asked the Chancellor of the Exchequer what estimates he has made of the annual yields from wealth taxes directed at wealth in excess of £20,000; if he will now introduce an autumn Budget to tax wealth; and if he will now make a statement on the Government's plans regarding a tax on wealth.

A 1 per cent. tax on wealth in excess of £20,000 owned by individuals would yield about £180 million, although because of the varying demand effects it certainly cannot be assumed that this would enable other taxes to he reduced by an equivalent amount. My right hon. Friend has no plans for an autumn Budget. I have no statement to make about future plans.

Is my right hon. Friend aware that millions of people who work for their living and pay taxes are very disappointed at the lack of urgency expressed by the Treasury in this matter? Does he not realise that the introduction of a redistributive wealth tax this autumn would have a material effect on the climate of opinion behind the prices and incomes policy?

I have listened carefully to what my hon. Friend has said, but I have no further statement to make.

Can the right hon. Gentleman tell the House whether the Inland Revenue is in any position to accept the burden of imposing another tax? Has it sufficient staff?

It is well known that a wealth tax does create problems of valuation.

asked the Chancellor of the Exchequer what is his latest estimate of the balance of payments out-turn in the second half of 1968; and whether he is still forecasting a surplus of £500 million in 1969.

asked the Chancellor of the Exchequer whether he will make a statement on the balance of payments for the first nine months of 1968.

asked the Chancellor of the Exchequer what estimate he has now made of the balance of payments in 1968 and 1969.

Our deficit fell substantially in the second quarter of 1968, and the recent trade returns suggest the third quarter may have been much better again. Exports are rising strongly and invisibles are doing well; imports remain higher than we had expected, though the increase has at least flattened out. I do not propose at present to give detailed forecasts, but there can be no doubt that we are now rapidly eliminating our deficit; next year should see us in substantial surplus.

That does not, of course, answer the question about the £500 million estimate which the Chancellor gave. Clearly, he will have to go a lot further with the I.M.F. officials when they come next month. How will he explain the fact that the money supply has continued to rise despite the fact that the expected surplus has continued not to materialise?

The latter part of that question has nothing to do with the Question which the hon. Gentleman had on the Order Paper. The money supply was expected to rise in the second quarter because—as he will know, if he studies these matters as I thought he did—the pattern of taxation coming in means that Government borrowing is necessarily higher in the second quarter.

Would my right hon. Friend care to comment on how this welcome trend is related to the effectiveness of the prices and incomes policy to date?

The prices and incomes policy and the other measures which we have taken—the public expenditure measures, and above all the Budget measures—are now working themselves out in the trade figures which we have seen in the past two months.

While welcoming today's trade figures, may I ask my right hon. Friend whether he does not agree that the present level of imports gives greatest cause for concern? Is he aware that the latest forecast of the National Institute predicted a level of imports flattening out to a plateau over the second half of 1968 and the whole of 1969? Would he not agree that, in the light of the latest figures, this forecast may prove too optimistic?

The forecasts of the National Institute, like those of other people, have not always proved wholly accurate in the past. That is somewhat in the nature of forecasting. It appears to be the case—and I speak with all due caution—on the basis of any number of months' figures that imports have flattened out, though they are higher than I would like them to be.

Will the Chancellor return to the original Question which he was asked by my hon. Friend and which he was asked again in a supplementary question? I understand that he does not want to make a new forecast, and I do not press him on that, but is he still holding to his original forecast of a surplus of £500 million in 1969?

If the right hon. Gentleman looks at my Budget statement he will see that what I said was that we should aim at achieving during 1969 a surplus at the rate of £500 million. That is precisely what I said in my Budget statement. If the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) does not believe me, he should look up my statement. I still think that a surplus at that rate is desirable and is within our achievement.

As the rest of the world would in any case react very quickly to prevent us from sustaining a surplus of £500 million on the balance of payments, would it not be more realistic to go for a much smaller surplus which we could sustain for some considerable time?

