HC Deb 10 June 1969 vol 784 cc1214-5
14. Mr. Edward M. Taylor

asked the Minister of Public Building and Works what representations he has received from the Federation of Civil Engineering Contractors in regard to the effect of selective employment tax on the civil engineering industry and what reply he has sent.

Mr. John Silkin

Representatives of the F.C.E.C. have discussed with me the treatment of the impending S.E.T. increase in respect of current contracts, and the more general question of tax fluctuation clauses in civil engineering contracts. I am considering these matters urgently in consultation with my colleagues, and I am not yet in a position to give a final answer.

Mr. Taylor

Would not the right hon. Gentleman agree that the S.E.T. increases impose serious additional burdens on the whole construction industry? Would he not agree that it will be difficult to get fixed price contracts in future if there is always a danger of such sudden savage increases in tax?

Mr. Silkin

I am fully aware of the feelings of the Federation of Civil Engineering Contractors.

27. Mr. Donald Williams

asked the Minister of Public Building and Works what increases in the productivity of the construction industry he estimates have taken place as a result of the levying of selective employment tax.

Mr. John Silkin

Since 1966 output per head on new work has increased at an average annual rate of 6½ per cent. as compared with the previous rate of about 4 per cent., but whether this acceleration is wholly due to S.E.T. I am not in a position to estimate.

Mr. Williams

I am grateful to the Minister for making that reservation in his Answer, because undoubtedly the result of S.E.T. has been more self-employed direct labour and an increase in the prices of all building products.

Mr. Manuel

Would my right hon. Friend agree that the figure which he has given for the increase in productivity has been accomplished with a smaller work force than that employed during 1966?

Mr. Silkin

That is a very good point. Between 1966 and 1968, the work force of private contractors fell by over 2 per cent. a year while their output increased by an annual rate of nearly 4½ per cent.

Mr. Chichester-Clark

But is the right hon. Gentleman aware that the main effect of S.E.T. on this industry is a falling-away in apprentices and a considerable increase in labour only subcontracting? Will he take that into account and get something done to relieve the burden on this industry?

Mr. Silkin

I have heard that suggested, but so far I have had no concrete evidence of a fall-away in apprentices. I am very well aware of the problem of labour only sub-contracting, and I am studying it closely.