asked the Chancellor of the Exchequer if he will seek to introduce an excess payments tax to support the Trades Union Congress's voluntary incomes policy, details of which are in his possession.

I am not sure exactly what form of tax my hon. Friend has in mind. There would be very great difficulties about recovering excessive wage and salary payments through the taxation of individual employers or employees.

Does my right hon. Friend realise that many of us on this side are totally opposed to the Government's proposed Prices and Incomes Bill because it is demonstrably unfair to organised labour? Second, does he realise that many of us want to see a prices and incomes policy, and we believe that the fiscal system is the only fair way to achieve it, by ensuring that incomes derived from any source are taxed in the way indicated in the Question?

My hon. Friend raised some rather wide issues at the beginning of his supplementary question. On the latter part, I am always willing to look at any new fiscal device, but I say to my hon. Friend again that there are difficulties in proceeding as he suggests.

asked the Chancellor of the Exchequer what discussions he has had with the United States Government on current trends in the United States economy as they affect the British economy.

My talks with the Secretary of the Treasury and others in the United States covered these subjects as well as others of mutual interest.

Can my right hon. Friend say something about the effect on the British economy of the proposed 10 per cent. tax surcharge now passed by the House of Representatives Ways and Means Committee, and will he say what conversations or communications he has had with the American Government about the possibility of an American export rebate scheme or import surcharge?

The conversations I have had have been confidential. The American tax increase is a matter for the United States Government, but it is undoubtedly true that we should be glad to see measures which would strengthen the United States balance of payments. On the latter part of my hon. Friend's supplementary question, it is the British Government's view that we should be most loth to see any steps taken which might lead to an escalation of protectionism throughout the world.

Did the Chancellor have any discussions on the special drawing rights, and has he any more information to give the House on when we may expect a Bill on this matter?

Not specifically in America, because my visit to America followed closely after Stockholm, where I had very long discussions both with United States representatives and with others. It is certainly our intention to proceed to ratify the agreement as soon as practicable and desirable, and I think that that would be during the course of this summer.

asked the Chancellor of the Exchequer if he will issue a White Paper defining his Department's attitude to dividend increases by public companies.

There have already been several Ministerial statements on the subject, including a section of a White Paper.

If the Chief Secretary is referring to paragraph 54 of Cmnd. 3590, I suggest that he reads it again, as it does not define anything. Is it not a fact that the blackmail which the Government have been exercising against companies in this matter has been abritrary, pointless and time-wasting to date, and will the right hon. Gentleman confirm that the Government neither have nor intend to take powers to compel public companies to disregard their prime obligations to their owners in the matter of distributions?

There has been no blackmail, and I am astonished that the hon. Gentleman thinks fit to use such a term. There has been a voluntary dividend restraint scheme, which has been accepted by industry in 100 per cent. of the cases.

Does not my right hon. Friend agree that a voluntary dividend restraint scheme is simply a postponement of the payment of unearned income? Would it not be far better to go back to the earlier idea of the present Chancellor of the Exchequer that there should be a compulsory, permanent statutory dividend limitation for all shareholders?

I recognise that a dividend restraint scheme and a wages restraint scheme are not on all fours; but, as I have previously explained in this Chamber, different questions arise as regards restraining or restricting a dividend and paying it out. A company frequently finds, as it has more liquid funds, that it is useful to make investments with those funds rather than distribute them in the form of dividend in a subsequent year.

How can the right hon. Gentleman possibly call it a voluntary dividend restraint scheme when the Treasury give directions to company after company on the maximum dividend they can pay?

I call it a voluntary dividend restraint scheme because up to the present there have been no powers and there has been complete correspondence with the Treasury's suggestions.

asked the Chancellor of the Exchequer to what extent in his refusal to allow Lex Garages Limited to increase their dividend from 14 per cent. to 24 per cent. he took into account the assurances given by the company at the time of placing on the market a large block of shares in October, 1967.

There has been no action by this company which amounts to a firm pre-Budget commitment of the limited kind which might justify a departure from the voluntary dividend restraint scheme.

