asked the First Secretary of State and Secretary of State for Economic Affairs what plans he has to increase the staff of the National Board for Prices and Incomes.

There has recently been a substantial increase in the Board's staff. My right hon. Friend will continue to keep the position under review.

Will the hon. Gentleman express the gratitude of the House to the members of the Board and their staff for the tremendous volume of work that they have endeavoured to cope with in pursuit of Government policy? Will the hon. Gentleman assure us that the Board will not be in a position to be able to reject looking at claims like those of the gas workers or to fail to produce reports on time, as happened in the case of the bakers' claim? Such things do a great deal of harm to Government policy.

I thank the hon. Gentleman for his tribute to the members of the Board and the staff. We are aware of the need to get out reports as quickly as possible. That is one reason why we have increased the staff.

asked the First Secretary of State and Secretary of State for Economic Affairs whether he will refer the 1966 Price Review to the National Board for Prices and Incomes.

No, Sir. The machinery of the Annual Review allows for proper regard to be paid to the Government's policies on productivity, prices and incomes.

In view of the importance of the Review to the Government's prices and incomes policy, does the right hon. Gentleman suggest that an increase in farm incomes of 3½ per cent. is reasonable for the coming year?

The hon. Gentleman had better allow the Review to proceed.

asked the First Secretary of State and Secretary of State for Economic Affairs what estimate he has made of the further action necessary to stimulate the economic recovery of the northern region.

Under the new system of incentives which was announced last month, investment grants will be available at double the national rate throughout the whole of the northern region. This will provide a powerful stimulus to its economic recovery and will reinforce encouraging progress already made.

I thank my hon. Friend. Will he bear in mind that, in spite of the recovery of recent months, there are still underlying weaknesses in the northern economy which can be strengthened only by getting a major new expansive industry there, such as motor manufacturing?

I am aware of the problem. Perhaps my hon. Friend will be encouraged by the fact that unemployment in the northern region was 2·8 per cent. in January, 1966, compared with 3·2 per cent. in January, 1965. That is a measure of the progress that is being made.

asked the First Secretary of State and Secretary of State for Economic Affairs if he will refer proposed rent increases by local authorities to the National Board of Prices and Incomes.

asked the First Secretary of State and Secretary of State for Economic Affairs whether he will invite the National Board for Prices and Incomes to consider the inflationary effect of increases in rents for local authority housing.

asked the First Secretary of State and Secretary of State for Economic Affairs whether he will refer the increase in Liverpool Corporation tenants' rents by approximately 10s a week to the National Board for Prices and Incomes.

As I indicated in my reply of 25th November to the hon. Member for Portsmouth. Langstone (Mr. Ian Lloyd), I do not propose to make a reference.

Does not my right hon. Friend agree that rent is a considerable part of a person's income? Does he think that increases of about 20 or 25 per cent., announced by Wandsworth Borough Council yesterday, are reconcilable with the Government's policy?

This is a very difficult problem. My right hon. Friend the Minister of Housing and Local Government has told the House that he is considering a number of representations that have been made to him about it, but he is not yet ready to make a statement.

Is my right hon. Friend aware that the wording of my Question was slightly different? I merely asked whether he will invite the Board to consider the matter. Would not he agree that the reference of these local authority matters to the Board would be quite improper? Would he further bear in mind the views expressed by my hon. Friend the Member for Putney (Mr. Hugh Jenkins)—that these are very heavy increases which make an enormous impact on the lower income groups?

I agree fully with my hon. Friend. Of course I am aware that this is a genuine problem. But, as I have said, the Government think that it should be dealt with in a different way and my right hon. Friend the Minister of Housing and Local Government is now considering it.

Does not my right hon. Friend agree that it is very difficult to ask industrial workers in areas such as Merseyside to keep their wage claims down to the 3½ per cent. norm if, at the same time, they are being asked to pay perhaps 10s. per week more in rent? Do not such things operate against the prices and incomes policy.

