asked the Chancellor of the Exchequer what recent representations he has received recommending that farmers should be allowed to average out their fluctuating incomes over a period of three years for tax purposes.

My right hon. Friend has received a number of letters supporting this recommendation from national and local organisations representing farmers.

May I ask the Financial Secretary two questions? First, is he aware that the Minister of Agriculture told farmers in December that he was seriously considering this proposal because of his anxiety about investment in the industry? What representations has the Minister received from that source? Second, would he not agree that, with the now seriously fluctuating incomes for farmers, because, for example, of last year's drought and the present concern about the pig industry, this proposal would help to give farmers stability and confidence and so secure the expansion we all want?

I understand the point, which a number of farmers have made on this matter, but it has, of course, already been looked at over a number of years. The problem is that, although everyone is in favour of this proposal at a time of rising incomes and profits, there are obvious disadvantages at a time of declining profits and incomes when the tax bill coming some time later can, perhaps, be something of a shock of those who had made calculations on a contrary assumption.

Is it not true that the farming industry has consistently made this case in bad and good years? Should not the Minister come forward with a rather more sympathetic response on the lines of that given by his right hon. Friend the Minister of Agriculture, instead of the Government appearing to speak with two voices on this matter?

I understand the problems facing farmers and a number of other professions and occupations as a result of widely fluctuating incomes. Our minds are never closed on any of these matters.

Does the Minister recognise that this is just one more example of the British farmer finding himself out of step with his European partners? Is it not time that in this matter as well as many others some parity was brought into the situation? Will the Minister look at this again with some sense of urgency?

The hon. Gentleman should be aware of the dangers of comparing tax systems which are so fundamentally different in their structures. If he goes into the matter, I think that he will find that the kind of comparisons that he may wish to make do not have a firm foundation. On the general matter, my mind is always open to ways of helping farmers and industry whenever possible. Naturally, I bear in mind the needs of collection of the revenue.

asked the Chancellor of the Exchequer if he will now authorise additional resources for the National Enterprise Board.

A total of £1,225 million has been allocated for the years 1976–77 to 1980–81. This includes an extra £100 million for the years 1977–78 and 1978–79, which my right hon. Friend the Chancellor of the Exchequer announced on 15th December 1976. The provision for later years will be reviewed in the normal way in the course of this year's public expenditure survey.

Has my right hon. Friend seen the recent report of the National Economic Development Office, which suggests that manipulating the exchange rate is not the best way to promote exports? Does he agree that exports depend much more on design, productivity and quality, which in turn depend upon investment? Will he look again at the allocation to the NEB in the light of the need for a much higher level of investment in British industry?

I certainly agree with my hon. Friend that this question of investment and industrial performance in exports generally is not a simple matter of the exchange rate. It is a matter of industrial performance and design, as he said, and the total level of investment. As I have indicated, we shall certainly look into the whole question of the amounts to be made available to the National Enterprise Board during the course of the present year's survey.

Will the Chief Secretary confirm that the devaluation of the currency which has occurred since this Government came to office is one factor which has led to higher food prices having to be paid by the housewife?

I would not do that. I am sorry that the hon. Gentleman seeks to make that kind of point. The fact is that the matter is much more complicated than that, as he very well knows. [HON. MEMBERS: "No. He does not."] My hon. Friends might be right. He does not know.

Is my right hon. Friend aware that there are large numbers of advance factories standing empty in industrial estates in regions of high unemployment? Would it not be sensible to allow the National Enterprise Board sufficient funds so that it can adopt an initiating role and establish industrial production in these factories? Does my right hon. Friend agree that not only would this reduce unemployment, but it would meet the point made by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) about import substitutions and perhaps help us to improve the balance of payments?

I very much agree with what my hon. Friend said. I am sure that he will have noted that we both agree with what the Prime Minister said a short time ago. He told the House on 3rd March that he has asked the NEB to investigate the possibility of its investing in the regions, particularly in the North-East and the North-West.

