HC Deb 08 April 1971 vol 815 cc314-6W
Mr. Chichester-Clark

asked the Secretary of State for the Environment what estimate he has formed of the effect on the prices of council houses built under firm price contracts with fluctuation clauses to allow for repayment of selective employment tax by contractors, of his proposal to halve selective employment tax.

Mr. Amery

On average, up to £60 per house depending on the date of the contract and how long it has still to run.

Mr. Chichester-Clark

asked the Secretary of State for the Environment what estimate he has formed of the effect of the Budget on the construction industry; and whether he will make a statement.

Mr. Channon

The Budget contains a number of provisions which will benefit the construction industry. Among these are the reductions in the rate of Selective Employment Tax and of corporation tax, which will improve the industry's liquidity, though the effect of the cut in S.E.T. will not be felt on current contracts with an appropriate tax fluctuation clause. The easement in the provisions for taxation of closed companies should be of material help to the many small private firms in the industry. The controlled relaxation of restrictions on lending should assist builders who have been hampered by the tightness of credit. The abolition of the stamp duty on mortgages will reduce house purchasers' initial outlay and the increase in the S.A.Y.E. savings limit should raise the building societies' funds for home ownership. The curbing of tax evasion by sub-contractors, coupled with the reduction in S.E.T., should lead to the gradual elimination of bogus self-employment in the industry. In addition to these benefits the construction industry can look for its due share of the increased economic activity which the Budget is designed to generate.

Mr. Chichester-Clark

asked the Secretary of State for the Environment what estimate he has formed of the yield from selective employment tax which will come from the construction industry in the next financial year; and what proportion this will be of the total yield from that tax.

Mr. Channon

I estimate that the yield from selective employment tax in 1971–72 from the construction industry will be £80 million. This will be about 13 per cent. of the total yield from that tax after refunds.