asked the Chancellor of the Exchequer whether, in view of the United Nations report that East European countries are expanding at a faster rate than West European countries without encountering price inflation and unemployment, he will make a study of their solutions to economic problems.

No, Sir.

The International Herald Tribune says, does it not, that what I suggest in my Question is so? In view of the Government's adoption of Socialist policies, for example yesterday, and their conversion to State intervention and to nationalisation, as in the case of Rolls-Royce, will they not find the Common Market too addicted to old-fashioned capitalism to suit their taste? Will they now withdraw and consider an application to join Comecon?

Such a study would not be worth while because we already know a great deal about the policies pursued by countries in Eastern Europe, for example the policy similar to that of the last Labour Administration relying on detailed compulsory control of prices and incomes. We know also that strikes in these countries are few and far between, perhaps because the future prospect for militants tends to be somewhat uncertain.

If my right hon. Friend undertakes the study, will he give some thought to economic cost-benefit studies which might be done on the influence of sending trade unionists to Siberia or using tanks to put down strikes in East Germany, and those other practices which go on under the East European regimes which are so popular with hon. Members opposite?

We should not take too narrow a view of this, because I understand that the trade unions in Eastern Europe perform a useful function in keeping workers informed about Government policies, and it may well be that there is something to be learned from that.

asked the Chancellor of the Exchequer if he will state the amount of revenue he expects to collect in respect of children's shoes in the first full year of operation of value added tax.

My right hon. Friend, the Chancellor of the Exchequer, promised during the debate in Committee on the Finance Bill on 16th May that there is to be an inquiry about the medical aspects of children's footwear, the outcome of which may well affect its treatment under value added tax. If VAT were imposed at 10 per cent. on footwear of a kind suitable for young children's wear it is estimated that it would yield £12 million in a full year.

If the tax is eventually levied on children's shoes, will the Minister of State agree that the £12 million would fall by and large on families already paying relatively little tax, and where additional children in the family would mean many additional shoes having to be bought? Will he reconsider imposing the tax on these articles?

To zero-rate all children's footwear would be an inefficient way of giving relief to low-income families, since much of it would go to families which did not require such help.

Is the Minister of State aware that the figure of £12 million is still disputed by a great many people in the shoe industry? The suggestion of an inquiry into children's foot defects and their shoes has met with widespread approval, and we now want to know when the inquiry will report. Will it report before the Report stage of the Finance Bill so that we may have another opportunity to tell the Chancellor how we feel about VAT on children's shoes?

I am glad that my hon. Friend welcomes the inquiry. My right hon. Friend the Chancellor has said that it will be completed in good time for any consequential decisions to be taken before the VAT comes into operation next April. The figure of £12 million is the best estimate we have available at present.

The Chancellor made clear in the debate that the inquiry would be on the basis of an open-minded consideration—presumably contrary to his previous closed-minded consideration. Will the hon. Gentleman give the House an assurance that, if the inquiry recommends that VAT should not be imposed on young children's shoes, it will not be imposed on them?

We must wait and see what the inquiry brings out. I repeat the words which the hon. Gentleman used. My right hon. Friend has said that he will make up his mind on the basis of a completely open-minded consideration of what the inquiry reports.

asked the Chancellor of the Exchequer whether he will set up machinery to examine the extent to which purchase tax reductions are passed on to the consumer.

No, Sir. Purchase tax will be abolished next year, and in any case experience has shown that purchase tax reductions are generally passed on to the consumer.

Does not my hon. Friend realise that a racket has been going on, particularly in toiletry and cosmetics? Is he aware that the jar of Max Factor hair dressing that I am holding cost 39p before the Budget and, in spite of the 20 per cent. reduction in purchase tax, still costs 39p? Should not the public have some redress against blatant profiteering of this kind, which undermines and sabotages the Chancellor's fight against inflation?

If certain trades or industries have not passed on the whole reductions, it is very disappointing, but this is a matter for the commercial judgment of the traders concerned.

Does not the hon. Gentleman realise that his extraordinarily shaky and vacillating reply should convince him of the need to set up machinery to examine whether purchase tax and other reductions are passed on to the consumer, and that he might include the building societies, which increase mortgage interest rates when Bank Rate is raised but do not reduce them when it is subsequently lowered?

The hon. Gentleman's point about building societies is in no way related to purchase tax.

asked the Chancellor of the Exchequer whether he will relieve from purchase tax dental packs given to children starting primary school; and if he will make a statement.

Toothpaste and plastic beakers are chargeable whether sold in packs or separately, but if such packs were issued free to local authorities by the manufacturers, no purchase tax would be payable.