Is it not rather odd to be talking of allocating extra money to the NEB when the Government have not even fixed the capital structure of the NEB, which has been in operation for 15 months?

It is not at all odd. The hon. Gentleman may have noted that many sections of private industry frequently queue outside the doors of Ministers and the NEB for public money to help them in their problems. I imagine that that was one reason why the last Conservative Government introduced the 1972 Industry Act.

Is my right hon. Friend aware that Lord Ryder gave evidence to the Public Accounts Committee that the NEB was providing funds for smaller growth industries which the banking sector had failed to supply? Would not my right hon. Friend accept that that is an excellent reason for adding to the resources of the NEB?

I agree with my hon. Friend, but at the moment there is no evidence that the NEB is short of funds for the type of investment to which he referred. Certainly it is doing an excellent job, especially to assist small enterprises.

asked the Chancellor of the Exchequer, what proposals he has to return to a fixed sterling exchange rate.

asked the Chancellor of the Exchequer if he is satisfied with the present value of the £ sterling.

For the reasons indicated in my right hon. Friend's Budget Statement, the stability of sterling that we have been enjoying is welcome. We do not, however, have any present intention of returning to a fixed rate.

Is the right hon. Gentleman aware that the manifest advantages of a floating exchange rate have been confirmed, even within the past 48 hours, by the Federal German Republic Bundesbank? Does he therefore agree that sterling should float freely rather than dirtily, and will he give an undertaking to the House that he will resist pressure from the International Monetary Fund that might require the Government to return to the regime of a fixed exchange rate?

I understand the hon. Gentleman's interest in a free float, which he has maintained for many years. The position of the Government is quite clear in this respect. At the end of it all, it is the market that determines the exchange rate of the pound. I am sure that the House welcomes the stability shown in the past few months, but we must realise, at the same time that an exchange rate wildly out of line with what our trading partners are prepared to pay for the pound will not last very long.

How is investment to be encouraged in manufacuring industries if the exchange rate means that our exports are not competitive? When will the Chancellor fulfil his undertaking to the IMF that he will manage the exchange rate in order to maintain competition?

The undertaking was to ensure stability and to maintain competitiveness. We have seen support for this from large sections of industry, which consider that our exchange rate provides them with a degree of competitiveness that enables them to increase their exports. A balance has to be struck, and I am sure my hon. Friend will appreciate the balance we have in this country between competitiveness and the rate of inflation and that they both ultimately have a bearing on the exchange rate.

Since the right hon. Gentleman is answering Questions Nos. 3 and 14 together, will he explain why, when the pound is stabilised, that is greeted with paeans of praise, but that when the Scottish National Party suggests that after self-government for Scotland the Scottish pound will be worth £1·20, we are told that that is economically wrong? Can the hon. Gentleman reconcile those two positions?

If the hon. Gentleman is to have anything to do with the economy of Scotland, I grieve for it. If that is the way he intends to operate the exchange rate policies of his country, he will find it extraordinarily difficult to come to terms with what industry will require to invest and to make Scotland and the rest of the country competitive. I believe that the present arrangements are the best guarantee to that end.

Is my right hon. Friend aware of the anxiety of some of us that the market might push up the exchange rate because of the surplus on the current account later this year arising from the oil resources? Such a rise in the exchange rate could, despite the inflation rate, force our industries into an uncompetitive position.

Not at all.

That problem does exist, and it will depend very largely on what we do with the money from North Sea oil. If that money is added purely to consumption, the country will face the problem that my hon. Friend foresees. If, on the other hand, means are found of diverting those resources into investment and industry, they will contribute to our long-term growth, and that is the way in which we should use the money.

