HC Deb 27 January 1971 vol 810 cc522-3
5. Mr. Ashton

asked the Secretary of State for the Environment what effect selective employment tax is estimated to have had on council house rents.

The Under-Secretary of State for the Environment (Mr. Paul Channon)

I cannot make such an estimate because council rent-fixing policies vary. The rent of a council house is not normally related directly to the cost of constructing it.

Mr. Ashton

Is the Minister aware of the outrage of the building industry at the imposition of S.E.T., which put 2 per cent. on to the price of a house? In view of that, does he not think that there is likely to be great concern when the abolition of subsidies leads to an increase of about 15 per cent. in rents, which in turn will lead to a cut-back in house building? Will he take this into account in formulating his future estimates?

Mr. Channon

I entirely agree that S.E.T. is a bad tax. It adds much more than 2 per cent —it adds about 3¾ per cent.—to the cost of a house, and I am glad to have the hon. Gentleman's support for any steps which the Government may take about this matter.

Mr. Allason

Will not the Minister reconsider this? Is it not worth working out precisely how much S.E.T. adds to the rent of a house? I am sure that council tenants will be interested to know because of what they were charged by the last Administration.

Mr. Channon

On a house involving contruction costs of £3,300, S.E.T. amounts to about £120, but I will certainly take into account my hon. Friend's suggestion.