Is the hon. Gentleman aware that Lanarkshire County Council got these packs free, but now, because of the increased cost, the company concerned has found it necessary to impose a charge? Is he further aware that the Secretary of State for Scotland has given a sympathetic hearing to the point of view we have expressed to him? On that basis, and in the interest of children's teeth in Lanarkshire and in Scotland as a whole, is the hon. Gentleman not prepared to waive this tax, bearing in mind that the company and the local authority do not make any money from it?

I know of the case mentioned by the hon. Gentleman, but we cannot just waive purchase tax in a particular case. That would not be possible. Under the value added tax, however, which will replace purchase tax in due course, toothpaste, for example, will effectively have its rate cut by the equivalent of 8½ per cent., assuming a 10 per cent. VAT rate. There will be a small rise of 2½ per cent. on beakers, but the tax on toothpaste will be substantially cut.

asked the Chancellor of the Exchequer what was the tax liability of a couple aged over 65 years whose sole income was a pension of £900 per annum, in the years 1968–69, and 1969–70; and what is the figure for the year 1972–73.

In 1968–69, the couple paid £104·75 income tax. In 1969–70, they paid £99·00. They will pay no tax at all in 1972–73.

Does my hon. Friend agree that the total relief from tax of a large number of pensioners represents a major social achievement, which has been widely welcomed by large numbers of people? About how many pensioners will benefit from the latest Budget measures?

I cannot answer that question without notice, because it depends very much on what the pensioners' other income may be, but if my hon. Friend puts down a Question I shall do my best to answer it.

Is the Minister aware that the value of the tax reductions has been exactly wiped out by the enormous rise in prices over which the Chancellor has presided in the past two years?

I am aware of nothing of the sort. Prices are rising at half the rate of a year ago, and less than the rate when the right hon. Gentleman's Government were in office.

asked the Chancellor of the Exchequer what estimate the Treasury has made of the numbers who will be exempt from estate duty if the whole of the estate is left to the surviving spouse for the capital ranges £15,000, to £20,000, and £25,000 to £30,000, respectively.

About 4,000 and 1,500.

Does the hon. Gentleman accept that the total cost of the remissions in estate duty is well over £60 million in one year? Will he contrast that with the penal reductions in social security benefits to people who have very small capital sums set aside, sums of less than £1,000? These people are left to try to live for one week on about £4.

I am not sure how far the sort of comparison to which the hon. Gentleman invites my attention is valid. I am certain that raising the threshold and giving the relief on estate duty to widows has been widely welcomed—and not only on this side of the House.

asked the Chancellor of the Exchequer if he will make a statement on the operation of his reflationary measures introduced in July, 1971; and what estimate he has made of the extent to which they have worked through the economy.

As a result of the July measures, together with the steps taken in the Budget last year to reflate the economy, the rate of growth of domestic product rose sharply to an annual rate of about 4½ per cent. between the first and second halves of 1971. Because of the dislocating effects of the coal strike, it is not possible to provide an estimate of the effects of the July measures in the current half-year, but the latest unemployment figures show that the increased demand is now working through to the labour market.

Would my right hon. Friend care to estimate the time lag between the introduction of reflationary measures and the point when they are fully effective, particularly in relation to unemployment? Does he agree that it is important that the length of this time lag should be established if the standard of demand management in Britain is to be improved?

I only wish that in regard to both restrictionist and expansionist policies it were possible to estimate a little more accurately what the time lag is, but this is a very difficult area.

As the Chancellor has made great play of the recent reduction in unemployment, will he confirm that most of the benefit has so far been confined to the most prosperous parts of the country, namely, the South-East? Will he repudiate the smug reply of his hon. Friend the Chief Secretary to my right hon. Friend the Member for Leeds. East (Mr. Healey) about the rise in prices? We read in the Financial Times of a meeting at Chequers over the weekend where prices were supposed to be the main issue of concern. If they are not to the right hon. Gentleman, they certainly are to the public.

My hon. Friend was absolutely right, and the hon. Gentleman was wrong. The country will note the Opposition's somewhat glum reaction to the fall in unemployment, which is in marked contrast to their political glee when the trend was upwards.

asked the Chancellor of the Exchequer how much money per annum would be lost to the revenue by allowing tax relief on graduated pension contributions.

About £250 million.

The hon. Gentleman will recall our correspondence on the matter. Does he not feel it is time the Government took steps to iron out this anomaly? In particular, why should people in private pension schemes have preferential treatment over those who are not covered in that way?