No. I think that it is necessary in present circumstances to sustain a very high rate of surplus. In all these matters a particular figure is not of crucial importance, but I think that it has to be of the order of £500 million. I am bound to point out to my hon. Friend that some other countries have sustained a substantial rate of surplus over a considerable number of years.

When the Chancellor talks about the trend of imports levelling out, does he anticipate any sharp rise in imports for industrial stocks in the next few months?

No. One must always speak with caution in these matters, as the hon. Member knows. I think that one factor in the relatively high level of imports in the last few months has been a high rate of stock-building. That is a factor which has been in the accounts for some months past. It could conceivably be a factor which would lessen in the future, but that remains to be seen.

asked the Chancellor of the Exchequer what steps he now proposes to take to strengthen the balance of payments.

asked the Chancellor of the Exchequer if he will give his latest estimate of the balance of payments out-turn in the second half of 1968 and in 1969.

asked the Chancellor of the Exchequer, in view of the fact that the balance of payments deficit is now running at the rate of £1,300 million per annum, how soon he estimates the undertaking to eliminate this deficit altogether will be fulfilled; and what new steps he is taking to achieve this end.

I have nothing to add to the Answer I gave to the earlier Questions today on this subject.

Can the right hon. Gentleman make it clear whether, on the present basis, he expects to move into surplus in the first or second half of next year?

I indicated when answering previous Questions, as I had done previously, that I was not prepared to give an exact date by which I thought we would move into surplus. I hope that it may be as soon as possible. I certainly hope that it may be in the first half of next year.

rose—

Order. The Minister is answering with this Question Questions Nos. 20 and 26. Mr. Dickens.

In view of the fact that the private outflow of capital in the first six months of the year totalled about £348 million, of which perhaps £100 million went out in portfolio investment to Australia alone, will my right hon. Friend now turn his attention with all urgency to considering new restrictions to prevent the heavy drain which this represents on our balance of payments?

I think that my hon. Friend is giving the gross and not the net figure, which is a very different thing indeed. Naturally, one's view of the capital flow must have regard to both capital outflow and capital inflow; and present indications are that the position in the third quarter was substantially different from that in the first two quarters.

Since the Economist a few weeks ago estimated that our balance of payments was—that is, at that time—running at the rate of £1,300 million a year, what view would the right hon. Gentleman now give, if he does not accept that estimate, of the position; and why should we believe him when he says that by next year we should be in surplus to the tune of £500 million? What evidence does he have to substantiate that claim?

I appreciate that the hon. Gentleman quoted the figure of £1,300 million in relation to the rate of the balance of payments when he put down his Question, which I suppose was tabled early in the Summer Recess. As he will be aware, matters have changed since then.

Answer.

I assure the hon. Gentleman that I will answer his question. If the rate of improvement since he tabled his Question—which itself was based on somewhat doubtful figures—remains what it has been since then, we shall be in very substantial balance of payments surplus indeed by next year, and at an early date.

asked the Chancellor of the Exchequer by how much he now expects the balance of payments surplus in the second half of 1968 to fall short of the estimate of £100 million given to the International Monetary Fund after the £ sterling was devalued; and what are the main reasons for this shortfall.

I have nothing to add to the Answer I gave to the earlier Questions today on this subject.

What is the right hon. Gentleman's answer to the charge that the main reason for the dangerous gap that has appeared between the forecast and the reality was his own blind refusal to face the facts of devaluation during the wild spending spree which followed?

In so far as the level of imports has remained our problem, and has remained a substantial problem, over the six months since the Budget, it did not respond, as did consumption at home, to the budgetary measures. Therefore, there is no reason to think, even if I accepted the hon. and gallant Member's premise, that this is a primary aspect of the matter.

asked the Chancellor of the Exchequer if he will make a progress report on the workings of the two-tier marketing arrangements for gold.

The system has worked well and I see no reason why it should not continue to do so for a considerable time to come.

