Tuesday 27th April 1982
civil Service arbitration award of 5.9% is nicely judged - we cannot fight it; but would if it were 6.5% - NHS, PM likely to agree to increase to 7 or more %
MS [Michael Scholar] said PM is v. techy [sic] with FO - they compare v. unfavorably with the Armed Forces who have shown that they are v. efficient. But she must give FO a chance to pull it out of the fire.
Spoke to Middleton about Bank saying always that it must defend sterling with interest rate policies.
Lunch at Gay Huzar [Gay Hussar] with Frank Giles, Hugo Young, Sarah Hogg, David Lipsey (used to be at No. 10) Benbridge etc.
- unemployment causes - they deny any benefit effect - hardly any
THS [text unclear] - most wrong etc. - but they had been wrong
Cecil Parkinson said Pym wanted to chicken out at mornings War Cabinet. PM insisted that they would not - even Willie [William Whitelaw] wavered somewhat. Then in afternoon morning Cabinet Pym proposed exactly the opposite of what he had said in the morning War Cabinet.