(c) crown copyright
Catalogue Reference:CAB/128/57/22
Image Reference:0001
. JUT
THIS D O C U M E N T IS 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
CC(75) 52nd
Conclusions
GOVERNMENT
COPY NO
n
^
CABINET
C O N C L U S I O N S o f a M e e t i n g of the C a b i n e t
h e l d a t 10 D o w n i n g S t r e e t on
THURSDAY 4 DECEMBER
1975
at 10.15 a m
PRESENT
The Rt Hon Harold W i l s o n
Prime Minister
MP
The R t H o n J a m e s C a l l a g h a n M P
Secretary o f S t a t e f o r F o r e i g n a n d
Commonwealth A f f a i r s
The Rt Hon L o r d
L o r d Chancellor
The R t H o n R o y J e n k i n s M P
Secretary of S t a t e f o r the H o m e D&pwftrn9.Jftt
The Rt Hon Denis Healey M P
C h a n c e l l o r of the E x c h e q u e r
The R t H o n A n t h o n y C r o s l a n d
Secretary of S t a t e f o r the E & v i y o n m e n t
The Rt Hon Michael Foot M P
S e c r e t a r y of S t a t e f o r E m p l o y m e n t
The R t H o n A n t h o n y W e d g w o o d B e n n
Secretary of S t a t e f o r E n e r g y
S e c r e t a r y of S t a t e f o r P r i c e s a n d C o n s u m e r
MP
MP
Elwyn-Jones
The Rt Hon Shirley Williams
MP
Protection
The R t H o n B a r b a r a C a s t l e
MP
The Rt Hon E r i c V a r l e y
MP
Secretary o f S t a t e f o r S o c i a l S e r v i c e s
S e c r e t a r y of S t a t e f o r
The R t H o n P e t e r S h o r e
The Rt Hon Roy Mason M P
S e c r e t a r y of S t a t e f o r D e f e n c e
Secretary of S t a t e f o r
MP
Trade
Industry
The R t H o n W i l l i a m R o s s M P
Secretary of State f o r S c o t l a n d
T h e R t H o n John M o r r i s QC M P
S e c r e t a r y of S t a t e f o r W a l e s
The R t H o n M e r l y n R e e s M P
Secretary of State f o r N o r t h e r n I r e l a n d
The 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 a n d F o o d
The Rt Hon Lord
Lord
P r i v y Seal
Shepherd
The Rt Hon F r e d M u l l e y M P
e c
The Rt Hon Reginald Prentice
r e t a r y of S t a t e f o r E d u c a t i o n a n d S c i e n c e
The Rt H o n R o b e r t M e l l i s h M P
Parliamentary S e c r e t a r y , T r e a s u r y
Minister for Overseas
MP
Development
T h e R t Hon John Silkin M P
M i n i s t e r f o r P l a n n i n g and L o c a l
Government
THE FOLLOWING WERE A L S O
PRESENT
The Rt Hon S a m u e l S i l k i n Q C M P
The Rt Hon Edmund D e l l
Attorney G e n e r a l
Paymaster General
(Item 4)
MP
(Item 4)
SECRETARIAT
S i r John Hunt
Mr
Mr
Mr
Mr
Mr
Mr
Mr
G
P
J
T
J
R
C
C
Item
1.
2.
R Denman
Benner
A Hamilton
F Brenchley
A Marshall
P S Hughes
J Farrow
O N T E N T S
Subject
PARLIAMENTARY
( I t e m 2)
( I t e m 1)
( I t e m s 3 and 4)
( I t e m 2)
( I t e m 3)
( I t e m s 1 and 2)
(Item 4)
Page
AFFAIRS
Dock Work Regulation Bill
1
D e b a t e on C a p i t a l P u n i s h m e n t
1
D e b a t e on U n e m p l o y m e n t
2
FOREIGN
AFFAIRS
Middle East
4
Saudi A r a b i a
4
European Council
5
3.
EARNINGS RULE
4.
CHRYSLER
(UK) L T D
8
10
Y
1.
T h e C a b i n e t w e r e i n f o r m e d o f the b u s i n e s s t o b e t a k e n i n the
H o u s e of C o m m o n s d u r i n g the f o l l o w i n g w e e k .
In c o n n e c t i o n w i t h
t h e d e b a t e on 8 D e c e m b e r about the e f f e c t s of G o v e r n m e n t
policy on
o f f s h o r e o i l , it w o u l d b e helpful i f the c u r r e n t M i n i s t e r i a l d i s c u s s i o n s
a b o u t the a p p o i n t m e n t of the m e m b e r s o f the B r i t i s h N a t i o n a l O i l
C o r p o r a t i o n could be c o m p l e t e d in t i m e for an announcement to be
m a d e d u r i n g o r j u s t b e f o r e the d e b a t e .
It w a s r e p o r t e d that i n c r e a s i n g p r e s s u r e w a s being brought to b e a r on
M i n i s t e r s and b a c k b e n c h M e m b e r s o f P a r l i a m e n t b y t r a d e u n i o n s
o t h e r than those r e p r e s e n t i n g the dock w o r k e r s w h i c h w o u l d be a f f e c t e d
b y t h e D o c k W & r k R e g u l a t i o n B i l l , w n i c h w a s due t o r e c e i v e i t s S e c o n d
R e a d i n g o n 10 D e c e m b e r .
It m i g h t be w o r t h c o n s i d e r i n g whether any
c o n c e s s i o n s c o u l d b e o f f e r e d t o t h e m a t a l a t e r s t a g e ; but t h e m o s t
p r e s s i n g n e e d w a s t o d o e v e r y t h i n g p o s s i b l e d u r i n g the S e c o n d R e a d i n g
debate to allay their immediate c o n c e r n .
The f a c t w a s that t h e r e w a s
a n u n a v o i d a b l e c l a s h of i n t e r e s t s b e t w e e n t h e t r a d e u n i o n s c o n c e r n e d ;
the a i m o f the B i l l w a s t o m i t i g a t e i t , but i t c o u l d n o t b e r e m o v e d
altogether.
T h e r e had b e e n f u l l c o n s u l t a t i o n s w i t h the t r a d e u n i o n s
not p r i m a r i l y c o n c e r n e d w i t h t h e i n t e r e s t s o f d o c k w o r k e r s , and
further consultations had been o f f e r e d .
THE PRIME MINISTER,
summing up a b r i e f discussion,
s a i d that t h e
C a b i n e t r e c o g n i s e d t h a t t h e r e w a s a c l a s h of i n t e r e s t s w h i c h c o u l d n o t
be wholly r e m o v e d .
It was h o w e v e r i m p o r t a n t that 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 should, d u r i n g the S e c o n d R e a d i n g d e b a t e , d o a l l
he c o u l d t o r e a s s u r e the t r a d e unions not p r i m a r i l y c o n c e r n e d w i t h
d o c k w o r k e r s a n d s t r e s s that t h e r e w o u l d b e c o n t i n u i n g
consultations
with them.
The Cabinet ­
1.
T o o k note, with a p p r o v a l ,
o f the P r i m e
Minister's
s u m m i n g u p of t h e i r d i s c u s s i o n .
T H E H O M E S E C R E T A R Y said that i t w a s i m p o r t a n t that t h e r e should
b e a g o o d a t t e n d a n c e a t the d e b a t e o n 11 D e c e m b e r on a P r i v a t e
M e m b e r ' s M o t i o n f o r the r e s t o r a t i o n of c a p i t a l p u n i s h m e n t f o r t e r r o r i s t
offences causing death.
T h e r e w o u l d be a f r e e v o t e , and if the H o u s e
of C o m m o n s d i d n o t p r o d u c e a s u b s t a n t i a l m a j o r i t y a g a i n s t c a p i t a l
p u n i s h m e n t p r e s s u r e i n the c o u n t r y f o r i t t o b e r e s t o r e d , a t a n y r a t e i n
r e l a t i o n to t e r r o r i s t o f f e n c e s , m i g h t b e c o m e i r r e s i s t i b l e .
The policy
of r e l e a s i n g a l l the r e m a i n i n g d e t a i n e e s i n N o r t h e r n I r e l a n d b e f o r e
C h r i s t m a s p r e s e n t e d s o m e p r o b l e m s f o r the handling o f the d e b a t e .
T h e n u m b e r of d e t a i n e e s a f f e c t e d w a s 46 a n d the S e c r e t a r y of S t a t e f o r
N o r t h e r n I r e l a n d w o u l d l i k e t o r e l e a s e t h e m a l l b y the e n d o f the
f o l l o w i n g w e e k , s o t h a t the w h o l e o p e r a t i o n c o u l d be c o m p l e t e d w e l l
1
before Christmas,
B u t t h i s w o u l d b e a s u b s t a n t i a l i n c r e a s e i n the
n o r m a l r a t e of r e l e a s e s a n d s u p p o r t e r s of c a p i t a l p u n i s h m e n t m i g h t
a r g u e t h a t i t w a s a p o l i c y of a p p e a s e m e n t .
