I beg to move Amendment No. 262, in page 2, line 23, at the end to insert:
(2) This section applies to any employment for a contribution week of less than 21 hours, in any establishment or activity not mentioned in sections 1, 3, 4, 5, 6 of this Act, or in other subsections of this section.
I think that it would be for the convenience of the Committee if there were discussed with it the following Amendments:
Amendment No. 209, in page 2, line 23, at the end to insert:
Provided that any such payment shall be reduced by one-half in respect of a person who has worked less than twenty-one hours during that week
Amendment No. 280, in page 2, line 24, to leave out subsections (2) to (6) and insert:
(2) This section applies to any employment—
the establishment employs amongst its employees at least 20 per cent. who are in part-time employment who each works for less than 21 hours a week, or are over 60 years of age ".Amendment No. 131, in page 2, line 38, at the end to insert:
(c) the establishment employs among its employees at least 20 per cent. who are in part-time employment who each work for less than 21 hours per week.Amendment No. 249, in page 2, line 38, at the end to insert:
(c) more than half of the employed persons employed for the purposes of the establishment are normally so employed at a rate of remuneration not exceeding five pounds per week.New Clause 3, "Part-time workers".
Amendment No. 262 concerns part-time employees. Amendment Nci. 280 makes nonsense unless it is taken in conjunction with Amendment No. 267, in page 1, line 10, to leave out from "to" to the end of the section and insert:
twice the tax paid—
The points to be made in support of this Amendment are very simple and can be shortly stated. I shall try to set a good example by speaking for only a very few minutes. First, this tax, being a poll tax, is a higher proportion of a low income than of a high income. Part-time employees receive low incomes and, therefore, the tax is a much greater disincentive to the employment of part-time workers than of full-time workers. This is a matter of simple arithmetic and the Front Bench opposite will be able to work it out.
Far be it from me to give the Government Front Bench a lecture on Socialist economics or Socialist principles of taxation, though I have some experience of Socialist economics. On previous occasions, I have said that one of the principles we should follow in taxation is to take according to the ability to pay. In this tax, we have a classic example of taxing low income earners. By definition, part-time workers are low income earners, and we are taxing them very heavily. Therefore, as I have said, the disincentive to employ part-time workers is all the greater.
We must attract part-time workers into employment. Earlier today, the Prime Minister laid great stress on the appalling shortage of labour in our economy. Where shall we find the labour? Apart from the shake-out of which the right hon. Gentleman talked, we shall find it only among those who are not at present members of the labour force. Who are these people? They are those who want part-time employment, primarily women and elderly people.
The employment in industry of women, particularly housewives and mothers of young children, presents a problem. Not only do we want to bring back into employment those qualified as doctors and teachers—the need there is obvious —but we want to bring women into employment in the whole length and breadth of British industry. We should encourage them at the time when their families have grown up to school age or some sort of independence to come back and take an active part in industry. But they cannot be brought back as full-time employees.
We all know about the "latch-key" children, and we have no desire to encourage that sort of thing. We should ensure that industry is able to adapt itself to the problems of housewives and mothers of young children so that they are encouraged to come in and work the sort of hours which fit in with the bringing up of a young family. This means part-time employment.
There are already substantial disincentives against women taking employment. Our Income Tax is a notorious disincentive, lumping together the incomes of husband and wife for tax purposes in many instances. I have had many such cases put to me, and we all know how these calculations are made and the criticisms which they cause. So there is already some disincentive for women to come back into industry. The tax will create an even greater disincentive because of the burden that it places on the employer who wishes to adapt his industrial processes to the employment of part-time women. We shall not be gaining from this great reservoir of now unemployed women.
Thirdly, do the Government believe that a great host of part-timers, when they have been shaken out by the tax, will go and push handles and get their heads down in manufacturing industry? I can assure them it will not happen. The Mrs. Mopps will not be forced by the tax into industrial processing. Many of them have reached a stage in life where industrial training for them would be somewhat problematical. Many of them are not the kind of people who can adapt themselves to the hours and processes in which the Government seem to be interested. So we shall not get a shakeup. We shall merely ensure a situation in which all those at present sweeping our floors will not be employed. If they are shaken out they will have to go back and sit all day in their front parlours. They will not go into factories.
My fourth point concerns the other important category of part-time employees —the elderly. Earlier we had an instance from the Government back benches. It is a medical fact that elderly people need a period of part-time employment to adjust to retirement. The Government are placing a hefty disincentive on part-time employment and are not making any provision for a period in which elderly people can adjust to retirement. We want older people to continue working productively in industry and elsewhere. This is, I hope, part of the Government's purpose. But employers will face the fact that, although the employment is cheap, and although the elderly employees are working few hours, they have to pay this very substantial tax, for it will be substantial in proportion to the incomes paid to the elderly. We already have a substantial disincentive to elderly people working because of the earnings rule. Now the Government are to heap this other disincentive on top.
I cannot believe that the Government can possibly fail to accept this Amendment. I cannot think what argument they could use to persuade themselves that the Amendment does not make sense. So I commend it to the Government and the Committee and hope it will be accepted.
I echo the words of the hon. Member for Cornwall, North (Mr. Pardoe). I canot see a valid reason why the Government could reasonably reject the Amendment. As the hon. Gentleman said, those concerned are generally low-income earners, and the imposition of this tax must, in effect, be a great disincentive to the employment of persons in this category.
I have put Amendment No. 131 on the Notice Paper, in page 2, line 38, at end insert:
(c) the establishment employs among its employees at least 20 per cent. who are in part-time employment who each work for less than 21 hours per week.
It would define even more narrowly the categories for whom I would seek a concession if the Government are so obdurate as to resist this Amendment. It would be a modest requirement because establishments of this nature with as much as 20 per cent. in part-time employees are doing a wonderful job for the community. If people are working less than 21 hours per week, they are truly part-timers.
There is a long tradition of part-time work in the booming industrial areas—the Midlands and Yorkshire, for example —where there has been prosperity for many years. But in many other areas the effects will be worse, because the opportunities for part-time employment are much smaller and are of comparatively recent development—for example, the South-West, Wales and Scotland. These are development areas where opportunities for part-time employment have been relatively small in the past.
It is only in comparatively recent years that some areas have been developing, through the infusion of newer industries, wider opportunities for the employment of part-time people. If the Government reject even the principle of the Amendment they will inflict yet another blow at these areas.
We know how hard it is in some cases to entice married women back to work. We know how desperately the Secretary of State for Education and Science wants to get them back to part-time teaching and how important it is for the future health of the economy that we should persuade more and more married women to go back to work when their children are old enough. This tax will lessen the opportunities for them.
The same is true of widows. We know how precious to many of them is the opportunity they have to do part-time work in order to supplement their inadequate pensions. If the Government reject the Amendment, widows will have fewer opportunities of such employment. The predicament of the elderly in some parts of the country will also be bad if their limited opportunities of part-time work are to be reduced. It will be particularly bad for those in the development areas and in places like the worst-hit parts of Scotland, Wales and the West of England.
The rejection of this series of Amendments by the Government can only be regarded as notice to widows, the elderly and others for whom part-time work is needed that, in future, their opportunities will be sadly reduced by the impact of this impost in its present form.
I support the Amendment. It is yet another which arises out of our discussions on certain other legislation. After all that we have heard during the Committee and Report stages of the Finance Bill, I wonder whether right hon. Gentlemen opposite have any hearts at all. I am not a doctor, but I suppose that anatomically they must have, but it seems extraordinary that we should reach this stage in our discussions in the hope—and that is all it is—that the Government have now reached some reasonable discretion in this matter.
I know only too well how important to the economy part-time workers are. They are extremely important in my constituency, as they are elsewhere. There have always been certain industries which undeniably depended on part-time workers, and it is interesting that those which depend most on part-time workers are often the most competitive. I would have thought that that would have dawned in the head and the heart of the Financial Secretary to the Treasury. He has had a lot of hard words from me. I am in one of my most reasonable moods tonight, because hope springs eternal and I have always imagined that one day the obvious would sink in, even with this Government, although I sometimes despair.
I hope that it will in this case, not only for the industries which I have mentioned and in which I have a particular constituency interest, but for the many other aspects of the economy which we have to keep going. Although the Government have today taken somewhat serious measures, I suppose and I shall read and learn more in due course—that even they want to keep the economy going. If they imagine that they can do so without using part-time workers, I invite the Financial Secretary once again to come to my constituency and to learn something outside the law courts which will he of great additive value to his appreciation of matters which are discussed in the House of Commons.
Many elderly people depend on part-time work for their livelihoods above a certain line. That applies particularly to those mentioned by the hon. Lady the Member for Wood Green (Mrs. Joyce Butler), in that telling speech which I have mentioned more than once—those who work in the shops. There is also a social aspect. There is not only an economic advantage in having this sort of assistance, but there is a social advantage from having people who are getting on in years having something which they can do and in which they can take an interest and which gives them that little extra which the State cannot provide and which adds to their dignity of living. Is not that something?
I remember only too well, when I sat on the benches opposite, listening to the speeches from this side of the Committee pleading much more eloquently than I dare to imagine that I could, hour after hour, without a Guillotine, for these very people. Are we nearer to giving them a chance now? is this the time when right hon. Gentlemen opposite will say that this is their opportunity and their chance to help these people about whom they have talked all these years, not to damn them and to tax their jobs out of existence?
Has it required all these debates to reach that point? If it has, my confidence in the democratic working of Parliament is not yet broken and I hope that on this issue it will be preserved.
Mr. W. T. Williams:
I do not propose to spend very long on this Amendment. I hope that the Government will find it possible to accept this, or one of the variants which have been put down. I have three reasons for asking that my voice may be added to those already raised in support of this Amendment, and to the voices which will undoubtedly follow mine.
The Government have talked a good deal about the difficulty of introducing legislation of this kind except in broad terms. It is agreed on every hand, including in Government quarters that this is a rough, rude instrument, that it falls heavily with little discrimination and that the only way in which it can be improved is by experience. It is said that it will need to be seen in the months ahead how the blows fall. To those who think as I do it appears that the weapon is too rough and rude, and falls too heavily in places for which the Government ought to have had regard before they introduced this legislation.
It appears to us that one of the difficulties into which the Government have got in introducing the selective employment payments machinery is that they have been content to divide industry into two sections, manufacturing and services, whereas there are at least three broad sections into which industry can be properly set. They are services, manufacturing and distribution, and each is as unrelated to the other as the Government accept services is to manufacturing.
The distributive industry has a completely different case from that of the general services industry. If the Govern- ment had been wise enough to have made the division a little broader they might have avoided many of the anomalies which are now apparent. In particular, the incidence of this tax upon part-time employees is one inflicting great and, we believe unnecessary burdens upon an important and valuable section of the community. When one is talking about the shops and the establishments which provide foodstuffs such as bread and milk and the other essentials of life, what one recognises immediately is that, by and large, the food distributive industry depends very substantially for its work upon part-time labour at weekends.
Most people shop at weekends and most establishments for the distributive trades employ additional labour at weekends. That being so, if the tax is to fall —even a 12s. 6d. tax applicable to women employees—upon the shops and distributive agencies, employing part-time labour at weekends, the Government will do double injury. They will injure the shops and make more difficult their operation, and they will do a great disservice to a large section of the community to whom reference has already been made—married women, widows and other people who, for some reason or other, have to do part-time work and are not in a position to undertake any other kind of employment than to work in shops at weekends.
If the Government persist in this tax the result will be that many of the shops which now employ part-time workers will be unable to continue to do so. It means, also, that families will feel the pinch from being prevented from earning the modest sum of money which they could earn if they were enabled to keep their jobs.
I understand perfectly the difficulties which the Government face, although I am less sympathetic with them than I am with the difficulties of the people affected by the tax. The Government's difficulty is to ensure that there is not abuse and of making the tax work through the machinery of the insurance system. This use of the insurance structure is in itself something which I deplore and which members of the Government used themselves to deplore in previous decades. But if difficulty arises because it is not possible to collect this tax without the danger of abuse and fraud, surely it is not beyond the wit of the Government to introduce an additional stamp through the insurance scheme which would meet the needs of part-time workers. Many of us feel that the stamp should anyway be cheaper than the full stamp, because many part-time workers, especially married women, feel a real sense of grievance that they have to pay the full insurance stamp, although they cannot reap all the benefits of it which would follow if, for example they were unmarried.
We do not wish to embarrass the Government, but we believe most sincerely that by introducing this tax they are putting an unnecessary burden both on the people who work in shops and on the proprietors of the shops themselves. Because we believe that this difficulty is not insuperable, we hope that the Government will not, merely because of the administrative problems of doing this through the insurance stamp or in conjunction with it, refuse to accept our plea.
I have sought to catch your eye, Mr. Jennings, because my right hon. and hon. Friends and I have other Amendments, and particularly new Clause No. 31, which march parallel with this Amendment. We feel so strongly that this Amendment should be carried that my right h on. Friend the Member for Grantham (Mr. Godber) will later seek to catch your eye, Mr. Jennings. I realise that many hon. Members wish to speak and therefore I shall keep my remarks as short as possible.
If a Conservative Government had introduced this tax, the outcry would have been enormous. How the welkin would have rung. We should have had passion. There would have been near hysteria from these benches. But, as it is, we have had a cogent case put exceptionally trenchantly by the hon. Member for Cornwall, North (Mr. Pardoe) and supported with the greatest clarity and force by my hon. Friends the Member for Barry (Mr. Gower) and Shipley (Mr. Hirst). Now the Government have heard the case put soberly, almost sadly, by the hon. and learned Member for Warrington (Mr. W. T. Williams).
