asked the Chancellor of the Exchequer what is the value of the £ sterling, to the latest date, compared to the French franc, Italian lira, deutsche-mark and United States dollar; and how this compares to the value on 28th February 1974.

With permission, I will circulate the figures in the OFFICIAL REPORT.

Would my right hon. Friend accept that those figures will show that the pound has improved generally against the currency mentioned? Can he say why it is that, since Election Day, 28th February, although the pound has improved in this way, thus reflecting foreign confidence, the Conservative Party and its leader have proclaimed throughout the country how badly the economy is doing under the present Government?

I am glad that there is foreign confidence in sterling. The figures available since 28th February confirm what my hon. Friend has said. There has been a slight depreciation compared with the deutschemark but in other cases there has been an appreciation.

Does the right hon. Gentleman accept that, quite contrary to the statement made by his hon. Friend, the Arab oil inflow in excess of £600 million is a key factor? Would he like to say whether he will pursue policies to lower interest rates and turn away such money, or does he intend to increase sterling guarantees?

Arab oil has been a factor in this. As has been frequently pointed out, our policy of lowering interest rates is subject to the constraints imposed by the international situation. As for the sterling guarantees, the hon. Gentleman must wait and see.

asked the Chancellor of the Exchequer whether he will remove from the scope of VAT those items of medical equipment such as linear scanners supplied to hospitals from money raised by public subscription.

I have noted the hon. Gentleman's suggestion.

Will the hon. Gentleman please bear in mind that medical research and treatment is in some cases being delayed or prevented by an inability to procure this equipment, for which on occasion public funds have been raised? Will he please give speedy consideration to exempting such equipment from this tax and possibly also from import duty?

The case to which I think the hon. Gentleman is referring is the purchase of a piece of equipment of this sort to be presented to the Worcester Royal Infirmary in memory of the late John Baker. If the hon. Gentleman has not yet heard the news, I am glad to be able to tell him that this equipment will be relieved from both import duty and VAT.

asked the Chancellor of the Exchequer what consultations are being undertaken by the Inland Revenue on the feasibility of differential rates of VAT; and what options are under investigation.

None, Sir. The Inland Revenue does not administer VAT. I would refer the hon. Member to the answer I gave yesterday to my hon. Friend the Member for Sheffield, Atter-cliffe (Mr. Duffy).

May I ask the Minister whether, in considering any changes in the rates of VAT, he would agree that in the interests of the family budget it would be better if he began by removing the 5p VAT imposed on petrol in the Budget?

My right hon. Friend had to make a decision about the amount of revenue he had to raise to lower the net borrowing requirement. Unfortunately one of the elements had necessarily to be petroleum products, in this case petrol. Through the operation of the VAT mechanism no element of that tax will fall on public transport fares.

When my hon. Friend is considering the scope of VAT, will he make it clear that the Government have no intention of implementing the proposals of the European Commission to impose VAT on the sale of new houses as is proposed in the harmonisation directive?

I will certainly take note of my hon. Friend's point. At the moment there are no requirements from the Commission for harmonisation as to either rate or rate structure.

Will the Minister accept that the whole point of VAT is that it should be imposed at two rates, zero and one other rate, thus distinguishing it from purchase tax, which had a series of rates? Will he assure us that it will operate only at those two rates?

Obviously I am not able to give the hon. Gentleman that assurance. That is why the consultations are taking place. I would point out that two countries already have four-rate structures and another has a five-rate structure.

Will the hon. Gentleman accept that the Opposition do not regard as obvious what he said about changes in rate structure? Is it true that traders have been told that if there is a change in rate or in rate structure they will be helped with the provision of calculating equipment?

Not to my knowledge.

asked the Chancellor of the Exchequer if he will seek talks with the Finance Minister of South Africa on the question of gold as a reserve currency.

No, Sir. There is agreement in the Committee of Twenty, in which South Africa is represented, that the SDR should become the principal reserve asset of the international monetary system and that the rôle of gold should be reduced.

Following the announcement by the Group of Ten last night, is not there a need to do everything we can to improve relations between Her Majesty's Government and the Government of South Africa? Are not the producers of gold as important to us as are the producers of oil?