Will the Chancellor tell us which British national interest is served by his collaboration with the American Treasury in denying to the South African Government their right under the Articles of the I.M.F. to sell gold for currency to the market?

It is not a collaboration only with the American Treasury. It is a collaboration with the financial authorities of all the main countries concerned in the world monetary system. The British national interest which is here served is the stability of the international monetary system to which I, at any rate, attach very considerable importance. The hon. Member has always been pessimistic about the working of that system. It is working far better than he indicated in previous Questions which he put to me, and I believe that it can continue so to work.

Does my right hon. Friend believe that it is likely to be a much more permanent system than was originally envisaged? Does he believe that it can be so permanent that it will no longer be thought to be a stop-gap, as was originally intended?

It has certainly worked. It has worked better than expected—perhaps better than I expected—when it was introduced in March. "Permanent" is a word to which one can apply varying interpretations, but it can certainly last a long time ahead and there is no need to regard it as a stop-gap.

asked the Chancellor of the Exchequer what plans are currently being considered by the Crown Estate Commissioners for the conversion and use of Carlton Mews.

The Crown Estate Commissioners have approved plans for a comprehensive scheme of development for an area covering Carlton Mews and adjoining properties. This is intended primarily to provide centralised accommodation for the British Council as well as a block of flats and a substantial public underground garage.Planning consent has been given by the local planning authority, but work cannot start until an office development permit has been obtained.

Can the Minister say how long the present fine buildings have been standing empty and why? Does the redevelopment plan mean the demolition of these buildings?

The present buildings in Carlton Mews were designed in 1829 and completed in 1832. Great care has been taken in the general redevelopment of the area to fit the new buildings into their historic character. Approval to the present plan was given by, among others, the Royal Fine Art Commission.

asked the Chancellor of the Exchequer what studies he is carrying out into the effects of taxation upon incentives.

I am carefully considering the main studies which have been carried out in this field in recent years.

But is my right hon. Friend aware that in his Budget statement the Chancellor of the Exchequer made a dramatic change from direct to indirect taxation and justified it on the ground of incentives? Is it not worth while to spend a little time—as is done by so many other organisations—measuring the effect of incentives in this connection?

As my hon. Friend knows, my right hon. Friend has studied the matter with great care. There have been many publications about it, and a great deal of time has been spent on this important topic, but it is not yet evident that there is a clear conclusion or that further study would produce a clear conclusion. I therefore hope that my hon. Friend feels that what I am doing is sensible—that is, going over the ground very carefully once more.

asked the Chancellor of the Exchequer what proposals he is considering for the reform of close company legislation.

The Inland Revenue are about to discuss this matter with representatives of industry and commerce. I shall, of course, give full consideration to any proposals which are put forward.

The House and British industry will be glad to know that the Treasury is looking again at close company legislation. May I ask the Government, and the Chief Secretary in particular, to have regard to the present limitation upon the salaries which executive managers in close companies can earn, because for the larger close companies these are clearly inadequate?

I am sure that the hon. Member did not phrase his question precisely as he intended, because executive managers are under no disability of any kind and could earn whatever their employers thought they ought to be paid. I recognise that he is, in fact, speaking of directors. That is one of the matters which no doubt will come forward in the discussions which are to take place.

asked the Chancellor of the Exchequer if he will consider extending the categories of persons qualified to claim repayment of post-war credits to those workers whose earnings are below the supplementary benefit rates for them and their families.

I am afraid it would not be practicable to extend the repayment of post-war credits in this manner.

I am sure that my hon. and learned Friend is aware that there are a large number of men who work for less than supplementary benefit rates and that the State owes them money. Would not a payment of this kind be one way of helping and encouraging them? Will he also seek other ways of helping this group?

