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CAB 195/20



C A B I N E T
M I N U T E S
C.C.(61) 46th Conclusions – C.C.(62) 32nd Conclusions

C.C. 46(61) 1st August, 1961
1. Tunisia [Enter M.R.
H. Specl. mtg. of Assembly – on pressure fr. Afro Asians. Strong pressure on France. They are saying they will handle it alone, w’out help from their friends.
2. Trafalgar Square: Demonstration [Enter J.H., Att.G.
R.A.B. Last occasion 826 arrests – at gt. inconvenience to Met. Police. Next time a similar no. might get committed to prison. Support view of Commr. tht. demonstration shd. be forbidden.
J.H. Only precedent 1956 – a sex maniac.
Att.G. Same nos. might well go in defiance of prohibition.
P.M. Para 6(a) is best ground for refusing – risk of breach of peace.
J.H. Express written intention to break the law – by sitting down (?)
Att.G. If there is evce of that, you can take action under Act of 1361 to get injunction.
P.M. Act on basis of para 6(a). If they switch to another Sunday, it is another mater.
AttG. X/ Refuse appln for this date. Then, if evce of intention to squat, proceed v. ringleaders under Act of 1361.
Agreed – as at X/.


  1. Parliament

R.A.B. Re-assemble 24/10. Business for that week. viz., 24 and 25 Oct. New session: 31/10 at 11.30a.m. Stansgate. St. Clair has taken his seat. Persuaded (by me this a.m.) not to apply for Chiltern Hundreds.

Hail. He shd. not resign unless he gets undertaking from S. tht. he won’t stand.
S.L.I. If that is to be the line, better to make such a statement soon.
D.S. V. strong case for doing that soon – don’t wait until autumn.
P.T. Yes: if he waits he will seem to be acting under pressure.

Agreed: Att.G. to draw up statement.


R.A.B. Still reserving decision on timing.

4. Public Expenditure [Enter R.W., E.P., P.M.G.

[Exit E.P. & P.M.G.
Memo. noted. Oversea expenditure also under review.
5. Birmingham Housing
M. As in memo.
H.B. Accept these conclns – tho’ wd. have preferred Swymmerton to Dawley. But Dawley at least needs no new announcement – I said 12 mos. ago we were considering it, & known tht. survey is being held. Tho’ I shall have to give some indication to B’ham deputn.
R.M. New town wd. compete with development areas: in respect of expansion in B’ham. Recognise this is a risk we must accept.
S.L.I. Agree no announcement. Swymmerton wd. be cheaper – by £2½ m. capital and £100,000 p.a.
H.B. But wd turn national liability into an asset. And I wd. not allow any B’ham firm to go to Dawley which cd. go to development area.
M. Wd. solve industrial as well as housing problem for B’ham.
Report approved in general.

[Exit R.W.



  1. Commercial Policy: Pigmeat

Hail. Issue as seen by E.P.C.

C.S. Assurance to buy 51,500 t. of pigmeat over 6-7 years: i.e. 3,000 over an existing 48,000. First long-term contract to iron-country. Moreover, bacon v. diff. qua Ty. We have adjusted guarantee to hold own herd level (reducg. cost fr. £40 – 20m.) whr. we can hold it terms on imports. This Polish contract wd. be 10% of total imports. Danish herd is increasing: must expect increased imports fr. them, which we can’t stop – unless market is depressed. Ireland, Canada – on C’wealth terms. Thus, Polish imports = only supply we can control & vary: if we accept long-term contract, we lose all flexibility. Risk tht. our subsidy will will be forced up. Also will tie our hands in negotiating v. diff. commodity with C. Market. Cd. we raise to 51,000 t. for one year – & say annually for future, tht. we wd. do our best to take this quantity.