Does not this exchange of argument across the Floor of the House about what is or is not the right level for the exchange rate underline the wisdom of the Minister's original reply—that it should be judged by reference to what the market in the end decides? Does it not point to the dangers of maintaining a policy of trying to hold the exchange rate at some level determined by some politician? Would it not be better, therefore, to accept the advice offered by my hon. Friend the Member for Oswestry (Mr. Biffen)?

I can only repeat what I said at the beginning, which the right hon. and learned Gentleman found so congenial. Of course, at the end of it all, the market will determine the final exchange rate over a long period of time. But within those overall limits there can, of course, be excessive fluctuations and part of the task of any responsible Government is to produce stability within the limits set by the market itself.

asked the Chancellor of the Exchequer when he next plans to meet the managing director of the International Monetary Fund.

My right hon. Friend is in Washington attending meetings of the IMF Development and Interim Committees, at which Mr. Witteveen, the IMF Managing Director, will also be present.

Does the Chief Secretary recall the letter that his right hon. Friend sent to Dr. Witteveen on 15th December last when he stated that an essential element of the Government's strategy was a substantial and continuing reduction in the share of resources required for the public sector? In order to implement that strategy, what further proposals does the Chief Secretary have for ensuring that that substantial reduction will take place?

I recall the letter very well. We have clearly indicated in the public expenditure White Paper the share of resources taken by the public sector. We have no further plans in that direction.

Will the Chief Secretary tell his right hon. Friend when he returns that some of us are still more than a little anxious about the IMF conditions and the lunatic policy that continues to create a massive dole queue and is causing prices to escalate and wages to be held back, except for a few of those top industrialists who are being paid confetti money? When his right hon. Friend returns, will my right hon. Friend tell him that the result of this in the country generally means that we have got to change our policy if there is to be any hope at all of a future Labour Government?

I do have occasional opportunities to tell my right hon. Friend a number of matters, and I shall certainly ask him to take note of my hon. Friend's comments. However, I am bound to say that whether or not we wrote a Letter of Intent to the IMF, the policies we are implementing are, we believe, the right policies for creating the right kind of stable situation.

My right hon. Friend is cutting his own throat.

I confess that cutting my throat is not something that I normally enjoy.

They are cutting my right hon. Friend's throat—I am not.

My hon. Friend and I have a very happy relationship. It depends on the fact that we often disagree with each other fundamentally. I disagree with him on this matter very strongly. I do not believe that changing the economic strategy in this way that he suggests would in the long term help reduce the dole queues or prices.

When the Chief Secretary next speaks to anyone from the IMF and discusses the sterling exchange rate, will he tell the IMF whether he agrees with today's report from the London Business School, which advances the argument that the most efficient way to reduce inflation is to allow the sterling exchange rate to rise under market pressures? If he agrees with that argument, will he please explain both to the House and to the IMF why the Bank of England continues to intervene in order to hold down the exchange rate?

I read almost everybody's forecasts, recommendations and advice. I view them all, including those of the hon. Gentleman, with the same sort of scepticism. The Treasury's forecasts in these matters are frequently better than some of the others, including forecasts on the borrowing requirement. The hon. Gentleman knows better than to suggest that there is a simple solution to this problem. The question is one of a very fine balance, as my right hon. Friend the Financial Secretary was saying a little while ago.

asked the Chancellor of the Exchequer how many representations he has received on the increases in petrol prices and vehicle duty since 29th March.

Up to 21st April my right hon. Friend had received 1,500 representations.

Has any intimation been received by the Government about the voting intentions of the Parliamentary Liberal Party on this question? Does he expect on this occasion that votes will follow threats, or is it likely that, as on the last occasion, we shall be marched up to the top of the hill and then down again by the Grand Old Duke of North Cornwall?

I have to tell the hon. Gentleman and the House that I am not responsible for the voting intentions of any party in this House. That is a matter for the various Chief Whips. I have quite enough to do without troubling myself with these matters.

If, as the Chancellor claims, one of the main objectives of the increased petrol tax is to conserve energy, would it not have been more sensible to introduce a variable road fund licence tax on the basis of the American system, with a reduction for the more economical, smaller vehicles?