There are many other ways, which go outside the Question, of helping this group, and certainly it is a group which deserves every sympathy. The difficulty about using post-war credits is that of determining for how long people have been under a certain level, which means many detailed inquiries. One must seek identifiable categories as the present system has done.

asked the Chancellor of the Exchequer if he will make a statement on the progress made with the 2,000 million dollars credit arrangement.

asked the Chancellor of the Exchequer if he will make a statement on the final agreement made with the Bank for International Settlements on the medium-term credit arrangement.

asked the Chancellor of the Exchequer what is the total sterling balance he estimates will remain after drawings have been made under the $2,000 million Basle agreement; which countries mainly will hold them, and by what amounts, respectively; whether they are all fully guaranteed in dollars against further sterling devaluation; what is the position after the 1971 guarantee expires; and what additional guarantee he has given to repay the whole amount unconditionally by 1978.

A full statement on the Basle facility and the sterling area agreements is contained in the White Paper which I presented to the House yesterday.

Will the Chancellor elaborate on paragraph 13 and tell the House what is the agreed starting level of the sterling balances below which the United Kingdom can draw dollars or other foreign currencies from the International Monetary Fund?

We do not draw from the I.M.F. It is a Bank for International Settlements arrangement. The starting level is broadly the end of March level.

Is my right hon. Friend aware that while many of us want to see changes made, in underwriting the short-term sterling balances in particular, many of us are nonetheless opposed to this Government going yet again to the Bank for International Settlements to incur new obligations to that body which recently advocated higher unemployment in Britain, reduced public expenditure, a tougher incomes policy and a revision of trade union law?

I assure my hon. Friend that none of those questions arises in connection with the facility which is here under discussion. My hon. Friend says that he would like to see changes but not made in the way in which we have made them. I am not quite sure in which way he would like to see changes made. I think that we have here made a practical step towards giving greater stability to sterling and, therefore, to the world monetary system by bringing in those countries which at present have large surpluses. That seems a most sensible direction in which to go.

Will the £500 million surplus of which the Chancellor spoke earlier be anything like sufficient to repay the debts which we shall incur under this agreement, to repay the £2,500 million which we owe elsewhere, and to add the £500 million which he says he requires to build up the sterling balances?

The debts which can be incurred under this agreement are by definition no greater than calls which we should have had to meet earlier had sterling balances been run down without the agreement, and we incur debts under this agreement only to the extent that sterling balances are run down. If we achieve and maintain—as I am determined that we shall—a substantial surplus, we can meet our commitments over the forthcoming years.

Will the Chancellor recognise, particularly as he was not pressed in the matter, that he has a duty to give as much information as he reasonably can to the House. In particular, will he tell the House what drawings, if any, have been made, in view of the fact that it was widely reported in papers such as the Financial Times that about 600 million dollars were drawn straight away?

As the right hon. Gentleman knows, it is not normal to give details of drawings in respect of the Central Banks' facilities. I can, however, tell him and the House that as a result of changes in the sterling balances between the date which I mentioned to the hon. Member for Banbury (Mr. Marten) and the present time about 600 million dollars were available for us to withdraw—as a result of changes which had taken place when the agreement came into operation on 25th September.

asked the Chancellor of the Exchequer what study he has made of the extent to which the grant of special drawing rights by the International Monetary Fund will have an inflationary effect on the economy; and if he will make a statement.

The allocation of S.D.Rs. will not in my view have inflationary consequences.

is there not reason to suppose that the grant of these drawing rights will simply wash up in due course as an increase in bank deposits in this country?

No, Sir. The allocation of S.D.Rs will have no direct effect on the money supply in this country. The acquisition of additional S.D.Rs. for currencies will have no more effect than the acquisition of other assets by the exchange equalisation account which has taken place in the past, and which has not been thought to have that effect. The effect of S.D.Rs. is to add to world liquidity, not to increase world inflation.

Can the Chancellor say anything about the progress made by other signatories towards ratifying the agreement? Does he wish to modify the estimate which the Financial Secretary gave to the House during the debate on the Bill that this scheme would become operative in the first half of next year?