It was the right hon. Member for Cardiff, South-East (Mr. Callaghan) who decided in 1965 to withdraw the allowance for the national insurance and graduated pension contribution, making a corresponding increase in the personal allowance. The reason was very largely the need to avoid the many millions of small tax adjustments that would otherwise have been necessary. In the reserve scheme to be introduced under the reform of national insurance, the share of the contribution of employer and employee is weighted in favour of the employee, who will pay a lower share, which largely offsets the absence of tax relief on the contributions.

asked the Chancellor of the Exchequer what is his estimate of the total number of civil servants needed to administer the new value added tax and proposed unified income and surtax systems with tax credits when introduced; and how this figure compares with the number needed to administer selective employment tax, purchase tax and income and surtax in mid-1970.

I cannot give estimates in the form requested, because the responsibilities of staff engaged on these taxes extend to other taxes as well. But as my hon. Friend the Chief Secretary said on the Second Reading of the Finance Bill, staff savings could well exceed 10,000 by the time the tax reform programme is complete.—[Vol. 835, c. 882–3.]

Will my hon. Friend confirm that, when this radical reform of the taxation system is completed, it will be not only more equitable but easier to administer and simpler to understand? Does he agree that it will be very welcome if the ever-increasing escalation in the number of civil servants is at least halted by these radical reforms?

The details of one aspect of the tax reform programme, the tax credit scheme, will be spelled out for the consideration of the House and the general public in a Green Paper to be published later in the year. We hope that this scheme will represent a real simplification and not a mere redistribution of the work load. We are talking of a reduction of between 10,000 and 15,000 civil servants during this period.

Is the hon. Gentleman aware that the House will find it difficult to understand why a tax which is easier to administer will require 6,000 extra civil servants? Is he aware that even without them the number of civil servants is greater than when the Government took office? How does that fit in with the Tory election pledge to reduce the number of civil servants?

The hon. Gentleman is well aware that we are introducing the value added tax, which I think is what he referred to in the first part of his question, because we believe it to be a better tax. The wider question of the number of civil servants generally is obviously one for the Civil Service Department, and the Parliamentary Secretary to that Department, and not for me.

asked the Chancellor of the Exchequer how much income tax he estimates will be paid by a married man with two young children and earning £30 per week in 1972–73; and what were the comparable figures three and six years previously.

In 1966–67, a married man with two young children would have paid £4·39 tax on weekly earnings of £30. In 1969–70, he would have paid £4·88. This year, his weekly tax bill will be cut to £2·84.

Do not these splendid figures show a dramatic transformation compared with the previous situation? Will my right hon. Friend confirm that it is still the Government's policy to continue to reduce the burden of income tax?

Yes, Sir. We said that we would cut taxation, and that is just what we have done.

Is the right hon. Gentleman aware that, contrary to the statement of the Chief Secretary earlier, the purchasing power of this wage has been cut by over 10 per cent. since the Government took office and that, therefore, there has been a net increase in the loss of purchasing power caused by prices and taxes combined since the Government took office?

The right hon. Gentleman is somewhat muddled. If he wishes to have the figures, I will give them. In terms of real disposable income per head, which is the best measurement of the standard of living and which takes account both of increases in the cost of living and taxation changes, between 1964 and 1970 the standard of living rose at an annual rate of 1½ per cent. Between June, 1970 and the end of 1971, it was increasing at a rate of between 2 and 2⅔ per cent.

asked the Chancellor of the Exchequer whether he will now seek powers to control the rate of lending by building societies in view of the rise in house prices.

No, Sir.

Is the hon. Gentleman aware that the building societies have condoned price increases of 22 per cent. on houses? Is it not time we had a cooling-off period in house price increases? Is he saying that he does not care about the small savers, pensioners and young couples trying to save for deposits with building societies? Why not step in and protect these people from inflation?

I remind the hon. Gentleman of what we have done through the ending of mortgage stamp duty last year, taking 96 per cent. of house purchases out of stamp duty this year, the Lord Chancellor's announcement of the ending of scale fees of solicitors for conveyancing, and the wide range of measures announced on 27th April by my right hon. Friend the Secretary of State for the Environment.

Does not my hon. Friend recall that, when there was a mortgage famine during the Labour Government's term of office, there was no appreciable drop in the price of houses? Is not the only solution to the situation to which the hon. Member for Bassetlaw (Mr. Ashton) has drawn attention a combination of consumer resistance and the freeing of more land? Is not this exactly what the Government are doing? Would not the building societies be well advised to pay no attention to this attempt to interfere with their lending freedom? Is not the Question a cover for the Opposition's intention to nationalise the building societies as soon as possible and should not they be more forthcoming about their intentions?

