asked the Chancellor of the Exchequer what is the present value of the £ sterling compared with its value in June 1970.

asked the Chancellor of the Exchequer by how much the buying power of the £ sterling has diminished in the last 12 months for which records are available.

asked the Chancellor of the Exchequer what has been the fall in the real value of the £ sterling since June 1970.

asked the Chancellor of the Exchequer what is the value of the £ now compared to 18th June 1970, based on the General Index of Retail Prices.

asked the Chancellor of the Exchequer what, on the basis of the General Index of Retail Prices, is the purchasing power of the £ sterling now, taking it as 100p on 18th June 1970.

Taking the internal purchasing power of the £ sterling as 100p in June 1970, its value in November 1972 was 82½p and in November 1973, the latest date available, it was 75p.

Is the Minister aware that he should hold his head in shame for that reply, because it will show the electors the total bankruptcy of the Chancellor's economic policies, which only a few weeks ago were supposed to be the foundation for booming Britain? Is he further aware that the reason why workers have to take industrial action to safeguard their interests is the 45 per cent. increase in food prices, plus the 25p loss in the value of the £ since June 1970 when the Tories came to power and not the scare-mongering rumours that the Government are now making about trade unionists?

The hon. Gentleman has listed a whole host of inaccurate charges against the Government. If the Labour Party's policies of penal taxation, massive additional public expenditure and widespread nationalisation were to be implemented, I think everybody would agree that this combination of policies would be unrealistic and incredible.

Certainly it is accurate, is it not, that there has been a drop of 25 per cent. in the buying value of the £ over this period? Is the Minister aware of the grave concern that this causes to ordinary people who cannot be expected to hold their wages down when prices are going up in this way?

During the past year, as every hon. Member knowns, inflation has been due predominantly to external factors. Domestically-generated inflation seems to have been less in the United Kingdom than in many other industrialised countries. I remind the hon. and learned Gentleman that nearly 4 million workers have now settled under stage 3, and it cannot be denied that, although prices have risen far too fast, pensions have increased by 55 per cent. and average earnings by 48 per cent. over the past three years.

Do not the hon. Gentlemen who ask these questions appreciate that it is precisely because of this constant depreciation of our currency that the Government have been forced to seek to prevent incomes from outstripping productivity, which is one of the two domestic causes of inflation? Should they not therefore welcome and support the Government's policy?

I entirely agree with my hon. Friend. Concerning inflation, I think the whole country would benefit from more support by Labour Members for the realistic and sensible policies that the Government are trying to follow.

Is the Minister aware that in view of the 20 per cent. devaluation of the £ on the foreign exchange markets yesterday, the possible £2,500 million deficit on our balance of payments and successive Governors of the Bank of England contradicting themselves and Ministers and the Prime Minister on successive days, it is high time that that crowd on the benches opposite got out and let Labour clean up the mess again?

First, I am confident that if the Labour Party would assist the country by encouraging a settlement of the miners' dispute, for instance, sterling would respond quite dramatically. Secondly, on the balance of payments, my right hon. Friend will be answering a Question on that matter later.

Will my hon. Friend give an indication of the effect on living standards of the movement in the value of the £, to which he has referred, in the light of the movement of wages and pensions over the same period?

With respect to my hon. Friend, I do not think it is helpful or, for that matter, very meaningful to compare a fall in the value of sterling, which is essentially an external matter although it has internal effects upon the cost of living, with the rise in wages and pensions. I have already given the figures. Average earnings have risen by 48 per cent. over the past three years.

Do not the figures indicate the pathetic incompetence of the Government's economic policy and at the same time fully justify the comments of the Governor of the Bank of England that as a result of those policies the country will have to endure austerity until 1984? As the Conservatives when in opposition always supported the views of the Governor of the Bank of England, can we take it that they support him now?

In his statement on 17th December, my right hon Friend the Chancellor of the Exchequer, referring to the energy crisis——

Answer the question.

I am just about to answer it. My right hon. Friend made it absolutely clear that for the next year or so people in Britain faced a severe test, and that over that period we should not achieve the rise in living standards that we might otherwise have expected. However, the setback represented by the rise in energy prices—in oil prices—throughout the world will affect this country rather less than most of our industrial competitors, and in the medium term when we get North Sea oil the prospects for this country can be very bright.

