asked the Secretary of State for Education and Science if he will now consider the reintroduction of free school milk for children from 8 to 11 years of age; and if he will make a statement.

asked the Secretary of State for Education and Science whether he will now introduce legislation to restore free school milk for children from 8 to 11 years of age.

Future policy on school milk is still under consideration.

Recalling the opposition of the Labour Party, and particularly that of the Under-Secretary, to the Education (Milk) Act 1971, remembering that the Government's reasons for not revoking that Act are financial ones, and recalling equally that the reason for introducing the Act in the first place was to save Government finance——

May we have a little less recalling and rather more questioning?

Will the Under-Secretary tell us what has happened between 1971 and now to change what we were then told was a matter of principle for Labour Members into a matter of policy?

I well recall my words when the Conservatives withdrew free school milk. I in no way retract anything I said about that decision. I am not in a position to make an announcement at present, because the matter is still under consideration. For the hon. Gentleman's information, it would cost approximately £8 million a year to restore the free milk to those from whom it was withdrawn at the time the Conservatives were in office.

Does my hon. Friend not agree that it would be desirable to restore free school milk? Will she take this opportunity to repudiate any suggestion that the Government may seek to end the powers whereby some local authorities have been able to get round the policy of the previous Government and supply free milk?

I agree with my hon. Friend that it is desirable that free milk should be made available to children, as it was in the past. As the matter is still under consideration I shall bear in mind the point he has raised when we examine the whole question of school milk.

May I be the first male Member to welcome the hon. Lady to her present position? Even in these days when women are equal a little courtesy is agreeable. Does the hon. Lady recall that when the Education (Milk) Bill was going through the House—I speak as the junior Minister who took the Bill through—she was deeply engaged in the question of school milk? May I, therefore, assume that her answer means that if the Government decide that free milk should not be reintroduced, she would clearly not feel it possible to remain in her present post?

Considering the courtesy with which the hon. Gentleman welcomed me back, and as I believe in equality, I thank him and wish to be courteous in return—but I think he wants me out of my job a little early. I remember clearly what I said, and I in no way retract it. We are in financial difficulties. The whole matter is under review and I cannot this afternoon make any commitment about my future or the future of school milk.

asked the Secretary of State for Education and Science what advice he will issue to local education authorities on the need to ensure that pupils attending differing primary schools all have an equal chance of basic educational advance.

Maintained primary schools are non-selective, and to that extent already offer equal opportunities for education. What they teach and how they teach it are matters to be decided locally.

The Minister said that maintained primary schools are nonselective and equal, but that they all teach differently. This could be misunderstood by a parent who knows that the standards of primary schools differ tremendously in the same area. If there is divisiveness, according to which school a child is directed to in the bureaucratic bingo of the State education system, and if we are to have equality, will not Her Majesty's Inspectorate have to enforce a minimum basic curriculum and basic standards in all primary schools?

I did not say "equality"; I said "equal opportunities". [An HON. MEMBER: "They are the same thing."] With respect, they are not. In primary schools it is important to bear in mind that the curriculum must be as varied as possible to cater for the differences of emotional development, aptitude and skills of children. My right hon. Friend the Secretary of State has no legal power to determine the curriculum of teaching methods in schools—a fact of which I should have thought the hon. Gentleman was aware. I defend strongly the principle of variation in primary schools, which, as an ex-teacher, I believe is essential.

Does my hon. Friend accept that we on the Government side of the House still believe in equal opportunity for children wherever they are, but does she also accept that if that principle involved children in primary schools in the repetitive examination system, as the hon. Member for Brent, North (Dr. Boyson) recently suggested, it would be rejected not only by Labour Members but by the vast majority of parents?

I entirely agree with what my hon. Friend says about examinations.

Is the Minister aware that many heads of secondary schools are becoming increasingly perturbed that whilst so many children going on to them from primary schools usually have a very good knowledge of music, movement and murals, they have only the most nodding acquaintance with the three Rs? Does this not mean that the curricula of the primary schools should be looked at again?

I hope that within the next few weeks I shall have an opportunity to meet many heads, when I can discuss with them what the hon. Gentleman has said, but I believe that very often when we try to establish the principle that all children must reach a certain standard by a certain age we tend to judge learning in rather unfortunate ways, and do not take account of variations. The Bullock Committee, which examined the question of reading in particular, pointed out that the big problem was not within the schools, but that there was still strong evidence that children from socially deprived backgrounds suffered most, and that this could be related not so much to the schools as to their backgrounds.