I agree with a great deal of what my hon. Friend has said. I agree also with the answer given to the hon. Member for Bassetlaw yesterday by the chief general manager of the Halifax Building Society, at its meeting yesterday, which the hon. Member attended. Mr. Potter then told the hon. Gentleman that building societies have a duty to hold a balance,

"and the balance lies between encouraging the building of new houses, which means having adequate funds available if builders are not to lose confidence, and meeting reasonable demands on reasonable terms without adding to inflation by unduly stretching lending policies to chase house prices."

Is the hon. Gentleman aware that many of us on this side do not want such powers of control because those on lower incomes would lose any chance at all of getting a house? Second, would he agree that the main cause of the increased pressure to buy is the Government's higher rents policy?

We have always recognised that, if fair rents were paid by those who can afford to pay them, they would realise the advantage of home ownership. That is why we give tax relief on mortgage interest for those who buy their own houses. I am grateful to the hon. Gentleman far the support expressed in the first part of his supplementary question. I am sure that it is right.

Would my hon. Friend agree that tampering with the supply of credit will not resolve the problem, which can be met only by an increase in the number of new houses?

My hon. Friend is absolutely right. By extending the range of spending on which tax relief on interest can be allowed, we are, as my hon. Friend the Minister of State pointed out in our debate on this matter, widening the range where people may spend money that they have borrowed. This, too, will reduce pressure on land, which was the only area left by the Labour Government in their 1969 reform.

In reply to my hon. Friend the Member for Salford, East (Mr. Frank Allaun), was the hon. Gentleman implying that it is Government policy to increase rents to such an extent for council tenants that they will be deliberately forced to buying their own houses?

I said nothing of the sort. I shall repeat what I said, though if I do not state it in exactly the same words, I hope that the hon. Gentleman will forgive me. If tenants who can afford fair rents reach the point of paying them, they will realise that they would be better off if they bought their own houses.

asked the Chancellor of the Exchequer what, on the basis of the General Index of Retail Prices, is the purchasing power of the £ sterling now, taking it as 100p on 18th June, 1970.

asked the Chancellor of the Exchequer what is the value of the £ sterling now as compared to the value on 18th June, 1970.

asked the Chancellor of the Exchequer what is the current value of the £ sterling as compared with June, 1970.

Taking the internal purchasing power of the £ sterling as 100p in mid-June, 1970, its value in mid-April 1972 is estimated at 87½p. This estimate is based on changes in the Consumer Price Index between 1970 and 1971 adjusted by movements in the General Index of Retail Prices for the months at the beginning and end of the period. If the estimate were based solely on movements in the General Index of Retail Prices, the corresponding figure would be86½p.

May I, first, thank the hon. Gentleman for being delicate enough to give the House the exact and accurate figures this time. Is he aware that his shocking announcement that the £ is worth only 86½p compared with its value when the Government came to power reflects only the first impact of the Government's high rents policy? Will he give an estimate of how high the cost of living will soar when the full force of the Housing Finance Bill is felt?

If the hon. Gentleman had asked for the figures last time on the basis of the retail price index, I would have given them to him. The latest figures confirm the improvement in price performance which has been achieved in recent months. In the nine months since last July, the retail price index has increased only 4¼ per cent. I remind the hon. Gentleman that between July, 1969 and April, 1970, under the Labour Government, prices rose in that comparable period at the much faster rate of 6¼ per cent. The effect of the Housing Finance Bill on the retail price index will not be large. Many people—and this applies to the most needy—will pay less rent, and for them the cost of living will fall. The increase in rents and rates in April was the same this year as last year.

Will the hon. Gentleman not agree that next year, when the VAT is introduced, inflation could run up to about 15 per cent. per annum, thus further eroding the value of the £? In view of this, does he not think that supervisory bodies should be established and controls introduced to protect the consumer?

I do not know how the hon. Gentleman works out his figures. Certainly, VAT will yield to the Revenue approximately the same as purchase tax and SET. I do not know where he gets his wild figure of 15 per cent. It bears no relationship to the facts.

While totally disregarding the absurd comments of the architect of the phrase about the pound in our pockets, may I ask my hon. Friend whether he agrees that there have been slightly perturbing signs of a revival of an upward movement in prices recently, and, in this context, could he confirm the welcome reports in the Press on Monday that the need for more stringent monetary policies and control of public sector expenditure were on the agenda for discussion at Chequers at the weekend?

I am not sure why my hon. Friend thinks that there has been some acceleration in price rises. The April figures are not seasonally adjusted, and there is always an above-average rise in prices in April for this reason. The April increase was under 1 per cent., and that is much smaller than in April, 1970 and April, 1971. As to the question of money supply, I am sure that my hon. Friend appreciates that the Government are pursuing expansionary policies. I do not believe that any cutback in the supply of money would have any effect on inflation. It would probably just cut back on the activity rate in the economy, and that is something we do not want to happen.

