HC Deb 24 April 1967 vol 745 cc1127-9
12. Mr. Pym

asked the Minister of Public Building and Works what representations he has received from the building industry about the relationship of the Selective Employment Tax and the growth of self-employment in the industry; and what reply he has sent.

Mr. Prentice

Some of the representations made to me about Selective

Mr. Prentice

The operation of the Act coincided with the beginning of the squeeze period last July, and the Act has played a part in reducing the overheating of the economy necessary because of the economic situation last summer. The ultimate effect of the Act must be judged in the longer term when there is no longer the possibility of overheating of the economy and resources are made available for housing and other needed projects.

Following are the details:

Employment Tax have suggested that it would stimulate self-employment.

Mr. Pym

Does not the right hon. Gentleman agree that one of the most absurd and undesirable effects of S.E.T. has been to encourage contractors to move into the field of self-employment? Do not the Government think that this tendency has been made very much worse by the imposition of this iniquitous tax?

Mr. Prentice

I do not think I would use the term "very much worse", for self-employment existed in some undesirable forms before the tax was introduced. For a number of reasons, the cost of employing people has been increased by such things as higher insurance contributions, redundancy payments and the training levy which were accepted on both sides as desirable. It is very difficult to separate the effect of these from S.E.T.

Mr. Channon

Would the right hon. Gentleman agree that the introduction of S.E.T. has actually encouraged self-employment in the building industry? Is this Government policy?

Mr. Prentice

It has increased the cost of employing a man and that of itself would increase self-employment, but certainly there were other reasons for introducing S.E.T. and these have been explained often enough.