(c) crown copyright
Catalogue Reference:CAB/128/10
Image Reference:0029
THIS
DOCUMENT
IS
THE PROPERTY
Printed
OP
HIS
for the Cabinet.
BRITANNIC
MAJESTY'S
GOVERNMENT
October 1947
Copy N o ,
SECRET
C M . (47)
78th Conclusions
C A B I N E T 7 8 (47)
CONCLUSIONS
of a Meeting of the Cabinet
on Thursday,
2nd October,
held at 10 Downing
1947, at 11 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
Chair).
The R i g h t H o n . E R N E S T B E V I N , M . P . , T h e R i g h t H o n . H U G H DALTON, M . P . ,
Chancellor of the E x c h e q u e r .
Secretary of State for F o r e i g n
Affairs.
The R i g h t H o n . S i r STAFFORD C R I P P S , T h e R i g h t H o n . A . V . ALEXANDER,
M . P . , M i n i s t e r of Defence.
K . C . , M . P . , M i n i s t e r for Economic
Affairs.
The Right Hon. J . CHUTER E D E , M.P., The R i g h t Hon. J . WESTWOOD, M.P.,
S e c r e t a r y of S t a t e f o r Scotland.
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
Department.
T h e R i g h t H o n . G. A . I S A A C S , 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 BEVAN, M . P . ,
M i n i s t e r of H e a l t h .
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 R i g h t H o n . 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 .
T h e R i g h t H o n . T. W I L L I A M S , M . P . ,
Minister
of
Agriculture
Fisheries.
T h e R i g h t H o n . LORD INMAN,
P r i v y Seal.
and
Lord
T h e following w e r e also p r e s e n t :
Mr. HAROLD WILSON, M.P.,
President
of t h e B o a r d of T r a d e (Designate).
The Right Hon. VISCOUNT HALL, F i r s t
L o r d of t h e A d m i r a l t y (Items 3 - 4 ) .
The Right H o n . P . J - NOEL-BAKER,
M . P . , S e c r e t a r y of S t a t e for A i r
(Items 3-4).
The Right Hon. A L F R E D BARNES, M . P . ,
M i n i s t e r of T r a n s p o r t (Item 4).
M r . H . T. N . G A I T S K E L L , M . P . , P a r l i a -
m e n t a r y Secretary, M i n i s t r y of F u e l
a n d P o w e r (Item 5). A d m i r a l Sir J O H N CUNNINGHAM,
First
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.
T h e R i g h t Hon. F . J . BELLENGER, M . P . ,
Secretary of S t a t e f o r W a r
3-4).
The Right Hon. JOHN WILMOT, M.P.,
M i n i s t e r of S u p p l y (Item 5).
M r . H . A . MARQUAND, M . P . , P a y m a s t e r -
G e n e r a l (Item 5).
M a r s h a l of t h e R o y a l A i r Force T H E
L O R D T E D D E R , Chief of t h e A i r Staff
(Item 3).
Field-Marshal VISCOUNT MONTGOMERY OF A L A M E I N , Chief of t h e I m p e r i a l
G e n e r a l Staff (Item 3).
Sea L o r d a n d Chief of N a v a l Staff
(Item 3). Secretariat S i r NORMAN BROOK.
Lieut.-General
Sir L E S L I E
HOLLIS.
M r . W . S. M U R R I E .
34393-3
(Items
B
A
C A B I N E T 78 (47)
CONTENTS.
Subject.
L o r d M a y o r ' s D i n n e r ....
Burma
....
Constitutional
Position.
S t r e n g t h of t h e A r m e d F o r c e s
Petrol Rationing
A l l o w a n c e s for T o u r i s t s a n d P e r s o n s o n L e a v e .
Steel
Steel Distribution
Scheme.
Lord M a y o r s
Diane?.
1.
The Prime Minister
said t h a t he h a d been considering
w h e t h e r the L o r d M a y o r ' s D i n n e r should be h e l d t h i s y e a r n o t w i t h ­
s t a n d i n g the C a b i n e f s decision t h a t i n the p r e s e n t economic s i t u a ­
tion the n u m b e r s a t t e n d i n g public b a n q u e t s should n o t n o r m a l l y
exceed one h u n d r e d . T h e C i t y a u t h o r i t i e s w e r e p r e p a r e d to l i m i t
t h e n u m b e r of guests on t h i s occasion to a b o u t t h r e e h u n d r e d , b u t if
a smaller n u m b e r w e r e insisted upon i t would n o t be p r a c t i c a b l e to
hold the D i n n e r . If it w e r e not held, a long t r a d i t i o n would be
broken. H e w a s himself inclined to t h i n k t h a t i t would be r i g h t
t h a t the D i n n e r should be held on the reduced scale proposed.
