asked the Secretary of State for Wales what reply he has given to the Welsh Council's recommendation that an Investment Bank for Wales be established.

I have told the Council that, as requested by it, I have brought its report on "The availability of capital for small firms in Wales" to the attention of those of my colleagues who also have an interest in the matters which it covers.

Does my right hon. Friend agree that, in the present financial situation of small firms in Wales, the establishment of such a bank would be highly desirable, if not necessary? Would he care to speculate on the extent of the assistance which the Government will be prepared to provide, either financial or otherwise?

The majority of the Council felt that there was a need for such an institution. There is a minority which is not so satisfied. We are now examining the proposal. I obviously want to encourage anything that will improve development in Wales, but we must examine it in depth. On the question of financial support, there is no proposal that Her Majesty's Government should help.

asked the Secretary of State for Wales what discussions he has now had with local government officers in Wales and with their associations and unions regarding the consequences on local government employment of implementation of his proposals for amalgamation of councils; and if he will make a statement.

None has yet been held, but I intend to discuss these matters, including my proposals for a Welsh Local Government Staff Commission, with local authority associations and with representatives of the staffs of local government as soon as possible.

As possible amalgamations may create difficulties in finding suitable employment for some officers quickly, does the right hon. Gentleman plan to create a central bureau to facilitate the placing of these officers in appropriate jobs?

The hon. Gentleman has made that proposal before, and I assure him that, if he has any new constructive arguments to advance in support of his plea, I will gladly look into them.

Will the right hon. Gentleman answer my hon. Friend's question? Is he or is he not setting up a bureau? He asked my hon. Friend to make a helpful suggestion, but I think that he has made one.

I am sorry—I thought that the hon. Gentleman was up to date. I have already told his hon. Friend that I do not see advantage in creating such a register at present.

Is the right hon. Gentleman aware that his plans for amalgamation will make local government in Wales less local and less democratic, and will involve less participation, without producing more efficiency or even economy? Could not a Royal Commission be appointed to inquire into local government in Wales?

The proposals are more democratic than that advanced by the hon. Gentleman that Wales should have a Governor-General—a proposal which has been rejected by most other countries.

asked the Secretary of State for Wales if he is aware of continuing concern at Barry and in adjacent parts of South-East Glamorgan, regarding the future of the Barry Accident and Surgical Hospital; and if he will give an assurance that Barry and district will not be deprived of the services of this hospital.

Yes, Sir. The Welsh Hospital Board will shortly be carrying out local consultations about the reorganisation of hospital services in the greater Cardiff area, which includes Barry. My right hon. Friend will consider the Board's proposals for the Barry Accident and Surgical Hospital in the light of representations received as a result of these consultations.

Is the Minister of State aware that in recent years hardly any issue has caused such deep concern over a wide area than the possibility which has been mooted that this hospital might be discontinued? Will the Minister and her right hon. Friend bear in mind that in the summer time this area provides hospital services for a total population well in excess of 100,000?

As the hon. Gentleman is aware, the whole purpose of holding consultations is precisely that such considerations should be given their full weight.

asked the Secretary of State for Wales what recent discussions he has had with interested parties about the future of the Welsh Rural Development Board.

There have been no recent discussions. The statutory period for objections to the modified boundary has only recently expired, and my right hon. Friend the Minister of Agriculture, Fisheries and Food and I are considering the next step. It will of course be for the House to decide the future of the proposed Board when the draft Order is laid.

Might I take the opportunity from these benches to congratuate the hon. Member for Cardiff, North (Mr. E. Rowlands) on his elevation to the Welsh Office, and to wish him luck. At the same time, we are sorry to see the going of the hon. Member for Gower (Mr. Ifor Davies) who was in that office for three years.

I much appreciate, as I know my hon. Friend does, the complimentary remarks made by the hon. Gentleman to the new Under-Secretary and to my former colleague my hon. Friend the Member for Gower (Mr. Ifor Davies).

Will not the Minister face the fact that in the four counties concerned there is intense opposition which has not been engendered from a party political point of view, and that it is about time that his party realised that this is a matter which is causing great local concern in Mid-Wales?

My hon. Friend the Under-Secretary of State at the Home Department is the Member of Parliament for this constituency. He is well-informed about opinion there, as I am. I believe that this scheme will be welcomed by the farmers when they realise the great benefits which it brings to them.

asked the Secretary of State for Wales what total moneys have been made available to Welsh local authorities for house mortgage grants during the current financial year.

I thank the hon. Gentleman for the kind words he expressed on my appointment, and I should like to pay tribute to my predecessor the hon. Member for Gower (Mr. Ifor Davies). I hope that I can carry on the work on which he has been engaged for the last three years in my present post.

