2
Page 209 permission for change of user. This matter is now before the Minister of Housing and Local Government. If the Minister, in the exercise of his quasi-judicial function, decides to allow a change of user, that strengthens rather than weakens the case for the proposed new hotel, since the loss of accommodation represented by the Mayfair exacerbates still further the serious accommodation problem in London. If, on the other hand, a change of user is refused, there will still be a need for more hotel accommodation, so that either way there is a case for building a new hotel in London.
5. I commend this project strongly. Not only will it substantially increase our dollar earnings, but will give tangible evidence to influential and vocal interests in the United States that we are prepared to act with determination and imagination in trying to solve our balance of payments problem.
Board of Trade, S.W. 1,
11th July, 1952.
Page 209
P. T.
Page 209
226
Page 210Page 52310 of 253
SECRET
CABINET
NOTE
Please substitute the attached
paper for the copy of C. (52) 237
issued to you on 12th July, 1952, and
return the latter to the Cabinet Office.
Cabinet Office, S. W. 1.,
14TH JULY, 1952.
Page 210Page 52310 of 253
227228
(THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT)
Page 211′′
SECRET
C. (52) 237
14th JULY, 1952
Page ZIT of 253-- CAB.NET OFFICE
RECORD COPY
COPY NO,
No.69
CABINET
BALANCE OF PAYMENTS IN THE SECOND HALF OF 1952
Memorandum by the Chancellor of the Exchequer
In my memorandum on the dollar gap in the second half of 1952
(C. (52) 195 of 16th June, 1952) I warned my colleagues that if there were no
change in existing policies in the import programmes put forward by Departments, we should be faced in the next six months with a loss of gold and dollar reserves which I estimated at about £175 millions.
2.
I have since been discussing with my colleagues principally concerned ways and means of filling this gap. As a result, the following reductions in import programmes and immediate increases in exports have been agreed:-
&m.
Increased exports of Defence Equipment
1.0
11
11 Coal
12
11
"1
Savings on oil imports
imports of raw materials "Imports of food
19
41
10
"
11
"machinery
5
Total
97
3.
It will be seen that this falls short of the amount required to fill the gap and that further action is needed.
4.
I suggest that in the first place we should consider whether we cannot reduce further the programme of food imports. I believe that without great risk or difficulty we could make savings of about £9.2 millions on wheat and flour and about £7.5 millions on coarse grains.
(a) Wheat and Flour. A saving of £9.2 millions on the programme could be
achieved in 1952 by reducing purchases so that the level of stocks at the end of the year fell to only 13 weeks' cover. This would imply that stocks at the end of 1953 would be equivalent to only 10 weeks' cover. Stocks at this level would be quite adequate commercially though they would not provide any stockpile.
(b) Coarse Grains. The import programme provides for a stock of 650,000
tons at the end of this year. This would be 250,000 tons above the level reached at the end of 1951. The programme assumes the maintenance of a ration pool totalling 51⁄2 million tons of all types of feeding supplies, but at present the ration is not being fully taken up and consumption is Page 2 likely253prove 300,000 tons per annum less thanages253xpected.
ka
·1-
229
5.
The import saving from this reduced consumption during the current half year would be some 100,000 tons. Furthermore, as consumption is Pagellofo25gntinue into 1953 at present levels we Fageda withf Dyer
stocks at the end of 1952. The grain prospects look much better now than a few months ago. The Russians have already indicated that they would like to start negotiations for another contract and the first home harvest reports are very promising. I see little risk in reducing stocks by 150,000 tons as was suggested by the Minister of Food which, together with the reduced consumption of 100,000 tons, would give a saving of £71⁄2 millions. I suggest below that even more could be saved from this source.
This extra £16.7 millions from wheat and coarse grains will bring the total to about £114 millions leaving a gap of £61 millions. I do not believe that we should risk a loss of this order in the remainder of this year and I feel sure that more can be done. In the discussions we have held I suggested that further savings of about £15 millions can be obtained by still further reductions in the food import programmes. For example if we agree to keep stocks of coarse grains to the level that they were at the end of 1951 we could make an additional saving of £3 millions. I am discussing with the Minister of Food ways and means of saving a further £12 millions and we shall report the result to the Cabinet when this paper is discussed.
6.
7.