The Government must note that the implication of the Bill goes dead against any sensible constructive labour policy. We are told that the country is short of labour. We believe that any Government should encourage people to work. We know that many people work part time because they cannot work full time. We are familiar with the sources—housewives, widows, the elderly, people who are disabled to such an extent that they cannot work full time but not so greatly disabled that they cannot work part time.
Earlier in our debates the Government sought to prove that the bulk of this army of part-time workers worked in manufacturing industries. But the March, 1966 issue of their own publication, the Ministry of Labour Gazette, disproves this thesis completely. I hope that the Government Front Bench will pay heed to these figures. According to that publication, nearly 2 million part-time workers were employed in March this year, 1¾million of them women. I do not have a division between adults and the 18–21 age group, but of the 2 million part-time workers the analysis shows that only about one-third of 1 million worked in manufacturing industries.
That shows that seven-eighths of the part-time workers are in service occupations and, therefore, come under the impact of this proposed tax. It is not, therefore, open to the Government to say that most part-time workers will benefit from the refund, let alone the premium. The vast bulk of part-time workers will ,through their employers, bear the tax with no refund, and certainly no premium.
Where do these part-time workers work? They work, as the hon. and learned Member for Warrington has told us, to a large extent in distribution, where they enable shopkeepers, stores, shops and co-ops to bear the peak load, particularly at weekends. They work in grocery shops, food shops, tobacconists, bookshops and in all manner of shops. Without them the peak shopping habits of the population would be most inadequately served. They work in the services, in dry cleaning, laundries, catering, shoe repairs and contract cleaning. We could all add to the list. They work in cinemas and hotels. The Government are desperately seeking to add to their number in teaching and nursing. Again, I give only a few of the headings of their employment.
What will be the result of this tax'? I fully endorse the argument of the hon. Member for Cornwall, North (Mr. Pardoe) that the lower the pay of the worker, the higher the proportion a fixed poll tax bears to his pay. We are dealing here with part-timers whose pay is relatively low. Therefore, let not the Government use the argument that it is a mere 12s. 6d. a week or something like that. In proportion to the wage costs of the occupation, this is a heavy impost. It may represent an increase of as much as 20 or 30 per cent. of the labour content of their service.
The Government have argued that any worry about part-timers was completely unnecessary because there was so little unemployment, they said, that no employer would be in a position to dismiss anybody because he could not replace him. Thus the Government were able to argue, I think wrongly, that in the present state of very low unemployment the part-timer was safe. Indeed, it is true that many of the services for which we speak are desperately short of labour.
It is no longer possible, however, for the Government to use that argument. After this afternoon's statement in the Prime Minister's frank admission that the Government expect unemployment to rise, and the Government's determination to hold prices steady, employers will be squeezed and they will have a growing number of unemployed from whom to choose for their employ.
In this situation we have to ask ourselves what the effect of this tax will be. Its purpose, although disguised by the Government, has been clear all along—that is, to put up prices. We are back to the 1951 Budget strategy when the late Mr. Gaitskell sought to deal with inflation by mopping up purchasing power, by putting up prices. The present Government chose to disguise their objective by making the employer put up prices to bear the burden of this tax.
It was a proper service under the Government's scheme for the employer to pass on this tax. That was the strategy. Now, however, the employer will not be able to pass on this tax because his profits will be squeezed and his prices will be held steady. Thus the employer will be forced to absorb the tax or to dismiss labour.
Now we ask ourselves the big question: whom will the employer choose to dismiss? As my hon. friends have already said, the part-timer already is an expensive luxury in a free labour market, because the employer has to bear full National Insurance stamp for less than full-time work. The result of this tax will be that the part-timers will be dismissed. The very people who eke out an extra income from part-time work for the benefit of the economy will be the ones who will have first to be dismissed.
The very people the Government should be encouraging to come into the labour force will be turned out of the labour force, and, as has been made plain, it is these people who, because of their pattern of life, cannot shift to industry. There cannot be any argument from the Government that these people are mobile, or that they will work in factories or exporting industry. Surely the Government have been riven by the logic of events and their own policies, culminating in the Prime Minister's statement this afternoon, of all their defences of the thoroughly damaging effect of the tax on part-time workers.
That is why my hon. and right hon. Friends and I urge upon the Government this group of Amendments. We support, in particular, New Clause 3. But if the Government cannot make sense of their wretched tax sufficiently to exempt the part-timers, then we ask them to find a way of refunding the tax to the employers of part-timers, and if they cannot do that, let them consider the method proposed by the hon. and learned Member for Warrington of a special tax.
There must be some way in which this tax can be spared on the part-timers. If there is not a way, and if this is what the Financial Secretary intends to tell us, then this is one more condemnation of a thoroughly bad tax.
In supporting the Amendment which has been moved by my hon. Friend the Member for Cornwall, North (Mr. Pardoe) I wish to follow for a moment or two the line of argument, not, if I may be forgiven, of the last speaker, the right hon. Member for Leeds, North-East (Sir K. Joseph), but of the hon. and learned Member for Warrington (Mr. W. T. Williams), whose argument it is a pleasure to try to pursue—perhaps in a slightly different direction. I was only sorry that during the eloquent speech which he made he had behind him virtually empty benches.
The fact is that this proposed tax with no refund in respect of part-timers is a poll tax upon a poll tax, because of its being added to the employer's National Insurance contribution. The National Insurance stamp is thoroughly identified in the public mind as a poll tax which is always going up, and one can scarcely blame the public if they begin to wonder how many months it will be before the S.E.T. part of the stamp also goes up.
Since the Liberal Party launched a campaign up and down the country against he S.E.T. proposals—by leaflets, and the like—our party postbag has, naturally, been very large. It has been brought home to us very clearly by employers of part-time labour that they regard this as a poll tax upon a poll tax, as I should like to illustrate by two brief quotations from the letters we have received.
From a substantial cleaning services company with various addresses in North and West London we have this comment from a director, in a letter dated 25th June, 1966:
We have, among others, a male pensioner working for us. He rises at 5 a.m., and works 2½hours in the mornings five days a week for £3 15s. Out of this he pays 11s. Income Tax and 8s. in fares and 9d. towards the National Insurance stamp of 14s. Id. He probably earns us about £1 or a little less. Under the S.E.T. we would have to pay an additional 25s. This old man, who still works and keeps his self-respect, will become redundant.
Then, if I may give one example in respect of the part-time employment of women, I have a letter from a laundry company in London, S.E.6, dated 22nd June, 1966, in which a director of the company says:
Our organisation at Catford employs some 700 people of which about 350 are part-time women. We estimate the cost of the Selective Employment Tax which we will have to meet to be about £526 per week, which is something like an 8 per cent. increase on wages. With such a la-ge percentage of part-time women, which with present-day labour shortages we are forced to employ, we are already carrying a heavy burden in the form of full National Insurance contribution for them.
In pursuing the Amendment, I have some feeling of hope, because of the sentiments expressed by the Chief Secretary when the probable plight of part-timers was discussed in the House on 27th June. On that occasion, and with special reference to a proposal from his own side of the House to alleviate the tax in respect of part-timers, the Chief Secretary used these words:
There is no point in having a disproportionate tax if one does not have to have one, and we would have been only too glad to have provided a method of avoiding a disproportion which was consistent with the need to introduce a tax of this kind at this time with the machinery that is available and which would be capable of being collected, in an economic fashion. My hon. Friend is right in saying that we would have introduced something to meet his point had it been possible to do so."—[OFFIciAL REPORT, 27th June, 1966; Vol. 730, c. 1347.]
I believe that the Amendment moved by my hon. Friend the Member for Cornwall, North (Mr. Pardoe) proposes a viable means of meeting the point which the Chief Secretary said that he would be glad to meet. I hope that in a few minutes we shall hear that that is exactly what the Government are willing to do.
I tried to dispel many of the misgivings which I have about the tax by going into the Library and reading an article by the Economic Editor of the Financial Times in the penultimate issue of the Banker. Although the article was extremely favourable in parts—it thinks that the tax, like the curate's egg, is good in parts—it did not dispel those misgivings. To some extent, the problem is that no one has defined precisely what the tax is supposed to do.
At the beginning, I thought that it was a revenue raiser. Then it slowly became a sort of resource reallocator. It is obvious now that it is a deflator which, in terms of a gamble, perhaps will not come off. Perhaps we should console ourselves with the fact that Mr. Kaldor did not introduce his expenditure tax.
I want to make one particular point and, in doing so, may I say that I am a completely unsponsored Member of Parliament, with no affiliations. I want to take up the question of the part-time worker because, without going into all the heartrending exhibitions that we have had from the benches opposite, I think that the Financial Secretary might look at the economics in terms of the present area of retail distribution.
It comes as a surprise to many people reading the work of Lady Margaret Hall, Oxford, that productivity in the area of retail distribution has risen extremely rapidly since the late 1959s. Whereas undoubtedly that is a function of major capital investment in the industry, it is also entirely dependent on the use of part-time labour.
Where one gets this sort of indivisibility in capital investment which is subject to peak period demand, it is essential to make certain that one can adapt the labour supply, and in this industry, or service, I think that we have this unique contribution, or combination, of investment on a considerable scale in the last decade made even more fruitful by the use of part-time labour. I hope that some of these Amendments will be agreed to by the Government, although I shall follow the conventions of the House and vote for the Government.
The application of the Selective Employment Tax to part-time workers will so obviously conflict with so many of the social and economic purposes which the Government and the Opposition have in mind that I think the Government will have to do something about this.
Amid all the conflicting factors, and arguments on these factors, that we have had in these discussions on the Selective Employment Tax—I wonder whether I might have the Financial Secretary's attention, because I want to make an impact on his mind, if it is possible to do so still—I should have thought that the Government could accept, and could not avoid accepting, two aims. First, that in these difficult times we have to make the maximum use of the energies and talents of as many of our people as possible. It is rather extraordinary that this tax should have been conceived, and this Bill drafted, without taking any note at all of the part played by part-time workers, be they married women, old-age pensioners, disabled people, or anyone else. The second aim, and this I would have hoped would have appealed particularly to a Left-wing Government, although I think that we have as good a record as they have, should be to apply this Tax to avoid hardship.
We can all quote various examples of how this tax will operate. I shall quote only one, that of a clerk to a local authority, who retired at the age of 60, a good many years ago now. He thought that it was his duty to keep on working for as long as he could. The value of his superannuation payment is not as good as he hoped it would be when he retired, in spite of the various increases which have taken place. He is now working for two days a week as a clerk to a firm of building contractors. He cannot imagine that the firm will keep him in employment if the full tax has to be paid in respect of his employment. Therefore, I would have hoped that we could agree upon aims.
On this, as in so many other matters —and I speak with some experience of Whitehall—there is always a tendency in Whitehall to overlook the situation which applies in rural England. I think that in our villages and country towns we tend to make greater use of part-time workers than is done in the great cities, partly because our people in the country places have more energy, and partly because they live longer, and therefore we have far more old people who are in part-time employment.
I hope that when the Financial Secretary replies there will not be any dispute about the aims. If we can agree on the aims, this debate can turn into a discussion as to methods. I know of only two methods of overcoming the Government's omissions in the Bill. The first is to follow the method proposed in most of these Amendments, which is to make the tax payable in respect of part-time workers the subject of refund. Another method is to have differential rates of tax, and I must say that, speaking as a Member representing a rural constituency, this has an advantage. To the extent that part-time workers are employed on farms their employers will be able to claim a refund, but if we have differential rates there will be no discouragement at all to the employment of part-time workers on farms; indeed, there will be an incentive on the part of farmers to employ part-time workers as much as possible.
I therefore suggest that the Government do not commit themselves tonight on the method by which the aims on which we all agree should be achieved. If they do not find the methods suggested in the Amendments, or the drafting of those Amendments, acceptable, they should say that they agree that the aim should be achieved and let us know later, when they have had further thoughts, about the method.
Is the right hon. and learned Gentleman envisaging that there is an easier method for dealing with a differential rate compared with the proposition for a total exemption? If so, I shall be glad to know what it is.
I would have thought that exemption was much more easily administered, but in order to give a special advantage in the case of part-time workers on farms the incentive of differential rates might be a good thing.
As the hon. and learned Gentleman has got me to my feet on the question of method, I should like to point out how wise my hon. Friends and Members of the Liberal Party are to have chosen 21 hours in a week as the dividing line, because that is the period fixed in the Contracts of Employment Act and the Redundancy Payments Act.
I want to draw the Government's attention to Amendment No. 209 and ask them carefully to consider its purpose. In the Second Reading debate I suggested that part-time employees working 21 hours or less a week ought to pay only half the rates for a stamp. Having failed in that respect I try again and put forward the view that half of what they pay should be refunded. The majority of these people cannot possibly take full-time employment. We are deliberately taking out of employment and production people who can do no other type of work. This means that what they are now doing will have to be done by someone else, who will have to come from the pool of employment from which we draw productive workers.
I am not concerned about the big combines which employ Mrs. Mopps, but I am concerned about the large number of small shopkeepers who depend on part-time workers to give them a little time off from a seven-day week, and often a 52-week year, so that they can have a holiday. These people depend on part-time help.