Would the hon. Gentleman realise that there is a continuing anxiety on this matter since at various times in the recent past several important local authorities in Wales have not been able to get sufficient funds for this purpose?

I am aware of the anxiety and we are trying to do everything we can for local authorities, especially those who have priority in that they have a good stock of older houses for which this type of finance is intended. I am seriously concerned about this matter.

asked the Secretary of State for Wales what sums the central Government spent on roads in Wales in 1966–67, 1967–68, and 1968–69.

I refer the hon. Member to the reply given to him on 28th April, 1969. Actual expenditure in 1968–69 was £14·8 million. In addition local authorities carried out a further £16·4 million worth of work which was in part financed by the central Government through the rate support grant.—[Vol. 782, c. 188.]

Why are the Government cutting down so greatly on expenditure on roads in Wales but not on similar expenditure in England? Is the right hon. Gentleman not aware that the construction of major highways is the key to industrial and economic development, and that the failure of the Government in this matter is a major contribution to the fact that there are 51,000 fewer men in work in Wales today than was the situation when Labour came to power in 1964?

The hon. Member is a master at twisting the facts. He knows that the figure I have given is not a decrease but an increase. Expenditure on roads in Wales is running at an all-time record. There are over £100 million worth of road schemes in our preparation pool.

But, as the right hon. Gentleman knows, the work in the preparation pool will probably be carried out by the next Government, which may not be his. Would the Minister tell the Welsh local authorities when he will revoke the Government's decision to cut down on road maintenance which is a matter of great importance to the county councils?

The carrying out of all road schemes is a long business, and we shall be continuing this work in the next Parliament as we have in the past. On the question of road maintenance, the hon. Gentleman will know that work under this head is covered in the rate support grant for local authorities. I am not ashamed of the programme which we have put forward.

asked the Secretary of State for Wales what was the total mileage of dual carriageway, motorways and trunk roads in use in Wales on 1st January, 1969; and how many miles have been brought into use since then.

Fifty-one miles and 8·5 miles respectively, representing an increase of over 16 per cent.

In view of the fact, of which my hon. Friend is well aware, that some people in Wales are dedicated to basking in a sense of deprivation, will he say if there is any further good news he can give us about projected developments?

A further 9·5 miles of trunk roads are under construction at present and work on a further 11·3 miles of dual carriageway will be started in the next few months.

asked the Secretary of State for Wales how many Welsh local authorities have so far submitted traffic and transport plans in accordance with the request from the Welsh Office in February, 1968.

Five.

Does not my hon. Friend consider this to be a most disturbing situation? If plans are not submitted, how will Welsh local authorities deal with traffic problems of the future? Will he call the attention of Welsh local authorities to the urgent need for the submission of these plans to protect the future of their own people?

These plans are important and local authorities should make every endeavour to submit them as soon as possible. They were asked for them in February, 1968.

asked the Chancellor of the Exchequer if he will make a statement on the latest visit to this country by members of the International Monetary Fund team.

asked the Chancellor of the Exchequer what discussions he had with the members of the International Monetary Fund during their recent visit to London; and if he will make a statement.

A team from the International Monetary Fund came to London in August. This was one of the regular consultations which under the arrangements already announced, precede each purchase on our current phased stand-by. The August consultation was related to the purchase we made in September. The talks were confidential, as is usual.

Does the Minister recall that in the report of the International Monetary Fund which came out after that visit on 23rd September Mr. Schweitzer said that Britain had to repay a large amount of debt in a short time, whereas the present Paymaster-General, speaking to the European Monetary Conference, said exactly the opposite, that we should have to fund a lot of our short-term debt into long-term debt. Which policy are the Government following?

My right hon. Friend did not make a statement of policy and I am not aware of a report having been issued by Mr. Schweitzer.

Did the Government discuss with the I.M.F. the virtues of a floating exchange rate for sterling, or did they follow the precept that the inevitable is undiscussable until it has actually happened?

The hon. Gentleman knows that these discussions are confidential.

Is it a fact that money supply is being restricted at a rather greater rate than was originally forecast to the I.M.F.? If so, by how much is it intended to improve the situation and in what way? Now that the balance of payment figures are so much better, is it not time to get away from the neurosis about them and to publish trade figures quarterly instead of monthly?

The last is an interesting but separate question. On the former question, the course of domestic credit expansion, to which I imagine my hon. Friend is referring, is satisfactory and compatible with our economic objectives and policies.