R.M. We cdn’t cut down their 48,000 (not subject to contract) because effect on our trade. The 3,000 extra is not v. much.
C.S. But we shdn’t be able to buy 48,000 t. or anything like it fr. Poland if we enter the Six. If we ‘expand our trade’ with P. (eg in aircraft), what can we buy in return?
R.M. Not bacon – other things.
P.T. If we do it, add aircraft as well as ships. If we take the bacon, let’s have the trade. C.S. argument O.K. only if we assumed we could keep out Polish bacon.
R.M. Any cut we have to make cd. fall on the 48,000 t.
C.S. Only if they failed to take our goods – not because we didn’t want bacon. Can’t hope to solve agric. problems vis-à-vis Six if we tie ourselves to long-term contracts for bacon with Iron Curtain countries.
D.E. V. dangerous to let bacon imports depress prices to a point when our subsidy to home producers has to be increased by millions. Must keep our freedom to manage this problem.
C.S. Discussed bacon with Danish For. Minister. He is ready to accept some quantitative restn . But what will he say if we make this sort of contract with Poland?
P.M. Only quota for this is on Iron Curtain countries.


  1. But other countries sell on economic terms. Poles don’t. As with coal, they swamp market whenever it suits them.

E.M. Ships – employ 300 men and 200 on sub-contracts for (?) one year.


C.S. Market is static: consumption is not rising. All other suppliers are in C’wealth or in Six.
I.M. x/ Argument nicely balanced. But y’day’s statement surely swings in favour of C.S. view.
P.M. Yes: this contract for 3,000 wd. increase oblign to take the 48,000.

R.A.B. P.T. & then E.M. supported x/, in spite of their Departmental interests.

Agreed: Refrain from concluding this long-term contract with Poland.

No general statement re reducing 48,000 t. because of C. Market. Keep flexible.




  1. Wages Policy

S.L.I. Mtg. with l.a.’s this p.m. No diffy foreseen about expenditure. What do I say on wages? Read draft statement. Govt. views on increases (any & if so what) must be taken into a/c. Shall consider how to do this: & meet again in autumn.


H.B. l.a.’s want common front with Govt. Don’t suggest Govt. intervention to avoid their getting out of line. Foreshadow consultns to get common front.
D.E. Teachers – l.a.’s are out of line with us already.
H.B. But on this Minister has a role. On other services we haven’t.
Agreed: S.L.I. to concert words with H.B.

C.C. 47(61) 3rd August, 1961
1. Wages Policy [Enter R.W., E.P., P.M.G., M.R
S.L.I. Apart from matters reserved by Govt. from time to time, all wage claims in C. Service have for 40 yrs. been subject to arbitration.

Applcns pending or in course : we must therefore take a line v. soon.

Alternative courses – as in memo. Diffies. in 3rd course : a) the arbitrators might discount delay & accumulate no. of large post-dated cheques. A 4th course : we can’t avoid arbitn. procedures & can’t avoid being bound by awards - & hope arbitrators will take a/c of national interests : but I doubt if they wd : also disparity with classes (e.g. N.H.S) not covered by arbitration.

Three discussions in Cab. Cttees.

J.H. Either cause will come diffies. : but (iii) is the least difficult.

(i) or (ii) wd. cause immediate difficulties : set wrong atmosphere for pause : we shd. seem to be seeking a clash with Unions : system of arbitration wd. be gravely damaged in long-term.

Under course (iii) procedures of negotiation cd. be continued : they wd. even be prolonged. Will do the least damage to arbitration.

Will impress on aribitrators tht. Govt. consider the crisis serious.

P.T. Difficult – and crucial. Last round of wage increases was £100m : dwarfs what we can do on public expenditure.

Choice : accept arbitn. but reserve our posn. on amount and date.



or say we can’t change existg. procedure & will comply with it whenever we can’t avoid it.

On balance prefer course (iii).


E.P. Agree with analysis : but on principle believe we shd. not break agreements : but, when we are free, make no offers and decline arbitration.
I.M. (iii) represents destruction of arbitn.

Arbitn. – tho’ it catches headlines – affect only 7% of all increases.

Another possible course : Last time we were tough on N.H.S. clerks and on bus strike (where we stood firm on an arbitration award). Cd. we not do the same now? Stand on teachers : let M/L. choose a good Wages Council case to put back. Two or three examples shd. have effect.
E.M. Rlways. 8% behind. Claim is in. Cd. be taken to arbitration – when 8% wd. be awarded.
Hail. Policy now is tht. during the pause comparability is not conclusive.
J.H. I.M’s line won’t do the trick.

