asked the Chancellor of the Exchequer whether he is aware that motor manufacturers have rejected the suggestion that they should supply safety straps as a standard equipment in new vehicles, and that the rejection is primarily because safety straps would then attract Purchase Tax, whereas they would not if fitted later; and whether he will amend the Purchase Tax regulations to avoid this anomaly, in the interests of road safety.

No, Sir. The motor manufacturers' reasons for not fitting safety straps as standard equipment in new cars were explained in correspondence published by my right hon. Friend the Minister of Transport in the OFFICIAL REPORT for 27th April. These reasons are largely technical, and are unrelated to Purchase Tax.

Is my right hon. Friend aware that many lives could be saved if there were more general use of safety straps? It is very unfortunate that the taxation system should act as a disincentive. There was a statement to this effect in the Press by the Society of Motor Manufacturers.

I am sure that my right hon. and learned Friend will bear in mind what my hon. Friend has just said, but I should like to emphasise the last sentence in my Answer, namely, that it is not just a matter of Purchase Tax. One must remember that safety belts are only one of a large number of accessories which are fitted to cars in the interest of road safety.

Does not my hon. Friend think that in this case the motor manufacturers ought to think again?

I am sure that they will take note of everything that is said in the House. I do not think that it is my responsibility to answer for them, but rather to point out that Purchase Tax is by no means the only consideration involved.

If it is one consideration involved and if it is a disincentive to manufacturers and also mitigates against purchasers of motor cars having safety belts fitted, will the hon. Gentleman reconsider the matter? Is it not obviously indefensible to advise and encourage people to use safety harnesses which are designed solely to save lives, their use being strongly advocated by the Minister of Transport, but at the same time to make them subject to Purchase Tax?

I do not think that I can add to what I have said in my earlier answers. I am sure that everyone concerned will bear in mind the feelings of the House. By no means all motorists are converted to the use of safety harness as standard equipment. Many motorists who are converted prefer to make their own choice as to the type and make of harness which should be fitted. There are a good many more aspects than those which hon. Members have suggested.

asked the Chancellor of the Exchequer if he is aware that the present Bank Rate plus the Export Credits Guarantee Department charge imposes on British shipbuilding firms an addition of at least 10 per cent. extra on the cost of a new ship, that this is handicapping British shipbuilding firms in competing with foreign firms for orders and causing unemployment in British shipyards; and if he will state his plans for releasing British shin-yards from those special burdens which are having these results.

I have nothing to add to what I said in the House of Commons on 7th November, and what my hon. Friend the Minister of State, Board of Trade, said on 10th November.

Does not the right hon. and learned Gentleman realise that in sniping at shipbuilding he is damaging not only one of Britain's major industries but the auxiliary industries associated with it? Would it not be wise for him to discriminate so that, if Britain is to enter the Common Market, she can enter it on a basis which will be just and fair to industries such as the shipbuilding and ship-repairing industries and their auxiliaries?

I assure the hon. and learned Gentleman that there is no question of my trying to snipe at the shipbuilding industry. When one comes to the question of preferential treatment for a particular industry much wider problems arise.

Are not the shipbuilding industry and its allied industry—shipping—in a very precarious condition at present, suffering from unfair competition from foreign shipbuilding countries? Is it not desirable for the right hon. and learned Gentleman to look at this matter again and try to render some assistance?

I certainly agree with the right hon. Gentleman that this is a matter which we have to keep constantly in mind, but when one comes to the actual methods of discriminating in favour of a particular industry one gets into rather troubled waters.

Since the right hon. and learned Gentleman has said twice now in answer to supplementary questions that trouble is involved when discriminating in favour of a particular industry is considered, will he say whether his mind is closed or not, as it seemed to be last week, to the idea of special help for financing capital goods exports generally, of which shipbuilding would be an important part?

That is a different matter and on that question I stand by what I said last week.