The right hon. Gentleman said that he had no news or knowledge of the report given by Mr. Schweitzer. But in a report in The Times newspaper on 24th September Mr. Schweitzer is reported as saying that

"In his report released today"—

Order. No quotations are permitted in a supplementary question.

—that Britain will be compelled by short-term debts to adopt more severe domestic conditions. Are the comments made by the Paymaster-General about rephasing our international obligation in line with our obligations to the International Monetary Fund as our creditors see them, or not?

The trouble is that the hon. Gentleman has no accurate knowledge of the comments made by my right hon. Friend.

Can my right hon. Friend confirm that the precise amount of domestic credit expansion accepted in the Letter of Intent remains the policy of Her Majesty's Government? Is it not time to accept that precise figures cannot be quantified in the way in which was then thought possible, and that further figures suggest that there is little relationship of the kind mentioned between domestic credit expansion and the growth of the gross national product?

The formula there used is an aid to understanding one aspect of economic development. No one suggests that it is the whole story. It is a valuable assistance to understanding economic development in one aspect.

asked the Chancellor of the Exchequer when he now expects to make a start on the fulfilment of undertakings given in his predecessor's letter of intent to the International Monetary Fund regarding the liberalisation of controls on capital movements.

My right hon. Friend has no present proposals for changes in this field.

Can the Chief Secretary say whether the Chancellor of the Exchequer regards the specific undertaking given in paragraph 13 of his predecessor's Letter of Intent to the I.M.F. as binding upon him? If he does, does not that mean that the liberalisation of capital transactions is a prior responsibility on any accumulated funds which may now come into the balance of payments?

The answer to the first question is "Yes", to the second one, "No".

asked the Chancellor of the Exchequer whether he has now reached a decision on the question of seeking powers to restrict distributions by companies by way of dividend after the end of the present calendar year.

I have nothing to add to the Answer I gave to the hon. Member for South Angus (Mr. Bruce-Gardyne) on 14th October.—[Vol. 788, c. 60.]

Is it not highly unsatisfactory that companies should be left in ignorance, when the date concerned is only just over two months ahead, of what the Government intend or do not intend to do by interfering in their activities?

The right hon. Gentleman has made it clear that the companies know their position to the end of December with precision. For the period after that, I am not aware that there is any considerable inconvenience. I would be anxious to meet it if I knew of it.

Is it not absurd for the Government even to continue giving this sop to their Left wing when their prices and incomes policy is in a shambles? Is it not the effect of this restraint to distort the allocation of resources to the economy and reduce the growth of national income? Will the right hon. Gentleman make his position clear and say that he will not continue this absurd farce?

I will make my position perfectly clear and say that the Government will have an announcement to make at the earliest possible opportunity and trust that no major inconvenience will be caused in the meantime.

asked the Chancellor of the Exchequer what was the total net increase in National Savings in the first nine months of 1969; and what were the comparable increases in the nine months of 1967, 1965 and 1963, respectively.

The provisional figures show a decrease of £37 million in the first nine months of 1969.

Are not these very depressing figures yet another sign that rapidly rising prices are undermining public confidence in savings? Is there not a danger that the new "Save As You Earn" scheme will be a flop unless it has a guarantee that the money invested will not be eaten away by inflation?

It does not show that savings have suffered. If one looks at national savings in the context of personal savings, in the first six months of this year the percentage as disposable income was marginally higher than in the two previous calendar years. As for "Save As You Earn", so far the reports are very encouraging.

asked the Chancellor of the Exchequer what further steps he will take to encourage shopkeepers and others to make use of new 5p. pieces instead of sixpences, so as to encourage a sufficient distribution of new 5p. pieces by 1971.

This is a matter for the Decimal Currency Board, in consultation with trade associations. The Board are doing everything they can to encourage the use of the new 5p. pieces, particularly in change-giving and in this they have my full support. I will gladly consider any suggestions which the hon. Member may care to put forward.

Is the hon. and learned Gentleman aware that present indications are that on D-day, which is only 16 months hence, we shall enter that period with a massive surplus of sixpences, and a shortage of shillings and new 5p. pieces, which will be the lowest silver coins? Should not a further effort be made to advertise the necessity for shopkeepers and others to bring the new 5p. pieces into use now?

I agree that every effort should be made to advertise the need to use the new 5p. pieces. A newsletter was issued by the Decimal Currency Board and widely circulated in trade circles to encourage retailers to alter their change-giving habits to use the new 5p. pieces more widely than has been the case until now.

Will my hon. and learned Friend discourage the use of the new 50p. piece because of the possible confusion with the 10p. piece?

Certainly I will not, However, that is a different question.

