asked the Chancellor of the Exchequer to what extent the £175 million of overseas aid given by Her Majesty's Government in 1963–64 was returned to this country in the form of debt-service payments, repatriated compensation payments, export earnings due to Export Credits Guarantee Department loans, and debt settlements with United Kingdom firms, respectively.

During 1963–64 we received £14 million in capital repayments of aid loans and £18 million in interest. There is no record of the extent to which compensation payments are returned to this country, nor is it possible to say how much of our expenditure of £50 million on loans under Section 3 of the Export Guarantees Act consisted of additional export earnings. Of the total aid expenditure of £175 million in 1963–64, £5½ million was made available under inter-Governmental re-financing agreements which enabled firms in developing countries to meet their obligations to British firms.

Is it not a fact that of the £175 million that we gave in aid in 1963–64, a total of about £110 million to £120 million returned to this country in the form of debt repayments, repatriated compensation payments, export earnings due to tied loans, and all those other factors mentioned in the Question? Does not this show that the burden of aid on the balance of payments has been exaggerated, and that this should therefore not be advanced as a reason why the Government should not immediately increase their overseas aid to I per cent. of the national income, as they have been urged to do by the United Nations?

I do not think that the burden has been exaggerated, and I think that we are living up to the target. The fact that people spend the money we lend them on buying British goods does not make it any less aid.

asked the Chancellor of the Exchequer what were personal national savings for the second quarter of 1964, expressed as a percentage of personal disposable income; and how this figure compares with the corresponding period of 1961.

I regret that figures for the second quarter of this year are not yet available. In the first quarter of 1964, personal savings are estimated to have been nearly 13 per cent. of personal disposable income compared with about 10½ per cent. in the corresponding period of 1961. Within these totals, National Savings accounted for 2·4 per cent. of disposable income in the first quarter of 1964, compared with 2·7 per cent. in the first quarter of 1961.

May I ask the right hon. Gentleman whether he regards this increase as satisfactory against the general background of economic expansion in the country? If not, what does he propose to do by way of stimulating it, other than by the very dull, moderate, and unimaginative proposals contained in his Budget statement of this year?

I think that the results are very encouraging. Whatever the hon. Gentleman's view about the nature of our measures, the record of savings in these years is one of the great achievements of the Conservative Government.

Would my right hon. Friend give the figures for 1951 compared with the first quarter of this year? In addition to giving the percentages, can he give the actual figures?

I cannot give the figures. They would cause too much pain to the Opposition if I did.

asked the Chancellor of the Exchequer whether he will ask the National Incomes Commission to review the incomes of those groups, such as civil servants, falling within their terms of reference, whose incomes, after tax, are on average lower, in real terms, than in 1938, and to make recommendations.

No, Sir.

Does not the right hon. Gentleman agree that to have some policy on incomes in the public sector is now a matter of pressing urgency? They are being continually left behind. Some of them have a lower income in real terms than before the war. We are failing to get recruits for the public service, and this really is a pressing matter. Why will the right hon. Gentleman not refer this to the National Incomes Commission?

It would not be proper for a general reference of this kind to be made to the National Incomes Commission. I do not accept what the right hon. Gentleman said. The principle of fair comparison, to which I attach the highest importance, as I think the House is aware, guarantees to the public service that their pay moves and advances with comparable jobs in outside industry.

Surely that is not so. It has lagged behind. Although this may be an admirable principle, it does not answer the purpose. It is true that they have not kept up and they are well aware of the fact.

I also read the articles in the Economist, but they referred to the years before Priestley and pay research. We are now working on a system of fair comparisons; and if we are to compare the present system with that which operated before the war we must take into account the great advantages derived by people from the social services, for which they pay in taxation.

asked the Chancellor of the Exchequer whether he will consider introducing a 4s. or 5s. piece in place of the present 2s. 6d. coin.

No, Sir.

As this country is gradually moving towards the adoption of the decimal system, could not we have 100s. or £5 as the unit of currency? This formula would save hundreds of thousands of pounds. If it is worked out, could not the half-crown piece be discontinued? Then we would need only to get rid of the threepenny and sixpenny piece later on. In the meantime, will' not my right hon. Friend consider this proposal? Can he tell us whether the Government will make a statement on the findings of the Halsbury Report, and what action will be taken?

