asked the Chancellor of the Exchequer what steps he has taken to inform those concerned that house-owners letting off part of their homes are assessed for capital gains tax on that part of the value of the property at the time of sale.

The notes enclosed with the return forms explain that full exemption will not be due if only part of the house has been used as the taxpayer's residence. The question of lettings is referred to in the general capital gains tax booklet and in a separate leaflet about owner-occupied houses.

Is the Chief Secretary aware that there are many people who, without expecting an early sale of their houses, have let off rooms, and have found subsequently, when they have had to sell their houses, that they are liable to capital gains tax, having believed that they would be relieved of the entire levy?

It has been explained in the tax itself, and in the leaflets and tax documents that accompany the tax return, that relief is limited to that part of the house which one owns and occupies.

asked the Chancellor of the Exchequer what further steps he is taking to relieve understaffing and overloading in the Department of Inland Revenue.

I am now studying the Report of the Select Committee on Estimates which was published last week and contains recommendations of these matters.

Would the Chancellor of the Exchequer accept that this report greatly reinforces the case for moving to a simpler self-assessment method of taxation, particularly in the non-P.A.Y.E. sector? Is he aware of the very unfavourable comparison between our own Inland Revenue and the American Inland Revenue service, where about the same number of revenue staff handle more than three times as many personal tax returns?

I would not agree with all that the hon. Gentleman says. This is a complex matter which, like many other matters raised by the Estimates Committee—and I value its report—needs to be studied carefully, but in not too leisurely a way.

Is not this matter very much over-stated? Are not inspectors of taxes finding it much simpler to deal with corporation tax computations whilst clerks deal with the majority of capital gains computations, and, is it not a fact that inspectors of taxes, having dealt with most of the back duty cases arising on bank interest disclosures, are now actually looking for new work by making capital checks on individual taxpayers?

I have not actually heard of that but my impression is—indeed, it is more than an impression; it is my belief—that there is serious overstrain in the Inland Revenue Department, though I think that this could be exaggerated.

asked the Chancellor of the Exchequer whether he will now discontinue the practice of translating monthly trade figures into projected annual rates in his presentations of economic policy.

I cannot discontinue a practice which I have not begun.

Would the Chancellor of the Exchequer in any case accept that if each month a three-month rolling total of the trade returns was published, as suggested by Samuel Brittan in the Financial Times, this would go a long way towards clearing up the situation, and will he make the position clear in people's minds?

We have tried for some time past to get the public to look at the monthly trade returns on a three-months' rolling total basis, and it is certainly the case, as I am glad the hon. Gentleman acknowledges in his supplementary question if not in his original Question, that I have never referred to an annual rate on a monthly basis as opposed to a six-monthly or three-monthly basis.

asked the Chancellor of the Exchequer if, in view of the sharp fall-off in the home market for cars and the imbalance thus created in this export industry, he will now assist home sales by regulations to reduce the initial hire-purchase deposit for cars and to relaxing in general the hire-purchase conditions; and if he will make a statement.

I have nothing to add to my right hon. Friend, the Chief Secretary's reply to the hon. Member for Oswestry (Mr. Biffen) on 25th November, 1969. All these matters are kept under continual review, but it would be premature to relax restrictions at this time.—[Vol. 792, c. 193–4.]

Would not my right hon. Friend accept that unless something is done soon there will be considerable short-time working and unemployment in this industry, which may even affect the resources available to develop new models? Would he not accept that it is high time that Treasury policy was used to counteract the seasonal cycle in the home market for cars?

No, Sir. I think that to act at the present moment would probably be to exaggerate rather than counteract, since one is moving fairly rapidly into the period in which there will, if normal conditions follow, be a seasonal upswing.

Notwithstanding the splendid export performances in motor cars and commercial vehicles during the last 12 months, will not the Chancellor of the Exchequer accept the views of the whole motor trade today that it will be nearly impossible to increase further export performance at today's prices unless sales on the home market can be increased?