All of these things have to be taken together, for they are related. As I have said repeatedly, my right hon. Friend the Minister of Housing and Local Government is considering what can be done about this aspect, which we believe is better dealt with in a different way. I hope my hon. Friend will put out of his mind that anyone is asking the workers of Merseyside to keep claims down to the 3½ per cent. norm. We are asking all workers, wage and salary earners, and everybody else in the country to recognise that the totality of increase in everyone's incomes must be within 3½ per cent.

asked the First Secretary of State and Secretary of State for Economic Affairs what report he has received from the Working Party of the British Paper and Board Makers' Association on future supplies of waste paper; and what action he proposes to take to maintain and increase such supplies.

My right hon. Friend has recently received the Report of this Working Party, which was set up by the Economic Development Committee for the Paper and Board Industry.

I thank the hon. Gentleman for that reply. Would he not agree that the incentives of an assured market and an adequate return on ratepayers' capital investments are absolutely essential if the local authorities are to play their part in maintaining these supplies?

Those are very important considerations which will be taken into account by the local authorities when considering the Working Party's Report.

asked the First Secretary of State and Secretary of State for Economic Affairs what agreement has been reached with the trade unions involved on the subject of demarcation and transferability of skilled labour as a condition of the Government's agreement to assist Fairfields; and if he will make a statement.

I am pleased to report that all concerned in the shipyard have readily accepted the objective of more flexible working practices and greater interchangeability of workers, and a number of useful talks to this end have already taken place between the management and union officials. Negotiating procedures are now being drawn up, but it will obviously take some time to carry through the necessary changes.

Has a firm agreement been reached with these workers to get rid of demarcation? If so, what price is being paid to them in the form of increased wages and what effect will this have on other yards?

I have a feeling that the hon. Gentleman prepared that supplementary question before he heard my Answer. If he will be good enough to read the Answer, he will see that it deals with that.

The right hon. Gentleman will surely agree that the whole basis of the original proposals which he put before the House was that the injection of public money would be dependent on firm undertakings by the unions and not on mere acceptance of objectives which have not yet been worked out.

I must say that the right hon. Gentleman shows an astonishing ignorance of these things. Before firm agreement can be made, there has to be agreement on firm objectives. Having got that, one then proceeds to work out arrangements, which is exactly what I said we were doing.

Is my right hon. Friend aware that the employees at Fairfields at all levels are co-operating exceptionally well with the management and that things are now proceeding in an excellent fashion and that nothing hon. Members opposite can do will stop that?

Is the First Secretary aware that if the workers in the Fairfields Yard had been offered shares directly in the company it might have had more effect on co-operation than the unions putting in money?

That seems to be a different question. The important thing at this stage is to get a change in attitudes and practices in the yard required both in that yard and as a lead for the rest of this vital industry. It is that which we are doing at the moment.

asked the First Secretary of State and Secretary of State for Economic Affairs if he will refer to the National Board for Prices and Incomes recent increases in food prices, especially the increasing practice of concealing price increases by reducing pack sizes.

No, Sir. Recent reports of increases in food prices have been greatly exaggerated and I see no need for a reference at the present time.

Can my right hon. Friend explain what steps his or any other Department takes to ascertain the extent of the practice of perhaps keeping prices steady, but reducing the size of the pack or whatever it might be? Is that taken into account when the cost-of-living or retail price index is formulated?

As I told my hon. Friend the Member for Wood Green (Mrs. Joyce Butler), who asked a similar question a little while ago, we have done our best to make very close checks through the Departments responsible, in this case the Board of Trade and the Ministry of Agriculture, Fisheries and Food, and we have used information which we can get in other ways. I have no information which leads me to believe that at the moment this is a serious or widespread practice. Indeed, in some recent cases price reductions have been made by increasing the size of packs. The point in all these things, as Lord Sainsbury said on television the other night, is that one has to balance the ups and downs and not concentrate on one or the other.

Would not the right hon. Gentleman agree that industry generally has played the game in absorbing increased costs by maintaining prices or reducing them, and is not this rather one-sided, as wages have gone up 8 or 9 per cent.?