Will my right hon. and learned Friend bear in mind that former Chancellors of the Exchequer have discriminated heavily in favour of shipbuilding by granting, quite unilaterally, a 40 per cent. investment allowance for shipbuilding, which is a high rate applicable to no other form of capital equipment?

My hon. Friend is quite right.

asked the Chancellor of the Exchequer what conditions were imposed by the International Monetary Fund before making Britain the recent £714 million loan.

I would refer the hon. Gentleman to the reply which I gave to my hon. Friend the Member for Chigwell (Mr. Biggs-Davison) on 7th November.

Will the Chancellor give the House an assurance that the loan was in no way dependent on the pay pause or cuts in the social services, as the Institute of Directors' Journal says it was? Is he aware that the Economist reported that these strings would require the Chancellor to stand by his tough measures, including the wages pause? If that was the case, does it not mean that international bankers were being allowed by the Government to determine our policy?

I tried to deal with the question of conditions in my Answer to my hon. Friend. I said that the only condition with regard to the loan was in respect of its repayment it had to be repaid within three to five years. Apart from that, there were no conditions. I made my statement in the House of Commons on 25th July, and after I made that statement, the Fund agreed to the loan.

But was not the statement made by the International Monetary Fund at the time in the light of—or perhaps in the darkness of—the Chancellor's statement on 25th July, and is not the whole point that the Chancellor was able to get this very large loan only in return for promising reactionary policies of a kind which would please certain international bankers?

It is not a question of conditions or being given in return for anything. There was no bargaining about this at all. I made a statement about the policy of the Government, and after the statement was made, the loan was granted.

Does the Chancellor deny that he discussed such matters as the seven per cent. Bank Rate and the wages pause with the International Monetary Fund before the loan was granted?

I categorically deny that I ever discussed any question of the wages pause or a specific figure with regard to the Bank Rate.

asked the Chancellor of the Exchequer what is to be the location of the fourth new university.

I hope to announce this shortly.

asked the Chancellor of the Exchequer whether he will prohibit the use of credit card facilities being allowed against company taxation for expenses.

I am not convinced that it is the use of these cards, as distinct from cash, that leads to abuse, but if my hon. Friend wishes to bring any cases to my notice, I will of course consider them.

Would not my right hon. and learned Friend agree that there is very genuine worry about abuses with expenses? Would he not also agree that if he put people to the small inconvenience of being asked to pay cash he could close up what could be a very nasty loophole and end what is, I think, in many cases abuse?

I will certainly consider what my hon. Friend has said, but I think what we have to do is to concentrate on the purpose and nature of the expenditure rather than the machinery by which it is made possible.

asked the Chancellor of the Exchequer what consideration he has given to the proposal to introduce a decimal currency system in the United Kingdom.

I still hope to make a statement before the end of the year.

Does not my right hon. and learned Friend agree that this matter is now becoming one of urgency in view of Britain's possible entry into the Common Market and the fact that we shall very soon be the only Commonwealth country with an outmoded system of currency? Is he able to say whether he himself is coming down in favour of the idea of decimal currency? Will he say what consultation there has been with the Commonwealth, because it seems to many people that this is very much a Commonwealth matter? As the matter has been under consideration by successive Governments ever since 1799, can my right hon. and learned Friend say definitely that we may expect a statement before very long?

In view of the length of time which my hon. Friend says the matter has been under consideration, perhaps he will not grudge me another month or two. I still hope to make a statement before the end of the year. With regard to Commonwealth consultation, I discussed this matter with the Finance Ministers of Australia and New Zealand when I met them in Accra earlier this year. I am afraid that I have nothing more to add to what I have said.

Has the Chancellor made any estimate of the possible cost of the change-over? Even if it is a large sum, will he bear in mind that the consequent saving would outweigh the cost?

I am certainly very well aware of the consideration which the hon. Gentleman has in mind, but I do not think I will pledge myself to figures today.