Does my hon. Friend agree with me that standards in the primary schools—and I was teaching just over a year ago—[Interruption.] I am obviously still teaching. Does my hon. Friend agree that conditions in our primary schools are the pride of the education system almost throughout the world, and that the Bullock Report vindicated the standards of reading in our schools and pointed out, knowledgeably, where the difficulties lay and said that they had been grappled with? Does my hon. Friend also agree that to be constantly knocking the education system and not facing the facts of that system is most unhelpful at a time of economic stringency?

I entirely agree with what my hon. Friend said. He has the great advantage of having taught very recently in the State system of education, and he therefore brings to the House a wealth of information on education questions.

asked the Secretary of State for Education and Science what is the real value in percentage terms, after allowing for threshold payments, of his offer to university teachers to take effect from October 1975.

asked the Secretary of State for Education and Science if he will make a further statement on the results of arbitration on university teachers' pay.

The board of arbitration on the pay of university non-clinical teachers gave its decision on 2nd June. The decision will result, with effect from 1st October 1975, in an overall increase of 24·6 per cent. in the scales in payment since 1st October 1974, or 21·3 per cent., excluding threshhold payments in payment before that date.

While welcoming this advance and readjustment for university teachers, may I congratulate the Secretary of State and his predecessor on having taken up the policy of the Opposition, that the matter should be referred to arbitration? May I also hope that the adjustment in the cost of living which is due to take place this autumn may be achieved with speed?

I am grateful to the hon. Gentleman. It is the intention to get the cost-of-living adjustments settled as soon as possible, and the negotiations are now being held.

Does the right hon. Gentleman accept, however, that a great deal of unnecessary damage was done as a result of not going to arbitration earlier? Does he also accept that a whole series of measures that the Government have taken, or failed to take, regarding universities have caused a great demoralisation in the university sector? Instead of the noble Lord the Minister of State going round full of his half-baked ideas softening up the universities for further cuts and economies, may we not have a full-scale inquiry into the whole of higher education? It is 12 years since the Robbins Report.

I do not think that that supplementary question arises directly from the Question. I entirely repudiate what the hon. Gentleman said about the activities of my noble Friend. The hon. Gentleman and his hon. Friends must understand, when they preach at us day after day about the need for the most dramatic and fantastic cuts in public expenditure, that if we have to curtail public expenditure, although we shall not adopt all their proposals, the cuts will affect every sector of public education. Therefore, it is no use making great speeches opposing my right hon. Friend the Chancellor of the Exchequer and then complaining that, necessarily, we shall not be able to spend as much money on this and that project as they would like.

asked the Secretary of State for Education and Science if he will introduce legislation to ensure that local authorities do not cut back on existing educational provisions without his direct authority.

No, Sir.

Is my right hon. Friend aware that Conservative-controlled authorities such as Bradford propose to cut the number of teachers by as many as 240 this year, which will mean larger classes and the virtual ending of remedial education? Does he realise that it is very sad for us to see him standing idly by while this happens? Will he assure Labour Members that he will fiercely resist any Treasury attempt to cut the central Government grant for education expenditure next year, and that he will make sure that local authorities spend education money where it counts—on education?

In the rate support grant settlement for the current year adequate allowance was made for education, in the Government's opinion, and there should not be cuts of the size to which my hon. Friend has referred.

Is not the truth of the matter that if the Government are serious about restraining public expenditure there must be such cuts not only in the future, but now?

I do not accept that. Some cuts have already been announced by my predecessor and by my right hon. Friend the Chancellor. I do not see the case for a further announcement today.

In an earlier reply, my right hon. Friend talked about the relationship between central and local government. Is he not aware that there are wide regional variations in the cuts being made? Whatever my right hon. Friend may say about the rate support grant, some local authorities are taking advantage of the situation to make bigger cuts than would be justified as a result of the rate support grant negotiations.

I share my hon. Friend's concern about the matter. The Government have offered guidance to local authorities about their current expenditure and will continue to offer guidance. But I could not undertake, as my hon. Friend the Member for Keighley (Mr. Cryer) asked, to make it conditional that the authorities should do nothing without my prior approval, because I do not have such powers and to seek them would be entirely to change the pattern of the relationship in education between central and local government.

I should like to begin by congratulating the Secretary of State and the Minister on their appointments.