I see no connection between what happened in Washington last night and Britain's relations with South Africa. There is a generally accepted policy, in which South Africa takes part, that the rôle of gold in the international monetary system should be reduced. Nothing that has happened in Washington has altered that fact.

Is my right hon. Friend aware that when Great Britain left the gold standard on 21st September 1931 there were 2,803,522 people unemployed in this country? Is he further aware that certain Powellites on the Opposition benches and the Editor of The Times seek to cure inflation by the creation of unemployment and wish to return to the gold standard as a means of inflicting the discipline of unemployment on the people of this country? Will my right hon. Friend utterly reject that philosophy?

We have no intention of curing inflation by an increase in unemployment of the kind referred to by my hon. Friend.

Is it not time that the Treasury came off cloud 10 or cloud 20 and came down to reality? Value is in gold and not in baskets of bogus currency which is constantly being inflated.

I know that that is the right hon. Gentleman's view. It is not the view of the Group of Ten or of the Committee of Twenty. A Private Notice Question has been tabled on what happened in Washington. Perhaps we should leave it until that is reached.

asked the Chancellor of the Exchequer what were the percentage increases since October 1973 in the retail price index (January 1962 = 100) in March 1974 and April 1974, respectively; and what is his estimate of the contributions made to those increases by the price of oil imports.

In March the General Index of Retail Prices was 6·1 per cent. higher than in October 1973, and in April it was 9·8 per cent. higher. By April the direct effect of oil import price increases had been to add about 1 per cent. to the index. Including indirect effects, it is estimated that the eventual effect of the increases will be to add about 3 per cent. to the index, but it is difficult to judge how much of this had come through by April.

Does the right hon. Gentleman agree that a major, if not the major, reason for the apparent failure of the previous Government's stage 3 policy was the Middle East developments? Does he agree that in his present position he is under the same difficulties as were experienced by the previous Government?

Certainly the increase in oil prices has been a factor in inflation in this country and elsewhere. The effect of the increase in oil prices has not yet fully worked through into the retail price index. Fortunately there are signs of commodity prices generally stabilising, which of course would be a favourable factor.

asked the Chancellor of the Exchequer if he will introduce proposals to prevent the abuse of tax avoidance by the use of addresses in offshore islands.

An address outside the United Kingdom does not in itself provide a means of avoiding United Kingdom tax. But the question of tax avoidance is continuously under review and I shall bring forward any necessary proposals at a suitable time.

I want my hon. Friend to apply his sharp accounting mind to this problem—

Ask a question.

Order. This is not speech-making time; it is Question Time.

I said only half a dozen words. When my hon. Friend is considering this matter, will he bear in mind that there are millionaires, property dealers and others of that ilk who have an address in Jersey or similar places and who use private aeroplanes and private airfields to come back to this country to live each week, or perhaps each night? By doing that they avoid taxation, yet in my constituency there are pensioners who have paid taxes all their lives and have never once been to the coast.

I fully understand my hon. Friend's feelings on this matter, and the Treasury Bench agrees with him. He is talking not about avoidance but about evasion. The difference between the two is the thickness of a prison wall. We are looking closely into these matters and hope to make a statement in the future.

Does the Chief Secretary agree that if one compares the various illegitimate claims being made on the real resources of society the one referred to by the hon. Member for Bolsover (Mr. Skinner) pales into insignificance in scale by comparison with the one that is illustrated on all the main posters advertising London newspapers this afternoon?

I hope that the hon. Gentleman is not suggesting that we should do nothing about evasion, which is what my hon. Friend was talking about. That is what we intend to stamp out.

asked the Chancellor of the Exchequer if he is satisfied with the operation of the arrangements for balancing Exchequer receipts between Great Britain and Northern Ireland.

Yes, Sir. Since 1st January 1974 these arrangements have been governed by Section 15 of the Northern Ireland Constitution Act 1973. That Act provides for payment from the United Kingdom to Northern Ireland of a sum equal to the Northern Ireland share of United Kingdom taxes. The amount of the share and the method of calculating it are determined by the Treasury.