It would b e a l l the m o r e
e m b a r r a s s i n g i f one o f the r e l e a s e d d e t a i n e e s c o m m i t t e d a t e r r o r i s t
a c t b e f o r e the debate took p l a c e .
It w o u l d t h e r e f o r e b e w o r t h w h i l e
c o n s i d e r i n g w h e t h e r a p r e f e r a b l e c o u r s e m i g h t n o t b e to r e l e a s e o n l y
s o m e 20 d e t a i n e e s d u r i n g the f o l l o w i n g w e e k a n d the r e m a i n d e r a f t e r
the d e b a t e a n d s h o r t l y b e f o r e C h r i s t m a s .
T H E S E C R E T A R Y O F S T A T E F O R N O R T H E R N I R E L A N D s a i d that
i n h i s v i e w the b e n e f i t s s o f a r a s 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 of
r e l e a s i n g a l l t h e d e t a i n e e s a s q u i c k l y a s p o s s i b l e o u t w e i g h e d the
p o s s i b l e d i f f i c u l t i e s w h i c h m i g h t a r i s e in r e l a t i o n to the d e b a t e .
O p i n i o n i n N o r t h e r n I r e l a n d n o w g e n e r a l l y s u p p o r t e d h i s p o l i c y of
b r i n g i n g d e t e n t i o n t o a n e n d a n d d e a l i n g w i t h t e r r o r i s t s t h r o u g h the
courts.
H i s c o n t a c t s w i t h p o l i t i c i a n s and w i t h the p o l i c e a n d t h e a r m y
s h o w e d s u b s t a n t i a l s u p p o r t f o r his v i e w that it would n o w be p r e f e r a b l e
to end d e t e n t i o n a s q u i c k l y a s p o s s i b l e .
M o r e o v e r the P r o v i s i o n a l
I r i s h R e p u b l i c a n A r m y w a s a l r e a d y i n d i s a r r a y , and the c o m p l e t e e n d of
d e t e n t i o n w o u l d r e m o v e o n e o f the m o s t i m p o r t a n t and m o s t p o p u l a r
planks in their p r o g r a m m e ; f u r t h e r m o r e it would deny t h e m any excuse .
f o r s t a g i n g s o m e a c t o f v i o l e n c e on t h e g r o u n d that t h e G o v e r n m e n t d i d
not i n f a c t i n t e n d to^honour i t s p r o m i s e to r e l e a s e all d e t a i n e e s .
THE
PRIME MINISTER,
s u m m i n g up a b r i e f 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 r e c o g n i s e d that t h e r e w e r e c o n f l i c t i n g c o n s i d e r a t i o n s which
w e r e nicely balanced.
O n b a l a n c e t h e y a g r e e d that the
preferable
c o u r s e w o u l d b e f o r t h e S e c r e t a r y of S t a t e f o r N o r t h e r n I r e l a n d t o
p r o c e e d a s p l a n n e d w i t h t h e i m m e d i a t e r e l e a s e of a l l the r e m a i n i n g
46 d e t a i n e e s a n d that a n y r i s k s this m i g h t i n v o l v e i n r e l a t i o n t o the
debate should be a c c e p t e d .
E v e r y e f f o r t should be m a d e to s e c u r e a
g o o d a t t e n d a n c e a t the d e b a t e ,
s i n c e i t w a s i m p o r t a n t t h a t the M o t i o n
should be r e j e c t e d by as l a r g e a m a j o r i t y as p o s s i b l e .
The Cabinet
2.
­
Took note, with approval,
o f the P r i m e
Ministers
s u m m i n g up of t h e i r d i s c u s s i o n .
Debate on
It w a s a r g u e d that it w a s i m p o r t a n t that t i m e should b e found f o r a
Unemployment
d e b a t e o n u n e m p l o y m e n t b e f o r e the H o u s e r o s e f o r t h e C h r i s t m a s
Recess.
I f this w e r e not d o n e t h e r e w a s s o m e d a n g e r that
G o v e r n m e n t b a c k b e n c h s u p p o r t e r s w o u l d s e e k an e m e r g e n c y d e b a t e ,
w h i c h m i g h t w e l l r e s u l t i n the G o v e r n m e n t s d e f e a t .
It w o u l d h a v e
t o b e a c c e p t e d that the H o u s e of C o m m o n s m i g h t i n c o n s e q u e n c e h a v e t o
s i t d u r i n g C h r i s t m a s w e e k r a t h e r t h a n r i s e on 19 D e c e m b e r a s h a d b e e n
hoped.
2
T H E P R I M E M I N I S T E R , s u m m i n g up a s h o r t d i s c u s s i o n , s a i d that the
C a b i n e t a g r e e d that t h e r e s h o u l d b e an a n n o u n c e m e n t d u r i n g the
b u s i n e s s s t a t e m e n t l a t e r t h a t d a y that t h e r e w o u l d b e a d e b a t e on
u n e m p l o y m e n t b e f o r e the R e c e s s , p r o b a b l y i n the w e e k b e g i n n i n g
15 D e c e m b e r .
I t s h o u l d t a k e p l a c e o n the b a s i s of a M o t i o n s e e k i n g
a p p r o v a l t o t h e p a c k a g e of m e a s u r e s t o c o u n t e r u n e m p l o y m e n t , t h e
p r e c i s e c o n t e n t of w h i c h M i n i s t e r s w o u l d b e s e t t l i n g s h o r t l y .
The
debate could a l s o deal w i t h C h r y s l e r , and if a p p r o p r i a t e , w i t h i m p o r t
restrictions.
A s a c o n s e q u e n c e of finding t i m e f o r the d e b a t e the
H o u s e o f C o m m o n s w o u l d h a v e t o s i t a t the b e g i n n i n g o f C h r i s t m a s
w e e k ; but the b u s i n e s s t a k e n s h o u l d b e a s u n c o n t e n t i o u s a s p o s s i b l e .
The Cabinet ­
3.
T o o k n o t e , w i t h a p p r o v a l of t h e P r i m e M i n i s t e r s
sxuriming up of t h e i r d i s c u s s i o n a n d i n v i t e d the
P a r l i a m e n t a r y S e c r e t a r y , T r e a s u r y to be guided
accordingly.
!
3
OREIGN
2.
rFAIRS
d e c i s i o n o f the U n i t e d N a t i o n s S e c u r i t y C o u n c i l t o r e n e w t h e m a n d a t e f o r
the U n i t e d N a t i o n s D i s e n g a g e m e n t O b s e r v e r F o r c e o n t h e G o l a n H e i g h t s
had a v e r t e d a g r a v e situation w h i c h m i g h t h a v e i n v o l v e d a r e a l p o s s i b i l i t y
of a n e w M i d d l e E a s t w a r .
T h e S o v i e t Union had undoubtedly s c o r e d a
s u c c e s s w i t h r e g a r d to the p o s s i b i l i t y of p a r t i c i p a t i o n b y the r e p r e s e n t a ­
t i v e s of t h e P a l e s t i n e L i b e r a t i o n O r g a n i s a t i o n ( P L O ) i n the S e c u r i t y
C o u n c i l d e b a t e o n the M i d d l e E a s t t o b e h e l d i n J a n u a r y .
This question
of p a r t i c i p a t i o n w o u l d b e r e - o p e n e d i n J a n u a r y a t t h e b e g i n n i n g o f the
d e b a t e , but since i t w a s a p r o c e d u r a l m a t t e r no v e t o could b e c a s t .
The
I s r a e l i s , w h o w e r e b i t t e r l y d i s a p p o i n t e d w i t h t h i s d e v e l o p m e n t , had s a i d
t h a t t h e y w o u l d n o t c o - o p e r a t e i n the J a n u a r y d e b a t e , b u t he h a d o f f e r e d
M r A l l o n , the I s r a e l i M i n i s t e r f o r F o r e i g n A f f a i r s , h i s a d v i c e t h a t t h e y
m i g h t b e w i s e t o r e c o n s i d e r t h e d a n g e r of l e a v i n g t h e f i e l d c l e a r f o r
their a d v e r s a r i e s .
H e p e r s o n a l l y c o n s i d e r e d that the I s r a e l i G o v e r n m e n t
would e v e n t u a l l y h a v e to r e c o n c i l e t h e m s e l v e s t o d e a l i n g w i t h the P L O in
s o m e m a n n e r : he thought that t h e y should b e turning t h e i r a t t e n t i o n to
e x a c t i n g i n r e t u r n the p r i c e o f r e c o g n i t i o n o f t h e s t a t e h o o d o f I s r a e l b y
the P L O .