No, wages have not gone up. Like so many of his hon. Friends, the hon. Gentleman mixes up earnings and wages. One wants earnings to go up. How is one otherwise to get people to work harder and produce more? One has to examine why earnings have gone up and whether increases reflect increased productivity. To a large extent, both sides have played the game and if right hon. Gentlemen opposite would concentrate a little less on trying to prove that they have not, we might get more success with those who are not playing the game.

asked the First Secretary of State and Secretary of State for Economic Affairs if he will now refer to the National Board for Prices and Incomes the profits and dividends of those companies engaged in the production of building materials.

Not on present information. But if my hon. Friend will send me details of any particular case he has in mind I shall be glad to consider the matter further.

Can my right hon. Friend say why he objects? All the references to the Board so far have been concerned solely with prices and wages. When will he refer some profits and dividends? Otherwise, there will not be very much prospect of the policy working.

For once, my hon. Friend has not done his homework. The last reference which I made was wholly concerned with prices, profits and costs, in this case, appropriately, of the brewery industry.

Cheers.

asked the First Secretary of State and Secretary of State for Economic Affairs what machinery he has with regard to increases in price of goods sold direct from manufacturers to retailers; and if he will refer such recent increases in the furniture trade to the National Board for Prices and Incomes.

Any price increase may be referred for investigation by the National Board for Prices and Incomes. I am not convinced at present that prices in the furniture trade should be referred to the Board.

Is my right hon. Friend aware that it is the usual practice of furniture manufacturers at the beginning of every year to recommend new prices at which goods should be sold in shops and that some of those items are increased this year by as much as £5 on an item of furniture costing £25, which is quite large? Will he look at this matter again?

We had a close look at it, but I am quite willing to look at it again. Perhaps my hon. Friend will send to me the sort of evidence which she has in mind and to which she has ready access. I am quite willing to consider it.

Would the right hon. Gentleman agree that much the best weapon to attack this kind of price increase was the ending of resale price maintenance?

It has not yet ended in this industry. It will be rather interesting to see what happens when it does.

asked the First Secretary of State and Secretary of State for Economic Affairs if he will refer the proposed increases in local authority rates over the 3½ per cent. norm to the National Board for Prices and Incomes.

I would refer the hon. Member to the Answer I gave to the hon. Member for Harborough (Mr. Farr) on 25th November, 1965.

Is not that reply in direct contradiction to the Government's Prices and Incomes Policy White Paper, page 9, paragraph 16, lines 5, 6 and 7, and is the right hon. Gentleman aware of the fear and trepidation which millions of ratepayers throughout the country feel as they face rises of between 10 and 20 per cent in their rates as a result of the Government's policy? Will he reconsider?

Increases in the rate burden are not a novel thing which happen under the present Government. What is novel under the present Government is that we are now taking steps to deal with it by the legislation now before the House.

Does not the First Secretary realise that what he has said is not an answer to my hon. Friend? In his own White Paper he makes a specific reference, which has been quoted, to the incomes of local authorities. In view of that, why does he not refer these rises, which cause so much anxiety to so many millions of householders, to the Prices and Incomes Board?

Because we have decided to deal with it by way of legislation which is already before the House, and further legislation which will be coming before the House very shortly.

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

asked the First Secretary of State and Secretary of State for Economic Affairs if he will make a statement on the pay claim of the railwaymen, following the report of the National Board for Prices and Incomes.

asked the First Secretary of State and Secretary of State for Economic Affairs if he will make a statement on the report of the National Board for Prices and Incomes concerning railwaymen's pay.

As the Answer is inevitably a trifle long, it may be for the convenience of the House if I am allowed to give it at the end of Questions.

asked the First Secretary of State and Secretary of State for Economic Affairs whether he will refer the recent price increase of water rates, in some cases by 50 per cent., to the National Board for Prices and Incomes.

I would refer the hon. Member to the Answer I gave the hon. Member for Somerset, North (Mr. Dean) on 3rd February.

As the First Secretary said last week that he was so good at riding his tandem with the Chancellor, will he now back-pedal and remove this iniquitous tax, which is falling upon those least able to bear it? Who is driving this tandem?

