia,
N e w Zealand, S o u t h A f r i c a , E i r e , I n d i a and P a k i s t a n ;
(7) Took note t h a t t h e F o r e i g n Secretary would arrange, in
consultation w i t h the Chancellor of the Exchequer, for
communications to be m a d e a t t h e a p p r o p r i a t e moment
to the Governments of the A r g e n t i n e a n d F r a n c e and
the other foreign countries who would be most directly
affected by the action outlined in A n n e x I I to
C P . (47) 2 3 3 ;
(8) I n v i t e d the P r i m e M i n i s t e r t o consider the suggestions noted
in p a r a g r a p h s (a) to (c) above for s t r e n g t h e n i n g the
i n t e r - d e p a r t m e n t a l machinery for h a n d l i n g balance of
p a y m e n t s questions a n d m a t t e r s related to the direction
of exports.
Goal.
H o u r s of W o r k
in t h e
Coalmining
Industry.
(Previous
Reference:
C.M.(47)69th
Conclusions,
M i n u t e 3.)
I
2. A t a meeting w i t h r e p r e s e n t a t i v e s of the N a t i o n a l Coal
B o a r d a n d the N a t i o n a l U n i o n of M i n e w o r k e r s on 30th J u l y , 1947,
the P r i m e M i n i s t e r h a d asked t h a t a n e x t r a h a l f - h o u r a d a y should
be worked in t h e coalmining i n d u s t r y as a t e m p o r a r y measure
designed to increase coal o u t p u t d u r i n g the c u r r e n t emergency. The
Cabinet now h a d before t h e m a m e m o r a n d u m by the Minister of
Fuel a n d P o w e r ( C P . (47) 232) r e p o r t i n g t h e results of t h e subse­
q u e n t n e g o t i a t i o n s on this m a t t e r between t h e N a t i o n a l Coal Board
and the N a t i o n a l U n i o n of M i n e w o r k e r s .
The Minister of Fuel and Power said t h a t t h e U n i o n doubted
whether they could p e r s u a d e the m i n e r s to work an 8-hour day;
a n d the Coal Board, while e s t i m a t i n g t h a t an 8-hour day would
yield a 5 per cent, increase i n o u t p u t , recognised t h a t there would
be technical difficulties in i n t r o d u c i n g it. A l t e r n a t i v e proposals for
S a t u r d a y w o r k i n g h a d therefore been discussed. The Coal Board
h a d suggested t h a t every m i n e r should work a full shift on alternate
S a t u r d a y s a n d should be p a i d time-and-a-half if he h a d already
worked five shifts d u r i n g the week. The U n i o n h a d claimed that
the men should work only 6^ h o u r s on a S a t u r d a y a n d should be
p a i d a t overtime r a t e s w h e t h e r or not they h a d already worked
five shifts d u r i n g the week.
T h e M i n i s t e r said t h a t h e h a d h a d a p r i v a t e conversation with M r , H o r n e r , Secretary of the N a t i o n a l U n i o n of Mineworkers. M r . H o r n e r was satisfied, from enquiries in the districts, t h a t the miners would be u n w i l l i n g to work a n 8-hour day. H e also believed t h a t , in o r d e r to provide a n incentive for S a t u r d a y w o r k i n g , it would be necessary to p a y time-and-a-half. W h i l e he w a s not prepared to a g r e e t h a t full payment should be m a d e only to men who had a l r e a d y worked five shifts d u r i n g t h e week, he w a s r e a d y to agree t h a t m i n e m a n a g e r s should have discretion to refuse to admit to S a t u r d a y work men who h a d been absent w i t h o u t good cause during the week. M r . H o r n e r h a d also i n d i c a t e d t h a t the U n i o n would raise no
question if the Coal B o a r d took proceedings a g a i n s t men who broke
their contracts by absenteeism : t h i s m i g h t m e a n t h a t such men
could be r e q u i r e d to recoup the Coal B o a r d for losses due to their
absence from work. H e also considered t h a t t h e Coal B o a r d would
be justified in proceeding for d a m a g e s a g a i n s t men adopting
practices r e s t r i c t i n g o u t p u t . A n d t h e U n i o n were p r e p a r e d to agree
t h a t men who a d o p t e d ' ' go slow ' ' tactics should be entitled to
receive only t h e a m o u n t s they h a d actually e a r n e d a n d should n o t
be entitled to the m i n i m u m u n d e r the P o r t e r A w a r d .