There are a long-term and a short-term problem. Clearly, the longer-term problem affects levels of investment in the industry, which is of importance. On the shorter-term problem I would not accept without critical judgment the views of those in the motor trade who naturally have a close interest in this matter, as I understand, but it has to be borne in mind that in five of the past seven months the seasonally adjusted figure for registrations at home has been higher than in the similar period of 1968.

asked the Chancellor of the Exchequer, what is his estimate of the annual cost of allowing people of pensionable age and other social security benefit recipients, subject to the possession of a valid driving licence, to road-tax one car for £10 a year; if he will take steps to introduce this £10 road tax concession for these groups; and if he will make a statement.

I regret that information on which a reliable estimate could be based is not available. We shall bear my hon. Friend's suggestion in mind, but I do not think that a concession of this kind would be the fairest way of helping those in need and I doubt that it could be adopted without the risk of widespread abuse.

Will my hon. Friend bear in mind that in a car-dominated constituency such as mine, a growing number of pensioners wish to run their cars after retirement, and the present level of road fund tax is an intolerable burden on such car-minded pensioners?

I shall bear that in mind, though I do not necessarily accept my hon. Friend's conclusion.

asked the Chancellor of the Exchequer how many man-hours were involved in the production of the recently published "Scottish Budget".

Departments have not kept a detailed record of their work on this question, but I estimate that the time spent amounted to approaching 800 man-hours, excluding secretarial services and the printing of the report by the Stationery Office.

Will the right hon. Gentleman tell us what he thinks the exercise achieved?

Certainly. The exercise achieved the normal one of supplying the answer to Members of Parliament who have asked for this specific information.

Has not the exercise helped to dispel the harmful fallacy, which was given widespread currency in Scotland, that Scotland was subsidising England?

It is not for me to inquire the reasons why hon. Members put Questions down, but I do my best to answer them.

Is not the right hon. Gentleman aware that the "Scottish Budget" was inspired guesswork against the background of admitted ignorance of Scotland's vital statistics? Will he explain why the findings of the Catto Commission in 1952 were not adopted to provide a proper basis for a breakdown of the Scottish figures, and will he provide that basis for future years?

The information which has been given has been valuable. It has taken a great deal of time. It is most unfair of the hon. Lady to suggest that it was not carefully done. It was carefully done to satisfy those hon. Members who had asked for the information.

asked the Chancellor of the Exchequer if he will make a statement about the repayment of war loan.

I have nothing to add to previous Government statements on this matter.

Is it not disgraceful that members of the public who invested in these loans, often from a sense of patriotism rather than for pecuniary gain, should be made to suffer the full burden of subsequent disastrous economic policies, and will he agree that the record of this loan shows that no one should ever again invest in the word of a British Government?

No, Sir; I could not possibly subscribe to that statement. I recognise and affirm that it is regrettable that many people have lost money on this stock, though many others have gained money. But one has to stick to the terms on which the stock was issued and on which people knew for certain that they would subscribe.

Will my right hon. Friend consider the possibility of repaying the loan over a period, say, at 10 per cent. per annum for 10 years? Let us make a start.

No, Sir. This matter has been considered most sympathetically by me and by many of my predecessors. Every time everyone has reached the identical conclusion, that it is not possible to deal with it along the lines suggested.

Will not the right hon. Gentleman consider allowing those who have held their stock for a very long time to convert it into a similar stock with a redemption date?

No doubt the hon. Gentleman knows that the stock originally had a redemption date, and there was a conversion offer made, which was accepted by those who went into the stock. Therefore, everyone did it with his eyes wide open. I share everyone's regret—I did my best when on the other side of the House to give voice to it—and I looked into the matter most sympathetically, but I reached the same conclusion as everyone, including—when he was the Economic Secretary—the present chairman of the Conservative Party.

As this war loan was at 109 in the 1940s, has it not been a normal investment risk? I declare an interest in that I myself bought some at 45. Apart from the personal gain to myself, would it not be utterly ridiculous to repay at 100, and will my right hon. Friend once and for all squash the idea that there is unfairness or that it should be repaid at 100?