The hon. Gentleman will not be surprised to know that we looked at the possibility of a variable vehicle excise duty as have, I imagine, many other Governments since it was removed in 1948. There are strong arguments against a variable vehicle excise duty, which I am sure the hon. Gentleman will have read—although perhaps if he had, he might not have asked about it.

Does not my right hon. Friend agree that a variable vehicle excise duty would not be related in any way to mileage? That is far more important in the conservation of energy than the weight of the vehicle.

I agree with my hon. Friend. The increase on petrol affects larger cars that do fewer miles to the gallon. It is true that, in terms of energy conservation, an increase in the price of petrol will almost certainly have a greater effect than a variable vehicle excise duty.

asked the Chancellor of the Exchequer what criteria he used in determining the fee charged by the chief registrar for the issue of certificates confirming that bodies are common ownership enterprises as defined in the 1976 Act.

The fee charged is designed to cover the full cost of dealing with a successful application for a certificate. Each application requires detailed checking to ensure that the bodies comply with the 1976 Act.

I appreciate that, but is my hon. Friend aware that the fee of £50 that is being charged is too much for the smallest enterprises and the new ones, which have a particularly important part to play in the development of common ownership? Will he consider reducing the fee to, say, £20?

I am not sure whether I agree with my hon. Friend that the fee of £50 is too much. If an organisation wishes to become a common ownership enterprise, I should not have thought that £50 was too much. If there were model rules, for instance, for all these enterprises, it might be possible to reduce the fee. But, since each application involves considerable work, we have to charge a fee commensurate with that work.

asked the Chancellor of the Exchequer what increase he estimates that there has been in the retail price index as a result of the fall in the value of the pound over the six months to 31st December 1976.

A rise in retail prices of about 4 per cent. might result from the depreciation of sterling between July and October 1976 and a 7 per cent. rise from the depreciation over the whole period February to October 1976. In each case, the full impact would not come through until six to nine months from the end of the period.

Does not that answer indicate the wisdom of the 15th December package in the light of subsequent events? Does it not also illustrate the limitations upon any policy of domestic price control?

I accept what my hon. Friend says about the wisdom of the December package—that will come as no surprise to him. Since October the improvement of the pound has resulted in a rise in the RPI by about 2 per cent. to 3 per cent. below what it would otherwise have been. I think that my hon. Friend can draw his own conclusions about the implications of this on prices.

What does the hon. Gentleman think was the cause of the fall in the value of the pound, and to whom should the blame be attributed?

Part of the blame goes back to 1973, as the hon. Gentleman has accepted, from time to time. The main cause has been the excessive inflation in comparison with other countries, coupled with the excessive use of the printing press, causes from which we are only just recovering.

Is it not the case that the depreciation of the pound accounted for about one quarter of our inflation rate in 1976? Is not a much more important factor in our economic prospects the need to produce and sell more? Does my hon. Friend agree that this cannot happen as long as our export prices for manufactures are less competitive than at any time since 1972?

As I said in reply to a previous Question, I accept that competitiveness is also of great importance. There is a balance to be struck. I accept what my hon. Friend says about the relationship between the decline in the pound and the increase in prices. In fact, the retail price index varies by between one-quarter and one-third of 1 per cent. for every 1 per cent. depreciation, and it takes six to nine months to work its way through.

Would the Financial Secretary accept a lesson from a former deputy leader of the Labour Party, who said there are no more alibis now? If, as he tells us, the cause of the fall in the pound last year was the high differential inflation rate in this country and if, in 1977, we are once again running at an inflation rate roughly twice that of the OECD countries, what future impact does he think that situation will have on the pound?