While there is plenty in the arguments about the merits of decimal coinage, does not the Chancellor agree that if the country continues to be in the red because of the bankrupt policies of the Government it will make no difference whether we divide a certain figure by 12 or 10?

I must leave the hon. Member to work that out for himself.

Since my right hon. and learned Friend has said that he has discussed the matter with two Commonwealth Finance Ministers, would he not agree that this is a suitable proposal for discussion within the Commonwealth Economic Consultative Council?

A great number of members of the Commonwealth have already adopted the decimal system. I discussed the matter with two which have not yet adopted it.

Will adoption of the decimal coinage system be a condition for our entry into the Common Market?

I do not think that any such condition has ever been stated.

asked the Chancellor of the Exchequer if, following the 1 per cent. reduction in the Bank Rate, he will now lower the present interest rates on Public Works Loan Board loans, which are causing increases in council house rents.

As the hon. Member will have observed, the rates of interest charged by the Public Works Loan Board were reduced on 11th November, following the fall in market rakes.

Does not the hon. Gentleman admit that even after that reduction the Board's rates of 6⅞ per cent. for loans up to fifteen years and 6¾ per cent. for longer-term loans are so high as to make it necessary for councils to charge impossibly high rents?

I do not admit that. With regard to council house rents, the effect of changes in interest rates one way or the other tends to be masked by the way in which local authorities conduct and finance their housing operations. The broad effect of the arrangements is to free local authorities from the need to charge rents directly reflecting the cost of particular groups of houses. In addition, many councils also operate rent rebate schemes for the benefit of poorer tenants. I do not believe that our economic system is a conspiracy against the less well off to anything like the extent the hon. Gentleman frequently makes out it is.

Would the hon. Gentleman agree that in respect of hundreds of thousands of house owners there is no masking the position that immediately the Bank Rate goes up their mortgage rates go up and that although the Bank Rate has come down, their mort- gage rates have stayed where they were? What will he do to protect the interests of young people who are trying to solve their own housing problems?

That is another question.

There is the conspiracy.

asked the Chancellor of the Exchequer if he will make a statement indicating the response he has had to his appeal for dividend restraint.

As I said in my speech to the House on 7th November, I believe my appeal for restraint is being regarded.

Is the right hon. and learned Gentleman aware that one company presided over by an hon. Member opposite has responded by increasing its dividend to 20 per cent.? Is he aware that it is a brickmaking company, and that if he wants further information he can get it from the hon. Member for Ayr (Sir T. Moore), who is the chairman?

I do not think it is proper or possible for me to deal with particular cases. I am dealing with the generality.

While the Chancellor is dealing with the generality, will he bear in mind that, despite the fact that many profits have been falling, dividends have this year increased a great deal more than wages have done.

That is a different question. I should be very willing to give the right hon. Gentleman the statistics at my disposal, but I am dealing with the situation since 25th July.

The Co-op dividend has gone down, not up.

asked the Chancellor of the Exchequer to what extent it is his intention, in connection with dividend restraint, that a company should not effectively increase its dividend distribution despite an increase in annual profits.

The fact that annual profits may have increased in certain cases does not affect my view that a further general increase in dividends is unjustified. Special considerations apply in the case of trading companies liable to Surtax directions, under Section 245 of the Income Tax Act, 1952.

Would not my right hon. and learned Friend agree that if the dividend of a company is increased proportionately with the increase in profits, the company's board clearly cannot be said to be exercising dividend restraint? Even though it may be that the dividend policy of certain trading companies is liable to Surtax direction under Section 245, their decisions may be controlled by a small number of persons. Surely my right hon. and learned Friend's appeal for restraint should apply to private incomes of that kind as well as to incomes dissipated very widely through the dividends of public companies?