I am grateful to my hon. Friend; he seems, as in most other things, to have managed his affairs a good deal better than I do; I bought at a very different price.

asked the Chancellor of the Exchequer if he will seek to grant a tax-free allowance to blind owners of guide dogs.

I am afraid that my right hon. Friend could not adopt the hon. Gentleman's suggestion.

I cannot say that I am grateful for that unhelpful reply. Will the hon. Gentleman take into account that purchase tax on dog foods has put many blind people in difficulty, and, further, will he give particular attention to the problem of the blind person who has a dog which is too old to carry on doing the job and who, therefore, faces the question whether to destroy the dog and buy a new one, since he cannot possibly afford to keep two dogs?

The hon. Gentleman raises some interesting questions. We are sympathetic towards the broad object which he has in mind, but we have to bear in mind the position of other handicapped people and those blind persons who may not be able to have a dog.

My hon. Friend says that he cannot accept what is suggested. Will he give the reason and deal with the question of cost? These people have blind persons' pension books. Could there not be a simple system allowing them the cost of what is involved, or a reduction, or, on the other hand, an increase in pension? It should be simple to operate, and it could not cost much.

I did not say that it was impossible to operate, although there are problems. I said that we have to consider the problems of other handicapped people who have special needs of their own and also those blind people who do not have dogs. We do not wish to discriminate in that way, although we are very sympathetic towards the broad object which hon. Members have in mind.

asked the Chancellor of the Exchequer to what extent has the undertaking given in the first sentence in paragraph 10 of the Letter of Intent of 22nd May, 1969, been fulfilled.

This was not an undertaking but a statement of fact which was wholly true when it was made and remains so.

But did not that paragraph undertake that the statutory powers relating to the incomes policy would, in effect, continue till the end of 1969, and is it not a breach of that undertaking to the I.M.F. that the incomes policy has now been breached in what amounts to a blitzkrieg of pay increases?

The undertaking specifically related to the statutory powers; the hon. Gentleman has paraphrased rather than quoted the sentence, but I think that he has paraphrased it accurately. It is the fact that until the latest date for which we have statistics wage movements have been slightly lower in 1969 than in 1968.

Is not the Chancellor sticking to the letter rather than the spirit of the undertaking, and, to give some indication of what has happened, could he tell us by how much prices and wages have gone up compared with the norm?

No, Sir, not without notice. [An HON. MEMBER: "But the Chancellor must know. I wish that the hon. Gentleman would not be so foolish. I will not give approximate figures off the cuff without notice. The hon. Member for Worthing, who follows these matters—I am not sure about his hon. Friend behind him—can find the published statistics quite easily.

asked the Chancellor of the Exchequer whether he is aware that in recent and proposed industrial mergers capital gains of several million pounds sterling have been and will be made by individual shareholders; and, in those cases where the shares have been transferred to Bermuda or the persons to Switzerland, if he will take steps to ensure that taxation is not avoided.

I am aware that substantial gains may be made as a result of industrial mergers. Tax avoidance schemes in this field, as in others, are kept under review, and amending legislation will be introduced if required.

In the case which I have in mind, is it not a fact that Dr. McDonald would have made a £7 million capital gain if the Plessey-B.S.R. merger had gone through, and, as Dr. McDonald has transferred his shares to Bermuda and himself to Switzerland, will my right hon. Friend say whether in such circumstances he would be able to levy capital gains tax?

My hon. Friend knows that I am unable to deal with the affairs of any individual taxpayer.

asked the Chancellor of the Exchequer what representations he has received from other countries about the proposed extension of the import deposits scheme.

The Government of the Irish Republic have made representations which we shall be discussing with them later this month.