I am much obliged to the hon. Gentleman for his kind personal remarks about my hon. Friend and myself.

asked the Secretary of State for Education and Science when his Department will take a decision on the report of the Working Party on School Transport; and if he will make a statement.

asked the Secretary of State for Education and Science whether he is now in a position to make a statement on future policy regarding travel concessions for schoolchildren.

School transport is among the many matters I am considering. My aim is to put to the local authority associations proposals for new school transport arrangements. These would take into account many of the features of the working party's recommendations.

Is my right hon. Friend aware that the main recommendation of the working party, namely, that parents should have a right to ask local education committees for transportation and that transportation should be provided at a flat rate, decided nationally, would remove the great sense of injustice felt by many parents either because they live outside the three-mile limit or because of the differing fare policies of various branches of the National Bus Company? Will my right hon. Friend undertake to present his conclusions and recommendations on this subject before October, which will be the second anniversary of the publication of the working party's report?

I am obliged to my hon. Friend. I shall certainly try to meet the target he set. In my previous post in the Government, as Minister for Transport I was at the receiving end of some of the complaints about the difficulties to which he referred when I went round the country. I am not unaware of the problem and I agree that something along the lines he suggests might be a way of approaching the difficulties. As I say, we are anxious to discuss the arrangements with the local authority associations as soon as we can.

Will the Secretary of State be a little less coy about what he is suggesting? Will his suggestions do away with the arbitrary distinction based on the two- and three-mile limits? Is he aware that that distinction is causing even more trouble now because of the much higher bus fares which children just within the limit are being required to pay?

I ask the hon. Gentleman to be a little patient. These are difficulties which we shall seek to eradicate, but in view of the present economic climate I do not think that anyone should expect us to change the system in a way that will add substantially to the cost. Our problem is to achieve a better system at the same cost for the local education authorities.

I join in congratulating my right hon. Friend and his colleague on their new appointments. I realise that my right hon. Friend has been in his new appointment for only a few days and one would not expect him to have taken immediate action. This difficulty causes great concern to parents of two or more children, who find it exceedingly difficult to meet the cost of the increased bus fares, and it is leading to truancy and a loss of education for the children. Will my right hon. Friend give this problem his immediate consideration?

I understand the difficulties, but the House will understand that before any proposals are proceeded with it is essential for us to have discussions with the local authority associations. The local authorities will have to administer the scheme and it is important that they should have the opportunity of giving us the benefit of their advice.

Will the Secretary of State bear in mind the effect that the present rules have on the recruitment of workers in rural areas, especially in agriculture and forestry? Will he also bear in mind the special plight of children who may have to walk through rain or snow for two or three miles to catch a bus and then have to sit wet and, perhaps, cold in the bus until they reach school?

Yes. It was problems of that kind that gave rise to the setting up of the working party, and we are concerned to try to improve the situation.

May I, from the Opposition Front Bench, congratulate the right hon. Gentleman on his elevation?

We assume that.

The hon. Gentleman should not assume anything where manners are concerned. May I express the hope that the right hon. Gentleman will prove as moderate in practice as his predecessor was in theory? Is it not extraordinary that after nearly two years we have not had so much as a peep from the Department of Education and Science on the question where the Government stand on the issue of school transport, which is of intense interest to millions of parents? Will the new Secretary of State tell the House today whether he accepts the principle of the Hodges Report that the important thing is to provide a transport service, and that if they were guaranteed that service parents would be willing to contribute to it according to their means?

I am obliged to the hon. Gentleman for his kind personal references, but I do not go along with his rather graphic description of the contribution made by my predecessor. I personally pay tribute to what my predecessor did in this sphere. As for dealing urgently with the transport problem, because of my previous appointment I am very sensitive to the need to get on with it, but at the same time I have to take account of local authority views and the financial situation. Within the five days that I have been in office I have tried to look at many matters, but I shall deal with this one as soon as I can.

asked the Secretary of State for Education and Science whether he is satisfied with the present arrangements for liaison between schools and universities.

There is close and systematic contact between university bodies and those representing the schools, but I am always ready to look at suggestions for improving present arrangements.

Does my right hon. Friend accept that such liaison in Scotland is made more difficult by the fact that the schools and universities are dealt with by different Government Departments? Will my right hon. Friend comment on recent suggestions that better liaison could exist between schools, universities and Scottish colleges of further education if governmental responsibility for implementing a fully comprehensive system of Scottish education, whether at school or at post-school level, were included in the devolution plans?