Whoever is driving, if the other one were to back-pedal that would be a horrible way of going forward.

asked the First Secretary of State and Secretary of State for Economic Affairs in view of the prices and incomes policy of the Government, what principles are now followed by Her Majesty's Government, in consultation with the nationalised industries, regarding normal wages and salaries negotiations in front of the negotiating machinery established under the various nationalisation statutes and to which both nationalised boards and trade unions are parties.

In accordance with the principles laid down in the White Paper on the "Early Warning" system (Command 2808), the nationalised industries are providing the Government with information on pay claims, the progress of negotiations, and the terms of settlements.

Would my right hon. Friend confirm that it is not the intention of the Government or the policy of the Prices and Incomes Board to interfere with the normal day-to-day process of collective bargaining, and that the nationalised industries are in the same position as everyone else?

The nationalised industries are in the same position as everyone else, and all the normal processes of collective bargaining will, I hope, be in accord with the criterion laid down in the White Paper.

asked the First Secretary of State and Secretary of State for Economic Affairs if he is satisfied with the results of the action taken by the soap and detergent manufacturers on the recommendations made to the industry by the National Board for Prices and Incomes; and if he will make a statement.

My right hon. Friend welcomed the action of the principal manufacturers last October in accepting the recommendations of the National Board for Prices and Incomes that prices of soap products and synthetic powders should not be increased before the end of 1966. He hopes they will go even further and make price reductions wherever possible. He has left the manufacturers in no doubt of his view that a reduction in advertising and promotional expenditure could help to make such reductions possible.

Is not this a good example of the groundwork that can be done by the Prices and Incomes Board? Would the Board consider inviting the industry to report on all the many recommendations in this Report?

We are certainly sorry that the manufacturers have not seen fit to carry out all the recommendations. We have made it very clear to them that we wish them to do so.

asked the First Secretary of State and Secretary of State for Economic Affairs how many increases in the prices of products of nationalised industries have been absorbed by the industries; and how many have been handed on to the consumer.

The nationalised industries gives us information in advance of all important prospective increases and where it has seemed desirable that the justification for specific proposals should be examined, we have not hesitated to refer them to the National Board for Prices and Incomes.

Will the right hon. Gentleman now give me a specific assurance that there will be no further increases in the cost of products of the nationalised industries? In view of the statement that we are to have an increase in the price of coal and in view of the increase in the price of electricity on the North-East Coast, can we know that these are to be absorbed in future just as he is telling other industries to absorb increases?

The hon. Lady must not always rely on what she reads in newspapers.

asked the First Secretary of State and Secretary of State for Economic Affairs whether he will hold a review of the priorities ac corded to the South-West in general, and Dorset in particular, by departments, in order to improve the priorities and thus meet the problems of this part of the United Kingdom.

No, Sir.

Did we not have an excellent example yesterday of Dorset's low priority when it was announced that the new fast reactor is to go to Scotland and not to Dorset, without any technical reasons being given for the preference of Scotland over Dorset?

Obviously, considerations of regional policy have to be considered within the framework of national policy. In this case national policy considerations dictated that the reactor should go to Scotland.

asked the First Secretary of State and Secretary of State for Economic Affairs whether he will refer the wages structure and conditions of work of London Transport busmen to the National Board for Prices and Incomes.

Pay and conditions of London were the subject of an official committee of inquiry, which reported in February, 1964. Negotiations on a new pay claim are due to begin shortly and we will be keeping in touch with the parties concerned.

Is not this failure to report the matter to the Prices and Incomes Board the final evidence of the failure of the Government to take their own prices and incomes policy seriously? Is it not clear to everyone—it must be clear even to the First Secretary—that the London Transport Board is about to make a hand-out to the busmen, together with a reduction in the services offered to the long-suffering London public—

Order, order. That is long enough.

That must have been the fiftieth occasion on which the hon. Gentleman has announced final evidence that the prices and incomes policy is not working. He is no better on this occasion than he was on the previous 49. What he said—[HON. MEMBERS: "Answer."]—I will answer only if hon. Gentlemen will listen. What the hon. Gentleman said cannot possibly be either accurate or relevant, because the new pay claim has not yet started.

