HC Deb 16 February 1971 vol 811 cc1592-4
15. Mr. William Hamilton

asked the Chancellor of the Exchequer what has been the total net amount of revenue collected in each year from selective employment tax; and what estimate he has made of the reduction in prices consequent on the proposed abolition of the tax in April.

20. Mr. Skinner

asked the Chancellor of the Exchequer what estimate he has made of price reductions following the proposed abolition of selective employment tax.

Mr. Maurice Macmillan

The net yield from S.E.T. from its introduction has been: 1966–67, £303 million; 1967–68, £325 million; 1968–69, £438 million; 1969–70. £527 million. The price effects of abolishing S.E.T. will depend on a number of variable factors. I have no statement to make on timing.

Mr. Hamilton

Is the hon. Gentleman aware that the Prime Minister had a statement to make on this matter on 16th June last when he told Mr. Alastair Burnet in a T.V. interview that it was the Government's intention to introduce in their first Budget a package deal specifically dealing with the reduction of direct taxation and the abolition of S.E.T.? This commitment was made on 16th June. Why cannot we have a degree of honest government for a change?

Mr. Macmillan

In so far as the hon. Gentleman's supplementary has any point at all, it is asking me to anticipate my right hon. Friend's Budget in a way which he knows perfectly well I cannot do.

Mr. Skinner

Will the Minister assure the House that if there are to be any hypothetical price reductions as a result of the abolition of S.E.T. they will not be taken "at a stroke"?

Mr. Macmillan

The abolition of selective employment tax reduces one element of labour costs. It has no effect on other elements, such as inflationary wage increases. The price effects of a reduction in selective employment tax. therefore, could easily be overshadowed by cost inflation.

Mrs. Knight

Will my hon. Friend bear in mind that many hon. Members on this side of the House are extremely anxious about the abolition of this tax put on by the previous Government because there is a real connection between it and the rocketing of prices?

Mr. Macmillan

Yes. My hon. Friend has made it quite clear that this Govern- ment have promised to take off selective employment tax——

Hon. Members

When?

Mr. Macmillan

—and will do so.

Hon. Members

When?

Mr. Macmillan

To ask "When?" at this stage is to invite the only answer which any Treasury Minister can give to such a question: I cannot anticipate my right hon. Friend's Budget.