It is a little too early to come to any final and firm conclusions on my hon. Friend's proposition. Because of the valuable interchange of students between Scottish, Welsh and English universities, I should need a lot of persuading before accepting that it would be desirable to have separate university systems.

In considering any proposals on the future of Scottish universities, will the right hon. Gentleman take account of the near-unanimous view of the Scottish universities that they wish to continue to operate under his Department?

I have noted that view.

Will the Secretary of State accept that there is a desperate need for a link between secondary and tertiary levels of education in Scotland? I accept that the right hon. Gentleman has had other responsibilities in the past few years, but is he aware how much first-year courses at Scottish universities militate against Scottish students? For example, does he know that in 1973–74 at St. Andrew's University 30 per cent. of first-year Scottish students failed that course, whereas only 4 per cent. of the GCE-qualified students failed it? The system needs urgent revision, so that Scottish students do not suffer from that situation.

The organisation of schools in Scotland is not within my responsibility. If I were to seek to take a close interest in them, the first people to complain would be the hon. Lady and her hon. Friends. I shall convey to my right hon. Friend the Secretary of State for Scotland the concern that has been expressed, and if, through the University Grants Committee and the Vice-Chancellors Committee—both of which have special links with the schools—it is possible to improve the arrangements—nothing is perfect—we shall be anxious and willing to consider any positive suggestions.

Is my right hon. Friend aware that the additional tier of education has been interposing itself between the schools and universities? Is he aware that there are about 50 sixth form colleges now in existence, and that this is a major educational innovation, with considerable implications? Will my right hon. Friend prepare a report on the working of the sixth form colleges and have it published as soon as possible?

I think that it would be rather a tall order to prepare a report of that kind. I shall certainly consider my hon. Friend's suggestion, but it is really much more a question of the way in which comprehensive education is organised within certain areas.

asked the Secretary of State for Education and Science when he intends to announce a second year's allocation for adult literacy, to follow his initial allocation of £1 million in July 1974.

The allocation last July was authorised with no commitment to further grants of this kind, and much of it still remains to be distributed. My right hon. Friend the Secretary of State for Scotland and I will be keeping the progress of this scheme under review, in relation to the continuing effort to promote adult literacy, our economic circumstances and other educational priorities.

Is my right hon. Friend aware that the regional programme which was started last year began in response to a specific Labour Party commitment in our manifesto to help the disadvantaged student, whether he be an adult or a child? Does my right hon. Friend agree that having started this scheme, and having aroused a great deal of enthusiasm in many parts of the country, it would be an absolute scandal if it were strangled at birth? Will my right hon. Friend ensure that the people working in the field are given some assurance that further money will be available?

As my hon. Friend knows, the scheme is administered by the Adult Literacy Resource Agency. I understand that so far it has allocated £368,000 among 58 local education authorities and 19 other organisations. Therefore, there is quite a lot of the £1 million still left to be allocated before the scheme reaches its limit. However, I shall strongly bear in mind the views that my hon. Friend has put forward.

Is the right hon. Gentleman aware of the British Broadcasting Corporation's important project to spend £800,000 of its own money over three years on programmes to stimulate the interests of illiterates and to encourage them to take lessons? Is the right hon. Gentleman aware that the BBC's charter prevents it from spending approximately £144,000, the sum which is required for ancillary work in connection with these programmes, including a telephone referral programme? Will the right hon. Gentleman take an interest in this project and consider whether part of the money available could be directed in the area to which I have referred?

I am not informed about that difficulty, but I shall look into it. It may be one of the ways in which the money could be spent.

asked the Secretary of State for Education and Science if, in view of the increasing responsibilities of the regional advisory councils for further education, he will take steps to ensure that all regional advisory councils for further education include representatives of recognised teacher organisations in colleges, in their councils, standing committees, and specialist sub-committees.

Membership of the regional advisory councils for further education is a matter for their constituent local education authorities, but I understand that further education teacher organisations are represented on all the councils and on most of their standing and sub-committees. As to the responsibilities of the regional advisory councils, I am consulting a wide range of interests on the arrangements for co-ordinating public sector higher and further education.

Does my right hon. Friend accept that the Government's expenditure cuts and their savage effect on further education are putting particular responsibilities on the regional councils? In these circumstances, does my right hon. Friend agree that it is vitally important that on the councils and their committees we should have people who have an understanding of grass roots college problems?

