asked the Chancellor of the Exchequer if he will state the total cost to date of the court actions taken by the Inland Revenue to establish a claim for taxation of royalties against Mr. Hammond Innes.

The Crown's costs in the Chancery Division and the Court of Appeal totalled £1,220. Following the order for costs made in the Court of Appeal, the Crown will also have to defray Mr. Innes's costs in that Court and in the Chancery Division, but details have not yet been received from him.

Is not this a waste of taxpayers' money, since no precedent was likely to be created by the action? Has a decision been taken as to whether the case is to go to the House of Lords?

A very important principle was involved, otherwise the matter would not have been pursued as far as it was. The decision has been taken not to take the matter to the House of Lords.

asked the Chancellor of the Exchequer what further progress has been made in inserting a clause into Government contracts that would forbid any form of discrimination on grounds of colour or race.

I would refer my hon. Friend to the Written Reply I gave on 5th June to my hon. Friend the Member for Hampstead (Mr. Whitaker).—[Vol. 747, c. 131–2.]

Is it not clear that neither the T.U.C. nor the C.B.I. will agree to such a clause? In those circumstances, may we be told whether the Government intend to pursue this matter?

My hon. Friend misunderstands the position. Industry is in full agreement with the principle that there should be no discrimination in employment, but is properly concerned to discover the best means of putting it into practice. It is not a question of ends; it is purely a question of means.

asked the Chancellor of the Exchequer if he will give a direction to the Bank of England to stop subscribing to the Institute of Economic Affairs.

asked the Chancellor of the Exchequer if he will give a direction to the Bank of England that they should cease to subscribe to the Institute of Economic Affairs.

No, Sir.

Is my right hon. Friend aware that much of the research of this organisation is of a highly tendentious nature and that it has published such titles as "Journeys to Coercion: From Tolpuddle to Rookes v. Barnard" and "The Inconsistencies of the Health Service"? Would not my right hon. Friend agree that much of this research is contrary to the economic principles for which we on this side of the House stand and that it is outrageous that a public body should subscribe to such an organisation?

Order. Questions cannot be speeches.

According to its own formulation, the Institute is

"a research and educational trust that specialises in the study of markets and pricing systems as technical devices for registering preferences and apportioning resources. Microeconomic analysis forms the kernel of economics … in the public and private sectors … Where the macro-economic method is used its results are verified … in the light of microeconomic analysis."

Does not the Chancellor of the Exchequer think that this and other relevant questions might well form part of an inquiry by the Select Committee on the Nationalised Industries into the functions of the Bank of England?

I should have thought that that was a rather heavy conclusion to hang on a question of this sort.

asked the Chancellor of the Exchequer what is his latest estimate of the effect of joining the European Economic Community on the British balance of payments position.

I would refer my hon. Friend to the statement made by my right hon. Friend the Prime Minister in the debate on 8th May.—[Vol. 746, c. 1077–80.]

But has my right hon. Friend seen the reports in some responsible national newspapers that the figure could be as high as £800 million? If that is the case, what kind of growth rate does he think he should allow?

On the first part of my hon. Friend's supplementary question, I am glad to say that I do not take responsibility for what appears in the newspapers. On the second part, the growth rate up to 1970, which is before any entry could have a major effect, is estimated at 3 per cent., and I see no reason to depart from that.

Has the right hon. Gentleman seen the conclusion in the report of the London and Cambridge Survey last week that even if the cost were only £500 million a year it could not be carried at the expected growth rate by 1970?

No, Sir. I did not see that, but as the expected growth rate up to 1970 would not affect that calculation it is not very relevant.

asked the Chancellor of the Exchequer in view of Her Majesty's Government's proposal to join the European Common Market, what proposals he has for encouraging the distribution, rather than the retention, of profits by fiscal means.

I would refer the hon. Member to the Written Reply given by my hon. Friend the Financial Secretary to the hon. Member for South Angus (Mr. Bruce-Gardyne) on 6th June.—[Vol. 747, c. 161.]