The Minister will be aware that the E.F.T.A. Council, at its recent Ministerial meeting, expressed concern about the continuance of the import deposits scheme and agreed, in effect, not to take any decision on its legality. Is that not rather unsatisfactory, and will the Government ask the E.F.T.A. Council to resolve the matter? What is the position regarding the I.M.F. and the G.A.T.T.?

The exact position as regards the E.F.T.A. decision is contained in the communiqué of the meeting of 6th–7th November, which said:

"While welcoming the recent evidence of improvement in the economic situation of the U.K., expressed concern at the continuation of the import deposits scheme. The Ministers instructed the Council at official level, which had already been charged with keeping the situation under review, to re-examine the effects of the scheme before the next Ministerial meeting."

Would the right hon. Gentleman clarify his original reply? Does he mean that just one governmental representation has been received, or is he including representations from trading associations and individuals?

I am including governmental and inter-governmental, if I may so refer to E.F.T.A., representations.

asked the Chancellor of the Exchequer if he will introduce legislation to change the title of purchase tax and describe it as a value-added tax.

No, Sir. I think this would lead to confusion.

As both taxes are on consumer expenditure but one is a multistage nightmare of a tax and the other a simple single-stage tax, would it not be as well and help towards our eventual entry to the Common Market if we called purchase tax a value-added tax?

I do not know whether my hon. Friend was making the point that this is a sweet-smelling rose, but the fact is that it is not a tax on value-added, although I agree with him, and we are grateful to him for pointing out, that there are many similarities.

Would the right hon. Gentleman tell the Chancellor of the Exchequer, before he makes any speeches against a value-added tax in the country, that 40 per cent. of the trade of this country is carried on with countries which have a value-added tax system, and to the extent that a value-added tax helps their exporters it means that our exporters are at a disadvantage?

I will try to recollect everything that the hon. Gentleman has said so that I can convey it at a suitable time to my right hon. Friend. Meantime, I cannot accept what he says about the effect on exports.

asked the Chancellor of the Exchequer whether he is aware that the lower limit for purchase tax exemption has remained at £500 since 1940, when this form of taxation was inaugurated as a temporary war measure; what was the notional adjusted and comparable figure at 1st December 1969 allowing for declining money values; and what changes he proposes.

The original exemption limit of £2,000 was reduced to £500 on 3rd November, 1941, following complaints of unfair competition. Allowing for the change in money values the current equivalent of £500 in 1941 is estimated to be rather more than £1,400. Despite this change, my right hon. Friend is satisfied that £500 is still the appropriate level for this exemption, whose purpose is to exclude cases which would in general involve disproportionate costs of collection.

Is it not a fact that grubbing around among thousands of small producers to collect relatively tiny sums of purchase tax leads to uneconomic exercises generally? Could not we have for purchase tax an exercise similar to that which the Chancellor of the Exchequer conducted last April in the context of income tax when a very large number of small payers were relieved?

The hon. Gentleman is perfectly right that if those circumstances applied it would be foolish to incur an uneconomic cost. I can assure him that the matter has been looked at. There is no uneconomic cost in collection at the present level. Even at the present level, we get objections by manufacturers on the ground of unfair competition.

Would my right hon. Friend accept the implied compliment of the hon. Member for Worcestershire, South (Sir G. Nabarro) to selective employment tax, which is a much easier tax to collect than the one to which the hon. Gentleman takes exception?

I am always prepared to accept compliments to Treasury Ministers, but I thought that your predecessor, Mr. Speaker, ruled that any compliment to a Treasury Minister was distinctly out of order.

It is not usual, anyway.

It was not a compliment.

asked the Chancellor of the Exchequer to what extent, and how quickly, he estimates changes in domestic credit expansion affect levels of employment and economic growth.

A discussion of this complex matter would take more time than would be acceptable for an answer to a Question.

Does my right hon. Friend now accept the rather more optimistic view of the future prospects put out by the National Institute recently? If so, would he consider relaxing domestic credit expansion to the extent of bringing forward the payment of investment grants, which would help specifically those companies which are investing in new manufacturing investment?

