§ 4. Mr. Ridleyasked the Chancellor of the Exchequer if he will exempt all fixed-price contracts for building and civil engineering works which were existing on 3rd May, 1966, from the operation of the Selective Employment Tax.
§ Mr. CallaghanNo, Sir. I would refer the hon. Gentleman to what I said in the Second Reading debate on the Selective Employment Payments Bill on 23rd June.
§ Mr. RidleyThe Chancellor having conceded the principle of this, does he not think that it is extraordinarily unfair that those who have contracts from the Government or local authorities are to get at least some refund, whereas those who have not but who have contracts with private employers are to get none? Does not the right hon. Gentleman agree that the only equitable way to put this matter right is to legislate that all such contracts will receive a refund?
§ Mr. CallaghanNo, I do not think so. The Government have indicated what their practice will be. We have debated it at great length. It is for private contractors to follow suit, if they think the practice is reasonable.
§ Sir Frederic BennettThe Chancellor has now said that the Government have said what the practice of Government Departments will be, but no doubt he will recall that he earlier said only what the principle will be in taking decisions. Will he undertake to give some details, because at present varying decisions are being taken by authorities and by Government Departments? Surely it is time that we had some more general but specific lead.
§ Mr. CallaghanIt is a general question. If the hon. Gentleman has any particular points in mind, no doubt he will put them to me.
§ 5. Mr. Biffenasked the Chancellor of the Exchequer what is the estimated total payment of the Selective Employment Tax which will be borne by manufacturing industry before the payment of premiums commences.
§ Mr. MacDermotAbout £140 million.
§ Mr. BiffenWill the hon. and learned Gentleman assure us that a statement will be made from the Treasury before the Recess about the attitude which should be taken by the banks towards any request for credit to meet this kind of figure?
§ Mr. MacDermotThat is the subject of a later Question.
§ Mr. NottWill the hon. and learned Gentleman, even at this late stage, consider not paying a premium to manufacturers, which is an incentive to them to hoard labour, and instead use the proceeds for some kind of rebate to development areas and outlying districts?
§ Mr. MacDermotWe shall have an opportunity to debate that proposal on the Selective Employment Payments Bill.
§ 27. Mr. Ridleyasked the Chancellor of the Exchequer what will now be the net yield of the Selective Employment Tax in the first year and in a normal year, taking into account all the concessions he has so far made.
§ Mr. CallaghanOf the order of £300 million in 1966–67 and £220 million in a full year.
§ Mr. RidleyIs not the Chancellor ashamed of himself for having brought in a tax which is so ill thought out that he has had to chop £20 million off its annual yield before we ever start to get to the Committee stage of enacting permanent legislation?
§ Mr. CallaghanThe point that arises, apart from the castigation of my character, is that with a new tax it is obviously not possible to make a precise estimate. A second point is that if one makes concessions, the yield is bound to be less.