These are the very people who are being squeezed on all sides. They cannot increase their prices because they have to compete with the multiple stores, who can undercut them. Very often they are victims of crimes of violence, against which they often cannot afford to insure. Many of them have invested their life's savings in a small business in order to fulfil their life's ambition and become their own boss, and we may be reaching the stage when, owing to the various pressures upon them, they will go out of business and return to work for someone else. The one thing which keeps many of these people in business is the fact that they can engage part-time staff occasionally to give them a few hours off. If we take this away from them, they will not be able to take those hours.
This means that people will no longer be able to buy a newspaper in the early hours of the morning or, as is done in Scotland, buy morning rolls for breakfast before going to work, because these shops will not be able to keep open seven days a week from early morning to late at night. If they cannot get the relief which they get now by employing part-time people, they will be hit very hard and eventually driven out of business.
This can have very important effects. Small shops like chemists fulfil a useful and necessary function. If we make it difficult or impossible for them to get part-time help, they will have to recruit full-time help or stay open for shorter periods. There will be fewer shops. Instead of a dozen small chemists scattered over a city, there will be one or two large shops which will not be open for the same long periods. This will not be worth what the Government will get out of it.
Among trade unions, we used to show a film called "The National Cake". It was designed to encourage people to produce more, because the more which was provided the more there was to share out among everybody. What we are doing now is reducing the number of people who can help to provide services. As a result, there will be less production or fewer services. Either way, we will suffer. This is something which the Government ought to take seriously.
This is such a well-conducted debate that one does not want to intervene for long, but this is a matter which greatly affects my constituency, in three ways—first of all, for the elderly. In coastal resorts there are numbers of elderly retired people. The present rise in the cost of living has been hitting them very badly. I have had a number of requests for help before the Prime Minister's announcement today. Because of that announcement, they will be even worse off. The way they get employment is in part-time work in hotels and shops.
A number of hoteliers in my constituency employ elderly people on an uneconomic basis because they think that as these people have been there for some time they ought to continue to work there. They have made it clear that this is the dividing line. If the tax is introduced for part-time workers who have not been earning their full keep but have been kept on, they will have to be discharged. The result is that these people, reluctantly, will have to go on to National Assistance—people who are determined to stay off National Assistance, but will be forced by this Government to take that step.
The tax will also affect the holiday camps of which there is a number in my area. I have had letters from local holiday camp proprietors pointing out that the only way in which they can staff the camps is with part-time workers in the evenings. An example is married women. Naturally, their husbands object to their being on duty every night, although they are prepared for them to work only two or three nights a week in order to supplement the family income. By putting this extra tax on part-time workers, the situation will be made extremely difficult and expensive. The result, of course, will be that they will try to employ more people than they do now for eight hours a day. The result will be that the Ministry will lose the stamp and they will be further unpopular.
The hon. Member for Dundee, West (Mr. Doig) drew special attention to ser- vices. I have had letters on this. The delivery of bread has been stopped in one of the villages in my area, purely because of the introduction of the Selective Employment Tax. People will have to go shopping when the shops are open and they will not be able to work the number of hours they would have worked.
Although this is a form of taxation which is supposed to encourage efficiency, in fact it discourages initiative, and if there is anything fundamentally wrong with the Government's policy it is that every Measure they introduce seems determined to cripple initiative. This Bill could not have been better chosen if they wished to discourage initiative.
We do not want to spend too long on the debate, but I ask Ministers to look at this matter again and to realise that there has been no one on the Government back benches prepared to support this proposal. They cannot go on relying on their back bench Members who in the past have roared like bulls when it came to objecting to the proposals but stamped like butterflies when they went into the Lobbies. Why should they not follow their convictions and come with us into the Division Lobbies—and tell the Government what they ought to do?
I am glad to be able to make this brief intervention. I am aware that many hon. Members want to speak on this issue. The effect of this tax on part-time employment in my constituency will be very great indeed. Effectively, the impact of the tax is twice as great on someone working half time as on someone working full time. The deterrent effect on the employer is twice as great. We are, therefore, not asking for equal treatment for part-time workers; because of this situation we are asking that they should be given special treatment.
In my constituency, the tax has two important effects above all others. First, it has a very grave effect on elderly people who hope to supplement their pensions by working part-time, and it has a particularly bad effect on those constituents who do not have National Insurance pensions and for whom part-time work is the only way in which they can supplement their incomes, which have been steadily depreciated by the effects of inflation.
If the Amendment is not accepted there is a grave danger—because there is no employment other than part-time employment available to them—that they will be in very serious circumstances indeed and may be forced in their later years on National Assistance, a situation which they have steadfastly sought to avoid since their retirement.
There is a vital point which has not been debated either in the Finance Bill or in connection with the Selective Employment Tax—and this indicates the way in which the Government have curtailed debate. In the guillotine debate the Leader of the House said that all points had been made, and I intervened to point out that none of the matters governed by our Amendments in Committee of the Finance Bill in respect of nursing homes, private hospitals and old people's homes had been debated at all and that, apart from a few passing sentences, there had been no mention of them.
They will be very seriously affected by the fact that the Government have granted no exclusion of part-time workers. This is a matter of vital concern to my constituency and many other constituencies where the burden falling on the hospital service is steadily increasing and the expansion of the hospital service has been curtailed by Government deferment. It may well be that in many areas, as in my own, people will die because adequate hospital facilities are not provided.
At the moment, a large number of nursing homes and private hospitals cater, in particular, for geriatric patients. These establishments are staffed largely by part-time employees who work on a shift basis to provide geriatrict treatment and to look after people who are unable to look after themselves. I have had a number of letters from my constituents on this problem. Hon. Members may be interested in this passage in one such letter:
The patients consist almost entirely of terminal and senile cases… They are essentially case; which the hospitals are no longer able to retain. There are about 20 patients, with a staff of 30 to look after them, which staff work on a "—
A few work whole time, but the majority are part time.
The tax can have one of two effects on such a nursing home. The nursing home may have to raise its charges to these people. As they are in hospital, they have no means of increasing their income to pay the increased charges. In view of the burden which is already falling on the National Health Service, where are these people to go if they cannot afford to pay for these services in private nursing homes? If the nursing home takes the view that it cannot raise its prices to take account of the impact of this tax on the part-timers who are looking after these patients, the only alternative is that the nursing home must close down.
If there were adequate hospital services, it could be argued that the State should provide for these people who are in their declining years and who are too sick and too old to look after themselves. But there is already a very great drain on the hospital service. We all hope that the hospital service will be expanded at the earliest possible moment. However, it cannot be expanded immediately, nor can it be expanded adequately to cope with all the people who are already in private homes. It is, therefore, vital that this Amendment be accepted.
I sent details of some of these cases to the Chancellor of the Exchequer. My letter was passed to the Minister of Health, because the Chancellor of the Exchequer, who has no doubt received many such letters, has been farming them out to the Ministries concerned. This is the reply I received from the Minister of Health:
We shall, however, bear in mind the effect of the tax on nursing homes and the points made in your constituent's letter in considering the application of the tax in case it is found right and possible to give any groups special treatment under a more refined scheme later.
Society cannot countenance a state of affairs in which these people are thrown on to the streets because of the impact of this tax, nor can it be content with a vague assurance by the Minister of Health that a more refined system will be introduced later. There is only one possible course, which is for the Committee to accept the Amendments.
It is of paramount importance that some form of employment should be available for people who cannot work full time. This is especially so in rural districts, where there are many people who are old and half retired, who are unable to spend their whole time working, but also who can improve their retirement conditions, make themselves happier, and make a contribution to the community by doing a job.
In many villages and districts where tourists congregate those who cater for the needs of tourists during the season could not carry on without the help of temporary people. If hotels were unable to rely on workers who come in for a few hours at a time to help out, the system would break down. That is the middle and both ends of it. Many elderly people and those who are nearing retirement, or who, perhaps, have retired find great happiness in working in this way and contributing to their own well-being and to the well-being of many other people. Disabled people, when they can work in this way for a few days a week, find a great reward and help in doing so.
If we do not recognise that many wish to work and should be allowed to work a reasonable number of hours each week, we shall not only go against the wishes of so many people, but also entirely against the Government's avowed intention of making as many people possible available to work. I imagine that that is what they want. If they want as many people as possible to work and they need the labour, let those who want to work a few hours a week get on with it, do the job, and help wherever they can to the best of their ability and to the country's good.
In the early hours of Monday morning I spoke about this tax and asked a question of the Economic Secretary. I asked what effect the new economic measures would have on the Selective Employment Tax, particularly as it affected part-time workers. At that moment the Economic Secretary—
I should have said the Chief Secretary. I hope that the hon. Gentleman will pay as much attention to some of my questions.
The Chief Secretary did not reply in any way to the points that I made, and I now ask the Financial Secretary whether he wishes to collect money from the tax on these part-time workers. Are not the measures announced this afternoon to raise £500 million for the Chancellor enough to collect money and mop up some of the purchasing power? Does he wish to force some of these part-time workers on to the labour market? Is not the prospect that about half to three-quarters of a million people will be unemployed as a result of the measures announced by the Prime Minister this afternoon enough to satisfy the Government's deflationary policy?
The Government should not be so hard-hearted now. Even though they may be suffering from midsummer madness, perhaps they may reconsider the position and the burden they are putting on part-time workers, particularly elderly people and the part-time workers employed in small shops, in hotels and guest houses, and in many rural area.
To me, this is a deliberate attack on the hard-earned pocket money of the retired people and married women. I hope that now, with the new measures announced this afternoon, the Front Bench and the Financial Secretary will be sympathetic. This is a social attack. It is not now a financial policy, in view of the new financial measures. I ask the hon. Gentleman not to be so hard-hearted, not to be so cruel to these part-time workers who rely on their part-time work for pocket money and to help them face the cost of living which is rising as a result of the Government's measures.
I should like to deal with one or two of the trades which will be particularly hit by the imposition of the tax at the full rate on part-time workers. I want to deal with three groups of wholesalers—food wholesalers, general wholesalers and, in particular, the pharmaceutical wholesale trade. I shall also say a word about laundries. All these employ substantial numbers of part-time workers, a much higher proportion than in other employment generally.
I take wholesalers first. There are two general points which are often forgotten here. The wholesale trade is very frequently in competition with its own manufacturers. This competition will now be distorted because the manufacturers will be able to claim refund in respect of their distribution people, provided that they qualify under the 50 per cent. of establishment rule, whereas the wholesalers will pay the tax and have no refund. Because of the large number of part-time workers which wholesalers employ, this distortion will be further accentuated.
Second, the wholesalers operate, for the most part, on quite tiny profit margins. have been astonished in studying the figures in trade after trade to realise that net profit margins as a percentage of turnover are sometimes less than 1 per cent. or between 1 and 2 per cent., which gives extraordinarily little scope for any saving. Any substantial addition in costs, which the Selective Employment Tax will represent, is bound to be passed on in higher prices.
It has been said often that the S.E.T. is a tax on food. Nowhere is this more apparer t than in the wholesale grocery trade. The net profit of an average firm represents 1·23 per cent. of turnover. Wages represent 4·8 per cent., and the tax will have the effect of putting the wage bill up to 5·2 per cent. and cutting the net profit by no less than 33 per cent., reducing it to less than 1 per cent. of turnover. No firm can stand that sort of cut in its profit. No firm can have its return on capital reduced by that amount. Inevitably, prices will be increased. If the Government say, "Let them introduce more mechanisation and improve efficiency", I throw the challenge back to them. How can they say that when by the Bill we were discussing in the early hours of this morning they are removing any form of investment incentive in this trade?
Now, the wholesale textile trade. I am given to understand that in a typical firm no fewer than one-fifth of the employees are part-time. The tax will cost this firm £112,000, a sum equivalent to 16 per cent. of its net profit. With the tax bearing particularly hard on part-time employees, the firm will be severely hit. How can textile wholesalers modernise? A textile wholesaler carries an enormous number of lines, and it has proved in practice almost impossible to mechanise. It is very much a labour intensive activity.
Next, hardware wholesalers. Here the average net profit of a typical firm is 1·7 per cent. and the Selective Employment Tax will reduce this by 0·7 per cent., almost by half. Ten per cent. of the employees are part-time. A radio wholesaler who wrote to me has 20 per cent. of his employees part-time, and I understand that the radio wholesale trade as a whole is likely to have to pay £1½million in Selective Employment Tax.
So one can go on, but I wish to say a word about the pharmaceutical wholesaler because his is a special case. The business of pharmaceutical wholesalers is almost entirely in the distribution of drugs for the National Health Service to 14,000 retail chemists and to over 1,000 hospitals. The wholesaler carries the drugs of 300 manufacturers. I understand that there are between 14,000 and 15,000 different lines carried by about 150 wholesale depots which perform two vital functions for the National Health Service. They are able to make immediate delivery of almost any drug which they have in stock, on demand, and they are able to carry a comprehensive stock of that enormous range of 14,000 or 15,000 different drugs.
Pharmaceutical wholesalers operate on tiny profit margins, below 2 per cent. profit of turnover. They are extensive users of part-time labour. Naturally, the problem of processing orders when dealing with goods on this scale involves an enormous amount of clerical work, and pharmaceutical wholesalers use a very large percentage of part-time labour. If it is asked why they do not automate, the answer is that this was tried eight years ago in America and failed disastrously because the nature of the work means that it cannot be put into an automatic system.
Indeed. If my hon. Friend's experience is anything like mine, he will have had a large number of letters from retail pharmacists in his constituency making that point. For the moment I am concentrating on the wholesale aspect.