Does my hon. Friend agree that the expression of confidence from the hon. Member for Bolsover (Mr. Skinner) in the abilities of the Opposition Front Bench can only confirm the opinion of the rest of the House about the total inadequacy of anything that could come from that quarter? With reference to the external value of the £, my right hon. Friend the Chancellor has frequently said that we would return to a fixed parity when the moment was opportune. Would it be too much to hope that the moment might be opportune fairly soon?

If there were to be an announcement on the value of the £, it would not come from the Minister of State, Treasury.

Is not the hon. Gentleman bitterly ashamed that in the past three and a half years the £ has been devalued abroad by more than 20 per cent. and at home by 25 per cent.? How dare this devalued Government go to the country on that record?

As my right hon. Friend the Prime Minister said yesterday, we have a very strong competitive position and, if only we can rid ourselves of our self-inflicted wounds and the problems which arise from our industrial relations, the opportunities for our exports and higher production are undoubtedly enormous.

Can my hon. Friend tell us what would be the cost of the programme of the Labour Party?

I do not know whether there is a sufficiently large computer to contain the amount of information which is embodied in the Labour Party manifesto and whether it could produce a sufficiently high figure. The cost of the Labour Party's proposals—its nationalisation proposals and public expenditure proposals—could clearly never be offset by the massive taxation which would be necessary under its programme. The figures are huge, and the country realises that perfectly well.

In the light of what the hon. Gentleman has just told us, no one will be surprised if the Government decide to run for cover. As they betrayed their promises at the last election in a more flagrant and extreme manner than any Govern12/22/2005ment in recorded history, however, can the hon. Gentleman assure the House that he will fight the next election on the slogan "Another three years of the Tory Government and the £ will be worth only 50p"?

I am sure that if the Labour Party were ever to fight an election on the basis of the right hon. Gentleman's taxation policies it could never win one again. If the Labour Party were to take away every penny earned by everyone earning more than £5,000 a year, that amount would be enough to provide one extra packet of cigarettes for each worker. The idea that the Labour Party could finance its programme without massive additional taxation from the ordinary people is absolutely absurd.

asked the Chancellor of the Exchequer if he will take steps to end the avoidance of capital gains and income tax by property companies which do not sell their properties but retain them in their accounts at the purchase price despite an increase of market value, by requiring periodic revaluation of such assets for tax purposes.

There is no question of tax avoidance in the circumstances described. However, the charge to tax on first letting which was announced on 17th December will ensure that the unrealised gains of property companies following material development are largely brought into charge to tax.

Is the Minister aware that the net assets of Land Securities Investment Trust alone increased in a single year by £368 million, on which it paid £2 million corporation tax? Is it not a fact that since the Chancellor's announcement last month property shares have actually risen on the Stock Exchange and that vast capital gains of that kind on properties already let—vast capital gains at the expense of the community—will not be subject to tax in any way?

When the hon. Gentleman talks about shares in property companies, he should realise that a large proportion of them are held by small shareholders, pension trusts and the like. For example, £150 million of new money from pension trusts went into properties last year. When they are sold, the shares in those companies attract capital gains tax. The hon. Gentleman should also realise that taxation of unrealised capital gains would be a fundamental departure from the principle which successive Governments have followed. But my right hon. Friend the Chancellor has brought in unrealised gains to the extent of first letting.

Is the Minister aware that in my constituency thousands of pensioners and widows are weeping because of what he has said? Is he not aware that in that part of industry the only real productivity drive is in the tax mitigation or avoidance business and that a lot of useless man-hours are spent in defrauding the Government of the revenue to which they are entitled?

The pensioners in the hon. Gentleman's constituency would no doubt be concerned about the consequences if the Labour Party returned to power, in view of the comparison of its pension record with that of the Conservative Government. As to tax avoidance, we are no less interested than the Opposition in stopping any form of tax fraud. We are all bent on the same endeavour. If there are cases of tax fraud of that kind, we shall certainly seek to stop them.

asked the Chancellor of the Exchequer if he will now propose fiscal measures to deal with the profits being made in land and property development.

I would refer the hon. Member to my right hon. Friend's statement on 17th December 1973 and to the statement by my right hon. and learned Friend the Secretary of State for the Environment on 21st December.

I repeat, will the Government now propose measures which deal properly with the vast profits which have been made in land and in property? When shall we have a tax on unrealisedgains? Every commentator on the Government's measures asked when we should have a tax which taxed property more than industry, instead of at the same level. When shall we have a tax which makes the property companies pay tax on the money they borrow from the banks? Even that would be something.

