Economy: Alan Walters diary (public expenditure meeting) [public expenditure cabinet meeting - pensions; Joseph wants to reduce student grants, Nigel Lawson on loyalty scrip][released 2012]

Tuesday 2nd November 1982

James Lothian of Citibank - forecasts with Base and M1 - 5/ inflation - writing an article for the Guardian.

Announcement of Scargill 39% against 61% for the NCB

Public Exp Cabinet - main discussion re 11% - benefits - should “clawback” 2.9&#37 next year leaving pensions +2½% in Election year

- “fulfilled our promise to protect pensions”

Very easy to agree on because inflation was lower than we expected.

120.5 83/4

127.3 84/5

133.3 85/6

Keith J [SirKeith Joseph] wanted to reduce students grants - base from 420 to 210 and increase 6% to 3½%

PM etc. complained about the plight of middle class with kids at university

Lunch with PM and private secretaries

- speech drafts - PM’s own draft pretty awful and should be scrapped

Nigel Lawson on loyalty script cmtn [scrip] for Britons.

He agreed it was economically nonsense but saw great political advantages.

Nevertheless (a) limit on script issue £ 100m

(b) 3 year holding before bonus is paid

(c) Very likely tender, but underwriters want a large piece of flesh.

MS said my “Future” for speech is best for Guildhall not H/C. Ferdy [Ferdinand Mount] is drawn into speechwriting.