Is not the money supply situation causing trouble for the building societies and for the Government? As to these 86½p pound notes, may we assume that they are in general use? Do they apply to the railwaymen or is it that when his right hon. Friend was accusing £15-a-week railwaymen of holding the country to ransom—[HON. MEMBERS: "£15 a week? How many?"]—more than there are here—was the right hon. Gentleman under the impression that railwaymen were using something other than these 86½p pound notes?

I am sure that the hon. Gentleman is as keen as the whole House is to see an end to the rail dispute. The British Railways Board has made an offer to the unions, which is being put to the ballot, and I do not think that it will help if I comment further on that issue.

This is a perennial Question, identically worded, from the same hon. Members. Would it not help if they had the monthly figures from my hon. Friend with a full explanation as to what is happening each month? They might then be able to understand the situation.

It might help the three hon. Gentlemen opposite who have asked Questions if I sent them a complimentary copy of a fascinating booklet called Statistical News. It would provide them with interesting bedtime reading, and they would then be able to understand how the figures were arrived at.

While the House will readily understand the Minister's reluctance to admit the Government's failure to control prices over the last two years, can he now confirm that the taxpayers referred to in Questions Nos. 4 and 9 have had the value of the tax reductions more than wiped out by the collapse in the purchasing power of the £ over the last two years? Will he answer the question instead of dodging it?

My right hon. Friend answered that Question. I am not sure how the right hon. Gentleman arrives at his figures, but my right hon. Friend has given the right answer.

asked the Chancellor of the Exchequer what computers are in use currently in his Department; what information is stored on computer filing systems; and what systems of access control exist.

The Treasury uses various computer terminals to develop and run economic forecasting models and in connection with the planning and control of public expenditure. For the most part, the information used is of an economic and statistical nature. The system of access control is designed to ensure that only authorised members of Treasury staff can have access to the records.

I thank the Minister for that assurance, but I remind him that computers in his Department are being used by the Inland Revenue. Is he satisfied that, when they are being used, individuals can have sufficient access to their own tax records? Also, is he aware that, once proposals for a negative income tax are introduced, other persons will seek access? What will he do about controlling access by other people when that system is introduced?

I assure the hon. Gentleman, who has a Question about Inland Revenue computers down for Written Answer today, that my right hon. Friend's departments are acutely aware of the need for proper security of computer records. I do not think that it would be possible for individual taxpayers to have direct access to computer output from the Inland Revenue computer, but they are always entitled to discuss their affairs with their local inspector of taxes. As to the tax credit system, I think we must await the publication of the Green Paper and consideration of the proposals when they are made public.

How are the computers and their human assistants getting on at Centre 1 at East Kilbride? Is he aware that the number of complaints I am receiving from my constituents shows no signs of abating?

There has been a marked improvement, and a tribute was paid in Committee last week by the hon. Member for West Lothian (Mr. Dalyell), who congratulated the Inland Revenue on the great progress that has been made. I am sorry that the hon. Gentleman's constituents have not enjoyed the same improvement.

asked the Chancellor of the Exchequer whether he will make a statement on the balance of payments in recent months.

The current account was in urplus in the first four months of this year, and the underlying balance of payments is sound. Recent trade figures have been distorted by a number of special factors, notably the effects of the coal miners strike.

While congratulating my right hon. Friend on these splendid achievements, may I ask him to direct his attention to the growth of the hire-purchase debt, which was announced yesterday as £1,678 million? Would he consider this in the context of future economic performance?

We keep all these matters under review.

Would the right hon. Gentleman enlighten the House as to his own interpretation of the extremely worrying recent trade figures? Is he aware that, even taking into account the distorting effect of the coal strike, which we all recognise must have been there, the balance of trade seems to be deteriorating steadily, from a level of £30 million in February to something under £57 million in April? Can he tell the House how soon he expects to implement his undertaking to devalue the £ rather than halt growth?

That was not my undertaking. As I said in my Budget Statement—I realise that the right hon. Gentleman was not responsible for these matters in the Opposition at that time—I expected the balance on visible trade to be less favourable this year than last because of the faster growth of imports, but the current balance as a whole should remain in comfortable surplus because of invisible earnings.

Have the Government in any way altered their policy on the balance between gold and dollars in the central reserve?

That raises a wider question. If my hon. Friend will put a Question down specifically directed to it, I shall be happy to answer it.

The Chancellor spoke about 1964 in an earlier reply. Could he give us the sum of the deficit which the Tory Government left in 1964, after 13 years of Tory rule?

