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 Patrick Wolrige-Gordon Mr Patrick Wolrige-Gordon , Aberdeenshire East 12:00 am, 3rd May 1966

I hope that the hon. Gentleman the Member for Sheffield, Brightside (Mr. Winterbottom) will forgive me if I do not follow him too closely in what he has said in the course of his interesting and long speech, which was concentrated mainly on distribution and the effect of this new tax on distribution services. I would like to say a word or two about the Budget. The Budget will be judged on two counts. First, on the extent to which it affects everyone's pocket and area, and secondly, on the extent to which it points the way for getting our country out of its present difficulties. I will deal with the first point quite briefly. I imagine that reactions will be as various as every citizen. My own comment would be that this further rise in taxation, which is what we have, comes ill from hon. Members opposite who, for as long as I have been in Parliament at any rate, have always argued that they could pay for their programmes out of increased production without having recourse to increased taxation.

I want to deal more fully with the effects of this selective tax on the areas. I was impressed, as I imagine many of my hon. and right hon. Friends were, by the Chancellor's statement and by the figures he gave by way of comparison between the service and manufacturing industries. However, 60 per cent. of Scotland's population is engaged in the service industries and last year we had the highest rate of emigration from our country ever. In my own part of the country, in the north-east of Scotland, the service industries are the principal source of employment for our population.

Whatever the Government may say about their regional development policies, let there be no doubt that this tax is inevitably going to make life more difficult for such areas as mine, in spite of the fact that they are already development areas. A move of this sort only underlines what I think is going to become increasingly more important and urgent, namely, that the time has come to consider seriously some kind of differential tax system for such areas. At present one has industries in those areas which cannot pay the same wage as industries in other parts of the country.

A lower wage rate makes a strong disincentive for the local people to stay and develop the local economy. I see no reason why the Government of the day should not provide the circumstances in which any industry, manufacturing or service, could pay a uniform rate of wage throughout the country.

The other serious impact of this measure concerns agriculture, which is the largest industry in Scotland. Once again the Government are condemning agriculture to live under a question mark. I hope that we shall hear in the course of this debate what is going to be the effect upon agriculture of this new tax. I do not believe that any farmers will welcome this formula of organising it in some way through the Agricultural Price Review machinery. I should like to ask why not have a perfectly straightforward rebate system for the agriculture industry?