§ 2.44 p.m.
§ [The Question was as follows:
§ To ask Her Majesty's Government why, in the application of the selective employment tax proposed in the Budget, it is shown that firms which process food are considered to be of more value to the nation, by virtue of the fact that they may claim back both a refund and a premium on the tax paid, than are farmers who grow the food and who are to be allowed to claim neither a premium nor a refund.]
§ LORD SHEPHERDMy Lords, there is no suggestion that firms processing food are considered to be of more value to the country than growers of food. The purpose of the tax and premium is to widen the tax base, to help those industries which have heavy indirect taxation and, in the longer term, to encourage the redeployment of labour, which is already being achieved in agriculture. The noble Earl will be aware of the statement of the Minister of Agriculture in another place, that farmers and horticulturalists will individually receive refund of the tax itself.
EARL FERRERSMy Lords, I am grateful to the noble Lord for his reply and, indeed, for explaining that the Minister of Agriculture has altered the situation since I originally put the Question down. But would he not agree that it would have been rather better if this consideration had been given before making the announcement and causing such havoc in the farming industry, rather than making the announcement and altering it afterwards?
§ LORD SHEPHERDMy Lords, I personally would not accept any question of havoc within the agricultural industry. In the first instance, the use of the Annual Review was considered the right way of refunding these sums to farmers, but after further conversation within the industry itself, which the noble Earl will accept was not possible before the tax statement was made, the Government have 881 now decided to repay direct to the farmers those sums levied upon them.
LORD INGLEWOODMy Lords, is the noble Lord not aware that that answer is really very weak? These fine phrases about widening the tax burden are not very convincing when this original decision about asking farmers to pay this tax was devoid of all common sense. Can he not see that to ask those who, say, grow peas in this country to pay this tax, even though they will get a refund later on, is quite absurd when others who process peas, for example, imported as well as home-grown, will be given a present for so doing?
§ LORD SHEPHERDMy Lords, I suggest to the noble Lord that he reads the statements that have been made in another place and, if he cares, the speech I made in your Lordships' House, I think a week ago, in regard to this tax. The reason the processors are receiving a refund is that they come within the definition of "manufacturers", and the purpose of the tax, of course, is to assist manufacturers generally. I do not take the view that my answer was weak. I think it was very strong indeed.
EARL FERRERSIs the noble Lord aware that many agricultural buildings are rated because they are factory farms? If they are factories for the purposes of rating, should they not also be considered factories for the purposes of the selective employment tax?
§ LORD SHEPHERDMy Lords, the noble Earl will understand that I should need notice of that question.
§ LORD SOMERSMight I suggest that the statement—
§ LORD SOMERS—which the noble Lord quoted is equally unconvincing in relation to his own remarks?
§ THE LORD PRIVY SEAL (THE EARL OF LONGFORD)My Lords, I must suggest to the noble Lord that he asks a question.
§ LORD CONESFORDMy Lords, what has caused Her Majesty's Government to change their view about the manufacture of candyfloss?
THE DUKE OF ATHOLLMy Lords, as farmworkers and foresters are frequently interchangeable, would the noble Lord elaborate on the position with regard to foresters?
§ LORD SOMERSWould the noble Lord agree that even before this tax appeared there was great anxiety in the agricultural world as to the drift of young people toward urban life, and would he not agree that this is going to make it even worse?
§ LORD SHEPHERDNo, my Lords, would not accept that. Certainly we want a balance of age within the agricultural industry, but it is perfectly clear that we need a continuing movement of workers from agriculture into manufacturing industry.
§ LORD FORBESMy Lords, is it the case that farmers are now being asked to lend the Government money? How much more have they got to do for the Government?
LORD BELHAVEN AND STENTONMy Lords, may I ask whether Her Majesty's Government, having changed their mind about farmers, intend to review seriously the position of agricultural engineers and those providing other services to farming, whose contribution to agriculture is as important as is farming itself? Is the noble Lord aware that the selective employment tax placed upon these agricultural engineers, and so on, will seriously affect the costs of agriculture generally?
§ LORD SHEPHERDYes, my Lords, I recognise that certain of the services are going to have some difficulty arising from this tax. But, as I have said on a number of occasions, and certainly once this afternoon, when we imposed this tax we had to take the broad definitions, and unfortunately, in this particular case, the agricultural engineers fall within the services. But the noble Lord will be aware that there will shortly be introduced in another place a new Agriculture Bill which will give further assistance to agriculture on top of what is already a very substantial payment out of the Exchequer to the farming industry.
THE DUKE OF ATHOLLMy Lords, did I understand the noble Lord aright when he said he wanted to encourage 883 people to leave the land, and to go to the urban areas and to manufacturing industries? This seems completely contradictory to the reasons why the Highlands Development Board was set up last year by the noble Lord's Government.
§ LORD SHEPHERDMy Lords, the noble Duke is perfectly correct in what he understood I said. As the noble Duke knows, we are, within the Highlands Development Board, making great efforts for the development of Scotland, but we have also to consider the nation as a whole.