Govt. has reserved right, on policy, to decline to go arbitn. (App)

On chorley & equal pay we delayed as an act of policy.
M. (iii), is best we can do in C.S. because we have commitments (arbitn. agreement) wh. we must honour. But same doesn’t apply in wider field – incldg. rlwaymen.

Ch.H. To follow I.M. line we shd. have to wait for a claim in N.H.S. or Wages Council field. In C.S. we are bound by arbitn. agreement – unless we can say tht. pause is an act of policy comparable to those on a/c of which we have w’held claims fr. arbitn. in past. I believe it is. We cd. for this reason follow (iii). I support that.

J.M. I agree. If arbitrator awarded 7% when 4% was enough in present circs., intelligible to give 4% and have 3% in abeyance for later.
H.B. Agree. Mtg. with l.a.’s successful : they will support our line : But not if we allow C.S. arbitration to make a vent in our policy. Believe they wd. be ready to follow course (iii) also.
H.W. In penumbra, when we pay w’out control, can we not put Govt. case at an arbitration.
D.E. Purpose of pause : to give time to move to policy of ensuring tht. wages don’t outstrip production. Problems i) how to fix limit ; job for new planning organn. ii) w’in that total must be scope for betterment for certain classes.

Deduction in wp. of public sector : must take course (iii).

Test by teachers : no betterness if I cd. say “only £42m now : but when productivity rises, you will have then further £3½m.”
K. This is matter of high policy – and arbitn. can be modified on that account consistently with past practice.
P.M.G. Agree with para. 12. – which is consistent with course (iii), which I support.
R.A.B. Agree with I.M. and E.P. Major breach of arbitration. Cd. we do this as soon as Parlt. rises? Wd. worsen our stance for the situation in the autumn.
E.M. How on that basis am I to deal with rlwaymen’s claim?
C.S. If we don’t take course (iii), what employer in private sector will resist claims?
J.H. However unpalatable, unless we set this example, no private employer will enforce a pause.

R.W. ‘Correct’ course is that advocated by R.A.B., E.P. & I..M. But it won’t accuse a pause : it will destroy the policy.

Wd. it help to present this as part of policy (link with productivity) wh we are trying to work out.

Diffies. with natd. Indies. we seek to apply (iii) to them. We can ask them : but they mayn’t be willing to accept consequences (Strikes).

H. Cd we start procedure by wh. Govt. put national case in an arbitn. to which Govt. are not parties.
H.W. Need we make general statement? Deal only with cases as they arise?
J.H. It will leak.
Ch.H. Need for general statement – to show we mean business & within what field.
P.M. This is v. difficult.

One course : declare tht. comp. arbitn. is no longer appropriate : honour those in pipline : but have no more.

Another : present this as interim suspension, while we work out a new policy.

Under one or other (?) use argument in para 4 of Appendix.

Perhaps S.L.I. will circulate a draft announcement in the light of this discussion.

Discussion to be resumed on Friday a.m. 11.00.


[Enter Att.G.

2. South Africa.


K. Offl. Cttee. reports considered by Africa Cttee., who approved recommns. on most points w’out modification.

Nationality : anything more wd. suggest no value in remaining in c’wealth Trade Relations:

High Commission Territories.

Repeal of S. Africa Act. Wait & see re-action of S.A. twds Territories.

Sugar.

Tactics of negotiation.


R.A.B. Agree with these recommendns.
D.E. Sugar – rounds v. expensive.
K. If we don’t we shd. have to by Swazi sugar ourselves. Also this is sweetener to our general trading posn. with S. Africa.
S.L.I. We pay this price only if we get all our other points : it would then be worth it.
K. Min. of 4 yrs and max. of 7 yrs.

C.S. Hope we can limit to 4 yrs.

Cost of bargain : £2½m. 16/17.000t Swaziland out of 150.000t

P.M. Departmental responsibility. Outlined this plan.

Date reserved.

I.M. New Ministers cd. usefully be associated with negotns. [Exit Att.G.
3. Commercial Policy : Japan.
Memo. approved.
4. United Nations : Finance.
P.M. Let H. talk to Rusk. We can pay no more.

