§ Q5. Mr. Pentlandasked the Prime Minister when he last made an official visit to Southend.
§ The Prime MinisterI have not made an official visit to Southend since becoming Prime Minister, and have at present no plans to do so.
§ Mr. PentlandI wish the Prime Minister would do so, because he must be aware of the deep anger prevailing in the development areas about the Government's disgraceful decision to locate the V.A.T. headquarters at Southend. Is he aware that in the Northern Region we have the highest unemployment rate for over 30 years; that we shall have 24,000 youngsters coming along in a few weeks time looking for jobs; and that the prospects there are grim indeed? Therefore, will he not reverse his decision? If he does not, he will be condemned as having complete indifference to the terrible situation which at present prevails in the development areas.
§ The Prime MinisterThe hon. Member is absolutely wrong. I believe that there has been great misunderstanding about this case which, like all matters of dispersal, is very difficult to settle. As I think my hon. Friend the Chief Secretary to the Treasury made clear on Tuesday, nearly three-quarters of the staff operating V.A.T. will be in local offices spread over the country. The increase 1518 at Southend will be an increase in headquarters staff, and that is because the headquarters is already based on Southend. We cannot at the moment say exactly what the numbers will be, but certainly three-quarters will be in regional offices, some of whom will quite obviously be in the development areas. As to indifference, it was under Conservative Governments that both the main initiatives for dispersal of Government personnel from London were taken. They were taken in 1963 by a Conservative Government, and by myself in this Conservative Government.
§ Mr. UrwinThe Prime Minister must surely now be aware that this decision is regarded by all shades of political opinion in the development areas as an utter negation of the strong regional policies he promised at the last General Election. This decision on the V.A.T. centre means that there has been a complete betrayal of the needs and requirements of the development areas. Does the right hon. Gntleman realise that there are at present 4,765 young people unemployed in the Northern Region alone? Will he not now, at least temporarily, abandon sacred cows and, if he will not visit Southend, will he at least come to the development areas and explain the justice behind his decision?
§ The Prime MinisterThe hon. Gentleman does his cause no good by the sort of remarks he has just made. If there is criticism of this decision in the development areas, it is because certain hon. Members opposite have been saying that 10,000 people are being put into Southend instead of being put into Clyde-side or Tyneside. This is certainly not the case. It is not yet possible, for obvious reasons, to say how many staff there will be, but of that staff, three-quarters will be in regional offices spread over the country. It is not possible to put all of them in a development area. What is happening at Southend is an expansion of the headquarters staff, which has to deal with the whole question of V.A.T.
§ Dame Irene WardPerhaps my right hon. Friend will give me the great pleasure of letting me say that I would much rather he came to the North of England than went to Southend, because 1519 it is essential that he should explain to unbiased people in the North of England what the policy is. It is rather disconcerting to the North of England when the policy which he has advocated this afternoon just has not got through. Will he come to the North of England, and especially to Tynemouth?
§ The Prime MinisterI should be perfectly happy to go to the North-East. Having implemented, or having been responsible for implementing, the original Hailsham Plan, I doubt whether there are many Ministers in either Government who know more about what has been done in the North-East than I. It is not possible to disperse all central Government work from London, but a major operation is taking place in Government to disperse from London to the development areas.
§ Mr. Roy JenkinsIs it not clear from the right hon. Gentleman's own argument that the regional staff on which he appears to lay weight must be scattered over the country? What is within the Government's control is where the headquarters staff is located. On that matter he has decided deliberately, not in favour of centralisation in London, but in favour of a non-development area as against a development area.
§ The Prime MinisterI have explained to the right hon. Gentleman, as I thought he knew from his time as Chancellor of the Exchequer, when this matter was investigated, that as the Customs—[Interruption.]—I am very surprised to hear that comment. The former Chancellor of the Exchequer says that it was not investigated but the Leader of the Opposition says that they turned it down. That difference of view may explain a great deal.
To return to this very serious point, what is happening is that there will be an expansion of the Customs headquarters at Southend to deal with the headquarters part of V.A.T.