H e h a d a r r a n g e d t o d i s c u s s the q u e s t i o n w i t h t h e U n i t e d S t a t e s
S e c r e t a r y o f S t a t e , D r K i s s i n g e r , w h e n t h e y m e t ; n ^ x t w e e k at t h e N o r t h
Atlantic T r e a t y Organisation Council m e e t i n g .
M e a n w h i l e , it w a s
i m p o r t a n t t h a t n o t h i n g s h o u l d b e d o n e t o h a r d e n a t t i t u d e s on e i t h e r s i d e
and c l e a r l y t h e r e c e n t I s r a e l i b o m b i n g o f t a r g e t s i n t h e L e b a n o n , in w h i c h
s o m e 70 p e o p l e h a d b e e n k i l l e d , h a d b e e n a m o a t u n f o r t u n a t e d e v e l o p m e n t .
if
lliddle E a s t
Saudi A r a b i a
THE FOREIGN AND COMMONWEALTH SECRETARY
s a i d that the
T H E F O R E I G N A N D C O M M O N W E A L T H S E C R E T A R Y said that he had
b e e n v e r y i m p r e s s e d b y h i s v i s i t t o S a u d i A r a b i a d u r i n g the c o u r s e of
his r e c e n t tour of the A r a b i a n P e n i n s u l a .
B r i t i s h e x p o r t s t o Saudi A r a b i a
t h i s y e a r w o u l d b e of t h e o r d e r o f
£ 200 m i l l i o n and t h e r e w a s no r e a s o n
w h y t h i s f i g u r e c o u l d nnt b e d o u b l e d .
H e h a d h e a r d f r o m t h e S a u d i s the
usual c o m p l a i n t s a g a i n s t B r i t i s h b u s i n e s s m e n and f o r h i s p a r t h e had done
h i s b e s t t o r e a s s u r e t h e m a b o u t t h e r e l i a b i l i t y of s t e r l i n g a n d a b o u t the
u n d e r l y i n g s t r e n g t h of o u r e c o n o m i c p o s i t i o n , a s w e l l a s m o r e g e n e r a l l y
about the G o v e r n m e n t s d e t e r m i n a t i o n to r e m a i n i n c o m m a n d of e v e n t s .
H e h a d f o r m e d t h e s t r o n g i m p r e s s i o n that S a u d i A r a b i a , a l t h o u g h i t s
r e g i m e w a s i n m a n y w a y s t o t a l i t a r i a n , had m u c h b e t t e r p r o s p e c t s o f
s t a b i l i t y t h a n m a n y of the n e i g h b o u r i n g G o v e r n m e n t s .
The Cabinet ­
1.
T o o k n o t e o f the s t a t e m e n t s b y t h e 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 . 4
uropean
Council
T H E F O R E I G N A N D C O M M O N W E A L T H S E C R E T A R Y r e p o r t e d on the
m e e t i n g of the E u r o p e a n C o u n c i l w h i c h t h e P r i m e M i n i s t e r a n d h e h a d
a t t e n d e d i n R o m e o n 1 and 2 D e c e m b e r .
T h e r e had b e e n no c o m m u n i q u e
b u t a n u m b e r o f a g r e e m e n t s had b e e n c o m e t o i n t h e f o r m o f w o r k i n g
documents.
O n the C o m m u n i t y B u d g e t and f i n a n c i a l c o n t r o l t h e
d i s c u s s i o n w h i c h the P r i m e M i n i s t e r had h a d w i t h t h e F e d e r a l G e r m a n
C h a n c e l l o r i n J u l y a n d the w o r k w h i c h t h e P r i m e M i n i s t e r h a d s i n c e put
i n t o e l a b o r a t i n g our p r o p o s a l s had paid a substantial dividend,,
There
had b e e n a g e n e r a l w e l c o m e a t t h e E u r o p e a n C o u n c i l f o r our p r o p o s a l s
w h i c h w e w o u l d now publish a s a White P a p e r and a g r e e m e n t in p a r t i c u l a r
t o p u r s u e a c t i v e l y o u r p r o p o s a l f o r a C o m m i t t e e o f the E u r o p e a n A s s e m b l y
on the l i n e s o f the " H o u s e of C o m m o n s ' P u b l i c A c c o u n t s C o m m i t t e e to w a t c h
over Community expenditure.
O n the b a s i s of the d i s c u s s i o n d e t a i l e d
p r o p o s a l s w o u l d b e s u b m i t t e d b y the C o m m i s s i o n t o the C o u n c i l o f M i n i s t e r s .
O n d i r e c t e l e c t i o n s , s e v e n c o u n t r i e s had a g r e e d t h a t e l e c t i o n s t o t h e
E u r o p e a n P a r l i a m e n t s h o u l d t a k e p l a c e on a s i n g l e d a t e i n M a y o r June 1976
I t had b e e n a g r e e d t h a t a n y c o u n t r y w h i c h a t t h a t d a t e w a s u n a b l e t o h o l d
d i r e c t e l e c t i o n s should be a l l o w e d to appoint its r e p r e s e n t a t i v e s f r o m
a m o n g the e l e c t e d m e m b e r s o f i t s n a t i o n a l P a r l i a m e n t .
T h e C o u n c i l had
n o t e d t h e P r i m a M i n i s t e r s s t a t e m e n t that f u r t h e r c o n s u l t a t i o n s w o u l d be
n e c e s s a r y b e f o r e the B r i t i s h G o v e r n m e n t could c o m m i t i t s e l f t o f i n a l
arrangements.
Denmark had a l s o r e s e r v e d its position.
Foreign
M i n i s t e r s h a d b e e n i n s t r u c t e d t o t a k e f u r t h e r t h e i r e x a m i n a t i o n of the
q u e s t i o n and t o s u b m i t a r e p o r t t o the n e x t E u r o p e a n C o u n c i l i n M a r c h .
T h i s w o u l d p r o b a b l y l e a d t o c o n s i d e r a b l e a r g u m e n t on t h e s i z e of t h e
E u r o p e a n A s s e m b l y b e t w e e n the F r e n c h , w h o w a n t e d t h e n u m b e r o f s e a t s
t o b e p r o p o r t i o n a l t o the p o p u l a t i o n of the M e m b e r S t a t e s , a n d the I r i s h ,
w h o w a n t e d t o i n c r e a s e t h e s h a r e of the t o t a l s e a t s h e l d b y t h e s m a l l e r
countries.
O n P a s s p o r t Union the C o u n c i l had a g r e e d that a u n i f o r m p a s s p o r t m i g h t
b e i s s u e d a s f r o m 1978 a n d h a d a s k e d t h e C o u n c i l of M i n i s t e r s ( F o r e i g n
A f f a i r s ) to r e s o l v e a l l o u t s t a n d i n g q u e s t i o n s i n t h i s a r e a i n c l u d i n g the
d i f f i c u l t i s s u e s o f t h e a b o l i t i o n o f f r o n t i e r c o n t r o l s and the h a r m o n i s a t i o n
of conditions of e n t r y .
M.
T i n d e m a n s h a d r e p o r t e d v e r y b r i e f l y on the p r o g r e s s o f h i s r e p o r t on
E u r o p e a n U n i o n but t h e r e h a d b e e n n o s u b s t a n t i v e d i s c u s s i o n .
A
U n i t e d K i n g d o m p r o p o s a l f o r a m e e t i n g of M i n i s t e r s of the I n t e r i o r t o
d i s c u s s c o m m o n p r o b l e m s w i t h p a r t i c u l a r r e f e r e n c e to l a w and o r d e r had
been agreed.
T h e P r e s i d e n t o f the F r e n c h R e p u b l i c h a d a l s o
suggested
t h a t t h i s m e e t i n g s h o u l d d i s c u s s t h e a s s o c i a t e d q u e s t i o n of t h e r i g h t of
asylum.
On the C o n f e r e n c e o n I n t e r n a t i o n a l E c o n o m i c C o - o p e r a t i o n t h e r e had b e e n
long and f i e r c e d i s c u s s i o n .
T h e P r i m e M i n i s t e r had fought v e r y hard for
our position and, w h i l e w e had not gained e v e r y t h i n g w e had publicly
a i m e d for, t h e r e had been s o m e significant p r a c t i c a l g a i n s .
The French
had a g r e e d t o the p r i n c i p l e of a M i n i m u m S u p p o r t P r i c e ( M S P ) and e m e r ­
g e n c y s h a r i n g a r r a n g e m e n t s f o r o i l a l t h o u g h the l a t t e r p o i n t w a s n o t f o r
5
p u b l i c a t i o n , a n d thus h a d c o m e i n t o l i n e i n e v e r y t h i n g b u t
n a m e w i t h the I n t e r n a t i o n a l E n e r g y A g e n c y
. which they had e a r l i e r r e f u s e d to j o i n .