C.C.48(61). 4th August, 1961.
Wages Policy.
S.L.I. Cases ‘in pipeline’ in C. Service – gave facts.
A.H.G. Dislike course (iii). Post-dated cheques : irresponsibility : post war credits.

I wd. prefer to suspend arbitration for a period, but allow negotiation to continue – on basis tht. Govt. wd. be in control of latter.


J.H. But arbitn. is part of whole system of negotns. To suspend it will bedevil atmosphere & lose us all hope of co-opn.

Suggested alternatives for final sentence.


Att.G. Not in acc. with precedents, which were refusals to have arbitratn. at all on specific points.
M. Was doubtful y’day. Arbn. award w’out date will involve us in struggle in wh. we have little sympathy.
P.T. This draft is not course (iii). If you w’draw timing & staging, it is no longer arbitn. Better therefore to suspend.
R.A.B. Prefer to have no interference with arbitn. at all.

But, if we have to do something, wd. prefer J.H.’s course.


Ch.H. Do we intend, during pause, to evolve policy for relating wages to productivity? If so, interim action must be consistent with tht.

D.E. A no. of points – incldg. need for arbitn. under future policy, for betterment cases.

In the pause, at least as severe. Therefore, arbitrary guiding light now – as near zero as possible. V. short pause : say it will last only long enough to work out policy eg. 31/12. In so short a period, we cd. w’draw arbitn. by either of methods now suggested.

J.H. We shan’t get a rational wage policy w’in 12 months. Must be done with industry – and they won’t be hurried. No early answer. Avoid more action wh. will destroy their co-operation. Suspension of arbitn. wd. destroy all hope of co-operation.
S.L.I. No chance for new ‘planning’ machinery if it is thought to be primarily for wages.
I.M. In 1960 under 1% (0.4%) of all wages increases came from arbitn. machinery provided by State. It’s private sector that matters.

V. serious matter indeed to interfere with arbitn. If we must, I wd. prefer to suspend.

J.H. But in 1958 it was 9.9% of total.
P.M. Tho’ small, example to private industry is what matters.
S.L.I. ?Suspend arbitn. [while we discuss with Unions revision of 1925 agreement.]
J.H. Prefer [] added to course (iii), not to suspension.
K. Opposed to suspension. Prefer course (iii).

C.C.49(61). 5th September, 1961.
[Enter M.R.

1. Congo.


H. Confusion. Adoula P.M. : Gizenga Deputy P.M. (L. Govt.). Chance of United Govt. if Tshombe can be squared over Kantanga. Hammarsk. propose to remove advisers who have deterred T. from negotiating with Adula. Belg. mil. advisers removal consistent with resoln. of 21/2. But Sec Gen has gone further – accusing T.’s deputy of attempted murder, & open to charge of interfering with internal politics of Katanga. Disturbing to Salisbury & his colleagues here. Shall advise Sec-Genl not to try to remove T’s civil advisers : warning him we cd. not support U.N. in that. Sec. G. says he will apply same treatment to Kisenga’s advisers.

D.S. R.W. v. excited : has encouraged T. to resist, with informn. re our attitude towards U.N. intervention in Katanqa. I have urged him to refrain from more violent action.

Hail. Is U.N. action legal?
H. They intervened to support central Govt. of whole Congo. There is now such a Govt. again.
D.S. Self-determination?
H. If Katanga separated off, we shdn’t come to its defence. Wiser that it shd. adhern to Congo, esp. if that can be done peaceably.

Spaak is willing tht. mil. officers be repatriated.


P.M. Our objective is to avoid E/W. struggle between provinces in Congo.

We must support U.N. in trying to achieve this.


I.M. General problem. Frontier (Katanga) as unusal as most in Africa.

We shall have similar problems – e.g. Somalis & Zanzibar strip in Kenya. Kabaka in Uganda. We shall have same choice beween imposing unity or having a chaos.


D.S. Only practical course for T. is to get best terms he can : longer he waits, worse terms he will get.
2. Nuclear Tests.
H. Two explanns. i) far behind in rocketry : series planned some time.