Is it not asking for trouble to produce new decimal coins of almost identical size and weight, as in the case of the new 50p. and 10p. coins? Will the hon. and learned Gentleman look urgently at some means of producing an alternative coin which is larger or a paper note to take the place of the new 50p. coin?

I realise the hon. Gentleman's concern, but he will have noticed that the new 50p. coin is of a different shape.

To ask the Chancellor of the Exchequer if he will make a statement on the future of the import deposits scheme.

To ask the Chancellor of the Exchequer if he will now announce the amount of the foreign travel allowance for the 12 months beginning 1st November, 1969.

To ask the Chancellor of the Exchequer (1) if he will now announce the limit on spending on foreign travel outside the sterling area for the forthcoming tourist year;

To ask the Chancellor of the Exchequer what is his policy regarding the future of the import deposits scheme.

Mr. Goodhew.

Question No. 13.

With permission, my right hon. Friend will answer this Question together with Questions Nos. 14, 28, 29 and 40 at the end of Question Time.

On a point of order. Do I understand the Chief Secretary correctly? Does the Chancellor of the Exchequer propose to answer Questions both with regard to the foreign travel allowance and with regard to import deposits at the end of Question Time These are quite separate issues, and I would have thought that many of my hon. Friends might like to raise separate points on them?

Order. When the Minister makes his statement, hon. Members will have an opportunity to ask supplementary questions connected with their own original Questions.

On a point of order, Mr. Speaker. In view of the fact that full details have been given already in the Press, need we have a statement at all?

Further to that point of order, Mr. Speaker. If you will not accept the point of order raised by my hon. Friend the Member for Worthing (Mr. Higgins), may I raise a point? How is it possible to connect the import deposits scheme with the foreign travel allowance? Is it because the Chancellor of the Exchequer is unable to be here at the moment?

Order. A Minister can answer Questions in whatever way he likes. Points of Order in Question Time cost some hon. Member a Question.

But surely the Minister must ask permission to link Questions together. Can this be done by linking them with a statement?

Order. It is a matter of courtesy for a Minister to ask to link Questions, but he may link them, in any case.

asked the Chancellor of the Exchequer to what extent the recently-agreed nurses' special meal allowance of £48 a year will be subject to tax.

This allowance is taxable like the rest of the earnings of nurses and other people.

Is the hon. and learned Gentleman not rather ashamed of that mean and miserly attitude? Why cannot a nurse's meal allowance be treated in the same way as an office worker's luncheon voucher for tax liability?

There are two separate questions. One is that of nurses' pay. The second is whether cash allowances of different kinds should be taxable. In some ways, luncheon vouchers are an historical anomaly, though cash allowances to nurses and others have always been regarded as taxable, and this must be the general tax rule.

May I take up that last point? Do all people who get meal allowances or cash allowances pay tax? When civil servants get their "out" allowances—and, for that matter, the chairmen of the nationalised boards—do they pay tax? My hon. and learned Friend said that all pay tax.

Every cash allowance is taxable unless it is in respect of extra expenses which have to be incurred beyond normal expenses.

Is it not the fact that a worker's luncheon voucher is evaluated by the Inland Revenue at 3s. per working diem—that is, 15s. a week, or £39 per annum—and has always been tax-free? Could not the Treasury overcome the difficulty by issuing luncheon vouchers to nurses, and then there would be no excuse for taxing them?

It is true that the luncheon voucher is in a separate category and is, to some extent, an historical anomaly which has been strictly restricted. For cash allowances, a different rule prevails, and the allowance is normally larger than the amount of any luncheon voucher.

On a point of Order, Mr. Speaker. In view of the highly unsatisfactory nature of that reply, I beg to give notice that I will seek to raise the matter on the Adjournment.

asked the Chancellor of the Exchequer what proposals he has to issue a further Government stock involving borrowing for 25 years at 9 per cent. annual interest.

My right hon. Friend has no such proposals. Hon. Members will have seen that the latest issue of long-dated stock was at 8¾ per cent.

The hon. and learned Gentleman must know that the 8¾ per cent. stock was issued at 96 and is now on a running yield of over 9 per cent.? Is it not absurd to be refinancing maturing debt at these fancy rates of interest over such a long period of time?

I am sure that the hon. Gentleman would be one of the first to appreciate that in the case of any issue of Government stock, it must be issued at the going rate. That is why this stock was issued at 8¾.

asked the Chancellor of the Exchequer to what extent Swiss banks are conniving in contravention of British exchange control legislation by accepting illegal exports of gaming club profits; and if he will take urgent steps to stop this activity.