T h e C a b i n e t endorsed the P r i m e M i n i s t e r s view.
The C a b i n e t I n v i t e d the M i n i s t e r of F o o d to m a k e the necessary
a r r a n g e m e n t s t o enable the L o r d M a y o r ' s D i n n e r t o he
held n o t w i t h s t a n d i n g the O r d e r l i m i t i n g the n u m b e r of
g u e s t s a t p u b l i c b a n q u e t s ; a n d t o a r r a n g e for the City
a u t h o r i t i e s to issue i n advance a p u b l i c announcement
e x p l a i n i n g t h e special circumstances w h i c h w a r r a n t e d the
holding of t h i s D i n n e r .
Burma.
Constitutional
Position.
(Previous
Beference:
C M . (47)63rd
Conclusions,
M i n u t e 2.)
2. T h e Cabinet considered a m e m o r a n d u m by the S e c r e t a r y of
S t a t e for B u r m a ( C P . (47) 275) on the p r o g r e s s of the n e g o t i a t i o n s
for a t r e a t y r e g u l a t i n g t h e t r a n s f e r of p o w e r i n B u r m a .
The Secretary of State for Burma s a i d t h a t good progress h a d
made w i t h these negotiations. T h e financial a n d commercial
clauses of the t r e a t y were now under discussion w i t h a F i n a n c i a l
Mission from B u r m a ; a n d i t w a s hoped t h a t t h e t r e a t y as a whole
would be r e a d y for s i g n a t u r e by 17th October. T h e C o n s t i t u e n t
Assembly in B u r m a h a d completed the p r e p a r a t i o n of the new con­
s t i t u t i o n for a n i n d e p e n d e n t B u r m a , a n d t h i s w o u l d come into force
on the d a y a p p o i n t e d for the t r a n s f e r of p o w e r i n the legislation
to be enacted by the U n i t e d K i n g d o m P a r l i a m e n t . The d r a f t t r e a t y
contained a clause recognising the independence of B u r m a , a n d p r o ­
vided t h a t ratifications should be exchanged on the d a y a p p o i n t e d
for the t r a n s f e r of power. T h e t r e a t y would t h e n come into force.
T h e r i g h t s of the P a r l i a m e n t a t W e s t m i n s t e r h a d t h u s been fully
s a f e g u a r d e d , since t h e ratification a n d coining i n t o operation of the
t r e a t y w o u l d be c o n t i n g e n t on the p a s s i n g of t h e necessary legisla­
tion in the U n i t e d K i n g d o m .
D e e n
The Prime Minister said t h a t the p r o g r e s s of these n e g o t i a t i o n s
h a d been k e p t u n d e r review by the I n d i a a n d B u r m a C o m m i t t e e ;
a n d he advised the C a b i n e t to a p p r o v e t h e procedure outlined i n
C P . (47) 275.
I n discussion the C a b i n e t expressed t h e i r r e g r e t t h a t the p r o ­
visional Government of B u r m a h a d f o u n d themselves unable to resist
the political p r e s s u r e i n B u r m a in favour of secession from the
B r i t i s h Commonwealth. T h o u g h the t r e a t y would provide close ties
between B u r m a a n d the U n i t e d Kingdom, B u r m a would inevitably
suffer d i s a d v a n t a g e s t h r o u g h ceasing to be a member of the B r i t i s h
Commonwealth.
The
Cabinet—
A p p r o v e d the p r o c e d u r e proposed i n C P . (47) 275 for t h e
conclusion of t h e t r e a t y r e g u l a t i n g t h e t r a n s f e r of p o w e r
in Burma.
34393-3 S t r e n g t h of
the Armed
Forces.
(Previous
Eeference:
CM. ( 4 7 ) 7 0 t h
Conclusions,
M i n u t e 2.)