In addition to that reply, would the Chancellor not accept that it would show a good earnest of our intentions if we were to move in the right direction in this matter? Secondly, as the Common Market has been more successful economically than this country, might we not with benefit copy some of the more successful policies in the fiscal sphere?

That is a matter of argument and one which is not susceptible of a reply at the moment. I should not have thought that it was right at this stage to start revising our fiscal system until we see more clearly the course of the negotiations.

asked the Chancellor of the Exchequer in view of Her Majesty's Government's policy of entering the European Economic Community, if he will amend the Selective Employment Tax so that it ceases to subsidise labour.

No, Sir. The Selective Employment Tax helps redress the balance of taxation between services and manufacturing. Premiums are payable to all manufacturing industry and do not favour particular forms of production.

But has the Chancellor asked the Commission in Brussels for its views about this subsidy on labour? Is he really so pessimistic about our chances of getting in that he is not prepared to alter the fiscal system to suit that obtaining on the Continent?

As far as I can see, the selective employment premiums are not inconsistent with the Treaty of Rome and the aims of the Six. Therefore, there is no reason to make the adjustment which the hon. Gentleman suggests.

asked the Chancellor of the Exchequer if he will now reconsider his policy on the introduction of a value-added tax, in view of the negotiations to enter the European Economic Community.

I would refer the hon. Gentleman to the statement made by my right hon. Friend the Prime Minister on 8th May.—[Vol. 746, c. 1089.]

As it is clear that the six countries of the E.E.C. are going to have a value-added tax, will the Chancellor now examine seriously the implications of such a tax, despite the inconveniences of a change?

The implications of all problems related to going into Europe are a matter for the consideration of the Government, and they are not behind the times in giving consideration to them, but I think the hon. Gentleman would be well served if he would read the relevant passage of my right hon. Friend's statement, which deals with this point precisely.

Would not my right hon. Friend agree that the Richardson Committee's Report found, for example, that the value-added tax did not stimulate exports for growth, and also that the Purchase Tax system was more economic and efficient than the value-added tax system? Does he not think that it might be better to try to persuade the Common Market countries to accept our simpler system of Purchase Tax?

There is a good deal in what my hon. Friend says, and if he reads what my right hon. Friend the Prime Minister said he will see that this point, too, was in mind.

asked the Chancellor of the Exchequer if he is satisfied with the progress made in dealing with the balance of payments problem; and if he will make a statement.

I am glad to say that figures published today show that the balance of payments was once more in surplus in the first quarter of 1967—the current account in particular showed a surplus of £41 million, seasonally adjusted. There is a good prospect of an overall surplus in 1967 and a larger surplus in 1968.

While congratulating my right hon. Friend on the efforts which he has made in making this remarkable achievement, will he bear in mind, when he starts his policies to lessen the loads on people, that the biggest contributions in achieving this remarkable recovery have been made by working people and that they should enjoy the benefits of any reliefs which he is prepared to give?

I accept the second part of that statement, at least. There is no tribute due to me on the first part. It is the efforts of the British people which, broadly speaking, either create a surplus or result in a deficit in our balance of payments. As regards the future, I repeat that I think that a growth rate of 3 per cent. per annum will enable there to be a progressive improvement in our standard of life. If we keep the growth rate at 3 per cent., on the basis of the calculations which I have, it seems that we shall also have a balance of payments surplus.

Would the Chancellor not agree that all the latest evidence, including the latest trade returns, suggests that we now have a combination of stagnating output, stagnating exports and sharply rising unemployment? Does that not suggest that there is a need for a fundamental change of policy?

No, Sir. That is not true. Exports are nearly 7 per cent. above the corresponding months of last year. That is a very considerable improvement, and I see no reason to depart from that estimate for the latter months of this year. As regards the other factors referred to by the hon. Gentleman, the Index of Industrial Output shows that there was an increase in the first quarter of a small amount, which looks as if it will grow during the latter part of this year. As for unemployment, the measures which the Government have taken and are taking, including the long-term structural changes in the regions, are designed to lower that rate.

asked the Chancellor of the Exchequer what special factors operate in the month of July to cause exceptional pressure on sterling in that particular month.