I accept that there should be such people on the councils and their committees. As I understand it, they are already so placed. I would caution my hon. Friend about using such explosive and immoderate language. I do not accept that the cuts have been savage. No cuts are to be welcomed in education, but we must bear in mind the serious economic situation which is facing the nation.

As my right hon. Friend is dealing with further education, is he aware that in England there are nine colleges of further education that deal entirely with the physically handicapped, and that there are other colleges that deal with the physically handicapped in special departments with special facilities? Although that is true of England, is my right hon. Friend aware that not one college in Wales has such special facilities? Will my right hon. Friend impress upon the Secretary of State for Wales the need for such facilities?

I shall draw the attention of my right hon. Friend to the point that my hon. Friend raised. I am sure that my hon. Friend will understand that after only five days in office I do not have the detailed knowledge of exactly how many colleges of this and that there are and where they are located.

asked the Secretary of State for Education and Science if he will seek to ascertain the extent to which the University Grants Committee takes into account the value of works of art possessed by universities in deciding on the grants to be made to them.

The UGC does not take this into account.

May we take it that the bizarre idea of universities selling works of art of which they are custodians is now finally dead and buried? Does the right hon. Gentleman agree that at a time of national economic difficulty the best way of helping the universities is to show a new-found realistic understanding of their problems, rather than to float culturally illiterate schemes of sale?

I hope that the hon. Gentleman is imputing no suggestion that I have said anything of that kind. What he is getting at is a statement or remark which was made lightheartedly, I think, by my predecessor. We have the testimony of the House, because the remark was made before the Select Committee on Science and Technology on 7th May, when, quite lightheartedly, my right hon. Friend said that he had been told by a professor that times were so hard in the universities that they might have to sell some of their famous oil paintings. My right hon. Friend said that although that was one kind of hardship, he also knew that secondary schools in poor parts of the country had very serious problems. It was not a suggestion, as I think the hon. Gentleman imputed, on my right hon. Friend's part that the universities should finance themselves by selling their art treasures. If there is a scintilla of doubt in people's mind that this might become Government policy, I must disabuse them completely. I would not be a party to any such suggestion.

asked the Secretary of State for Education and Science whether he will have discussions with the universities about public access to their art collections.

I see no grounds for doing so. Most important university collections are open to the public, but if the hon. Member has any exception in mind I shall look at it if he will write to me.

Will the hon. Gentleman ask his right hon. Friend the Secretary of State to dissociate himself from the remarks made by the previous Secretary of State for Education and Science that universities should sell their art treasures to pay their bills? Is this not an inheritance for future generations to enjoy, and would it not be far better to raise money by making those treasures available to a larger public?

If the hon. Gentleman had been here earlier, he would have heard my right hon. Friend make the situation perfectly clear. My right hon. Friend did not associate himself with the remarks of his predecessor, and added that his predecessor intended those remarks to be taken as a joke. Therefore, the hon. Gentleman's supplementary question is based on a wrong premise.

asked the Secretary of State for Education and Science what estimate he is able to make, as a result of his discussions to date, of the likely cost to the education service of discontinuing the direct grant system.

I have nothing to add to the reply given on 8th April to a similar Question by the hon. Member for City of Chester (Mr. Morrison).—[Vol. 889, c. 997–8.]

Is it not completely unsatisfactory that at a time of great economic stringency the Department is not able to give any indication of the cost, while at the same time it is giving the boot to a number of good schools?

The hon. Lady must try to understand that the financial implications of the abolition of the direct grant system, which I totally support, are difficult to estimate. There could be anything between a saving of £30 million and an addition of £12 million. Much depends on which of the schools elect to go into the maintained sector and which elect to become independent. By becoming independent they will subject themselves to any legislation which may be discussed or considered in respect of independent education. It is very difficult to estimate the cost until we know the outcome of our contacts and consultations with the schools.

Does my hon. Friend accept that it is typical of the Opposition that they should count the cost of educational policy in economic terms rather than bear in mind the real educational advantages of increasing equality of opportunity?

I totally agree with what my hon. Friend said.

May I fill in the gaps in the hon. Lady's figures?

Order. The hon. Gentleman can do so only in an interrogative manner.

I should not dream of trying to do anything else, Mr. Speaker. Has the hon. Lady taken into account the possible capital cost of replacing the places in the direct grant schools which may go independent? If she does so, will she not find that the cost to the Exchequer is liable to be in the region of £100 million? Is it not an Alice-in-Wonderland state of priorities to be incurring this extra expenditure at a time when the education service is facing major cuts?