As many Ulstermen are not incurious about the topical subject of the precise extent to which they are beholden to us on this side of the water, will the Treasury mount an exercise to establish the truth? Secondly, will the Treasury reflect on a system of financial decision making that has resulted in under-carred motorways in Ulster and Protestant and Catholic slums in Belfast?

The truth of the essential facts of the matter is already known and the total payments have been announced recently by the Secretary of State, but I shall be happy to circulate a breakdown of the figures in the OFFICIAL REPORT. In reply to the second part of the supplementary question, this is a matter of priorities inside Northern Ireland within the concept of parity.

asked the Chancellor of the Exchequer whether he proposes to end the statutory restraint of incomes at the expiry of phase 3.

The Prices Bill contains provision for ending the statutory control of pay. We shall seek parliamentary approval for the exercise of these powers as soon as they are available to us.

In view of the Minister's confirmation that he wishes to abolish statutory control over incomes immediately, what steps will the Government take to moderate the huge new pay claims now in process of preparation which his right hon. Friend the Chancellor of the Exchequer has already stated publicly the nation cannot afford?

It is of the utmost importance to moderate pay settlements. That is the object of entering into the social contract and of the discussions we are having with the Trades Union Congress.

Although he accepts that it is essential to restrain wage claims, does not my right hon. Friend recognise that wages are only one factor in inflation? Is it not better to emphasise the insignificant effect of wages upon inflation compared with other factors? Does my right hon. Friend agree that Opposition Members, before talking about restraint, should think not only in terms of the incomes of industrial and commercial workers but also in terms of the incomes which they themselves enjoy?

There are certainly other important factors in inflation, but that does not mean that it is not important to moderate income settlements.

May I take it that the right hon. Gentleman still agrees with the Prime Minister that one man's pay increase is another man's price increase?

I certainly agree that wage settlements can be a factor in inflation. There are other factors. Inflation has to be brought under better control than was achieved by the Conservative Government.

asked the Chancellor of the Exchequer what additions have been made to the net borrowing requirement since the Budget; and how it is proposed that such additions should be financed.

It is not customary 1 to give forecasts of the public sector borrowing requirement other than at Budget time. My right hon. Friend has made clear our intention to effect a large reduction in the borrowing requirement for the current year compared with 1973–74.

I am sure we all wish the right hon. Gentleman the best of British luck in that objective. Is it not the case, however, that since the Budget hardly a day goes by without fresh Government commitments to the financing of the social compact and that each of these commitments is being financed out of "hot" money? What I happens when the "hot" money starts going out again?

I do not agree with the hon. Gentleman. The only major event in this respect is the £500 million which we promised would go, if required, to the building societies. If the hon. Gentleman does not want to reduce mortgage payments—

I do not.

The hon. Gentleman may not want to reduce them, but I should like to hear what his hon. Friends have to say.

Is it not dangerous to have a Secretary of State for the Environment who is not clear which of his proposals will increase the borrowing requirement and which will not? Will the Chief Secretary hold a seminar for his right hon. Friend?

No, Sir.

asked the Chancellor of the Exchequer what recent representations he has received about the likely effect on agricultural production of the proposed wealth tax.

asked the Chancellor of the Exchequer if, in introducing the proposed wealth tax, he will seek to ensure reliefs that will prevent the piecemeal sale of the assets of any business due to the accumulative effects of this tax when added to other taxation.

I have received some representations on behalf of farmers. But the effects of the wealth tax on agriculture or on businesses are matters for later public discussion in the light of the Green Paper which my right hon. Friend will publish during the summer.

Will the hon. Gentleman accept that farmers who have expressed anxiety about this matter are not enjoying a lush standard of living but by and large are people who have seen the main tool of their trade—the land—rise sharply in value? Can he, in advance of the Green Paper, do something to restore confidence in the farming industry by giving an undertaking that he will not bring in any measure which would lead to the breaking-up of farms or do anything to upset a highly efficient farming industry?