In s o f a r a s r e p r e s e n t a t i o n
o f the U n i t e d K i n g d o m w a s c o n c e r n e d i t had b e e n a g r e e d that the
C o m m u n i t y s p o k e s m e n s h o u l d b e the P r e s i d e n t o f t h e C o u n c i l and t h e
C o m m i s s i o n , but that the P r e s i d e n t o f the C o m m u n i t y D e l e g a t i o n w o u l d
b e a b l e to i n v i t e t w o c o u n t r i e s , the U n i t e d K i n g d o m and L u x e m b o u r g
( a s t h e c o u n t r y d u e t o s u c c e e d t o the P r e s i d e n c y a t the e n d of the y e a r )
t o " p r e s e n t a d d i t i o n a l s t a t e m e n t s " p r o v i d i n g t h a t t h e y d i d not a c t u a l l y
c o n t r a d i c t the C o m m u n i t y m a n d a t e .
But, of c o u r s e , any C o m m u n i t y
m a n d a t e r e q u i r e d u n a n i m i t y a n d w e w o u l d o n l y a g r e e t o one w h i c h f u l l y
t o o k a c c o u n t of o u r o w n i n t e r e s t s .
So, both at the M i n i s t e r i a l C o n f e r e n c e
i n D e c e m b e r w h i c h he w o u l d a t t e n d a n d i n t h e v a r i o u s C o m m i s s i o n s , the
U n i t e d K i n g d o m w o u l d b e a b l e t o put i t s o w n p o i n t o f v i e w .
This
a r r a n g e m e n t w a s n o t a s s a t i s f a c t o r y a s the s e p a r a t e s e a t f o r w h i c h w e
had p r e s s e d .
B u t i n r e a l i t y t h e g a i n s of s u b s t a n c e w e had m a d e i n
s e c u r i n g F r e n c h a g r e e m e n t t o M S P a n d the e m e r g e n c y s h a r i n g a r r a n g e ­
m e n t s and t h e s e p a r a t e v o i c e w e h a d g a i n e d f o r the U n i t e d K i n g d o m
represented a good c o m p r o m i s e .
W e c o u l d n o t h a v e o b t a i n e d m o r e and
w h a t w e had s e c u r e d had only b e e n g o t by tough and sustained n e g o t i a t i o n
on the p a r t of the P r i m e M i n i s t e r .
T H E P R I M E M I N I S T E R s a i d t h a t w e h a d i n f a c t s e c u r e d the s u b s t a n c e of
w h a t w e h a d s e t out t o g e t .
N o t o n l y had t h e F r e n c h a g r e e d t o t h e
p r i n c i p l e of a n M S P and e m e r g e n c y o i l s h a r i n g b u t w e h a d s e c u r e d the
r i g h t to state our c a s e .
T h e P r e s s r e p o r t s of a r o w b e t w e e n h i m s e l f
a n d the F e d e r a l G e r m a n C h a n c e l l o r had b e e n e n t i r e l y u n f o u n d e d .
Indeed,
H e r r Schmidt had b e e n helpful throughout.
A f t e r the c o m p r o m i s e had
b e e n r e a c h e d P r e s i d e n t G i s c a r d h a d s a i d t h a t t h e r e s u l t h a d s h o w n the
v a l u e of the E u r o p e a n C o u n c i l a n d t h a t the C o m m u n i t y had b e e n
s t r e n g t h e n e d b y the c o m p r o m i s e .
A n d an e d i t o r i a l in today s L e Monde
J
h a d p o i n t e d out t h a t , a s a r e s u l t o f t h e P r i m e M i n i s t e r ' s t a c t i c s ,
C o m m u n i t y e n e r g y p o l i c y had m a d e m o r e p r o g r e s s i n a f e w h o u r s than
s i n c e the b i r t h o f t h e C o m m u n i t y .
T h e P r i m e M i n i s t e r a d d e d that he had b e e n a s k e d at the lunch a t t e n d e d
only b y H e a d s of G o v e r n m e n t about our intentions on i m p o r t c o n t r o l s .
H e had s a i d that w e w e r e s t i l l c o n s i d e r i n g our p o s i t i o n .
I n the c a s e of
c a r s a d e c i s i o n w o u l d d e p e n d o n t h e f a t e of the C h r y s l e r o p e r a t i o n s in
Great Britain.
P r e s i d e n t O r t o l i o f the C o m m i s s i o n h a d b e e n u n h e l p f u l and
t h e o t h e r H e a d s of G o v e r n m e n t h a d s a i d t h a t i m p o r t r e s t r a i n t s i n t h e
U n i t e d K i n g d o m on c a r s w o u l d p r e s e n t d i f f i c u l t y .
A c t i o n o n o u r p a r t on
t e x t i l e s and f o o t w e a r p a r t i c u l a r l y in s o far as i m p o r t s f r o m l o w c o s t
p r o d u c e r s w e r e c o n c e r n e d , w o ul d cause much l e s s d i f f i c u l t y as w o ul d
a c t i o n on t e l e v i s i o n t u b e s p r o v i d i n g t h a t t h i s w a s l i m i t e d t o t y p e s n o t
s u p p l i e d b y the E u r o p e a n m a r k e t .
I n d i s c u s s i o n i t w a s a r g u e d t h a t a s r e p r e s e n t e d i n the m e d i a t h e d e c i s i o n
o f the E u r o p e a n C o u n c i l on p a s s p o r t s , i n p a r t i c u l a r the p r o p o s a l t h a t a
C o m m u n i t y p a s s p o r t should have the w o r d s " E u r o p e a n C o m m u n i t y " at
the t o p , w a s l i k e l y to a r o u s e n a t i o n a l i s t r e a c t i o n s in this c o u n t r y .
M o r e o v e r the p r a c t i c a l u t i l i t y of a E u r o p e a n p a s s p o r t w a s o p e n t o
question.
O n t h e o t h e r hand i t w a s p o i n t e d out t h a t t h e P r i m e M i n i s t e r
had m a d e it c l e a r at the E u r o p e a n C o u n c i l that w e w o u l d not w i s h to
i u . t r e d u c e the n e w p a s s p o r t b e f o r e t h e n e w n a t i o n a l i t y l e g i s l a t i o n w h i c h
h a d b e e n p r o j e c t e d had c o m e into f o r c e .
A n d a w h o l e r a n g e of t e c h n i c a l
i s s u e s w h i c h r e m a i n e d to b e r e s o l v e d w o u l d n e e d t o b e s t u d i e d f u r t h e r
b y the C o u n c i l of M i n i s t e r s .
The Cabinet ­
2.
T o o k note, with a p p r o v a l ,
of the s t a t e m e n t s b y
the P r i m e M i n i s t e r a n d t h e F o r e i g n a n d
Secretary.
7
Commonwealth
ARNINGS R U L E
3C
T h e C a b i n e t h a d b e f o r e t h e m a m e m o r a n d u m b y the C h a n c e l l o r
of the E x c h e q u e r and the S e c r e t a r y o f S t a t e f o r S o c i a l S e r v i c e s
( C ( 7 5 ) 1 3 8 ) a b o u t the e a r n i n g s r u l e w h i c h g o v e r n e d t h e a m o u n t a
r e t i r e m e n t p e n s i o n e r m i g h t e a r n b e f o r e s t a r t i n g to l o s e b e n e f i t .
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 i n the p r e v i o u s
S e s s i o n of P a r l i a m e n t , a n a m e n d m e n t t o t h e u p r a t i n g B i l l h a d b e e n
f o r c e d upon t h e G o v e r n m e n t ; t h e a m e n d m e n t r a i s e d t h e e a r n i n g s r u l e
l i m i t f r o m £ 1 3 a w e e k t o £ 2 0 a w e e k f r o m A p r i l 1975, t o £ 3 5 f r o m
A p r i l 1976 a n d £ 5 0 f r o m A p r i l 1 9 7 7 .
T h e e x p e n d i t u r e this e n t a i l e d
w a s n o t of h i g h p r i o r i t y i n t h e s o c i a l s e c u r i t y p r o g r a m m e a n d t h e
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 h a d b e e n u n a n i m o u s i n
the v i e w that a s h o r t B i l l should be i n t r o d u c e d t o substitute £24 ( o r i f
n e c e s s a r y £ 2 6 ) f o r the £ 3 5 a n d t h e r e a f t e r a l l o w the l i m i t t o m o v e i n
l i n e w i t h the m o v e m e n t of e a r n i n g s i n the c o u n t r y a t l a r g e .
To make
t h e c h a n g e i n t h e A p r i l 1976 f i g u r e i t w a s e s s e n t i a l t o g e t a S e c o n d
R e a d i n g of t h e B i l l b e f o r e C h r i s t m a s and R.oyal A s s e n t b e f o r e
19 F e b r u a r y .
I f t h i s w e r e i m p o s s i b l e , a n d an a m e n d i n g B i l l c o u l d
o n l y be e f f e c t i v e f r o m A p r i l 1977, the s a v i n g s t o be had in l a t e r y e a r s
w o u l d b e g r e a t l y r e d u c e d and w o u l d p r o v i d e m u c h l e s s j u s t i f i c a t i o n f o r
the B i l l .