Both the United Kingdom and the overseas sterling area move at about this time from a seasonally favourable to a seasonally unfavourable period of the year. This should not cause any undue difficulty if the underlying balance of payments position is sound.

But as we have had a sterling crisis in five successive years under three successive Governments, does not this seem to indicate some lack of forward planning in the Treasury?

That is a large question on which I would be very interested to dilate at some length, but the basic position which I think it is important to understand this year is that during the last six months there has been an overall balance of payments surplus of £151 million, and therefore any adverse seasonal movement this year should not unduly affect the position of sterling.

Would not the right hon. Gentleman agree that the recurrence of this exceptional pressure during each of the last three years, and the prospect that it is going to recur again in July of this year or next year, suggests that one of the special factors must be Her Majesty's present Government?

The hon. Gentleman keeps on making these points. I will say only that we have not had such a favourable balance of payments surplus as we have now for several years of the last Tory Administration.

asked the Chancellor of the Exchequer what plans he has for removing the financial responsibility for some sections of the educational service from the shoulders of the ratepayers; and if he will make a statement.

I have no further plans in relation to Local Government finance in advance of the report of the Royal Commission.

Does my right hon. Friend realise that we on this side expect a substantial increase in expenditure on education during the next few years due to a considerable advance in all spheres, and that it will get to something beyond any amount which can be raised by the rate revenue?

My hon. Friend is as fully aware as I am of the increase in the size of the child population and the need, therefore, for increased expenditure on education.

Does the right hon. Gentleman not remember that at the last two General Elections there were guarantees that the large proportion of the salaries of teachers would be removed from the shoulders of the ratepayer on to the taxpayer? What is happening about those promises?

We have gone much further than that and done something much more radical than merely transferring that part of teachers' salaries which is not already carried on central Government finance.

asked the Chancellor of the Exchequer if he will take steps to bring the tax position of industrial and office workers into line with that of companies by making expenses incurred in the course of their employment such as lunches, travelling to and from work, and wear and tear on clothes all allowable against personal taxation.

I am afraid that I could not adopt my hon. Friend's suggestion for extending the expenses that are deductible under the Schedule E expenses rules.

Does my right hon. Friend not agree, however, that the present tax position gives an enormous and unfair advantage to the man in business compared with the salary and wage earner? Does he not feel that these sorts of allowances would contribute greatly to the mobility of labour?

Perhaps my hon. Friend is not aware of the fact that the sort of allowances to which he refers are already made. For example, there is a flat-rate reduction granted on overalls, which is an item of expenditure agreed with the trade unions themselves.

Would my right hon. Friend not consider increasing the concession for luncheon vouchers, for example, which have been at 3s. 6d. from the date on which they were started?

Certainly not.

I recognise the weight of my hon. Friend's point, but this matter has been debated, and he is aware of the reasons why it has remained at that figure.

Is the right hon. Gentleman aware that nowhere in this country is there a canteen which is self-supporting and not subsidised at the cost of the taxpayer?

I do not know whether the hon. Gentleman is referring to canteens for directors, canteens for employees, or both.

asked the Chancellor of the Exchequer whether he will see that Customs officers wear numbers similar to those worn by police officers in order that they may be identified in the event of differences with passengers.

No, Sir. Customs officers, whether or not in the uniformed service, are already directed to give their name if asked for it by a member of the public making a complaint in connection with an official matter.

Will the right hon. Gentleman look into this, because I have examples, which I am prepared to give him if he wishes, of two occasions on which Customs officers declined to identify themselves to complaining members of the public.

If the hon. Gentleman will forward the details to my hon. and learned Friend the Financial Secretary, we shall be only too glad to consider them.

asked the Chancellor of the Exchequer if he will seek to amend the Selective Employment Payments Act so that nationalised industries do not receive the refund in respect of those engaged in selling domestic appliances such as cookers and refrigerators.

No, Sir. Gas and electricity showrooms are an integral part of the Board's main activities. They accordingly receive a refund in respect of the staff employed.

