HC Deb 26 May 1971 vol 818 cc365-6
19. Mr. Brewis

asked the Secretary of State for Scotland what representations he has received following the recent Budget concerning the net benefit to Scotland of the regional employment premium and the selective employment tax.

Mr. Gordon Campbell

None, Sir.

Mr. Brewis

Is my right hon. Friend aware that the halving of S.E.T. is very good news for Scotland? Could R.E.P., which has been quite popular in some quarters, in any case continue after 1974 under the regional policy of the E.E.C.?

Mr. Campbell

I am well aware of the great welcome in Scotland for the halving of S.E.T. in July. [Interruption.] There is no need for writing on that, or for the welcome of the total abolition within two years. I could not answer the question about R.E.P. and the E.E.C. regulations without notice, but I want to make it clear that we are committed to continuing it until September, 1974.

Mr. Dalyell

Will the Scottish Development Department do a study of the effect of continuing the regional employment premium on the investment plans of multi-national companies?

Mr. Campbell

I will consider that but I am not sure what its relevance will be.

Mr. Buchan

Surely the right hon. Gentleman realises that, despite the apparent marginal effect of the halving of selective employment tax, it by no means compensates for the ending of the regional employment premium. This is especially serious in view of the destruction by the Government of the other incentives which should be going to Scotland. Has he made any estimate of the loss to Scotland incurred by the simultaneous phasing out of the regional employment premium and the introduction of the value-added tax?

Mr. Campbell

I do not know about the marginal effect in one respect, but I know of another—that the constituency of the hon. Member for Renfrew, West (Mr. Buchan) is likely to become more marginal as a result of the abolition of selective employment tax. The package of incentives introduced by the Government is more flexible and more related to the creation of new jobs. A larger amount of incentives is flowing to the special development area in West Central Scotland than ever before.

Mr. Dalyell

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.