Can the right hon. Gentleman clear up the question of whether or not an assurance was given by the directors of Lex Garages Limited when a substantial block of shares was placed privately last October?

No commitment was given of the kind which would compel a dividend declaration out of line with the dividend restraint scheme.

Would not the right hon. Gentleman agree that he has no power to make Lex do this? Will he make it publicly clear that the firm is in no sense bound to follow his guidance?

I have already given an Answer to that. This is a voluntary restraint scheme. There have been many discussions between companies intending to declare dividends and the Treasury, and in all cases they have been satisfied that it is in the general interest that the view of the Treasury should be accepted.

Is the right hon. Gentleman now saying that there is a distinction between a representation given privately by the directors of a company on the issue of shares and the representation given publicly by the issue of a prospectus?

I say nothing of the sort. I did not and do not draw such a distinction. I drew a distinction between a commitment and the lack of a commitment.

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest opportunity.

asked the Chancellor of the Exchequer what arrangements will be made under Her Majesty's Government's incomes and prices policy to prevent persons receiving dividends from shares in foreign companies more than 3½ per cent. greater than the dividends of previous years.

None, Sir.

As the prices and incomes legislation cannot possibly apply to foreign-owned companies and companies operating abroad, is not this a direct incentive to investors to invest outside the country, totally contrary to the Government's policy in this matter?

No, Sir. That branch of policy is dealt with by other methods and no part of the intention of dividend restraint is affected.

asked the Chancellor of the Exchequer by what authority he is restraining increases in dividends.

The Government have asked companies voluntarily to restrain dividends. Guidance is given by the Treasury as necessary on how to comply with this request.

Is the Chief Secretary aware that Parliament has the function of preventing the Executive from doing things for which it has no authority, and that in these circumstances the fatuous and totally irrelevant things which the Government are doing about dividends shows how wise it would have been if Parliament had been allowed to debate these measures before they were put into practice?

Parliament was given full opportunity to debate these proposals, in the sense that my right hon. Friend made a statement in his Budget speech and I made a very long and detailed statement in my contribution to the Budget debate when contributions were made from both sides of the House. There was, therefore, ample opportunity to debate whether this should be a voluntary scheme. I am glad to say that the whole of industry so far concerned takes a view diametrically opposed to that of the hon. Gentleman.

As the Treasury has said that a percentage increase in productivity justifies an equal percentage increase in wages, is the Treasury giving the same direction about dividends?

We are giving guidance of the kind which is fully detailed in hand-outs.

Does not the hon. Gentleman realise that what Parliament—certainly the Opposition—objects to is government by guidance? That is totally wrong.

I am glad to say that that is not the view reflected by industry, which is most anxious that, even when powers exist under an Act, they should not be motivated and that the whole scheme should depend on voluntary co-operation.

On a point of order. 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 Chancellor of the Exchequer whether Her Majesty's Government's policy of restriction' on non-employment incomes in 1968 and 1969 applies to unit trusts, investment trusts, companies owned wholly or partly by United Kingdom citizens but incorporated outside the United Kingdom, and to all close companies.

Unit and investment trusts, whose main income derives from companies which are themselves subject to dividend restraint, and companies not incorporated under the law of the United Kingdom, are wholly exempt from the policy. Close companies may exceed the maximum permissible level of distribution to the extent necessary to meet the requirements of the Finance Act, 1965.

I thank my right hon. Friend for that reply. Will he be kind enough to draw it to the attention of his hon. Friend the Financial Secretary who, on 24th April, at column 396 of the OFFICIAL REPORT, told the House that there were no exceptions to dividend restraint?

My hon. Friend the Financial Secretary has listened very carefully to what my hon. Friend the Member for Poplar (Mr. Mikardo) has said, and has whispered in my ear—and I would not dream of repeating it—that he himself said nothing of the sort.

asked the Chancellor of the Exchequer how much betterment levy so far collected by the Land Commission represents a reduction of tax collectable by the Inland Revenue.

The information on which to base an estimate is not available.

Has the Minister's attention been drawn to the Answer I received from the Minister of Housing and Local Government when I pointed out that his Department can collect money at 3·2d. in the £? Would it not be much more economical to collect this money through the normal procedure and not another agency?