I do not accept the assumption in the hon. Gentleman's question. The subject of farmers will be discussed when the Green Paper is published. It is known that there are many farmers and landowners who have been known to acquire substantial amounts of wealth, and they should pay their fair share in wealth tax.

When considering the treatment given to farmers, will my hon. Friend bear in mind the great advantages which they enjoy in rate relief and which are not enjoyed by other people?

I am grateful to my hon. Friend for that comment, and I remind him that there are other reliefs as well. It is important to remember that there are some career farmers whom it might be necessary to help, and this matter will be discussed when the Green Paper is published.

Is the hon. Gentleman aware that practically all the farmers in my constituency have all their money invested in their business? Does not the hon. Gentleman appreciate that if there is to be a further tax imposed upon them, they will have to sell part of their business to pay the tax? This would have a disastrous effect on agriculture in my constituency.

I doubt whether that is true of every farmer, although it may be the case in the hon. Gentleman's constituency. It will be a matter for discussion when the Green Paper is published.

asked the Chancellor of the Exchequer when he next expects to meet the Finance Ministers of the EEC.

asked the Chancellor of the Exchequer when he will next be meeting Common Market Finance Ministers.

My right hon. Friend attended a meeting of EEC Finance Ministers on 6th June. The next meeting will be held on 15th July.

In view of the present economic difficulties and uncertainties in Western Europe, and indeed throughout the world, is it not clear that close cooperation between the Chancellor of the Exchequer and his colleagues in the Committee of Finance Ministers will be important in the coming months?

That is true. Indeed, general international monetary co-operation will be important in the coming months. This is why my hon. Friend is currently in Washington.

What about monetary union? Has any progress been made on that perilous road?

My right hon. Friends the Chancellor of the Exchequer and the Secretary of State for Foreign and Commonwealth Affairs have made clear the Government's view about economic and monetary union.

When the Chancellor meets the Finance Ministers, will he remind them of the Conservative Party manifesto in 1970 in which we said that if we did not get into the Common Market we were confident that we could stand on our own feet outside it? Does the right hon. Gentleman agree that the oil bonanza since then will mean that we shall have a much greater opportunity to stand on our own feet outside the Community?

The hon. Gentleman forgets that nobody is likely to believe anything in the Conservative manifesto any more.

asked the Chancellor of the Exchequer if he will make a statement on the present situation and future prospects for corporate liquidity.

The gross liquid assets of industrial and commercial companies were at the high level of £10,000 million at the end of the fourth quarter of 1973. The strains of three-day working will since have eroded the position to some extent. The Government will continue to watch the situation and will ensure that investment is not hampered by a lack of finance.

When watching the situation will the right hon. Gentleman bear in mind that there is a malaise among British industrial and commercial managements, which amounts almost to a crisis of confidence? This derives partly from the belief that the Government are unaware of the serious cash difficulties in British industry and the belief that there is hostility to the profit motive among many Labour Members and appropriate anxiety about the intervening ambitions of the Secretary of State for Industry.

I do not believe that there is reason for a lack of confidence on those grounds. The problem arises from the changing pattern of company finance. Companies are increasingly reliant on bank finance and, therefore, their net liquidity position shows a deficit. Nobody believes that money outstanding from them will be called in. They are as far as we can see generally speaking in a strong liquidity position and this should have a beneficial effect on investment.

Is it not the case that the fears allegedly expressed by the business community about the activities of the Secretary of State for Industry are simply the latest in a long and old list of excuses for the useless and hopeless performance of large sectors of British privately-owned industry in past years?

There are many reasons for the poor economic performance of this country. One may be our stop-go policies since the war. I do not wish to distribute the burden of responsibility for our poor performance unequally between Government and industry.

asked the Chancellor of the Exchequer if he will publish a White Paper setting out the details of taxes on higher incomes, gifts, inheritance, death, and capital gains, in the United Kingdom and in the principal industrialised countries of the West, respectively.

No, Sir. A comparative table of nominal tax rates would be of little value without a full examination of their social context and their practical effects. My right hon. Friend will be publishing in the forthcoming Green Paper some information about wealth taxes in other countries.