I would not accept the latest view put out by the National Institute, and I note that I have a considerable body of support among commentators for not so doing. I would not agree that it was entirely a more optimistic appraisal. It was optimistic in one respect and unduly pessimistic in other respects. I am bound to bear in mind that the National Institute has changed its view of the future fairly often and quickly in recent months.

In view of the severity of the credit squeeze likely to operate in the next three months during the taxpaying season, what proposals has the right hon. Gentleman to raise the ceiling under which the clearing banks are operating?

I have no statement to make at the moment. I will watch the matter carefully. It is possible to exaggerate the severity of the revenue quarter, since I do not believe that most well-managed companies wake up on 1st January and find, to their surprise, that they have tax to pay.

Would not the right hon. Gentleman agree that the question of timing is crucial as to how long this takes effect? Could he give in broad limits what he thinks the lag is likely to be between the change in domestic credit expansion and the level of employment?

To some extent it depends on the form which domestic credit expansion takes. This is a complex matter which could usefully be discussed in debate or other fora. But I do not think that a useful answer can be given in reply to a question.

asked the Chancellor of the Exchequer when he expects to have details of changes in domestic credit expansion during the second quarter of the current financial year.

Figures will be published in the December issues of Financial Statistics and of the Bank of England Quarterly Bulletin.

Can the right hon. Gentleman tell the House whether he subscribes to the very official-sounding forecast carried in The Times this morning to the effect that domestic credit expansion this year is likely to be substantially below the figure he gave in his Letter of Intent? If this is so, should he not withdraw the Import Deposits Scheme, which has, after all, increased the severity of the squeeze since the Letter of Intent was written?

I suspect that forecasts in The Times sound more convincing to the hon. Gentleman than they do to me. It is too early to make a judgment.

asked the Chancellor of the Exchequer how much selective employment tax was retained, after repayments on all grounds from pensioners over 60 years of age being women, pensioners, both men and women, over 65 years of age, and pensioners, men and women, over 70 years of age, respectively; and what is the estimated loss in revenue from abolishing selective employment tax for pensioners over 60 years of age for women and 65 years of age for men.

We estimate that on the basis of employment figures the amount of tax due to be paid and not refunded in respect of women aged 60 to 65 is £5·5 million a year and in re- spect of men and women over 65 £4·5 million. The cost of giving full relief from the tax in respect of these employees would therefore be of the order of £10 million.

Would not the hon. Gentleman concede that the collection of selective employment tax for all men and women over State pension age militates against their useful employment and leads to undue unemployment among elderly people who would otherwise be found sedentary work? Could not he consider at an early date relieving all those drawing State pensions of the S.E.T. liability?

No, Sir. The relief is sufficient incentive to encourage the employment of elderly people. But this is something which we always have in mind and watch carefully.

Will the hon. Gentleman take into account not just the yield of selective employment tax but the cost of its collection, the administration expenses involved, and the fact that it is a disincentive for people to go on working who would be much happier doing so?

We will think about that as well.

asked the Chancellor of the Exchequer if he will now seek to reduce the purchase tax on motor vehicles.

No, Sir. I shall be reviewing this matter at the appropriate time.

Would not my right hon. Friend agree that, in spite of the new registrations figures which he quoted earlier, there is an approaching crisis in home sales? If he feels unable to do something about the matter this year, would he seriously consider studying how, for next year at any rate, he can produce measures from his Department to even out the difference between summer and winter sales?

As my hon. Friend will be aware from answers which I gave to supplementary questions on Question No. 7, I do not entirely accept his premise. But for next year I will carefully consider what he has said as well as other representations.

asked the Chancellor of the Exchequer if he will state his estimates for the costs of reprinting the Statute Book by conventional methods, and by computer typesetting, respectively.

This work may be the subject of competitive tender, so it would be undesirable to give estimates of cost.

If my hon. Friend has no idea of the comparative costs, on what basis does he contemplate the relative advantages of the two methods?