This has no relevance to the Question on the Order Paper.

Would the Minister disagree with the statement by my hon. Friend that it would be much cheaper to collect the betterment levy through the normal machinery rather than through the Land Commission?

I shall be able to answer that question when I have had notice of it.

asked the Chancellor of the Exchequer what estimate he has made of the cost to public funds in 1968 of overseas visits by members of the Government, including staff and other persons accompanying them.

All Departments have been asked to keep the total of their expenditure on overseas visits for 1968–69 to not more than the total for 1967–68, absorbing the substantial increase in costs as a result of devaluation by reducing numbers of visits. Separate estimates for visits by members of the Government within this total are not available.

While that is gratifying as far as it goes, if the hon. Gentleman is not willing to offer even an approximate estimate to the House, does not he see that this will cast fresh doubts on the Government's ability to control public expenditure?

One way of controlling Government expenditure is not to spend time on elaborate breakdowns of expenditure which are not particularly relevant.

Will the hon. Gentleman encourage Ministers, particularly junior Ministers, when travelling, at any rate in Europe, to travel by British airlines rather than by executive aircraft owned by the Board of Trade? Will he encourage them to set an example?

The most economical means of transport are always encouraged by the Treasury, and we shall continue in that practice.

asked the Chancellor of the Exchequer whether he will make a further statement on Her Majesty's Government's policy with regard to further borrowing from central banks and Governments abroad.

I have nothing to add to the Answer which I gave the hon. Member for Louth (Sir C. Osborne) on 30th April.—[Vol. 763, c. 166.]

Does the Chancellor intend to fund any of the short-term debts which the present Government have incurred? If so, in the light of the Prime Minister's remarks about that on television in his devaluation broadcast, are the Government prepared to accept any strings if they are funding the short-term debts?

I have no proposals in that direction to announce.

If it is against the public interest to tell the nation of the size of our short-term debts, would not it be more honest to our creditors and ourselves to fund those debts as quickly as possible?

This question was dealt with at some length yesterday, when I explained that the practice I was following was exactly the same as that followed by previous Chancellors.

The Gas and Electricity Bill which has recently come before the House contains a novel power for the gas and electricity undertakings to borrow abroad. Where will these amounts figure in the figures produced for the House? Is not this a novel departure?

It may be a novel departure, but the hon. Gentleman must not necessarily assume that what is novel is bad.

asked the Chancellor of the Exchequer how many hours of overtime will have to be worked by the Inland Revenue in order to effect the re-codings consequent upon the Budget proposals; and what remuneration will be paid for this overtime.

Eight hundred thousand hours for which the remuneration paid will be about £430,000.

Is the Minister satisfied with this extra expenditure? Does not he realise that industry will have similar extra expense? Is it not all out of the productivity of the nation?

I cannot undertake to keep the tax system static merely in order to avoid any possible extra expenditure to be made in making adjustments.

asked the Chancellor of the Exchequer what has been the increase in the note issue of British banks in the last 12 months; and how much Government spending and lending he intends to finance by further increases in the note issue in the current year.

Between February, 1967, and February, 1968, notes in circulation increased by £157 million, from £3,041 million to £3,198 million. The size of future note issues will continue to be determined by public demand for notes.

Would not the Minister agree that printing new money at the present time represents very muddled economic thinking? As the new notes add to Government spending power, is not it true that they add directly to the speed of our already cantering inflation?

The answers to all those questions is, "No, Sir." The muddled thinking is on the part of those who believe that any increase in the supply of notes reflects an increase in the money supply. In fact, it is usually merely a convenient way of breaking up the total money supply.

When production has been almost static, as it has been in the past year, is not it very clear thinking that the issue of £157 million more of notes must tend towards more inflation?

Not so. The increase of notes reflects the increase of cash demand by the public.

Give me a thousand.

The note supply is a mere fraction of the total money supply in the country.

asked the Chancellor of the Exchequer what estimates he has made of the dis-saving which will result from the special levy on unearned incomes introduced in his recent Budget.

