Ah, indeed—and high time, too.
Now, two specific points with reference to the new tax. Why has the date 5th September been chosen? I make a plea on behalf of the hotel industry that if this tax is to be introduced, it should be introduced at the end of September and not at the beginning of September. This would allow the many hotels which close down at the end of September to work out their new costings for the next season in plenty of time and they would not be tied up in the new tax in the last month for which they remain open and are busy.
This new tax will bear very hardly upon hotels. I regret that the new investment grants will not apply to hotels. I regret the abolition of the investment allowances. That decision shows a weakness in the Government's attitude towards taxation. At every stage, whatever they do, whether it is theoretically advantageous or not, the result is an additional complication. One of the great virtues of the old investment allowances was that everybody knew where they stood and what they would get, that they applied to everyone and were easy to apply and that it did not need a single additional clerk to administer that tax. Moreover, it rewarded those who were successful because it gave the allowance to them in tax relief. The allowance was given to the hotel industry, which is only now beginning to reorganise itself from its rather Victorian appearance of a few years ago.
Coming from a farming area, I cannot fail to mention the most serious difficulty of all which arises from the tax—its effect upon the farming community. The smaller farmers are finding it difficult to keep going, and the strain of keeping their working force together is very great. More and more they have to look around for ways of getting rid of one or two helpers and of relying more and more upon themselves and their wives. This tax will be a great burden to them. It is the acceptance of an immediate burden in return for a theoretical compensation at a later date, and no farmer will be particularly enthusiastic about that.
May I turn to the question of Surtax on certain dividends received from companies which have paid earlier interim dividends. May I state clearly my own philosophy on this matter? I do not believe that retrospective legislation is justified in any circumstances whatever, unless it is to right a wrong which has been inadvertently committed in the past. If it is in the nature of an additional levy or burden, it should not be allowed. In this case many thousands of shareholders are affected who had no say at all in the decision. Most of the additional dividends declared by interim dividend were declared by the boards of directors. The shareholders simply received these dirk dends, as they had every right to do, just as the directors had a right to declare these dividends as the law stood at that time. But because it has not been popular with them, hon. Members opposite propose to change the law for that year only, so that the additional dividends in the year 1965–66 may not be spread over several years, as may he done in any other year when exceptional dividends are received from a particular company. This is wrong. The action taken by those companies was legitimate and within the law. People have the right to act as the law stands without having those actions upset by subsequent legislation.
I agree with the Chancellor that the greatest problem at the moment is how to increase productivity. During the last week we heard many speeches on this subject, which is a good thing, but we are entitled to judge the Government by their actions and not by their words. Many actions will have to be taken by the Government if we are to get the increased productivity which we all require. I cannot see the justification for the unions having different sets of law applicable to them by comparison with any other set of people in the community. Just as it is right that we should get rid of restrictions introduced in the past by industries to protect themselves—restrictions which are no longer justified—so it is right that we should apply this principle to the unions.
When Ministers are asked to intervene in wage settlements they must influence the decisions in favour of productivity. I do not say that they will not do this but we are entitled to judge them by the actions which should follow their words.