I therefore propose
(a) that the savings of £97 millions should be put into effect immediately by
Departments;
(b) that we should obtain additional savings of about £17 millions through reduction
of stocks of wheat and coarse grains;
(c) that in addition the Ministry of Food should produce savings of £3 millions
from coarse grains;
(d) that my colleagues should give further consideration to the means by which
the remaining gap of £58 millions may be closed.
In considering the action to be taken my colleagues should bear in mind that it is still our objective to achieve a balance in our payment with the non- sterling world in the second half of this year and that the world will be able to judge our progress towards this objective as the figures of the gold and dollar reserves are published monthly. In these circumstances I need not emphasise the risks we shall be running if our action is inadequate,
Imports for the First Half of 1953
→
8.
In paragraph 6 of C. (52) 195 (the Dollar Gap: Second Half of 1952) I said: "We must also take action, as proposed in the official Report (i.e. the Report by the Programmes Committee attached to the paper under reference) to keep our forward commitments down, and to make our import system more responsive to the needs of our balance of payments position". The details of the new procedure were set out in paragraphs 27 to 30 of the Report by the Programmes Committee attached to C. (52) 195 and paragraph 3(ii) of that Report recommended that the new procedure should be adopted and a preliminary decision should now be taken on the level of non-sterling imports in the first half of 1953. The level suggested was £800 millions.
9.
I therefore ask my colleagues' approval for the adoption of the new pro- cedure and for the figure of £800 millions for non-sterling imports for the first half
of 1953 with 12view to a submission being made by Depar
a submission being made by Departments induf fourse on this
basis.
Treasury Chambers, S.W.1.,
14TH JULY, 1952,
R.A.B.
230
(THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT)
“Page 213 of 253-
CONFIDENTIAL
---Page 213 of 253
CABINET OFFICE
C. (52) 238
RECORD COPY
COPY NO.
77
12TH JULY, 1952
→
CABINET
SCHUMAN PLAN: APPOINTMENT OF UNITED KINGDOM DELEGATION
Memorandum by the Secretary of State for Foreign Affairs
In accordance with the Cabinet Conclusions of 22nd November, 1951 (C. C. (51) 10th Conclusions, Minute 4) the Home Secretary announced at Strasbourg on 28th November, 1951, that if the Schuman Plan was ratified, Her Majesty's Government would set up a permanent delegation at the seat of the High Authority to enter into relations and to transact business with it.
2.
The Plan has now been approved by the legislatures of the six member countries. Ratifications are expected to be deposited, the treaty to enter into force, and the High Authority to be set up in the latter half of August. The formal appointment of our delegation must await the conclusion of these processes, but if we are to be ready in time, preliminary decisions must be taken without delay.
3.
Commercial considerations also underline the need for quick action. I am informed that industrial interests on the Continent may already be concerting arrangements for the organisation of coal and steel markets after the treaty comes into force. These preliminary exchanges may closely affect our own interests, but Her Majesty's Government and the industries concerned cannot at present effectively make their influence felt, for lack of recognised representation with authority to speak on their behalf.
4.
The High Authority will act for the six member states in their external relations within its field. Moreover, though the matters with which it deals are in themselves commercial and industrial, the underlying purposes of the Community are political and form part of the complex of federalist developments with which I have to deal in the European Defence Community, in the Pflimlin Plan and in recent proposals for a European Political Authority. On these grounds I consider that responsibility for our delegation, and for the conduct of our relations with the Schuman Community, should rest with the Foreign Secretary.
5.
I should require continuous advice upon the varied departmental interests involved, and I propose that this should be provided by a small official committee to be established under a Foreign Office Chairman with membership drawn, from the Ministries of Fuel and Power and Supply, the Treasury, the Board of Trade and, as required, the Ministry of Labour. Instructions to the delegation would be prepared by this committee and issued by me.
6.
In planning our delegation the first step must be the choice of a leader. Our relations with the Community will be under continuous discussion between now and the time when the High Authority is set up, and the leader of our delegation should be appointed without delay so that his advice may be available. For this post I consider that we should select a man if possible whose background is commercial or industrial, though preferably not connected with either coal or steel. The High Authority itself is likely to consist of a mixture of business men,
2
politicians, officials and trade unionists, but our day to day dealings with it will be
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