T h e r e w e r e t w o m a j o r p r o b l e m s ; could the B i l l b e f i t t e d
i n t o the t i m e t a b l e , a n d c o u l d the G o v e r n m e n t c a r r y i t i n t h e H o u s e ?
O n the f i r s t , the p o s i t i o n m i g h t b e e a s i e r n o w that C a b i n e t had d e c i d e d
t h a t t h e H o u s e w o u l d n o t a d j o u r n u n t i l T u e s d a y 23 D e c e m b e r .
O n the
s e c o n d h e t h o u g h t t h e r e w a s a g o o d c h a n c e o f c a r r y i n g the B i l l s i n c e
o n e i n c r e a s e i n the e a r n i n g s r u l e w a s a l r e a d y e f f e c t i v e a s a r e s u l t of
the a m e n d m e n t , and t h e r e w a s n o w a much b e t t e r g e n e r a l understanding
o f the n e e d t o c o n t a i n p u b l i c e x p e n d i t u r e .
It would be e x t r e m e l y
difficult for the o f f i c i a l Opposition to oppose a m o v e which r e d u c e d
p u b l i c e x p e n d i t u r e , a n d e v e n i f t h e y d i d s o s o m e of t h e i r o w n s u p p o r t e r s
m i g h t w e l l not support t h e m .
I t c o u l d b e m a d e c l e a r that i f t h i s
e x p e n d i t u r e w e r e not cut s o m e o t h e r e x p e n d i t u r e , p e r h a p s of h i g h e r
s o c i a l p r i o r i t y , would have t o suffer.
T H E S E C R E T A R Y O F S T A T E F O R S O C I A L S E R V I C E S s a i d that the
situation on public e x p e n d i t u r e i n the m e d i u m t e r m m a d e it e s s e n t i a l
t o try to obtain these savings.
In h e r v i e w h o w e v e r i t w o u l d be
e x t r e m e l y d i f f i c u l t to g e t an a m e n d i n g B i l l through the H o u s e u n l e s s
the G o v e r n m e n t w e r e p r e p a r e d t o s a y that the £ 5 0 m i l l i o n w h i c h w o u l d
be saved in 1976-77 would be switched to s o m e other s o c i a l l y d e s i r a b l e
purpose.
She had p r o p o s e d to the M i n i s t e r i a l C o m m i t t e e on E c o n o m i c
P o l i c y t h a t a f u e l b o n u s of £ 10 s h o u l d b e p a i d i n F e b r u a r y .
This
w o u l d h a v e c o s t j u s t o v e r £ 1 0 0 m i l l i o n , a n d i t h a d b e e n r e j e c t e d b y the
Committee.
She w o u l d b e p r e p a r e d t o cut the bonus t o £ 5 , w h i c h
although s m a l l would be b e t t e r than nothing.
O n t h i s b a s i s she w o u l d
b e w i l l i n g t o t a l k t o the d i s s i d e n t b a c k b e n c h e r s t o s e e k t o w i n t h e i r
a c q u i e s c e n c e in an amending B i l l .
8
In d i s c u s s i o n i t w a s p o i n t e d o u t t h a t t h e r e c o u l d b e n o p r o s p e c t of
g i v i n g such a B i l l a S e c o n d R e a d i n g i n the w e e k b e g i n n i n g 8 D e c e m b e r ,
the b u s i n e s s f o r w h i c h w o u l d h a v e t o b e a n n o u n c e d t h a t a f t e r n o o n t o t h e
House.
I t w o u l d , h o w e v e r , b e p o s s i b l e f o r the B i l l t o b e a p p r o v e d b y
L e g i s l a t i o n C o m m i t t e e on T u e s d a y 9 D e c e m b e r a n d p u b l i s h e d o n
10 D e c e m b e r , w i t h t h e p o s s i b i l i t y o f a S e c o n d R e a d i n g b e f o r e t h e
C h r i s t m a s a d j o u r n m e n t ; but t h e p r o g r a m m e w a s a l r e a d y f u l l a n d
something e l s e would have to g i v e w a y .
One p o s s i b i l i t y w o u l d b e t o
d e l a y b y a w e e k t h e S e c o n d R e a d i n g o f the A r m e d F o r c e s B i l l a n d
s e e k t o p e r s u a d e the O p p o s i t i o n t o a g r e e t o c o m p l e t e i t s S e c o n d
R e a d i n g i n h a l f a d a y , l e a v i n g the o t h e r h a l f of the d a y a v a i l a b l e f o r a
B i l l o n the e a r n i n g s r u l e .
It m u s t b e doubtful w h e t h e r i n fact the
O p p o s i t i o n w o u l d a g r e e t o s u c h an a r r a n g e m e n t .
O t h e r i t e m s in the
p r o g r a m m e i n c l u d e d the C o n s o l i d a t e d Fund B i l l , w h i c h was e s s e n t i a l
b u s i n e s s , a S u p p l y D a y , w h i c h w a s i n the O p p o s i t i o n ^ h a n d s , the
R a t e Support G r a n t O r d e r , w h i c h m u s t be a p p r o v e d , and a d a y s d e b a t e
on u n e m p l o y m e n t , w h i c h had b e e n p r o m i s e d .
On t h e q u e s t i o n of
c a r r y i n g the B i l l , i t w o u l d o b v i o u s l y b e n e c e s s a r y t o s p e a k i n a d v a n c e
t o t h e b a c k b e n c h e r s w h o a b s t a i n e d o r v o t e d a g a i n s t the G o v e r n m e n t on
t h e l a s t o c c a s i o n , a n d i t w a s t h o u g h t that a t l e a s t s o m e of t h e m w o u l d
b e w i l l i n g to g o a l o n g w i t h t h e G o v e r n m e n t s p r o p o s a l , ,
While it m i g h t
b e d i f f i c u l t f o r t h e O p p o s i t i o n t o o p p o s e i t , the p o s s i b i l i t y that t h e y
m i g h t d o s o c o u l d not b e r u l e d out.
A s r e g a r d s the s u g g e s t i o n that the
s a v i n g s in 1 9 7 6 - 7 7 m i g h t b e s w i t c h e d t o s o m e o t h e r s o c i a l l y d e s i r a b l e
p u r p o s e , it w a s s t r o n g l y r e p r e s e n t e d that i t w o u l d be w r o n g to
h y p o t h e c a t e s a v i n g s i n this w a y .
F u r t h e r m o r e i t w o u l d hi a n y c a s e b e
d i f f i c u l t to s w i t c h the saving i n a w a y w h i c h d i d not i n v o l v e s o m e
c o n t i n u i n g c o m m i t m e n t a f t e r t h e f i r s t y e a r : t h e l e o a o a of the C h r i s t m a s
b o n u s should not be f o r g o t t e n .
It would be t a c t i c a l l y better to indicate
t h a t i f t h e s e s a v i n g s w e r e n o t m a d e s o m e o t h e r i t e m of d e s i r a b l e p u b l i c
e x p e n d i t u r e w o u l d h a v e to b e c u t .
J
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 t h a t the
g e n e r a l v i e w in C a b i n e t w a s t h a t a n a t t e m p t s h o u l d b e m a d e t o r e v e r s e
the e f f e c t of the a m e n d m e n t on the e a r n i n g s r u l e c a r r i e d a g a i n s t the
G o v e r n m e n t i n the uprating B i l l i n the p r e v i o u s S e s s i o n ,
As a first
s t e p the 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 and the C h i e f W h i p
should see the i n d i v i d u a l L a b o u r M e m b e r s w h o e i t h e r v o t e d a g a i n s t
t h e G o v e r n m e n t o r a b s t a i n e d on t h e l a s t o c c a s i o n , e x p l a i n t h e
G o v e r n m e n t s intentions to t h e m and s e e k their a c q u i e s c e n c e .
In
d o i n g this i t w o u l d b e helpful t o i n d i c a t e that i f the G o v e r n m e n t c o u l d
n o t m a k e t h i s c h a n g e o t h e r p r o g r a m m e s of p u b l i c e x p e n d i t u r e w o u l d
h a v e to s u f f e r .
T h e 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 s h o u l d put
a B i l l f o r w a r d t o L e g i s l a t i o n C o m m i t t e e f o r a p p r o v a l ; and t h e C h i e f
W h i p should c o n s i d e r w h a t r e - a r r a n g e m e n t of the P a r l i a m e n t a r y
p r o g r a m m e b e t w e e n now and C h r i s t m a s could be m a d e to a c c o m m o d a t e
a Second R e a d i n g of the B i l l .
It w a s noted that, to b e e f f e c t i v e in
A p r i l 1976, t h e r e m a i n i n g s t a g e s o f t h e B i l l w o u l d n e e d to b e g i v e n
p r i o r i t y a f t e r the C h r i s t m a s R e c e s s so as to e n s u r e R o y a l A s s e n t
b y 19 F e b r u a r y .
