HC Deb 17 May 1966 vol 728 cc1109-14
27. Mr. Wolrige-Gordon

asked the Chancellor of the Exchequer what will be the position of the fishing industry in relation to the Selective Employment Tax.

Mr. Diamond

As in the case of shipping, employers in the fishing industry who pay the tax will receive a refund.

Mr. Wolrige-Gordon

Is the Chief Secretary aware that almost the least planned for victim of this hasty, ill-considered and unplanned tax has been the fishing industry, which has been caused considerable and understandable confusion as a result of the introduction of this tax? Is the right hon. Gentleman aware that, just like agriculture, fishing needs to be classed as a basic productive and manufacturing industry?

Mr. Diamond

No, I am not aware of either of those statements and do not accept either of them. I am aware of a good deal of noise.

Mr. Hector Hughes

Does the Minister realise that in the national interest and in the interests of catches and consumers the fishing industry deserves and requires a rebate, not a penalty? Would he take steps to see that that is put into effect?

Mr. Diamond

I have already said—I repeat it—that employers in the fishing industry who pay the tax will receive a refund.

Mr. Macleod

Does not the right hon. Gentleman realise that although the Government's position in relation to agriculture, fishing and forestry should be classed as manufacturing industries and that we shall press for that?

Mr. Diamond

It is for the right hon. Gentleman to decide on what course he will adopt. If he intends to press for that, there will be another opportunity for us to debate these issues.

28. Mr. Wolrige-Gordon

asked the Chancellor of the Exchequer if he will assist by fiscal means those development areas most seriously affected by the Selective Employment Tax.

Mr. Callaghan

The Government's measures to strengthen the development areas have had a substantial effect in increasing employment and there is no present need for the step proposed.

Mr. Wolrige-Gordon

Is the Chancellor aware that the introduction of the Selective Employment Tax has hit any regional development policy more seriously than anything else could have done and that, unless some alternative of the kind I suggest in my Question is put forward, the depopulation from my part of the country and from many other parts of the country will be increasingly intensified?

Mr. Callaghan

That extravagant language might be justified if it were not the case that under the Industrial Development Bill 40 per cent. investment grants will be payable; building grants, loans and the provision of factories will be continued for investment; there will be additional incentives for certain new projects; there has been a tighter control over I.D.C.s in the more congested areas; there is preferential access to the Public Works Loan Board for local authorities in certain regions; development districts have been exempted from the deferment of capital projects; banks have been requested to give special regard to regional development policies; and the loans and building grants, as my right hon. Friend said yesterday, will continue to be available for new hotels and other employment-creating institutions in the tourist industry.

Mr. Younger

Is not the Chancellor aware that all that wonderful catalogue does not alter the fact that the Selective Employment Tax will tax people out of jobs, particularly in the Highlands? Will he not take this matter more seriously and discuss it with his right hon. Friend the Secretary of State for Scotland with a view to doing something concrete and giving jobs back to those who will be thrown out of work?

Mr. Callaghan

The hon. Gentleman, like the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon), is forecasting something which has not yet happened. The tax is not yet in operation. They are merely making prophecies. I am asked in the Question to give additional assistance over and above the very wide range of measures that I have catalogued this afternoon which are an earnest of the Government's desire to ensure that there is full employment in these regions.

Mr. Woodburn

Is my right hon. Friend aware that the same dismal prophecies were made about the Tory tax on hotel occupants which was proposed and then withdrawn?

Mr. Callaghan

I think that is true. At that time, unlike now, there was considerable unemployment in Scotland. I am glad to say that now there is a record number of vacancies in proportion to the number of unemployed in Scotland and the position is better than it has been for as far back as I can remember.

Mr. Baker

Does not the Chancellor realise two things; first, that the rate of male unemployment in North-East Scotland is double that for the rest of Scotland and, secondly, that service industries, which employ a great number of people in the areas concerned in this Question. do not qualify for the grant?