Property companies are taxed first in the ordinary way upon their dealings in property. They are taxed on their realised capital gains. My right hon. Friend the Chancellor has introduced an additional tax which can involve an increase in tax liability of up to 75 per cent. on individuals and a considerably bigger burden upon the shareholders of certain companies. Therefore, we have a system of taxation which catches the capital windfall gains which the hon. Gentleman no doubt finds offensive and which we, too, have found offensive.

Is the Minister saying that he is not too worried about the effect upon pension funds of the other policies?

The question of pension funds arose on the question of the taxation of unrealised gains, which are not qualified as a disposal either by the sale of the asset or by the measure that my right hon. Friend has introduced of the disposal created by a first letting. The point that the hon. Gentleman should recognise is that the taxation of property, which seems to be the wish of Opposition Members, with the aim of catching everyone who invests in property, would catch very heavily a very large number of pension funds. The hon. Gentleman seems to be bent on the assumption that properties are owned by one or two rich individuals. Property is an investment the benefits of which are shared over a very wide section of the community.

asked the Chancellor of the Exchequer what evidence he has of the extent of tax evasion in Great Britain.

asked the Chancellor of the Exchequer if he will outline Her Majesty's Government's policy in regard to prosecution arising from alleged fraudulent tax evasion ; and if he will make a statement.

It is impossible to estimate the extent of tax evasion but details of under-assessments for the past 10 years are in Table 25 of the recently published report of the Commissioners of Inland Revenue.

Is the Minister aware that, according to the Inland Revenue, no fewer than 250 persons last year illegally evaded tax to the tune of over £10,000 in each case, yet only five of them were prosecuted and fewer still had to pay even a paltry fine? As the Government, in their Companies Bill, purport to believe in disclosure to prevent abuses, will the Minister say how many other cases there have been like that of Mr. Norman Fox-Andrews, QC, whose prosecution for fraudulent and extensive tax evasion was quashed by the Board of Inland Revenue after it had been recommended by the Solicitor's Branch?

I do not think that the hon. Gentleman has any right to make that kind of statement. He has no right to say that about the gentleman in question, who I believe is now deceased. In any event, I am not able to discuss this matter because of the long-standing rules of confidentiality about individual taxpayers. On the first part of the hon. Gentleman's question, however, there are well-established procedures and penalties for correcting under-assessments of tax. Cases involving tax fraud are often complicated and of a kind which is not easy to deploy before a jury. If the Inland Revenue was required to take more cases before the courts for criminal proscution, there is no doubt that there would be far fewer penalties paid for tax evasion than there are even now.

May I draw my hon. Friend's attention to the £150 million repaid in tax refunds wrongfully merely because short-term benefits are not taxable? Will he give consideration to altering this principle?

My hon. Friend has tabled Question No. 22 on this issue. He will shortly receive an answer to that Question. I hope that it will be an oral answer, but if not it will be a written answer. I hope that it will satisfy him.

Is the Minister aware that he has revealed the tremendous weakness in our tax legislation that needs to be examined by his Department? Will he undertake to examine closely the article sent to him by the Inland Revenue Staff Federation exposing the scandal of tax evasion and to deal with it as promptly as possible? Is he aware that at present we are dealing with a situation in which social security payments and the supposed attitudes towards them are receiving a tremendous amount of publicity and we are, therefore, having one law for the rich and another for the poor? That situation must be ended immediately.

I appreciate the point made by the hon. Gentleman. Clearly it is a matter of concern to all those who work in the Inland Revenue. I shall certainly draw the hon. Gentleman's comments to the attention of the Chairman of the Board of Inland Revenue. The hon. Gentleman knows that the Inland Revenue is never slow to suggest and recommend to Treasury Ministers additional powers to combat tax evasion. My view is that the Inland Revenue is extremeily vigilant in this area, as I am sure the hon. Gentleman will agree. In any event, whether there should be any additional rules is a matter for my right hon. Friend the Chancellor in the context of his Budget.

Does not the hon. Genteman agree that the number of prosecutions against poor people receiving social security is vastly in excess of the number of prosecutions against the men referred to by my hon. Friend the Member for Oldham, West (Mr. Meacher)? Is there not a flagrant case of double standards here? The present Government won the 1970 General Election partly on the so-called scandal of scroungers. They should look at the scroungers at the top of the tree rather than those at the bottom.

