CAB23-58 — Page 224

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The Postmaster-General's Memorandum stated

that, after taking the opinion of the Solicitor to the Post Office, he was of opinion that he had no statutory authority to enter into a contract such as was suggested by the Select Committee; that it would be neither convenient nor appropriate for the Post Office to enter into a contract of

the nature contemplated, since any demands for

>

modified or additional services would almost certainly be based on passenger and cargo require- ments, and the cost of meeting them could not properly be defrayed out of the Post Office Vote. The Secretary of State for Scotland, however, considered that there was no practicable alterna- tive to the continuance of the past practice by the Post Office and of their making a contract even though it might be technically ultra vires.

The Cabinet were in formed that it would not be possible to sign a contract until the necessary legislation had been passed.

that could be

dene vas to initiel the Heade

The Cabinet agreed

(a) To approve generally the proposals

of the Secretary of State for Scotland

summarised above:

as

(b) That the Secretary of State for

Scotland should be authorised to

initial the Heads of the Agreement.

-X. the new company had been incorporated, probably in September or October. All that could be done until don was to initial the beads of Agreement."

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