Is the hon. Gentleman aware that his reluctance to give the House this information must be due to the fact that it is well known that taxes of this kind on the Continent are infinitely lower than are those which operate in the United Kingdom? Since those continental countries have had a much more satisfactory economic performance than we have enjoyed, does he agree that the higher that taxes of this sort are levied the less likely we are to get a decent, sustained growth?

I am sure the hon. Gentleman would agree that comparisons of relative tax burdens between different countries are notoriously difficult to make unless one takes into account the different physical structures, standards of living and income levels.

Is it not a fact that the earlier questions about impoverished farmers and the kind of questions we are now hearing from the Conservative benches are irrelevant when we consider that the starting point in such a tax would be at a level of £50,000? I hardly think that many of our constituents would consider themselves poor if they were enjoying a capital of over £50,000.

I agree that very few of our constituents would attract wealth tax.

Before the hon. Gentleman resorts to the habitual pride of the Labour Party in a high level of taxation, he and his colleagues should look at the long list of writers, artists, composers, musicians and the rest who have been forced to go elsewhere. Does he think that this tyrannical system of tax ultimately will be to the benefit of our country?

I would be surprised if the right hon. Gentleman was suggesting that the artistic spirit was so closely connected with financial matters.

asked the Chancellor of the Exchequer what would be the approximate cost in a full year of raising the age exemption limits from the proposed £785 for a single person and £1,130 for married couples to £900 and £1,300, with corresponding marginal relief.

The revised age exemption limits proposed for 1974–75 are £810 for a single person and £1,170 for a married couple. The cost of increasing these to £900 and £1,300 respectively, with the consequential adjustments in marginal age exemption relief, would be about £50 million in a full year.

I recognise the value of the pension increase and the large exemption increases even since the Budget Statement but does not the Financial Secretary agree that pensioners with a small private pension over and above the State pension are particularly hard hit by rising prices? Does he not realise that big deductions from these modest incomes can cause great hardship and resentment, and does he not feel that higher priority should be given to raising the starting point on taxation for pensioners?

I am grateful to the hon. Member for his remarks about the increase in the national insurance pension. Of course, we all recognise that there is genuine concern on both sides of the House about the position of pensioners at all income levels. I am sure, however, that the hon. Member will agree that the greatest need is on the part of those who do not have enough income even to attract the lower rate of income tax. My right hon. Friend provided in his Budget that any elderly person who was exempt from tax before by reason of the threshold will remain exempt thereafter.

If the Financial Secretary and his right hon. and hon. Friends are genuinely concerned with deeds and not merely with words concerning the problems of the retired, why are they increasing the taxation burden on such people?

I am sure the right hon. Gentleman will recognise that even those pensioners who are fortunate enough to have an income that would attract the investment income surcharge will not have to pay the full rate. They will get relief additional to that afforded to other taxpayers.

asked the Chancellor of the Exchequer what representations he has received from women's organisations on the tax allowances of widows.

asked the Chancellor of the Exchequer what further proposals he has for an improvement in the position of tax allowance for widows.

My right hon. Friend and I have received a number of representations on this point, and I am meeting a deputation from the National Association of Widows later this month.

Has any consideration been given to extending to widows, and perhaps even to divorced women, a tax allowance at the same rate as that enjoyed by a married man rather than that of a single woman, which is the prevailing situation? Will the Minister bear in mind that these women often have to go on meeting the same financial and family burdens after the loss of a husband for one reason or another?

Again, I am sure there is common ground between both sides of the House on the need to do everything possible to help widows, particularly those with young families. I am sure the hon. Member recognises that women who are unfortunate enough to be in such a position will have their single person's allowance increased by £30 this year. They will also benefit by the increase in the child allowance by £40 for each child. A point to which the hon. Member did not allude is that the widow's pension will go up by a record amount and that those having care of children will attract an additional personal allowance.

Does my hon. Friend accept that many of these widows, as the hon. Member for Brentwood and Ongar (Mr. McCrindle) pointed out, have to bear all the financial burdens of being a house owner and all the family burdens of their late husbands but that they do not have anything like the same income? Notwithstanding some of the proposals which I understand may be emanating from my right hon. Friend the Secretary of State for Social Services, does not my hon. Friend think we now have an opportunity to take a much more comprehensive look at this?