The latest report of the Inland Revenue showed that over £5 million was charged in penalties for tax underassessment and evasion. But although there are very few criminal prosecutions in the courts—[HON. MEMBERS: "Why not?"]—substantial monetary payments are made to the Inland Revenue for tax evasion. The answer to the question "Why not?" is that it is extremely difficult to convict before a jury in a criminal prosecution, and that is the reason I gave.

asked the Chancellor of the Exchequer what changes he now proposes in the incidence of value added tax.

The incidence of value added tax is changed to a minor degree by four statutory instruments which were laid before the House on 20th December 1973. As regards any major changes, I cannot anticipate my right hon. Friend's Budget Statement.

I welcome generally the replacement of the arbitrary purchase tax and selective employment tax by the much more reasonable and lower-rated value added tax, but will my hon. Friend nevertheless look at some of the unfortunate minor consequences of this wide-ranging tax, particularly bearing in mind that in certain of its categories the administrative cost of collecting very little income is far too great?

I would not necessarily accept the last point in my hon. Friend's question, but if he has a particular case or example in mind I will gladly look at it.

Without wishing to anticipate his right hon. Friend's Budget Statement, will the Minister give a categoric assurance that there will be no application of value added tax to food items?

My right hon. Friend has no plans to alter the existing arrangements regarding zero-rated food. On the second point, the hon. Gentleman will recall that, as a result of the reform of indirect taxation which the present Government have carried out—the change from purchase tax and SET to value added tax—the tax falling on food is estimated for 1973–74 to be £255 million less than it would have been if it had continued as it was under the previous Government.

Bearing in mind the difficulties in which many small firms often find themselves with regard to the three-day working week, particularly regarding cash flow, will my hon. Friend look at the suggestion made by various chambers of commerce and trade that payment of VAT due at the end of January could possibly be deferred?

There is a later Question on the Order Paper on that subject. Indeed, a somewhat similar Question was answered yesterday. I refer my hon. Friend to those answers.

Regarding the last part of the Financial Secetary's previous answer, may I ask whether he is prepared to say what is the price of food, including tax, today in comparison to what it was in June 1970?

That does not arise on this Question, but if the hon. Gentleman would like to table a Question on the matter we shall seek to provide an answer.

asked the Chancellor of the Exchequer, if he will take steps to relieve all items of school uniform from VAT.

No, Sir. The relief applies only to articles of clothing and footwear for young children.

Is it not a silly little anomaly for school crests and badges to be liable for value added tax when they are sold separately? Does not the Minister realise that this reduces the benefit which is available if uniforms are sold so that parents can shop around and not have to rely on expensive monopoly supply arrangements?

I wrote to the hon. Member about this in July. School blazers with a badge attached are regarded as a single article for tax purposes and if designed for a young child would be free of tax. A blazer for an older child would be taxable at the standard rate for the broad reason of the dividing line between the two.

asked the Chancellor of the Exchequer if he will make a further statement on the steps he is taking to improve Great Britain's balance of payments.

I have nothing to add to my right hon. Friend's statement on the economic situation on 17th December. My right hon. Friend made it clear then that he would not hesitate to take any further action which may be required in the national interest.

Do the Government dispute the statement made earlier this week by the Governor of the Bank of England, who said that prior to the increase in oil prices at the time of the Middle East War our balance of payments deficit was running at an annual rate of £2,500 million? Is it not abundantly clear that, no matter what international measures may be taken to obviate the difficulties created by the increased oil prices, Britain will be required to take specific further measures to correct our balance of payments?

In making his statement to the House my right hon. Friend made it plain that there was a balance of payments problem before the oil situation developed. He said that there was a considerable deficit and added that there was at that time reason to believe that, as the effect of the depreciation of sterling worked through the balance of payments, the deficit would begin to improve. That was the case.

Will my right hon. Friend give the latest estimate of the deficit on our balance of trade with the rest of the Common Market?

If my hon. Friend will put down a specific Question for those figures I shall give them to him, but I do not have them now. What the House and the country must accept is that, in common with the other countries of Europe, we are facing a major problem in the world where the cost of energy is high. The position of the United Kingdom, provided that the coal comes forward, is more favourable that that of other European countries.

Will the right hon. Gentleman say what is the estimated cost to the country of the revised Basle agreements assuming the current dollar value of the pound? How does he propose to finance the enormous current balance of payments deficit during the coming year? Has the Chancellor approached the International Monetary Fund for a loan?