As my right hon. Friend said in his speech on the Second Reading of the Finance Bill, I consider it unlikely that savings will be affected by the special charge, which of course is for 1967–68 only.

Is not it clear that members of the public will try to maintain their standard of living and will draw on savings, and that with this tax they must draw more heavily on their capital, as with many of the other taxes? Will not this simply add to the public's propensity to consume, which is already far too high?

The first part of the hon. Gentleman's assertion is highly conjectural. The latter part, that this will add to spending, seems to me to be absolutely opposed to the normal inferences drawn from this tax.

Has the Minister considered the particular problem which will arise for shareholders in close companies, which are forced to distribute whether or not they wish to do so and may have great difficulties with this additional burden?

That problem has been considered. However, it does not relate to the Question on the Order Paper.

asked the Chancellor of the Exchequer whether he is aware that essential export forms, such as No. 57, Combined Certificate of Value and Origin and Invoice of Goods for Exportation to New Zealand, are subject to Purchase Tax at 33⅓ per cent., recently increased from 27½ per cent. under category 26B, and as it is Government policy not to tax exports, whether he will remove Purchase Tax from all export stationery.

I regret that it would be quite impracticable to distinguish stationery used in connection with exports for the purposes of the tax.

I reject absolutely that proposition. Will the Minister go away and do his homework and recognise that all these export forms by their millions annually are printed solely and specifically for the conduct of export trade, and could relatively easily be exempted from Purchase Tax? Will he examine the matter again?

I will readily look again at any matter the hon. Gentleman wants. But it is perfectly clear that the task of segregating forms in this way for Purchase Tax purposes is administratively expensive and impossible to achieve at a reasonable cost.

asked the Chancellor of the Exchequer why he has classified cosmetics as the most luxurious of consumer goods and increased Purchase Tax on them by 82 per cent. from 27½ per cent. to 50 per cent., and having regard to the fact that 97 per cent. of all adult females use cosmetics and 72 per cent. of all adult males, whether he will now regard cosmetics as essentials and reduce Purchase Tax on them to 20 per cent. as for soft drinks.

In a Budget in which it was necessary to propose extensive increases in indirect taxation, cosmetics could not be excluded from the range of less essential goods now subject to the 50 per cent. rate of purchase tax.

But does the Minister realise that his rearrangements of Purchase Tax are entirely retrogressive in that they are widening the gulf between articles most extensively in demand for ordinary and necessary every-day usage, and the most sumptuary articles? Why should he tax cosmetics at 2½ times as much as soft drinks?

Cosmetics must be regarded as among the less essential, though very commonly used, articles, and the rate of tax seems appropriate in the circumstances of this year's Budget.

Does my hon. Friend agree that it would be more appropriate to bring the Purchase Tax nearer the tax on whisky since those who drink cosmetics are drinking spirits rather than Coca Cola?

I think that the rates are very appropriately judged.

asked the Chancellor of the Exchequer whether, in the interests of exports, he will seek to relieve export merchants of Selective Employment Tax in the audited ratio of the volume of export sales to that of any sales in the home market.

No, Sir.

Do not the Government realise that only in a very few cases does the manufacturer sell his product overseas? It is done by export merchants. Why do the Government think that to make something is good but that to sell or maintain it overseas is apparently bad?

The Government do not think that at all. One of the reasons why the hon. Gentleman's request cannot be complied with is that it would, if supported by some special concession to services ancillary to the export of goods, be contrary to some of our international obligations.

If my hon. and learned Friend cannot agree to the suggestion in the Question, will he consider the recommendations made by the Kleinwort Committee in respect of relief of this tax to export houses and merchant banks in the City in connection with exports?

Another difficulty is that many services are concerned with exports. If we gave a refund or some other concession to all services connected with exports, as the Bland Committee pointed out, only the distributive trade would be left bearing the S.E.T.

Does the hon. and learned Gentleman really need the Reddaway inquiry to confirm the belief that the work of export merchants is vastly more important than a whole range of manufacturing? Will he not be better employed in planning to get rid now of the S.E.T. and to replace it with one of the variants of a sales or value-added tax?

