Selective Employment Tax (Hansard, 24 November 1970)

§ 16. Mr. Milne
asked the Chancellor of the Exchequer what discussions have taken place in regard to the rôle of selective employment tax arising from the Reddaway Report, "Selective Employment Tax and the Distributive Trades"; and if he will make a statement.

§ Mr. Barber
None, Sir. The Government are pledged to abolish the S.E.T. Our proposals for doing this will be announced in due course.

§ Mr. Milne
Is the Chancellor aware that his reply is disappointing, and that 220 the selective employment tax has been largely turned into a charge on consumers, in effect making it a value-added tax on commodities? When he is abolishing selective employment tax, will he consider also deciding that we shall have no value-added tax either?

§ Mr. Barber
With great respect to the hon. Gentleman, we have made our position quite clear on a number of occasions. We shall abolish the selective employment tax, and we are considering a value-added tax. Whenever any reference is made to selective employment tax, I find it a little curious how right hon. and hon. Gentlemen opposite seem to be so much keener that we should keep our promises than they ever were to keep their own.

§ Mr. Evelyn King
Will my right hon Friend confirm that the food trade pays by way of selective employment tax about £80 million a year? Will he reverse as soon as possible the policy of his predecessors, which thus increased the price of food?

§ Mr. Barber
I do not know what the figure is, but I know that the amount paid by the food distributive trades is very considerable.

§ Mr. Shore
On a point of order, Mr. Speaker. Is it not normal to call an hon. Member when Questions are being asked about an establishment which is within his constituency and when he has risen at least three times to catch your eye?

§ Mr. Speaker
Order. The Speaker is not omniscient. If an hon. Member has a constituency interest in a Question, he should let the Speaker know.

§ Mr. Oram
It was understood that the Reddaway Report was the first of a series of studies Professor Reddaway was making. Is he continuing his study, or is there sufficient certainty about the Government undertaking to enable him to give up his work on the tax?

§ Mr. Barber
My understanding is that Professor Reddaway is completing his existing studies but undertaking no more because of our commitment to abolish the tax.

§ Mr. Marten
Until such time as my right hon. Friend abolishes S.E.T., which 221 I know he will, could he give consideration to suspending that part of it under which people pay in and get back the same amount, which seems a rather redundant sort of action?

§ Mr. Barber
I have considered this matter, which on the face of it seems to be a nonsense and in principle is a nonsense. Certainly, if the tax were going to be kept in any form we should have to modify it to get rid of something which is rather nonsensical. But as we shall abolish the tax, and in view of the problems which would arise if we were to institute a new system for dealing with it, I regret that it is unlikely that we shall be able to modify it in the way which my hon. Friend has suggested. It is a matter that I am considering, but I should not like to raise any hopes.