My right hon. Friend the Chancellor made it clear some months ago that he might, if necessary, approach the International Monetary Fund. I think it was the occasion of his Mansion House speech. He also made clear in the course of his statement to the House in December that he would consider any methods which were necessary in the national interest to help finance the balance of payments. It is also clear that the oil-importing countries, including the United Kingdom, will have a massive problem of financing the balance of payments deficit to the Arab countries. The Basle figures will not be available until the end of the month.

asked the Chancellor of the Exchequer if he will take steps to curb the abuse of tax relief for the purchase and construction of holiday villas outside the United Kingdom, details of which have been sent him by the hon. Member for Derby, North.

I am not aware of any abuse of tax relief for this purpose.

The Minister has seen a copy of the letter which is being sent to my constituents in Derby by the firm of Slater Barwick. It is a blatant invitation to use public money granted in tax relief on mortgages or second mortgages for the purpose of constructing holiday villas abroad. What possible place is there for parasitic firms of this kind in what is supposed to be a time of national crisis?

The example sent to me by the hon. Member involved an individual extending his mortgage on the existing home. Interest on this mortgage would be allowable for tax and does not involve any abuse of the tax rules.

asked the Chancellor of the Exchequer what is the current position on the proposals for moving towards economic and monetary union in the EEC ; and if he will make a statement.

At the meeting of the Council of Ministers on 17th December, which I attended, agreement was reached on most of a resolution on the move to a second stage of economic and monetary union. Agreement on the references in the resolution to regional and energy policy has been deferred until the issues have been settled.

Why do the Government continue to devote their time and energy to this charade of economic and monetary union, particularly since the proposals have never been endorsed either by this House or by the country? Will not even the provisions of the second stage be rendered meaningless if the Government have to introduce further monetary controls, as seems likely?

I do not accept the implications of the latter part of that supplementary question. It is not a charade. There has been a great deal of discussion and agreement among European countries on a second stage going towards European monetary union. It is obviously a long-term process which has to be argued out between the countries concerned, and agreement has been reached with the exception of the part referring to regional and energy policy.

Is the Minister aware that when hon. Members and Members of the House of Lords travel to Europe to discuss the harmonisation of economic and monetary union they are warranted with £120 for each flight, that they travel by charter flight for £46 and that they pocket the difference? Will the right hon. Gentleman, in his rôle as Minister of State within the chancellery, find out from the Inland Revenue what it has been doing in this matter and whether tax evasion is taking place on this massive scale and report to the House as quickly as possible?

The hon. Member knows or should know what is known to every hon. Member: that no Minister has ever had the capacity to interfere or intervene in the individual tax matters of persons whether they are Members of Parliament or not. I hope that no member of any administration would seek to have political power over the legal authorities dealing with tax evasion.

asked the Chancellor of the Exchequer if, in view of the economic situation, he proposes to make use of Article 135 of the Treaty of Accession to the EEC.

My right hon. Friend has already announced the measures considered necessary in present circumstances ; these do not entail recourse to Article 135.

Since we now face the worst balance of payments crisis in the history of any country, surely the time has come to tell the Common Market that we can no longer bear the burden of the taxes on imported food, the net cost of our payments to the Community budget and the intolerable burden of Common Market membership on our overall balance of payments position.

It is not membership of the Common Market that has placed an intolerable burden on our balance of payments but the pressure of world prices and commodity prices, which has been enhanced by the increase in energy prices. This has presented the whole of Europe with a balance of payments problem vis-à-vis the exporting countries.

Has the Chancellor discussed recently with the Community the question of limiting imports of nonessential consumer durables from non-Community countries?

My right hon. Friend has held a number of discussions with Ministers within the Community. In so far as these are public, the results have been made known. It would not be right for me to say what my right hon. Friend might or might not be discussing in his present talks in Rome.

asked the Chancellor of the Exchequer whether he will now propose tax relief for suitably approved expenditure by householders on improved thermal insulation, in the interests of long-term savings of national energy resources.

asked the Chancellor of the Exchequer if he will consider allowing tax incentives to encourage improved insulation of industrial and commercial premises with a view to fuel conservation.

I have noted my hon. Friends' suggestions.

While that is at least an encouraging answer, may I ask the Treasury to bear in mind the deplorably poor insulation standards of our buildings which are costing hundreds of millions of pounds to the balance of payments? If the Government are serious about the conservation of energy and helping the balance of payments, may we have some co-operation between Government Departments to ensure that the proper incentives are provided to improve domestic thermal insulation standards?