9
The Cabinet
­
1.
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
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 .
Ministers
2.
I n v i t e d the S e c r e t a r y o f S t a t e f o r S o c i a l S e r v i c e s
a n d the C h i e f W h i p t o s p e a k a c c o r d i n g l y t o t h e L a b o u r
b a c k b e n c h e r s w h o v o t e d a g a i n s t the G o v e r n m e n t o r
a b s t a i n e d on the p r e v i o u s o c c a s i o n .
3.
I n v i t e d the 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
t o put an a m e n d i n g B i l l t o L e g i s l a t i o n C o m m i t t e e .
4.
I n v i t e d the C h i e f W h i p t o c o n s i d e r h o w s u c h a
B i l l m i g h t b e f o u n d a p l a c e i n the P a r l i a m e n t a r y
p r o g r a m m e to enable a Second Reading to be given
before Christmas.
4.
T h e C a b i n e f s d i s c u s s i o n and the c o n c l u s i o n s
are recorded
Cabinet
separately.
Office
4 December
1975
10
reached
US D O C U M E N T IS T H E P R O P E R T Y O F H E R B R I T A N N I C M A J E S T Y ' S
COPY
GOVERNMENT
NO
CABINET
CONFIDENTIAL
ANNEX
C C ( 7 5 ) 52nd C o n c l u s i o n s ,
Thursday 4 December
Minute 4
1975 a t 10. 15 a m
CHRYSLER
(UK) L T D
T h e C a b i n e t c o n s i d e r e d m e m o r a n d a b y the S e c r e t a r y o f S t a t e f o r
Previous
Reference:
CC(75) 51st
Conclusions,
Minute 3
( C ( 7 5 ) 140) a n d 1 4 1 ) , a n d
I n d u s t r y ( C ( 7 5 ) 1 3 9 ) , the S e c r e t a r y of S t a t e f o r
Employment
the S e c r e t a r y of S t a t e f o r
Scotland
( C ( 7 5 ) 1 4 2 ) , o n the f u t u r e o f C h r y s l e r (UK) L t d .
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 s a i d that a t the l a s t
m e e t i n g of t h e C a b i n e t h e h a d b e e n i n v i t e d t o c o n t i n u e n e g o t i a t i o n s
w i t h t h e C h r y s l e r C o r p o r a t i o n o n t h e s c h e m e o f s u p p o r t f o r the
c o n t r a c t i o n o f C h r y s l e r (UK) L t d , l i s t e d as s c h e m e B i n t h e a n n e x
t o h i s m e m o r a n d u m C ( 7 5 ) 1 2 8 , a n d t o put i n h a n d a n u m b e r of s t u d i e s .
T w o f u r t h e r m e e t i n g s h a d b e e n h e l d w i t h the C h a i r m a n o f C h r y s l e r
Corporation.
T h e f i r s t a t M i n i s t e r i a l l e v e l , at w h i c h the M i n i s t e r
o f S t a t e f o r S c o t l a n d and t h e P a y m a s t e r G e n e r a l t o g e t h e r w i t h
o f f i c i a l s f r o m the C e n t r a l P o l i c y R e v i e w S t a f f ( G P R S ) and the P r i m e
M i n i s t e r ^ o f f i c e had b e e n p r e s e n t , and the s e c o n d at o f f i c i a l l e v e l .
T h e C h r y s l e r C o r p o r a t i o n had r e f u s e d to m a k e a n y i n c r e a s e in thieir
f i n a n c i a l c o n t r i b u t i o n or t o r e v e a l the b a s i s o f t h e i r o f f e r .
With
t h e a g r e e m e n t o f the M i n i s t e r of S t a t e f o r S c o t l a n d , C o o p e r s & L y b r a n d
h a d b e e n e n g a g e d t o f o r m a n i n d e p e n d e n t a s s e s s m e n t of t h e c o s t s a n d
p r o s p e c t i v e v i a b i l i t y of s c h e m e B .
T h e i r v e r d i c t w a s that it w a s not
viable.
T h e S e c r e t a r y o f State f o r Scotland had q u e s t i o n e d w h e t h e r
this w a s the r i g h t c o n c l u s i o n t o d r a w f r o m their r e p o r t but they h a d
d i r e c t l y a g r e e d to the u s e of t h e s e w o r d s .
A s the C a b i n e t had
r e q u e s t e d h e had c o n s u l t e d the c h a i r m a n o f B r i t i s h L e y l a n d ( B L ) on
the q u e s t i o n o f w h e t h e r t h e y c o u l d e x p a n d t h e i r o u t p u t b y t a k i n g
o v e r s o m e o f the a s s e t s o f C h r y s l e r ( U K ) L t d , and i n p a r t i c u l a r
w h e t h e r they m i g h t u s e the L i n w o o d f a c i l i t i e s t o expand p r o d u c t i o n of
Land R o v e r s .
B L w e r e s t r o n g l y opposed to t h i s ; the only parts
of C h r y s l e r s business i n w h i c h they m i g h t have an i n t e r e s t w o u l d be
the I r a n i a n c o n t r a c t , c e r t a i n t e s t f a c i l i t i e s a n d s o m e of t h e d e a l e r s h i p s .
B o t h h e a n d the C h a i r m a n of t h e N a t i o n a l E n t e r p r i s e B o a r d c o n s i d e r e d
that if s c h e m e B w e r e to b e adopted this w o u l d b e d a m a g i n g to
B r i t i s h L e y l a n d , w h i l e F o r d and G e n e r a l M o t o r s had w a r n e d h i m that
s u p p o r t f o r C h r y s l e r c o u l d put t h e p l a n s f o r t h e i r B r i t i s h c o m p a n i e s
in j e o p a r d y .
T h e C a b i n e t had i n v i t e d h i m , i n c o n s u l t a t i o n w i t h the S e c r e t a r y o f
S t a t e f o r E m p l o y m e n t t o s e e k the v i e w s of t r a d e s union l e a d e r s on
t h e p o s s i b l e c o u r s e s o p e n t o the G o v e r n m e n t .
T h i s he had d o n e .
T h e u n i o n o f f i c i a l s h a d b e e n a p p a l l e d a t t h e p r o s p e c t s v/hich had t o
be faced.
A l t h o u g h the m e r i t s o f s c h e m e B h a d b e e n m a d e c l e a r t o
t h e m t h e y had s p o n t a n e o u s l y a n d u n c o m p r o m i s i n g l y r e j e c t e d i t a n d
s a i d that i t w o u l d b e u n a c c e p t a b l e t o a l l C h r y s l e r e m p l o y e e s .
They
had c o m m e n t e d that the c o n t r a c t e d c o m p a n y e n v i s a g e d i n s c h e m e B
w a s t o o s m a l l t o be v i a b l e and w o u l d c o l l a p s e w i t h i n t w o y e a r s and
t h a t the r i g h t c o u r s e f o r the G o v e r n m e n t w a s t o m a k e n o d e a l w i t h
t h e C h r y s l e r C o r p o r a t i o n b u t f o r c e t h e m t o t a k e the o d i u m f o r t h e
closure.
The G o v e r n m e n t should h o w e v e r take steps t o p r o v i d e
a l t e r n a t i v e e m p l o y m e n t , should pay the w a g e s of a l l C h r y s l e r
w o r k e r s f o r s i x m o n t h s w h i l e o t h e r p l a n s w e r e p r o d u c e d and s h o u l d
i m p o s e r e s t r i c t i o n s o n the i m p o r t s o f c a r s .
I t w a s t r u e that n o
S c o t t i s h t r a d e u n i o n i s t s had t a k e n p a r t i n the m e e t i n g b u t the
c o m p o s i t i o n of the t r a d e s u n i o n p a r t y had b e e n l e f t , r i g h t l y i n h i s
v i e w , t o the G e n e r a l S e c r e t a r y o f t h e T r a d e s U n i o n C o n g r e s s .
I t w a s c l e a r t h a t , w h a t e v e r t h e v i e w s of S c o t t i s h t r a d e s u n i o n i s t s ,
t h e r e p r e s e n t a t i v e s o f the w o r k e r s a t R y t o n w e r e n o t p r e p a r e d t o
a g r e e t o a n y a r r a n g e m e n t s w h i c h s a c r i f i c e d j o b s a t l & s i r p l a n t vto
bring employment to Scotland.
D u r i n g the p a s t f o u r w e e k s h e h a d e x a m i n e d m a n y o p t i o n s f o r
d e a l i n g w i t h the C h r y s l e r p r o b l e m .