Did not the right hon. Gentleman hear his right hon. Friend refer a little earlier to S.E.T. as seeking to redress a balance? Will the right hon. Gentleman at least try to redress this balance whereby on the one hand he taxes private traders and then involves them in a situation in which they are indulging in unfair competition?

There is no evidence whatsoever of unfair competition between the boards and private retailers of appliances. It is not surprising that there is none. The total amount involved is about 2d. in the £.

Is the right hon. Gentleman aware that the Midlands Electricity Board extensively retails television and radio sets and that none of its staff pays S.E.T. from so retailing, whereas private enterprise competitors are required to pay this tax and are thereby gravely disadvantaged?

I repeat categorically that they are not gravely disadvantaged. The staff in question deal with a whole host of problems, such as disconnection of supplies—[Laughter.]—the provision of information about supplies and tariffs, the handling of customers' queries, the receipt of customers' payments, and so on, of which retailing is a very small part.

asked the Chancellor of the Exchequer why he is repaying before the due date international loans which cost only 4 per cent. with hot money on which Great Britain pays 6 per cent.; and how much hot money he estimates has flowed into London during 1967.

These repayments are being made as a result of the improvement in our reserves, and the strengthening of both our capital and current accounts. Overseas balances have been rebuilt, but not to a level which is in any way exceptional by past standards.

But why should the Chancellor before the time is due repay a debt which he borrowed at 4 per cent. with hot money on which he is paying 6 per cent.? Why waste 2 per cent. extra of taxpayers' money?

The hon. Gentleman does not seem fully to understand that money will come here whether I repay the debt or not. We are saving the 2 per cent., or whatever is the appropriate rate of interest, by repaying it earlier.

asked the Chancellor of the Exchequer whether he will make arrangements for taxpayers to discharge payments of arrears of tax due by bankers' order in future without necessarily requiring the direct credit procedure.

These arrangements already exist.

In that case, why was it that very recently the Financial Secretary told me that this was administratively very difficult, though he was courteous enough to make special arrangements in the case to which I referred?

My hon. and learned Friend told the hon. Gentleman that because it was an accurate statement of the case. These arrangements are diffi- cult to make. They involve additional costs, but nevertheless arrangements are made to meet individual cases.

asked the Chancellor of the Exchequer what was the cost to public funds of the recent visit of King Faisal.

The information is not yet known, but I would provisionally estimate a figure around £13,000.

Can my right hon. Friend say whether we got value for money?

The answer is "Yes".

When the information is published, will the right hon. Gentleman publish also the cost of the visit of Mr. Kosygin, which we were promised would lead to a treaty with Soviet Russia which we still have not got?

I shall look into the question of the publication of additional information.

Did my right hon. Friend see the interview which King Faisal gave on television during his visit? Does my right hon. Friend think that what the King said was consistent with the behaviour of a guest on a State visit and whether it formed any part of the value for money which we got out of it?

I regret that at this time of the year I am too much occupied to spend enough time watching television.

Will the right hon. Gentleman say whether King Faisal was a guest of this country on a State visit, and whether it does not seem highly discourteous to ask for the publication of what it cost to entertain him?

King Faisal was, of course, on a State visit, but these are public funds, and I am the Chief Secretary to the Treasury, responsible to Parliament for the payment of public moneys.

asked the Chancellor of the Exchequer what discussions he had with the Government of Australia before they reduced the proportion of Australia's international reserves held in sterling from 80 per cent. to 63 per cent. in the period between December 1964 and March 1967; why this reduction has taken place; and what estimate he has made as to the extent to which the trend will continue in 1967.

The composition of Australia's international reserves is a matter for the Australian authorities; but naturally close contact is maintained with them about these matters.

When the Australian Government reduced their large holding of sterling in this country to such an extent, did they consult the Chancellor? If so, did they give him a reason why they were withdrawing their currency?

I think we can assume that these changes are not made without serious discussion and consultation. In view of Australia's growing trade with Asia and the United States, there is certainly a case for some redistribution in her reserves.

asked the Chancellor of the Exchequer by what amount he estimates the total gross domestic product in 1967 will exceed the corresponding figure at constant prices for 1966.