With regard to the first part of my hon. Friend's supplementary question, one must deal with the general and not the particular. With regard to the second part, I could not be expected to encourage people to avoid Surtax by putting profits to reserve beyond the needs of a company.

asked the Chancellor of the Exchequer (1) who was present at the meeting between officials of his Department and representatives of the Observer newspaper on 30th October; and for what reason this meeting was held;

One of my private secretaries, one member of the Treasury Press Office, two members of the Press department of the Conservative Central Office and two members of the staff of the Observer newspaper were present. I instructed the Treasury Press Office to ensure that what I had said at Leicester was made known to the Press.

Will the right hon. and learned Gentleman inform us who actually sponsored the meeting at which he spoke? If, as I believe, it was sponsored by the Conservative Party, can he tell us why Press hand-out issued by the Conservative Central Office and the subsequent reporting of his speech were dealt with apparently by the Press department of the Treasury, and who authorised the calling into a conference in the Press department of the Treasury two officers of the Conservative Central Office? What was the purpose of having two political officers of that nature there? As after the statement in the Observer the Press Office of the Treasury, presumably on the Minister's instructions, issued a categorical denial which was printed in some newspapers and cast aspersions on the integrity of a reliable reporter, will the right hon. and learned Gentleman now admit that the reporting in the Observer was, in fact, correct?

The hon. Gentleman has no business to suggest what he has just suggested. I have never at any time cast any aspersion on the integrity of the reporter. I still think that he made a mistake. I am certain that it was not intentional and that there was no question of there being any bad faith about it. This idea that it is impossible for anyone to make a mistake seems really surprising. With regard to the question about why any representatives of the Conservative Central Office came to the Treasury, under the direction of the editor the Observer kindly said that they would make available to me a transcript of the shorthand note. They said they would make it available and in order to avoid the representative of the Observer having to go first to the Treasury and then to the Conservative Central Office, it was arranged that he could hand it over to both concerned at the same place and at the same time.

But whatever the Chancellor may or may not have said—and I am surprised that anyone takes seriously anything he says—does not the right hon. Gentleman agree that when a meeting has been organised by a political party to clear up any mess—whether done by the Chancellor or someone else —this should be a matter for the party concerned, and Treasury officials should not be brought into it? Does not the right hon. Gentleman agree that it is very important, despite the low standard set by this Government in recent years, to avoid blurring the line between Government officials and party officials in any case of this type?

It is an absolutely ridiculous proposition to say that, because a statement was made at a party meeting, my private secretaries and the Treasury should be debarred of any knowledge of what goes on and what has been said.

asked the Chancellor of the Exchequer how much hot money is estimated to have come to London since the Bank Rate was raised to 7 per cent.; what rate of interest is being paid on it; what is the total cost to the country; if he will reduce the Bank Rate to 4 per cent.; and if he will make a statement.

It is not possible to identify precisely and measure the flow of what is called hot money. I believe that much of the increase in the reserves since July has not been stimulated by interest rates but is due to other reasons.

If the increase in the money coming into the country is not stimulated by higher Bank Rates Why put higher Bank Rates there? Since high money rates obviously cause hardship at home, and since the increase in funds does not fool the Zurich bankers, why do not we bring the Bank Rate down?

With regard to my hon. Friend's first suggestion, if one were to do what he suggests and bring in an artificially low Bank Rate one would have to bring in also the whole apparatus of physical controls, and I do not believe that that is what my hon. Friend wants. With regard to the question of hot money, and so on, my hon. Friend knows only too well that there was substantial speculation against sterling. A good deal of what came in was not hot money but what is called leads and lags.

Since other finance centres can run their economies on very much lower rates of interest, why cannot we?

Because, as my hon. Friend is repeatedly pointing out, we have a very precariously balanced economy. [HON. MEMBERS: "Why?"] I will tell hon. Gentlemen opposite why and I am surprised that they do not know. We have very heavy obligations overseas by way of defence, we have very heavy obligations by way of aid and we also depend, to a very large extent, on our export trade.