§ Sir S. McAddenWhile welcoming the overwhelming interest which hon. Members seem to take in my constituency, may I say one word for myself and ask a question? Is my right hon. Friend aware that the decision to site the Customs and Excise headquarters in Southend was taken, not by him, but by the previous Government and that what is now pro- 1520 posed is merely a limited extension of the facilities in Southend, whereas the regional facilities, as my right hon. Friend said, will be spread throughout the country?
Does my right hon. Friend appreciate that, although there seems to be a unanimous desire on the part of hon. Members to send unpleasant things to Southend, such as the third London Airport, they seem to be very unhappy when my right hon. Friend sends somehing pleasant to Southend?
§ The Prime MinisterMy hon. Friend has made a valid point.
§ Mr. Arthur DavidsonIn view of the difficulties that the Prime Minister has got himself into, would not the ideal solution be for him to scrap the whole idea of V.A.T.? If he is not prepared to do that, has he thought of siting the headquarters in Accrington, which would have the approval of all hon. Members?
§ The Prime MinisterI remember that the Leader of the Opposition when he was Prime Minister said that, as the Community had adopted V.A.T., this was one of the tax measures he was prepared to accept if we were to go into the Community. [Interruption.] I think that I report the Leader of the Opposition perfectly accurately. I hope that that is still his view.
§ Mr. Harold WilsonMr. Speaker, having been foreclosed earlier at your discretion, on Questions affecting the Common Market, may I say to the Prime Minister that I said many times from that side of the House and from this that, if the terms were right for going into the Common Market, there would be certain very unpalatable burdens which Britain must bear in return for the advantages accruing from joining? One was V.A.T. The other was the common agricultural policy. I made it clear from that bench, as I have from this, that the idea of supporting V.A.T. on its own and not as part of the Common Market would be intolerable to all of us in this party.
§ The Prime MinisterOn that we disagree, because there is a great body of opinion in Britain which believes that V.A.T. can be an asset to this country, particularly as it involves the abolition of purchase tax and selective employment tax and encourages exports. There is a 1521 perfectly legitimate difference of opinion about this. What I hope to be able to do is to persuade the right hon. Gentleman, who when he opened negotiations accepted the common agricultural policy, as he will agree, that the arrangements which we have negotiated are satisfactory and that this will allow him to support our entry into Europe.
§ Mr. Harold WilsonMay I ask the right hon. Gentleman if he remembers the name of the very testy Leader of the Opposition who during the election, when questioned about this point on television, said, "V.A.T. is no part of our policy"?
§ The Prime MinisterWe set out in the election manifesto—[HON. MEMBERS: "Answer."]—that we were not committed to V.A.T., and I said so on television. That was our position, and it was absolutely clear. [HON. MEMBERS: "Answer."] I have answered the right hon. Gentleman, if he would listen. This is precisely what I said on television, and it was precisely what was in the election manifesto. [Interruption.] If the right hon. Gentleman will look up the election manifesto he will see that we were not committed to V.A.T. When we came into Government we discussed with the Treasury the work which we had done and which N.E.D.C. had done on it, and then my right hon. Friend the Chancellor in his Budget speech announced that he accepted V.A.T.
§ Mr. Harold Wilson rose—
§ Sir T. BrintonOn a point of order, Mr. Speaker. May we please be informed what an argument about the merits of V.A.T. has to do with the Question?
§ Mr. Harold WilsonFirst, does the Prime Minister deny using the words I have just attributed to him? Second, does he deny that the Conservative Central Office sacked one of its staff for saying in Hampstead at the beginning of the election that the reason that V.A.T. was out of the election manifesto was that it was unpopular?
§ The Prime MinisterThe gentleman concerned was not sacked at all. [Interruption.] I do not know why the right hon. Gentleman works himself into such a state. We said in the election manifesto that we were examining the whole of indirect taxation, that this in- 1522 cluded V.A.T., and that, if it were instituted, it would mean the abolition of S.E.T. and purchase tax. That is the position. Now we have examined it. We have published a Green Paper on it and the Chancellor of the Exchequer has accepted it. It is now to be embodied in our tax reforms. What the right hon. Gentleman should address his mind to is the fact that, if we go into Europe, as we are proposing to Parliament, it will involve the V.A.T. and he must therefore give his decision on whether we should go into Europe on that basis.