HC Deb 01 April 1976 vol 908 cc1563-6
15. Mr. Adley

asked the Chancellor of the Exchequer if he will pay an official visit to Lymington for the purpose of assessing the effect of 25 per cent. VAT on the boatbuilding industry.

Mr. Denzil Davies

My right hon. Friend has no plans to visit Lymington.

Mr. Adley

As the price of the Chancellor of the Exchequer's spiteful leer at my right hon. Friend the Member for Sidcup (Mr. Heath), when announcing a rate of 25 per cent. VAT on boat building, is being paid by my constituents in terms of lost jobs, and notwithstanding the fact that the Chancellor of the Exchequer lost his deposit last Thursday, will he now reverse this damaging decision, the sole aim of which appears to have been to appease the left-wing of his party?

Mr. Davies

The hon. Gentleman, as usual, exaggerates and overstates his case.

Mr. Adley

No, I do not.

Mr. Davies

We have accepted that 25 per cent. VAT could have had some effect on employment, but the main effect on the boatbuilding industry and other industries has been the recession, in this country and world-wide. It has not been the 25 per cent. rate of VAT.

Mr. R. C. Mitchell

I dissociate myself from the rather silly remarks of the hon. Member for Christchurch and Lymington (Mr. Adley), but will the Minister nevertheless have another look at the employment position arising directly from the 25 per cent. rate of VAT on boatbuilding? I do not think that it is quite as good as the Minister thinks it is.

Mr. Davies

As we have said on other occasions, we are monitoring the effect of VAT on various industries, and the results will be taken into account in my right hon. Friend's Budget.

Mr. Stephen Ross

Is the Minister aware that five miles from Lymington is my constituency—the Isle of Wight—where 8.2 per cent of the people are unemployed, and where a reduction in VAT at this moment would be of great assistance to the boatbuilding industry?

Mr. Davies


Dr. Bray

Is my hon. Friend aware that the boatbuilding industry has considerably increased its exports in recent months as a result of the fall in the home market? Will he examine the situation to see whether it is possible to find further measures to help it with exports, because, for the relatively small volume concerned, export credits are not as easily available as for much larger contracts?

Mr. Davies

My hon. Friend is quite right. There has been an increase in exports, and exports do not suffer from the 25 per cent. rate of VAT. The best way to help the exports of boats and other products is by containing our domestic inflation.

Sir David Renton

Is the hon. Gentleman aware that it is not only a question of lost jobs and lost exports but of the loss of hardly-acquired skills, which are not easily replaced? Will he bear that in mind in his future thoughts about the rate of VAT for boat building?

Mr. Davies

I was not aware that there was a question of loss of exports. Indeed, exports have improved. As I mentioned, a 25 per cent. rate of VAT might have had some effect on employment, but the main effect has been the recession.

Sir G. Howe

Will the Minister take as many opportunities as are now left to him before the Budget to drive home to the Chancellor of the Exchequer the folly of ever having moved on to a multi-rate VAT system? Will he make it plain to the Chancellor of the Exchequer that it is not only in the boatbuilding industry that jobs are being lost, but that trade and industry throughout the country have been greatly disturbed by this, and that thousands of jobs are being cast away by the reckless spate and unnecessary change of taxes? Will the Minister tell the Chancellor of the Exchequer to get back to a single rate as soon as possible?

Mr. Davies

I do not accept what the right hon. and learned Gentleman says about the folly of multi-rate systems. The Common Market countries which have this tax—it was introduced here by a Conservative Government—do not seem to have suffered particularly as a result.

16. Mr. Stonehouse

asked the Chancellor of the Exchequer if he is satisfied with the system of Treasury control over expenditure by Government Departments; and what measures he proposes to ensure the application of cost-effective techniques.

Mr. Joel Barnett

We are committed to a number of measures for better control of expenditure, and we are constantly seeking ways of ensuring cost-effectiveness.

Mr. Stonehouse

Will the Chief Secretary look at the answer that the Minister for the Civil Service gave me last night, in which he stated that there are 200 computers in use in Departments? As most of these have been introduced since 1964 for the sake of saving manpower, how is it that Civil Service non-industrial manpower has gone up by 30 per cent. in the last 12 years? As this, surely, shows a degree of overmanning that is quite unacceptable, what is to be done about it to show an example to the rest of Britain?

Mr. Barnett

As the right hon. Gentleman will have seen from the White Paper. steps are being taken to reduce the size of the Civil Service. I am glad of the right hon. Gentleman's support.

Mr. Ridley

Is the Chief Secretary aware that in the Health Service, as the number of beds occupied has decreased so the number of administrative staff has increased, according to the Government's own White Paper? What will the Chief Secretary do about the growth of the bureaucracy? It will take over the whole of our life unless he does something about it soon.

Mr. Barnett

As I am sure the hon. Gentleman is aware—he is always ready to criticise his own side—the reorganisation of the Health Service was largely the responsibility of a Conservative Government.