These are very interesting suggestions, but they go rather wide of the original Question.

In view of the reduced value of money since the Government came in in 1952, is not this a most desirable—indeed, an essential—proposal?

The half-crown stood up to the party opposite.

asked the Chancellor of the Exchequer what proportion of British costs of the British Army of the Rhine is met by German purchases of arms from Great Britain.

No proportion is specified in the agreement which was recently reached. The Federal German Government state that it is their intention to offset the foreign exchange costs, in so far as possible, by military, civil and offshore expenditure.

Can the right hon. Gentleman say whether the German Federal Government have bought any Bloodhound missiles? If they have, can he say whether any of the £4 million rebate that Her Majesty's Government have received will be passed on to the German Government?

That is an ingenious supplementary question, but I do not know the answer to it.

Why have the Government introduced this crucial difference from the arrangements made last time? I see that no target figure is set for offsetting the cost of British troops in Germany by the purchase of our equipment by the Germans.

We thought that this was a better arrangement. There is no target figure and there is no limit. The German Government will offset the cost to the fullest extent possible.

In view of the fact that the Germans found very great difficulty in meeting the target last time, and met it only at the last moment by way of some arrangement with Nigeria, will the right hen. Gentleman tell the House how it will be possible for us to maintain a target equivalent to last time, even though no figure is set?

As the hon. Gentleman has said, there is no target. The point is that the German Government have agreed with us to offset the cost, without a limiting figure, so far as it is possible for them to do so, and the two Governments are co-operating in getting it done.

asked the Chancellor of the Exchequer what is the total annual cost of maintaining British troops in Germany in foreign exchange.

I would refer the hon. Member to the Answer which my right hon. Friend the Chief Secretary gave to the hon. Member for Cardiff, South-East (Mr. Callaghan) on 9th June.

That is unfortunate, because I do not know the answer to that Question. But is it not disgraceful that we, who are maintaining a British Army in Germany for the protection of Germany and the Continent of Europe, should have to pay for it in foreign currency? Should not the Germans accept payment in sterling, and not burden us with the necessity to pay foreign currency, which we have to find?

The acceptance by the Germans of payment in sterling would be the same as payment in foreign currency.

Can the right hon. Gentleman tell the House why he has made such a bad bargain with the Germans? The Americans and the French both get the full cost of their troops in Germany offset by German expenditure, whereas we have only an unspecified agreement whereby the Germans agree to do as much as they can do. Can the right hon. Gentleman tell us why this should be so, in view of the serious effect on our balance of payments this year?

If the hon. Gentleman will study it, I think he will find that our agreement is based on the agreement which the Germans made with the Americans.

Can the right hon. Gentleman say whether this is a permanent agreement or merely one for another 12 months, after which we shall again be going cap-in-hand to the Germans, as we have done over the last 10 years, asking them to honour an obligation which they obviously have no intention of meeting?

There is no question of our going cap-in-hand to the German Government. As to the duration of the agreement, I should need notice of that question. The purpose of the agreement is quite clearly in line with that of the agreement which the Germans have made with the Americans.

in view of the profitable expansion of German trade in South-East Asia, would it not be a good idea if the German Government contributed towards the cost of British forces in Malaysia?

asked the Chancellor of the Exchequer what steps are taken when valuing property for rating to find out which properties have had central heating installed since the previous valuation; and whether, having regard to the fact that some properties are revalued without account being taken of such installations, he is satisfied that the present methods of valuation take sufficient account of the differences between one ratepayer and another in this respect.

Central heating installations and other improvements affecting rental value are taken into account when they come to the valuation officer's notice; for example, on inspection of the property or because of information received from the rating authority. I agree that it is desirable that the valuation officer should have some further source of information on this point and a question about it will be added to the statutory rating returns for the purposes of the next revaluation.

Is my hon. Friend aware that there is a very dangerous thought behind this Question, namely, that if one is to be penalised for putting central heating into an ancient building there will be a positive incentive to allow such places to rot and decay?

There is no question of penalty involved. My hon. Friend will, I am sure, agree on reflection that if we are to have valuation for rating purposes it must be based on equity as between one citizen and another.

asked the Chancellor of the Exchequer what was the total value of entertainments deducted for Income Tax purposes in the most recent year for which figures are available.

