Speeches, Interviews & Other Statements

Margaret Thatcher

HC PQ [National Finance]

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [740/218-40]
Editorial comments: MT spoke at cc226, 228, and 236.
Importance ranking: Minor
Word count: 8407
Themes: Monetary policy, Taxation
[column 218]


Civil Service (Clerical Officer Grade)

1. Mr. Onslow

asked the Chancellor of the Exchequer why he has authorised a lowering of the minimal formal qualification for entry to the examination for clerical officer grade.

The Chief Secretary to the Treasury (Mr. John Diamond)

There never have been such qualifications.

Mr. Onslow

How, then, does the Minister explain Press advertisements which say that normally the Civil Service Commission insists on five O-levels as a minimum qualification, but that now the standards have been lowered? Is he utterly indifferent to the watering down that this involves in the Civil Service?

Mr. Diamond

The hon. Member is on an altogether different point. The Question related to qualification for entry to the examination. The Answer I gave was precise and accurate. The point that the hon. Member is now on deals with the time after a candidate has been taken on—quite a different situation. There is a seven months' study of the candidate's behaviour in employment, which is reckoned to be equivalent to one further O-level.

£ Sterling (Purchasing Power)

2. Mr. Stratton Mills

asked the Chancellor of the Exchequer what is the purchasing power of the £ sterling compared with 16th October, 1964.

The Chancellor of the Exchequer (Mr. James Callaghan)

On the basis of the change in the index of retail prices, the purchasing power of the £, taken as 20s. in October, 1964, was about 18s. 3d. in December, 1966, the latest date available.

[column 219]

Mr. Mills

Does not the figure cause the Chancellor of the Exchequer to hang his head in shame at that shoddy performance? Would he agree that while prices have been held back in the past eight months the flood gates of price increases will open substantially after July?

Mr. Callaghan

There is no doubt that the success of the Government's prices and incomes policy has had the effect of slowing down the increase in the cost of living very substantially. But although the retail price index went up by 9½ per cent. in the period, total earnings went up by 11 per cent. But I see no particular value in that kind of progress, and hence the reason for the Government's present policy.

Mr. Lipton

Would not the purchasing power of the £ sterling be immensely improved if we did not give scores of millions of £s away every year to the Government of Northern Ireland?

Savings Certificates (Unit Trusts)

3. Mr. Stratton Mills

asked the Chancellor of the Exchequer if he will seek power to introduce a new type of savings certificate with one-third of the fund invested in unit trusts.

Mr. Callaghan

This is a variation on the idea of a State unit trust, and I will see that it is kept in mind during the studies of a State unit trust which are still going on.

Mr. Mills

Is it not desirable to associate the great mass of savers with the profitability of British industry? Will the right hon. Gentleman look carefully at this suggestion, particularly bearing in mind the importance of linking the National Savings Movement with some method of keeping pace with inflation?

Mr. Callaghan

I am all in favour of everyone being concerned with the progress of British industry but National Savings were originally designed to encourage people to invest in Government savings and there are feelings in the Movement and among the voluntary workers about that. I would not want to pressurise them if they decided that they preferred to stick to the traditional means of saving.

Mr. Grant

Why has the right hon. Gentleman taken so long to make up his [column 220]mind on the idea of a national unit trust to be run by the National Savings Movement? It is over two years since the Wider Share Ownership Council put the idea to him.

Mr. Callaghan

The Wider Share Ownership Council does not run the National Savings Movement. We are dependent on the voluntary work of a great many people in the Movement and I would not want to put pressure on them in this matter if they were wholly resistant to the idea.

Government Contracts (Racial Discrimination)

4. Mr. Winnick

asked the Chancellor of the Exchequer what progress has now been made in getting a clause inserted in Government contracts that will prevent any discrimination on grounds of colour and race; and if he will make a statement.

52. Mr. Chapman

asked the Chancellor of the Exchequer what progress was made at the meeting of the National Joint Advisory Council on 25th January about a non-discrimination clause in Government contracts; and whether Her Majesty's Government now intends to introduce such a clause as regular practice and to associate the Race Relations Board with enforcement of it.

Mr. Callaghan

The best means of discouraging racial discrimination in employment were further discussed at the National Joint Advisory Council meeting on 25th January. The matter is now being considered further by the Government.

Mr. Winnick

Is my right hon. Friend aware that the T.U.C. and C.B.I. seem to have rejected such a clause? If so, is this not deplorable? Will the Government give a promise that, regardless of what the C.B.I. and the T.U.C. say, the Government will try and put such a clause into Government contracts?