Certain investigations are proceeding, and I cannot anticipate their outcome.

Is my hon. Friend aware that, according to a report in the Sunday Telegraph, the sum of £20 million a year is reported by Scotland Yard to be drained away by Swiss banks which are illegally investing in British gaming clubs? This is a dividend upon illegal investment. Will the Minister cause his investigations to come to a speedy conclusion and take steps to stop this gambling?

I am not sure that my hon. Friend has accurately summarised the article in the Sunday Telegraph, which I have read. But certainly I agree that this matter requires investigation, and it is being investigated.

asked the Chancellor of the Exchequer what arrangements he has now made to speed up repayments of selective employment tax to persons not liable to the tax; what is now the average interval between payment and repayment; and whether this period is the same for public authorities and private citizens.

Most claims for refund are paid within about two weeks of receipt. Claims for private taxpayers are on a quarterly basis, but in the case of public bodies where the number of claims to be dealt with is small by comparison, payments are made more frequently.

As levying this tax on those not liable to it involves an interest-free loan to the Exchequer, will the hon. Gentleman say what justification there is for treating public authorities more favourably than private citizens?

The reason why public authorities are treated more favourably is because in their case there is one single claim covering a large number of people which can be administratively dealt with in this way.

asked the Chancellor of the Exchequer when he now expects to receive and lay before the House the report on selective employment tax by Professor Reddaway; and whether he will make a statement.

It is expected that Professor Reddaway's initial findings will be available before the end of the year. They will be published and my right hon. Friend will give very careful consideration to his findings.

asked the Chancellor of the Exchequer by what authority he requires the joint stock banks to offer specially favourable loans for export credit and for shipbuilding.

The arrangements for fixed rate lending under the special schemes for export and shipbuilding finance were agreed between the Bank of England and the banks concerned. The question of authority does not therefore arise.

If the Government want to subsidise these two activities, will they please pay for them instead of asking the customers of the banks to pay for them as a result of a piece of dirty arm-twisting in the background?

I am not sure that "dirty arm-twisting" is the right way to describe this scheme, which I should think the whole House would welcome, because it provides assurances to exporters and shipbuilders that they are free from the short-term variations in rates.

Is the Minister saying that it was not the suggestion of the Treasury that these special rates of interest should be provided? Is not this a case of further Treasury interference with the ordinary financial structure of interest rates?

Of course the Government wish to see this, and we are extremely grateful to the banks for cooperating as they have. But, because of the refinancing facilities made available by the Bank of England, we and the banks can be sure that the growth of fixed rate finance does not constrain their lending in other forms.

asked the Chancellor of the Exchequer whether he will name the banks which have been officially reprimanded for irregularies in foreign exchange dealings.

No, Sir. The inquiries which were made revealed irregularities by a small number of banks, each of which has given an assurance that these will not recur. My right hon. Friend does not propose to take any further action in respect of these particular irregularities but this area of foreign exchange operations is being kept under close scrutiny.

Why should banks be immune from the general proposition that offenders should be named—pour encourager les autres? Is it not the case that these banks were holding foreign currency reserves which they should not have held and which should have been handed over to the United Kingdom foreign currency reserves? By this debt have they not been weakening sterling, and would not sterling be stronger than it is if they had acted properly? Will the Minister make certain that there is no further cause for offence?

On the latter part of the question, yes. As I have indicated, we are taking special steps to keep this area under constant review.

asked the Chancellor of the Exchequer if he will defer his arrangements for centralising Pay As You Earn income tax arrangements until he is able to ensure to Pay As You Earn taxpayers the present facilities available by local tax officers for consultation and solution of tax inquiries.

Under the centralisation programme local tax officers will continue to be available to assist P.A.Y.E. taxpayers.

Is the Minister aware that to assist is one thing and to solve is another? What will happen will be that the P.A.Y.E. taxpayer, who usually cannot get away from his business, will have to make two visits with the delay of a week or so, and the other form of taxpayer will be able to get an interview and solve his problems there and then. Why the differentiation in these cases?

If the P.A.Y.E. taxpayer can give a few days' notice of his request all his problems can be dealt with. If it is an urgent matter, no doubt the local tax office can get in touch with the computer centre and obtain the necessary information.

asked the Chancellor of the Exchequer what further consideration he has given to the introduction of a value-added tax; and with which organisations he has had discussions on the matter.

My right hon. Friend keeps the whole tax system, including the possibility of changes like the introduction of value-added tax, under continuous review.