I am afraid this information is not available.

Can the Minister give me some idea of the definition of "entertainments" under the Act? Can he say what proportion of the money is used for the purpose of subsidising strippers, and night club workers, for instance? Is he aware that these premises provide not only entertainment but ladies of easy virtue? Should not taxpayers be protected against this sort of abuse? Can he state here and now whether he is satisfied that expenses for entertainment purposes are not exaggerated?

I cannot answer from an expert point of view most of the questions that the hon. Gentleman raised. Perhaps he will accept this as an answer: to be allowable for tax purposes expenses must be incurred for genuine business reasons. These are subject, in the first case, to the normal processes of audit, and in the second, to the scrutiny of the inspector of taxes.

asked the Chancellor of the Exchequer if he is satisfied with the progress being made in the Government's review of the relationship between national and local expenditure; and if he will make a statement.

asked the Chancellor of the Exchequer if he will now make a statement on Her Majesty's Government's review of the relationship between national and local expenditure.

Progress is satisfactory, but I am not yet in a position to say what proposals will emerge or when the review will be completed.

When the review is completed, will my right hon. Friend take action as quickly as possible on the recommendations in view of the continuing but admittedly necessary increase in the rates burden? When the time comes, will he consider publishing some of the conclusions which are reached?

I will certainly consider that when the time comes. We do not want to waste time. One of the important things will be to have consultations with local authorities.

Is the right hon. Gentleman aware that it is over seven months since the decision to carry out this reform was announced by the Minister of Housing and Local Government, and that if no conclusion is to be reached until the Allen Committee has reported—and since this Committee does not report until the autumn—it means that there will be no major changes before the new rate demands go out in April next year? At this rate of progress I shall have grown a long white beard before there is any rating reform.

I do not know whether that is a threat or a hope on the part of the hon. Member, but to effect any reform in the rating system will involve legislation, and consultation with local authorities. Therefore, it is bound to take a considerable time.

asked the Chancellor of the Exchequer whether he will arrange for hon. Members using their own cars for journeys to and from their constituencies to be paid the cost of a first-class return rail ticket.

The present scheme allows Members to claim for the cost of the petrol needed for travel by the most direct route. I would suggest that consideration of any changes in this scheme should be deferred until the Committee on the Remuneration of Members of Parliament and Ministers of the Crown has reported.

May I ask the Minister whether he will take account of the fact that an hon. Member can get a free voucher for first-class rail travel between Westminster and his constituency and equally in respect of air travel, but if he uses his own car he merely gets the cost of the petrol? Does the hon. Gentleman consider that fair? Would he ask his right hon. Friend to request the Committee sitting under the chairmanship of Sir Geoffrey Lawrence to consider the whole question?

The appearance of the hon. Gentleman's Question and my Answer in HANSARD will achieve the real purpose which the hon. Member has in mind.

Would my hon. Friend bear in mind that the ordinary commercial rates for running motor cars are about 6d. and 9d. a mile, that hon. Members get only 2d. a mile and that the first-class fare is the very minimum which in equity could be offered to hon. Members?

I think that the same reply applies to my hon. Friend's supplementary question.

asked the Chancellor of the Exchequer whether he will amend the notes issued with Income Tax return forms to avoid possible ambiguity about the nature of the interest in Post Office Savings Bank accounts required of married women to qualify for £15 tax exemption in addition to that of their husbands.

As I said when writing to my hon. Friend about the case I assume he has in mind, I do not think the present notes are ambiguous; but the Inland Revenue will consider whether they can be improved.

asked the Chancellor of the Exchequer whether he will introduce legislation to amend Section 212 of the Income Tax Act, 1952, so that educational establishments as defined in the Act will include establishments where mentally handicapped children receive education not presently recognised as such under the Act.

I have noted my hon. Friend's suggestion for legislation, but there would be difficulties in relaxing the requirements of Section 212 in relation to a particular class of children.

I thank my hon. Friend for that Answer. Does not he agree that the present interpretation leads to somewhat unfortunate anomalies, in that genuine education applies, but in many of these cases only the lower forms of benefit can be drawn, as he will be aware? Will he look at the unfortunate anomalies which arise?