By about 1½ per cent.

Are we to understand from that Answer that the Chancellor is disagreeing quite categorically with the comment of the hon. Member for Edmonton (Mr. Albu), who concurred with my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) that the rise will not be very much more than ½ per cent.?

That is a little too complicated, and I do not know the context in which the statements were made.

Will the Chancellor say whether that was his Budget estimate or a revised estimate since then, taking into account the inflationary measures announced and expected to be announced, according to Press hand-outs?

This was the Budget estimate. I hope the hon. Lady will soon grasp the point that it is possible to make an assessment of growth in February based on measures not then announced and not likely to be announced for some months later.

Since the forecast that the Chancellor has made is well within the statistical limits of error of any gross national product series, what significance can the figure of 1½ per cent. possibly have?

A figure of 1½ per cent. of the gross national product would be between £400 million and £500 million, and that would be a significant figure. If the hon. Member is asking me what degree of accuracy can be attached to this forecast I would refer him to my previous comments on this subject.

asked the Chancellor of the Exchequer by what amount he intends to revise the projected expenditure of £13,295 million for 1969–70 in the public sector, excluding nationalised industries, at 1965 Survey prices, on account of the underfulfilment of the National Plan targets; and if he will make a statement.

I would refer the hon. Gentleman to what my right hon. Friend said in his Budget statement.—[Vol. 744, c. 990.]

The right hon. Gentleman's right hon. Friend said that we would have to wait, and we are still waiting. While we are still waiting, will the Chief Secretary take this opportunity to confirm that if we are to have the expected recovery in private investment some room must be made for it by a moderation in the rate of expension of public expenditure?

My right hon. Friend said in his Budget statement that when private investment grew room must be made to accommodate it.

asked the Chancellor of the Exchequer what is his policy regarding the continuance of Selective Employment Tax as a permanent feature of the tax system.

The Selective Employment Tax is an important addition to the tax structure. It helps to redress the balance of taxation between goods and services and should have valuable long run effects on the performance of the economy.

Is my right hon. Friend not concerned at the limited success achieved in the transfer of labour from service to manufacturing industry, and also at the resentment caused in the country because of increased prices due to the tax? Is not he going to amend the tax in some way in order to remove the anomalies?

The first important effect is that the tax raises £200 million approximately that would have to have been raised in some other way. As for the shift of labour, I certainly never expected, nor did I indicate, that it would take place in a period of 12 months. This is a long-run change. It is bound to take some time to have its effect because the balance of taxation is adjusted. As for the anomalies, my right hon. Friend will have seen that a substantial change has been made in relation to the payment of tax by part-time workers, and this has now had a valuable effect and has lessened a great deal of the criticism.

How many years does the Chancellor expect will go by before he realises what a stupid tax this is?

I do not think that any tax which collects £200 million as cheaply as this can be described as stupid.

Can my right hon. Friend ask his Treasury experts if they can devise a tax which does not take money from the general public? If this does not prove possible, will he investigate the offers of alternative forms of contribution which will eliminate the necessity for this tax?

I am much obliged. If any Select Committee of the House went to work on this problem, I should be glad to lend my assistance.

Is the Chancellor aware that it dangerously weakens confidence in Treasury statements when he gives such an obvious example of changing ground? This tax was supposed to move people from the distributive trades to the manufacturing trades. It has not done so. Is it to be a permanent tax, or only temporary?

This is a permanent tax. If the hon. Member would refer to the White Paper published on Budget day, 1966, he would see that the statement I have made today is in line with the statement made in that White Paper.

Is it not a ludicrous situation when those supplying milk, bread and the basic necessities of life have to pay this tax while those who manufacture juke boxes, one-armed bandits and the like receive a rebate? Is this the sort of society we want to see.

The selection of grotesque illustrations of that sort on the extremities of a tax can always be construed to make it look as though the general body is not working properly, but in fact, as is well known in the House, the tax on manufacturing goods from which we derive most of our exports has been relatively much heavier than the tax on services for many years.