The hon. Gentleman should turn to his monetarist friends for an answer to that question. Their answer is that the winding down of inflation is a very hard and long struggle. That is what has been taking place. If adverse factors appear at any time, it is easier for inflation to increase once again than to maintain its downward descent. That is the lesson that we have learnt over the past few years and the lesson that all future Governments will have to heed.

asked the Chancellor of the Exchequer what representations he has received since his Budget statement from widows and widows' organisations.

My right hon. Friend has received a number of letters from widows, but he has no record of representations received since the Budget from widows' organisations.

Is the Financial Secretary aware that there is great disappointment among hon. Members on both sides of the House that the Budget seemed to make no response to the problem of the discouraging effect of the tax system on working widows and the injustice done to widows and single women between the ages of 60 and 65? Can we have an assurance that he will be prepared to give sympathetic consideration to the further representations which will certainly be made during the course of our consideration of the Finance Bill?

The hon. Gentleman will know that I am always happy to receive representations from the widows' organisations and to profit from the information they give me from their constituent organisations throughout the country. Widows, like other members of society generally, have benefited from the tax reliefs given by my right hon. Friend in his Budget. When the hon. Gentleman asks for a special relief for widows he must be aware that by far the majority of them pay no income tax. If money is spent in this direction, it will not go to those in the greatest need, and the majority will not benefit at all. Bearing these points in mind, I look forward to our debates in due course on the Finance Bill.

Does my right hon. Friend agree that middle and upper income groups have benefited far more from the Budget than the poor, including widows, single-parent families, and low-paid workers with families? Would he agree also that these latter groups would benefit more from an increase in personal allowances than from a reduction in the basic standard rate of income tax? Can he indicate whether the child benefit is to be reviewed regularly in the same way as other long-term and short-term benefits?

My hon. Friend says that most relief has been given to those at higher income levels. But he is, of course, aware of the changes that have been taking place over the past few years as a result of the higher tax rates that have been introduced. He may recall the figures I have quoted of the ratio between the net earnings of a person on average male industrial earnings and those of a man at, say, £25,000 a year. That ratio, after taking allowances into account has shrunk to less than four to one. I believe that this is the basic reason why my right hon. Friend the Chancellor of the Exchequer has been called the most egalitarian Chancellor this country has ever known, something of which we may be proud.

Does not the Financial Secretary agree that the real problem affecting widows lies in the difference between the retiring ages of men and women? If women are to be required to retire at 60 and not 65, should not that be taken into account? Will he consider sympathetically and with action any representations that may be made in that regard during the Committee stage of the Finance Bill?

The difference between the retirement ages of men and women is a matter that is being raised more often and representations are being received in greater volume. There are problems, such as the interaction between retirement age and the age at which increased tax allowances become available, and these and other complications will undoubtedly have to be dealt with in due course.

asked the Chancellor of the Exchequer if he is satisfied with the growth in money supply.

Yes. The Government have shown their determination and ability to keep monetary expansion under control, and this has made possible the recent substantial falls in interest rates.

Would not my hon. Friend agree that the growth in money supply even now is well below the target set in the Letter of Intent to the IMF? Would he not further agree that this will have disturbing implications for the economy in the latter part of this year, particularly for unemployment? Does the Chancellor of the Exchequer intend to take any steps to increase the growth in the money supply?

I agree with the first part of my hon. Friend's supplementary question. The growth of the money supply is rising at present at a rate below the target of 9 per cent. to 13 per cent. which we wish to maintain. But I do not agree with him that this will make the recession worse. In fact, one of the components of the money supply figures is the figure for bank lending to the private sector. Recently, there has been very little bank lending to the private sector, which is one reason why the growth of money supply has been fairly low. However, with interest rates falling substantially, we hope that bank lending will increase, which in turn will increase the money supply and enable the growth to be kept within the target of 9 per cent. to 13 per cent.

Will the hon. Gentleman recognise that the present low growth of the money supply should certainly not be regarded as an excuse for creeping towards expansion of the rate of growth of the money supply as the year moves on, and that to go down that course—even to go as far as the 13 per cent. upper limit set for next year—would be to stoke the fires of the next round of catastrophic inflation?

