CAB129-78 — Page 66

Page 66 informed the British component of the Consortium of its inability to underwrite their contract without Bank aid the British group were not put at a disadvantage vis-à-vis their foreign associates.

16.

To sum up, we recommend:-

(a) that we should reject the idea that the Egyptian

Government might be encouraged to enter into a contract with the Consortium without seeking either a loan from the International Bank or grant aid from the United States;

(b) that H. M. Ambassador in Washington and the

United Kingdom Executive Director of the International Bank should explore further with Mr. Black the possibility that the Bank might grant a loan to the Egyptian Government from which the project could be financed without the need for grant aid from either the United States or the United Kingdom Governments;

(c) that if the Bank is not willing to make a loan on

that basis we should

(i) make it clear that Her Majesty's Govern

ment cannot for their part offer any funds by way of grant in addition to the large sterling balances already held by Egypt;

(ii) be ready to advise the Consortium to

negotiate for the inclusion of American firms up to a participation of 25 per cent (the proportion of the foreign exchange cost of the project represented by the proposed United States grant).

31st October, 1955.

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94

(THIS DOCPA167 34E PROPERTY OF HER BRITANNIC MAJES Page 67 VERNMENT)

SECRET

C.P.(55) 169

2nd November, 1955

CABINET

COPY NO.

NO.62

ROAD HAULAGE DISPOSALS BILL

Memorandum by the Minister of Transport and Civil Aviation

The Cabinet on 18th October invited me to consult further with the Lord President, the Chancellor of the Duchy of Lancaster and the Financial Secretary, Treasury, on two issues raised in C.P.(55) 154 and to report back, (C.M.(55) 35th Conclusions, Minute 9).

2.

3.

These discussions have now taken place..

As a result it was agreed between us that I should recommend that the proposed Bill should make provision that the transport levy should not be continued after 1956. The Cabinet have already decided that it should continue at the present rate during 1956.

4. In connection with contract hire vehicles, I was able to report to any colleagues that since the Cabinet's discussion. I had had an opportunity to consult the Road Haulage Association. That body told me that they would have no objection to provision being made for the British Transport Commission to retain vehicles which were required for the purpose of a contract which the other party concerned desired to renew with the Commission. They felt, however, that in these circumstances the retained vehicle should surrender its open "A" licence and receive only a contract "A" licence in its place, The Commission under the present system would only obtain a contract "A" licence in respect of a new vehicle purchased to carry out the contract.

5. In the light of this my colleagues agreed that I should report to the Cabinet a recommendation that provision should be made in the Road Haulage Disposals Bill to enable the British Transport Commission to retain contract hire vehicles required to carry out contracts for which they had negotiated renewals but that they should do so with contract "A" licences only.

6.

I therefore seek the authority of the Cabinet to provide for these two recommendations in the forthcoming Bill.

J.A.B-C.

Ministry of Transport and Civil Aviation, W.1.

31st October, 1955.