10 DOWNING STREET

From the Private Secretary 1 October 1980

As you know, the Prime Minister had dinner last night withthe Young Contractors Group.

The Group made predictable conm:ents about interest rates,the exchange rate, the level of public spending on capital projectsand in particular on infrastructure, and excessive current spendingby Government and local authorities. The following less familiarpoints were also made:

I They argued that the tendering procedures operated bythe European Development Fund tended to favour Frenchconstruction companies: the Government should press fortheir replacement by FIDIC-type terms.

II On tendering for contracts within the EEC, they arguedthat the UK was the only country which stuck to the rules,while other countries - and particularly the French - werein flagrant breach of them. They argued, for example,that their associate companies in France found it very hardto understand why the recent Ipswich project ?,.ad been allowedto go to a Dutch firm. It was also suggested that the Frenchmethod of breaking down contracts into small parts tended tokeep British companies out of France.

III They argued that more local authority highway workshould be subject to competitive tendering: the current£100,000 minimum limit was far too high.

IV It was suggested that some of the spending currentlyundertaken by Government on infrastructure could be replaced,and supplemented, by private sector financing. The financingof roads and bridges by means of tolls was given as an example.

V It was suggested that the UK's coal requirement could bemore easily met if the Government were to allow more open castmining by construction companies: the scope for open cast miningwas enormous, and we were far behind other countries in thisregard.

I am sending a copy of this letter to Julian West (Department ofEnergy) and Anthony Mayer (Department of Transport).

David Edmonds, Esq.Department of the Environment.

0

YOUNG CONTRACTORS DINNER.

30th SEPTE M BER, 1980.

Pavilion Room , Dorchester Hotel, at 7.45.

GUEST LIST

The Hon. Margaret Thatcher PM

T. Lankester

R. A. McAlpine

E. P. Beck

A. T. B. Shand

C. Beck

R. J. McAlpine

J. R. T. Douglas

C. Wates

I. M. McAlpine

A. C. Bryant

J. B. Sunley

R. H. Amis

W. S. Parkinson

H. W. A. Francis

P. Galliford

B. S. L . Trafford

C . T . w Vatt

R. I. J. Agnew

J. J. Polding

C. J. Chetwood

G. F. Parsons

10 DOWNING STREET

PRIME MINISTER

Alastair McAlpine isvery anxious that you shouldlunch or dine with theYoung Contractors Group.You will remember that Ihad a word with you aboutthis some time ago and yousaid that Michael Heseltineshould do it.

Alastair would very much

appreciate your acceptanceand neither Tim nor theDepartment of the Environmenthave any objection.

Agree to a date possibly

in the Autumn?

25 April 1980