The importance of the work of these houses is acknowledged, but they have had a considerable gain through devaluation.

asked the Chancellor of the Exchequer if he is aware that since devaluation import prices have increased by 9½ per cent. and export prices by only 43½ per cent.; how much this further increases Great Britain's balance of payments problems; how long he expects this situation to continue; and what steps he proposes to reverse this trend.

I would refer the hon. Member to the Answer which he was given by my right hon. Friend the President of the Board of Trade on 24th April.—[Vol 763, c. 209–10.]

But that was a completely unsatisfactory Answer. Is not the Chancellor aware that we import half our food and all our raw materials, that we are paying 9 to 9½ per cent. more in import prices and that we export one-third of what we manufacture and get 14 per cent. less for that? Surely that must increase the deficit on our balance of payments. Will he explain why he thinks there is no truth in what I am saying?

The hon. Gentleman is saying so many things that I would hesitate to say that there is no truth in any of them. What is inevitably the case is that devaluation increases the price of imports and, broadly, decreases the price of exports, which is one reason why it improves the competitive position of exports and should also improve the competitive position of import substitution.

While there are strong reasons for not doing so, are there not equally strong reasons in the present difficulties for having, for a brief period, some degree of import control?

As my hon. Friend recognises, there are very strong reasons against that.

Does the right hon. Gentleman consider that it would be unpatriotic to observe that many of us think that the balance of payments position is steadily deteriorating and not improving?

I note the hon. Gentleman's views, which I treat on this as on all other subjects with the respect they deserve.

asked the Chancellor of the Exchequer how much more Great Britain must earn than it spends in 1968 in order to wipe out the £540 million adverse balance of payments which occurred in 1967, and to repay the foreign loans due for repayment in 1968.

I have nothing to add to what I said on this subject in my Budget Speech.—[Vol. 761, c. 255 and 258.]

May I beg the right hon. Gentleman not to give me a clever but a proper answer? Will he promise the country that, by the end of this year and for this year, we shall be in balance of payments? Secondly, can he get his trade union allies to believe what he tells them—that they must produce £750 million mole of wealth without their being paid a brass farthing more for producing it?

I did not give the hon. Gentleman a clever answer and did not intend to do so. But I cannot add usefully, in answer to a Question. to what I outlined as best I could in my Budget Statement and elsewhere, and which cannot be amplified in the course of 10 words or so at Question Time.

In view of the trade figures since devaluation, including those published today, is it the right hon. Gentleman's expectation rather than his hope that we shall be in balance during the coming year and have a surplus of £500 million on current account next year?

I see no reason to revise my view that it is essential for this country to go for a very large balance of payments surplus in 1969.

asked the Chancellor of the Exchequer if he will give a general instruction to all Government Departments, particularly those responsible for the publicly-owned industries, to refrain from taking advertising space in journals showing extreme racialist views and comments.

The general rule is that advertising by Government Departments and publicly-owned industries is so placed as to achieve the required results in the most economical way and does not have regard to editorial policy.

Does my right hon. Friend appreciate that I do not dissent from his view that the individual must have freedom of expression? But is he aware that the Illustrated County Magazine Group is disseminating filthy, arrogant and offensive copy through a chain of regional magazines throughout the country? Is it right that public money should be used for advertisements in such magazines?

I will look at any case which my hon. Friend wishes to draw to my attention, but there is difficulty in departing from the principle I have laid down without getting into very deep water indeed.

Will the Chancellor give an assurance that what his hon. Friend is asking for will not apply to newspapers which criticise the Government?

I think that we would have to restrict our advertising very considerably.

asked the Chancellor of the Exchequer what will be the responsibilities of the Central Office of Information in the underground regional seats of Government.

It would not be in the public interest to disclose this information.

Would it not be in the public interest to know that civil defence and the regional seat of Government proposition are being put on a care and maintenance basis?

No, Sir.

asked the Chancellor of the Exchequer when equal pay will be applied to Government industrial establishments.

As soon as economic circumstances permit.