3. T h e Cabinet considered a m e m o r a n d u m by the Minister of
Defence ( C P . (47) 272) r e p o r t i n g the conclusions reached by the
Defence Committee on the s t r e n g t h of the A r m e d Forces d u r i n g the
period u p to 31st M a r c h , 1949.
The Minister
of Defence said t h a t the recommendations now
submitted to the Cabinet involved very s u b s t a n t i a l reductions, both
i
e n a n d i n money, as compared w i t h the proposals orginally
p t f o r w a r d by the Service M i n i s t e r s a n d the M i n i s t e r of Supply.
Between 30th September, 1947, a n d 31st M a r c h , 1949, there would
be a n e t reduction of 514,000 i n the s t r e n g t h of the A r m e d Forces;
a n d the o r i g i n a l forecasts of a total s t r e n g t h a t 31st March, 1948,
of 1,087,000 i n the A r m e d Forces and of 450,000 i n d u s t r i a l workers
engaged on production, research and development for the Services
would be reduced by 150,000 a n d 100,000 respectively. H e was
satisfied, for the reasons given i n p a r a g r a p h 9 of C P . (47) 272, that
i t would not be possible to secure a more r a p i d reduction i n the
s t r e n g t h of the A r m e d Forces over the p e r i o d u p to 31st March,
1949. I n p a r a g r a p h 15 of the m e m o r a n d u m annexed to C P . (47) 272
he h a d i n d i c a t e d t h a t the total of the 1948-49 Defence Estimates
w a s likely to be £ 7 1 1 million. This figure would be the subject
of f u r t h e r e x a m i n a t i o n a n d the Cabinet were not asked to approve
i t at this stage. If, however, the Cabinet a p p r o v e d his proposals
r e g a r d i n g the s t r e n g t h of the A r m e d Forces i t would be difficult
to make a n y m a t e r i a l reduction in the e s t i m a t e d e x p e n d i t u r e . At
t h e same time, i t w a s h i s long-term a i m to secure p r o p e r l y balanced
a n d efficient peace-time Forces at a n a n n u a l cost not exceeding
£ 6 0 0 million. The proposal for reducing the s t r e n g t h of the Armed
Forces to 937,000 by 31st M a r c h , 1948, w a s based on c e r t a i n assump­
tions w i t h r e g a r d to the l i q u i d a t i o n of overseas commitments and,
as would be seen from p a r a g r a p h 8 of C P . (47) 272, it was not by
any means c e r t a i n t h a t the hopes on which the p l a n n e d reduction
w a s based would be realised. The Cabinet would note t h a t the
proposals for the period u p to 31st M a r c h , 1949, involved the
acceptance of serious political a n d s t r a t e g i c risks a r i s i n g from the
w e a k e n i n g of our Forces overseas on the lines i n d i c a t e d i n para­
g r a p h 19 of the m e m o r a n d u m annexed to C P . (47) 272. There was
also the possibility of considerable political difficulties a t home if
i t should prove necessary, for example, to p u t on a care a n d main­
tenance basis one of the s o u t h e r n Dockyards.
n
m
U
The Chancellor of the Exchequer
said t h a t he supported the
proposals in C P . (47) 272, though he h a d been d i s a p p o i n t e d that
t h e r e d u c t i o n in the s t r e n g t h of the A r m e d Forces to 713,000 could
not be accelerated. H e recalled t h a t t h e Defence Committee had
a g r e e d t h a t the possibility of reducing the numbers employed in
the A r m y on s t a t i c d u t i e s a n d the numbers of civilians employed
by the Services should be examined a n d pointed out that, pending
t h e results of these studies, i t should not be assumed t h a t the con­
sequences i n d i c a t e d i n p a r a g r a p h 19 of the m e m o r a n d u m annexed
t o C P . (47) 272 would necessarily flow from acceptance of the
Defence Committee's recommendations. H e must reserve h i s posi­
tion w i t h r e g a r d to the estimated cost of the A r m e d Forces in
1948-49.
The Foreign Secretary
said t h a t the foreign policy of His
M a j e s t y ' s Government m u s t be backed by a d e q u a t e A r m e d Forces.