No, I do not think so. This is by its nature something which cannot be firmly predicted, but it is a hope to which I stick and to which Mr. Schweitzer sticks.

asked the Chancellor of the Exchequer what measures are now proposed to encourage the repatriation of British capital.

The Government have already taken action on this front. The 25 per cent. scheme is making a substantial contribution in transferring to the first-line reserves a proportion of the nation's foreign currency assets and tax changes since 1965 have reduced the attractiveness of overseas investment as a whole.

Will the Chancellor tell the House what are the Government's plans for increasing the profitability of investment in this country?

I have no specific plans to announce, but it is clearly the case that the profitability of British industry has been increasing fairly sharply since the Budget, which I predicted at that time would be the case. That, I have no doubt, will have a considerable effect on investment.

asked the Chancellor of the Exchequer if he will now take steps to remove from the public schools the fiscal advantages which spring from their charitable status as recommended by the Public Schools Commission.

The majority view of the Commission on this point has been noted, but I have no statement to make at present.

In view of the fact that The Times stated last week that there is a case in equity for removing charity status, would not my hon. and learned Friend consider applying the £4½ million which he could raise in this way to the deprived primary schools of the country?

That is a matter of educational policy with which it would be more appropriate for the Secretary of State for Education to deal.

Since the charge is often made against public schools that they are too exclusive—a charge in which I see some truth—is there any possible reason for making them even more exclusive?

Again, the hon. and gallant Gentleman has asked a question of educational policy.

asked the Chancellor of the Exchequer if he will give special directions to Government Departments with a view to their estimates for the forthcoming financial year being so framed as to secure reductions in Government expenditure.

Departments are already operating on instructions based on the plans for public expenditure in 1969–70 announced last January.

Does that mean that the right hon. Gentleman has given no further and more emphatic direction? Secondly, can he say to what extent he expects public expenditure in the coming year to be less than that in the current year?

In answer to the first part of that supplementary question, as the right hon. Gentleman knows probably better than anyone else in the House, this is a matter for continuing management and not for special occasions only. Certainly we are continuing to give the matter most careful thought. It is a matter which engages my attention certainly every week and sometimes every day. The answer to the second part of the right hon. Gentleman's question is "Yes. The increase as already announced is expected to be about 1 per cent.".

Will it be possible to reduce Income Tax by 4s. in the £ in the next Budget, as suggested by one prominent Member of the Conservative Party?

My right hon. Friend takes the view that it is his responsibility to look after this matter now, next year and for many years ahead, so one need not look too closely into the suggestion mentioned in that supplementary question.

asked the Chancellor of the Exchequer if he will investigate the increase in Government spending of £5,000 million in the last five years, with a view to effecting economies.

All public expenditure is subject to constant investigation, and economies are made wherever this is possible without undesirable consequences.

Is the right hon. Gentleman aware of the commonly-held view in Scotland that Government expenditure is regulated by Parkinson's Law—that work expands to fill the time of the number of people available to do it—and the new law, that Government spending increases according to how much the House of Commons will put up with it? Would the right hon. Gentleman seek to effect reductions, particularly in over-centralised Government spending in London?

I am prepared to consider most carefully any case which the hon. Lady wishes to make out about extravagant spending in whatever part of the country it is incurred. Since the hon. Lady mentioned one area, she may care to know that in the last five years—the period mentioned in her Question—the increase in identifiable public expenditure has been somewhat greater in Scotland than in the rest of Great Britain.

Does the right hon. Gentleman's use of the phrase "constant investigation" in answer to this Question and his use of the phrases "constant observation" and "constant management" in answer to a previous Question in relation to budgetary matters mean that we are now to dispense with the pantomime of an annual Budget?

No. The hon. Gentleman will be aware that when one is dealing with projected expenditure of £15,000 million a year, it is a matter which cannot be allowed to run on on its own.