If the tax is to be such a burden on the wholesale pharmacist—it is likely to represent between 0·6 and 1 per cent. of his turnover, I understand, cutting his net profit in some cases by more than half—what will he be able to do about it? He and other distributors were advised by Mr. Fred Catherwood at a conference held in May for the distributive trades by their Economic Development Committee. He advised retailers and other distributors to protect reasonable profit margins by raising their prices and seeking better terms from manufacturers receiving premuim payments under the new tax arrangements. That may be possible for some trades but it is impossible for wholesale pharmaceutical distributors because the prices of their goods are fixed by agreement between the Government and the manufacturers. So the wholesale and retail margins are fixed, and there is no opportunity for such firms to recoup any of the extra burden.
So the firms are faced with two possibilities. They can reduce their delivery services, which will inevitably lead to delays in delivery of essential drugs required on prescription, representing a danger to health, or they can reduce the range of stocks which they hold. Seventy-five per cent. of their turnover is accounted for by only 20 per cent. of their products. They could cut out large numbers of the rarely used drugs and no doubt save a good deal of money to offset the cost of the tax.
But do the Government want this important link in the Health Service between the drug manufacturer and the patient to become so very much less efficient? Are they prepared to put the lives of men and women at risk because pharmaceutical wholesalers will be unable to afford a comprehensive stock of drugs? [Interruption.] An hon. Member opposite is laughing. He should talk, as I have done, to men responsible for running wholesale pharmacies. It is monstrous that hon. Members opposite should scoff at the arguments advanced by the Opposition on a matter causing gravest concern to the industry. He should be ashamed of himself. The tax is bound to reduce standards in the industry, and the fact that it is a high employer of part-time labour accentuates the difficulties.
Laundries are very substantial users of part-time labour. Indeed, 20 per cent. of their labour is part-time, compared with about 6 per cent. in industry as a whole. Laundries in some areas employ up to 75 per cent. of their workers part-time. The tax and the National Insurance contribution will amount to about 2s. an hour in the trade. This makes it quite uneconomic.
The tax will cost the industry about £5 million a year, representing no less than 6 per cent. of its total turnover. That is why there will be a substantial increase in laundry costs. This is an essential service. People cannot do without it. If they do the work themselves it is much less economic. Yesterday in the evening press, one of the largest firms in the country stated that it would have to put up its prices by ls. in the £—5 per cent. It processes 10 million miles of roller towelling a year for supply to offices and other places. The report said that the Selective Employment Tax was blamed for the increase and added:
With 10.500 mostly part-time workers on the payroll, the tax is going to cost the firm an extra £440,000 a year.
That is what the Government are doing to firms performing essential services.
This is bound to put up costs. In many cases firms cannot pass costs on in their prices as Mr. Catherwood recommended they should. It will cause acute difficulty. The Amendment would go part of the way to solve the problem so that part-time workers would not be such an additional burden for these firms to bear.
The hon. Member for Dundee, West (Mr. Doig), who is not here, gave some sturdy North Country advice to the Government on this issue and I hope that he will go into the Lobby with us in support of the Amendment. The Amendment would give the Government an easy way out, saving their face by reducing the tax by a half.
My hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) has put the case for the wholesalers. I have had a mass of correspondence on this matter. I have not had so many letters on a single subject since Suez. That is what the public think of the tax. It is the greatest issue of the last 10 years. I have picked out particularly those letters which rely heavily on part-time workers, such as laundries, engineering distributors, chemists, accountants, solicitors, caravan distributors and electrical contractors. The last named are very badly hit because they have to pay the tax while their nationalised rivals do not.
Very often the words of an M.P. do not carry much weight in the House while the rough words that constituents use do. I have had a letter from a constituent which says:
If this crowd of bright boys think they can get away with this one, then I have underestimated them. What about the mass of part-timers doing a very satisfactory job? Do we pay an extra 25s. for about 15 hours and see some firms getting a rebate at our expense?…. Had it been, say ten bob they might have got away with it. but not as it stands, I am sure.
' Reluctant Victim ' ".
That represents the views of a large number of retailers.
My hon. Friend the Member for Wanstead and Woodford also referred to distribution. I have been connected with both manufacturing and distribution and I assure the Financial Secretary that, if there is any overmanning and labour hoarding, it occurs in manufacturing and not in distribution, which is labour intensive. I was talking to a steel master today about the situation in Sheffield. He said that things are very flat in Sheffield, that the order book is small, that the industry is already working short-time and that it will soon be on a four-day week. I asked whether he would get rid of his labour in view of this, but he replied, "We have to hold on to our labour during a bad period for when good times come again, if they do." That is the manufacturer's outlook. He will hoard is labour. The retailer and the man in distribution does not take that view.
Does the Financial Secretary suggest for a minute that women in Twickenham employed part-time in a laundry, if made unemployed, will go into a foundry or a steel works to help manufacture? Of course he does not. What will happen as a result of the tax is simply that costs will be put up by the retailer, or there will be unemployment among these part-time workers, the married women, the retired people and old-age pensioners who all make a valuable contribution throughout the country and without whom we should feel very sadly in need. This is one of the worst provisions of the Bill and I hope that it will be defeated.
Throughout much of this important debate the number of Liberal Members of Parliament present has exceeded the number of Labour back benchers present. This is the first time in years that I can recall this happening, although if we have a few more days like today the Liberal Members of Parliament may well permanently outnumber hon. Members opposite.
I am assiduous in my attendance of debates in the Chamber and I cannot recall this happening in the last nine years, and probably not since the end of the war.
The Kent Development Plan Survey shows that about 47 per cent. of the workers in my constituency are employed in distributive and professional services as opposed to 24 per cent. in manufacture. This shows that the effect of the Selective Employment Tax as a whole will bear particularly hard on my constituents. The same survey shows that about 10 per cent. of the workers in my constituency are employed on a part-time basis and the effect of the tax on part-timers will bear most heavily, therefore, on local services.
As hon. Members from both sides of the Committee have said, many of these part-time workers are employed in chemists' shops, in newsagents and in grocers and throughout the entire distributive trade system. In recent weeks, I have talked to and corresponded with many shopkeepers, and almost to a man they have assured me that the tax on part-timers will put up their total labour bill by almost 10 per cent.
Before the so-called price freeze, no doubt this increase would have been passed on to the consumer, and I suspect that it still will be in large part. but if it is not many of these workers, the lowest paid in the country, will be put out of employment. During our previous discussions of the subject, the Chief Secretary has been asked many times what survey the Government have made of the impact of the tax on part-time employment. Do they have any idea of what will happen, the number who will be thrown out of work, the number who will be thrown on to National Assistance?
From the usual poverty of the replies that we have had from the Chief Secretary on this subject, as on so many subjects, it is perfectly plain that the Government have made no real survey at all. But if they had made a survey before, it certainly would have been made out of date by the impact of the measures introduced this afternoon to mark the collapse of the Government's economic policy.
There are, however, some people who know full well what will be the impact of this tax on part-timers, and I should like to quote from a letter that I have received from a constituent who is himself a member of a firm that employs a very large number of part-time women workers. He says:
In the event of loss of trade resulting from increased prices, the jobs of many of these women will be placed in jeopardy. Some 60 per cent. of them are old-age pensioners, widows and mothers of large families, supplementing a low wage-earning or sick husband. In most cases they need to work near their homes in order to maintain their domestic obligations. Thus there would be no willingness on their part to he absorbed into manufacturing industries.
In Beckenham, and Kent generally, there are very few manufacturing industries in which the displaced part-time workers can be absorbed and, indeed, the Government spend a considerable amount of time and effort in preventing the expansion of those factories that are already located in the constituency. Therefore, quite clearly they cannot absorb these part-time workers who have been displaced.
These Amendments were put down before the events of this afternoon were thought out. It would be fair to say that before the latest squeeze on the economy the tax on part-time employment was going to hit hard at some of the lowest paid workers in the country. Now it will not just be a hard blow to them. It will be an absolute calamity.
I cannot understand why, in reason and humanity, the Government do not accept this Amendment, or at least the spirit of the Amendment. We heard this afternoon from the Prime Minister that we are living in a period of labour shortage. If we are living in an age of labour shortage, there are plenty of full-time jobs to be had. Why, therefore, are there so many part-time employees?
I think that the reason is fairly simple. Most people who work part time do so because, for a variety of circumstances, they cannot take a full-time job. There are the old-age pensioners, the widows with children, the married women, the disabled men. There are many people who, for a variety of reasons, cannot contemplate taking a full-time job.
Another reason why I believe many people are part-time employees is that they live in a part of the country where full-time employment is not available. I represent such a part of the country, where certainly there are some full-time jobs, but married women, for example, would find extreme difficulty in many parts of my constituency in getting a full-time job. What will be the effect of this tax on those people?
The Government will be taking a wrong view if they think that nothing serious will happen as a result of the application of this tax to part-time employment. In fact, tens of thousands of part-time employees will be out of work, for this obvious reason, that the proportion of the tax in relation to the low earnings of part-time employees is so great. Take, for example, the part-time employees in a laundry. Obviously, laundries employ many married women because they are so suitable for the job. They are so skilled at doing it.
As a result of this tax they will be tempted more and more to employ more full-time employees and part-time work will not be available. In such an area as mine one gets part-time employment, because the small shopkeeper cannot afford a full-time employee. He is working a six or seven day week and he wants relief for a few hours a day. Therefore, he employs a part-time worker. The small hotelier or cafe proprietor, running on a small margin, employing a married woman to help out in the busy season is another example.
I said that there would be difficulty because of this tax. What will the result be? I know from my own experience that many people, if they are not in part-time employment, will be entitled to National Assistance. Have the Government considered the effect of this tax upon these people? They will lose their jobs and there will be an additional charge upon the State.
Many other people, although they may not qualify for National Assistance, would be hard hit. In areas such as mid-Wales there is a scarcity of jobs. Take the roadman, whose average wage is £9 to £10 a week. His wife, although she has three or four children, finds work in a local hotel and this makes the difference between mere existence and getting the extra bit of money for the family.
As a result of this tax the married woman is unlikely to be employed and that will mean real hardship for the family. If this tax, with its particular application to part-time workers had been introduced by a Conservative Government, the Labour benches would have exploded. This is a direct attack upon those who can least afford it. It is disgraceful that the Government have shown such a lack of sympathy for the part-time worker. It seems that the Government are more concerned about a neater administrative package and administrative difficulties arising from the use of the stamp. This can be overcome if the will to cure it existed.
I understand from previous debates on this matter that the Government are saying that this is a rough and ready tax, to be amended in the light of experience. What an argument for what is purported to be a radical government. If that kind of government cannot anticipate where hardship is to fall, then there is something seriously wrong with them. This is old-fashioned Tory argument, which I hope even the Tories have abandoned now—that we should simply apply a rough and ready measure and then amend it when the hardship is felt in the light of experience. Hardship is to be seen and the Government should do something about it.
I shall be brief, but I would not like to let this debate pass without saying a word or two about one of the areas where this tax applies most heavily. There has been a great controversy about who was the orginating mind behind it. We do not know that, but one thing that we do know is that it was based on London experience and has no relevance to areas north of Birmingham, and areas in the West and in Scotland.
Or the North-East. This is the best example that I can think of where a tax has been thought up in relation to the over-employed southern part of the country without any thought of the peripheral areas in the country. In the Fylde area, one finds that practically no one will attract the premium and that almost everybody will pay the tax. On top of that, the proportion of part-timers is one of the highest in the country.
I should like briefly to refer to two industries to which I have referred before, but which deserve to be mentioned again. I excuse my hon. Friend the Member for Worthing (Mr. Higgins) for missing my small contribution on a previous occasion. There was no reason why he should particularly have noticed it, but I have addressed the House before concerning those employed in nursing homes and there is no harm in thinking of them for just a moment again.
A typical nursing home requires about half as many staff as patients. A home with about 20 beds needs 10 or 12 people to look after them. In a place such as Blackpool, almost everybody who becomes old has finally to resort to such a nursing home, because there are no facilities in the national system for these people to be looked after.
People in the last stages of decrepitude, the geriatric cases, are looked after in nursing homes because there is nowhere else for them to go. Ten or 12 people come in to help them. In most cases the helpers are part-timers. They are not necessarily trained nurses, but they have a modicum of skill and can look after the patients in their last days.
Those are the people whom the Government are taxing. I say this because my constituency will at least recognise the appositeness of the contrast. They are taxing them and—at the moment we are having a holocaust of stink bombs—they are subsidising the manufacturers of stink bombs. That is the contrast.
That applies not only to nursing homes. If one looks at the main industry of the Fylde coast, one sees the classic example of an industry which is dependent upon part-timers. I use the example because it is familiar, but it can be repeated from many different industries. I refer to the holiday or boarding-house industry.
In that industry part-timers are essential. Nobody will work the hours that are necessary in a boarding-house. Owners cannot get people to come in from 6 o'clock in the morning and stay till nearly midnight. They must have part-timers. It is the only way that it can be worked. Some come in in the morning, some at midday and some later. The imposition of this tax on an industry such as that is likely to be appalling.
But if the industry itself is hurt, how much more will those typical part-timers be hurt? In most cases they are elderly. Where are they to go if they cannot take full-time work? If they try to leave Blackpool, there is no manufacturing industry within 20 miles to which they can go. There is no help for them in that way. In most cases, they would not in any event be able to take up full-time work. The choice before them is part-time or nothing.
Although Blackpool is often thought to be a rich town, it is not. Very often these are the people whose income makes all the difference to a family which otherwise would have a marginal living. Perhaps the wife is younger than her husband and by going out to work part-time in an hotel she does something to help at home. Her income makes all the difference between living in near-misery and having something extra to spend.