Perhaps the First Secretary will return to the Question. Would he not agree that a useful purpose could be served if the restrictive practcies in the London Transport area, notably the refusal of the Transport and General Workers' Union to accept even so elementary a thing as work study, were referred to the Board? Does he not think that a confrontation between the Board and the Minister of Technology might be productive?

I do not really think that any part of that question arises on this Question.

asked the First Secretary of State and Secretary of State for Economic Affairs if, in view of the substantial increase in rents charged to dairy farmers by landlords in Scotland which could result in an increase in costs, he will refer the increase to the National Board for Prices and Incomes.

No, Sir.

Is the Minister aware that the Scottish Milk Marketing Board has recently published statistics about alarming increases of rent which have had to be paid by tenant farmers producing milk? Is he aware that this means that rents have gone up by 27s. an acre, £200 per farm and 1½ per gallon of milk? Does he not agree that if such rents send up the price of the gallon of milk this affects the cost of living? Should not he investigate this matter?

My hon. Friend will be glad to know that not only do I know of what was said by the Chairman of the Scottish Milk Marketing Board but that I have read what was said. There are many other considerations to be taken into account, and in any case changes in rents are one of the considerations discussed during the course of the Annual Farm Price Review.

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

asked the First Secretary of State and Secretary of State for Economic Affairs in the light of the 8 per cent. to 9 per cent. rise in earnings in 1965, what changes he proposes to make in his incomes policy.

I propose to develop and strengthen the agreed policy, and press on with the job of getting it fully understood and implemented. I invite the hon. Gentleman's support.

Can the right hon. Gentleman say what increases in earnings over the last year are due to increases in productivity and would he say when the Bill on the early warning system, the publication of which has been postponed on three occasions, is to come before the House? May we have a date please?

No postponement has yet occurred. I am not in a position to make a statement about the date. On the first part of the hon. Gentleman's supplementary question, I could not give him a breakdown without notice because I do not have the figures with me. We have carried out such an exercise and there are certain difficulties to it. I would be quite willing to see if I could answer the Question.

Does not the right hon. Gentleman realise that his answers to this Question and to Questions Nos. 16 and 18 are irrelevant to his attempt to obtain greater productivity, and are only relevant to the pegging of prices and wages, without greater productivity?

Clearly the hon. Gentleman believes that. I happen to think that he is wholly wrong. It is a matter of judgment between us.

asked the First Secretary of State and Secretary of State for Economic Affairs if he will now particularise the means referred to in the National Plan which the Government may use to make sure that total national profits do not get out of step with wages and salaries.

My right hon. Friend has nothing to add to the reply he gave to the hon. Member on 25th November.

Is it the Government's policy to arrange that there shall be no profits, in which case an incomes policy will no longer be necessary because there will be no incomes?

I hardly think that that question deserves a reply. We have made it perfectly clear that we fully encourage the earnings of profits when they are earned by increased productivity, output and exports.

asked the First Secretary of State and Secretary of State for Economic Affairs what proportion of the mathematicians, mechanical and other engineers, and physicists working in manufacturing industry were employed in the aircraft industry in 1965; and where this proportion represents a decline on the 1962 figure, as recorded in the National Plan, what action his Department has taken to analyse the redeployment of the personnel concerned; and with what result.

Provisional figures for 1965 suggest that the aircraft industry employs a slightly lower proportion of the mathematicians, mechanical engineers and physicists working in manufacturing industry than it did in 1962. The Department of Economic Affairs is co-operating with the Ministry of Labour in a special study of recent redeployment of labour from the aircraft industry.

I am sure that that reply will give the House some encouragement, but has the Minister any real grounds for expecting that he will be able to track down these men, particularly when they leave the country? Has he any grounds for saying that in 1968–69 the men who are needed in these categories will still be working in industry?

There are two answers to that. First of all, we must not exaggerate the number of people leaving the country, which is certainly not large in relation to the total number employed. Secondly, there is a very great need for men with this degree of skill in other branches of the engineering industry.

Can the hon. Gentleman say when the study to which he referred will be completed and whether it will be published?