I never cease to be amazed by lectures from the Opposition Front Bench about the money supply. Their record was appalling in that regard. My right hon. Friend and I have said that we mean to keep the growth within the target of 9 per cent. to 13 per cent. Also, as the right hon. Gentleman knows very well, the main indicator, as a result of our agreement with the IMF, is domestic credit expansion, and we mean to keep that within the ceiling imposed in that agreement.

Will the Minister say what rise in average earnings between August this year and July next year would be commensurate with the money supply guidelines that he has just stated?

This is not a matter that can be looked at in that way. We have said clearly that we regard the money supply as important. It is one important factor in ensuring that the rates of inflation come down, and we mean to keep the money supply within those limits. That is separate, to some extent, from any agreement that will be reached in relation to phase 3.

Will my hon. Friend reconsider the answer that he has just given? As a Socialist, is he not horrified to have announced to the House that he and his colleagues in the Treasury are now satisfactorily keeping down the level of demand in slump conditions? Will he now, on behalf of the Government, say to the world that this Government dissociate themselves entirely from the money supply arguments that we heard advanced from hon. Members opposite, since there is now no relevant relationship between money supply and the rate of inflation and between money supply and any of the developments within our economy? The sooner Ministers at the Treasury release themselves from the dominance of the outmoded and outdated theories that seem to manipulate this Government into slump conditions, the better we shall all be.

I disagree with my hon. Friend. The Government are not keeping demand down to the money supply. What we are doing is ensuring that the money supply is kept under control. My hon. Friend asked me why, as a Socialist, I can support that kind of policy. I had always understood that it was not part of Socialist philosophy to print money, either. It is not part of the philosophy of the Labour Party. What we want to do is control the money supply and ensure that our production and productivity improve so that we can have real growth in this country.

asked the Chancellor of the Exchequer when he intends to open formal negotiations with the TUC on phase 3 of his counter-inflation incomes policy; and if he will make a statement.

asked the Chancellor of the Exchequer what progress he has made towards securing a third year of pay restraint.

Discussions about pay policy after July 1977 have already begun. Both the Government and the TUC remain convinced of the need to avoid a wages explosion when the current round comes to an end.

Does not the Chief Secretary agree that the present social contract is causing alarm and despondency to skilled workers and is proving fertile ground for industrial trouble makers? If he accepts that, does he agree that, unless phase 3 manages to solve both these problems, it will turn out to be nothing more than a public relations exercise between the Government and the TUC?

Of course there are problems with skilled workers and differentials generally. This has not grown up just over the last two years, although it has been made more difficult because we have had to concentrate on bringing down the rate of inflation generally. The problems of differentials have grown up over successive incomes policies over many years. I agree with the hon. Gentleman to the extent that the next phase of incomes policy will almost certainly have to take account of, and be much more flexible to allow for dealing with, the problems of differentials.

Is it not the case that policies stringent enough to achieve the Treasury's own forecasts will have to be negotiated at a time when price inflation is running at the very high level of 16 per cent. and over? Is not Mr. Jones correct, therefore, in saying that it will be impossible to lay down centrally any kind of strict means for dealing with the matter if we are to overcome the problem of differentials to which the Minister has just referred?

I have noted the hon. Gentleman's reference to centralism. I assume that he took that straight out of the recent pronouncement by the right hon. Lady the Leader of the Opposition about leaving everything to be negotiated at local level. I am not sure that I would necessarily go along with that proposition. Certainly there are problems here, although the remarks often quoted as coming from Jack Jones do not take account of what he actually said. He stressed the need to continue the attack on inflation and warned against a wages scramble.

In future discussions with the TUC, will my right hon. Friend look at the TUC's economic review for 1977 and accept some of the TUC's proposals to expand the economy, and will he make the reduction of unemployment the Government's main priority?