Tests concerned with interceptn. of I.C.B.M.’s.

ii) timing : must have bn. deliberate vis-à-vis. Belgrade. Execution of tactics of intimidation followed at U.N. 1960. Hoped neutrals wd. press West to make concessions.
D.S. Neutrals’ protests pretty feeble epd. with their ferocity over Fr. tests cd. our repive make the point?
H. Will consider that. Neutrals are always more polite to those whom they most fear.
P.M. Need for careful thought on this. urge U.S. not to make any precipitate public statement.

M/D. to submit S.2: - appreciation of need for tests in atmosphere – to P.M.


3. Berlin.

H. Memo. states latest pos.

b) Build-up of mil. strengths. Idea of large-scale probes has bn. given up. U.S. realise any large reinforcement in Berlin wd. be at risk. But they do want to build up NATO strength. Danger in this. But U.K. may be right in thinking tht. w’out this K. might be tempted to nip off Berlin.

We can’t do much more w’out conscriptn. or reservists. U.S. don’t like this reply, wh. they have had, v. much. We have said we can’t do reservists until sitn. more critical.

c) Economic measures. U.S. want full p’umme – now they have put less reliance on mil. measures. Plan is to begin with air-lift then econ. measures escalating to full blockade. We have said this will hurt West more than Soviet bloc & suggd. they be limited to E. Germany. U.S. reject that. They regard blockade as alternative to war.
a) Neogtiation. We aimed at statement by end/Aug. contemplating mtg. in Oct. U.S. backed off when Fr. were so intransigent – fearing to expose difference betwn W. Powers. Settled for announcement only of mtg. on 14/9. U.S. Amb. will try in while to get K.’s view. Hope mtg of 14/9 will result in announcement. we hope to take to Grom.

Clear we must negotiate. Not clear what our tactics shd. be. Wide front will get us nowhere. May be better to start on access to W. Berlin, poss. thro’ Ambassadors.

Trying to play down crisis. All are searching for negotiating posn.
Miliary measures.
P.M. Cdn’t call up reservists w’out Parlt. Debate on that (w’out aim of negotn.) wd. weaken Western position.
H.W. In transition fr. conscript to regular basis – awkward moment for this crisis. BAOR is 3.000 under peace-strength of 55.000. Norstadt asking for war strength – out of ques w’out conscritn.

Measures we can take won’t increase real strength of B.A.O.R. Most I cd. offer is to hold it at present strength over next 6 months.

We cd. say tht., if thing got worse, we cd. unbody TA - ¼m.
H. U.S. accept tht. reservists wd. be short-term. Their criticism is tht. we can’t do other things to strengthen B.A.O.R.
H.W. Considering means of w’drawing specialists from other theatres

General approval for this attitude.


H.W. Helpful if NATO cd. be brought more into military picture.
H. Stikker is mtg. Ambassadorial Group.

Economic Measures.

R.M. Wdn’t harm Soviet Union. Mght hurt Poles & E. Germans.

Pity U.S. can’t be made to realise that.


S.L.I. Agree. We shd. look v. foolish. U.K. more damaged that Allies.

Action v. E. Germany wd. really bite.


E.M. To make it bite on shipping, NATO Powers alone wdn’t do.

Effect on U.K. v. bad.


H. But so would war. This isn’t contemplated until access to W. Berlin is completely blocked. This wd. be v. brink of war.
Hail. If it hurts no more than them, it will involve us in dipl. defeat – for we shd. have to w’draw it.
R.M. Do it, if at all, on moral grounds viz., not to trade with an enemy. But don’t suppose it will bring any economic pressure on R.
M. Blockade, in crisis. Most of war, has never bn. successful.
P.M. Must handle this tactfully with U.S. Might, it low level, but in some informn. re small economic effect on R.
D.E. Only frontier we cd. close is E/W. Germany. That wd. embarrass E. Germany.
H.W. Denial of N.A.T.O. airfields to R. aircraft would hurt them.
Hail. Wd. U.S. not realise it is nonsense if we demonstrated that.
P.M. Stress special advantage of quick action v. E. Germany.

Go slower on general blockade planning.


