CAB129-53 — Page 94

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Printed for the Cabinet. June 1952

Page 94

CONFIDENTIAL

C (52) 212

24th June, 1952

CABINET

Copy No.66

SCOTTISH AFFAIRS

MEMORANDUM BY THE SECRETARY OF STATE FOR SCOTLAND

I ask my colleagues to agree that we should : —-

(1) make a return of revenue from, and expenditure in relation to, Scotland.

and the rest of the United Kingdom; and

(2) recommend to The Queen the appointment of a Royal Commission-

"to review, with reference to the financial, economic, administrative and other considerations involved, the arrangements for exercising the functions of Her Majesty's Government in relation to Scotland, and to report.

I.-Return of Revenue and Expenditure

2. A strong committee, presided over by Lord Catto, was appointed by the late Government to consider whether a return of Scottish revenue and expenditure and of Scotland's balance of trade could be prepared. A summary of the main conclusions of their Report, which will be ready for publication before the Summer Recess, is attached. The Report shows that a return of revenue and expenditure is possible and sets out the way in which it could be drawn up. It shows also why an economic balance sheet for Scotland is not practicable.

3. I recognise that a return of Scottish revenue and expenditure will put a good deal of work on the Treasury and other departments and that this is a difficult time to undertake it. But I see no alternative. The pressure for it from both sides of the House will, in my view, be irresistible. I propose, therefore, that we should say at once that we will prepare and lay in 1953 a return on the lines laid down in the Catto Report. We should at the same time avoid any suggestion of making an annual return, and I would accordingly propose that it should be made clear that any question as to the future of the return would be decided in the light of the reception it gets, the practical use made of it, and the expense and labour involved in its compilation.

II. Royal Commission

4. We undertook in our 1949 policy statement "Scottish Control of Scottish Affairs to set up a Royal Commission" to review the whole situation between Scotland and England in the light of modern developments, and to make recom- mendations." In our pre-Election statement "Britain Strong and Free" we reaffirmed the 1949 undertaking, saying that our policy included "the appointment of a Royal Commission to review the economic relationship between England and Scotland together with other important issues." Since then, in reply to questions in Parliament, I have undertaken to consider the terms of reference of the Royal

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