HC Deb 19 November 1969 vol 791 cc1307-8
32. Mr. Clark Hutchison

asked the Secretary of State for Scotland what representations he has received regarding the burden of selective employment tax upon retailers and distributive services in Scotland; and if he will make a statement.

Mr. Ross

Ten such representations have been received. As I have said in earlier replies, the most effective way of insuring the prosperity of retailers and distributive services in Scotland is not by protecting the service sector from general taxation but rather by our continuing to support the general development of the economy, on which the service sector so largely depends.

Mr. Clark Hutchison

Does the Secretary of State not realise that the selective employment tax is doing immense damage in Scotland, particularly to the smaller businessmen, many of whom are having to give up their businesses? Will he look at the matter again, and indeed try to persuade his right hon. Friend the Chancellor of the Exchequer to abolish the tax?

Mr. Ross

No, I cannot accept the suggestion made in the last part of the question. The hon. Gentleman would be quite wrong to suggest that all the difficulties of small businesses should be laid at the door of this tax. There are many other changes in the retail industries which affect small businesses and large ones as well.

Mr. Dewar

Will my right hon. Friend bear in mind that the service industries, and perhaps more important the customers, might get a bad bargain if in place of S.E.T. they were to get an added-value tax?

Mr. Ross

One of the points made by the Chancellor of the Exchequer when the S.E.T. was introduced was that it was a revenue-raiser. Anyone who suggests that it could be removed without putting something else in its place is deceiving the public.

Mr. Gordon Campbell

Is the right hon. Gentlemen aware that there is intense feeling amongst retailers in Scotland at the inequity of this tax as opposed to a value-added tax and other taxes falling upon people in commerce? Is he further aware that they particularly resent the recent increase in the rate of S.E.T., which is a heavy burden on retailers and also adds to the prices in the shops?

Mr. Ross

As far as equity is con-corned, we made changes in the tax's incidence in respect of certain rural areas in development areas. These changes were of considerable advantage to certain parts of Scotland.