HC Deb 31 January 1967 vol 740 cc228-31
14. Mr. Wingfield Digby

asked the Chancellor of the Exchequer what would be the cost in a full year of abolishing Selective Employment Tax for the whole South-West area.

Mr. Diamond

This would not be administratively practicable. In the South-West Planning Region the tax is expected to yield £65 million in a full rear and premium refund payments will be about £49 million.

Mr. Digby

Will the right hon. Gentleman agree that this falls particularly unfairly on this region? Will he bear this in mind in future, on other occasions?

Mr. Diamond

While not necessarily agreeing with the first part of the hon. Gentleman's remarks, I am sure that he will realise that my right hon. Friend has said on many occasions that he has the effect of this tax very much in mind and is examining it.

Mr. Bessell

May I ask the Chief Secretary whether he appreciates that in an area of high unemployment, such as the South-West, this tax is a particular hardship? Will he therefore look at the at matter again in the light of the Government's stated policy on regional development?

Mr. Diamond

I will repeat what my right hon. Friend has said many times, that he is already looking at this in the light of regional development.

Dr. John Dunwoody

Would my right hon. Friend look at this problem with special regard to the situation in the development areas, not looking at the South-West region as a whole but realising that there are special problems of persistently high unemployment in some of the development areas in this region?

Mr. Diamond

My right hon. Friend has already said that he is looking at the whole of this problem, but my hon. Friend will realise that the Government's policy with regard to development areas is already a full and effective one.

16. Mr. G. Campbell

asked the Chancellor of the Exchequer if he will consider the introduction of a value-added tax and the abolition of the Selective Employment Tax.

Mr. Callaghan

I see no close connection between the two. Value-added tax would be a general tax on consumption, whereas the Selective Employment Tax primarily combines a tax and a premium on employment designed to raise revenue, and in the long term to achieve a shift between services and manufacturing industries.

Mr. Campbell

Does the Chancellor recognise that the existence of a complicated Selective Employment Tax may hinder real reforms in taxation which entry into Europe will probably make necessary in indirect taxation?

Mr. Callaghan

All forms of taxation, I find, are complicated, but I would be inclined to have a wager with the hon. Gentleman that the value-added taxation is a darned sight more complicated than S.E.T.

29. Mr. Frank Allaun

asked the Chancellor of the Exchequer if he has now reviewed the effect of the Selective Employment Tax on the employment of part-time workers, particularly the elderly, married and disabled and if he will make a statement.

Mr. Callaghan

The tax has been in operation for no more than five months and I am continuing to watch its effects on part-time and other workers.

Mr. Allaun

I thank the Chancellor for that reply, but may I ask whether he is aware that I know personally many old-age pensioners and part-time workers who have lost their jobs as a result? Is that a good thing either for the country or for the individual?

Mr. Callaghan

One of the difficulties about the present situation is that it is rather hard to distinguish between those who may lose their jobs as a result of this and those who may lose their jobs as a result of the measures taken in July. We must be careful to distinguish between the two before condemning the Selective Employment Tax—[Interruption.] The hon. Gentleman has said in the past that he supports the meaures taken in July. I hope that he is not ratting on that now. As to the situation generally, I am considering the whole position, and any evidence which my hon. Friend the Member for Salford, East (Mr. Frank Allaun) has, I shall be glad to consider further.