Will the Chancellor accept that this tax is permanent only so long as we have a Socialist Administratration? Secondly, does he realise that this is the worst piece of folly that has come out of the Treasury, even in recent years, and that a Conservative Administration will abolish it?

It was precisely because I recognised that it would need a Conservative victory to change the tax that I was so confident in saying that it was permanent.

Can my right hon. Friend say whether there is not some simpler way of collecting this tax on part-time workers? Why not reduce it to half-price straight away, instead of paying the full amount and at some later date this year claiming it back?

Because part of the simplicity and cheapness of the Tax is that it is related to the National Insurance stamp. This is why it is the cheapest of all possible taxes to collect. Therefore it would be administratively more complicated and costly to do it the way my right hon. Friend suggests. I have no doubt that as the years progress and as this Socialist Administration waxes in strength further adaptations will be made in it.

Has the Chancellor of the Exchequer any evidence of the effect of the tax on the cost of living?

Yes, but I do not carry it in my head at the moment.

Mr. Biggs-Davison, to ask Question No. 30.

On a point of order. As Question 45 is on all fours with this Question, may I ask a supplementary question?

The Minister did not decide to answer them together.

asked the Chancellor of the Exchequer what was the basis for assessing the compensation of £250,000 paid by the Reserve Bank of Rhodesia in London to Giesecke and Devrient for banknotes printed for the Reserve Bank of Rhodesia in Salisbury and now deposited with a German bank.

This figure was settled in negotiation between the Board of the Reserve Bank of Rhodesia and the German printing firm.

Is it not the case that these bank notes amounted in value to £100,000 rather than £250,000? Why, then, did the Government agree to this exorbitant settlement? Will not the printers be free in any case to deliver these bank notes to Rhodesia after October 1969? Is not this a great nonsense and a waste of time and money?

No, Sir, I do not think that is so. The matter has been debated. The Board of the Reserve Bank entered into negotiations on the directions of the Secretary of State and a good settlement was reached.

asked the Chancellor of the Exchequer whether he will publish a memorandum on the social and economic implications of the introduction of an added-value tax.

I will bear this suggestion in mind. As my hon. Friend is no doubt aware, a Committee of the N.E.D.C. is at present considering the value-added tax.

Does not my right hon. Friend agree that if tax reform is to proceed smoothly it is important that it should be possible for objections to be raised and discussed in advance before a tax becomes a fact? If the Government decide to introduce an added-value tax, can they draw the legislation in this way?

I will bear what my hon. Friend says in mind. He realises that this is the procedure adopted on what has now come to be known as the Green Paper.

asked the Chancellor of the Exchequer why Selective Employment Tax is imposed in respect of workers employed in laundries.

Laundries are a service and the tax is payable by service industries in general.

Is not that a somewhat theoretical answer? Is not work in laundries analogous to that of work in factories? Are not laundries short of labour, and are not they also hit both by the withdrawal of the investment allowance and the price limits imposed on them? Will not he consider this question a little more from the practical angle?

The right hon. Gentleman may know that I did receive a deputation. I have sympathy with the difficulties which this industry is facing, but I regard those difficulties as stemming mainly from the transfer to domestic laundering rather than from any other main cause.

Is the Chief Secretary aware that in some of the underdeveloped areas, which the Government claim to be helping, service industries are the only form of major employment, and there is no alternative employment? Among those service industries laundries bulk quite largely. Will the right hon. Gentleman look at this matter again, because it is not the case that they are losing business to domestic laundering but are being put out of business by this tax?

No, Sir. With respect, that is not an accurate analysis either of the situation for any given region or of the circumstances affecting this particular industry. In most regions there is a distribution, and I agree that it is different in some regions from others. This industry was fully investigated by the Prices and Incomes Board, and what I am saying is accurate.

asked the Chancellor of the Exchequer whether he has now considered the information sent him by the right hon. Member for Kingston-upon-Thames relating to the practice adopted by the district valuer, Derby, in respect of transactions which it was desired to complete before April 1967; whether this practice has his approval; and what steps he proposes to take to compensate citizens whose property as the result of this practice was subject to payment of part of an impost not then in force and operation.