Mr. Callaghan

My hon. Friend should ask my right hon. Friend the Minister of Labour about the discussions he has conducted with the C.B.I. and the T.U.C. It is for the Government to make up their own mind about what their attitude should be on the question of Government contracts, and we shall do so.

[column 221]

Mr. Chapman

Will my right hon. Friend go a little further and say that the Government's view is that it would be a very good thing if we could agree on the writing-in of such a clause into Government contracts, because this involves a principle on which hon. Members on this side feel very strongly.

Mr. Callaghan

I hope that the whole House feels strongly on the issue of principle. I believe that we do. But this is a matter for consultation with those concerned as to the best method of enforcing the principle and that is what these rather long-drawn-out discussions are about. I hope that they can soon be brought to a conclusion.

Mr. Ronald Bell

Will the right hon. Gentleman pay far more attention to the principle of freedom than to the obvious bias of his hon. Friends?

Mr. Callaghan

I am not in favour of freedom which excludes people from sharing the rights of all citizens in this country purely on ground of colour.

Customs and Excise (Electronic Data Processing Techniques)

5. Mr. Onslow

asked the Chancellor of the Exchequer what studies are being made of the application of electronic data processing techniques to the handling of air freight by Her Majesty's Customs and Excise.

Mr. Diamond

Customs are co-operating with the major United Kingdom and foreign airlines in a joint expert study of the possibilities of applying electronic data processing techniques to the handling and Customs clearance of air freight, with particular reference in the first instance to Heathrow Airport.

Mr. Onslow

When are these studies likely to be completed? Does the right hon. Gentleman realise that, if electronic data processing is not introduced, in about three years' time Heathrow air freight is likely to come to a standstill? May we have an assurance that, whatever action the Customs and Excise takes, it will remember that the new techniques should be fully compatible with those that the airlines want to use?

Mr. Diamond

It is because of this that we have taken the initiative in setting up this examination. It is [column 222]expected that the examination will take about 12 months to complete and the growth in traffic at London Airport is, as the hon. Gentleman indicated, likely to expand very considerably.

Mr. Hugh Jenkins

Would not the best way to prevent freight piling up at Heathrow be to build a new airport elsewhere?

Mr. Diamond

That is a different matter.

Statistical Services

6. Mr. Marquand

asked the Chancellor of the Exchequer whether he will set up a Standing Committee on Social Statistics under the chairmanship of the Central Statistical Office, following the recommendation contained in paragraph 86 of the Fourth Report of the Estimates Committee on Government Statistical Services.

20. Mr. Kenneth Lewis

asked the Chancellor of the Exchequer what improvements he proposes to make in Government statistical services and in the status of the Central Statistical Office following the recommendations of the Fourth Report of the Estimates Committee on Government Statistical Services.

Mr. Diamond

I would refer the hon. Gentleman to the reply given by my right hon. Friend the Prime Minister to my hon. Friend the Member for West Lothian (Mr. Dalyell) on 20th January.—[Vol. 739, c. 156–157.]

Mr. Marquand

Will my right hon. Friend at least agree that the kind of economic planning to which this party is committed cannot be properly carried out unless we have a considerable improvement in the quality of the social statistics available to the Government? Will he, therefore, examine this part of the Estimates Committee's proposals very favourably?

Mr. Diamond

That is one element of the very full consideration which this important proposal merits.

Mr. Lewis

Since the National Plan foundered partly because the statistics were completely inadequate, if we are to have another plan should not the Government get the statistics right? This is an urgent matter.

[column 223]

Mr. Diamond

Certainly. It is always desirable to get statistics as accurate as possible.

Industry (Government Investments)

7. Mr. Ridsdale

asked the Chancellor of the Exchequer what net return he expects to receive from capital the Government invests in industry.

Mr. Callaghan

The return will vary according to whether the investments are undertaken for purely commercial purposes or for wider economic or social reasons?

Mr. Ridsdale

Is the right hon. Gentleman satisfied with the net return of of capital in the nationalised industries? Is he aware that the net return of the National Coal Board is 03 per cent.? What is he doing about its?

Mr. Callaghan

The Government, since we took office, have put the finances of the National Coal Board and especially its capital structure on a much more satisfactory basis. The general progress and productivity in the industry is a matter for congratulation to all associated with it. In their policy for the nationalised industries generally, the Government are requiring that new investment should be seen to earn a reasonable return although, of course, the older investment naturally cannot be expected in all circumstances to earn the same level of return.

Invisible Exports

8. Mr. Ridsdale

asked the Chancellor of the Exchequer what is the total amount the United Kingdom has received for invisible exports, in the last three months, respectively; and how this compares with 1964 and 1965.

