Economy: Alan Walters diary [Legality of firing ASLEF members and rehiring; need to prevent rumour of devaluation to stimulate economy][released 2012]

Thursday 8th July 1982

Ferdy [Ferdinand Mount] + John [John Vereker] about firing ASLEF and rehiring those who will agree to flexible rostering - some doubt about legality as it would be discriminatory ruling.

Eric Roll - conventional discussion about Gvr [Governor of the Bank of England, Gordon Richardson] appointment - but he did suggest that Eddie George be made a second deputy gvr of Bank

Gvr C/E [Chancellor of the Exchequer, Sir Geoffrey Howe] etc on international situation/USA/interest rates

Eastern Bloc - somewhat better - containable US but v. concerned about US position

Decoupling - gvr said we must prevent the rumour that we wanted to devalue in order to stimulate the economy - agreed by all, but we did not winkle out a commitment “what would happen in EER fell to 88” the markets would expect interest rates to rise - and then we would follow them up - even if £1 = $1.80 and 4DM = £1

- the gvr has preempted one of our planks of policy