Can my right hon. Friend say how many additional civil servants will be needed to introduce this tax? Has any assessment been made of the effects of the tax proposed by the right hon. Member for Enfield, West (Mr. Iain Macleod) on the cost of living, because this problem very much exercises the minds of ordinary people?

The number of civil servants engaged will depend a great deal on the form and coverage of the tax. The cost of administration would be much greater than for purchase tax and selective employment tax.

Is not the introduction of the value-added tax a necessary consequence of joining the Common Market?

The right hon. Gentleman will be aware of recent developments in the Common Market.

asked the Chancellor of the Exchequer what discussions he has had with the National Economic Development Council on the introduction of a value-added tax.

The report of the Committee set up by the National Economic Development Council to examine value-added taxation was discussed at the Council's meeting in November, 1968, which my right hon. Friend attended.

Will my right hon. Friend bear in mind the very strong representations made by the T.U.C. about the effect of a value-added tax on the lower paid, and that the tax is regressive? Will he also bear in mind the calculation made by N.E.D.C. that to implement the tax would require between 6,000 and 8,000 additional civil servants apart from the substantial number of people who would be employed in this work in private industry as well?

My right hon. Friend will bear in mind the nature of the tax and the administrative difficulties associated with implementing it.

asked the Chancellor of the Exchequer (1) what instructions he has given to the Inland Revenue on discretion to be used in allowing taxpayers the choice of alternatives open to them in opting for one or other method of calculating capital gains;

A taxpayer who has a statutory option is free to exercise it or not, as he thinks best. It is for him to decide. Inspectors of Taxes cannot and do not require taxpayers to opt for one method rather than another.

On the choice of either the apportionment basis or the value at April, 1965, is not the Inland Revenue being somewhat bloody-minded in insisting that the taxpayer makes a choice? Should he not be allowed the opportunity to make the formal choice after agreement with the inspector of taxes on the fairest method for the taxpayer concerned?

In principle, obviously the 1965 valuation would be right. It is to solve the difficult questions of valuation and the enormous administrative complexities involved that the time apportionment basis was provided with the option for 1965 as an alternative. If this option was revocable, precisely the same valuation difficulties and administrative complexities would again arise.

asked the Chancellor of the Exchequer if he will make a statement on the outcome of his recent meetings with the United States Secretary of the Treasury and the management of the International Monetary Fund.

These meetings took place as part of a process of periodic and informal exchanges of view. They were not designed to have a specific outcome.

Did the Chancellor discuss with the Managing Director of the International Monetary Fund his publicly expressed view, of which the Chief Secretary is apparently ignorant, that the demand management of the British economy in the months ahead will have to be more severe than the state of the economy necessitates because of the accumulation of short-term debts by the Government? What is the Chancellor's view on Mr. Schweitzer's opinion?

I did not discuss this matter, and I am not quite sure to what the hon. Gentleman is referring.

asked the Chancellor of the Exchequer how many local authorities have borrowed foreign currency at long-and medium-term since April, 1969; and what steps his Department is taking to encourage this development.

One, Sir. Section 14 of the Finance Act, 1969, enabled local authorities to pay interest without deduction of tax on foreign currency borrowing, and we are prepared in suitable cases to provide relief for the exchange uncertainties involved but the terms and timing of such borrowings must have regard to conditions in the markets concerned and other demands on those markets.

Is it not the case that during the debate on the Budget Resolutions the then Financial Secretary said that he would encourage local authorities to do this? Is the Chief Secretary aware that the Treasury has been particularly unhelpful to some local authorities, particularly my own?

I am aware of the circumstances affecting the hon. Member's local authority, but the answer is as I have already given it to him, namely, that those demands, and other demands, have to be regulated, and note has to be taken of the condition of the market.

Will my right hon. Friend tell the House whether the restric- tions imposed by the Treasury on local authority borrowing overseas has anything to do with the advice tendered to the Bank of England and the Treasury by merchant banks which are attempting to regulate themselves so as to prevent so many local authorities from getting into the queue for borrowing?

We have our information, and we take such advice as is necessary to ascertain the state of the market and the likely demands upon it.

asked the Chancellor of the Exchequer what estimate he has made of the cost to the Exchequer of raising all personal income tax allowances by £100, £200 and £300 a year, respectively; and of the cost of restricting these increases to those earning under £30 a week.

The cost of the suggested increases in the single and married allowances and the maximum wife's earned income allowance is estimated at £870 million, £1,600 million and £2,200 million, respectively, for a full year. I am not sure precisely what my hon. Friend has in mind in the second part of his Question, but there would be practical and other difficulties involved, and the costs would be in the region of two-thirds of the figures I have given.