H. Cd. work that idea into concept of escalation, which we have

persuaded U.S. to accept.


S.L.I. Action v. E. Germany wd. hurt R. – to extent tht. they wd. have to sustain it, instead of exploiting it.

Agreed: work up advantages of action directed immediately to E.

Germany.

Stress lack of harm to R., not harm to U.K.

Also have on movement – airports, ports.
Negotiations.

H. Mtg. of 14/9 will follow Thompson’s talk with K. Hope to be able to talk to Gromyko.

French position. Negotn. must mean concesion. Transfer to E. Germany need not matter : for E. Germany will be trying to gain respect & won’t be likely to take awkward action on access.

Our feeling has bn tht. we wd. do better out of K. before a Treaty than out of Ulbrecht after it.

H.W. Gt. risk of outbreak of firing – thro’ tension in Berlin.
H.B. Fr. posn., tho’ logical, is v. dangerous.
S.L.I. Agree.
P.M. Fr. view based, not only in logic, but in pessimism and in cynical attitude tht. W. won’t fight over Berlin. Negotn. will lead to bad outcome – diplomatic defeat. Better therefore to wait : outcome may not be so bad.

Don’t share that conclusion. Br. opinion wd. not be content w’out negotiation. And build-up is not now so bad – more general negotiation tht. some concessions will have to be made.


4. United Nations : Represenation of China.
H. Para 6.

“Important question” is a device, but w’in the rules. We cd. support it. If carried & there were straight vote to seat Peking, we shd have to vote for it.


P.M. O.K. with A. & N.Z.?
D.S. Yes : if it’s agreed with U.S.

Agreed.
5. Kuwait. [Enter K.


H. Ruler has accepted concept of a stock-pile. He will pay. O.K.

Agreed : net is implement stock-pile plan.
H.W. If we assume we must retain capcity to intervene w’in 36 hours this is minimum. But I would like to be able to review it when we see what Arab League force is like.
S.L.I. Hope we can wait. Hope F.O. willalso consider pol. means of securing our interests in Kuwait. We might also balance value of K. against cost of its military defence.
P.M. Ruler will be under increasing pressure from Arab League.
H.W. A rather larger presence in Bahrein wd. pay a dividened. Need not pro-retain capacity to intervene in 36 ours.
6. Economic Situation.

S.L.I. Employment – pressures relieved a little, tho’ unusually large no, of school-leavers.

Production – seems to be rising.

Sterling – 2.80¾ satisfy. Reserves not too bad : tho’ 3rd week in Aug. was worrying (Berlin). Net improvement over Aug. is about £35m. Sept. shd. be reasonably good. But longer prognosis is gloomy.

Bank rate is damaging exports. Need study of provision of finance for exports.

Wages Policy. Mtgs. in Aug. C. Service Unions pained over arbitn., but will prob. confine themselves to protests. Industrial Unions less pained over doctrine & seem to be going pretty slow. M. rate are we to breach agreement? Must consider that. Mtg. Thurs. Employers’ Confedn. have circulated all members, urging them to resist claims. Test will be on Electricians’ claim. Generally, Unions don’t seem to be in a hurry for trouble.

Planning. Moderate T.U. leaders were most outspoken : but promised to consider. Alternative proposals. Looks as tho’ T.U.’s will co-operate. Employers are enthusiastic.

Must maintain momentum. Propose to put my 2nd alternative to both sides, in writing, by end/September. Will take some time to build up the “offices”, but a good deal of work cd. be done in m’while by W’hall. Wd. involve abolition of COPPI. and Planning Board, but I wd. keep N.P.A.C.I. and the other thing.

R.M. Right approach. Deprecate over-reference to Monnet.

Troubles ahead in motor industry – not adapting itself to increasingly seasonal variation in demand.

Imports – grain & steel dropping. Exports not rising enough – heavy cost of financing to a problem. We need system for cheaper money for exports. B/E., Ty. & B/T. working on this.
Hail Ty. shd. consider how to bring Research Counils into planning machine because effect on technological development in industry.
J.H. Won’t get consultn. before Tory Conference it cn. not wait until end Sept. Meeting of E.P.C. this week.

