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 Mrs Patricia McLaughlin Mrs Patricia McLaughlin , Belfast West 12:00 am, 13th June 1961

I think it important that I speak for this Amendment, but I hope that I have already made clear that I speak on behalf of Northern Ireland without it having any let or lien on any part or side or party within this Committee.

Tonight, we have listened to hon. Members who have spoken on behalf of the payroll tax and against the payroll tax. We have listened to hon. Members who have put the point of view of certain areas which require special attention, and we have listened with great attention to the Chancellor, and his promise that on the Report stage of this very important Bill he will give particular attention to the needs of Northern Ireland.

I am here, then, despite what has been said by the hon. Member for Newton (Mr. Lee), who always shows such great attention to Northern Ireland when we come to discuss the Finance Bill or other important matters, but who, I am sad to say, does not pay such great attention to Northern Ireland's urgent day-to-day needs. I wish that we could have the same attention paid to the day-to-day needs that we get only very occasionally. On the other hand, Her Majesty's Government have achieved practical results by their work and determination to see that Northern Ireland is looked after. I must say this honestly, and I would say it beyond the Bar of the House, if I had the opportunity.

This payroll tax, as it is called—this regulator—has been designed to do something for the country in times of national emergency, when it is necessary to ensure that the economy of the country is stabilised. It is said that what is good for one part of the United Kingdom is good for the lot. In this case, I cannot believe it, nor can my hon. Friends who have supported the Amendment.

9.15 p.m.

We in Northern Ireland know very well that when prosperity reigns it reaches us much more slowly than any other part of the United Kingdom. We know that when prosperity dwindles, we dwindle much more quickly than any other part of the United Kingdom. [Laughter.] It is all very well to laugh, to sneer, or to be casual about it, but we in Northern Ireland know that we have a difficulty which is much greater and is much slower to resolve than in any other part of the United Kingdom.

That is why I support the Amendment, to get the Chancellor of the Ex-chequer not only to consider this matter on Report, but to take a definite decision in the critical situation in which we find ourselves. [HON. MEMBERS: "Hear, hear."] Hon. Members may say, "Hear, hear," and support us, and we are, no doubt, grateful for that, but that is not the crux of the matter. The crux of the matter is that we have six counties in the northern part of Ireland which are part of the United Kingdom integrally, economically and in every way.

We in the six counties know that we were not put in that position of being part of the United Kingdom by any choice of ours. We would have preferred to be a larger part of the United Kingdom. But because we are a small number of counties—six—separated by water from the rest of the United Kingdom, we feel all the economic difficulties more seriously and more quickly.

When we come to the question of the payroll tax, this economic regulator, we know that we are already accepting the first regulator and that the second one cannot he for us. We ask the Chancellor seriously to consider this issue. I know that he has passed it off to the Northern Ireland Government and said, "You will administer this, you will impose it and draw in the money." That means that every employer in Northern Ireland, whether employing 100, 200, or 300 people, will be involved in this proposal should an economic crisis arise in Britain.

That means that the small industries, the rural industries, industries which I know so well, working on a small economic margin, will be the hardest hit. This tax could not be satisfactory for the whole of the United Kingdom. That is why I venture to take the time of the Committee and ask for reconsideration of this urgent matter.

We can think of it in, perhaps, Gilbert and Sullivan terms. The Northern Ireland Government are to be forced by the Government at Westminster to impose a tax which they will pay back. To whom and how much will they pay back? Who will pay the cost of administering it? Will it be paid back to those employing merely a few workers, or simply to the large employers? Are we to consider only the aircraft and shipbuilding industries, or will we consider everyone?

If the Chancellor had decided tonight to use Northern Ireland as a guinea-pig area in this new idea, Northern Ireland could be exempted permanently from this tax and used as an area in which he could study the repercussions of exempting such an area from the tax. We in Northern Ireland have sympathy with hon. Members who represent Scottish development districts. We have heard their propositions put forward, but we know that they differ from us in one respect. They differ particularly in the fact that they are all, except Northern Ireland, on the mainland.

We in Northern Ireland have the extra freight charges and the extra cost of getting the raw materials which are essential to our economic development there and getting them back again into the United Kingdom in the form of finished products. We know perfectly well that we have a bigger unskilled labour force however hard we try to train them, because we have a greatly increasing birthrate. This is part of the problem when it comes to any, question of a payroll tax. The Chancellor has said that he will look at this-matter again on Report, but tonight I want him to say more and to give us a very favourable idea of what he will say on Report.

The Chancellor tells us that the Minister of Finance for Northern Ireland has said that he will repay the payroll tax to those who have to pay it if it is imposed in the next twelve months, but if a tax is suggested it is surely not done in jest. It is done with some genuine intention that it may have to be imposed. If it has to be imposed we must accept that in Northern Ireland it cannot and must not be imposed in its present form.

It must be remembered that Ministers in Northern Ireland are limited in what they can say because they are only working within the framework in which they are allowed to work. Despite what the Minister of Finance for Northern Ireland has said, I ask my right hon. and learned Friend to give us greater assurance here tonight. I wish that the Minister of Finance far Northern Ireland had told me and the public that he would repay this payroll tax. Problems in Northern Ireland arise entirely of the nature of the Opposition in the Parliament there. If there were a stronger and better Opposition there we might have a clearer indication of what is going on, but the House of Commons here is the only place where efforts can be made to clear up this problem.

We believe that the Northern Ireland Government are given power to charge this tax to individual industries if and when the tax is applied and that they are given power also to pay it back, but we are not told—and this is the important issue—whether or not the Government there will impose it. This is the crux of the whole matter. Time and again we from Northern Ireland have suggested in the House and in Committee that Northern Ireland is a small economic entity in the United Kingdom which should be used for many experiments. This is a first and vital experiment. Let Northern Ireland be exempted from the payroll tax and let us see how that works.

Northern Ireland is a part of the United Kingdom with many industries, among them shipbuilding, which have been hit by the present serious world situation. I do not want to weary the Committee now with the problem of shipbuilding, but we all know that in the United Kingdom today it is extremely difficult to obtain a contract for shipbuilding. It is usually swiped by Germany, Japan, or some other country. We have many ship repairers in the industry who will not see the age of 50 again. They are among the great number of ardent workers in Northern Ireland who are without the skill of full training; and the demand for ship repairing is decreasing.

There is also the problem of aircraft building. Hon. Members have sat through innumerable debates on the subject and they know perfectly well that when it comes to aircraft building we are told that Ulster is either too far in front or too far behind. We in Northern Ireland have never hit the right moment for a number of years. When it comes to vertical take-off aircraft and similar ideas we are far in advance of other countries, but we have found it extremely hard to persuade Her Majesty's Government and the countries of the Western world from which we hope to obtain commercial contracts that that is a fact.

Here again, we know that we are—