These are the people whom the Government are hurting by this tax.
I believe that the economic thought underlying the tax is based entirely on experience of a mixed, highly over-employed economy in the southern part of the country. It has no relevance to whole areas outside the London area. For this reason and many others, the Government should accept the Amendment.
I should like to come straight to another point. We have had such cogent and detailed arguments employed that I have long ago come to the conclusion that it is quite impossible to get the Government to accept any reasoned argument, but I am inclined to think that they may be prepared to accept some emotional argument. They are so unreasoned in their approach that I think their heart may, perhaps, be appealed to more than their head, and so I want to put forward this suggestion.
I have noticed a certain amount of toing and fro-ing on the Treasury Bench: the Minister of Pensions and National Insurance has left, accompanied by the Chief Secretary and others; and I was wondering whether, if possible, the Government: are really trying to find a way out of this problem of the part-timers.
Well, of course, as we very well know, the right hon. Member for Belper (Mr. George Brown) retired hurt—I think the phrase is—with bruises of his own, earlier this afternoon, and, of course, has not been seen on the pitch since.—[Hoisr. MEMBERS: "Sent off?"] Whether he was sent off or whether he contemplated resignation, undoubtedly, at any rate, he felt very sore about what he had to listen to this afternoon. Well, I can understand that; he preferred not to listen to it.
All of us have been disappointed, none more than this side of the Committee, by the lack of reception we have had of ex tremely well reasoned and cogent arguments on Amendment after Amendment on this Bill, on the Finance Bill, and on the Industrial Development Bill, but this is a matter which appeals to the heart, and I put forward this sugges- tion. If, in fact, the Minister is not willing to give complete exemption—and I appreciate that he is not willing to do so —in respect of part-timers for less than 21 hours, and then the next difficulty which arises is that he is not willing to have an allocation of about half the amount because of the administrative difficulty, then there is only one simple way out of it, and that is to classify those up to 21 hours as if they were women.
This can be done—administratively. We can classify part-timers as women, and we can classify part-time women as being boys under 18—[Laughter.] I know that this sounds an amusing way of handling it, but the fact is that if we want to deal with this group on the stamp, and we do not want to increase the number of stamps, all we can do administratively is to treat the group which we are dealing with on the full amount as going on the half amount and the ones on the half amount as going on the lesser amount.
In this way we would be able to see that part-time workers under 21 hours would be paying the half rate. I throw this out as a serious suggestion—although it sounds amusing—to try to get over the administrative difficulty not having to have more stamps—[Interruption.] We may have plenty of stamps, but apparently the Government want to save stamps.
It might lead to a future difficulty, but the difficulty we are faced with at present is that unless we find an immediate method of saving the situation for the part-timers we shall have the manifold difficulties which have already been outlined to the Committee. I will be fairly brief in indicating a few more.
My hon. Friend the Member for Blackpool, North (Mr. Miscampbell) and my hon. Friend the Member for Worthing (Mr. Higgins) have dealt with the case of the nursing homes. It so happens that by my own home, in Broadstairs, within a matter of 440 yards surrounding it, there are no fewer than 10 examples administrative difficulty of not having to There is the nursing home case. In the road in which I live, there are three nursing homes which employ, between them, 25 part-time people. The average wage is £3 15s. a week, and they are paid 5s. an hour. The average woman earns four times that figure, yet those part-timers pay exactly the same amount.
I am sure that the Government would agree that, if they could find a method whereby such people paid only a quarter of the normal rate for 15 hours' work, that would be equitable and right, and I suggest that some method whereby a cheaper stamp is used is the only way to achieve that.
Then, within a few hundred yards of my house, there is a spastics' home, and, nearby, two other homes, one for juvenile delinquents and the other for mentally handicapped children. Each of them employs part-time workers. In one case of course, it will be local authority owned, and that may be able to recover the amount or not even have to pay it. The other two are private, and I suggest that it is unfair to draw a distinction between a local authority home, which may be able to recover the full amount or not even pay it at all, and what I call private enterprise homes which are not covered by charities but by small subscriptions.
Then there is the case of newsagents. Practically all the newsagents and small tobacconists who distribute newspapers are using part-time employees. Is the distribution of newspapers throughout the country to be lost to us, because this is a real factor in the printing and distributing industry?
We think, too, of the catering trade. One aspect which has not been mentioned so far is part-time banqueting in rural areas. Local Rotary and Conservative club dinners are very important to my constituents, as, I am certain, Labour club dinners are to the constituents of the hon. Member for Buckingham (Mr. Maxwell). I am sure that, without those dinners which he attends, they would not be prepared to sustain him in his seat. All these functions are handled by part-time workers, and it is the women in small towns and villages who turn up to do the two or three hours' work, winter and summer, to provide the class of dinner with which all hon. Members are so well conversant. It means, for those part-timers, an average of 12 hours' work a week.
Then there are the old-age pensioners. My constituency has a large number of old-age pensioners who are also on National Assistance in the winter. There are about 1,500 of them in the Isle of Thanet alone on National Assistance in the winter and obtaining a certain amount of employment in the summer. They earn about 5s. a hour and do about 15 hours' work a week. Their total earnings vary from £3 10s. to £7 a week. It is quite unrealistic that they should be charged pro rata the same rate—25s. for a man and 12s. 6d. for a woman—as the man earning £1,500 or the woman earning £1,000.
However it is achieved, if there cannot be a total rebate, I hope that the Government will be able to say that the stamp which is to be used for the 12s. 6d. woman can be downgraded so that the man employed part-time can go into that category, and the woman employed part-time can go into a 6s. 3d. category and thus pay half the rate. By overstamping or some method of that kind, it is possible to achieve a half-rate in respect of those people, and I am convinced that, with the assistance of the Postmaster-General or whoever creates this form of stamping, something can be arranged to achieve what I am prepared to believe that the Minister of Pensions and National Insurance is in favour of achieving.
I cannot think that anybody who looks at this problem fairly can believe that it is selective employment—"selective" is the word—to treat the part-time worker on the same basis as the full-time industrial worker. It simply cannot be so. This is to deny the essence of the Bill. But, even on their basis, if it is selective employment, let it be selective, and, if it is, they must find a method of diminution in the case of the diminutive amounts of money which these old people earn.
I think that this tax will have a bigger effect in my constituency than in any other—[HON. MEMBERS: "No.']—so it might be as well to give some reasons why I urge that the Amendment should be accepted. There is a certain amount of dissent from what I have said. I hope that by the time I have finished some of my colleagues will have appreciated that this tax will have a big impact on my constituents, where there are an enormous number of retired people, and as many pensioners as in any other constituency. [Hon. Members: "No."] It seems that some of my hon. Friends dissent from that, too.
My hon. Friend the Member for Beckenham (Mr. Goodhart) said that it would not be easy for his constituents to get work in a factory. I think that it would be much easier for them to do that than it would be for my constituents, who are in the far corner of South-East England, to get a job in a manufacturing industry. If they do not work in the industries available in my constituency, the simple answer is that they will not he able to work at all, and if the Financial Secretary could tell us how an elderly person who, at the moment, is working part-time in my constituency, but who is laid off because of this tax, can get himself, or herself, into an export trade, it would be very helpful.
There are four categories about which I should like to make a few comments. First, I have in my constituency a number of schools, a high percentage of which are boarding schools. These schools provide something which the State does not provide, and there is a strong case for supporting them. People send their children to these schools from all over the world. There are some people who, for various reasons, have to send their children to boarding schools.
These schools have to rely on a certain amount of assistance, and the only assistance available in my area is from elderly and part-time workers, and if they are employed these schools will have to pay twice as much as they would have to pay if they employed full-time workers. I therefore suggest that this tax will have a serious impact on them.
It is perhaps as well to remember that many of the children attending these schools come from abroad. In one school, a number of the pupils come from the United States, and a good deal of the money content in these schools comes from outside the sterling area.
The hotels in my area provide a considerable amount of employment. Nobody can suggest that they have over-staffed themselves. I am constantly receiving letters urging me to obtain permits for people to come here from different parts of the world so as to help these hotels to keep going. The only way in which people running hotels in my constituency are able to keep going is by getting elderly part-time assistance.
The other difficulty that arises is that during the winter months they may want to keep these people, and hotels are not so full in the winter as they are in the summer. If a hotel cannot keep open in the winter it will lose this labour and will find it very difficult to replace it when summer comes round again. I therefore ask the Minister to examine the situation in respect of hotels in my type of constituency. The idea that they are overstaffed is nonsense. If they are unable to keep such part-time staff as they have because they are having to pay a tax of twice the amount that is paid in respect of full-time employees, their standards will fall, and then foreign visitors, who come to my constituency in numbers as great as in any other constituency because it is near the Continent, will not get the service that they expect.
The third category includes such people as shopkeepers, pharmacists, the proprietors of laundries, and other people who have been referred to by other hon. Members. I have received many representations from chambers of trade and chambers of commerce about the difficulties that will arise as a result of the imposition of this tax. I know a laundry where 235 out of the 274 people employed are working part-time. That laundry specialises in doing work for hospitals, schools, charitable institutions and shipping lines. If it has to pay in respect of the part-time people as well as the full-time people it has no doubt that it will have to pass on the cost in some way to its customers.
A case has been made out for the wholesale pharmacists. I am concerned with the retail pharmacists. I have received a number of representations from them about the difficulties which will arise because they have to rely on part-time workers.
Finally, on a number of occasions when we debated the Finance Bill, as well as in our debates on this Bill, the Chief Secretary has said that this is not a tax on employees, but on employers. In my constitueny the difficulty is that many of the employers are themselves elderly persons. I gave the right hon. Gentleman some examples recently of employers in the 70-plus category, who have to have some assistance. They employ somebody part time. I gave the right hon. Gentleman the example of a person over the age of 80 who employs somebody for seven hours a week. He is working on a very slender margin.
That is not a very simple arrangement for somebody when he reaches the age of 80. I ask the Financial Secretary to consider the case of the employer who is of an advanced age and who employs people part time whether it be for seven or 17 hours a week.
The other annexe to that point is that a number of these people have to go into homes in due course. There is a large number of such homes in my constituency, and the effect upon them will be very serious. Therefore, there will be a greater impact than in some others if there is not complete agreement on that proposition.
At 6.20 a.m. yesterday morning, I glanced up at Big Ben as I was walking home to my flat. I was surprised to see a large number of London buses driving down the Embankment. A number pulled up outside Scotland Yard. I wondered what was happening in Scotland Yard that buses were arriving at that hour. Out of those buses descended a crowd of women, who were going to clean up the mess at Scotland Yard. Some of them were possibly coming to clean up the mess in the House of Commons.
I was very interested in those women. Some of them were young women; some of them were very well dressed. I wondered how much work the Government were giving these women employed in contract cleaning. I think that I was the first during the debates on this Measure to use the words "contract cleaning "—
I will not dispute that. In HANSARD there is a report of an interruption which I made, and everyone laughed when I mentioned contract cleaning.
I thought that I would follow this matter up, particularly with the Chief Secretary. So I asked, in a Question on 28th June,
What proportion of Government offices in central London are cleaned by outside cleaners under contract; ".
I am glad that the Financial Secretary to the Treasury is on the Government Front Bench. He has my sympathy this evening: he has not a friend on either side of the Committee—
In the whole of my Parliamentary experience, I have never seen such a friendless Front Bencher. The hon. and learned Gentleman gave me an interesting reply. He said that approximately two-thirds of the cleaning work in Government offices was done by contract cleaners, and went on:
The saving… is… about £430,000 per annum."—[OFFICIAL REPORT, 28th June, 1966; Vol. 730, c. 122.]
So, by employing contract cleaners, the Government are saving nearly half a million pounds in Central London alone. I wonder how much they are saving all over the country.
The Prime Minister today expressed the intention of keeping both prices and costs stable. I can inform the House that the effect of the Selective Employment Tax on the contract cleaning industry is bound to raise prices by about 15 per cent. If the Government are determined that their costs shall be kept steady, they will not be able to employ these contract cleaners because they will be driven out of business. They are giving a tremendous amount of employment in the part-time sector: about 90 per cent. of their employees are part-time.
The only alternative for these contract cleaners is to employ full-time men and women who will work through the night. I do not imagine that any of those contractors would wish to engage in an entirely anti-social undertaking. Just because they are not able to get people to work for a short shift in the morning and another in the evening—a different squad—-they would have to employ part-time men and women working entirely through the night. That would be entirely anti-social. I would not regard it as being in accord with any Government's policy, and it is certainly not the policy of the Conservative Party.
Contract cleaning is important. It is only one aspect of part-time employment. I have explained the great saving which the Government and large industrial organisations are making from employing contract cleaning.
Another aspect of part-time work arises in respect of the type of constituency l represent—significantly, a Tory seat. I have an idea that this deep-laid plot is aimed at Tory seats. It is significant that Tory seats are mostly those in which a high proportion of employment is in service industries, which are to be taxed. A high proportion of the seats represented by hon. Members opposite are industrial seats, and manufacturing industry will get a bonus. Is this a fluke, or is it by design? I have a suspicion that it is by design. In my constituency there is a high proportion of men and women—pensioners—who are helping out in the hotel industry and in the distributive trades.
Agricultural workers—agriculture is a neutral zone—retire at the age of 65, but many of them take up part-time gardening, tilling the land just as much as if they were in agriculture. These men are to be subject to the tax if they work more than eight hours a week.