F o r t h i s reason the necessary r e o r g a n i s a t i o n of the A r m e d Forces
m u s t be c a r r i e d o u t w i t h all speed. E v e n if every effort were made,
i t looked as though i t would be some y e a r s before the power of
defence would have developed sufficiently to c o u n t e r the new weapons
of offence. Savings i n m a n - p o w e r achieved by r e d u c i n g the numbers
employed on s t a t i c d u t i e s or as civilians should be reflected in a
s t r e n g t h e n i n g of the c o m b a t a n t element of the A r m e d Forces. When
the proposals were made public the financial p i c t u r e should be fairly
presented. For this purpose i t was essential to show not merely
the total cost, but also the dollar cost, of m a i n t a i n i n g forces overseas.
The Defence Committee h a d invited t h e Chancellor of the Exchequer
on 18th September to s u p p l y figures on t h i s point. Again, the
Services should be given c r e d i t for the c o n t r i b u t i o n w h i c h they m a d e
to t h e n a t i o n a l economy by c a r r y i n g o u t w o r k w h i c h would other­
wise have to be done by civilians. A c c o u n t should also be t a k e n of
the receipts from the disposal of s u r p l u s Service stores a n d of t h e
benefits derived from our occupation of G e r m a n y a n d from t h e
employment of p r i s o n e r s of w a r i n t h i s country.
I n f u r t h e r discussion t h e following p o i n t s were m a d e :—
(a) The First Lord of the A dmiralty p o i n t e d Out t h a t the reduc­
tion in the s t r e n g t h of the R o y a l Navy t o a peace-time level would
be c a r r i e d out i n 6 i n s t e a d of 18 months a n d t h i s m u s t involve, a t
least for a time, a very large r e d u c t i o n in its. effective s t r e n g t h .
I n p a r t i c u l a r , there would have to be a heavy cut i n the size of the
B r i t i s h Pacific Fleet, w h i c h would seriously w e a k e n the political
a n d economic influence of the U n i t e d K i n g d o m i n t h e Pacific. T h e
i n f o r m a t i o n given i n p a r a g r a p h 19 of t h e m e m o r a n d u m a n n e x e d to
C P . (47) 272 was, however, only designed to give a measure of the
consequences which would flow from acceptance of the proposals a n d
he wished to r e t a i n freedom to make such a d j u s t m e n t s as would
enable t h e m a n - p o w e r available to be used to the best a d v a n t a g e .
(b) The Secretary
of State for Air said t h a t the acceleration
of the r e d u c t i o n in the s t r e n g t h of the Forces would have t h e effect
of i n c r e a s i n g still f u r t h e r the d i s p a r i t i e s between the d a t e s of
release of m e n i n the same age a n d l e n g t h of service g r o u p b u t i n
different b r a n c h e s a n d t r a d e s .
. (c) The Chief of the Air Staff e m p h a s i s e d t h a t the proposals
in C P . (47) 272 were based on t h e a s s u m p t i o n t h a t there would be
no m a j o r w a r for the n e x t five years. Moreover, t h e a d d i t i o n a l dis­
iocation w h i c h the A r m e d Forces would suffer m a d e i t very doubtful
w h e t h e r they would be able, for some time to come, to u n d e r t a k e
any fresh commitments which were n o t now foreseen.
(d) I n p r e s e n t i n g the proposals to P a r l i a m e n t i t would be
i m p o r t a n t to d i s t i n g u i s h t e r m i n a l from c u r r e n t e x p e n d i t u r e a n d to
avoid inflating the n u m b e r s of w o r k e r s e n g a g e d on p r o d u c t i o n for
the Services by i n c l u d i n g those who were m a k i n g only a remote a n d
i n d i r e c t c o n t r i b u t i o n or were employed on the p r o d u c t i o n of supplies
which members of the A r m e d Forces would consume if they w e r e
civilians. I t would also be desirable t o show t h a t the proposed
reductions i n the s t r e n g t h of the A r m e d Forces were n o t being
obtained a t the expense of a n increase i n t h e n u m b e r of civilians
employed by the Services.
(e) T h e Service D e p a r t m e n t s a n d t h e M i n i s t r y of S u p p l y w e r e
c o n c e n t r a t i n g to the g r e a t e s t possible e x t e n t o n research a n d develop­
ment a n d h a d cut t h e i r p r o d u c t i o n to a m i n i m u m . I t w a s difficult
to p l a n t h e development of n e w w e a p o n s in the absence of a clear
p i c t u r e of the lines on which a n y f u t u r e w a r would be f o u g h t b u t
such g u i d a n c e a s the Defence Research P o l i c y Committee h a d been
able to give w a s being applied. M u c h of t h e r e s e a r c h u n d e r t a k e n
for the Services w a s of a f u n d a m e n t a l c h a r a c t e r a n d its results
were of benefit to i n d u s t r y .
