HC Deb 20 February 1967 vol 741 cc1123-4
7. Mr. Higgins

asked the Minister of Labour what instructions he has given to local offices of his Department regarding the Selective Employment Tax which will have the effect of imposing the tax on independently owned warehouses while similar warehouses owned by manufacturers will be paid the Selective Employment Tax premium.

Mr. Hattersley

I would refer the hon. Member to the reply given by the then Parliamentary Secretary to the hon. and learned Member for Warrington (Mr. W. T. Williams) on 12th December, 1966. —[Vol. 738, c. 3.]

Mr. Higgins

Is it not the case that independent warehouses are being discriminated against as a result of the arbitrary decision which the Minister has made and his absurd adherence to the Standard Industrial Classification as the basis for levying this tax? Will he reverse this decision which is discriminatory, arbitrary, and quite contrary to the economic prosperity of the country?

Mr. Hattersley

As I understand the allegations, it is based on the fear that warehouses which are part of a manufacturing concern can be used as a base for wholesale and retail sales drives. In fact, the rules which govern the administration of the S.E.T., which say that half the employees must not be concerned in non-qualifying activities, mean that the discrimination is not half as great as the hon. Gentleman suggests.

47. Miss Quennell

asked the Minister of Labour in which sections of his Department he has been able to offset the cost of administering the Selective Employment Tax against lower salary costs for the year 1966–67, as stated in his Supplementary Estimate for that year.

Mr. Hattersley

The reference to Selective Employment Tax does not relate to the cost of administering the Selective Employment Payments Act but to the estimated tax payable in respect of the staff in my Department. The partial offset by way of lower salary costs is mainly the result of newly-appointed or promoted staff entering their salary scales at or near the minimum, thus reducing the average salary cost.

Miss Quennell

Can the hon. Gentleman assure the House that his Ministry will do nothing whatever to diminish the strength of the health, welfare and safety departments of the Ministry and the employment service department of the Ministry?

Mr. Hattersley

I can give that absolute assurance.