7. Teachers’ Salaries.


D.E. Teachers strongly v. legn. because fear general powers.

Have stood firm on £42m. and operation date. Also rejected suggn. of post-dated cheque for the remainder, after the pause.

C.C.A. have suggested tht. teachers might take £42m. if I w’draw insistence on differentials. This means taking money from graduates & giving it to young women. Quite wrong : but it might avert trouble. Prestige : Minister can settle sum : but can’t settle its distribution.
J.M. Hope Minister will stand firm – as we did in Scotland.
H.B. Yes : we shd. alienate those who supported our common-sense line.

Agreed : make no concession on differentials.



C.C.54(61). 9th October, 1961.
1. Public Investment.
E.B. Explained draft W. Paper.
D.E. Following year will not be much higher, but it builds up to a much larger inevitable volume in the third year. Rolls forward.
E.B. No commitment on figures, but I accept the point.

Memo. approved.


2. Importation of Liquid Methane.

R.W. Shd. have to give written statement of my reasons, to Gas Council – because of practice, not requirement.

P.M. Concerned about this. deG. will soon have to accept some decision on Algeria : my belief is that he will abandon it. Result can’t be foretold. Effect on Sahara.

Alternative sources – Nigeria etc., but transport cost wd. be too high. Oil cracking or coal wd. be competition.


R.W. Nigeria wd. be cheapest.

Total wd. be only 1/7th of needs – effect on prices wd. not therefore be v. marked.

Real reason for this is to get coal & oil interest to be more accommodatg. to gas industry because new source of competition.

Surprised tht. Ty. shd. be so ready to accept addn. of £4m. foreign exchange when we are treatg. defence and F.O. so roughly. Not ready to knock H. Kong about if we waste £4m. on this sort of thing.


R.A.B. Agree : cost may rise to £7m. or more. We need more informn.
R.W. The diffce. of £4m. puts case in worst light because assumes tht. all oil alternatives wd. be refined here. In fact, to reduce gas price, we shd have to import but are etc., which wd. cost as much in f. exchange.
E.B. By 1965/6. we shd. spend £4m. in f. exchange, but wd save £7m. on internal cost. This is justified on basis of greater efficiency.

Lower efficiency of gas industry wd. also be damaging.


R.M. Effect of stopping people from developing more efficient methods.
P.M. Let small Cttee., under R.A.B., consider arguments and report to me. (M/P., D.E., Ty. Minister etc.,)

[Exit R.W. Enter Att.G,

3. Trade Union Elections.

J.H. T.U.C. have taken effective action v. E.T.U.

In talks T.U.C. reacted violently to the v. mild suggns. I put fwd. Not only Woodcock, who is pathological about T.U.C. independence, but others much more moderate believed it wd. have serious effect on T.U. officiails (liable to questioning etc.,)

Thus, T.U.C. have taken effective action & will resent action by us. But, on other hand strong feelings among our supporters. Have therefore suggd. incln. of words in Q. Speech will imp. keep door open for further action. Quite ready to use vaguer & less specific words e.g. “My Govt. are considg. in consultn. with TUC, the problems raised by breaches of T.U. election rules”.

K. The more general form would be wiser.
Hail. Need we put anthing in? Regard for trouble with T.U.’s on wages & planning.
J.H. I see that. If I cd. get T.U.C. to say they wd. act in future case of fraud as they have done with E.T.U., I wd. be content. But there will be other cases – e.g. Fire Brigades Union.
I.M. E.T.U. case is triumph for democracy in T.U.’s
H.B. We shdn’t legislate early in session : so why put it in Q. Speech.

Agreed : no reference to this at all in Q. Speech.


4. Queen’s Speech : Prorogation [Exit Att.G.
P.M. Para 5. Will Mali etc., be offended at not being mentioned? Wd. some general formula be wiser? – in addn., if not in substitution.

F.O. to consider

Approved – subject to amendments.
5. The Cabinet.
H.M. Certain changes. Sole purpose to increase efficiency of our joint effort.

C.C. 55(61). 10th October, 1961.
1. Foreign Affairs. [Enter M.R.
a) Syria.