(/) I f the p l a n n e d r e d u c t i o n i n t h e s t r e n g t h of the A r m e d
Forces i n t h e p e r i o d u p to 31st March, 1948, w a s to be c a r r i e d out,
an a n n o u n c e m e n t about the age a n d l e n g t h of service g r o u p s to be
released i n the first q u a r t e r of 1948 m u s t be m a d e by about the
12th October; and, since d u r i n g this p e r i o d t h e r e would be wide dis­
p a r i t i e s in the dates of release of m e n i n the same g r o u p , a n y
such a n n o u n c e m e n t should give a full e x p l a n a t i o n of w h a t w a s p r o ­
posed, even t h o u g h t h i s m e a n t a n t i c i p a t i n g to some e x t e n t the
general s t a t e m e n t Avhich would be m a d e i n the Debate on the
A d d r e s s . T h e announcement should m a k e i t clear t h a t the n e w
decisions would not affect the dates of release of men d u e to be
released before 31st December, 1947.
(g) T h e Service D e p a r t m e n t s should ensure t h a t any a d d i t i o n a l
h u t t e d accommodation which m i g h t be released i n consequence of
the proposals i n C P . (47) 272 w a s not occupied by s q u a t t e r s .
T h e Cabinet—
(1) A p p r o v e d the proposals i n C P . (47) 272 for reducing the
s t r e n g t h of the A r m e d Forces to 937,000 by 31st March,
1948, and to 713,000 by 31st M a r c h , 1949;
(2) A g r e e d t h a t the p l a n n i n g assumptions a n d the s t r a t e g i c and
political risks i n d i c a t e d in p a r a g r a p h s 4 and 5 of
C P . (47) 272 should be accepted;
(3) Took note t h a t the p l a n n e d reduction of the s t r e n g t h of the
A r m e d Forces t o 937,000 a t 31st M a r c h , 1948, was based
on c e r t a i n assumptions w i t h r e g a r d to the liquidation
of overseas commitments which m i g h t not be realised;
(4) A g r e e d t h a t the N a t i o n a l Service i n t a k e i n t o the three
Services should be reduced to a p p r o x i m a t e l y 150,000
i n 1948-49 a n d took note t h a t ways a n d means of
achieving this r e d u c t i o n were being u r g e n t l y considered;
(5) A g r e e d t h a t the p o i n t s m a d e by the F o r e i g n Secretary in
the Cabinet's discussion a n d those noted i n p a r a g r a p h (d)
above should be t a k e n into account i n presenting the
G o v e r n m e n t s proposals to P a r l i a m e n t ;
(6) A g r e e d t h a t an announcement about t h e releases to be made
i n the first q u a r t e r of 1948 would have to be made by
a b o u t 12th October, a n d invited the M i n i s t e r of Defence,
i n consultation w i t h the M i n i s t e r of L a b o u r and the
Service Ministers, to settle the terms of t h a t announce­
ment.
Petrol
Rationing.
Allowances
for
and
on
Tourists
Persons
Leave.
(Previous
Eef erence:
C.M.(47)74th
Conclusions,
Minute
2.)
4. The Cabinet considered a m e m o r a n d u m by the Minister
of F u e l a n d P o w e r ( C P . (47) 274) on the question whether, after
the w i t h d r a w a l of the basic petrol ration, allowances of petrol should
continue to be given to (i) t o u r i s t s visiting the U n i t e d K i n g d o m ;
and (ii) Service men and civilians on leave in the U n i t e d Kngdom.
T h e r e w a s general a g r e e m e n t that, as no basic r a t i o n was to
be given to motorists resident i n t h i s country, there w a s no justifica­
tion for giving petrol allowances as of r i g h t to all Service men and
civilians v i s i t i n g this country on leave. The Secretary of State for
War asked, however, t h a t members of the Services should not be
deprived of the " end of w a r leave " allowance of petrol which in
effect formed p a r t of their demobilisation benefits. The Cabinet con­
sidered t h a t even these allowances should not i n f u t u r e be given as
of r i g h t : t h e g r a n t of t h e allowances should be a m a t t e r for the
discretion of the issuing a u t h o r i t i e s , though t h e discretion might be
exercised fairly freely.