Would not my hon. Friend agree that the Government should give a lead in this matter, particularly having regard to their anxiety to enter the E.E.C., which will have implemented this principle by 1971?

I cannot set a date for this. I can only say that I sympathise with my hon. Friend's viewpoint. This cannot be regarded as an approximate prospect but rather as a future attraction which will take place. The Government will certainly give a lead as soon as economic circumstances permit.

Will my hon. Friend say whether equal pay will be introduced for these women before the next General Election?

I cannot make a prediction of that kind. I do not even know when the General Election is likely to be.

asked the Chancellor of the Exchequer what is the long-term policy of Her Majesty's Government in the field of international liquidity.

To co-operate with other countries in the development of a monetary system which will provide for an orderly growth of liquidity so that the world's output and trade can continue to expand.

In order to increase international liquidity to take care of trade, what is the Government's long-term policy—to raise the price of gold, or to try to get rid of gold in favour of special drawing rights?

The policy of the Government is to believe that the present system can and should last for a considerable time, and beyond that to move in an orderly way to secure a system which does not restrict world trade.

asked the Chanceller of the Exchequer on what grounds the Treasury based its decision to refuse permission to the board of Rest Assured to give an issue of scrip to its shareholders.

Companies have been asked to defer normal scrip issues for the time being as they are widely misunderstood by the public.

Do not the Government realise that capitalisation of reserves brings no material benefit whatever to the shareholder? Is not this an example of the bovine attitude of the Government which does more damage to sterling than anything else could?

No, Sir. I understand full well what happens when a normal scrip issue is distributed and I understand that there are many cases, and it may be most cases, when there is no real transfer of value, but that is not so in every case. I am saying that there is widespread misunderstanding, that the need for scrip dividends is often not pressing and that it would therefore be in the general interest of the whole policy of restraint, which is valuable to the economy, that there should be postponement in appropriate cases.

Is the Chief Secretary putting it forward as a serious proposition that companies, businesses and firms should refrain from an ordinary business practice because some extremely ill-informed people may not understand it?

I am putting it forward as a sensible contribution to the restraint of dividends and the incomes policy.

Can the Chief Secretary explain why scrip issues are forbidden, but share splits are allowed?

It depends on the exact nature of the scrip issue.

On a point of order. 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 Chancellor of the Exchequer what percentage of the gross national product he estimates will be taken by central and local government spending, including national and health insurance contributions and interest on loans to local authorities and public corporations, in the coming year; and what was the figure for 1963.

Total expenditure by central government and local authorities —as defined in Table 47 of the 1967 National Income and Expenditure Blue Book—amounted to 40·6 per cent. of the size. of gross national product in 1963. This includes the outgoings of the National Insurance Funds but does not include interest on loans to local authorities or to public corporations. An equivalent figure for 1968–69 cannot be given at this stage.

But is it not a fact that there is nothing for trade in this increasing Government share, and that it is retarding our export drive?

No, Sir. I would not accept that view for a moment.

asked the Chancellor of the Exchequer why the Royal Mint struck 100 million halfpennies last year although they will be demonetised in August, 1969.

Halfpennies were minted and issued in 1967 to meet a continuing demand from the public.

As it costs more than a penny to mint a halfpenny, is not this policy of halfpenny foolish, pound foolish quite ridiculous? What are we to do with these millions of halfpennies when they go out of circulation, as they will in the not-too-distant future?

These halfpennies were issued to meet public demand.

Nobody wants them.

My hon. Friends says that nobody wants them, but they were issued precisely because there was considerable public demand for them, and they were released against that public demand. The loss per halfpenny is not great and amounts to no significant sum compared with the public convenience involved.

asked the Chancellor of the Exchequer what steps he now intends to take to relieve the deflationary measures, in view of the upward trend in unemployment.

None, Sir. The Government's measures are not deflationary, but on the contrary are intended to create the conditions for an export-led expansion on a scale permitting a downward trend in unemployment.

Is not the Chancellor's gamble on his vast inroads into future home consuming power being taken up by increased exports? What happens if they do not grow sufficiently?