Yes, Sir. I am writing to the right hon. Gentleman. I do not agree that the district valuer, Derby, has acted in the way he is alleged to have acted, and the question of compensation does not arise.

Is the right hon. Gentleman aware that it is clear, on the evidence of a highly respectable firm of professional surveyors that I submitted to the right hon. Gentleman, that the effect of the district valuer's action was to impose the levy under the Land Commission at half-rate two months before it became legally in force, and is that in accordance with the instructions of the Inland Revenue?

No, Sir. The evidence does not indicate that. I want to make it absolutely clear. This is a very serious allegation and, therefore, I—as the right hon. Gentleman would no doubt have done in my position—have gone into it very carefully indeed. The surveyors acting for the right hon. Gentleman's client are under a complete misapprehen- sion. No such thing as he has alleged has happened. No damage has been suffered.

Is the Chief Secretary aware that there is very strong feeling about this particular case, which, it is felt, is perhaps not an isolated one? Would he publish a full report of the circumstances?

I am grateful to the right hon. Gentleman for what he has said, because this matter is extremely difficult to deal with simply by Question and Answer. I have gone into the case very carefully, and I shall be answering the right hon. Gentleman. With his permission—he is acting on behalf of his constituent—I am sure that it would be helpful if this matter could be published.

In order to facilitate the right hon. Gentleman's public discussion of the details of the matter, Mr. Speaker, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

Adjournment notice must be given in the conventional way.

asked the Chancellor of the Exchequer what has been the total sum raised in new taxes since 15th October, 1964; and if he will state this as an approximate annual percentage of Government taxation.

The broadening of the tax base through the Capital Gains Tax, the Selective Employment Tax, the general betting duty and the gaming duties has yielded net revenue of £281 million, up to the end of 1966–67, or 3 per cent. of total taxation in that year.

But the right hon. Gentleman has substantially underestimated the increase in taxation of over £1,000 million by the Socialist Administration—an average of 23s. per week for every family in the land. Will he say whether it is his intention to reduce taxes over the next few years?

I was answering the Question on the Order Paper, but if the hon. Gentleman wants to ask a supplementary on a different question I would refer him to the large increase in wages that has taken place since October. 1964.

asked the Chancellor of the Exchequer if he will make a statement reviewing the results of the £50 travel allowance; and what proposals he has for increasing it.

No, Sir. Meaningful figures will not be available for some time after the main holiday season is over. In reply to the second part of his Question, I refer the hon. Member to the reply given to the hon. Member for Blackpool, South (Mr. Blaker) on 6th June.—[Vol. 747, c. 162.]

Will the Chancellor of the Exchequer confirm that the British travel allowance is one of the lowest in the Western world, and will he say whether it is his intention to increase this travel allowance during the year 1967–68?

No, Sir. I have no statement to make today on 1967–68. I am satisfied that the travel allowance is certainly adequate for the holiday needs of most families in this country when they go abroad.

asked the Chancellor of the Exchequer what is the estimated cost of Income Tax and Surtax relief for children in the year 1967–68.

About £630 million.

Is my right hon. Friend aware that his reply shows an increase of over £50 million, and that the previous year showed an increase of £80 million? Is not this a very strange inequality when one considers that family allowances have remained unchanged since 1956?

No, Sir. I do not think that tax allowances, which determine the residual sum that is left to a man after he has earned his income, can be compared with an allowance that is given by the State out of the general taxation.

asked the Chancellor of the Exchequer what will be the increased annual cost of the 46,000 extra civil servants who will be employed in March, 1968, compared with December, 1964.

£55 million, calculated on the average salary for non-industrial civil servants.

is the right hon. Gentleman aware that this represents an increase of 11 per cent., which far exceeds the increase in the working sector of the economy? Can he say what his right hon. Friend's policy is with regard to the trends of these two percentages?

These two have very little relationship to one another. As the hon. Gentleman recognises, the percentage which he quotes is not an annual percentage. The simple reason for the increase is that we have to man the services which this House deems should be carried out.

