SELECTIVE EMPLOYMENT PAYMENTS VARIATION ORDER 1968 (Hansard, 28 June 1968)

§ LORD BESWICK
My Lords, I beg to move that the Selective Employment Payments Variation Order 1968, a draft of which was laid before this House on May 30, be approved. The main purpose of this Order is to correct two anomalies. It will put the private-sector slaughterhouses in a similar position to those operated by the local authorities. The private-sector slaughterhouses, of which most are operated on a co-operative basis, have previously been at a disadvantage as compared with the local 1644 authority slaughterhouses, and the position has been very carefully, and I might say forcefully, put by Members in the other place.
As a result, this Order proposes that private-sector slaughterhouses and knackers' yards shall now be eligible, subject to certain conditions, for registration under Section 1 of the Act. The effect of this is that in all parts of the country, outside development areas, they will receive refund of the tax, and will be in a similar position to local-authority slaughterhouses. In development areas they will get, in addition, regional payments, as do food-processing establishments in those areas.
The second change made by this Order is the result of judicial decisions of this House. The testing of goods for manufacturers has been held to be eligible for refund of the tax under Section 1 of the Act as part of the manufacturing industry. However, owing to an earlier legal decision this ruling cannot apply to the testing of such goods to make sure that they conform with some Statute laid down by Act of Parliament. Thus the testing of anchors after manufacture to make sure that they conform with the standards laid down in the Anchors, Chains and Cables Act 1899 does not at the moment attract refund of the tax, whereas if there were no Act laying down standards, similar testing would attract refund of the tax. This is clearly inequitable, and the Order puts the anomaly right.
The cost of these two changes—slaughterhouses and statutory testing—will be about £650,000 in a full year at the proposed new rate of the tax which comes into effect on September 2. The Order is not and cannot be retrospective. My right honourable friend therefore proposes that the changes I have been explaining should take place on the earliest possible date, which is August 5.
There have been representations, in addition to those made by the representatives of the co-operatives about a number of other activities which are neither the subject of tribunal decisions favourable to those who pay the tax nor included in this Order. My right honourable friend has considered all these representations very carefully indeed, but has been unable to agree that there is sufficient merit 1645 in them to enable her to include them in this Order. The general question of classification of particular activities for S.E.T. purposes will, however, be kept under review. In this connection I should mention that the present edition of the Standard Industrial Classification, which is used as a basis for decisions on classifications under the Selective Employment Payments Act, is at present being revised for statistical purposes and will probably be published later in the year. When the new edition is available, the Government will consider the implications for S.E.T. of any changes which it incorporates and will be ready, where appropriate, to take account of them for the purposes of the Selective Employment Payments Act. My Lords, I hope that with that explanation it will be possible for you to approve this Order. I beg to move.

§ LORD KILMANY
My Lords, may I take up for a moment the last few sentences of the noble Lord? I had not intended to speak on this particular variation of selective employment tax regarding slaughterhouses, but the noble Lord went further and promised the possibility of a review of other cases of selective employment tax. I wonder if he can tell your Lordships whether that review will include the case of the Scottish hoteliers, who sent a deputation to London last week. They made their case to the Government, and the Government promised consideration. The question I ask the noble Lord is whether what he has just told us is likely to include consideration of that particular subject.

§ LORD DRUMALBYN
My Lords, may I thank the noble Lord for his explanation of this Order, and ask him about the statistical review that is being prepared. Is it being prepared for publication or simply for the purposes of the Government? Is it only for statistical purposes? I understand that the impression which the noble Lord gave was 1646 that he was going to take advantage of something which had been prepared for another purpose in order to review the whole work of the Selective Employment Act. It seems strange that it should be necessary to await statistical surveys of this kind before the Government can give an opinion on matters of principle affecting the S.E.T. I should have thought that the statistical survey merely provides some evidence for that, rather than that it would govern the principles involved. I do not know whether the noble Lord is able to give us any further information on what he expects to get out of this and what he will be looking for in the statistical survey.

§ LORD BESWICK
My Lords, on the point about the Scottish hoteliers. I understand that my right honourable friend the Chancellor of the Exchequer or the Chief Secretary will be making a statement about the position there during the course of the discussions on the Finance Bill next week in another place.
In regard to the statistical publication, as I understand it a review of this kind showing the practical application of the tax may give rise to the need for a change. I assume that there must be cases where there is a marginal consideration. All I am saying here is that when this statistical review is complete, if it throws up any other anomalies which have not been brought to the attention of my right honourable friend he will be prepared to consider them.

§ LORD DRUMALBYN
My Lords, would the noble Lord answer my question as to whether or not the statistical review will be published?

§ LORD BESWICK
My Lords, I am not able to answer that, but I wi11 certainly let the noble Lord know.