No, Sir. In present circumstances the gamble would be not to allow room for the export demand to be met as it builds up. I certainly think that there is no possibility of achieving, as I think that we can achieve, a secure underpinning of the balance of payments position if we change our policy at a few weeks' notice.

If the policy is not deflationary, how can the Chancellor explain the fact that in the last 16 months unemployment has been above the 500,000 wholly unemployed mark on 12 occasions, while during the whole of the 13 years it was above that mark on only seven occasions?

I accept everything the hon. Gentleman says, but the fact of the matter is that, contrary to the views sometimes expressed, the Budget, combined with other factors in the situation, is not intended to have, and in my view over a period will not have, a net deflationary effect.

In view of the recent trends in the unemployment figures, is there not a danger that there might be greater need to support an export boom by a boom at home? Would my right hon. Friend not be running too great a risk if he did not encourage more investment at home, to support the development of our exports?

I am very anxious to see a strong development of investment at home, but I do not think that a consumer-led boom at home would support the export boom, as my hon. Friend says.

If taking £923 million out of the economy is not deflationary, what figure would the Chancellor put as being deflationary?

I said taking that, in connection with other factors, and I stick to this. I noticed that yesterday upstairs, the hon. Gentleman was urging me to do more to contain a consumer-led boom.

Can the Chancellor tell us when we may expect a substantial reduction in the present high level of unemployment, and can he give us some clear assurance that the Government have completely abandoned any idea of maintaining, permanently, a larger margin of unused resources than we have had in the past 10 years?

I have no desire at all to maintain the present level of unemployment, but I believe that it is essential that, as that level is reduced, and as production takes up, it should be done, if we are to cure our balance of payments difficulties, by means of an export-led boom.

asked the Chancellor of the Exchequer, if he will give a breakdown of the increases in Ministerial salaries from £591,225 on 4th April to £613,850 on 23rd April.

As explained to the hon. Member for South Angus (Mr. Bruce-Gardyne) on 29th April, the net increase was, in fact, £14,125, made up of £8,500 for the Paymaster-General, whose office had been vacant since November, 1967, and £5,625 for a Minister of State. In aggregate salary costs the percentage increase is 2·4 per cent.—[Vol. 763, c. 126.]

These figures become more and more confusing. Is the right hon. Gentleman aware that on 17th April he said that the total increase in Ministerial salaries was £28,500? Even so, is it not absurd to make this sort of increase in Ministerial salaries without any increase in official productivity at all? This is government by Bonnie and Clyde.

The right hon. Gentleman must naturally expect an accurate answer to the Questions he asks, and if he compares different dates he will surely get different answers. The figure of the number of Ministerial appointments is now less than it was in October, 1967, and several less than it was in November, 1965.

Will the right hon. Gentleman consider introducing a system of payment by results for Ministers?

I should be glad to receive suggestions from the hon. Gentleman.

asked the Chancellor of the Exchequer if he is aware that the share index on the London Stock Exchange has risen from 127·8 on 19th March to l49·3 on 30th April; and if he will introduce the permanent limitation of dividends.

Dividends are not the sole factor influencing share prices.

In view of the continuing share boom—since Budget day—how can the Government expect wage restrictions to be accepted? Would not this suggestion create, or restore, some sense of fair play, particularly as temporary dividend limitation merely increases capital values?

My hon. Friend will have noticed that the recent activities on the Stock Exchange do not entirely support the basis of his question.

asked the Chancellor of the Exchequer what action he proposes to take to counter the effect on the balance of payments of the continuing high level of imports.

Devaluation will help to make import substitution practical and profitable, but it is bound to take time for the benefits of devaluation to be realised.

With imports for April only £7 million down, at £645 million, and consumer demand still at a very high level, does my hon. Friend not feel that some further action is needed if we are to get the £500 million surplus next year that he is talking about? Would he consider looking again at the question of further restriction on capital outflow?

That is a somewhat different question from the one that my hon. Friend has on the Paper. It is the case that reduction in imports is taking some time to work through, but I reiterate the point I made in reply to an earlier Question, that it is vitally important that we do not encourage the development of protectionism throughout the world.