Does my hon. and learned Friend agree that it would be far fairer to those on low incomes to increase personal allowances rather than to reduce income tax by 6d. or some other amount in the £?

I think that my hon. Friend has received a letter from my right hon. Friend saying that this is one of the many considerations which he will bear in mind.

asked the Minister of Public Building and Works if, in order to promote tourism in North Wales, he will introduce at Caernarvon Castle Son et Ltonière entertainments based on Welsh history.

A Son et Lumière was held at Caernarvon Castle every evening from 14th July to 27th September this year. The entertainment related to the history of the castle and, more generally, of Wales.

I was aware of the entertainment that had been provided there, but would not my right hon. Friend agree that it would be a good idea to extend it to other Welsh castles in the area? This would provide an enormous tourist attraction, bounded on the one side by the mountains of Snowdonia and on the other by the coast of Anglesey?

A Son et Lumière was also held at Rhuddlan Castle, sponsored by the Daily Express and organised by a local committee.

Although the Minister is not prepared to move on this front, is there any reason why the regalia used for the Investiture should be kept in England and not in Wales where it rightly belongs?

I do not think that that arises out of a question on Son et Lumière.

asked the Minister of Public Building and Works whether he is aware of the recurrent nuisance annually in September to householders from incursions of swarming yellow flies, Thaumatomia Notata; and, having regard to the fact that these pests originate from water, whether he will take preventive measures in regard to the lakes and ponds in the Royal Parks to abate this nuisance.

I have been advised by the British Museum (Natural History) that all the available evidence suggests that this species of fly does not originate from water.

If it does not originate from water, whence does it originate? From wherever it originates, will the Minister kindly take preventive measures, as requested?

The question where it originated is a matter for the followers of Charles Darwin, and not for my Department, but I am told that in any event the flies are quite harmless and may easily be killed, if so desired, by insecticidal sprays and the bodies swept up or removed with a vacuum cleaner.

asked the Prime Minister if he will invite the Dutch Prime Minister to visit him for talks on matters of mutual interest.

I have no plans to do so at present.

When the meeting takes place, will the Prime Minister discuss with him the remarks of Dr. Luns, the Dutch Foreign Minister, that unless Britain gives a firm pledge to a federal Europe our application will not have the wholehearted support of the Dutch Government? In view of the E.E.C. Report of 1st October which pleads for an elected Parliament with budgetary powers, surely the movement for federalism is afoot, either inside or outside the Treaty of Rome? If we were members of the Common Market, and this went further, would the Prime Minister say "Yes" or "No" to such a federal movement?

If I were to meet the Dutch Prime Minister, all relevant matters would be considered. As regards the question of federalism, I have answered this a number of times in the House, and still more recently on the South Coast.

Has my right hon. Friend seen the reference in that E.E.C. Report to the publicly-owned British steel industry? Does not my right hon. Friend agree that this matter was raised in the Select Committee on Nationalised Industries, and that the Government then gave an assurance that under no circumstances would the publicly-owned steel industry be broken up again? Will my right hon. Friend reaffirm that to the House this afternoon?

Yes, Sir. We have taken our own decision about steel. I do not accept that the present situation of the steel industry in Britain has any bearing on this matter.

asked the Prime Minister if he will make an official visit to Nigeria.

I have no plans at present for a further visit. We are, however, in close contact with the Emperor of Ethiopia and other members of the O.A.U. who are active in promoting negotiations on a settlement and I had a useful discussion on this matter with the Ethiopian Foreign Minister last week.

In the meantime what steps is the Prime Minister taking to ascertain accurately the extent of suffering and hunger in Biafra? In view of the completely alarming reports, has the Prime Minister put a proposition to the Soviet Union and to France about a possible international arms embargo, and if so what reply has he had?

I have nothing to add on the question of an arms embargo beyond the whole series of answers that I have given in the House, and what has been said in successive debates. With regard to the problem of famine and relief supplies, which again we have debated at great length, I think that the hon. Gentleman will have studied the accounts of the recent negotiations between the International Red Cross and, on the one hand, the Federal Government and, on the other, Colonel Ojukwu. I think that the hon. Gentleman will have concluded that whatever the residual problem of food shortage, it could be dealt with immediately by Colonel Ojukwu accepting the proposal of the Red Cross for daylight flights.

But since the Prime Minister answered Questions towards the end of July and there was a debate, the Foreign Secretary has been at the United Nations. Did he not take the occasion, on behalf of the Government, to raise the question of an arms embargo with the Soviet Union and other Governments?

