HC Deb 17 June 1968 vol 766 cc678-9
5. Mr. Gresham Cooke

asked the Minister of Public Building and Works what estimate he has formed of the increase in building costs as a result of the imposition of Selective Employment Tax; and by how much this will be augmented by the further increase in September.

Mr. Mellish

Selective Employment Tax added about 2 per cent. to building costs, but this was offset to some extent by the rapid increase in output per operative during 1967. From September onwards, as I indicated in a written reply to the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) on 25th March, the increase in this tax could add another 1 per cent. but the increase could be less if productivity continues to rise, as I expect it will.

Mr. Gresham Cooke

What benefit has the building industry received from the collection of £80 million in Selective Employment Tax from it? What benefit will accrue to it from an additional £40 million being taken from it?

Mr. Mellish

This industry's performance is very creditable. Last year there was a 5 per cent. increase in productivity with a 2½ per cent. reduction in total manpower. There are those who believe that S.E.T. had nothing to do with that. It is a matter of opinion.

Mr. Wellbeloved

Has my right hon. Friend any evidence from the large building construction firms that a genuine effort has been made to absorb S.E.T. in their excess profits?

Mr. Mellish

This is an industry which is comprised of many excellent firms. With the increase per individual that has been shown over the past year or two, I believe that in many cases firms are absorbing this increase.

Mr. Speed

Does the Minister agree with the very sensible statement by the hon. Member for Bethnal Green (Mr. Hilton) that S.E.T. is the worst tax ever invented?

Mr. Mellish

I was not aware of that statement, but my hon. Friend the Member for Bethnal Green (Mr. Hilton) talks a great deal of common sense as a rule.

8. Mr. Tilney

asked the Minister of Public Building and Works what recent representations he has received about the effects on the building and construction industry in the North West of the Selective Employment Tax; and what reply he has sent.

Mr. Mellish

I recently received a copy of a letter sent to certain hon. Members by the Liverpool Region of the N.F.B.T.E., proposing the abolition of the Selective Employment Tax, particularly insofar as it affects the construction industry. I replied that I expected that Mr. Reddaway's inquiry into the effects of S.E.T. would deal with the points raised in the letter.

Mr. Tilney

Is the Minister aware that the building employees say that as a result of this absurd tax the number of apprentices for skilled crafts has fallen by one-half compared with last year?

Mr. Mellish

I cannot accept that. The construction industry has done rather better than the average industry throughout the country for apprentices. Figures can be supplied to prove that. I do not think that S.E.T. has anything whatsoever to do with the number of apprentices coming into the industry.