Would my right hon. Friend try to discover what effect this expenditure in Scotland has had in relation to bringing very much needed new jobs to the area, how this expenditure has increased under the present Government in the last four years and how it has increased to benefit old people, particularly in Scotland, the chronic sick and all those others who badly need help? Will my right hon. Friend take it from me and from the vast majority of my hon. Friends that there are no complaints whatever in Scotland about expenditure on these two vital matters?

I have noted carefully and sympathetically what my right hon. Friend has said. I will endeavour to obtain such information as is accurately available.

asked the Chancellor of the Exchequer whether he will now announce the amount of the foreign travel allowance for 1969.

The basic allowance for the 12 months beginning on 1st November will remain at £50. The arrangements for special allowances for business, education, etc., will continue as at present.

Is the right hon. Gentleman aware that that Answer will cause dismay and despair? Is he further aware that the present £50 allowance is regarded by most people as a petty, irksome and totally unnecessary restriction which is being increasingly evaded by many British tourists? Why will the right hon. Gentleman not end this farce?

This is not a restriction which I like or which I would wish to keep on for a moment longer than is necessary. However, in present circumstances, with our present problems and with the sacrifices we are having to impose elsewhere, I do not believe that it would be right to take it off until we move into surplus. As for the other points raised by the hon. Gentleman, there is certainly no legal means of evasion; and I hope that illegal evasion is on a small scale. This is certainly not a negligible matter. Our best estimates, which are bound to be based on projections about the trend and growth of foreign travel and expenditure, are that this represents a saving of between £25 million and £30 million a year, so that this is not a negligible matter, particularly in present circumstances.

Is the right hon. Gentleman aware that the allowance was fixed before devaluation? Will he consider increasing the allowance to compensate for the effects which devaluation has had on it?

It might possibly be said that such a case could be made out, but devaluation has involved certain other sacrifices. I do not think that it is unreasonable that the foreign travel allowance should bear a small measure of the sacrifice. Looking at the matter—and I assure the hon. Gentleman that I have looked at it closely—it seems that a small adjustment would be costly without giving any great benefit. I would, therefore, prefer to wait until it is safe to abolish the restriction altogether.

asked the Chancellor of the Exchequer what estimate he has made of the loss of revenue resulting from a cut of 6d. in the standard rate of Income Tax and of the effect on the income of married men with two young children earning £10 per week, £20 per week, £40 per week, and £100 per week and receiving £100 per week unearned income.

The loss of revenue would be £141 million for a full year; the cases quoted would benefit, respectively, by nil, 3s. 6d., £20 8s., £84 10s. and £109 19s. annually.

I am grateful to my right hon. Friend for those figures. Would not he agree that any reduction in Income Tax benefits most those who have high incomes, not necessarily earned, and benefits least those who work for average and below-average wages? When considering changes in direct taxation, will priority be given to these workers, to their incentives and also to groups such as widows who work to supplement their pensions yet who are taxed? Is he aware that they greatly resent this tax?

Order. Questions, however worthy, must be brief.

The short answer to the first point made by my hon. Friend is, "Yes". What my hon. Friend says is, of course, right, and that is why one must take other matters into account when these matters are considered.

asked the Chancellor of the Exchequer if he will introduce legislation to permit the granting of free depreciation rates for tax purposes in respect of all machinery purchased as a result of the need to convert or replace existing machinery arising out of the decimalisation of the currency.

I cannot add to my right hon. Friend's reply of 26th July to my hon. Friend the Member for Wythenshawe (Mr. Alfred Morris) and my hon. Friend the Member for Bradford, West (Mr. Haseldine).

Does not the hon. and learned Gentleman realise that this expenditure is likely to be very considerable indeed in certain sections of industry and that it is not incurred for the creation of new types of machinery for new purposes but to maintain the existing position? Is he aware, therefore, that this expenditure is incurred more in the nature of a repair than as a true addition to capital and, as such, should be allowed as a charge in the year of purchase against the profits of that year?