I accept that anomalies can arise in these matters. My hon. Friend will agree that we must always appreciate the difficulty that in curing one anomaly we may create more. I have noted his suggestion and it will be considered.

asked the Chancellor of the Exchequer if he will state the worth of £100 sterling placed in the Post Office savings account in 1951 at present-day values, after allowing for the depreciation in the £ sterling and the accumulation of interest rates; whether he will give the annual change since 1951 in a £100 investment, allowing for the £'s annual depreciation and the accumulation of interest; and whether he will increase the present rate of interest.

Taking June, 1951, as the starting point, £96 12s. The answer to the last part of the Question is "No, Sir".

Is the Chancellor aware that since October, 1951, the only thing that has remained static is Post Office Savings Bank interest at 2½ per cent. In view of his enrapture with his figure of 3½ per cent., may we ask the Chancellor to consider increasing the Post Office savings figure by at least 1 per cent.? Surely people who have Post Office savings are entitled to some encouragement when they find that other interest rates have increased?

No, Sir. For a long time the policy has been to keep the interest rate level. Other interest rates have fluctuated both up and down. The Post Office provides facilities for the easy withdrawal of savings which are valuable, and the first £15 of savings are tax-free, so that I think there is a reasonable return.

asked the Chancellor of the Exchequer what arrangements have been made with the European Central Banks during the last six months for them to increase their holdings of sterling or otherwise assist the £.

None, Sir.

May we take it that no assistance of any kind has been requested or given by the European Central Banks?

One cannot always disclose all the operations of the Exchange Control, but I am prepared to say—as I said—that the answer is, "None, Sir." In fact European holdings of sterling have been falling, not rising.

asked the Chancellor of the Exchequer, what is the practice of the Arts Council in appointing the chairmen of the advisory panels; and what is the length of service of the present chairmen.

The Arts Council's practice is to appoint as chairmen of the advisory panels members of the Council with particular knowledge of the subject concerned. Appointments are for one year at a time. Of the present panel chairmen, two have now served for 2½ years each, one for 3½ years and one for 10½ years.

Is my right hon. Friend aware that in view of the development of taste and alterations in all the arts in the modern world, it would be more in line with good business to have articles of association which made the Arts Council change its chairmen of panels at specified periods? Is he aware that certainly some of the chairmen of panels have been associated with decisions which have been very unhappy in themselves and that it would give greater confidence if the panels did not have so much control and the Arts Council was not guided or controlled by its panels?

As I have said before about other things, I think that this is the sort of matter which we must leave to the Arts Council.

Not at all.

We have confidence in its conduct of its affairs and we must not interfere in its decisions in matters of this sort.

asked the Prime Minister if he will set up a Department under a new Minister for the purpose of encouraging, promoting, and financing inventions, especially by persons with limited means; and if he will make a statement.

No, Sir. One of the functions of the National Research Development Corporation, which operates with capital provided from public funds, is to assist the development of private inventions which would not otherwise be sufficiently exploited.

Is the Prime Minister aware that the mechanics of this process are unsatisfactory and very circuitous? Does not he realise that his own Government do not provide a single halfpenny, as a Government, towards this end? Is he aware that by the discouragement we give to inventors with limited means, we are driving them out of the country into the arms of our competitors all over the world? Is not it time that this process was halted and the ingenuity of British people retained for the good of the British nation?

As a matter of fact in answer to a Question today my right hon. Friend the Secretary of State for Industry and Trade makes a statement about the plans of the Government for extending the scope and scale of the work of the National Research Development Corporation. If the hon. Gentleman will look at that he will be more satisfied than he is now.

Is my right hon. Friend aware of the work of the Institute of Patentees and Inventors which handles problem such as that raised by the hon. Member for Coatbridge and Airdrie (Mr. Dempsey)? Does he realise that this organisation plays a valuable part in the exploitation of inventions and would he examine the possibility of the N.R.D.C. making available some financial help for this very efficient body?

I know of the part played by the body to which my hon. Friend refers. I will take note of the suggestion that it may be given some funds.

asked the Prime Minister what steps he has taken to coordinate the activities of Ministers responsible for complying with the Security Council resolution of 18th June in the immediate provision of education and training facilities for non-white South Africans; and what finance Her Majesty's Government are proposing to earmark for this purpose.