My hon. Friend misrepresents me. I did not say that I had no idea. I said that it would be undesirable to give estimates of cost for good reasons related to tendering.

asked the Chancellor of the Exchequer by what date he expects to reach a decision whether to reprint the State Book by conventional methods or by computer typesetting.

Not until a decision is taken on the form and timing of the reprint.

Will my hon. Friend take well into account the several advantages of the computer method, involving the existence of a permanent record, the fact that it can be amended easily, and that selective statutes can be extracted easily if necessary? Will he bear those facts in mind in coming to a decision?

Certainly, we shall.

asked the Chancellor of the Exchequer if he has investigated representations made to him from the North-East that the selective employment tax has had an inhibiting effect on some commercial activities which ought to be encouraged in the interests of regional employment; and what conclusions he has reached.

The North East Development Council made a number of representations to me on these lines. I have replied that I do not think S.E.T. is a handicap to the development of commercial services of the kind which the council is particularly anxious to attract to the region.

Does not my right hon. Friend agree that there is an over-concentration of services like banking, insurance and even architectural advice in London, and that there needs to be more growth in these services in the North-East? Will not he look at it from that point of view?

I share my hon. Friend's view that there can be a over-concentration in London. Certainly the Government have set a pattern, which I should have thought others would be happy to follow, of dispersal wherever it is possible and appropriate.

In view of the fact that unemployment in the North-East is increasing, is the right hon. Gentleman certain that all his views are right? Certainly we in the North-East do not think so? As he does not seem to be having the proper effect, perhaps he would look at some of the ideas emanating from those of us who live there and understand what goes on there?

I am always anxious to listen to advice from those who are on the spot. As the hon. Lady knows, preferential assistance to the Northern region is running at about £75 million a year, and there has been considerable success in attracting manufacturing industry to the area. I can only conclude, therefore, that the situation would be worse if the Government had not adopted these policies.

While agreeing that incentives to the North-East are having a valuable effect on the economy there, would not my right hon. Friend also look at the effect of the selective employment tax, since its removal would give us a diversity of industry which is lacking at the moment in our development?

I am sure that my hon. Friend will recognise that if we attract manufacturing industry which provides the greater measure of employment. exhypothesi the proportion of services is smaller than it would be otherwise.

asked the Chancellor of the Exchequer if he will seek to modify the selective employment tax to give the building and construction industry a financial incentive to employ winter building techniques to the full.

No, Sir.

Does not my hon. Friend agree that it is in the national interest that as many building firms as possible should use the latest techniques in winter building with a view to getting the maximum production, but that individual firms are reluctant to do it because they look at the costs? Would it not be desirable to modify S.E.T. to encourage builders to do this?

I know my hon. Friend's close interest in and knowledge of the problem, but he is in error if he feels that any remission of S.E.T. would necessarily lead firms to invest in the sort of equipment required for building in the winter.

Is it not clear that in the building industry S.E.T. has a very bad effect on employment? Is it not also clear that building is not a service industry and that it is high time this ludicrous tax on it was abolished—the quicker, the better—in the interests of employment?

I am afraid that I cannot agree with any of those propositions.

asked the Chancellor of the Exchequer whether he has considered the Report on Taxation sent to him by the Programme of National Recovery; and what action he proposes to take upon its recommendations.

Yes, Sir to the first part of the Question; none to the second.

Does the hon. Gentleman recall that on 20th June last year the Prime Minister said with respect to previous recommendations from the same economists that he could not agree with the analysis or the conclusions and yet, within nine months, his Government had adopted their main recommendations? Will the hon. Gentleman ask his right hon. Friend the Chancellor of the Exchequer to abbreviate the period of gestation with regard to these proposals, which would, if applied to the last Budget, have reduced public expenditure and taxation by 29½ per cent.?

