Amendment of the Law

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

Alert me about debates like this

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk 12:00 am, 3rd May 1966

I am delighted to have been called in this Budget debate tonight. It is a long time since the repeal of the Corn Laws, but the present Government are the first to have the courage to tax the nation's food. This is a very different story from the one put out during the General Election, when the party opposite complained about Tory policy for agriculture because, they said, it would raise the price of food. Then, within a month, the Government bring in a Budget which, at a very conservative estimate, will put up the price of most food by 5 per cent.

There is to be this 25s. a week tax on employees of all the distributive trades, including slaughterers, distributors, retailers and any processor who does not come under the heading of "manufacturer". This again will be a heavy burden, particularly to the people on fixed incomes and the old-age pensioners. It is also inflationary, because it will be passed on to the cost-of-living index. It will give to the public a reason for demanding increased wages.

I am not against a pay-roll tax. I am against the present proposal for a payroll tax, because I cannot understand what was in the mind of the Chancellor of the Exchequer when he made these proposals. If his proposal said that any manufacturing firm which kept its turnover to the same level but was able to dispense with any of its employees would get a bonus from the Government for increased efficiency, I could have understood this.

I admit that it might have been difficult to work out. It might have been a difficult administrative problem. But it would have been a strong pressure for increased efficiency in our manufacturing industries. But what do the Chancellor's proposals bring about? The trade unions now know that, in a foreseeable time, each of their employers will receive 7s. 6d. a week per employee as a bonus from the State.

For the life of me, and however responsible the trade union leaders may be, I cannot see any union not slapping in an immediate claim for 7s. 6d. increase in wages. They will know that the employers will be getting the money from the State and they will therefore demand that the money be paid to those working in the industry. Human nature being what it is, I cannot see how I could blame them for taking that action.

There is nothing in the proposal, therefore, to bring about increased efficiency. It will merely provide an inbuilt reason for retaining labour in the manufacturing industries and for demanding wage increases by the unions in industries where the State, out of its generosity, is subventing the employers by 7s. 6d. a week for every male employee and 12s. 6d. for every female employee. If that does not create inflation I should like to know what will.

I also want to criticise the Chancellor's proposal in that he claims that the agricultural community will recoup its expenditure on the pay-roll tax in the Annual Price Review. I need not tell you, Sir Eric, with your long experience, that in the last two Price Reviews, the farming community under-recouped its costs by £28 million and if the Government think that they can sell to the farming community the idea that the pay-roll tax will be taken care of in the next Price Review——