Mr. Callaghan

£770 million gross credits in July-September, 1966, compared with £694 million and £760 million in the corresponding period of 1964 and 1965. Figures for individual months are not available.

Mr. Ridsdale

Will the right hon. Gentleman make these figures more readily and regularly available monthly, and not on a quarterly or half-yearly basis?

[column 224]

Mr. Callaghan

I have considered that suggestion but a large part of these figures are derived from sampling and I do not think that we should trouble industry more than necessary on this basis. But I emphasise the implication of the hon. Gentleman's supplementary question—that we should not judge our balance of payments figures solely on a month-by-month basis but take a longer view.

Northern Ireland (Government Contracts)

10. Mr. McMaster

asked the Chancellor of the Exchequer if he will review the percentage of all classes of Government contracts awarded to firms in Northern Ireland so that steps may be taken where possible to increase the percentage and rate of allocation of such work in order to stem the present alarming rise in unemployment.

Mr. Diamond

Firms in Northern Ireland, together with those in development areas in Great Britain, are already treated preferentially when Government contracts are awarded.

Mr. McMaster

Is the right hon. Gentleman aware of the recent very sharp rise of unemployment in Northern Ireland and of the anxieties in both new industries and in traditional industries, such as shipbuilding, due to Government restrictions and uncertainly? Will he take steps to see that the unemployment in Northern Ireland, which is higher than anywhere else in the United Kingdom, does not rise further sharply?

Mr. Diamond

I am aware of the circumstances and of the anxieties which exist. No one is less complacent about the situation than I. Nevertheless, I am sure that the hon. Gentleman will want to know that the figures of unemployment in Northern Ireland in 1965 and 1966 were the lowest for the past 10 years.

Mr. McNamara

What steps is the Stormont Parliament taking to deal with the situation? Will my right hon. Friend guarantee that no Government contracts wil be awarded to any firms in Northern Ireland which employ any sort of political or religious discrimination in employment practices?

Mr. Diamond

My hon. Friend is quite right in drawing attention to the fact that [column 225]the prime responsibility rests with the Northern Ireland Government. As to the latter part of his supplementary question, my right hon Friend has already indicated the way the Government think on these matters.

Mr. Chichester-Clark

Leaving aside the irrelevance of the last supplementary question, will the right hon. Gentleman bear in mind that a very serious situation could arise and that the unemployment rate might well rise next month to about 9 per cent.?

Mr. Diamond

Of course I have these problems very much in mind and realise that a serious situation could arise. But the Government are giving this continual thought in regard to both the new and traditional industries, mentioned by the hon. Member for Belfast, East (Mr. McMaster). But I would be the last to agree that it is irrelevant to have regard to the Northern Ireland Government's prime responsibility for unemployment.

Sir Knox Cunningham

Is the right hon. Gentleman aware that the economic policy of the United Kingdom rests with the Westminster Government? Is he also aware that the unemployment figure today in Northern Ireland is 8 per cent.?

Mr. Diamond

No one is unaware of our responsibilities, and I thought that I had already indicated—perhaps the hon. and learned Gentleman did not hear—that the average monthly figure for unemployment of 31.2 thousand during 1966 was the lowest figure, bar 1965, for the last 10 years.

Mr. McMaster

I beg to give notice that, in view of the unsatisfactory nature of the reply, I shall seek to raise this matter on the Adjournment at the earliest opportunity.

National Savings

11. Mr. Edward M. Taylor

asked the Chancellor of the Exchequer what net increase in National Savings took place in the year 1966; and what were the comparable figures for 1965, 1964, and 1963, respectively.

Mr. Callaghan

There was a decrease of £38 million in 1966 compared with increases of £74 million, £357 million, £315 million in 1965, 1964, 1963 respectively. This was owing to the large maturities [column 226]of defence bonds falling due last year. If undistributed interest and defence bond maturities are excluded there was an increase of £10 million in 1966.

Mr. Taylor

What steps is the Chancellor taking to rectify this alarming situation? Can he say in what previous year there was a net drop in National Savings?

Mr. Callaghan

We are already taking steps which are proving very successful, namely, the return on the National Savings Certificate which is just about the best return anyone can get on an investment at present. This is having a profound effect on the increase in National Savings during the course of the current year.

Mrs. Thatcher

Is James Callaghanthe Chancellor satisfied with the present amount being saved through National Savings, bearing in mind that the amount invested at the end of 1966 was less than at the beginning of the year, and that this is the first time for a decade that this has happened?