Will the right hon. Gentleman ask his right hon. Friend to use his influence with his colleagues to reduce Government expenditure?

We take note of the hon. and learned Gentleman's views.

Is the right hon. Gentleman aware that in the Departments investigated by the Treasury O. & M. Section very large savings have been produced? Will he, therefore, increase the staff of the Section so as to cut down everywhere else?

I am grateful for the hon. Gentleman's comments. The answer to his Question about an increase in the staff of O. & M. is that it has taken place already.

asked the Chancellor of the Exchequer if he will publish in the OFFICIAL REPORT a table showing, for each of the last 10 years, the number of Administrative Class Civil Servants recruited to the Treasury and Diplomatic Service, respectively, from Oxford and Cambridge, and from other universities.

Yes, Sir.

Can my right hon. Friend now say whether the trend away from the undue proportion of Oxford and Cambridge graduates and towards a better and fairer proportion of graduates from the civic universities is satisfactory to the Government, and in view of the fact that the performance both at home and abroad has not exactly glittered during the last ten years, may not part of the solution to the problem lie in the terms in which the Question is posed?

Yes, Sir, but for the Civil Service as a whole the number of successful candidates from universities other than Oxford and Cambridge is rising steadily and had reached 35 per cent. by 1966 compared with a much

asked the Chancellor of the Exchequer what is being done to obtain qualified cost accountants for the Civil Service.

Staff in several Departments are studying for the qualifications

Will the right hon. Gentleman include in the table the total number of applicants from both groups so that the House may have a comprehensive picture of the situation?

I cannot alter the table, which does not include the number of applicants, but I can tell the hon. Gentleman and my hon. Friend that we are most anxious that more applicants should come from universities other than Oxford and Cambridge. The difficulty in the main is the lack of applicants.

Is my right hon. Friend aware that in a recent article The Times suggested that the Civil Service is recruiting the wrong type of cost accountant?

Yes. My attention was drawn to that article. It is quite wrong. There are some jobs, of course, which can only be done by chartered accountants or by certified accountants. There are other jobs which are more appropriate for accountants who are more experienced in particular cost and works spheres. We are doing a great deal to assist with sandwich courses, by way of aid in support of those courses, to encourage people to train in this sphere of activity.

asked the Prime Minister if he will give an assurance that the House will be informed of a Government decision to authorise the manufacture of a new generation of nuclear weapons.

If my hon. Friend is referring to a proposal to replace the Polaris missiles by Poseidon missiles, the answer is that Her Majesty's Government have no such intention.

Is my right hon. Friend aware that his Answer will be received with a great deal of satisfaction, certainly on this side of the House?

Can the Prime Minister say how much of the £260 million a year we are now spending on military research is given to devising new generations of nuclear weapons?

I have made it clear that we are not concerned at all with new generations of military weapons. It is not the practice to give the figures my right hon. Friend asked for, but I made clear in my Answer what the position is about future generations.

What nuclear weapons of the present generation are still being manufactured by Her Majesty's Government?

It is not usual to give answers on these questions. I was asked in this case about new generations.

asked the Prime Minister when he proposes to visit Moscow.

No date has yet been arranged, Sir.

Are not the main points in the communiqué issued after Mr. Kosygin's visit moving rather slowly? Have there been any discussions with the Russians about the visit, because it is a very appropriate time at this very moment?

Yes, Sir. There have been discussions. I had a discussion very recently with the Soviet Ambassador on this question. I think that the view of both Mr. Kosygin and myself is that the visit should be timed at whatever time seems most useful and fruitful for the things we shall want to be discussing. As the hon. Member will know, my right hon. Friend the Foreign Secretary was in Moscow two or three weeks ago.

asked the Prime Minister if he will define the duties in Aden of the Minister without Portfolio.

As my right hon. Friend the Foreign Secretary told the House on 10th April, my right hon. and noble Friend the Minister without Portfolio went to Aden to provide political guidance on the spot and also to advise Her Majesty's Government on the problems of South Arabia as seen from Aden. He has paid two extended visits to South Arabia, and since his return on 30th May he has been engaged in discussions in London about the future of South Arabia.