But if the purpose of the 7 per cent. Bank Rate was not to attract money to this country, whatever was it for? Was it intended to deflate our economy for no purpose whatever?

As the right hon. Gentleman knows, the purpose of the Bank Rate is partly internal—to damp down demand—and partly external. It was part of a number of measures designed to protect the £, and that is in the interest of all sections of the community.

asked the Chancellor of the Exchequer if he will amend the regulations governing the compensation payable for loss of remunerative time to persons attending official appeal tribunals in order to provide amounts more closely related to average earnings in industry.

I do not think it would be appropriate at the present time to authorise an increase in the maximum allowance which may be paid for loss of earnings in these cases.

As we have been told so often about high dividends and earnings, is it not time that something was done to bring this allowance into line?

The point is that the allowance is intended not to replace lost wages in full in all cases but to relieve hardship, and an increase at the present time would not be consistent with the Government's general measures for dealing with our economic difficulties.

The allowance is not designed to relieve hardships but is for loss of a day's work for these people.

The hon. Gentleman is mistaken. The doctrine I have just stated is correct.

asked the Chancellor of the Exchequer whether, in discussions with trades unions on the establishment of a National Economic Development Council, he is also consulting with unions not affiliated to the Trades Union Congress.

On the trade union side I have only been in consultation with the Trades Union Congress

Can my right hon. and learned Friend say whether he thinks that this country consists only of the T.U.C. and the employers' organisations? Is he not aware that there are many hundreds of thousands of people who are not associated with either? In this great measure to try to secure our economy, should he not pay more attention to a lot of other people who are just as interested as are these bodies, and will he contact them?

I think that the answer to the first part of the supplementary question is "No, Sir." With regard to the second part, I am aware of that fact but I still think that, in the consultations in which I have been engaged, I have followed the usual course. If any of the other organisations to which my hon. Friend is referring wish to send comments or representations to me on this point I am always willing to receive them. Of course, various other bodies have done so, but not those bodies to which my hon. Friend referred.

Would my right hon. and learned Friend bear in mind that the country would be very much better pleased if he took a little more trouble over other sections of the community and did not always refer to trade unions and employers? Why should other people send my right hon. and learned Friend information when he is so busy trying to get the trade unions and employers together? Many of these other people would like to see him.

A great many people would like to see me. I am very glad to see them on any possible occasion and to hear the views they wish to put forward. With regard to this operation, I should like to deal with representatives of the Trades Union Congress and the employers' organisations.

asked the Chancellor of the Exchequer whether, in discussions with the employers and trades unions over the setting up of a National Economic Development Council, he is considering safeguards for those whose productivity cannot be increased or measured and whose improvements in salaries and wages could not be regulated by accepted productive effort.

Discussions about the setting up of a National Economic Development Council are at present concerned mainly about the organisation and functions of the Council. With regard to the formulation of a policy about wages, salaries and other incomes, I would refer my hon. Friend to the speech I made, in the debate of 23rd October.

Yes, but is my right hon. and learned Friend aware that, although I indeed support him in the efforts he is trying to make, everyone would be very much better pleased if the whole policy was put across with greater knowledge, greater humanity and an understanding of the anxieties of many people who seem to have no opportunity—like the supplementary to medicine group and the small fixed income group and a whole range of others —of knowing how their interests are to be protected? Is my right hon. Friend aware that I think that the whole thing has been put across abominably?

I am grateful to my hon. Friend for her help in this regard, for on this question of the classes of the community in which she is so interested she takes jolly good care to see that I know a great deal about what they think.

is the right hon. and learned Gentleman aware that there are 13 million consumers who are members of the Co-operative Movement, and would he consider inviting that organisation to join in this planning council?

I have considered whether it would be wise to have representatives of consumers upon this body. That matter is still under my consideration, but, in order not to raise false hopes, I think it would be wrong. That is my provisional opinion. I think it is much better that this body should consist of representatives of the Government, of the trade unions and of employers, with possibly one or two independents. I am still discussing the matter with other people, and I have nothing to add today.