If t h e r e w e r e a n y p r o s p e c t
of r e s t o r i n g C h r y s l e r ( U K ) L t d t o v i a b i l i t y h e w o u l d h a v e put a
p r o p o s a l f o r w a r d i m m e d i a t e l y , e v e n if it involved l a r g e e x p e n d i t u r e ;
b u t h e h a d c o n c l u d e d w i t h g r e a t r e l u c t a n c e t h a t n o n e of t h e o p t i o n s
could be supported.
H e w a r n e d t h e C a b i n e t t h a t t h e t i m i n g of a
d e c i s i o n w a s n o t e n t i r e l y in t h e i r h a n d s : t h e r e w a s nothing t o
s t o p t h e C h a i r m a n o f the C h r y s l e r C o r p o r a t i o n m a k i n g a n a n n o u n c e ­
ment at any t i m e he wished.
T H E S E C R E T A R Y O F S T A T E F O R E M P L O Y M E N T s a i d that w h i l e
h e d i d n o t q u a r r e l w i t h t h e S e c r e t a r y of S t a t e f o r I n d u s t r y ' s r e p o r t
of t h e i r j o i n t m e e t i n g w i t h t r a d e s union o f f i c i a l s he did not c o n s i d e r
that i t s c o n c l u s i o n w a s s o c l e a r cut.
The union r e p r e s e n t a t i v e s
had a l l b e e n a n g r y about C h r y s l e r ' s b e h a v i o u r but h e b e l i e v e d that
i f t h e y w e r e b r o u g h t t o r e c o g n i s e t h a t s c h e m e B w a s the o n l y
a l t e r n a t i v e t o c l o s u r e of t h e e n t i r e c o m p a n y t h e y w o u l d n o t o p p o s e i t .
O n the c e n t r a l i s s u e h e c a m e t o a d i f f e r e n t c o n c l u s i o n f r o m t h e
S e c r e t a r y of S t a t e f o r I n d u s t r y , p r i n c i p a l l y b e c a u s e o f h i s c o n c e r n
f o r the c o n s e q u e n c e s in S c o t l a n d .
C l o s u r e of L i n w o o d would m a k e
f a r w o r s e a s i t u a t i o n w h i c h w a s a l r e a d y b a d a n d w o u l d put i n
j e o p a r d y the w h o l e o f t h e G o v e r n m e n t s p o s i t i o n i n S c o t l a n d .
The
G o v e r n m e n t c o u l d n o t put a l l t h e b l a m e f o r c l o s u r e o n C h r y s l e r .
It w o u l d i n e v i t a b l y b e c o m e p u b l i c k n o w l e d g e t h a t t h e C o r p o r a t i o n
h a d b e e n p r e p a r e d t o m a k e a l a r g e c o n t r i b u t i o n t o w a r d s the c o s t s o f
s a v i n g a s u b s t a n t i a l n u m b e r o f j o b s a n d that t h i s p r o p o s a l had b e e n
r e j e c t e d b y the G o v e r n m e n t .
C l o s u r e w o u l d m e a n the l o s s o f
5 5 , 000 j o b s ; the c o s t s , £ 1 5 0 m i l l i o n i n u n e m p l o y m e n t p a y and l o s s
o f t a x e s and. £ 3 0 m i l l i o n f o r a r e d u n d a n c y s c h e m e , w e r e h i g h e r t h a n
t h e h i g h e s t e s t i m a t e of the c o s t o f p r o c e e d i n g w i t h s c h e m e B .
W h i l e i t m i g h t b e that s o m e f u r t h e r c o n t r a c t i o n w o u l d h a v e t o f o l l o w
a t a d d i t i o n a l c o s t the s c h e m e w o u l d b o t h p e r m i t a s l o w e r r u n d o w n
and h a v e a l o w e r i n i t i a l c o s t .
T h e r e should be further i n v e s t i g a t i o n
o f w h e t h e r i t c o u l d g o a h e a d w i t h o u t the p h y s i c a l t r a n s f e r o f
m a c h i n e r y f r o m the M i d l a n d s .
T h e G o v e r n m e n t should not be
p r e s s e d to an i l l - c o n s i d e r e d d e c i s i o n by C h r y s l e r .
T h e y should
take at l e a s t a further w e e k to c o n s i d e r what further i m p r o v e m e n t s
could be made to scheme B.
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 a d e c i s i o n
on this m a t t e r c o u l d not be taken without full r e g a r d t o the p o l i t i c a l
consequences which it would bring in Scotland.
The L i n w o o d plant
had a s y m b o H c i m p o r t a n c e .
The G o v e r n m e n t s proposals for
d e v o l u t i o n had b e e n w i d e l y c r i t i c i s e d in Scotland on the g r o u n d s that
i n s u f f i c i e n t e c o n o m i c p o w e r s w e r e t o b e d e v e l o p e d a n d b e c a u s e of
the o v e r r i d i n g p o w e r s t o b e r e t a i n e d a t W e s t m i n s t e r .
T h e y had
b e e n a t t a c k e d not only b y the O p p o s i t i o n but a l s o b y the S c o t t i s h
T r a d e s Union C o n g r e s s .
I f the G o v e r n m e n t a n n o u n c e d t h a t i t
s u p p o r t e d t o t a l c l o s u r e of C h r y s l e r ( U K ) L t d w h e n t h e r e w a s the
a l t e r n a t i v e of p r e s e r v i n g a p a r t of i t t h e i r p o s i t i o n w o u l d be
indefensible.
H e h a d n o t e d t h a t a t the p r e v i o u s m e e t i n g of t h e C a b i n e t
the C h r y s l e r C o r p o r a t i o n h a d b e e n q u o t e d a s d e s c r i b i n g s c h e m e B
as " p o l i t i c a l l y v i a b l e , but not e c o n o m i c a l l y v i a b l e " .
Mr Riccardo
h i m s e l f d e n i e d h a v i n g s a i d that a n d b e l i e v e d t h a t i t w a s b o t h p o l i t i c a l l y
and e c o n o m i c a l l y v i a b l e .
W h e n a s c h e m e had b e e n c o n s i d e r e d b y t h e
Industrial Development A d v i s o r y Board ( I D A B ) they had divided
e q u a l l y on it, but this w a s on the a s s u m p t i o n that if C h r y s l e r m a d e
a n y c o n t r i b u t i o n to i t s c o s t s i t w o u l d b e n o m o r e t h a n £ 1 0 m i l l i o n ,
N o w C h r y s l e r w e r e o f f e r i n g £ 3 5 m i l l i o n , and the w a i v i n g of d e b t s
of £ 2 0 m i l l i o n .
T h e G o v e r n m e n t contribution would be £43 m i l l i o n :
the c o s t t o the G o v e r n m e n t o f c l o s u r e w o u l d b e £ 1 8 0 m i l l i o n .
The
r e p o r t b y C o o p e r s & L y b r a n d did not i t s e l f say that s c h e m e B w a s
not v i a b l e .
A s to the c o n s u l t a t i o n w i t h the t r a d e s unions he f e l t
that i t w a s unfair t o h a v e e x p e c t e d a n i m m e d i a t e r e a c t i o n .
While
the union l e a d e r s had o p p o s e d s c h e m e B this v i e w had t o be r e a d
a g a i n s t t h e i r d e s i r e f o r n a t i o n a l i s a t i o n o f the c o m p l e t e c o m p a n y a s
had happened with B r i t i s h L e y l a n d .
It w o u l d not be r i g h t t o d e c i d e
against s c h e m e B b e c a u s e i t m i g h t i n v o l v e industrial disputes at
one plant.
If the c l o s u r e w e n t a h e a d t h e r e w o u l d be i n d u s t r i a l
t r o u b l e a t e v e r y C h r y s l e r p l a n t a n d the s i t u a t i o n i n S c o t l a n d w o u l d
b e e x a c e r b a t e d b y t h e k n o w l e d g e t h a t t h e r e had b e e n a c o n t i n u o u s
outflow of job opportunities to E n g l a n d .
H e b e l i e v e d that the
G o v e r n m e n t s a p p r o a c h had b e e n o v e r - i n f l u e n c e d b y the G P R S r e j p o r t .
H e b e l i e v e d that it w a s n e c e s s a r y t o g e t c l o s e r t o the C h r y s l e r
C o r p o r a t i o n by further n e g o t i a t i o n s , to look further at the options ,
and t o h a v e f u r t h e r and w i d e r t a l k s w i t h the t r a d e s union m o v e m e n t .
3
I n d i s c u s s i o n , i t w a s a r g u e d that s o m e p a r t s of C h r y s l e r ( U K ) L t d ' s
b u s i n e s s c o u l d b e c o n t i n u e d p r o f i t a b l y - the c o n t r a c t w i t h I r a n w h i c h
c o u l d h a v e l a r g e c o n s e q u e n c e s f o r t h e b a l a n c e of p a y m e n t s , t h e
c o m m e r c i a l v e h i c l e b u s i n e s s , t h e A v e n g e r e n g i n e a n d the s p a r e p a r t s
business.