I cannot say at present.

asked the First Secretary of State and Secretary of State for Economic Affairs to what extent the calculations upon which the National Plan was based have been altered by the Government's commitment to the purchase of military aircraft from the United States of America.

Not at all, Sir.

Does this mean that the hon. Gentleman and his right hon. Friend view with complete equanimity the possible further commitment to purchase the F111 aircraft from the United States?

That is purely a hypothetical question. It does not really arise out of the original Question.

asked the First Secretary of State and Secretary of State for Economic Affairs if he will now make a statement on the Report of the consultants advising on the diversification of Short Brothers and Harland.

Not at the moment, Sir.

Would the right hon. Gentleman confirm that he received the report in December, and would he give us the exact date and explain the reasons for the delay? Would he also confirm that he stands by his pledge of 28th May last that Short Bros. and Harland would remain part of the aircraft industry?

I cannot find the exact date in December when I received the report, but I had it in December. There has been no delay. The real purpose is to do good for the people who work in this company and for the people of Northern Ireland. Therefore, it is much more important that we take time over doing the job well than rush into publication.

When the discussions on Short Bros. take place, if it is not possible to go ahead with aircraft production, would my right hon. Friend consider setting up some publicly-owned science-based industries in this factory?

My hon. Friend may have misunderstood the situation. There is no question of Short Bros. not going ahead with aircraft production. Not only has that been said many times before, but it was said by the Minister of Aviation the other day in the debate on the Plowden Report. In addition, we want to arrange the best and most sensible diversification for this company. This is what the report is about, and this is what discussions are now going on about.

Is the right hon. Gentleman aware that the Minister of Aviation said only the other day in the House that in the next 12 months 4,000 men in Short Bros, may lose their jobs? Would he expedite the putting into effect of this Report?

We will bring about the arrangements which the Report recommends as soon as we can. We are busy at it now. We will also take every step to ensure that training, retraining and other facilities are available for anybody who has to move from this company. We are in touch with the Northern Ireland Government at this very moment on the subject.

asked the First Secretary of State and Secretary of State for Economic Affairs why he has referred the salary scales, negotiated for Scottish teachers by the Scottish Joint Council, to the National Board for Prices and Incomes.

The Board has been asked to consider whether the overall increase of 13 per cent. proposed by the Government puts Scottish teachers generally in a fair relationship with teachers in England and Wales.

Would the right hon. Gentleman elaborate on that? How far does he intend to correlate the salaries of English teachers and Scottish teachers in view of the wide difference in training qualifications? Will he give an assurance that he does not intend to do that?

The Secretary of State for Scotland retains his rights in the fixation of teachers' salaries in Scotland. The matter rests with him, and nobody is talking about disturbing his rights. On the other hand, it seemed to us as well as everybody else that there was something to be said for an independent body to look at the question to see whether the relationship was fair, and this seemed to be the right body to do it.

Is the 13 per cent. guaranteed already to teachers no matter what the Board says? Will the Board be able to recommend an additional 2 or 3 per cent., or whatever it may be?

The 13 per cent. is the fixation; it is fixed. When we receive the Board's report we will be able to consider the situation thereafter.

Would the right hon. Gentleman agree that the prices and incomes policy must surely take into account the desperate need for teachers and the fact that the breaking of the joint negotiating council's agreement will certainly ensure that there will not be enough teachers to allow the raising of the school leaving age in Scotland in 1970?

Those are not the terms of the reference. This is a general question about teachers anywhere in these islands. I think that hon. Members are missing the point of the reference. We think that we should make sure that Scottish teachers are in a fair relationship with their English and Welsh colleagues. I should have expected that to be welcomed by Scottish Members.

May we have an assurance from the Minister that on this occasion the Board will not give a ruling that the awards for teachers shall be based, as is the case with railwaymen, on the profitability of their service?

I do not think that my hon. Friend accurately reflects the Report on the railwaymen. I do not think that I should anticipate the report which the Board will make to me on this question.

asked the First Secretary of State and Secretary of State for Economic Affairs whether he will refer the method of assessing consultant engineers' fees and charges to the National Board for Prices and Incomes.

No, Sir.