Mr. Callaghan

The hon. Gentleman obviously does not listen to my answers. The Question asks if I will give additional fiscal assistance. I have already given the House this afternoon a long list of the help that is available to these areas. Perhaps when the hon. Gentleman is making speeches in the country he will pay equal, it not greater, regard to that list.

31. Mr. Loveys

asked the Chancellor of the Exchequer to what extent, under the terms of paragraph 17 of Command Paper No. 2986, agriculture, horticulture and forestry will be adversely affected by the proposed Selective Employment Tax.

Mr. Diamond

On the first part of the Question I would refer the hon. Member to the reply given by my right hon. Friend the Minister of Agriculture on 13th May. On Forestry, I cannot add to what was said in the White Paper.

Mr. Loveys

I welcome the change in the system of repayment announced since the White Paper was published, but how is account to be taken of the cost to these industries of outside purchases which will be affected by the tax and which in the case of agriculture alone amount to approximately £1,000 million a year?

Mr. Diamond

I am not quite clear that I follow the hon. Gentleman's supplementary question. He understands, I am sure, that the tax is payable by everybody who pays an insurance stamp—that is the criterion—and my right hon. Friend has indicated where the repayment will take place as to the agricultural industry.

Mr. Grimond

We welcome the change in the Government's attitude, but would it not be much simpler, as farmers are readily identifiable, to relieve them of this tax altogether?

Mr. Diamond

Self-employed farmers are relieved of this tax altogether, and the essential principle in collecting the tax at the minimum cost is the one I have just indicated.

Mr. Wingfield Digby

With regard to forestry, is the right hon. Gentleman aware that paragraph 17 is very ambiguous in that it does not make clear what will be given back? Will the two fixed scales of grant remain, or will there be one scale in future?

Mr. Diamond

The hon. Gentleman is right in saying that the paragraph does not precisely describe the amount in every single case, but discussions will take place which will lend further clarification.

Mr. Gibson-Watt

In view of the importance of forestry to the Welsh rural economy, will the right hon. Gentleman come clean and tell the House whether these industries, agriculture, forestry, fishery and horticulture, will be treated in exactly the same way?

Mr. Diamond

I do not take offence at what the hon. Gentleman said about coming clean. I know that he did not mean what he said. His hon. Friend the Member for Finchley (Mrs. Thatcher) who is sitting on the Opposition Front Bench, is always very helpful on this kind of logic. The Question refers to forestry, and my right hon. Friend has already indicated the effect on agriculture.

33. Mr. Lubbock

asked the Chancellor of the Exchequer if he will exempt institutions of higher education which are negotiating for accession to universities from the Selective Employment Tax.

Mr. Diamond

No one for whom flat rate employers' National Insurance contributions are paid is exempt. Educational institutions in receipt of public funds will be variously compensated to the extent set out in the White Paper, paragraph 22.

Mr. Lubbock

Is the right hon. Gentleman aware that the particular institutions which I mention will have to dismiss lecturers as the only means possible of finding the money with which to pay the tax? Is this not extremely unfortunate just at a moment when they are negotiating for accession to university status?

Mr. Diamond

No, Sir; I am not aware that that is the only method they have for meeting the tax.

Mr. Iain Macleod

Could the right hon. Gentleman clear up a point which arises out of the White Paper? It lays down that universities will have recompense in one way or another through the University Grants Committee, but for modern universities the university is the unit whereas for many other universities the college is the unit. Will the college have the same treatment as the university?

Mr. Diamond

With great respect to the right hon. Gentleman, I do not think that that is a question, as he himself pointed out, which arises on this Question, being directed to the White Paper.

Mr. Macleod

But the Question is directed to institutions of higher education. Is the Chief Secretary telling the House that, as so often, he has not even thought of this point in relation to the colleges, apart from the universities?

Mr. Diamond

That has been adequately set out in paragraph 22 of the White Paper.