Amendment of the Law

Part of the debate – in the House of Commons at 12:00 am on 3rd May 1966.

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Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West 12:00 am, 3rd May 1966

I cannot entirely accept the hon. Gentleman's point, because what he is, in effect, saying is that this is the only remedy, whereas if he had listened with great care, as I did, to the Chancellor of the Exchequer, he would have realised that the policy of the Government is to increase productivity so that the total amount which the Chancellor of Exchequer can tax is that much more because of a planned economy, that there is no need to raise individual rates of taxation—which my right hon. Friend has not done today.

As the House knows, I am a Co-operative Member of Parliament. I want to make a quick response to what the Leader of the Opposition said about the effect of the new tax on the consumer. I understand my right hon. Friend's difficulties. Whatever taxes he proposes, it is said, "They are all right provided they do not affect me." What my right hon. Friend has done, in an ingenious way, is to produce an entirely new tax which will give him a fresh source of revenue and will enable him to deploy this new sector of taxation in future years before the five-year National Plan is finished.

The basis of the country's financial stability rests on whether we shall succeed in the great adventure on which the Government have embarked of a prices and incomes policy—a planned growth of wages and a planned economy. This is the start. This Budget is at the outset and is the framework within which that aim can be achieved. In pursuing it, the Government have been under pressure from people interested in incomes, on the one hand, and people interested in prices, on the other. Unless we are able to hold prices, the task of trying to hold wages, salaries and other incomes will be extremely difficult. Therefore, I contend that the starting point of this policy must be prices.

I express concern that the new tax, which will affect services rather than manufactured goods, is likely to have an immediate effect on prices. Once again, it is the housewife who will have to bear the burden. Housewives, although there are many of them, are not organised in precisely the same kind of pressure groups which are organised elsewhere and it is difficult for their voice to be heard. I speak, in some respects, for a Co-operative movement which consists of 13¼ million members which is not a mean proportion of the public—one in four. This movement will be considering with much deeper concern than I have been able to show in a short speech the effect which this tax will have on prices and particularly on groceries.

To look at the matter from the sectarian point of view of the Co-operative movement, we have 250,126 employees. Hon. Members can work out what impact 25s. makes on the weekly pay roll. Of that number, 218,222 are directly involved in services and sales. I suspect that some of my colleagues who have given service to the Union of Shop Distributive and Allied Workers will be interested to know what effect the tax will have on the union's members.