I understand my hon. Friend's point, but there is, of course, co-ordination between Government Departments on such matters. It would be wrong to suppose that the tax system is necessarily the best way to achieve this objective. My hon. Friend will appreciate that as a means of encouraging domestic thermal insulation it would not help those who were below the tax threshold and similarly, unless a limit were imposed, the benefit would be greater depending on the rate of tax paid.

Will the Minister reject these suggestions because they would mean only a subsidy to wealthy people on undertaking this expenditure and very little or no subsidy to the less well-off?

As the hon. Gentleman appreciates, that would depend on the exact form in which the relief was given.

Is my hon. Friend aware that there is a motion on the Order Paper which suggests that thermal insulation should be made grant-allowable both for existing houses and to new houses in order to save fuel?

The question of grants is not for me but for my right hon. and learned Friend the Secretary of State for the Environment.

asked the Chancellor of the Exchequer what estimate he has made of the economic consequences to the country of the cuts in invstment in the nationalised industries.

asked the Chancellor of the Exchequer what estimate he has made of the economic consequences to the United Kingdom of the cuts in investment in the Post Office.

My right hon. Friend made it clear that there was a need to reduce demand on scarce investment resources. It is right that the nationalised industries, excluding the energy industries, should make a contribution to this.

Is the Minister aware that the cut of £140 million in investment next year in telecommunications will be disastrous for the telephone service? Is he further aware that for commerce and administration an efficient telecommunications service is as vital as energy to manufacturing industry? Does he understand that the disruption of the equipment manufacturing industry will bring a heavy increase in unemployment to the development areas?

Yes, I am aware that it creates problems within the Post Office. My right hon. Friend the Minister of Posts and Telecommunications is discussing this matter with the industries concerned. There has been no cut in the aid or support given to the regions. I invite the hon. Gentleman to compare the level of investment in the Post Office for the past three years with that which was approved during the period of the previous administration.

Is this a once-for-all cut with the obvious disastrous consequences which have already been outlined by my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding)? Will the planned level of investment for subsequent years remain unchanged?

My right hon. Friend the Chancellor of the Exchequer has made it clear when talking about taking £1,200 million out of the 1974–75 expenditure that that will mean the deferment of a number of plans for the nationalised industries and for the public sector generally. These are areas in which it is vital that demand should be reduced so that essential resources may be conserved.

Does not the Minister consider it outrageous that he should persist with cuts in the steel industry in view of the present state of the industry and the effect which such cuts will have on everything else? Will he advise his right hon. Friend to reverse the decisions which have been made regarding the steel industry?

The hon. Gentleman must be well aware of the massive investment programme approved for the steel industry of £3,000 million. I ask him to contrast that with the insignificant or very small investment which was approved by the previous administration. The cuts which are being made in the steel industry are such that they will not affect long-term strategy. The impact on the output of steel has, as the hon. Gentleman knows, nothing to do with investment but is related to other causes which are highly regrettable.

asked the Chancellor of the Exchequer what is the total amount of the surtax assessments (1972–73 of £150 and above) entitled to payment deferment, and not so entitled, respectively ; and how many assessments fall into each category.

The estimated amount of surtax for 1972–73 for which deferment claims may be made is £45 million, and the estimated amount not entitled to deferment claims £385 million. The corresponding number of assessments is about 110,000 and 300,000 respectively.

Am I right in assuming that those who are not entitled to deferment are those who live on investment income whereas those who enjoy the privilege live on earned income? Is this not further discrimination against people whom we should encourage to save?

As my hon. Friend knows, the Government have introduced a level of £2,000 below which income is not treated as so-called unearned income. That has been a major benefit to retired and elderly people.

asked the Chancellor of the Exchequer is he will now take further action to reduce the cost of mortgages for young married people.

Discussions with the Building Societies Association on the deferred mortgage payments scheme to help first-time home buyers are well advanced. The scheme should provide a good deal of help to young married couples taking on a mortgage for the first time.

Is the right hon. Gentleman aware that few people continue to believe the Government on this matter? Does he recall the days when the Conservatives castigated the Labour Government when mortgage interest rates reached 8½ per cent.? How does he justify the present penal rates? In his reply, will he refrain from citing the miners as an excuse?

Well over half the people of this country are now owner-occupiers. That is, on the whole, of great credit to the success of Tory policies. The building societies have recently made statements which indicate that they are not expecting any further increase in mortgage rates.