Clause 26. — (Surcharges on Employers.)

Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 13th June 1961.

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Photo of Mr Cledwyn Hughes Mr Cledwyn Hughes , Anglesey 12:00 am, 13th June 1961

I have not the confidence in the Chancellor of the Exchequer which the hon. Member for Willesden, East (Mr. Skeet) has, and I do not wish to confer this dangerous power upon the right hon. and learned Gentleman. In my view, this is one of the most ill-conceived proposals which even this Government have produced. It has been received with varying degrees of hostility in various parts of the country, but it has shocked those areas which have suffered for years from chronic unemployment. What my hon. Friends have said about Scotland and what hon. Members have said about Northern Ireland is true of large areas of Wales. For many years, the position has remained fairly static in my constituency of Anglesey. For the last eight or ten years, unemployment has fluctuated between 8 and 10 per cent. of the insured population, the highest of any county in the United Kingdom. The consequences of this unemployment are well know to all hon. Members and I need not dwell upon them.

Recently, there has been an improvement. The efforts of local authorities and the inducements of the Local Employment Act are beginning to bear fruit. New industries are beginning to come in. The point which the Committee should bear in mind is that these industries are in the early stages of growth. Obviously, they are having and will have for some time teething troubles. It is not for me to tell the Government that it is not easy to induce new industry to come into these areas. We have been told that by Government spokesmen since 1951.

In Anglesey, we have five fairly new industries. They are doing well and are now on the threshhold of expansion. Things are beginning to look promising, but considerable problems remain. In its last report, the Anglesey Employment Committee said: In the last twelve months, the Employment Exchanges and the Youth Employment Office in Anglesey have placed some 2,000 people in work, yet at no time were there more than 100 vacancies available in the county. These figures give a broad indication of the surplus of the supply of labour over demand in Anglesey. That will give the Chancellor some idea of the problems with which we still have to contend.

Many of the industrialists who are building new industries in Anglesey and elsewhere have been greatly upset by the Chancellor's proposal. Quite naturally, their confidence has been shaken. On the one hand, we are told by the Government that they are doing everything they possibly can to induce industrialists to go into areas with high unemployment, while, on the other hand, the industries which are there are threatened with arbitrary taxation at the very moment when they are trying to establish themselves and build up. Many of these industries have not yet started to make a profit. Obviously, a new industry must expect to run for some time at a loss. They can go through a very trying time unless they have vast resources. In my opinion, this tax would have the effect of neutralising all the efforts which have been made.

The Chancellor says that he would use the tax only in times of economic crisis. It is precisely at times of economic difficulty that industries on the periphery need bolstering and encouraging. Shortly after the Chancellor's Budget statement, I received a letter from an industrialist in North-West Wales. He was extremely disturbed by what he had read. He said to me, "If this tax is imposed, I shall have no alternative but to close my three plants in Caernarvonshire and Anglesey" Although his industries do not employ a large number of people they make a vital contribution in the life of the area.

I want the Chancellor to say now whether it is his intention to apply this tax in areas such as Anglesey and the other unemployment areas in the United Kingdom. If he says that such is not his intention, that will reassure industry in these areas. On the other hand, if he does not give such a categorical assurance, he will shake the confidence of everyone concerned and nullify all the work which has been done by local authorities and others to deal with the twin evils of unemployment and depopulation. As it stands, the present proposal is monstrous, and I hope that even now the Government may decide to withdraw it. I warmly support the Amendment.