A reasoned case on this subject was put forward by the Decimal Currency Board just over a week ago, so that all these matters will be carefully studied, when the likely cost and effect that will be involved by this change will be looked into.

Perhaps my hon. and learned Friend is not prepared to give an immediate answer, but is he broadly satisfied with the apparent rate of progress being made in plans to invest in new machinery so that we are ready for decimalisation day?

I do not think that it would be appropriate for me to express a view on this matter generally, when the Question is concerned with the specific matter of allowances for free depreciation.

asked the Chancellor of the Exchequer how many letters and packets from Rhodesia have been opened by the Customs authorities since 14th June, 1968; how this figure compares with the previous four months; what information is extracted, and to whom it is passed.

No records are kept of the numbers of such letters and packets opened for Customs examination. The examination, in any event, is concerned solely with Customs matters and there is no question of information being extracted for other purposes.

As the Postmaster-General has announced that all mail from Rhodesia goes to the Customs for examination, would the Minister say by how much this delays the mail?

Mail which comes from Rhodesia is not opened and is not examined if it consists of only a flat letter. It is because of the import Order passed earlier this year, which prohibits the importation of goods except under licence, that this mail goes through the Customs.

asked the Chancellor of the Exchequer whether he will add the self-adjustable bed for invalids, made by H. Bickerton Limited, to the list of those items that are exempt from Purchase Tax.

No, Sir. An exemption for invalid beds would not be practicable.

Would the Minister recognise that all the beds sold by this company have been sold to severely handicapped and crippled people? Is he aware that these people live in their own homes and endeavour to be cured by this means rather than by being a charge on the State? Is there not a good humane and economic reason for abating the Purchase Tax on these beds?

The question at issue is for what these beds could be used—[Interruption.]—I must mention, for example, that the sales literature of this firm claims that these beds are superbly comfortable and useful for people in normal health.

asked the Chancellor of the Exchequer why Treasury approval was given to Montague L. Meyer Limited for the increase of their dividend from 16 per cent. to 20 per cent.

This company was firmly committed to a total dividend of 20 per cent. in a public offer document issued before the Budget. Treasury approval was given in accordance with the ruling which the Chief Secretary explained to the House on 25th March.

Does not my hon. and learned Friend realise how difficult it will be to explain to low-paid workers why their wages must be restrained and increases denied to them at a time when millionaire firms with friends in high places — [Interruption.] — can increase their dividends by 25 per cent.

Cheap.

My hon. Friend makes out a perfectly good case, which the Government have accepted, for dividend restraint. In this case, however, money was accepted from shareholders on the basis of an offer already made; and it would have been wrong in the circumstances not to have acted as we did.

What conclusion does the Minister draw from the fact that this firm is doing very much better since the Prime Minister stopped advising it?

If the right hon. Gentleman wishes to analyse the prosperity of the various firms which have been and are advised by hon. and right hon. Members, he would be engaging on a long, though no doubt interesting, task.

Would my hon. and learned Friend repudiate the allegation that has been made that the decision to increase the dividend in this case was attributable to any influence exercised by anyone in Her Majesty's Government? Is my hon. and learned Friend aware that that was a most offensive remark?

I am sure that not a single hon. Member would for a moment think that there was any possible explanation for what has occurred, apart from the one which I have given and which is perfectly satisfactory.

asked the Chancellor of the Exchequer what steps he is taking, in view of the effect of recent weather conditions on farm incomes, to ensure that agricultural recovery is not help up through lack of credit.

None, Sir. Agriculture is a priority category within the credit ceiling, and I am sure that the banks will do all they can to help farmers badly affected by recent weather conditions.

None the less, is not the right hon. Gentleman aware that the short-fall in crop income is so great that most farmers will be reaching their ceilings a great deal earlier than was expected? Therefore, will he instruct the banks that they can extend credit to enable agriculture to get back into full production; and to use any spare credit for that purpose rather than giving it to other institutions to enable other industries to stop production?