Clause eleven of the Security Council Resolution of 18th June invited the Secretary-General of the United Nations to establish a programme for the education and training abroad of South Africans.

Is it not a fact that the Committee of Experts of which Sir Hugh Foot was the rapporteur attached great importance to the establishment of a United Nations South African education and training programme as one of the peaceful methods of preparing South Africa for democracy? Is it not also a fact that the Scandinavian and many African Governments have already been giving assistance to young South Africans in exile in order to enable them to take up university scholarships and other training facilities? Why will not the British Government take some initiative in this matter? What do they intend to do to carry out the promises we have made about fighting apartheid in South Africa?

The hon. Lady is talking of the Security Council Resolution and there the initiative must come from the Secretary-General. We have a programme of our own in this country about which, from the nature of her question, I do not know whether the hon. Lady is aware. In 1963–64, 22 scholarships of one year or more were awarded by the British Council to South African post-graduate students, and 12 bursaries for a shorter term were given to candidates with lower academic qualifications. So we have a plan of our own at the moment.

Is the Prime Minister aware that the Question refers to non-white South Africans? Is he aware that the vast majority of the cases he has quoted related to white South Africans and that this discriminates against Africans in South Africa?

The programme has been altered and of the remaining 18 scholarships 10 have gone to white students and eight to non-white students and of the 11 bursaries eight have gone to non-white students. More bursaries are yet to be announced which will also go to non-white students.

asked the Prime Minister if he will give an assurance that Her Majesty's Ministers will exercise their powers under Standing Order No 117 to make the appropriate representations for an earlier meeting of this House to discuss any item of policy which they may propose during the forthcoming Recess which has not been previously reported to the House.

asked the Prime Minister if he will make representations that Parliament should be recalled under Standing Order 117 for two weeks in early September.

I think we can rely on the usual arrangements which my right hon. and learned Friend the lord Privy Seal will have in mind tomorrow when the House comes to deal with the Motion for the Summer Adjournment.

Is the right hon. Gentleman aware that I welcome his assurance and also the assurance that what he has just said will be confirmed tomorrow by the Leader of the House? May we have a further assurance that the project for a mixed-manned force, whether canvassed by the United States or advocated by the Secretary of State for Defence, will not meet with any commitment or decision during the Recess and until Parliament has had an opportunity of debating this subject?

We have not made up our minds and are unlikely to make up our minds—[HON. MEMBERS: "Oh."]—because we want to understand all the facts. So does every other member of the N.A.T.O. alliance want the full facts before us before we make up our minds on the matter.

Does not the Prime Minister agree that it would be a good idea to have a week or a fortnight of debate in this House in early September to discuss questions such as that raised by my right hon. Friend the Member for Easington (Mr. Shinwell)? Does not the Prime Minister recognise that there will be a smell of blood in the air at that time—blue blood particularly—and does he not recognise that in addition to this question there is an economic crisis looming up, as his matchstick exercises will have convinced him? In view of those circumstances, would not he agree that it would be in the public interest to have at least a week to debate these issues?

I do not think we had better go into the business of blood. For a long time the Douglas's and the Hamiltons had a feud in which a great deal of blood was shed in Scottish history. On the whole, the Douglas's came out as the winners. I think it very unlikely that we should be ready to discuss in Parliament such matters as the right hon. Gentleman the Member for Easington (Mr. Shinwell) mentioned. A decision on this matter is very unlikely for some months to come.

Will the Prime Minister take it from me that the one thing I deprecate is any shedding of blood during a General Election and that we ought to debate matters of policy like the gentlemen we are?

indicated assent.

asked the Prime Minister whether he will lay a White Paper before the House containing the text of the Final Communiqué of the recent conference of Commonwealth Prime Ministers, together with the text of memoranda laid before the conference on the creation of a Commonwealth Secretariat, on economic and educational cooperation, and on other similar matters.

I am arranging to lay before the House a White Paper containing the text of the Final Communiqué of the Commonwealth Prime Ministers' Meeting. It would not be proper to publish the texts of the memoranda laid before the Meeting, since these were confidential working documents. But the House will of course be kept fully informed of the progress made, in consultation between Commonwealth Governments, in implementing the various new initiatives which were considered at the Meeting.