Mr. Callaghan

As I said, if one excludes undistributed interest and defence bond maturities there was an increase in 1966. Of course I am not satisfied with the level of National Savings. I should like a higher level of saving all round, and that is one reason for the very substantial yield that anyone can now get on the National Savings Certificate.

Mr. Ian Lloyd

Has the Chancellor perchance seen the advertisement for Premium Bonds on many hoardings which says, “Have a flutter in the national interest” to which there is appended the phrase “You cannot lose” ? Does he not think that this is a most lamentable bedfellow of the national interest, and would he not agree that in this form of national savings, as in any form of National Savings, the Government would be honest to indicate what the rate of return in real terms would be after depreciation of the citizen's capital has taken place?

Mr. Callaghan

This was introduced by Mr. Harold Macmillan when he was Chancellor and I am sure that he had full regard to all of these moral considerations. I am very happy to profit from this.

[column 227]


12. Mr. Gresham Cooke

asked the Chancellor of the Exchequer by how much the total burden of taxation, central and local, will have increased in the financial year 1966–67 as compared with the calendar year 1964.

Mr. Callaghan

On the basis of the Financial Statement, modified by the Regulator in July, total taxation would increase by about 30 per cent., as compared with an estimated increase of 11 per cent. in gross domestic product up to the end of the first half of 1966–67.

Mr. Gresham Cooke

Would the Chancellor confirm that this amounts to nearly £2,000 million a year? If this is so, does it not mean that it is about £2 a week per family, and is this not one of the most depressing things for the British public, depressing industrial production, and depressing overtime earnings and altogether having an unsatisfactory effect on the country?

Mr. Callaghan

I would not like to confirm the hon. Gentleman's figures but there was a deliberate choice made by the country, and the party opposite when it was in Government, towards the end of its life, that there should be a shift from an improvement in the private standard of life of the individual to an improvement in the collective standards, as expressed in housing, hospitals, and many other ways, It is the job of the Government to try to establish a balance between the improvement in the private standard of life and the improvement in the collective standard. Under the policies that have been followed we have made a very substantial shift, and it is a matter for constant debate as to how far that shift should go.

Mr. Barnett

Would not the Chancellor agree that the best way to prevent increases in taxation and to get the increase in social service expenditure that most of us want is to increase the rate of growth much more than we have in the past? Would he perhaps reverse the priorities that he has given to growth in the economy?

Mr. Callaghan

I absolutely agree that the first priority for the country is to [column 228]get a healthy rate of growth. We have run a deficit for so many years that we have had to enthrone the balance of payments as the prior objective. The country will be healthy only when we combine a balance of payments surplus, a substantial rate of growth and full employment, and this must be the constant objective.

Mrs. Thatcher

James CallaghanThe Chancellor was very verbose in his last but one supplementary answer. In basic English did it mean that this Government planned an increase in taxation?

Mr. Callaghan

No. What it meant is what I said, that a different balance had been struck for the last three years, between improving the private standard of life and improving the collective standards of life. I hope that the hon. Lady can understand that.

Government Administration Services (Cost)

13. Mr. Gresham Cooke

asked the Chancellor of the Exchequer by how much the cost of central Government administration services will have increased in the financial year 1966–67 as compared with the calendar year 1964.

Mr. Diamond

I regret that this information is not available in this form. The cost of Departmental administration associated with roads, housing, environmental services, law and order, fire services, education, health, social security, tax and other financial administration and the administration of the National Insurance Funds was £226.1 million in 1964–65, and is estimated to be about £38 million higher in 1966–67.

Mr. Gresham Cooke

Will the Chief Secretary look at the Estimates Memorandum, where it would appear that the costs of central administration have gone up 20 per cent. in the last two years? Is this likely to be added to by the Land Commission, S.E.T., and so on, and furthermore is that not a heavy increase?

Mr. Diamond

If the hon. Gentleman will study the Answer that I have given—I am sorry that it could not be as short as I would have liked—he will see that the growth for those two years was at the rate of 3½ per cent. per annum.

[column 229]

Selective Employment Tax

14. Mr. Wingfield Digby

asked the Chancellor of the Exchequer what would be the cost in a full year of abolishing Selective Employment Tax for the whole South-West area.

Mr. Diamond

This would not be administratively practicable. In the South-West Planning Region the tax is expected to yield £65 million in a full year and premium refund payments will be about £49 million.

Mr. Digby

Will the right hon. Gentleman agree that this falls particularly unfairly on this region? Will he bear this in mind in future, on other occasions?

Mr. Diamond

While not necessarily agreeing with the first part of the hon. Gentleman's remarks, I am sure that he will realise that my right hon. Friend has said on many occasions that he has the effect of this tax very much in mind and is examining it.

