Highlands and Islands (Selective Employment Tax)

Oral Answers to Questions — Scotland – in the House of Commons at 12:00 am on 15th June 1966.

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Photo of Mr Russell Johnston Mr Russell Johnston , Inverness 12:00 am, 15th June 1966

asked the Secretary of State for Scotland whether, in view of the dependence of the Highlands area on service industries, he is yet in a position to announce proposals to offset the effects of the Selective Employment Tax on the work of the Highlands and Islands Development Board.

Photo of Mr Jo Grimond Mr Jo Grimond , Orkney and Shetland

asked the Secretary of State for Scotland what steps are being taken to offset the damaging effect of the Selective Employment Tax in the Highlands and Islands.

Photo of Mr William Ross Mr William Ross , Kilmarnock

I do not accept that the Selective Employment Tax will have a damaging effect on development in the Highlands and Islands or that it will pejudice the work of the Highlands and Islands Development Board.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness

Surely the Secretary of State will admit that it is quite contradictory on the one hand to offer a £500,000 grant in aid for 1966–67 and, on the other, to take out £2 million from the area. This will obviously militate against development, as a member of the Board has clearly and forcibly said.

Photo of Mr William Ross Mr William Ross , Kilmarnock

The increase in taxation may take money out of the area, but that does not mean to say that we are wrong in emphasising the need to maintain expansion within the manufacturing industry. If there is any part of the country that needs such an expansion and will benefit from it, it is the Highlands. We must not always consider these matters in isolation.

Photo of Mr Jo Grimond Mr Jo Grimond , Orkney and Shetland

Is the right hon. Gentleman aware that he must be living in cloud-cuckoo-land? There is no question of people being squeezed out of the service industries in the Highlands and going into manufacturing industry, unless they go to Birmingham. We have the extraordinary situation in which we are encouraging manufacturing industry to absorb more people in the South. Will he look at this matter again and make representations to the Chancellor? This tax will do a great deal of damage to many parts of the Highlands, and in the Islands, coming on top of the seamen's strike, it will be disastrous.

Photo of Mr William Ross Mr William Ross , Kilmarnock

I do not think that there will be this squeezing, as the right hon. Gentleman suggests. He knows that the tourist industry in Scotland will prosper according to the demand made upon it, and I am satisfied that the demand will continue to rise and thus lead to further employment.

Photo of Mr Michael Noble Mr Michael Noble , Argyll

If the right hon. Gentleman simply refuses to believe what he is told by every source in the Highlands, not only by those in tourism but by those in transport and all the service industries, will be undertake a tour of the area to try to find out what the position is?

Photo of Mr William Ross Mr William Ross , Kilmarnock

I do not need to make a tour of the area to find out what the people there feel. I shall be having discussions with the Highlands and Islands Development Board very soon on this matter. I hope that the right hon. Gentleman will not misrepresent any statements that it may make, as he has done in the past.

Photo of Mr Robert Maclennan Mr Robert Maclennan , Caithness and Sutherland

Will my right hon. Friend consider what additional steps he can take to reduce the dependence of the Highland area on the service industries?