I am obliged to the Prime Minister for that Answer. Would he consider that the real strength of the Commonwealth, which is a democratic institution, depends on the support of its peoples and that if, with the consent of other Commonwealth Prime Ministers, he can tell us more about the new development for a secretariat and other matters that will be of great value to this House and to the public?

Yes, Sir. The communiqué has of course appeared in the OFFICIAL REPORT already, but I thought that it would be for the convenience of some hon. Members to have it as a separate paper. Therefore, I am arranging for a White Paper to be published.

asked the Prime Minister what answer he gave to the official request of the Indian Prime Minister for the supply of frigates to India.

I have received no such request from the Prime Minister of India, The Government of India have been negotiating with a British firm in connection with their project to manufacture "Leander" class frigates in India. We greatly value these commercial and Service links. The Government of India have estimated their requirements of foreign exchange for this purpose at £13·66 million, spread over 10 years, and have asked Her Majesty's Government to assist in the financing of this project.

Does that reply mean that the Prime Minister is now willing to grant the credits which India requires to buy these supplies? Is it not deplorable that these negotiations have had to go on for so long and as a result India has had to look elsewhere for such supplies? Is the Prime Minister aware that this is not the only example of where a Commonwealth country has endeavoured to obtain supplies from this country and has been fobbed off for quite a long time?

As the hon. Member uses the expression "fobbed off" I had better take the opportunity to tell him what we have done. In December, 1962, we offered £19 million worth to India and more than £14 million worth has already reached India. In August, 1963, we offered further military aid. The equipment to be supplied has been agreed with the Indians and is on order. In May, 1964—two months ago—we offered more military aid and discussions as to the type of equipment to be supplied are now in progress with the Indian Government. Over the last six years military and economic aid from Britain to India has amounted to something over £200 million.

Did not the late Mr. Nehru and other Indian leaders express their gratitude to Her Majesty's Government in the United Kingdom for the very prompt and generous military assistance given to India in her time of need? Are not Questions of this kind thoroughly damaging to good Commonwealth relations?

We try—and I think we have succeeded—in consultation with the Indian Government, to give them the type of military aid they want at the time. Up to now we have been engaged with the danger of a land attack on India. If the priority should change we would consider it just as we have considered military aid before.

While welcoming the Government's acceptance of our proposal for lend-lease aid—[HON. MEMBERS: "Oh."]—our proposal for lend-lease aid which the Government all the time rejected—[HON. MEMBERS: "No."] —they rejected it—is not the right hon. Gentleman aware that this request for frigates has been going on now for 18 months? In view of his repeated insistence that full employment can be based only on exporting frigates, can he say why it has taken 18 months to reach this decision and whether we may now feel, the matter having been raised on the Floor of the House, that there is some hope of India getting them?

The kind of aid and the priorities have depended on the threat to India and what the priorities should be. The threat was a land attack up to now. If the Indian Defence Minister wishes to change the priorities we shall of course consider this matter of frigates if that is their desire.

In view of the haste which the right hon. Gentleman has shown in supplying frigates to non-Commonwealth countries—[HON. MEMBERS: "Which one?"]—will he say what kind of an attack, whether by land or sea, he envisages for Spain?

The frigates for Spain were a matter of straight trade. The question which the right hon. Gentleman has mentioned raises the matter of the whole balance between economic and military aid which this country gives to India. This is quite a different matter, and, as one of my hon. Friends said, it is a red herring which the right hon. Gentleman has tried to draw across the issue.

On a point of order. May I draw your attention, Mr. Speaker, to Question No. 13, addressed to the Prime Minister. You will see that this is a Question which the Prime Minister has accepted as being within his responsibility and that it is down for Answer today. In the past, the Chair has always ruled that when a Question is on the Order Paper, and is due to be answered, the Minister concerned may ask for permission to answer it. Should it not, therefore, be the Prime Minister who asks for your permission to make this statement, as he has accepted this Question?

I received notice that the Minister of Aviation desired to make a statement.

On a point of order. I should like your guidance, Mr. Speaker, on a matter which I raised with you last night—a matter of urgent public importance relating to the activities of Fiesta Tours Ltd. I have received no reply to that request. May I have your guidance as to when I may raise this matter?

I do not understand this except that the hon. Member sought leave to ask a Private Notice Question. I felt that I could not allow it. That is all that I can say about it.