Will the right hon. Gentleman look at this matter again? Does not he think that it is a crazy system whereby if a consultant engineer makes a mistake he has an increased fee at the end of the day?

Since I saw the hon. Gentleman's Question on the Order Paper, and since I prepared the Answer, I have thought again about it and I have asked the Department to let me have some information on it. [Interruption.] Good Questions quite often bring about good Answers. It is the other sort of Questions which fail.

asked the First Secretary of State and Secretary of State for Economic Affairs whether he will refer the proposed increase of rural bus fares to the National Board for Prices and Incomes.

I would refer the hon. Member to the Written Reply given by my hon. Friend the Under-Secretary to my hon. Friend the Member for Don Valley (Mr. Kelley) on 2nd November.

As this is, again, a direct result of Government action, will the right hon. Gentleman persuade the Chancellor of the Exchequer to remove this iniquitous tax which is falling on those least able to bear it and causing great hardship in country areas?

I do not think that this is the season of the year when the Chancellor of the Exchequer would welcome comments on taxation from me. The reason for not taking the action suggested is that we believe that the statutory procedures under the Road Traffic Acts adequately safeguard the national interest.

asked the First Secretary of State and Secretary of State for Economic Affairs what percentage annual increase in the gross national product is consistent with an incomes norm of 3 to 3½ per cent.; and by what percentages the gross national product increased during 1965 and is expected to increase during 1966.

I would refer the hon. Member to paragraphs 3, 4 and 11 of the White Paper, on Prices and Incomes Policy for an answer to the first part of his Question. The latest available figures for the gross domestic product at constant prices relate to the first three-quarters of 1965 and show an increase of 2·6 per cent. over the first three-quarters of 1964. It would not be appropriate for me to forecast the expected increase during 1966.

Would not the right hon. Gentleman agree that an increase in the gross domestic product at the rate of 2·6 per cent. a year suggests that the corresponding prices norm should be 2 to 2½ per cent.? Unless the right hon. Gentleman is able to suggest that the gross domestic product will grow more rapidly this year, will he take steps to revise the prices norm?

I am against doing it on these short-term bases, although we have periodic reviews of trends through the National Economic Development Council. But we must view this matter over a longer time-scale. We made it clear when the National Plan was produced that inevitably, because of our inheritance, there would be a slowing of the increase in output in the first period of the five-year plan. That does not mean that we do not expect to achieve it by the end.

asked the First Secretary of State and Secretary of State for Economic Affairs whether he will seek to arrange that Government Departments and local authorities contemplating any significant increase in staff, where a compensating increase in productivity cannot reasonably be expected, submit their proposals for examination by the National Board for Prices and Incomes.

I will certainly consider referring to the Board any question arising in the public sector which it could appropriately examine. But, as the hon. Member will see from the White Paper on Prices and Incomes Policy published last April, an inquiry into the size of the staffs of public authorities is outside the Board's normal rôle.

Is the right hon. Gentleman aware that in a period of 3½ years, during which the population has not increased, the Socialist Cardiff City Council has increased its staff by 2,000 and its wage bill by £2 million a year? Would not he agree that similar increases in wage costs must be going on in other bigger authorities throughout the country? Therefore, will the right hon. Gentleman reconsider whether this matter is appropriate for reference to the Board?

To my personal knowledge, very much so in Conservative-controlled councils. This is a question which we have to look at. While people require, as they should, more and more improved community services, more people and more finance will be required. But we have to watch the matter very closely and make such that productivity applies in this field, too.

asked the President of the Board of Trade how many new industries were introduced into the Merseyside Development District in 1965; what further proposals his Department has in this field; and what effect the new financial proposals will have.

The industrial development certificates to which I referred in my Answer to my hon. Friend on 27th January covered a wide range of industries. The new proposals announced in the White Paper on Investment Incentives will, I hope, attract more firms to Merseyside.

asked the President of the Board of Trade what estimate he has made of the value of the new system of investment allowances to industry in Scotland.

No precise estimate can be made, since the value depends on the level of investment in industry in Scotland. On the basis of the current level of investment, the total value of the investment grants which my Department will be giving to industry in Scotland is likely to be of the order of £25 million to £30 million in a full year. In addition substantial assistance is likely to be given in the form of building grants, loans and Board of Trade factories.