I have not got the figure off-hand, but I think that the short and medium-term debt outstanding when we handed over in 1964 was of the order of £70 million. That was all.

asked the Chancellor of the Exchequer how much revenue has been collected through capital gains tax since its introduction in 1965.

About £850 million. This figure includes £350 million of corporation tax on chargeable gains, but does not include the £45 million of tax on short-term gains charged under Schedule D Case VD from 1962.

Does my hon. Friend agree that this represents a significant withdrawal of capital from the economy at a time when investment and job creation should have high priority?

The Minister of State told my hon. Friend when he last raised this question that we have the tax system under continuing review and, as I think he will acknowledge, under radical reform. I assure him that the future of the capital gains tax will not be ignored in this study.

asked the Chancellor of the Exchequer if he is satisfied with the rate of consumer expenditure following the Budget proposals; and if he will make a statement.

It is too early for the Budget tax cuts to have affected the published indicators, but they will certainly have a favourable effect on consumer spending in the current quarter.

Is the hon. Gentleman aware that the three months moving average of retail sales is still down and that there is no evidence anywhere that retail sales and consumer expenditure are likely to be both substantial enough and sufficiently broadly based to sustain the growth rate which the Chancellor of the Exchequer promised in his Budget statement?

While consumer expenditure may not increase exactly in line with the half-yearly forecasts given in the Financial Statement and Budget Report, it is still expected that consumer expenditure will increase at an annual rate of about 5 per cent. over the 18 months between the second half of 1971 and the first half of 1973.

In general, is my hon. Friend satisfied that the purchase tax reductions are being passed on to consumers?

Yes, Sir.

asked the Chancellor of the Exchequer whether the United States Treasury has yet taken advantage of its £83 million drawing on the International Monetary Fund to repay short-term indebtedness to the Bank of England.

There is some misunderstanding implied in my hon. Friend's Question. The United States has not incurred any short-term indebtness to the Bank of England. My hon. Friend may have in mind the outstanding swap transaction, but this is not a debt.

Even if the sums involved relate to the swap transaction, was there not a clear understanding at the time of this settlement at the beginning of May that the United States would use its drawing to repurchase surplus dollars in United Kingdom accounts? Is it not somewhat unsatisfactory if this understanding is not to be honoured?

The mechanics of the Federal Reserve Bank's drawing on the reciprocal swap facility are of a highly technical nature, but, briefly, the effect was to increase forward liabilities on both sides and to give the United Kingdom an exchange guarantee against dollar devaluation. My hon. Friend refers in his Question to a drawing of £83 million. As part of the arrangements for the repayment of the whole of the United Kingdom's outstanding debt to the International Monetary Fund, the United States made a drawing in sterling from the IMF equivalent to £83 million.

Is the right hon. Gentleman aware that the epoch-making announcement which he has just made will be warmly welcomed by all the widows, orphans, sick and unemployed in this country?

asked the Chancellor of the Exchequer what is the latest estimate he has made of the advances that will be required from the National Loans Fund in the year 1972–73 to the nationalised industries as a result of their acceptance of the Government's limit on price increases and of the withdrawal of certain subsidies to railway services needed for social reasons.

It is not possible to identify separately the amount by which borrowing by the nationalised industries from the National Loans Fund in 1972–73 will be increased as a result of their participating in the CBI initiative on price restraint. No change has been made in the arrangements for paying grant to the British Railways Board.

Is the hon. Gentleman aware that the Government have reduced the finances of the nationalised industries to a greater shambles than they have been in over the last 10 years? Will he ask the Chancellor of the Exchequer to publish a White Paper explaining the principles by which coal, gas and electricity are subsidised but council house rents and commuter fares are not.

I do not think that there is any accuracy in the hon. Gentleman's charges, but my right hon. Friend the Chancellor has noted what he said.

As the hon. Gentleman did not answer the previous question when one of my hon. Friends said that he had got all the facts right, will he now say whether it is the Government's policy to allow the nationalised industries to run on commercial lines, and, if so, how he equates that with the idea that they should restrain their prices in the way suggested?

The CBI scheme, which the hon. Gentleman knows all about, still has just under three months to run. At the council meeting on 19th April, the CBI decided to defer for three months its decision on the extension of the price restraint policy beyond 31st July. It is very much better to consider these issues as they affect the nationalised industries in the light of the CBI's forthcoming decision.

asked the Prime Minister if he will make a statement on his meeting with the Scottish Council (Development and Industry) on 12th May, 1972.