T h e M i n i s t e r said t h a t on the m a i n issue the Government should
give some g u i d a n c e to t h e Coal B o a r d before t h e i r n e x t m e e t i n g w i t h
the U n i o n on 2 0 t h A u g u s t . I n the circumstances w h i c h he h a d
described the choice seemed to lie between a l t e r n a t i v e forms of
S a t u r d a y w o r k i n g . T h e Coal B o a r d m i g h t be advised to press for
a system of w o r k i n g a l t e r n a t e S a t u r d a y s a t o r d i n a r y r a t e s of pay.
T h e objection to t h i s w a s t h a t it would afford no incentive to t h e m e n
to work a s i x t h shift a n d it seemed doubtful w h e t h e r it would lead
to any increase of o u t p u t . The a l t e r n a t i v e w a s to advise the Coal
B o a r d t o persist i n t h e i r proposal t h a t each m a n should work a full
shift on every o t h e r S a t u r d a y a n d should be p a i d time-and-a-half on
condition t h a t he h a d a l r e a d y worked five s h i f t s d u r i n g the week.
H e recommended t h a t the Coal B o a r d should be advised to press t h a t
proposal.
I n discussion M i n i s t e r s expressed d i s a p p o i n t m e n t a t the
reaction of t h e N a t i o n a l U n i o n of M i n e w o r k e r s to t h e a p p e a l m a d e
to t h e m by t h e P r i m e M i n i s t e r on 30th J u l y . I t w a s u n s a t i s ­
factory that, in response to t h i s emergency a p p e a l for increased
h o u r s of work, the i n d u s t r y should reply t h a t increased o u t p u t
w a s most likely to be achieved by i n c r e a s i n g s t i n t s , s t o p p i n g r e s t r i c ­
tive practices a n d r e d u c i n g absenteeism; for these h a d been the
conditions a t t a c h e d to the g r a n t of the five-day week a n d the Govern­
m e n t w e r e now a s k i n g for a f u r t h e r c o n t r i b u t i o n t o w a r d s t h e
economic emergency. Moreover, h a v i n g so recently acquiesced in
the view t h a t a five-day week need not necessarily involve a reduction
in o u t p u t , M i n i s t e r s w e r e r e l u c t a n t to accept t h e conclusion t h a t , if
a d d i t i o n a l hours w e r e now t o be worked, the best course would be
to revert to S a t u r d a y w o r k i n g . I t m i g h t be t r u e t h a t t h e w o r k i n g
of a n a d d i t i o n a l h a l f - h o u r on other days would n o t lead to increased
o u t p u t in p i t s w h e r e a g r e e m e n t had not vet been reached on a n
increase of s t i n t s ; b u t increased s t i n t s should have been i n t r o d u c e d
as a condition of the five-day week, a n d the p r o p e r remedy w a s to
expedite agreement on the increased s t i n t s so a s to m a k e the e x t r a
h a l f - h o u r profitable.
I t w a s the C a b i n e t s conclusion t h a t a firmer line m u s t now be
t a k e n w i t h t h e m i n e r s ' representatives. T h e Government should
insist t h a t t h e U n i o n should p r o m p t l y fulfil t h e u n d e r t a k i n g s w h i c h
they h a d given i n r e t u r n for the five-day week a n d should e x p e d i t e
the conclusion of s a t i s f a c t o r y agreements for i n c r e a s i n g stints, stop­
p i n g restrictive p r a c t i c e s a n d reducing absenteeism. I t should be
m a d e clear to them t h a t these measures formed p a r t of the e a r l i e r
agreement in respect of t h e five-day week. W h a t they were now
being asked t o do was to m a k e a f u r t h e r c o n t r i b u t i o n to assist t h e
c o u n t r y in the p r e s e n t economic crisis by a c c e p t i n g a t e m p o r a r y
increase in w o r k i n g h o u r s ; and they should be strongly pressed to
agree t h a t the i n d u s t r y should m a k e t h i s c o n t r i b u t i o n by w o r k i n g
an e x t r a h a l f - h o u r on each w o r k i n g day.
The Cabinet—
(1) I n v i t e d the M i n i s t e r of F u e l a n d P o w e r to advise t h e
N a t i o n a l Coal B o a r d , for the reasons summarised above,
to press t h e r e q u e s t t b a t , a s a t e m p o r a r y measure, m i n e r s
should work an e x t r a h a l f - h o u r on each w o r k i n g d a y ;
(2) A g r e e d t h a t , if the N a t i o n a l Coal B o a r d were unable to
reach a s a t i s f a c t o r y a g r e e m e n t w i t h the N a t i o n a l U n i o n
of M i n e w o r k e r s on this basis, M i n i s t e r s should renew
their r e p r e s e n t a t i o n s a t a f u r t h e r m e e t i n g w i t h r e p r e ­
sentatives of the Union.
Cabinet Office, S. W. 1,
11th August,
1947.