These proposals for part-time workers are disastrous and I am not surprised that the Treasury Bench is so friendless this evening.
Reference has been made to the effect of the tax on part-time workers employed by wholesale pharmacists. I want to refer to the even greater effect of the tax on retail pharmacists. A wholesale pharmacist must depend on full-time workers. A much higher proportion of the employees of the retail pharmacist are part time, perhaps married women who know the different drugs and medicines which are needed and who come in for a few hours a day or a week to help out.
Some specific points have been raised in letters I have received. Leicestershire is the hub of the nation's shoe and hosiery trade. The county has the nation's lowest unemployment figure. This condition has existed for some time, although I hesitate to think what the effect of the measures announced by the Prime Minister will have on the nation's unemployment figure. However, there is a high level of employment in Leicestershire.
The result is that all the varied garment industries in Leicester, in the county and throughout the Midlands have to depend on part-time labour, because full-time labour cannot be obtained. All the workers are tied up largely in the hosiery and shoe industries. In this part of the Midlands employers must employ part-timers, or shut up shop.
I want to call some examples to the attention of Treasury Ministers. I have received representation from a firm of wholesale hardware merchants. The firm says that for over 100 years it has been providing useful service in supplying to the public, to local authorities, and to the building trade materials and fitments for industrial and private construction work.
The managing director of this firm said that if the S.E.T. were applied to last year's figures, on the number of part-time workers he had to employ it would have the effect of absorbing over 40 per cent. of the firm's net profit before tax, and the effect on the previous year would have been to absorb no less than 80 per cent. of the profit before tax.
I wish to refer to two other industries —launderers, who have been mentioned, and dry cleaners, who have not been mentioned. My hon. Friend referred particularly to part-time cleaners in laundries and I will mention dry cleaners. In dry cleaning, many of the employees are women and no less than 25 per cent. of all the employees in dry cleaning are part-timers.
The Minister realises that dry cleaning plays an important part, perhaps an unsung and even an unspoken part, in the national economy. It helps to preserve garments by proper cleaning and treatment and lengthens the useful life of a garment. In this way costly imports are saved, and the length of life of our garments can be extended. There is a very large female labour force in dry cleaning. Women represent three-quarters of the labour force of dry cleaners, and over 25 per cent. of these are part timers.
There is no doubt that if the incidence of this unfair and savage tax prevents part-time women workers from putting in a few hours' work a week because the employer cannot afford to employ them, it will have a serious effect on national efficiency and on a very useful and productive industry.
What about British Legion clubs? I have been unable to find out, even although I have attended most of the debates about the tax, what is the position of the individual British Legion club. I understand that the British Legion as a movement will be treated as a charity, but what is the position of the part-time worker who works for a few hours a week in a British Legion club? Will this tax have to he paid in respect of him or. because the British Legion is to be treated as a charity, will the employees in clubs throughout the country be treated in the same way?
Not only British Legion clubs, but many other clubs are affected. I will not make the obvious reference to Conservative clubs. Instead, I will refer to a working men's club, the representatives of which came to see me the other day. It is a very small club with very few members, but it engages some part-timers to provide amusement and entertainment for the members in the evening. This club will have to pay £9 a week in Selective Employment Tax—£450 a year. This picture can be repeated in working men's clubs in smaller towns throughout the country. The tax can make the difference between bankruptcy and solvency for these clubs.
I sat right through the night during the debate on the Finance Bill relating to the hotel and catering industry. I wished to make some remarks about part timers in that industry, but, unfortunately, I was unable to catch your eye, Sir Eric.
I shall try not to paint the picture that was so successfully painted by my hon. Friends from seaside towns and tourist centres, but the picture of the application of the tax to the small hotel in a small market town in a Midland shire or, indeed, in any part of the country. My hon. Friend the Member for Blackpool, North (Mr. Miscampbell) spoke of the savage effect the tax would have on the hotel industry in Blackpool, and we have also heard of the savage effect that it will have on seaside and tourist hotels elsewhere.
But, in addition, in many Midland towns and market towns one of the most important centres is the little country hotel, which is so dependent on the part-timer not only to serve behind the bar, but to cook, to act as the waiter and help as the chamber maid and in many other ways. These part-timers cannot be channelled into another industry. They are likely not to be employed by many of these hotels if the tax comes into force. and in many of the market towns there is no manufacturing industry to which they can be transferred. The net result is likely to be that they will stay at home and live on the old-age pension for which many of them qualify.
I stress the invaluable part that married women play in a part-time capacity in many industries, particularly in nursing. Skilled physiotherapists and nurses, perhaps with many years' training at great expense to the State, who have left to get married, are prepared to come back to do a few hours' work a week, but they will be discouraged. The job will not be there for them if the tax comes into operation.
We have heard examples of the effect the tax will have on some of the older people. A pensioner of 67 or 68 came to me the other day. He wanted a part-time job in a garden, and I had to tell him that if the Bill became law such a job could not be found for him. He is not very well, and cannot work more than 12 or 14 hours a week, but he is the type of man who can still play a useful part in society. Yet there is a threat to people in this category, because employers will not pay the full rate of tax for an elderly man whom one employs as much to help him as to help oneself.
The Bill is very bad. For Treasury Ministers not to allow exemptions for part timers who work 21 hours a week or under is a disgraceful imposition, and I shall seize with relish the opportunity to vote for the Amendment.
I speak from the point of view of the rural areas. Scotland, Devon and Cornwall, and Norfolk are lower-paid areas, but we shall have to pay millions of pounds to higher-paid industrial areas, and the rural areas contain very large numbers of part-time workers who cannot possibly obtain industrial work in factories. It is a most unfair tax. People grumble at taxation, but accept it if it is necessary; but they do not accept unfair taxation. That is why the Government benches are so empty.
I will give three examples of how the tax will affect some of my constituents. Two examples concern seasonal workers, who must present tremendous administrative difficulties. My business of a farmers' livestock auction employs 25 or 26 men for nine or 10 hours every Tuesday for part of the year and for seven hours for the rest of the year. We are told that for the weeks when the men work less than eight hours we shall not have to pay any tax, but when they work eight or more hours we shall have to pay. Imagine the difficulty that this will present to those paying and collecting the tax. Fruit pickers, vegetable packers and others are seasonally employed. Some weeks they will work 15 or 20 hours and others six. It will present enormous difficulties.
My constituency has three privately run old people's homes, and the majority of the workers there are employed part time doing an extraordinarily good job looking after people in their last years. The tax will add a big burden to the running of the homes. I believe that it will create great injustices for everybody in rural areas.
The Bill is an extremely bad piece of legislation. It is unfair, and extremely badly thought out. If the tax had been a poll tax for evrybody at a third of the rate, I think we should all have accepted it, for it would have enabled us in good times to reduce the main taxation. But the Bill is rotten, unfair and totally incompetent, and I shall have great pleasure in voting for the Amendment.
We debated the subject of part-time workers at considerable length when we were considering the Finance Bill in Committee and on Report. Naturally, we have now had another full and very interesting debate on the subject. However, I think it fair to say about the speeches that we have heard today that it has been a question not so much of new arguments being adduced as of new examples being given illustrating the arguments previously put forward. [HON. MEMBERS: "No."] I should be interested to have my attention focused on new arguments. I sat through all the previous debates—some of the hon. Gentlemen saying "No" did not—and I recall arguments I heard then that I have heard again tonight. We have heard them illustrated from examples of a wealth of different industries and activities. I am sure that hon. Members will not expect me to deal with individual examples, but rather with the general underlying principles upon which the argument is based.
Some hon. Members suggested that there should be complete refund of the tax for part timers, others that a fair solution might be to have a proportionate refund or lower rate of tax for them. The hon. Member for Worthing (Mr. Higgins), in a powerful speech dealing particularly with the problems of nursing homes, argued that for part timers there should only be a half rate. I remind the Committee that 90 per cent. of part timers working between eight and 30 hours a week—those working less do not have to have the tax paid—are women. The rate for women is half that for men. This reflects the very high incidence of part-time workers among women. Broadly speaking, the incidence of the tax is related to the average earnings for people in different categories.
Last time I stated this, the hon. Lady the Member for Finchley (Mrs. Thatcher) challenged me. I have looked up the figures since then. The rates of this tax were based on the average earnings as disclosed by the Family Expenditure Survey for different classes of employees in the various services, excluding public administration and defence, but including transport and communications.
The tax rates are 25s. for the adult male, 12s. 6d. for the adult woman, 12s. 6d. for a boy and 8s. for a girl. If we had followed exactly the proportions of the average earnings of people in these categories, the same figure would have been produced for the adult male, lls. 3d. for the adult woman, 12s. instead of 12s. 6d. for the boy and 7s. 3d. instead of 8s. for the girl. I repeat that the structure of the tax takes account to a substantial degree of the fact that the earnings of part-time workers are lower and that the incidence of the tax on their employers is, therefore, at a lower rate in general than for full-time workers because of the high incidence of part-time work among women.
No. I am giving average earnings for all women and the point I have made is that a very high proportion of women employees are part-timers and an enormously high proportion of part-timers are women. Indeed, 90 per cent. of all part-time employees are women.
I am not suggesting, and never have, that the rates were proportionate to the hours worked. What I have said is that, broadly speaking, the high incidence of women among part-time workers is reflected in the rates and there is some gradation as a result.
A very large section of part-time workers will qualify their employers for either the premium or the refund. The right hon. Member for Leeds, North-East (Sir K. Joseph) suggested, I think in error, that the Ministry of Labour Gazette had given a figure for part-time women workers in the manufacturing industries of about one-third of a million. Had the right hon. Gentleman turned the page in that document he would have seen that the column from which he was quoting continues and that the figure given is 480,000 and not one-third of a million.
I have with me figures, based on estimates, showing that of the part-time workers, just over 50 per cent. work in industries which are liable to pay the tax without the refund, and just under 50 per cent. who will qualify their employers to either the refund or premium—and of those the great majority will be for the premium and not for the refund.
Of a total of 905,000 who, it is estimated, will qualify their employers for the refund, 528,000 will qualify their employers for the premium. This shows that for a substantial part of the part-time employees, there will be no disincentive. On the contrary, there will be a slight incentive the other way.
So what indeed. It is being suggested that the greatest weight of this tax will be to act as a disincentive to part-time employment. I am pointing out that only a part of it could operate in that way and that the other part, nearly a half, will operate in the contrary direction. It is a matter of balancing the different factors.
The hon. and learned Gentleman's argument would be clearer if he would quote the figures for part-time workers alone. He is confusing the issue by referring to part-time and full-time statistics.
I have sat through the whole of this debate. I am surely entitled to put one question to the hon. and learned Gentleman. Is it not a fact that the people in the service industries are in no way affected by his argument so far? It is the other people about whom we want to hear from the Financial Secretary.
I am glad to know that the hon. Lady has been following my speech so far, because I had intended to direct my next remarks to dealing with those part-timers employed in the service industries.
The primary argument on this issue is that this tax will act as a strong disincentive for employers to employ part-timers in the services. This point was emphasised by the hon. and learned Member for Montgomery (Mr. Hooson). It has been stated that, as a result of this tax, employers will seek to employ full-timers instead of part timers. In the existing National Insurance contributions system there is already an incentive for employers to employ full-timers rather than part-timers if they can. Certainly, employers are not now going to employ two part-timers instead of one full-timer and thereby have to pay double their contributions in stamps.
The fact is—and all the arguments have been based on this fact—that there is great economic pressure on employers to employ part-timers. That is the main argument against the whole of the assumption on which the argument of hon. Members opposite is based—this assumption that because employers have to pay this tax they will start to dismiss their part-timers. They will not, because they will need the employment of these people just as they need it now.
Then it has been said that as a result of the measures announced today, with the reduction in demand, employers will employ fewer people than they did before, and that this is an inevitable part of the redeployment process at which these measures are aimed. Again, if an employer, as a result of a reduction in demand, will have to reduce his staff, he will not be affected in that decision or deterred from making that decision because he is exempted from the Selective Employment Tax. If he does not need to employ any more because of the reduction in demand, he will not hoard the labour and keep on a part-time 'employee as a result of the tax.
Can the hon. and learned Gentleman address himself to a major question that arises here? Many of these people who are employed in the service industries are, by definition, unlikely or unable to work in other industries. Therefore, what is the purpose of the tax which affects them?
If I was not interrupted so much, I would find it easier to proceed more quickly.
As I said when discussing the subject on the Finance Bill, it is our belief that the fears expressed by hon. Members opposite about the effect of this tax on part-time workers are exaggerated. But I also said that we would take very careful note of the arguments that have been adduced. As I conceded then during the debate on the Finance Bill, the incidence of the tax is to some extent, though to a more moderate extent than has been argued, disproportionate in its weight in respect of the employment of part-time employees. I spoke then of the difficulties, within the framework of this tax, of making an exception for part-time employees.
We were urged in one debate, in which the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) spoke powerfully, that we should make an exemption for a particular category of people within the National Insurance field—a somewhat illogical group from the point of view of this tax, but it was urged that we ought to make an exception for them and either grant an exemption or a different rate for them. I gave the reasons why we did not feel that that was the right thing to do.
Now we are being asked whether some machinery is possible by which we could devise a repayment system which would be discriminatory and selective within the sphere of the part timers. We are discussing, in particular, an Amendment, and other Amendments grouped with it which are variations on it, suggesting that there should be a refund in relation to people who are employed between eight and 21 hours a week. I must tell the Committee that we are able to find no practical way whatever of devising a refund system on the basis of part timers. I can explain very briefly why.