It w o u l d be a m i s t a k e t o a l l o w these w o r t h w h i l e a c t i v i t i e s
to be c l o s e d b e c a u s e the c o m p a n y a s a whole was unviable.
The
C h r y s l e r C o r p o r a t i o n would not t h e m s e l v e s be p r o p o s i n g a c o n t r a c t i o n
r a t h e r t h a n a c l o s u r e i f the c o n t r a c t e d c o m p a n y h a d h o p r o s p e c t o f
viability.
T h e r e p o r t b y C o o p e r s & L/ybrand w a s n o t t o t a l l y
u n f a v o u r a b l e to s c h e m e B.
O n the other hand it w a s a r g u e d that
i f t h e G o v e r n m e n t s u p p o r t e d o n e u n v i a b l e c o m p a n y b e c a u s e of the
f e a r o f c o n s e q u e n c e s o f c l o s u r e t h i s w o u l d l e a d t o a s e r i e s of o t h e r
such c a s e s .
A n u m b e r of options had a l r e a d y b e e n e x p l o r e d o v e r
the p r e v i o u s 4 w e e k s .
W h a t e v e r m i g h t b e the v i a b i l i t y of s c h e m e B ,
i t w a s n o t f e a s i b l e b e c a u s e i t i n v o l v e d the m o v e m e n t o f w o r k f r o m t h e
Midlands to Scotland.
I f t h e c l o s u r e w e n t a h e a d n o w the o d i u m f o r
i t w o u l d a t l e a s t b e s h a r e d w i t h the C h r y s l e r C o r p o r a t i o n .
If the
G o v e r n m e n t t o o k o v e r the C o m p a n y a n y s u b s e q u e n t c l o s u r e s w o u l d
b e its r e s p o n s i b i l i t y a l o n e , y e t if the contraction plans l e d to
i n d u s t r i a l d i s p u t e s the p l a n s m i g h t h a v e t o b e a b a n d o n e d w i t h i n a
m o n t h or at s o m e t i m e l a t e r w h e n i t w a s e v e n m o r e d i f f i c u l t f o r the
Government.
T h e r e w o u l d a l w a y s be s t r o n g a r g u m e n t s a g a i n s t
t a k i n g a p a i n f u l d e c i s i o n b u t i f i t w e r e not f a c e d t h e G o v e r n m e n t ' s
i n d u s t r i a l and e c o n o m i c p o l i c i e s w o u l d b e d i s c r e d i t e d .
T h e i s s u e of
d e v o l u t i o n c o u l d n o t j u s t i f y c o n t i n u a l m e a s u r e s t o a p p e a s e the
nationalist movements.
T h e r e w a s a l r e a d y a s t r o n g b a c k l a s h in
E n g l a n d a g a i n s t t h e p r o p o s a l s on d e v o l u t i o n and a d d i t i o n a l c o n c e s s i o n s
w o u l d m e a n that t h e d e v o l u t i o n l e g i s l a t i o n w o u l d n o t b e p a s s e d .
In further discussion i t was questioned whether the c o s t c o m p a r i s o n s
w h i c h had b e e n quoted w a r e c o r r e c t .
If s c h e m e B w e r e s u p p o r t e d i t
w o u l d d e f e r b u t n o t a v e r t t h e c o s t s of c l o s u r e , t h e s e s h o u l d t h e r e f o r e
a l s o b e t a k e n i n t o a c c o u n t a n d t h e e v e n t u a l c o o t w o u l d b e i n the
r e g i o n of £260 m i l l i o n .
F u r t h e r m o r e if scheme B went ahead some
t w o f i f t h s of C h r y s l e r ' s e m p l o y e e s w o u l d s t i l l b e c o m e r e d u n d a n t a n d
i n c o n s e q u e n c e c o s t s of £ 6 0 m i l l i o n , t w o f i f t h s o f the c o s t s of c o m p l e t e
c l o s u r e , w o u l d s t i l l f a l l on t h e G o v e r n m e n t .
It was also questioned
w h e t h e r t h e e s t i m a t e d c o s t s of c l o s u r e t o o k s u f f i c i e n t a c c o u n t of the
i n c r e a s e in e m p l o y m e n t by other B r i t i s h manufacturers which could
f o l l o w the i m p o s i t i o n of i m p o r t c o n t r o l s and w h e t h e r i t w a s r i g h t t o
a s s u m e that t h e r e w o u l d be a net i n c r e a s e of u n e m p l o y m e n t of
5 5 , 000 f o r a c o m p l e t e
year.
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 the d i s c u s s i o n , s a i d t h a t t h e
Cabinet would n e e d t o r e s u m e their discussion the following day.
T h e a r g u m e n t s w h i c h he h a d h e a r d s o f a r d i d n o t s e e m t o h i m t o
a n s w e r c o m p l e t e l y t h e c a s e m a d e b y the S e c r e t a r y o f S t a t e f o r
Industry.
B e f o r e the d i s c u s s i o n was r e s u m e d h o w e v e r s o m e
a d d i t i o n a l c o u r s e of a c t i o n s h o u l d b e i n v e s t i g a t e d u r g e n t l y .
First
the G o v e r n m e n t m i g h t i t s e l f t a k e o v e r L i n w o o d a n d a r r a n g e the
p r o d u c t i o n and m a r k e t i n g of L a n d R o v e r s and R a n g e R o v e r s .
If an
o r d e r w a s p l a c e d P*V t h e G o v e r n m e n t s a c c o u n t t h e r e m i g h t b e g o o d
p r o s p e c t s of the v e h i c l e s b e i n g s o l d o v e r s e a s w h e n w o r l d e c o n o m i c
activity increased.
The a r m e d f o r c e s might also increase their
purchases.
T h e s e c o n d c o u r s e w o u l d be to i n s i s t that i f C h r y s l e r
c l o s e d the L i n w o o d p l a n t s h o u l d b e t r a n s f e r r e d f r e e o f c h a r g e t o t h e
Government.
T h i s w o u l d g i v e s o m e a s s u r a n c e a t l e a s t that the
G o v e r n m e n t w o u l d m a k e e v e r y e f f o r t to e n s u r e that a l t e r n a t i v e
e m p l o y m e n t w a s b r o u g h t t h e r e a t the e a r l i e s t p o s s i b l e m o m e n t .
I t w o u l d a l s o b e h e l p f u l i f the C h a n c e l l o r of the D u c h y of L a n c a s t e r
w o u l d i n v o l v e h i m s e l f , b e f o r e t h e i r n e x t m e e t i n g in a n e x a m i n a t i o n
o f the p r a c t i c a b i l i t y o f s e c u r i n g t h e c o n t i n u e d o p e r a t i o n o f t h o s e
p a r t s of C h r y s l e r S b u s i n e s s w h i c h h a d a v i a b l e f u t u r e .
In d o i n g
s o he s h o u l d c o n c e n t r a t e p a r t i c u l a r l y on t h e p o s s i b i l i t y o f p r e s e r v i n g
e m p l o y m e n t at L i n w o o d .
The Cabinet
1.
­
T o o k note, with a p p r o v a l ,
of the P r i m e
Ministers
s u m m i n g up of t h e i r d i s c u s s i o n and a g r e e d t h a t i t
should be r e s u m e d at their next m e e t i n g ,
2.
I n v i t e d the S e c r e t a r y of S t a t e f o r I n d u s t r y to study,
b e f o r e t h e n e x t m e e t i n g , t h e p o s s i b i l i t y of p r o d u c i n g
L a n d R o v e r s and R a n g e R o v e r s at C h r y s l e r S L i n w o o d
p l a n t on t h e b a s i s of a G o v e r n m e n t o r d e r f o r t h o s e
vehicles.
H e s h o u l d a l s o s t u d y the p o s s i b i l i t y of
i n s i s t i n g on t h e t r a n s f e r of the L i n w o o d p l a n t t o the
G o v e r n m e n t i n t h e e v e n t of t h e c l o s u r e of C h r y s l e r ( U K ) L t d .
3.
I n v i t e d the C h a n c e l l o r o f t h e D u c h y of L a n c a s t e r ,
i n c o n s u l t a t i o n w i t h the S e c r e t a r y of State f o r I n d u s t r y ,
t o e x p l o r e t h e p r a c t i c a b i l i t y of m a i n t a i n i n g i n o p e r a t i o n
t h o s e p a r t s o f t h e b u s i n e s s of C h r y s l e r (UK) L t d w h i c h
w e r e p r o f i t a b l e i n t h e e v e n t of t h e c l o s u r e o f t h e
c o m p a n y a s a w h o l e , t o c o n c e n t r a t e p a r t i c u l a r l y on the
p o s s i b i l i t y o f c o n t i n u i n g s o m e o f the o p e r a t i o n s a t L i n w o o d ;
and t o r e p o r t t o t h e C a b i n e t a t t h e i r n e x t m e e t i n g .
Cabinet
Office
4 December
1975