Together with my right hon. Friends the Secretaries of State for Scotland and for Trade and Industry and my noble Friend the Minister of State, Scottish Office, I met representatives of the Scottish Council in Edinburgh on 12th May.

I thank the right hon. Gentleman for that reply. Did the Scottish Council raise the possibility of extending refinery capacity in Scotland in view of the North Sea oil discoveres? Also, did it raise the very urgent position of the steel industry in Scotland and, in particular, Scotland's capacity to continue making crude steel?

The Scottish Council discussed the question of refinery capacity in Scotland, but it expressed itself as satisfied with the new arrangement which we have had since our January meeting, whereby a standing conference of Scottish interests under the Under-Secretary of State for Development brings together all those concerned with oil developments in Scotland, and refinery capacity is one aspect of that.

Was my right non Friend able to confirm to the Scot- tish Council that a final decision has not been made about the vital Hunterston steel works project in the West of Scotland? Was the delegation encouraged by the dramatic reduction in Scottish unemployment of 16,000, which is more than the average for the United Kingdom?

Certainly, it is much encouraged by the present trend of unemployment in Scotland in that there has been a decrease of 16,000, which is proportionately greater than the decrease for the rest of the country. It was made absolutely plain to the Council that no decisions have been taken about the location of steel plant, and that any reports to the contrary were quite incorrect.

Can the right hon. Gentleman say whether the Oceanspan proposals, on which Lord Polwarth was particularly keen, were further considered? Does the right hon. Gentleman agree that this matter is particularly important in view of our entry into the Common Market?

I agree about its importance. We discussed this matter very fully at the January meeting, but not very much further when we met in Edinburgh.

asked the Prime Minister what communications he has had with President Nixon since 9th May. 1972.

My communications with President Nixon, as with other Heads of Government, are confidential.

As President Nixon is currently running as hard in Moscow for re-election as the Prime Minister is in Bexley Heath, and there may not be very much time for him, is it not time that we communicated to the American Government a view about the total illegality in international law of the mining of the ports in the Gulf of Tonkin; or does he share the disgraceful sycophantic view of the Foreign Secretary that these actions are, in some way, justifiable?

If the hon. Gentleman wants to treat this as a serious question, he might have worded his supplementary question more seriously. I do not accept his allegations about mining in international waters.

Does not my right hon. Friend agree that it is entirely legitimate for the United States to have a treaty with South Vietnam against external aggression? Does he not further agree that the British Government are entitled to support those of their allies who honour their treaties?

President Nixon has a right to settle his policy in the light of the attack by North Vietnam on South Vietnam, and that is what he has done.

asked the Prime Minister what communications he has had with President Pompidous and Chancellor Brandt since 9th May.

My communications with President Pompidou and Chancellor Brandt, as with other Heads of Government, are confidential.

In his Godkin lectures at Harvard, the right hon. Gentleman proposed Anglo-French nuclear sharing. What steps has he taken to implement that proposal since he became Prime Minister? Has he communicated with, and is his proposal approved by, M. Pompidou and Herr Brandt, and what is the effect of his proposal on our signature of the nuclear Non-Proliferation Treaty?

I am grateful to the hon. Gentleman for his reference to the Godkin lectures, which are still available in a publication by the Harvard Press. What I proposed in the lectures was that the two nuclear forces should be held in trust for Europe with a European Council. That is rather different from the phrase "nuclear sharing" used by the hon. Gentleman. As I have told the House on two previous occasions, in neither of the discussions between President Pompidou and myself was this matter raised. I did not think that nuclear defence was an appropriate subject for discussion.

Has the Prime Minister had any communication with President Pompidou on the statement by Dr. Grey- Turner widely reported in the British medical Press that, under pressure from the Common Market, we may have to alter the basic concept upon which the National Health Service is built? Is the right hon. Gentleman aware that the view has been widely expressed that we may have to change from the concept of 85 per cent. of the cost being met from taxation to the system adopted in the Common Market countries?

No, Sir, this is not a subject I have discussed with President Pompidou. I understood that the arrangements for the professions were in the first place to be left in the hands of those representing the professions. I am perfectly prepared to ask my right hon. Friend the Secretary of State for Social Services to inquire into the point which the hon. Gentleman has raised. Generally, the Common Market will move to a situation in which the costs of industry and the social services are approximately the same.

asked the Prime Minister if he is satisfied with co-ordination between the Department of Education and Science and the Department of Employment in obtaining employment for newly qualified graduates; and if he will make a statement.

Yes, Sir. Responsibility for assisting newly qualified graduates to obtain their first jobs rests with the appointments services of universities and colleges. There is close liaison between these services and those of the Department of Employment.