I do not think that the hon. Gentleman has done anything to improve my figures. He is quite right in suggesting that there may be some more capital expenditure, but I can only repeat that until we know which direct grant schools will opt for which options before them it is impossible to give an estimation of the cost involved. That seems to be a fair and reasonable answer.

asked the Secretary of State for Education and Science if he will make a statement on the progress of his discussions with the direct grant schools.

Since my Department wrote on 1st May to the schools and local education authorities about the arrangements for phasing out the grant, my officials have discussed particular questions with individual schools and authorities, and consulted their representative bodies about a departmental circular to be issued when the regulations implementing the Government's decision are laid before Parliament.

Has the hon. Lady had discussions with parents of children at direct grant schools? Does she agree that the standards of education in those schools are such that they are always enormously over-subscribed.

In my three days in this office I have not had a chance to have discussions with anybody, let alone parents, about direct grant schools. I do not think it is necessary to do so—[Interruption.] A large number of parents have made their views known to the Secretary of State for Education and myself through letters and representations which have been made through other bodies.

Before the Minister comes to any firm policy decision, will she pay an early visit to Dulwich, where she will see the most obscene example of educational apartheid? On one side of the road, there is a direct grant school with great education and other facilities, and on the other side of the road a comprehensive school belonging to the Inner London Education Authority. The grossly obscene educational apartheid in that area surely will convince everybody in the country that the sooner we get rid of direct grant schools the better.

I agree with my hon. Friend's remarks, and I should be happy to visit at least some of the schools and make the comparisons which he has mentioned. Since at one time I was the chairman of the Labour Party working group which made recommendations that were included in our manifesto on the subject of direct grant schools, I am unlikely, on any ground, to change my view that the present system involves educational apartheid.

Is the Minister aware that the alternative she gave to the direct grant schools—namely, that they could go into the public sector or remain independent—discounts the fact that there are direct grant schools which have been told they can either go independent or be closed down, such as the Perse School for Girls? Has she taken that factor into account in assessing the cost?

I cannot assess the cost until I know which of the options the direct grant schools are to take. Although I have not had time to look into this matter, when direct grant schools are closed it will involve some costs in respect of those children who come into the State sector.

asked the Secretary of State for Education and Science whether he will pay an official visit to school buildings in the metropolitan borough of Wirral.

I have no plans for such a visit at present.

Is the Secretary of State aware that my constituents in Bebington are fed up at delays in implementing comprehensive secondary education, chiefly caused by the disastrous policies of the right hon. Lady the Leader of the Opposition when she was Secretary of State for Education? Therefore, will he take the opportunity, when visiting my constituency, to make clear—or will he say now—that despite the recent sabre rattling of Tory councillors he intends to implement comprehensive education throughout the Wirral?

In reply to the general proposition advanced by my hon. Friend, I intend to see that comprehensive education is implemented throughout the country—which includes the Wirral. I understand that the Department received a scheme from the Wirral in February. We have had no indication of any change in those proposals. I hope that the local authority will go ahead and implement them as soon as possible.

asked the Prime Minister whether he will place in the Library a transcript of his interview on the television programme "Weekend World" on Sunday 11th May.

I refer the hon. Member to the reply which I gave to the hon. Member for Blaby (Mr. Lawson) on 10th June.

Is the Prime Minister aware that his criticism of Mr. Sevareid in his all-too-realistic analysis of Britain will seem extraordinarily complacent at a time of national crisis? What distinction does the Prime Minister's labyrinthine mind draw between Mr. Sevareid's description of Britain sleepwalking to disaster and the description by the Secretary of State for the Environment of Britain being on a suicide course—or is the Secretary of State just another wet hen in the cocktail party circuit?

I answered a question last week on the serious speech made by my right hon. Friend the Secretary of State for the Environment. What Mr. Sevareid might have missed—as, indeed, have the Opposition—is the fact that in relation to our overseas balance of payments and the strength of the pound there has been the most remarkable recovery in the last five months in our balance of payments. Over the first five months of this year the deficit—including even oil, of which the Conservative Government never had to take account because it hardly entered into their last quarterly figures—is now 75 per cent. less than the monthly average for the same five months last year, and 50 per cent. less than the average monthly deficit of the last quarter of 1973, even though oil price increases had hardly begun to work through in that quarter. This is a remarkable achievement. It would be nice if the Opposition occasionally paid tribute to the exporters and those who have worked so hard to produce those figures.