My hon. Friend can be assured that we look at the proposals that the TUC expresses in its economic review, but I am sure that he will recognise that it will not help anybody in this country if we expand the economy by expanding home consumption. The way to expand the economy is to improve our industrial performance and expand it in exports and import substitution. That is the way to improve our position, to increase demand and reduce unemployment.

Can the Chief Secretary help the country to understand exactly what stage has been reached in the dialogue that is taking place? Do the Government stick to the view expressed by the Chancellor that the conditional tax cuts will not be made final until a satisfactory agreement on new pay policy has been reached? Do the Government also stick to the Chancellor's other view that he expects such an agreement to be reached well before the Finance Bill leaves the House? Will the right hon. Gentleman answer those two questions about the Government's intentions?

The right hon. and learned Gentleman knows how happy I am always to answer his questions or anybody else's. I assure him that, as my right hon. Friend the Chancellor said, the 2p reduction in the basic rate of tax is conditional upon achieving a satisfactory deal with the TUC on pay policy. It is our intention to ensure that that reduction in tax will be put forward to the House—I imagine that the Report stage will be the most appropriate time—on the Floor of the House.

Will my right hon. Friend bear in mind that many of us would like to see the Government and the TUC get a move on? Does not the result of the votes at the USDAW conference, the Scottish TUC conference and the Welsh TUC conference reflect the fact that the majority of working people in this country are sick and tired of inflation and want to see a genuine phase 3 with specific limits written into it? Will the Government take encouragement from those conferences and not be too discouraged by Mr. Gormley's pessimistic pronouncements and Mr. Jones's ambiguous pronouncements? May we see specific proposals at a fairly early date?

I assure my right hon. Friend that I take encouragement from wherever I can find it. As regards getting a move on with the negotiations, I am sure that my right hon. Friend will recognise that there are great problems here. There would be no point in settling a deal with the leaders of the TUC which was not generally acceptable to its members. It therefore entails some lengthy negotiations. I do not believe that it would necessarily be helpful to rush them.

Does the right hon. Gentleman agree with the dictum of his right hon. Friend the Member for Huyton (Sir H. Wilson) that a policy of wage restraint can work for one year and, at a pinch, two? Does he accept that, since prices have been allowed to soar beyond wage increases, there is no justification for conning the trade unions into a phase 3?

I do not accept that we should not seek to obtain a phase 3. I recognise that the problems of getting a phase 3 will be difficult. It has been difficult in the past to achieve that kind of situation. I do not seek to blame the trade unions or their members for all the problems that we face in this country. It would be foolish so to do. Equally, I am sure that they recognise that they will not increase their living standards by a wages scramble. That is why we are having negotiations with the TUC. There is an excellent relationship between us, and I am sure in my own mind that, given the appropriate amount of time, we shall come to a satisfactory agreement.

asked the Chancellor of the Exchequer how many persons who have applied for No. 714 certificates have not been given a decision, to date; and how many who have been given a favourable decision have still not been given certificates.

At the latest count, on 14th April, about 47,000 applicants had not been given a final decision either way, although the great majority of them had been told why their applications could not at present be approved. It is not possible to say exactly how many successful applicants have not yet received their certificates, but on 14th April about 10,000 certificates were in the course of production.

Is not this one of the greatest administrative disasters to have befallen even this Government? Does not the Financial Secretary think that it is disastrous that he should be encouraging firms to pay sub-contractors gross on the strength of an Inland Revenue letter whereas the law explicitly makes cleat that that is against the law?

The hon. Gentleman has sought to hold up the undertaking that had been given by this Government to end the lump. I make no complaint about that. But since our legislation is at present operating successfully without the calamities that the hon. Gentleman foresaw, with the vast majority of those concerned having received their certificates and with only 10,000 certificates in the course of production, which will take no more than two to three weeks, it is clear that the scheme is working well, and the House should welcome that fact.

In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.