I am sure that my right hon. Friend would be prepared to look at the pamphlet again. At first sight, it seems a bit old-fashioned and unsophisticated. It talks of

"a return to the pre-war principles of financial management",

Does not my hon. Friend agree that, although one can look at new forms of taxation, it would be a good idea to look at the present administration of taxation within his Department? The situation at the moment is just short of verging on a scandal, with people not getting replies to letters referring to their income tax affairs.

I know the problem which my hon. Friend has in mind. We are looking at it and trying to do our very best to help.

asked the Chancellor of the Exchequer if he will introduce regulations to ease hire-purchase restrictions.

No, Sir.

Why not? The Chief Secretary should recognise that by the turn of the year there will be a turn-down in trade in various aspects because of the difficulty that people have in ordering goods on hire purchase due to Government restrictions. Could not they be eased now if the economic situation is better?

The short answer is that the export performance of the industries most affected by current restrictions is generally highly satisfactory.

In view of the emphasis now placed on the control of money supply, would it not be better to consider exercising control over hire purchase by setting a top limit to the credit available and leaving the finance companies to exercise that control by discriminating amongst the credit worthiness of their customers, rather than these set and arbitrary percentage deposits?

That is a tenable point of view, and I will consider it carefully. I think that our present system is an improvement, but I will consider it.

asked the Chancellor of the Exchequer how much he estimates will be invested by customs and excise officers in test bets at bookmakers' offices and shops, in the current financial year; and what check is made of the winnings of those officers who invest public money.

About £100,000. Test betting is strictly controlled by senior officials.

Does the hon. Gentleman think that these exercises are in the best interests of the taxpayer, bearing in mind that the Revenue men seem to be very inexpert punters? Last year, £98,000 was staked by them, but they collected only £78,000 winnnigs.

They did rather better than I would have done in similar circumstances. Bearing all considerations in mind, this is an important way of helping to ensure that the law is enforced.

asked the Chancellor of the Exchequer what representations he has received from Scottish bankers about the present Government policy on the supply of money; and what reply he has sent.

None, Sir.

In view of the recent rise in unemployment in Scotland as against the decreases elsewhere, has the right hon. Gentleman not considered easing the current restrictions on bank lending, which have a direct effect on unemployment? Is his policy not like putting a starving man on a diet of bread and water to cure his neighbour's obesity?

I would draw the hon. Lady's attention to the undoubted benefits to our external position which has already resulted from a tight money policy at home. In the view of my right hon. Friend, it would be imprudent to relax these policies until the improvement in our balance of payments has been firmly secured.

asked the Chancellor of the Exchequer what is the comparative cost of printing 126 million 10 shilling notes and minting 126 million 50 pence coins, including materials and distribution costs.

The note costs considerably less than the coin to produce. But the coin has a life of about 50 years against about five months for the note. If the once-for-all cost of the coin is compared with the recurrent cost of the note over the life of the coin, the coin is much cheaper.

Why are the Government so averse to giving the public a choice between notes and coins, as is the case in every other European country where there are coins of a denomination as high as this?

There is a considerable saving for the taxpayer here, and, though I understand the problems which have arisen with the new coin, I hope very much that they will be overcome.

If this coin is much more economical than the 10s. note, why did not the Government get rid of the £1 note on the same basis?

I think that my hon. Friend slightly misrepresents what I said. I said that there was an economy in having a 50p piece instead of a note.

asked the Chancellor of the Exchequer whether, in view of the fact that only imperfectly forged 50 pence coins are likely to be brought to the notice of the police, he will invite banks throughout the country to return sample coins to the Mint for expert checking at regular intervals.

No, Sir.

Does the hon. Gentleman accept that there is any forgery risk against which he should be taking steps to safeguard the public?

Certainly there is some risk, but it should not be exaggerated.

Is my hon. Friend aware that in the East End of London the police have already issued statements to the effect that there are forgeries of these coins circulating in the area, and they are asking the public to be careful? Will he see if some steps should not be taken to safeguard the public?

