HC Deb 12 December 1966 vol 738 cc22-4
42. Mr. Patrick Jenkin

asked the Minister of Labour what representations he has received from wholesalers' organisations with regard to his decision that separate establishments comprising manufacturers' storage premises and warehouses should in future qualify for refund of Selective Employment Tax plus premium, regardless of its distance from the point of manufacture; what reply he has sent; and if he will make a statement.

Mrs. Shirley Williams

My right hon. Friend has received representations on this question from the Federation of Wholesale Organisations, the Association of Toy and Fancy Goods Wholesalers, and the National Federation of Wholesale Grocers and Provision Merchants. He replied explaining that the separate storage establishments of a manufacturing firm are classified to the same heading of the Standard Industrial Classification as its manufacturing establishments and will therefore, provided they satisfy the conditions relating to non-qualifying activities, qualify for refund of Tax plus premium.

Mr. Jenkin

Why did the Minister change his view from what was indicated by him in July? Is not this taxation by Ministerial dictate, and is it not grossly unfair to the firms which are left out of it?

Mrs. Williams

The hon. Gentleman may not be aware that there was no public statement to industry on the original view, and that it was not the case that the Ministry made it clear that it wished to consider in detail this problem, which is a technical one. I would stress that it now means that those warehouses which satisfy the non-qualifying condition can receive premiums.

Sir K. Joseph

Does not this illustrate what this side of the House pointed out forcibly during the passage of the Selective Employment Act, that the bad drafting of the Measure gives the Government a totally unconstitutional power to decide the tax burden on individuals and individual enterprises by Ministerial decision?

Mrs. Williams

No. Sir; I would not agree with that. I think it has been fairly clearly pointed out by my right hon. Friend the Chancellor of the Exchequer that there were certain anomalies in the Bill—[HON. MEMBERS: "Oh."]—and I think that the Ministry of Labour is acting in the correct tradition by looking very closely at representations made about the anomalies.

Mr. G. Campbell

Does it not also illustrate the completely arbitrary nature of the division in many cases between those who have to pay the full tax and those who are paid a premium?

Mrs. Williams

The division is based on the standard industrial classification. It is the case that certain establishments fall rather neatly between different categories in that classification.