Mr. Bessell

May I ask the Chief Secretary whether he appreciates that in an area of high unemployment, such as the South-West, this tax is a particular hardship? Will he therefore look at the matter again in the light of the Government's stated policy on regional development?

Mr. Diamond

I will repeat what my right hon. Friend has said many times, that he is already looking at this in the light of regional development.

Dr. John Dunwoody

Would my right hon. Friend look at this problem with special regard to the situation in the development areas, not looking at the South-West region as a whole but realising that there are special problems of persistently high unemployment in some of the development areas in this region?

Mr. Diamond

My right hon. Friend has already said that he is looking at the whole of this problem, but my hon. Friend will realise that the Government's policy with regard to development areas is already a full and effective one.

16. Mr. G. Campbell

asked the Chancellor of the Exchequer if he will consider [column 230]the introduction of a value-added tax and the abolition of the Selective Employment Tax.

Mr. Callaghan

I see no close connection between the two. Value-added tax would be a general tax on consumption, whereas the Selective Employment Tax primarily combines a tax and a premium on employment designed to raise revenue, and in the long term to achieve a shift between services and manufacturing industries.

Mr. Campbell

Does the Chancellor recognise that the existence of a complicated Selective Employment Tax may hinder real reforms in taxation which entry into Europe will probably make necessary in indirect taxation?

Mr. Callaghan

All forms of taxation, I find, are complicated, but I would be inclined to have a wager with the hon. Gentleman that the value-added taxation is a darned sight more complicated than S.E.T.

29. Mr. Frank Allaun

asked the Chancellor of the Exchequer if he has now reviewed the effect of the Selective Employment Tax on the employment of part-time workers, particularly the elderly, married and disabled and if he will make a statement.

Mr. Callaghan

The tax has been in operation for no more than five months and I am continuing to watch its effects on part-time and other workers.

Mr. Allaun

I thank the Chancellor for that reply, but may I ask whether he is aware that I know personally many old-age pensioners and part-time workers who have lost their jobs as a result? Is that a good thing either for the country or for the individual?

Mr. Callaghan

One of the difficulties about the present situation is that it is rather hard to distinguish between those who may lose their jobs as a result of this and those who may lose their jobs as a result of the measures taken in July. We must be careful to distinguish between the two before condemning the Selective Employment Tax—[Interruption.] The hon. Gentleman has said in the past that he supports the meaures: taken in July. I hope that he is not ratting on that now. [column 231]As to the situation generally, I am considering the whole position, and any evidence which my hon. Friend the Member for Salford, East (Mr. Frank Allaun) has, I shall be glad to consider further.

European Economic Community (Tax System)

15. Mr. Channon

asked the Chancellor of the Exchequer if he will take steps to harmonise the British system of taxation with that prevalent among the Members of the European Economic Community.

Mr. Callaghan

It is too early to say what modifications in our tax system might be necessary to harmonise with the tax systems of the members of the European Economic Community.

Mr. Channon

Since the Prime Minister has told us that the Government mean business about their negotiations with the Community, would it not be a helpful thing if the Government were to show that they meant business by harmonising some of our taxation systems?

Mr. Callaghan

We might find that we have harmonised with something that was disharmonised. There are still a great many discussions to take place in the E.E.C. before they reach finality about the future of their tax system.

Mr. Whitaker

Will my right hon. Friend bend his efforts towards providing more money for social security, which in many respects is higher in all the Common Market countries than it is in Britain?

Mr. Callaghan

I am not sure about the general level of social security. There is a different way of financing social security in the European Community, and it would be a matter for debate as to whether we should want to move over to that system.

Service Industries (Taxation)

17. Mr. G. Campbell

asked the Chancellor of the Exchequer when he will change his policy which discriminates against service industries in taxation matters, in view of the adverse effects of this policy on large areas of Scotland and certain regions of England and Wales.

Mr. Diamond

The concentration of tax incentives and other benefits on manufac[column 232]turing industry will encourage the growth of the economy as a whole, including Scotland and the development areas in England and Wales.

Mr. Campbell

Is it the Chancellor's intention to reduce the number of jobs in service industries in the north of Scotland?

Mr. Diamond

It is my right hon. Friend's intention to encourage the strength of the economy so as to benefit all people engaged in all parts of the country.

Mr. Nott

Is the Chief Secretary aware that when he said that the Government's regional policy was effective, he could not have been applying himself to certain regional development areas in the South-West, where unemployment is now higher than ever before? Does this really mean that the Government's regional policy is effective?