Reverting to the original question, is it not the case that at the moment only people whose productivity cannot be measured are coming within the right hon. and learned Gentleman's ban? Would he say at what point productivity in the Civil Service and the teaching profession will have improved, and how he will regulate it to the point where they can have increases?

I referred in my original Answer to remarks that I made on 23rd October. I have nothing to add on that point today. I am not disputing that the hon. Gentleman has a point which requires consideration.

asked the Chancellor of the Exchequer what would be the annual cost to the Revenue of accelerating by three times the current rate of depreciation for tax purposes on plant, equipment, vehicles and buildings if granted to firms exporting more than 25 per cent. ad valorem of their output of finished goods; and if he will estimate the effect of such an exports' incentive to British firms upon United Kingdom trade under existing international agreements.

I regret that there is not enough information on which to base an estimate either of the cost of the suggested concession or of its effect on exports.

Does my right hon. and learned Friend recall that last Tuesday he undertook to examine this matter when he kindly gave way to me in the middle of his speech? Since then has it not come to light that examination of the balance sheet of any French major industrial undertaking will reveal that the present French Government are giving this direct export incentive to manufacturers in the form of an accelerated depreciation allowance? If the French can do it within international agreements to which we are also party, why cannot we do it?

Following upon my hon. Friend's helpful intervention the other day, I made inquiries into this matter and I understand that for some reason or another the French are shortly to abandon this system. Whether this is because of its complications or for other reasons I have not yet been able to find out.

asked the Chancellor of the Exchequer what estimate he has now made of the yield during the period 26th July, 1961 to 5th April, 1962 in terms of additional tax revenue arising from the 10 per cent. regulator advance in all Excise duties; and for what purposes such revenue will be used.

When the Customs and Excise surcharge was introduced in July, it was estimated that if it continued in force to the end of the financial year it would yield an additional £130 million. The surcharge revenue will be used to fortify the Budget surplus.

What does my right hon. and learned Friend mean by "fortification" in this context? Does he mean that it will be available next April for the very justifiable purpose of reducing taxation? Otherwise, has it not been collected illicitly from hard-pressed taxpayers?

No, I think that in this context "fortification" means "addition". The addition of this sum to my surplus will make it less necessary for the Government to go to the market to borrow money.

asked the Chancellor of the Exchequer, if, by legislation or otherwise, he will require all Government Departments and nationalised boards inviting tenders to publish the names of tendering firms and the totals of each tender.

The practice of nationalised industries in this matter is the responsibility of the boards themselves. As regards Government Departments. my right hon. and learned Friend is not prepared to issue a general direction of this kind.

Will not the Financial Secretary be willing to come clean on this matter? Would it not inspire greater confidence that everything is fair and above board if the details for which I have asked were published in all cases where public money is involved? How on earth is the public to know whether these tenders are really competitive unless these details are published? What have the Government got to hide?

I am satisfied that this is a matter which must be left to Departments to decide in the light of the various circumstances of Government contracts. If the hon. Member would like to correspond with me or to see me about the matter, I shall be prepared to discuss it with him further.

asked the Chancellor of the Exchequer whether he will make a statement on the financial assistance he will give to provincial theatres.

Yes, Sir. Subject to the approval of Parliament, I propose to make provision in next year's grant-in-aid to the Arts Council for an additional sum of £150,000 to provide further Government assistance to provincial theatres.

While expressing what I know will be general appreciation of that action, may I ask the Chancellor whether he is prepared to consider sympathetically applications from local authorities who want to acquire theatres which are perhaps threatened by site developers?

I will consider that suggestion. Perhaps the hon. Gentleman will communicate with me about it.

Will the Arts Council be completely free to allocate this money as it thinks fit?

Speaking without notice, I think it is. I think it is within the discretion of the Arts Council, we having decided on the amount, to deal with its application.