The tax is likely to add on average about 2 per cent. in each case, but the lifting of the import surcharge and the new investment grants should enable the builders to absorb part of this.
Two per cent. on the cost of a house is quite a substantial sum of money. How does the right hon. Gentleman expect to encourage people to build houses when this increase is imposed upon them? Will not he ask his right hon. Friend the Chancellor of the Exchequer to remove the burden of the Selective Employment Tax from people building houses?
The hon. Member should appreciate that in our economic circumstances an additional burden of taxation was required. If another form had been used it might have had an even more depressing effect upon the economy, and particularly upon Scottsh house building.
Does not the right hon. Gentleman agree that although 2 per cent. by itself may not sound a great deal, it is 2 per cent. on top of an already steeply rising house-building cost?
The right hon. Gentleman should know all about steeply rising house-building costs, because they occurred while he was Secretary of State. [Interruption.] Oh, yes—in 1964 the increase was 10 per cent., and he did nothing about it. I hope that it will stimulate increased efficiency in the use of labour in the building industry.