H. Nasser won’t oppose admn to A. League or U.N. We can therefore

recognise, in assocn with some others.
b) Laos.

Princes have met & recognised Souv Phouma as P.M. But the King

has said he won’t have him : this may be passing tantrum: hope so.
c) Congo.

Tsoumbe has sent message to Adula suggesty. delegn to Elizabethville:

& Adula has sent positive reply.
d) U.N.

R. hardened on Sec-Genl. (unitary) & are falling back on Troika


e) Berlin.

H. President & R. another mtg. Gromyko. As result G. has agreed to

further round of bi-laterals with U.S. – prob. in Moscow.

Alternative of early F.M. Mtg. wd. not have bn. acceptable to

France.


No other recent developmts. I will circulate memo. to bring Cab. up

to date.
P.M. I was uneasy: ‘phoned to President K. Have advised him to try to

bring Germans round – Fr. more likely then to follow.

Hopeful tht. French haven’t reproached R. for going rather

beyond agreed W. line. Handicapped until A. forms a Govt.
H. U.S. spokesmen in Moscow must have views of W. Govts. on main

points – suggd therefore mtg. of officials for this purpose, to

clear U.K./U.S. views with Fr. and G.
2. U. Nations: Resolution on Colonialism.
P.M. Discussed with Ministers concerned wtr. Nigeria shd. be encouraged

to submit moderate resolution on Colonialism in Africa.

Independence by 1970 – broadly in accord with our aims.

Agreed we shd. give broad support to this, as preferable to more

extreme resoln which R. & others wd. favour. Useful to divide Afro. Asians.

[Enter Att.G. & E.B.


3. Commonwealth Immigrants.
R.A.B. Will be awkward. Will be seen to be aimed at colour, tho’ in form

applicable to all. But strong pressure for it.

Flexible – because of class (c); but will give control.

Reluctantly concluded this is now inevitable.

Resoln on this to-morrow at Party Confce: must reserve announcement

of legn until Q. Speech.


K. For 6 months we have recognised “sad necessity”. Risk of social

tension: redn in housing standards. These outweigh C’wealth

sentiment and econ. advantages of col. man-power.

This will give control over flow – no dramatic redn.

D.S. Welcome this Bill. Better to face criticism once for all, rather than

risk series of incidents.

Want liberty to tell Dom. Govts in confidence, as soon as possible.

P.M. Take care to avoid leaks.
Att.G. Is it necessary to imply at Party Conference tht. we are going to act.
D.S. Embarrassing to me – before I have consulted Dom. Govts.
K. Form of Bill. Enabling Bill wd. be even more controversial.
E.B. Econ. advantage in having this man-power. Economically

indefensible to cut it down to a trickle. Don’t therefore imply

tht. (c) will be small.
J.H. Agree: categ. (c) is weak spot: constant pressure to disclose what

our quota shd. be.


Att.G. Deportn: extension beyond 5 yrs. to be discussed.
P.M. Party Conference. Say no announcemt. until we have communicated

with other C’wealth Govts, - still in process of consultn with

them. M’while only preliminary indication to C’wealth Govts.

[Exit Att.G.

4. Ghana.

D.S. Joint communiqué may be of some use – esp. on Colonial Policy.

But recognise this has only papered over cracks. We must continue

to consult – to avoid things becoming worse.

Nk. doesn’t want to go over to Communist bloc, but wants to get best

of both worlds.

Point for discn: Queen’s Visit.

a) Safety b) Political. On b. no doubt she will have warm

welcome & that cancellation wd. ruin our relns with

Ghana. Thus a. is the more important.

Went into a. with gt. care. Got from Nk. tht. if there were

disturbances anywhere, Queen wd. not be asked to go there.

Fr. others I got re-assuring re-actions. Head of Sp. Branch

(Irishman) was clear tht. recent events hadn’t increased risks.

Jacks. also saw no increased danger. Leading Br. business men

(while thinking timing unfortunate politically) agreed no

abnormal security risk.

No grounds therefore for advising Queen now to change her plans.
P.M. Tour includes also S. Leone, Gambia & Liberia. Cdn’t drop Ghana

alone: would have to find excuse for cancelling whole tour.



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