I take my hon. Friend's point that there are certain unavoidable expenses attached to the running of a household, however modest it may be and regardless of whether it is run by a single individual or a married couple. It is for that reason that the single person's allowance has for a long time been much more that half of the married person's allowance.

It not slightly dishonest for the Financial Secretary to claim that personal allowances have been increasing and will therefore help widows when the increases are less than the rate of inflation and household costs, particularly as a result of the Budget, have been increased substantially?

I merely remind the hon. Member that the widow's pension has been increased by a record amount and that we have taken steps outside the Budget in terms of food subsidies to try to hold down the basic cost of living for those who are least well off.

asked the Chancellor of the Exchequer what instructions he has given to the Bank of England about the rôle to be played by the banking system towards property companies in financial difficulty.

None, Sir.

I appreciate the political sensitivity of the subject and the strong feelings which exist about speculation, but in any instructions that may be given will the Paymaster-General bear in mind the connection between the property industry and pension funds? Will he bear in mind that a complete collapse in the property industry would very much add to the considerable difficulties already facing many pension funds?

I shall bear in mind the facts to which the hon. Member has referred. We are in close contact with the Governor of the Bank of England, who is keeping us informed of developments affecting the property companies and their possible implication.

Are not property companies absorbing an abnormal amount of money from pension funds, which should be going into building societies to help young couples to buy their own homes? Cannot my right hon. Friend introduce legislation to insist that pension funds and unit trusts devote a large proportion of their income to building societies so that young couples can get loans?

There are regulations governing these funds and, of course, I am prepared to consider any proposal made to me.

Will the right hon. Gentleman bear in mind that, whatever ought or ought not to be the situation in the future, the present situation is that the pensions of many millions of people are heavily dependent on the point raised by my hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont)?

We are in close contact with this problem but we do not under existing law govern the investment decisions of pension funds. If people invest ill advisedly, it comes poorly from Conservative Members to recommend the Government to rescue those investors from the results of those decisions. However, this is an important problem and the fate of pension funds is of wide significance. We have that fact in mind.

Is my right hon. Friend prepared to consider other activities of so-called property companies? For example, how about those that indulge in asset stripping? They seem to get away with vast profits and to damage some aspects of British industry.

I am always prepared to consider any matter that my hon. Friend brings before me.

Will the right hon. Gentleman consider the suggestion of the hon. Member for Bassetlaw (Mr. Ashton) that he should encourage property companies to invest in building societies, and at the same time remove the fiscal disadvantage which those companies would suffer by so doing?

If the hon. Member wishes to put a proposal before me I shall consider it.

If we are to hear these pathetic pleas from investors in property companies, whether they be pension funds or anyone else, would it not be better if the Government were able to direct investment to social ends as well as to the highest rate of return and take over the insurance companies and pension funds?

I hope my hon. Friend will bear in mind that one of the things we have done is to bring down the rate of interest to assist building societies to help channel money into the buying of houses. All this is of great social importance.

Is the right hon. Gentleman aware that one of my hon. Friends has made a proposition? It appears on the Order Paper and will be debated later today.

We look forward to his speech during the debate.

asked the Chancellor of the Exchequer if he will make a statement about the Government's policy towards the indexation of national savings to protect savers against inflation.

asked the Chancellor of the Exchequer if he has yet reached a decision on action to implement the recommendations of the Page Report on National Savings.

We are considering the report of the Page Committee, including its recommendation for the experimental issue of an index-linked bond for the small saver. We will announce our decisions as soon as we can.

I thank the Paymaster-General for that slightly encouraging reply. Referring back to the previous Question, is the right hon. Gentleman aware that the most ill-advised invest- ment anyone in this country could make is not in property companies but in the Government? Will he admit that the Government are actively encouraging people to invest their money at a loss? Will he take immediate steps either to ensure that small savers get at least a positive return on their money in national savings, or to stop all advertising of this fraudulent practice?