My right hon. Friend will be aware that page one of the transcript of the interview referred to the need to keep the country free from strikes, to boost production and exports. I support that view and the work of the Secretary of State for Employment, but will my right hon. Friend tell the House about the latest situation on the proposed strike on British Rail?

My hon. Friend and the House will be aware that there have been developments over the weekend on that topic and that further developments have taken place this morning. In the expectation that discussions will be taking place, I think that probably I should not add to anything that has already been made public on this important issue. The Government have made their position absolutely clear.

Is the Prime Minister of the view that the improved balance of payments position makes it unnecessary for him to take further action to curb inflation?

Not at all. I said that it would be nice if Opposition Members occasionally paid tribute to the remarkable turn-round in our balance of payments. The need to curb the increase in inflation is due to the fact that we do not want to imperil the considerable success in our balance of payments so far achieved. I agree with the hon. Gentleman that if inflation continues at the present rate it will imperil improvements in the balance of payments in the present year.

Has my right hon. Friend received any observations on his important comment in the broadcast. in respect of the desirability of pre-Budget consultations with interested parties?

My hon. Friend will be aware that the idea was welcomed by both the CBI and the TUC during that weekend. He may also like to know that reference was made to this matter in the meeting of NEDC this morning, when we discussed the future role of NEDC and the important paper produced jointly by the TUC and the CBI.

Will the Prime Minister bear in mind that during the last election campaign the Healey figure for inflation was 8·4 per cent., and that after eight months of Socialist Government it is now 53·1 per cent.? Will the Prime Minister now say what action he proposes to take, if any, to arrest the daily decline of the pound?

The right hon. Lady will be aware that this question was answered yesterday by my right hon. Friend the Secretary of State for Prices and Consumer Protection. My right hon. Friend particularly referred to the Budget figures in the last month, but the right hon. Lady will be aware that a very high proportion of the increase in wages in the last year, which she regards as uniquely the cause of this problem, has been due to threshold payments introduced by her Government.

Does the Prime Minister recall that he said frankly in that broadcast that those who took more out of the economy than the nation could afford would face the Chancellor with the proposition either of clawing it back through taxation or of cutting down on social expenditure? Does he agree that the unfairness of that is that it hits people equally, whether they have settled within or outside the social contract?

Yes, Sir. I agree with the right hon. Gentleman's interpretation of what I said. I agree with his judgment of the colossal unfairness between particular groups within the country. I think that my right hon. Friend proved in the Budget what was said, both by the right hon. Gentleman and myself—that because there were some settlements which were consider- ably outside the social contract, he had to do more in the way of taxation in the Budget than he would otherwise have done, at a time when the House would wish, not on cost inflation grounds, but on demand inflation grounds, to do something to increase the level of activity in this country because of the increase in unemployment.

asked the Prime Minister if he will seek an official meeting with Dr. Hastings Banda in the near future.

I have no plans at present to meet President Banda, though, as the House knows, I met him in April, when he was visiting this country.

Is the Prime Minister aware that that reply will be greeted with some regret? If he met Dr. Banda he would receive sound advice on the question of Rhodesia. Is the Prime Minister also aware that that advice would be to drop the monstrous idea of subsidising, the Marxist régime in Mozambique, so as to persuade it to close the railway link, and so try to subjugate all the people of Rhodesia, black and white alike?

I do not agree with the hon. Gentleman. Nor do I agree with his attribution of such views to President Banda. President Banda, and Malawi, provided the occasion for the meeting of the African Presidents with Mr. Vorster, all of whom are now trying to find an early solution to the problem of Rhodesia.

asked the Prime Minister what changes in general Government policy he proposes to introduce following the outcome of the referendum.

We shall continue to pursue the policies set out in our manifestos and approved by the country in two General Elections last year.

Will the Prime Minister please now turn his undivided attention to inflation? Is it true that the Government are pressing—as was reported by the Press and radio this morning—the board of British Rail to go beyond the highly inflationary arbitration award? If the Government are prepared to accept and finance a rail settlement above 27½ per cent., how on earth do they expect anyone to take them seriously on inflation?