Mr. Diamond

I was referring, for example, to the fact that with regard to investment grants, the differential in favour of the development areas is very substantial indeed, 45 as again 25 per cent.

Government Expenditure

18. Mr. Ridley

asked the Chancellor of the Exchequer the estimated percentage increase in Government expenditure for 1967–68 over 1966–67.

Mr. Callaghan

I must ask the hon. Member to await the Vote on Account.

Mr. Ridley

Would the Chancellor agree, however, that the increase in Government expenditure should not be greater than the proportionate increase in the growth of the gross national product? Would not that be a principle with which he could agree for the coming financial year?

Mr. Callaghan

No, I would not agree with it for this year or for any other year. In some years it should exceed it, and in some years it should be less than it. We are reverting, I think, to a little discussion which we had on an earlier Question.

Royal Mint (New Site)

19. Mr. Edward M. Taylor

asked the Chancellor of the Exchequer if he will now make a statement on the site chosen [column 233]to build the proposed new Royal Mint; and if he will give an estimate of when the Mint will be in operation and how many persons will be employed by it.

56. Mr. Anderson

asked the Chancellor of the Exchequer what consideration is being given in the siting of a new Royal Mint to the claims of Wales as a suitable venue; whether ordnance factory sites have been considered; and whether, in view of the imminent closure of the Royal Naval Propellant Factory at Caerwent and the considerable acreage of land owned there by Her Majesty's Government, consideration will be given to its use as a site for the Royal Mint.

57. Mr. Abse

asked the Chancellor of the Exchequer, in view of the serious congestion of the existing buildings of the Royal Mint and the need for expansion in the light of intended change to decimal coinage, what consideration is being given to the siting of a new Royal Mint in Wales; and whether, in considering any possible site, account will be taken of suitable sites in Monmouthshire where land is already owned by Her Majesty's Government.

Mr. Diamond

The difficult issues involved are under consideration but no decisions have been taken.

Mr. Taylor

Before arriving at a decision, will the right hon. Gentleman look closely at the Act of Union of 1707, which states clearly that Scotland joined with England only on the strict understanding that the Mint would be continued? Will he also bear in mind that unemployment in Scotland is now increasing at twice the rate for the rest of the country?

Mr. Diamond

I assure the hon. Member that all relevant matters will be taken into account, and, on his special request, the first matter which he has mentioned.

Mr. Anderson

Will my right hon. Friend similarly ensure that the claims of Monmouthshire are not overlooked in the light of its high unemployment figures and its easy communications, including the M4, the attractiveness of the area and the large amount of vacant land owned by the Government such as at Caerwent?

Mr. Diamond

I am grateful to my hon. Friend for giving me these further matters for consideration.

[column 234]

Mr. Abse

Will my right hon. Friend, without having to turn back to past centuries, look at the present conditions in Wales and note its great metallurgical tradition and, in particular, the special claims of the fine new town of Cwmbran. which can provide all the facilities which could possibly be needed?

Mr. Diamond

Nobody could be more impressed than I am with the relevance and weight of these various arguments.

Mr. David Steel

Will the Chief Secretary study the Government's plans for industrial development of the Borders of Scotland and note how the employment structure of the Mint would be eminently suitable for this part of the country?

Mr. Diamond

Notwithstanding what is becoming an apparent coincidence between the arguments from the respective constituencies, yes, Sir.

Taxation (Collection Costs)

21. Mr. Tilney

asked the Chancellor of the Exchequer what criterion he lays down as to the percentage which is reasonable for the cost of collection of a tax; and whether in his calculations he takes into account the cost to industry of personnel employed by industry solely for the collection of that tax.

Mr. Diamond

Because of the varying circumstances, there is no single criterion of cost. In considering taxation policy the Government take into account the costs falling on industry as well as those falling on public funds.

Mr. Tilney

Will the Chief Secretary bear in mind that the cost of the collection of tax in the United States of America is immensely less than it is in this country? Does he not consider that the collection of tax should be as simple as possible?

Mr. Diamond

I have always thought that the collection of tax should be as simple as possible and I put forward this argument when we introduced Corporation Tax.

Budget (Representations)

22. Mr. Dalyell

asked the Chancellor of the Exchequer whether, in the light of the written representations he has received from the Institute of Directors on [column 235]the subject of pre-Budget tax secrecy, he will have wider consultations before finalising his tax plans.

Mr. Callaghan

I receive representations before the Budget from a wide range of interests and when appropriate they are discussed with those who submit them. I welcome these representations and study them with great care, but I do not think it would be helpful to interpose a new body such as the Institute has suggested.