The hon. Gentleman will know that we have improved the terms for national savings securities. The improved terms recently came into operation and we shall see how attractive they are to the public. Index linking is a question which we have under serious consideration. The House must realise that there are substantial difficulties. If index linking can be achieved there will be advantages, especially for the small savers. It is for that reason that we have the matter under serious consideration. I cannot give any promises or make any statement now.

Is any significance to be attached to the fact that this afternoon the Page Report is not available in the Vote Office? Will the right hon. Gentleman draw the attention of the Chancellor of the Exchequer regarding savings to the need for both a policy and an example in fighting inflation and improving investment?

I did not know that the Page Report was not available in the Vote Office. I am sure that it should be. It may be that during the time of the previous Government the people in the Vote Office became tired over a period of 12 months of waiting for a decision from them on what to do about the report. As for creating an example, my right hon. Friend, the Chancellor has given an example by substantially improving the terms of national savings securities.

asked the Chancellor of the Exchequer what was the total sum raised in local rates in the most recent annual period for which figures are available; and if he will express this total as a percentage of the total sum raised in national taxation and revenue duties during the same period.

The total sum raised in local rates in 1973-74 is estimated in the Financial Statement and Budget Report at £2,716 million, or 15·7 per cent. of total taxation.

Does the hon. Gentleman agree that the recent savage increases in local rates in some areas have demonstrated clearly that local rates represent about the most unfair and unjust form of taxation which has ever been invented? Will the Government say clearly whether they are investigating or considering a fundamental review of this iniquitous form of taxation?

The hon. Gentleman will know that his own Government instituted a review of sorts and issued a Green Paper in which they outlined the problems of various alternatives and indicated why they could not be adopted. We are now considering the whole problem.

Is my hon. Friend aware that the previous Government gave quite insufficient time, during the passage of the Local Government Bill, for proper discussion of the alternatives to rating? Will he urge his right hon. Friend the Lord President of the Council to set up a Select Committee to examine the alternatives?

We are now considering the whole problem. I shall bear in mind what my hon. Friend says.

asked the Chancellor of the Exchequer if he will make it a condition of any loans to the building societies that they apply the whole of the loan to the assistance of house purchasers.

The purpose of the loans is to help house purchasers, and the Government are satisfied that the terms under which they have been offered will result in a higher level of mortgage commitments and advances than would otherwise have been the case.

Is my right hon. Friend aware that it is reliably reported that by reinvestment the building societies are making a profit each month of £150,000 from the Government's loans which were made for the purpose of keeping down interest rates? Is not that a gross misuse of public funds? What will right hon. Friend do about it?

My hon. Friend should remember that the building societies have to hold some of their funds in authorised liquid assets and that their yield reflects short-term market conditions. He should also remember that the societies are nonprofit-making and that ultimately all their receipts will go to increase the societies' capacity to lend to house purchasers. As I said in my original answer, we are confident that the loans that have been offered will result in a higher level of mortgage commitments and advances than would otherwise have been the case.

Will the right hon. Gentleman now enjoin the building societies to reduce their reserve ratios to provide more money for house building?

We believe that the steps we have taken are enabling the societies to allow more money for house building without their taking action on their reserves.

asked the Chancellor of the Exchequer if he will introduce legislation to bring under stricter public supervision the investment policies of the nationalised industries pension schemes.

No. It is already the legal duty of trustees of pension funds in both public and private sectors to safeguard the interests of actual and potential beneficiaries.

Is my hon. Friend aware, however, of the considerable disquiet that is felt by the employees of nationalised industries about the uncertain nature of many investments in property companies? As it is 25 years since the statutory considerations governing the operation of nationalised industry pension schemes were drawn up, is it not about time that they were considered again?

I have no reason to believe that the trustees of nationalised industry pension funds are any better or any worse advised than those of other pension funds. Generally they are advised by the same people.

I am not asking the Chief Secretary to supervise these funds in any way, but does he not agree that the policies of the Government of which he is a member have knocked tens of millions of pounds off the value of the pension funds of the nationalised industries?

It was the policies of the previous Government in their competition and credit control that did that.