A s r e g a r d s the allowances for tourists, it w a s pointed out that
the d i s a p p o i n t m e n t felt by motorists at the w i t h d r a w a l of the basic
r a t i o n would be increased if an allowance of petrol continued to
be available for foreign tourists. A t the same time, there was a
strong logical case for c o n t i n u i n g this allowance as p a r t of the
c a m p a i g n to a t t r a c t foreign t o u r i s t s for the purpose of increasing
our invisible exports. A n d it would be p a r t i c u l a r l y u n f o r t u n a t e if
these allowances w e r e w i t h d r a w n a t a time when special efforts
were being m a d e to a t t r a c t foreign tourists for the Olympic Games
in 1948. I n these circumstances i t would be preferable t h a t the
e x i s t i n g practice r e g a r d i n g the g r a n t of petrol allowances to
t o u r i s t s should r e m a i n u n d i s t u r b e d for t h e time being.
T h e Cabinet—
(1) A g r e e d t h a t Service men a n d civilians on leave in this
country should not in f u t u r e be entitled, as of right, to
a n y special allowances of p e t r o l ; but t h a t the issuing
a u t h o r i t i e s should exercise a fairly free discretion in
d e a l i n g w i t h a p p l i c a t i o n s by Service men for the grant
of " end of w a r leave " allowances of p e t r o l ;
(2) D e f e r r e d a final decision r e g a r d i n g the p e t r o l allowances
to be given to persons v i s i t i n g t h i s c o u n t r y as t o u r i s t s ,
on the u n d e r s t a n d i n g t h a t in the m e a n t i m e the e x i s t i n g
rules governing the g r a n t of petrol allowances to such
persons would be continued in force.
Steel.
5. T h e Cabinet h a d before them a m e m o r a n d u m by t h e P a y m a s t e r - G e n e r a l ( C P . (47) 269) covering the r e p o r t of the e n q u i r y
made, i n p u r s u a n c e of the C a b i n e f s decision of 9 t h September, into
t h e w o r k i n g of t h e e x i s t i n g m a c h i n e r y for controlling the issue of
steel to m a n u f a c t u r e r s .
Steel
Distribution
Scheme.
.
(Previous
Reference:
C M . (47) 75th
Conclusions,
M i n u t e 5.)
'
The Paymaster-General
said t h a t the e x i s t i n g scheme h a d
broken down m a i n l y because the t o t a l a m o u n t of t h e a u t h o r i s a t i o n s
(" M " forms) issued by D e p a r t m e n t s w a s f a r in excess of t h e
allocations m a d e to D e p a r t m e n t s . A subsidiary cause h a d been the
lack of a n y effective check o n the use m a d e of " M " f o r m s by m a n u ­
f a c t u r e r s . T o meet t h i s s i t u a t i o n , i t was proposed t h a t a new steel
currency should be s u b s t i t u t e d for the " M " form, by 1st A p r i l ,
1948, t h a t all orders for delivery by t h a t d a t e but u n d e l i v e r e d a t
t h a t d a t e should be cancelled, but t h a t o r d e r s a l r e a d y placed for
delivery after t h a t date should be v a l i d a t e d u n d e r the new currency.
A n y o r d e r s t h u s cancelled could be r e - a u t h o r i s e d by t h e sponsoring
D e p a r t m e n t , b u t only w i t h i n its e x i s t i n g allocation. D e p a r t m e n t s
should review ail o u t s t a n d i n g o r d e r s in the l i g h t of the new
economic s i t u a t i o n . A number of selected officers would be a p p o i n t e d
to supervise the w o r k i n g of the new scheme by v i s i t i n g firms pro­
ducing a n d consuming steel. All M i n i s t e r s in c h a r g e of D e p a r t ­
ments s p o n s o r i n g steel-consuming i n d u s t r i e s should t a k e special
steps to see t h a t the a u t h o r i s a t i o n s issued by t h e i r D e p a r t m e n t s did
not exceed t h e i r steel allocation. N o scheme of control could w o r k
effectively w i t h o u t the collaboration of i n d u s t r y ; a n d the m a j o r
steel-consuming i n d u s t r i e s should a p p o i n t liaison officers to m a i n ­
t a i n contact w i t h the I r o n a n d Steel B o a r d a n d the F e d e r a t i o n on
steel delivery problems. Finally, the P a y m a s t e r - G e n e r a l d r e w
special a t t e n t i o n to p a r a g r a p h 5 of his m e m o r a n d u m , in w h i c h i t
w a s p o i n t e d out t h a t the system of control over e n d - p r o d u c t s m u s t
be fortified by a careful w a t c h on t h e q u a n t i t y of labour employed
by less essential users of steel a n d , above all, by r e d u c i n g t h e
m o n e t a r y d e m a n d for steel for less essential purposes.