No, Sir, but we had informal consultations about whether such a proposal would make progress in the United Nations, and it was our clear view that it would not. We have always expressed the view—and I think that the right hon. Gentleman accepts this—that the only way to get an effective arms embargo is on the ground, and this requires a cease-fire.

Whatever Colonel Ojukwu's limitations, are we to understand that this country will go on sending arms to Nigeria however long this civil war goes on?

I will not repeat what has been said on this question on many occasions from this Box about our obligations in this matter and the effect that we have been able to exercise in certain matters on which concern was expressed in the House, not least last March, as a result of our close relationship with the Nigerian Government.

asked the Prime Minister when the economic analysis of the effects of British entry to the European Economic Community on the terms of the Treaty of Rome will be made available to Parliament; and whether he will institute procedures whereby hon. Members may seek elucidation by interrogation of those charged with the duty of producing the analysis.

I have nothing to add to what I said in reply to the right hon. Gentleman the Leader of the Opposition and other hon. Members on 6th October.—[Vol. 788, c. 601–5.]

Does not the Prime Minister appreciate that that does not answer the second part of my Question? Does he agree that since the Foreign Secretary has warned us that this analysis will produce figures that may be qualified and imprecise there should be made available to hon. Members some opportunities beyond the catch-as-catchcan of Question Time for some steady and sustained processes of cross-examination?

I do not accept the right hon. and learned Gentleman's description of Question Time. His Question referred to "those charged with the duty of producing the analysis." Those charged with the duty of producing the analysis are Her Majesty's Ministers, and they are subject to questioning by this House.

Would not it be preferable and more satisfying to the general public to have an independent analysis, instead of one that I suppose will be provided by the Foreign Office, which has made up its mind about this?

Perhaps I should not be far out of order if I began my answer by congratulating my right hon. Friend about the events of last Saturday, that I heard of too late to take up. As for his Question, having heard many questions and speeches, and having read many articles and written some articles and made some speeches, I am not sure what an independent analysis of this question, as indicated by my right hon. Friend, would exactly produce, but in fact all the relevant Departments and not just the Foreign Office are involved in this analysis. It is principally a matter for the economic Departments.

Can the Prime Minister say whether the analysis is being done on the basis that Britain alone becomes an additional member of the Community or that two other E.F.T.A. countries and Eire become members, and others become associate members of the Community? This would have a major impact on the price levels of the common agricultural policy.

I very much agree with the right hon. Gentleman. The study is being made on a number of alternative assumptions. Certainly the one that he has in mind is one of those assumptions. If Denmark, for instance, were to become a full member it would have a great effect on the supply side. Further, as Britain is a big consumer, this would obviously affect the consumption side.

When the figures are available will my right hon. Friend allow a debate in the House on the current situation in regard to the Common Market, particularly following the widespread concern shown at all the party conferences this year and by the public in general, so that we may have a reassessment of the figures that he is so often proud to quote and quoted in the last debate we had in this House on our possible entry into the Common Market?

The question of a debate is a matter of discussion through the usual channels. As to what was said at the various conferences on the South Coast recently, my impression of the one that I attended and—if I have been correctly informed by reading Press reports—of the others, is that no one has seriously questioned whether Britain should continue with her application. That was not seriously questioned at our own Conference; indeed, an amendment to that effect was not even pressed to a Division. The real concern expressed at our Conference, and I believe at others, was the terms which the Government might put forward to this House for entry. This is a matter that can be ascertained only by negotiations.

Having considered it and having delivered to the House his view about the cost of going in, will my right hon. Friend the Prime Minister also ensure that the House is made fully aware of the cost of staying out and the jobs that may be lost if we stay out?

My right hon. Friend will be aware that that was one point that I covered in my speech in Brighton, and it was covered at greater length by my right hon. Friend when dealing with this specific situation at that Conference. He will also recognise the great difficulty of quantifying assumptions of that kind. But certainly there will be a cost to Britain of going in to set against the undoubted gains from going in, and also a cost if Britain is not able to get in.

Will the Prime Minister realise that there is widespread apprehension among the general public about the alleged alarming price rise in the cost of food if Britain joins the Common Market? Will he bear in mind that apprehensions cannot be allayed by departmental officials producing a report? Would it not be advisable to allow Members penetratingly to question officials as to how they have arrived at their conclusions about comparative retail food prices, in order to allay anxieties of the housewife?

I have no doubt that in any debate that supervened after the publication of these figures the hon. Member would make his usual penetrating comments thereon. Whether he made them at Brighton recently I was not informed. As for the cost of living, this is obviously one thing which must be examined. But he gives his more or less loyal support to a party which is committed to this increase in the cost of living even if we do not get into the Common Market.