I will look at that, but I think that it is a matter for my right hon. Friend the Home Secretary.

asked the Chancellor of the Exchequer whether he proposes to exercise his right to waive the service charges on the dollar loans contracted by Her Majesty's Government between 1945 and 1950 due at the end of this year.

No, Sir.

I suppose that we should be grateful for small mercies. Would the right hon. Gentleman agree that it is typical of the Labour Government that, not content with loading the next Tory Government with an enormous burden of new debt, they should also have virtually exhausted the right to waive payments on the debts incurred in their last period of office?

The hon. Gentleman should not ask a supplementary question prepared for "Yes, Sir" when the answer is "No, Sir."

asked the Chancellor of the Exchequer by how much the standard of living in Great Britain has fallen since 1958 in relation to living standards in Common Market countries, details of which are available to him from international sources; and to what extent he estimates that this loss of wealth to British families will be recovered on Great Britain joining the Common Market.

Between 1958 and 1967—the latest date for which figures are available—G.N.P. per head rose by roughly 4 per cent. per annum in the Six, and by roughly 2½ per cent. per annum in the United Kingdom.

Does this not confirm the estimate that if Britain had joined the Common Market when it was started and shared in the growth of living standards of the members of the Common Market, the average family in this country would now be £5 a week better off? Will the Chancellor draw the attention of the British people to the threat to their living standards contained in the anti-market propaganda?

I believe that I was an even more premature European—if that is the word—than my hon. Friend. Before drawing that deduction he should bear in mind that the rate of growth in the countries of the Six varies considerably between one and another.

Why is the right hon. Gentleman unable or unwilling to answer the second part of this Question? Is it that he knows these figures are not yet available, and if they are not, does he expect them to be published in the statement which the Prime Minister has promised us on the consequences of joining the Common Market?

I would have thought that the second half of the Question was highly hypothetical and bound to be the subject of argument, one on which we can all take up different positions, rather than one which can be answered simply on the basis of fact.

asked the Chancellor of the Exchequer what is the estimated average rate of Corporation Tax together with equivalent local taxation in the countries concerned paid by British-owned tea, palm oil and rubber plantations within the Commonwealth from information available to him from international sources.

Sufficient information to make the estimates asked for is not available.

Will the right hon. Gentleman bear in mind that excessive taxation discourages investment in developing countries in industries in which the British would normally play a part? Would he bear this in mind when dealing with fiscal policy?

That is why I was saying that there is no such excessive taxation.

asked the Chancellor of the Exchequer if he will modify the tax-free over-the-counter sales scheme introduced recently for visitors from abroad.

The scheme will be reviewed at the end of the year, in consultation with the principal trade organisations concerned.

Would the right hon. Gentleman recognise that the scheme is unduly complicated for small export orders and causes excessive paper work for comparatively small refunds? Has he the figures available for the average refund and the cost of making each refund on each export order, which I believe is comparatively minor?

I have not got that information. It will be included in the review, but I can tell the hon. Gentleman that my information is that in general the scheme seems to be working quite smoothly.

asked the Chancellor of the Exchequer what is his estimate of the cost of exempting State retirement pensions from income tax.

About £150 million for a full year.

While I do not want to anticipate the Chancellor's Budget State- ment, could my right hon. Friend give some consideration to the abolition of the earnings rule, or at least make some concession for the benefit of pensioners, who have already paid for their pensions?

The earnings rule is a matter not for me but for my right hon. Friend the Secretary of State for Social Services.

Would it not be better to make the contributions allowaable once again for tax purposes?

The hon. Gentleman knows the history of this. He knows that there was a compounding of the allowance given at a particular time.

asked the Chancellor of the Exchequer when he expects to receive the report of the Reddaway Committee on selective employment tax; and if he will make a statement.

My right hon. Friend still expects to receive Professor Reddaway's initial findings by the end of the year.

Can my hon. Friend speed up the issue of this report and its examination by his Department, in view of the widespread disquiet arising from this tax, which affects employment?

We shall do our very best, though not necessarily for the reasons which my hon. Friend has outlined.