Mr. Dalyell

Does my right hon. Friend think that all the secrecy that surrounds Budget decisions is really necessary?

Mr. Callaghan

Broadly, yes, although I never like to over-emphasise the importance of the Budget in the economic scheme of things. It is a national sport in which most people disagree with me. On the question of confidentiality, however, I think that broadly it must be maintained.

Mr. Bruce-Gardyne

Will the Chancellor bear in mind in particular any representations which are made about the level of Corporation Tax, bearing in mind especially that any increase in the level of this tax would have a most damaging effect on the falling level of manufacturing investment?

Mr. Callaghan

That seems to me to be a rather different proposition, but I assure the hon. Member that I have had a great many representations on this and on many other matters.

Decimal Currency

23. Mr. Channon

asked the Chancellor of the Exchequer how many protests he has received in the last month against the use of the pound unit for decimal currency.

Mr. Callaghan


Mr. Channon

Would not the Chancellor agree that whether or not he has received only 33 representations, there is overwhelming evidence that the vast majority of people concerned in this issue would far prefer the 10s. unit than the pound? Will the Government be prepared to reconsider their decision?

Mr. Callaghan

No, Sir, I do not agree with that on the basis of the correspondence which I am getting. I have [column 236]had an analysis made. I agree that there are a great many vocal lobbies on the subject—indeed, few subjects arouse greater interest—and a great many views are expressed to me. I think, however, that most of the case that is made for the 10s. unit is based on the initial period of three months and the question of how easy it will be to assimilate it. I do not think that when deciding the long-term nature and future of the coinage, it should be determined on the basis of three months' associability.

Mr. G. Campbell

Will the Chancellor reconsider very seriously the Treasury's present preference, because it would be expensive and would waste valuable time to have to make this change later when almost everyone in the country will be favouring a 10s. unit?

Mr. Callaghan

I am not aware of this. I know that there are a lot of lobbies about the subject, but my information is, and my correspondence shows, that the general public on the whole prefer the pound and the penny—[Hon. Members: “No.” ]—I am referring to the general public—as the basis of any coinage that will exist.

Mr. Pavitt

Do the protests received by my right hon. Friend include those of the whole of the Co-operative movement, including 800 regional societies?

Mr. Callaghan

I cannot remember, but probably they do—almost certainly, I dare say, because the traders have made up their minds that the general public cannot understand the difference between 10s. and the pound. That is a view which, on the whole, the general public does not share.

Mrs. Thatcher

Are we to understand from James Callaghanthe Chancellor's previous replies that his mind is not entirely closed on this matter and that he will reconsider it if sufficient evidence is presented to him that the 10s. unit would be preferable to the pound?

Mr. Callaghan

The Government have issued a White Paper on the subject and that is the Government's policy. So far, no arguments have been adduced that would warrant any suggestion that the Government should change their mind on this matter. A great deal of lobbying is going on, but the arguments stand. I hope that the advocates of the 10s. unit will read the debate in another place [column 237]yesterday, when they will see how strong is the case.

Mr. Channon

In view of the unsatisfactory nature of the reply, I beg to give notice that I will raise the matter at the earliest opportunity.

Disabled Employees (Taxation)

24. Mr. Barnett

asked the Chancellor of the Exchequer if he will grant a tax allowance in respect of a proportion of their home expenses, to disabled employees who do part of their work in their own home.

Mr. Diamond

I have noted my hon. Friend's suggestion, but my right hon. Friend cannot anticipate his Budget statement.

Mr. Barnett

Would not the Chancellor agree that this is another example of the unfair working of the effect of the tax system on employees as opposed to employers or self-employed under Schedule D, where this sort of expense would be allowed? When drafting his Finance Bill, would my right hon. Friend consider making this sort of relief to a section of the community who already suffer enough, and will he, perhaps, look also at the general question?

Mr. Diamond

My hon. Friend will know from his great and professional knowledge of these matters that this is a subject which has been looked at many times but that it has never been found possible to give this kind of relief.

Mrs. Knight

In framing his Budget proposals, will the Chancellor also bear in mind the problems of the disabled housewife, who bears many fiscal difficulties which could be relieved as well as physical disabilities which cannot?

Mr. Diamond

One of the problems is that the proposal put to me by my hon. Friend the Member for Heywood and Royton (Mr. Barnett) is only one of the many proposals which are quite properly canvassed in connection with disabled people.

Football Pool Winnings (Capital Gains Tax)

25. Mr. Fisher

asked the Chancellor of the Exchequer whether he will seek to make football pool winnings liable to the Capital Gains Tax.

