Selective Employment Tax

HC Deb 30 March 1971 vol 814 cc1346-7

24. Mr. Pavitt

asked the Chancellor of the Exchequer what is his estimate of the effect on the cost of living index of reducing selective employment tax by 50 per cent.

Mr. Higgins

Such a reduction would exert a downward influence on the index. The precise effects would depend on a number of variables.

Mr. Pavitt

Whilst not wishing to anticipate the abolition of this tax in a few hours' time according to the election pledges, may I ask the Minister of State to bear in mind that a good deal of this has been absorbed by the retail services and that any institution of value-added tax in its place would hit the consumer far more badly than this one does?

Mr. Higgins

I am well aware of the hon. Gentleman's concern about the effect on the retail trade. What I find remarkable is the sudden, new-found enthusiasm for the abolition of the selective employment tax which is discernible on the other side of the House.