As I have already explained to the hon. Gentleman, there is no need to give additional instructions because instructions have already been given broadly to the effect he has indicated.

asked the Chancellor of the Exchequer if he will state approximately the amount of loans incurred by local authorities since 1945 and before the increase in interest rates in 1956 which matured for repayment in the last 12 months, the amount borrowed to replace these loans at high interest rates, the consequent increase in councils' annual expenditure, and its effect on council rents.

It is not possible to give the figures for which my hon. Friend asks, since statistics of local authority borrowing are not collected in such detail.

Is my right hon. Friend aware that it is this burden of high interest rates on replacement loans which is the main cause of soaring council rents throughout the country? Will the Government therefore consider granting 4 per cent. loans for this purpose, as they already do—and it is a great thing—for new council house building?

I am glad that my hon. Friend appreciates the efforts which the Government have already taken to assist in this difficult matter, but I have no further announcement to make with regard to any further steps.

Is the Chief Secretary aware that for some local authoties finance has become a nightmare under this Government owing to very high interest rates, and can he give any indication how much these rates have risen in the last three years compared with the previous three years?

If the hon. Gentleman cares to put down a Question, I shall be only too glad to give him the information.

asked the Secretary of State for Commonwealth Affairs what is the position of Gibraltarians about entering the United Kingdom, in the light of the negotiations held in Gibraltar in July and later developments; and if he will make a statement.

The position remains the same as it was on 23rd May, when my right hon. Friend the Commonwealth Secretary stated in Gibraltar that he was satisfied that within the present number of vouchers available to the whole Commonwealth tinder the Commonwealth Immigrants Acts all the Gibraltarians who wished to come to Britain would be able to do so. Between that date and 30th September, 13 vouchers were issued to Gibraltarians. One application was outstanding, but the voucher has now been issued. No applications were refused.

Does the Under-Secretary of State realise that there is a feeling in Gibraltar that we are not hurrying very much over the decisions made at that time? Can he assure us that the matter will be quickly dealt with to cover not only these people but everyone else concerned, especially the local Indians?

The position is that all those who wish to come can do so under the provisions of the Commonwealth Immigrants Act. Under the proposals put forward in February, there is now a special quota for people from dependent territories, and under that special quota all those wishing to come to this country from Gibraltar can do so.

asked the Minister of Power what further consideration has been given to the pit closure programme.

The National Coal Board continues to keep my right hon. Friend informed of the collieries it intends to close, and he keeps the general lines of the Board's programme under constant review.

Is my hon. Friend aware that within the mining communities there is great hostility to the future pit closure programme? Is he aware that there is even hostility between his Department and the miners' trade unions? Does he propose to examine or re-examine this policy, because if the programme is continued as suggested at the present time it can mean disaster for the economy of the country?

All I can say is that the Government are examining the possibility of deferring some closures on a selective basis, as has been done in the past, in areas where there is very high unemployment. Indeed, two closures have already been deferred this month pending consideration of their implications.

Having regard to that reply by the Minister, when the Government have seen the list of possible closures, do they then decide what they will do to help to a proper and considerable extent the men who are displaced owing to the closures? That is really one of the failures of this Government.

I am afraid that the hon. Lady is a little out of touch with what has been going on in this respect. A great deal has been done, and earlier this year a special scheme of retirement pay or redundancy pay for men in this industry over 55 years of age having to leave their employment owing to closures was introduced, something the previous Government never did.

Is my hon. Friend aware that the rundown in the mining industry now is reaching nearly double the rate envisaged in the White Paper and that as a result, redundancy in the coal mining industry is now in danger of far outstripping the provisions of alternative employment? In view of that fact, will he take steps to defer closures?

As I have indicated, there is a procedure for considering selective deferment. On the general point, the Government are very concerned, and my Department is very concerned, about the rate of rundown this year, although we have no reason to believe on the evidence so far available that the extremely high level of rundown this year will be repeated in the succeeding two or three years.