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Mr. Diamond

No, Sir, because they are not derived from assets. We deal with football pools by charging Pool Betting Duty at the rate of 25 per cent. of the stake money.

Mr. Fisher

Is the right hon. Gentleman aware that in the United States of America, for example, every form of capital gain is subject to tax? Why, in this country, should furniture, pictures, and that sort of thing be considered fiscally, and apparently socially, more reprehensible than football pool winnings?

Mr. Diamond

I have already explained to the hon. Gentleman the reason why this, not being an asset, is not subject to Capital Gains Tax. I am most grateful to him for his reminder that in the United States there has been a Capital Gains Tax for a very long time, and with wider application. Perhaps he would remind his right hon. and hon. Friends of that.

Mr. Lubbock

Is the right hon. Gentleman aware that when we on this bench introduced an Amendment to the 1965 Finance Bill to give effect to this proposal, the party of which the hon. Member for Surbiton (Mr. Fisher) is a member voted against it? In spite of that, will he reconsider his decision not to discuss the taxing of capital gains on pools winnings since it is irrelevant from the point of view of the recipient whether it is an asset or not?

Mr. Diamond

It is not irrelevant, from the point of view of having a sensible and acceptable tax, that it should work on principles which are well understood, notwithstanding the inconsistencies of hon. Gentlemen opposite.

Regional Hospital Boards (Capital Allocations)

26. Mr. Thorpe

asked the Chancellor of the Exchequer whether he will now allow regional hospital boards to carry forward unspent capital allocations from one year to the next.

Mr. Diamond

No, Sir, because this would be inconsistent with Parliamentary control of annual expenditure.

Mr. Thorpe

Is the right hon. Gentleman aware that very often vital capital [column 239]projects in hospitals cannot be completed within a particular fiscal year, and a hospital board has to decide whether to return the money to the Treasury or use it for a minor project such as asphalting a back path or exit? Is not that sort of nonsense a piece of official bumbledom about which people in this country are getting rather angry and could he look into the matter?

Mr. Diamond

This matter has been looked at carefully and sympathetically lest the kind of undesirable attitude which the hon. Gentleman described should prevail. I assure him that when I look at these matters in carrying out my responsibility to this House in connection with public expenditure, I regard these problems with considerable sympathy.

Sir J. Vaughan-Morgan

Why is the quinquennial basis all right for universities, but not for hospital boards?

Mr. Diamond

That does not affect the issue. We are not talking about a quinquennial basis for planning. The grant to the University Grants Committee is subject to exactly the same kind of Parliamentary control as that applied to capital expenditure for hospitals.

Gold (Price)

27. Mr. St. John-Stevas

asked the Chancellor of the Exchequer if he will make a statement of Government policy on proposals to increase the price of gold.

Mr. Callaghan

I would refer the hon. Gentleman to my statement in the House on 17th January.—[Vol. 739, c. 31–4.]

Mr. St. John-Stevas

Whatever reservations I may have about the Chancellor's fiscal policy, I am not unsympathetic to the statement which he made. Will he take this opportunity of telling the House his views on how the London gold market is likely to be affected by today's French abolition of exchange control?

Mr. Callaghan

It is a little early to say, but the London gold market is well established. It serves a valuable purpose recognised widely throughout most countries, and I am sure that it will continue in that way.

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Mr. Barnett

Will the Chancellor make it clear that playing about with the price of gold is a poor substitute for a new reserve currency?

Mr. Callaghan

I am happy to say that, once again; I have said it very forcefully in the past, and I have no hesitation in repeating that view.

28. Mr. Bruce-Gardyne

asked the Chancellor of the Exchequer whether, following the London meeting of the Group of Ten, there has been any change in the decision to exclude the price of gold from the agenda of the Group's discussions; and what steps the Government has taken to achieve agreement on a contingency plan for credit creation in time for the next annual general meeting of the International Monetary Fund.

Mr. Callaghan

The answer to the first part of the Question is “No Sir” . As to the second part, I welcome the progress made so far towards a contingency plan, and shall continue to work for agreement on it.

Mr. Bruce-Gardyne

I thank the Chancellor for that most informative reply. In regard to his earlier statements about the price of gold, will he agree that they have been contradicted by a number of authoritative views, including those of the President of the Board of Trade? Will he not agree further that in the Group of Ten, the Treasury's traditional technique of hanging on to the coat-tails of the United States Treasury is hardly likely to commend itself to our prospective partners in the Common Market?

Mr. Callaghan

It would be unfortunate if anyone deduced from the hon. Gentleman's remarks that there is any general desire to increase the price of gold. As far as I know, the majority of countries in the European Economic Community are strongly opposed to it.