As to the first part of the question, about giving my undivided attention to this matter, that is the case. We have had a series of meetings with the TUC and the CBI. Those meetings are continuing. I chaired the meeting of NEDC this morning. I shall be meeting the CBI this afternoon and the TUC tomorrow. These meetings will continue. We are seeking to reach agreement, in this democracy, on the basis of consent and not of confrontation. Any fool can obtain a settlement on confrontation. That does not last very long—as we saw. We are trying to get the basis of consent. I have already answered a question about the railways situation. I do not want to go beyond what I said this afternoon.

Will my right hon. Friend give an assurance that, following the discussions with the CBI this afternoon, there will be no amendments to the Industry Bill beyond those which were agreed in Committee? I think that this is a matter of the greatest importance, and I hope that my right hon. Friend will give us his assurance.

My hon. Friend will be aware that the Government, as usual, are considering the Bill as it comes from Committee. We shall discuss it with both sides. The Bill, and the implementation of the Bill, will be in full accordance with the manifesto and with the White Paper. My hon. Friend will be the first to agree that where action can be taken by voluntary policies, that is the right approach. That is what he said on Second Reading last February.

Does the Prime Minister accept that any attempt to readjust the time scale of devolution, as a result of the outcome of the referendum, would prove to be a costly error for the Labour Party, in political terms? Will the Prime Minister give us an assurance that there will be no extension of the timetable originally promised?

I welcome the hon. Gentleman's concern for the future welfare of the Labour Party. There is no connection in the minds of any of us between the outcome of the referendum and the Government's proposals on devolution, which were set out clearly in a White Paper which was published last autumn. We are sticking to the terms of the White Paper.

asked the Prime Minister whether he will make a statement on his recent meeting with Mrs. Bandaranaike, the Prime Minister of Sri Lanka.

We discussed a number of matters of mutual interest, including the tea industry in Sri Lanka, my proposals on commodities made at Kingston, the future development of relations between the South Asian countries and the European Economic Community, and the meeting of the non-aligned nations in Colombo next year.

Can the Prime Minister give us any indication of any measures which Mrs. Bandaranaike proposes to take to deal with the problems to which the Government have given urgent attention in relation to the tea plantations?

Some problems have been discussed, some of which are of a bilateral character, as some of the plantations are owned by British interests. I have pressed that any changes made there should be accompanied, as is the usual and universally agreed practice, by compensation in cases where they are taken over.

In view of the Prime Minister's distinguished record in support of War on Want, which is deeply concerned with the position of the Tamils in Ceylon, will he tell us whether he raised the problem of these Stateless people, who are without votes, representation or sustenance in the tea estates, largely because of their political position?

I am aware of the problem. I did not raise the matter with Mrs. Bandaranaike because it must be regarded—whatever the feelings of my hon. Friend, or of War on Want, of which I was a founder—as an internal affair of the Sri Lanka Government.

asked the Prime Minister if he will place in the Library a copy of his public speech at Poplar on Monday 19th May on pay negotiations.

I did so, Sir, on 20th May.

Is the Prime Minister aware that he said—and I quote—[Interruption.] I withdraw the personal quotation. The Prime Minister said that the big battalions should show restraint in the use of their industrial muscle during this period of unparalleled economic difficulty. Will he now say something about the vexed question of differentials, the solution of which would go some way to relieving the position of the lower paid?

What I said about differentials I said to the TUC last year. I know from Questions put by the Leader of the Liberal Party this afternoon that this is a matter about which we are all deeply concerned. I answered a Question about differentials last week. The subject has been considered by the Economic Committee of the TUC and will be considered by the General Council in the light of proposals for a flat-rate increase on which I commented last week. The problem has been that when low-paid workers have received a flat-rate increase on a given poundage it has been translated into percentages, and people who are far better off—not only manual workers but white-collar and managerial workers—have said that they wanted the same percentage to maintain differentials. By maintaining the percentage differential they vastly increase the differential in cash terms. This is a problem to which the Government and the TUC are devoting a great deal of attention.

Apropos the Question answered earlier, may I suggest to the right hon. Gentleman that it would be more accurate, in view of the Government's record, to say that any fool can get a settlement with surrender? What is the Government's policy towards the railway dispute?

It is exactly as we have explained it to the union and the board. I do not believe that it would help at this stage—[Interruption.] We have made it clear—we did this at the weekend—that we cannot possibly go along with the union's claim or with negotiations related to getting anything like that. We have made this very plain. We have explained to the union that although the consequences of a strike in support of the claim would be costly to the country at home and abroad, particularly for the travelling public and the movement of essential goods, the acceptance of a doctrine which would involve agreeing to the claim would be even more damaging.