The Minister
for Economic Affairs,
The Minister
of
Supply
a n d The Parliamentary
Secretary, Ministry
of Fuel and Power (as
C h a i r m a n of the M a t e r i a l s Committee), spoke in s u p p o r t of the
new scheme of control recommended in C P . (47) 269.
I n discussion the following p o i n t s were r a i s e d :—
(a) I t w a s u n f o r t u n a t e t h a t the n e w form of a u t h o r i s a t i o n
could n o t be i n t r o d u c e d before 1st A p r i l , 1948. The
PaymasterGeneral a n d The Minister
of Supply said t h a t they would have
p r e f e r r e d to introduce the new scheme earlier, b u t were satisfied
t h a t it would be impracticable to do so.
The President
of the Board of Trade asked whether it would
be possible to enlist t h e assistance of the steel i n d u s t r y in securing
special p r i o r i t y , in t h e i n t e r v e n i n g six months, for o r d e r s w h i c h
were of special importance, e.g., for the e x p o r t t r a d e . The
Chairman
of the Materials
Committee
said t h a t he would discuss w i t h the
M i n i s t e r for Economic Affairs a n d the P r e s i d e n t of the B o a r d of
T r a d e how t h i s p o i n t could best be met.
(b) The Minister of Health suggested t h a t , i n w o r k i n g o u t the
details of t h e new scheme, the M i n i s t r y of S u p p l y m i g h t usefully
consult w i t h officials in his D e p a r t m e n t a n d i n t h e M i n i s t r y of
W o r k s w h o h a d experience in the w o r k i n g of s i m i l a r schemes for the
control of b u i l d i n g m a t e r i a l s .
(c) I n discussion of p a r a g r a p h 5 of C P . (47) 269, special
e m p h a s i s w a s l a i d on the difficulty of r e g u l a t i n g d i s t r i b u t i o n of
m a t e r i a l s by physical controls u n d e r conditions of inflationary pres­
sure. The Chancellor of the Exchequer said t h a t he h a d t h i s point
i n mind.
The C a b i n e t ­
(1) A p p r o v e d the r e p o r t annexed t o C P . (47) 2 6 9 ; a n d invited
the M i n i s t e r of Supply to a r r a n g e for the introduction
of a n e w scheme for controlling the issue of steel to
m a n u f a c t u r e r s on the lines recommended in t h a t report;
(2) I n s t r u c t e d the other D e p a r t m e n t s concerned t o collaborate
in t h e p r e p a r a t o r y measures r e q u i r e d to enable the new
scheme to be brought i n t o effect by 1st A p r i l , 1948, and
to consider f o r t h w i t h m e a n s of m a k i n g bulk authorisa­
tions as recommended in p a r a g r a p h s 7 (d)-(f) of the
r e p o r t annexed to C P . (47) 2 6 9 ;
(3) I n v i t e d all M i n i s t e r s in c h a r g e of D e p a r t m e n t s sponsoring
steel-consuming i n d u s t r i e s to review t h e arrangements
in force in their D e p a r t m e n t s for e n s u r i n g that
a u t h o r i s a t i o n s are n o t issued i n excess of the Depart­
m e n f s allocation;
(4) A g r e e d t h a t t h e Committee which h a d p r e p a r e d the report
annexed to C P . (47) 269 should continue in being, under
t h e C h a i r m a n s h i p of t h e P a y m a s t e r - G e n e r a l , to super­
vise the p r e p a r a t i o n of the n e w scheme of control.
Cabinet Office, S.W. 1,
2nd' October, 1947.