Clause 26. — (Surcharges on Employers.)

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

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Photo of Mr George Lawson Mr George Lawson , Motherwell 12:00, 13 June 1961

The hon. Member for Barry (Mr. Gower) appears very happy about developments in his own area. I remember that recently he boasted to me about those developments. It would seem that what has been provided in that part of the country is similar to what we are asking for elsewhere, namely, a measure of discrimination. It is for that we are asking in the Amendments.

A characteristic of the Clause is that it is non-discriminatory. It is designed to treat all kinds of industries, workers and employers on the same flat-rate basis. It appears to me that unless a considerable measure of discrimination is injected into the Clause it will not serve the purposes which I think that the Chancellor has in mind. I am prepared to agree that the right hon. and learned Gentleman wishes to bring into being a regulator which would enable the Government, by its operation, to lessen an excessive demand for labour; to prise out workers from those firms and industries where there are too many workers and transport labour to where it may be better used. It is designed to liberate the workers; to enable them to go where their skill may be more effectively used in the interests of the national economy.

The very fact that this is a flat-rate, non-discriminatory general regulator will defeat that purpose. My hon. Friend the Member for Glasgow, Scotstoun (Mr. Small) asked about the practicalities of the idea. As he said, when any employer finds himself having to carry the payroll tax, he will look round to see what kind of labour he is able to dispense with. I submit to the Chancellor that those workers whom employer A could dispense with most advantageously are not necessarily the workers who could be profitably employed by employer B. It may well be the other way round. Those whom employer A would wish to dispense with are the same as those whom employer B would get rid of were he in the same position.

5.15 p.m.

To my mind, the term "special area" does not mean only an area of relatively high unemployment. It includes areas where there may be an excessively high demand for labour. That is the case, for example, in the Midlands. My hon. Friends and I have asked Questions designed to bring out the relative demand for labour or, as we put it, job opportunity, in the Midlands as compared with Scotland. Both areas are the same in size.

The Answers to those Questions revealed a startling difference in the job opportunity or demand for labour. There is a scarcity of labour in the Midlands and an abundance of labour in Scotland. Out of every 100 boys wholly unemployed in Scotland there might, for example, be 30, 40 or 50 unfilled vacancies. On one occasion there were 23 unfilled vacancies in the Midlands for every boy who signed the unemployment register. At the same time, in Scotland there were two or three boys for every vacancy. The contrast is so great. The position with which the right hon. and learnd Gentleman is seeking to deal is more or less permanent, in the sense that there are excessive demands in some parts of the country, and in certain industries and skills, and a considerable lack of demand in other parts.

What is likely to happen if the right hon. and learned Gentleman does not apply his regulator in a discriminatory fashion is that in areas of high labour demand employers who have the labour will hold on to their workers. In areas like the Midlands, such a regulator would not prise out the workers. If employers have found it difficult to obtain workers, they will be all the more likely to want to keep them. In that sense the regulator would work the wrong way round and would lead to a tighter rather than a looser grip on the workers.

This must apply more especially in the case of the scarcer types of labour, the skilled workers. In any area where there is a great demand we know that there is a great scarcity of skilled workers. So it must mean that the discrimination will operate in that direction, in the sense that those workers will be retained and others dispensed with. In terms of skill if the purpose is to release labour it must mean that the purpose is to get skilled people especially out of jobs where their skill is not being utilised to the full.

I should like to see some kind of payroll tax which would operate heavily in some areas, where it would make certain skills expensive, and less heavily in other areas where the same skills would be less expensive. This would have to apply to special industries. My hon. Friend the Member for Scotstoun referred to the shipbuilding industry. It might be argued by such people who write for papers like the Economist that if an industry cannot pay its way, it is time that it went out. But we must appreciate that we shall need the shipbuilding industry for a long time to come. Our shipbuilding industry finds difficulty in competing with the industries of other countries and it is not for us to make those difficulties greater.

Just as this payroll tax, operated on a flat-rate basis, favours skilled workers and certain districts, so it does in respect of certain trades or industries. It is discriminatory to industries like the automobile industry which can afford to pay substantially higher for some skills. Such industries as the automobile industry and the shipbuilding industry are competing for the same kind of skills.

Often, the automobile industry draws away skill from shipbuilding and uses it at a much lower level of operative ability than would be the case in shipbuilding. Unless the discrimination for which we ask is applied, or unless there is even much finer discrimination than is proposed, an industry like shipbuilding would in these circumstances find itself even more readily and rapidly drained of the skills that are essential for it.

When there was a reference to unemployment in Scotland, the hon. Member for Ayr (Sir T. Moore), who is no longer in his place, said, in a rather offhand fashion, that is was only 3·1 per cent. The suggestion in his voice was that it was very little. The important factor, however, is not the absolute total of unemployment, but the relative position. It would be fantastic if we in Scotland had the kind of unemployment that we had in the interwar years. What we have in Scotland is a great lack of job opportunity as compared with other parts of the country. We resent this, because it is quite unnecessary.

There is not a night when I go to Motherwell station on my way to London—I travel every Sunday night—when there are not some young fellows on the platform who are coming down here "on spec." When I ask where they are going, they reply that they are coming down here to see if they can get a job. When I ask whether they have a job to go to, they reply that they have not, but that they are coming down "on spec" to stay with a sister or brother, who has told them that there are good opportunities. That sort of thing goes on day after day

Figures have just been issued showing that in the past ten years we have had a net loss by migration of over a quarter of a million people. That is not to say that only a quarter of a million have emigrated. It is the net loss bearing in mind that we have a higher birthrate than is characteristic of England and Wales, although not, perhaps, as high as is characteristic of Northern Ireland. Nevertheless, our population growth remains practically static.

This is where we make our special plea. We must have deliberate Government action to rectify the wrong balance that has grown up in our economy. A great centre of population like Birmingham or London draws more and more people to it nagnetwise. The bigger it becomes, the more powerful the draw. The further one is away from the centre, the less job opportunity there is in the more peripheral areas. There is always this draw to the centre. As a result, more and more of our population moves into this quite small pant of the country.

We must have Government action to rectify that type of development. If the Chancellor's measures are to work effectively, they must be discriminatory. We ask him at least to accept our Amendments.