I thank the Prime Minister for that reply. Will he confirm that the Government have no intention of using the present levels of unemployment among graduates as an excuse to reduce the number of university places?

That is certainly not the intention. As I have said on the last two occasions when this matter has been raised at Question Time, the intention is to reduce unemployment and provide greater opportunities for graduates, not only in their own specific subjects but also in the wider field of industry and administration.

Is my right hon. Friend aware of the need to encourage many more people to become graduates in medicine, among whom there would not be the slightest chance of unemployment?

What my right hon. and learned Friend says is correct in regard to medicine and veterinary surgery.

Is the Prime Minister aware that, at the end of 1971, 8½ per cent. of Manchester university graduates were unemployed, compared with 5½ per cent., which was bad enough, at the end of the previous year? What specific and positive action are the Government taking to reduce the level of unemployment among graduates in Manchester?

Last Thursday, I gave the figure provided by the University Grants Committee for unemployed graduates all over the country at the end of 1971, namely 3½9 per cent., which was not very different from the national average. The expansion of the economy, particularly in engineering, will have helped the graduates in the hon. Gentleman's area.

asked the Prime Minister how many times in his official capacity he has attended the Cup Final at Wembley.

I attended the Football Association Cup Final earlier this month and the League Cup Final last year.

Is the Prime Minister aware that, if he chooses to go to the Cup Final next year, he will find that the spectators will be paying £19,000 in value added tax for that one match, which is equivalent to 19p per spectator for British entry into the Common Market? Will the Prime Minister visit one or two third and fourth division clubs and tell them how they can avoid bankruptcy when the Government impose the value added tax?

The VAT was fully debated in Committee of the whole House on the Finance Bill, and I have nothing to add. I agree that there is no doubt that the crowd at Wembley will be just as large next year as it was this year.

Is my right hon. Friend aware that his visits to Wembley Stadium have been greatly appreciated by the staff and all those who have come into contact with him? Will he accept as many invitations to Wembley as he possibly can, especially on Saturday afternoons?

I shall endeavour to please my hon. Friend, who has previously extended invitations to me.

asked the Prime Minister what general rules exist governing the transfer of personal and confidential information between and among the Departments of his Administration; and whether he will make a statement.

In some cases, there are statutory provisions. Otherwise, it is for individual Departments to give giudance to their staff on the handling of such information.

Is the Prime Minister aware that a massive collection of personal and confidential information will come under the auspices of the Department of the Environment from those who submit themselves for means tests under the Government's proposals for fair rents? How does he expect the people who are supposed to be coming forward for means tests under the provisions of the Housing Finance Bill to do so when they pretty well have to sign away their birthright to get a means test?

I cannot agree with that, especially when the Minister of Housing and Local Government in the previous Administration was strongly in favour of a system of rent rebates.

Will the Prime Minister tell us how he manages without Lord Wigg?

Very satisfactorily, Sir.

asked the Prime Minister what discussions he is having with other Commonwealth heads of Government about the next Commonwealth Conference.

None at present, Sir. It is the responsibility of the Commonwealth Secretary-General to co-ordinate consultation on Commonwealth Prime Ministers' Conferences.

Will not the Minister convene a Commonwealth Conference in view of what has been revealed in our discussions on the European Communities Bill—notwithstanding the disgraceful guillotine—which has caused great concern within the Commonwealth? Will he pay as much attention to the views of the Commonwealth countries as he pays to those of the EEC countries, because there are many in the Commonwealth who feel that he has no more interest in the future of that organisation than he has in the future of the House of Commons and the British nation?

I cannot accept any of that. It is 16 months since we last had a Commonwealth Conference. Under the previous Administration, as the right hon. Gentleman the Leader of the Opposition will remember, two years four months elapsed between Commonwealth Conferences. This matter is best left to the Secretary-General of the Commonwealth, who has contact with all the countries and can establish when the time is right for us to have a Commonwealth Conference.

Is there not a new situation in Rhodesia about which all Commonwealth countries are concerned? Is it not incumbent upon the Prime Minister to take the initiative and to consult his colleagues in this respect?

Of course, consultation has gone on with our colleagues in the Commonwealth on the subject of Rhodesia all the time we have been in Government. I do not feel that it is necessary to have a meeting of the Heads of Commonwealth Governments to carry on that consultation on Rhodesia.

So that the House and the country may not gain a wrong impression from the period mentioned by the right hon. Gentleman, will he acknowledge that between the summer of 1964, when there was a conference presided over by his right hon. Friend, and 1970 there were five full-dress Commonwealth Conferences?

Yes, Sir. I was only making the point that a greater interval than 16 months between the holding of Commonwealth Conferences is perfectly satisfactory.