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Clause 1. — (Selective Employment Premium.)

Part of Orders of the Day — Selective Employment Payments Bill – in the House of Commons at 12:00 am on 20th July 1966.

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Photo of Mr Robin Chichester-Clark Mr Robin Chichester-Clark , County Londonderry 12:00 am, 20th July 1966

My only regret at this moment is that we have so little time adequately to discuss these very serious and grave Amendments. We are discussing other Amendments, including one dealing with fixed-price contracts and their effect upon the industry. That in itself is a subject worthy of a good many hours of debate if the situation is to be made clear.

Sixteen Amendments have been selected, and, despite the speed with which they have been discussed, despite the speed with which my hon. Friends have spoken and the restraint with which they have treated the Amendments, saying no more than it was necessary to say, we find ourselves with but a few minutes left to discuss the largest industry in the country, employing 1,811,000 people, of whom, I understand, 1,350,000 are liable for the Selective Employment Tax. Here we are having to deal in a few minutes with an impost of about £86 million, no less than £48 million of which is likely to be levied on men engaged on public authority contracts carried out by private builders, for which the weary taxpayers and ratepayers have to foot the bill.

We are also discussing an industry the manpower of which builds our houses, roads, schools and universities. This is the first occasion during the course of the Bill—and it may be the last—on which we are able to dilate upon the importance of the industry and what it is doing today. That is disgraceful, and is entirely due to the Government's timetable.

The purpose of the Amendment is to move the construction industry, as defined by Order XVII, Minimum List Heading 500 in the Standard Industrial Classification, out of its present position where it is subject to a levy of 25s. a head into the "good boy" class with a cash prize of 7s. 6d. a head—in other words, from low gear, via neutral, to overdrive.

To discuss this Amendment, we should have needed much more time. We shall also have to use a great number of figures, because this is, as the right hon. Member for Leeds, West (Mr. C. Pannell) has said, a "technocratic" industry and it must be considered with statistical accuracy and care so that the "dialogue" —his words again, I think—can be meaningful in the Committee.

As the Bill is at present drafted, the incidence of the tax on the construction industry will have a very serious effect on output and performance. We believe that the industry should be encouraged rather than depressed, assisted rather than attacked. It has suffered another blow today. lf there are to be premiums at all, there are few more worthy candidates than this industry, which builds our houses, schools, hospitals and universities.

As the Clause stands, the industry will bear the full incidence of the tax without refund or premium, which means an impost of I:86 million in a full year. The National. Plan shows that 1,350,000 people are liable for the Selective Employment Tax. As I said, a number of those are engaged on public authority contracts carried out by private builders, for which we have to foot the bill. No one is suggesting, I think, that the industry should in any way "opt out" of the economic crisis, but, after all, any industry can reasonably expect a Measure of this kind to meet at least two requirements. One of them is relevance and I will come to the other in a moment.

One of the avowed aims of the tax is that …it will have a beneficial longer-term effect by encouraging economy in the use of labour in services and thereby making more labour available for the expansion of manufacturing industry. That is from the Chancellor's own White Paper. He said, in his Budget Statement: The tax will apply to construction in the same way as services so as to encourage the industry to scrutinise its use of labour more closely;"— [OFFICIAL REPORT, 3rd May, 1966; Vol. 728, c. 1455.] That, to anyone who has knowledge of the industry over the past few years, is a very strange remark, as the Parliamentary Secretary ought to know.

Of course, it would be idle to deny that some improvements can be made in the industry's use of manpower. Of course they can, although the industry's record in this connection is second to none. But I am fair from convinced that the industry is ever able to hoard labour, unlike potential labour hoarders like the motor industry and the printing industry—and they get a cash prize under Clause 1. Even if the construction industries did hoard labour, the tax would be irrelevant, for the very reason that it is discriminatory or selective, term it what one will.

I would give a hypothetical example. The right hon. Gentleman's tax seriously affects the small and medium-sized builders. A builder in a small manufacturing town will be faced with the prospect of paying 25s. a head for his employees, some of whom will be skilled men. He might decide that he could not absorb all the tax and would not dare to pass it on because of the fierce competition in tendering in the area.

Therefore, he would lay of two men, perhaps skilled bricklayers, members of a craft which is in short supply. Down the road might be a motor manufacturer who took them on—not as skilled bricklayers, but simply as unskilled labourers. He could use them on the shop floor and receive a premium for each of them. 'That is a loss to the building industry of two skilled men and a gain to the motor industry of two unskilled men. That is the kind of thing which the Government ought to know. Who can call that a sensible redeployment of labour?

I know that, in a moment, Sir Eric, you will be moving in your Chair. I will only echo my earlier protest that it is absolutely disgraceful that we should be faced with a timetable which prevents us from discussing what is perhaps the most important industry in the country. We have done our best to be discreet and restrained in our discussion of Amendments so far. They have been discussed with expedition and they have been sensibly discussed.

No one has made any attempt to hold up progress. On the contrary, we have tried to speed progress. Yet the Government have arranged matters so that the construction industry shall have no discussion of the vast problems which face it—an industry in which the Government have created a crisis of confidence, added to by the events which have taken place today and the announcement which the Prime Minister made concerning that industry this afternoon.

This is a disgraceful situation. What is anyone to think of a Government who so treat one of the major industries of the country that they make a distinction between the brickmaker and the bricklayer sufficient to justify the award of a cash prize to one and the imposition of the supreme penalty on the other. The Contracts Journal, the other day, relapsed into the kind of language which A. A. Milne might have used, and which I suspect the right hon. Member for Leeds, West might use, when it wrote: I suppose it is no use trying to point out to Mr. Callaghan that there can be no possible purpose in making bricks and paying out 7s. 6d. a week in respect of every man making them unless they can be laid.It being one hour and eleven minutes after half-past Seven o'clock, being the time equivalent to the time which elapsed between half-past Three o'clock and the time at which consideration of the Bill was entered upon, The CHAIRMAN proceeded, pursuant to Order, to put forthwith the Questions on the Amendments, moved by a member of the Government, of which notice had been given, to that part of the Bill to be concluded at that hour.