If there is to be a refund system, neither the Ministry of Labour nor the Ministry of Pensions and National Insurance has any list of people in the employment of different employers, still less of part-time employees. Therefore, applicants for such a refund would have to make a return of the numbers whom they said they had in their employment during a particular period and who were working a given number of hours.
That could be done either with or without names. If it was done there is no practical way in which that information could be checked. It would have to be taken on trust.
I have said that I would not give way again because I would be coming to the point. I was coming on to that point and if the hon. Gentleman had been present when we were debating the matter on the Finance Bill he would know the answer, because I gave it then.
With the eight-hour exception for National Insurance there is a built-in policing system, because the employee has an interest to see that he is not returned as having worked less than eight hours when he is working more, because he will lose his National Insurance contribution, rights and benefits.
This does not operate on a 21-hour basis, which has no significance from the point of view of a man's insurance rights. It would obviously be wholly impracticable for the Ministry of Labour, or whichever Ministry was concerned, to police and check the claims made by employers on that basis. We would be in the position of paying out enormous sums of public money entirely on trust, without any practical means of verification.
My hon. and learned Friend the Member for Warrington (Mr. W. T. Williams) was the first to anticipate and recognise this and to say that if a solution was to be found he felt that it could only be found within the framework of the National Insurance stamp system. This was repeated by other hon. Members. I do not see any approach that we could make while we are operating this on the basis of the National Insurance stamp, other than through the mechanism of the stamp.
I have told the House on the Finance Bill what the difficulties are there. I have been asked to look at this again and I can give the assurance that we certainly will be doing so. I can assure hon. and right hon. Gentlemen that we appreciate the problem and that we will look further at it and consider how the Measure is operating and what the facts are, whether the fears expressed by the hon. Members opposite are realised, or whether our more sanguine approach is justified. If it is shown that hon. Members opposite are right and that we are wrong, and action is required, it will require a fairly considerable alteration to the National Insurance system so that we can devise a mechanism by which we could make a separate category of part-time workers.
This could not be achieved in time for the launching of this scheme, which will be starting in September. We will have an opportunity in the Finance Bill to operate as from the beginning of the next financial year. It is only a six-month period from that time when the scheme starts and within that period we can make any adjustments which are proved to be justifiable and necessary. Meanwhile, I must advise the Committee to reject the Amendment.
The suggestion of the hon. Gentleman has already been looked at, and I do not think that it is workable. All that I am saying is that it would be necessary to devise new categories of stamps to improve the situation.
Having listened to the Financial Secretary it becomes more and more clear why we had a Guillotine on this Bill. Such totally inadequate replies as we have had are enough to exasperate any Opposition and would certainly have led to prolonged discusion in the normal way. I am sure that all my right hon. and hon. Friends will feel that after the cogent arguments and points that have been put from all sides of the Committee the reply which we have just heard has been one of the lamest that any of us can recall.
Throughout the debate on this important series of Amendments relating to part-time workers it has been extremely noticeable that every speech without exception. apart from that of the Financial Secretary, has been attacking the Government. The speeches from the hon. and learned Gentleman's own side have been harshly critical, although one of his colleagues, after attacking the Bill and supporting the Amendment, said that he would follow the convention of voting for the Government. I suggest that when Government supporters have been reduced to that stage, it does not look a very happy future for the Government.
The Financial Secretary must admit that all the speeches, from both sides, have concentrated on the unfairness of this tax concerning part-time workers. The speech to which we have just listened reflects the Financial Secretary's feeling that that is abundantly justified. He has based himself, we understand, on the impracticability of dealing with the matter. If one introduces a tax, one should work out the practicability of it first. That is the sort of thing that is normally done by Governments. We certainly find it exceedingly strange to have that argument put forward as the major reason for not granting an Amendment. We on this side, therefore, are bitterly disappointed with the reply which we have just heard.
I do not propose to go through again the many and cogent arguments which have been put forward from hon. Members on this side. I merely pick up the point, made by my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies), that as this is a selective tax and we are dealing with selective employment repayments, the fact that we are dealing with part timers makes the degree of selectivity much worse. It means that it impinges much more severely on the part timers in the industries which do not get repayment than it does on the full timer.
We have, therefore, the distinction between manufacturing industry, in which there is to be repayment and premium, those industries which get repayment and those which do not get, either. It is in these latter industries that the savageness of the imposition on part timers really comes about. This has been borne out abundantly in the speeches to which we have listened.
Various categories have been brought to our attention— shop workers, particularly in retail food distribution, the distributive trade generally—
Will my right hon. Friend give way? Since he has referred especially to the distributive trade, may I say that a very relevant passage which appeared recently in the National Plan indicated the need for the distributive trades to develop fully the use of part-time staff. Is it not extraordinary that this encouragement should have been given in the Plan to develop the use of part-time staff, but that in the Bill the Government are trying to do the very reverse? It is no wonder that the Chief Secretary is on the point of resignation.
I am sure that some sections of the Committee are relieved to have that assurance from the Chief Secretary.
I am grateful to my hon. Friend for pointing out the complete illogicality of the Government's approach as opposed to the National Plan, but he recognises, as we all do, that the National Plan is virtually dead and that its author is very sick indeed. I sympathise with him in some degree in this predicament in which he is placed.
Nevertheless, the fact remains that upon all these distributive trades and the whole area of services and work which we have been discussing upon this Amendment the impact of this tax is harsh and savage. There have been some extremely strong criticisms of it; indeed, one of the Financial Secretary's hon. Friends, the hon. and learned Member for Warrington (Mr. W. T. Williams), referred to the tax as a whole as being a rough and rude instrument. In so far as it impinges on these part-time workers I think that the criticism should be even stronger than that.
We have had references to all these categories of workers. We have had references to the cleaners. We have had references to the Mrs. Mopps, for whom I think there is a particularly strong feeling of sympathy because of the injustice to those excellent ladies who do such good work. We have had references to laundries, nursing homes, homes for old folk, hotel workers. All these categories of workers are being savagely hit by the imposition of this tax, in that their employers are having to bear the whole range of the tax, and it cuts right across the whole field.
In particular, there have been references to the elderly, to whom I also would make a particular reference. The point has been made tonight by various of my hon. Friends that there are social as well as economic reasons why the elderly should be encouraged to remain at work. Here is a tax by which they will be prevented from doing so. Those of us who also have been Minister of Labour, as one or two of my right hon. Friends and I have, know from the social point of view and also, of course, from the economic point of view, the need to try to encourage these part-time workers, the elderly in particular. There is a feeling of sympathy with their desire in many cases to go on at some useful job. These are the people who will be not only discouraged, but prevented from doing that.
I think that I can put the position probably more clearly than in any other way by quoting from a letter I have received from a constituent. Various hon. Members have quoted this evening from
letters they have received. This letter does put in a nutshell the effect of the tax on the employment of old-age pensioners who are doing small jobs to eke out their incomes. My constituent writes of the absurdity of the tax and its effects on the part-time workers and old-age pensioner part-time workers, and he says:
I employ an old-age pensioner 20 hours a week to help in the garden. From this the Chancellor gets 10s. Income Tax and 14s. 1d. in National Insurance. If I am taxed 25s. I shall have to reduce his hours to eight a week, which means no stamp, no Income Tax, no Selective Employment Tax. The net result of the Chancellor's wisdom is a loss of 24s. Id. to the Revenue and a loss of income to the man employed, who will only be doing eight hours instead of 20.
My constituent adds:
It does not make sense to pay 39s. Id. with National Health Insurance and S.E.T. for 12 hours for an old-age pensioner.
That, I think, puts in a nutshell the folly of the tax, a folly if judged from the point of view only of the need to bring in revenue. We have been told time and again that the purpose of this tax is to help the Exchequer. That letter shows its practical effect: there is a man being cast off; and that case can be multiplied hundreds and thousands of times over. This is the sort of thing my hon. Friends have all been emphasising.
Some of them have reminded us of the particular problem in the rural areas. If redeployment of labour is needed in the rural areas, it is no good putting a part-time worker off when there is no alternative employment available. That is a very serious aspect, as any hon. Member representing a rural constituency will know. Many part-time workers are employed in agriculture, mainly seasonal workers, and, admittedly, the amounts paid in respect of them will now be fully recouped. But in respect of those employed in trades ancillary to agriculture, of whom there are a great many, there will be no recoupment at all. I have in mind firms dealing in agricultural machinery and repairs to machinery, corn merchants and, in particular, agricultural and horticultural co-operatives.
The co-operatives are something which the Government and their predecessors have encouraged, and a large number of women are employed part-time in them. But these people are not included in the classification to enable them to get repayment. It could be argued that they should seek reclassification, and I do not know what assistance will be given there. But, as things stand at present, part-time workers in a co-operative venture will not be able to get recoupment, whereas other people doing similar work on nearby holdings will get it.
This selective tax is grossly unfair in its selectivity, and that is the main criticism which we raise. It is particularly unfair in relation to the part-time worker, where the effect is doubled many times over.
The whole debate this evening has taken place against the background of the statement which the Prime Minister made this afternoon. It is very important, in that connection, to consider what has been said by Government spokesmen about the part-time worker in the discussions that we lave had both on the Finance Bill and the Second Reading of the present Bill.
On the Second Reading of the Finance Bill, the right hon. Gentleman the Chief Secretary said, referring to part-time workers:
So long as the policy of full employment is maintained—and this the Government are determined to do—it does not seem that there can be an overall falling-off in the need for workers in these groups."—[OFFICIAL REPORT, 25th May, 1966; Vol. 729, c. 485]
In winding up the Second Reading of the Selective Employment Payments Bill, the Chancellor of the Exchequer was much more explicit when he said, in relation to part-timers:
…we are introducing this tax in a period of very full employment. There is at present a great swirling around of people offering jobs to part-time workers ".
A little later, he said:
.…this is a problem which we must look at carefully. We will have to see how it operates, remembering that we are operating in a condition of full employment."—[OFFICIAL REPORT, 23rd June, 1966; Vol. 730, c. 1046–7.]
What did the Prime Minister say today? He said that what is needed is a shakeout that will release the nation's manpower. When asked by my right hon. Friend the Leader of the Opposition to clarify that, he talked of 1½ to 2 per cent.
unemployment, meaning up to half a million unemployed. With the prospect of half a million unemployed, how can the Financial Secretary or the Chief Secretary pretend that the situation is the same now as when the tax was first proposed?
The whole basis has been changed. That being so, and the fact that the Chancellor rested his argument on the great swirling around of people offering jobs to part-time workers, the whole basis has been destroyed, and the position of part-time workers should be looked at again.
The Financial Secretary must have had that in mind in his very lame reply to what we had been saying, because he rested his case tonight not so much on the swirling around of jobs available, but on the difficulties of excluding part-time workers. In the light of what has been said previously by his right hon. Friends, there is a clear duty imposed on the Government. They brought in this tax and thought that it was a clever one to introduce. It is for them to find a way out of the difficulty that they have created and the injustice that it is creating for the part-time worker.
In the light of what the Prime Minister said today, the Financial Secretary's answer is far from good enough. We must have some improvement in this attitude, and some definite proposals to help out the part-time workers, otherwise many innocent people—in many cases old people, widows, and those who are unable to take full-time jobs, the people who are least able to defend themselves —will be thrown out of employment because of the effects of this tax, apart from the effect of the new measures which the Prime Minister has announced. For this reason we utterly reject the arguments which have been put forward by the Government, and I invite my right hon. and hon. Friends to show their feeling by taking this matter to a Division.
