§ 2.35 p.m.
§ [The Question was as follows:
§ To ask Her Majesty's Government why those who process and pack poultry are entitled both to a refund of the selective employment tax and to the premium, whereas those who process and pack vegetables are entitled only to the refund but not to the premium.]
§ THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON)My Lords, entitlement to premium or refund under the Selective Employment Payments Act 1966 depends upon the category in which the activities of any establishment are classified in the Standard Industrial Classification. The processing of poultry, which usually involves a series of operations to convert the live bird into a packed product, is regarded as manufacturing for the purposes of this classification. The processing of vegetables is also regarded as manufacturing if preservation by canning, bottling or quick-freezing is involved. Both processes attract premium. If, however, the processing of vegetables simply involves preparation for sale, it is regarded as a part of wholesale distribution which attracts neither premium nor refund. When the preparation and packing of vegetables is carried out by the producer himself it is regarded as part of his agricultural or horticultural activities and qualifies for refund. In the same way, the preparation of poultry for 1318 the market, if undertaken by the producer himself, would normally qualify for refund.
EARL FERRERSMy Lords, would the noble Lord agree that the complexity of the Answer which he has just given indicates that some more uniform method of application of the selective employment tax is highly desirable?
§ LORD WALSTONNo, my Lords. I would suggest that the Answer I have given is an extremely simple and straightforward one. Any complexity—and there is complexity—arises in the variety of processes and the forms in which they can be carried out on the farm, in the agricultural enterprise, in the factory, in the retail establishment, or wherever it may be.
EARL FERRERSMy Lords, what happens if a manufacturer of pre-cooked meals wishes to put both poultry and vegetables into the same packs? Does he get a premium or only a refund?
§ LORD WALSTONMy Lords, a manufacturer is classified as a manufacturing enterprise and receives the appropriate treatment.