Is the right hon. Gentleman aware that most businessmen in Scotland found the depreciation allowance in development districts a most attractive incentive? Why did he cut it out?

They will now get a 40 per cent. investment cash grant and the appropriate building grants in addition. I think those will be an even greater incentive.

Will the right hon. Gentleman confirm that the value of the new scheme of investment incentives will be less than the system operated by the last Conservative Government?

That will not be so, as the right hon. Gentleman will learn when we debate this in more detail.

asked the President of the Board of Trade why the new investment incentives, announced on 17th January, will not apply to buildings or equipment used by hotels either within or outside the new development areas.

I would refer the hon. Member to my Answer of 27th January to the hon. Member for Blackpool, North (Mr. Miscampbell) and of 31st January to the hon. Member for Bournemouth, West (Sir J. Eden).

Does the President of the Board of Trade recognise that the initial allowance is no proper substitute either for the old investment allowance or for the new investment grant? Is not this change entirely contrary to the need to encourage the tourist industry, especially in Scotland?

Hotels in development areas, which now cover the greater part of Scotland, will get the Board of Trade building grant for the building. They will also get the increased initial allowance, up from 10 to 30 per cent. for plant and equipment. In addition, the Government make a £2 million a year grant to the British Travel Association.

Does not the right hon. Gentleman realise that seaside resorts are, almost by definition, because of their seasonal occupation facilities, in a very bad way during the winter? Does he not realise that this will affect the general prosperity of resorts and increase unemployment in areas which really need a great deal of help?

Yes, I recognise the special problem of seaside resorts; and I think that the hotel and tourist industries are of great importance. But, for the reasons that I have given, we are already affording them substantial help.

On hotel equipment, will the right hon. Gentleman say whether under the new scheme hotels will be better off or worse off than previously?

They will get the increased initial allowance, and that will probably, as far as they are concerned, leave them slightly worse off compared with the previous investment allowance.

asked the President of the Board of Trade if he will now detail the specific export rebates at present applied by other Free Trade Area countries which are to be treated in the same way as United Kingdom export rebates, namely, that they will only be available as an alternative to preferential European Free Trade Association tariff treatment.

No other E.F.T.A. country applies specific export rebates of taxes of the kind rebated under the United Kingdom scheme.

I am grateful to the hon. Gentleman for that reply. Will he draw it to the attention of the President of the Board of Trade, who told me that it was a general settlement? Is not this operating a one-sided concession by the United Kingdom Government which will continue in force when import surcharges have been withdrawn, although it has been imposed as a concession to satisfy people about the import surcharges?

My right hon. Friend explained the point to the hon. Gentleman. The hon. Gentleman has been misled in the past on this question. As he knows, on 31st December of this year our exporters will be able to take advantage of either the E.F.T.A. preferential treatment or the export rebate scheme.

Does not the hon. Gentleman recognise that it has never been part of the arrangements of the Free Trade Area that the remission of Excise duties should be forbidden on trade passing between the countries in that area? Does he not recognise that his right hon. Friend has sold the pass on this very important issue, and that this is a perfectly legitimate device for encouraging exports?

This export rebate scheme is not incompatible with the existing rules of E.F.T.A.

asked the President of the Board of Trade whether he will now introduce legislation to provide for better control over the financial affairs of public and private companies.

I would refer my hon. Friend to the Companies Bill which was introduced on 2nd February.

Is the right hon. Gentleman not aware that the provisions of the Companies Bill do not go far enough? Why have two bites at the cherry?

If my hon. Friend will make further suggestions, we shall be glad to have them.

Will the President of the Board of Trade avoid politically vindictive legislation in the future, and concentrate on a job that wants doing?

What we are seeking in this matter is equity for all sections of the community.

Will the right hon. Gentleman give an assurance that if we on these benches put down an Amendment on the lines suggested by the hon. Member for Woolwich, West (Mr. Hamling), it will not be treated as a matter of tomfoolery?

That is a wholly hypothetical question.