|Division No. 138.]||AYES||[12.6 a.m.|
|Alison, Michael (Barkston Ash)||Godber, Rt. Hn. J. B.||Munro-Lucas-Tooth, Sir Hugh|
|Allason, James (Hemel Hempstead)||Goodhart, Philip||Murton, Oscar|
|Astor, John||Goodhew, Victor||Heave, Airey|
|Atkins, Humphrey (M't'n & m'd'n)||Gower, Raymond||Noble, Rt. Hn. Michael|
|Awdry, Daniel||Grant, Anthony||Nott, John|
|Baker, W. H. K.||Grant-Ferris, R.||Onslow, Cranley|
|Balniel, Lord||Gresham Cooke, R.||Orr, Capt. L. P. S.|
|Batsford, Brian||Griffiths, Eldon (Bury St. Edmunds)||Orr-Ewing, Sir Ian|
|Beamish, Col. Sir Tufton||Gurden, Harold||Osborn, John (Hallam)|
|Bell, Ronald||Hall, John (Wycombe)||Page, Graham (Crosby)|
|Bennett, Sir Frederick (Torquay)||Hall-Davis, A. G. F.||Page, John (Harrow, W.)|
|Berry, Hn. Anthony||Hamilton, Michael (Salisbury)||Pearson, Sir Frank (Clitheroe)|
|Bessell Peter||Harris, Frederic (Croydon, N.W.)||Peel, John.|
|Biffen, John||Harris, Reader (Heston)||Percival, Ian|
|Birch, Rt. Hn. Nigel||Harrison, Brian (Malden)||Peyton, John|
|Blaker, Peter||Harrison, Col. Sir Harwood (Eye)||Pike, Miss Mervyn|
|Body, Richard||Harvey, Sir Arthur Vere||Pink, R. Bonner|
|Bossom, Sir Clive||Harvey Anderson, Miss||Pounder, Rafton|
|Boyd-Carpenter, Rt. Hn. John||Hastings, Stephen||Powell, Rt. Hn. J. Enoch|
|Boyle, Rt. Hn. Sir Edward||Hawkins, Paul||Prior, J. M. L.|
|Braine, Bernard||Hay, John||Pym, Francis|
|Brinton, Sir Tatton||Heald, Rt. Hn. Sir Lionel||Quennell, Miss J.M.|
|Bromley-Davenport,Lt.Col Sir Walter||Heseltine, Michael||Rawlinson, Rt. Hn. Sir Peter|
|Brown, Sir Edward (Bath)||Higgins, Terence L.||Rees-Davies, W. R.|
|Bruce-Gardyne, J.||Hill, J. E. B.||Renton, Rt. Hn. Sir David|
|Bryan, Paul||Hirst, Geoffrey||Ridley, Hn. Nicholas|
|Buchanan-Smith,Alick(Angus,N—M)||Hobson, Rt. Hn. Sir John||Ridadale, Julian|
|Buck, Antony (Colchester)||Hogg, Rt. Hn. Quintin||Rippon, Rt. Hn. Geoffrey|
|Bullus, Sir Eric||Holland, Philip||Rodgers, Sir John (Sevenoaks)|
|Burden, F. A.||Hooson, Emlyn||Rossi, Hugh (Hornsey)|
|Campbell, Gordon||Hordern, Peter||Royle, Anthony|
|Carlisle, Mark||Hornby, Richard||Russell, Sir Ronald|
|Carr, Rt. Hn. Robert||Howell, David (Guildford)||St. John-Stevas, Norman|
|Cary, Sir Robert||Hunt, John||Sandys, Rt. Hn. D.|
|Channon, H. P. G.||Hutchison, Michael Clark||Scott, Nicholas|
|Chichester-Clark, R.||Iremonger, T. L.||Sharpies, Richard|
|Clark, Henry||Irvine, Bryant Godman (Rye)||Shaw, Michael (Sc'b'gh & Whitby)|
|Clegg, Walter||Jenkin, Patrick (Woodford)||Sinclair, Sir George|
|Cooke, Robert||Johnston, Russell (Inverness)||Smith, John|
|Cooper-Key, Sir Neill||Jones, Arthur (Northants, S.)||Stainton, Keith|
|Cordle, John||Jopling, Michael||Steel, David (Roxburgh)|
|Garfield, F. V.||Joseph, Rt. Hn. Sir Keith||Stodart, Anthony|
|Costain, A. P.||Kaberry, Sir Donald||Stoddart-Scott, Col. Sir M. (Ripon)|
|Craddock, Sir Beresford (Spelthorne)||Kerby, Capt. Henry||Summers, Sir Spencer|
|Crawley, Aidan||Kershaw, Anthony||Talbot, John E.|
|Crouch, David||Kimball, Marcus||Tapsell, Peter|
|Crowder, F. P.||King, Evelyn (Dorset, S.)||Taylor, Sir Charles (Eastbourne)|
|Cunningham, Sir Knox||Kitson, Timothy||Taylor,Edward M.(G'gow,Cathcart)|
|Currie, G. B. H.||Knight, Mrs. Jill||Taylor, Frank (Moss Side)|
|Dalkeith, Earl of||Lambton, Viscount||Teeling, Sir William|
|Dance, James||Langford-Holt, Sir John||Temple, John M.|
|Davidson,James(Aberdeenshlre,W.)||Legge-Bourke, Sir Harry||Thatcher, Mrs. Margaret|
|d'Avigdor-Goldsmid, Sir Henry||Lewis, Kenneth (Rutland)||Thorpe, Jeremy|
|Dean, Paul (Somerset, N.)||Lloyd,Rt.Hn.Geoffrey(Sut'nC'dfield)||Tilney, John|
|Deedes, Rt. Hn. W. F. (Ashford)||Lloyd, Rt. Hn. Selwyn (Wirral)||Turton, Rt. Hn. R. H.|
|Digby, Simon Wingfield||Longden, Gilbert||van Straubenzee, W. R.|
|Dodds-Parker, Douglas||Loveys, W. H.||Vickers, Dame Joan|
|Doughty, Charles||McAdden, Sir Stephen||Wainwright, Richard (Colne valley)|
|Douglas-Home, Rt. Hn. Sir Alec||MacArthur, Ian||Walker-Smith, Rt. Hn. Sir Derek|
|Drayson, G. B.||Mackenzie,Alasdair(Ross&Crom'ty)||Wall, Patrick|
|du-Cann, Rt. Hn. Edward||Maclean, Sir Fitzroy||Walters, Dennis|
|Eden, Sir John||Macleod, Rt. Hn. lain||Ward, Dams Irene|
|Elliot, Capt. Walter (Carshalton)||McMaster, Stanley||Weatherill, Bernard|
|Elliott, R.W.(N'c'te-upon-Tyne,N.)||Macmillan, Maurice (Farnham)||Webster, David|
|Errington, Sir Eric||Maddan, Martin||Wells, John (Maidstone)|
|Eyre, Reginald||Maginnie, John E.||Whitelaw, William|
|Farr, John||Marples, Rt. Hn. Ernest||Wills, Sir Gerald (Bridgwater)|
|Fisher, Nigel||Marten, Neil||Wilson, Geoffrey (Truro)|
|Fletcher-Cooke, Charles||Maude, Angus||Winstanley, Dr. M. P.|
|Forrest, George||Mawby, Ray||Wolrige-Gordon, Patrick|
|Fortescue, Tim||Maxwell-Hyslop, R. J.||Wood, Rt. Hn. Richard|
|Foster, Sir John||Maydon, Lt.-Cmdr. S. L. C.||Woodnutt, Mark|
|Galbraith, Hn. T. G.||Mills, Peter (Torrington)||Worsley, Marcus|
|Gibson-Watt, David||Mills, Stratton (Belfast, N.)||Wylie, N. R.|
|Giles, Rear-Adm. Morgan||Miscampbell, Norman||Younger, Hn. George|
|Gilmour, Ian (Norfolk, C.)||Mitchell, David (Basingstoke)||TELLERS FOR THE AYES:|
|Gilmour, Sir John (Fife, E.)||Monro, Hector||Mr. Eric Lubbock and|
|Glover, Sir Douglas||More, Jasper||Mr. John Pardoe.|
|Glyn, Sir Richard||Morrison, Charles (Devizes)|
|Mott-Radclyffe, Sir Charles|
|Abse, Leo||Evans, Albert (Islington, S.W.)||Mabon, Dr. J. Dickson|
|Albu, Austen||Evans, loan L. (Birm'h'm, Yardley)||McBride, Neil|
|Allaun, Frenk (Salford, E.)||Fernyhough, E.||McCann, John|
|Alldritt, Walter||Fitch, Alan (Wigan)||MacColl, James|
|Allen, Scholefield||Fletcher, Raymond (Ilkeston)||MacDermot, Niall|
|Archer, Peter||Fletcher, Ted (Darlington)||Macdonald, A. H.|
|Armstrong, Ernest||Floud, Bernard||McGuire, Michael|
|Ashley, Jack||Foley, Maurice||McKay, Mrs. Margaret|
|Atkins, Ronald (Preston, N.)||Foot, Sir Dingle (Ipswich)||Mackenzie, Gregor (Rutherglen)|
|Atkinson, Norman (Tottenham)||Foot, Michael (Ebbw Vale)||Mackie, John|
|Bacon, Rt. Hn, Alice||Ford, Ben||Mackintosh, John P.|
|Barnes, Michael||Forrester, John||Maclennan, Robert|
|Barnett, Joel||Fowler, Gerry||McMillan, Tom (Glasgow, C.)|
|Beaney, Alan||Fraser, Rt. Hn. Tom (Hamilton)||McNamara, J. Kevin|
|Bence, Cyril||Freeson, Reginald||MacPherson, Malcolm|
|Bern, Rt. Hn. Anthony Wedgwood||Gardner, A. J.||Mahon, Peter (Preston, S.)|
|Bennett, James (G'gow, Bridgeton)||Garrett, W. E.||Mallalieu,J.P.W.(Huddersfield,E.)|
|Bidwell, Sydney||Garrow, Alex||Manuel, Archie|
|Binns, John||Ginsburg, David||Mapp, Charles|
|Bishop, E. S.||Gordon Walker, Rt. Hn. P. C.||Marquand, David|
|Blackburn, F.||Gray, Dr. Hugh (Yarmouth)||Marsh, Rt. Hn. Richard|
|Blenkinsop, Arthur||Greenwood, Rt. Hn. Anthony||Mason, Roy|
|Boardman, H.||Gregory, Arnold||Maxwell, Robert|
|Booth, Albert||Grey, Charles (Durham)||Mayhew, Christopher|
|Boston, Terence||Griffiths, Will (Exchange)||Mellish, Robert|
|Bottomley, Rt. Hn. Arthur||Hamilton, James (Bothwell)||Mendelson, J. J.|
|Bowden, Rt. Hn. Herbert||Hamilton, William (Fife, W.)||Millan, Bruce|
|Boyden, James||Hamling, William||Miller, Dr. M. S.|
|Braddock, Mrs. E. M.||Hannan, William||Mitchell, R. C. (S'th'pton, Test)|
|Bradley, Tom||Harper, Joseph||Molloy, William|
|Bray, Dr. Jeremy||Harrison, Walter (Wakefield)||Morgan, Elyetan (Cardiganshire)|
|Brooks, Edwin||Hart, Mrs. Judith||Morris, Alfred (Wythenshawe)|
|Broughton, Dr. A. D. D.||Hazell, Bert||Morris, John (Aberavon)|
|Brown, Hugh D. (G'gow, Proven)||Healey, Rt. Hn. Denis||Moyle, Roland|
|Brown,Bob(N'c'tle-upon-Tyne,W)||Heifer, Eric S.||Mulley, Rt. Hn. Frederick|
|Brown, R. W. (Shoreditch & F'bury)||Henig, Stanley||Murray, Albert|
|Buchan, Norman||Herbison, Rt. Hn. Margaret||Neal, Harold|
|Buchanan, Richard (G'gow, Sp'burn)||Hilton, W. S.||Newens, Stan|
|Butler, Herbert (Hackney, C.)||Hobden, Dennis (Brighton, K'town)||Norwood, Christopher|
|Butler, Mrs, Joyce (Wood Green)||Hooley, Frank||Oakes, Gordon|
|Cant, R. B.||Horner, John||Ogden, Eric|
|Carmichael, Neil||Houghton, Rt. Hn. Douglas||O'Malley, Brian|
|Carter-Jones, Lewis||Howarth, Harry (Wellingborough)||Orbach, Maurice|
|Castle, Rt. Hn. Barbara||Howarth, Robert (Bolton, E.)||Orme, Stanley|
|Coe, Denis||Howie, W.||Oswald, Thomas|
|Coleman, Donald||Hey, James||Owen, Dr. Davis (Plymouth, S'tn)|
|Concannon, J. D.||Hughes, Emrys (Ayrshire, S.)||Owen, Will (Morpeth)|
|Conlan, Bernard||Hughes, Hector (Aberdeen, N.)||Padley, Walter|
|Corbet, Mrs. Freda||Hunter, Adam||Page, Derek (King's Lynn)|
|Cousins, Rt. Hn. Frank||Hynd, John||Paget, R. T.|
|Craddock, George (Bradford, S.)||Jackson, Colin (B'h'se Spenb'gh)||Painter, Arthur|
|Crawshaw, Richard||Jackson, Peter M. (High Peak)||Park, Trevor|
|Cronin, John||Jay, Rt. Hn. Douglas||Parkyn, Brian (Bedford)|
|Crosland, Rt. Hn. Anthony||Jeger, George (Goole)||Pearson, Arthur (Pontypridd)|
|Cullen, Mrs. Alice||Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)||Peart, Rt. Hn. Fred|
|Dalyell, Tam||Jenkins, Hugh (Putney)||Pentland, Norman|
|Davidson, Arthur (Accrington)||Jenkins, Rt. Hn. Roy (Stechford)||Perry Ernest G. (Battersea, S.)|
|Davies, Dr. Ernest (Stretford)||Johnson, Carol (Lewisham, S.)||Perry, George H. (Nottingham, S.)|
|Davies, G. Vied (Rhondda, E.)||Johnson, James (K'ston-on-Hull, W.)||Prentice, Rt. Hn. R. E.|
|Davies, Ednyfed Hudson (Conway)||Jones, Dan (Burnley)||Price, Christopher (Perry Barr)|
|Davies, Harold (Leek)||Jones,Rt. Hn.SirElwyn(W. Ham, S.)||Price, Thomas (westhoughton)|
|Davies, Robert (Cambridge)||Jones, J. Idwal (Wrexham)||Price, William (Rugby)|
|de Freitas, Sir Geoffrey||Judd, Frank||Probert, Arthur|
|Delargy, Hugh||Kelley, Richard||Pursey, Cmdr. Harry|
|Dell, Edmund||Kenyon, Clifford||Rankin, John|
|Dewar, Donald||Kerr, Mrs. Anne (R'ter & Chatham)||Redhead, Edward|
|Diamond, Rt. Hn. John||Kerr, Russell (Feltham)||Rhodes, Geoffrey|
|Dickens, James||Lawson, George||Richard, Ivor|
|Dobson, Ray||Leadbitter, Ted||Roberts, Albert (Normanton)|
|Doig, Peter||Lodger, Ron||Roberts, Goronwy (Cae narvon)|
|Donnelly, Desmond||Lee, Rt. Hn. Frederick (Newton)||Roberts, Gwilym (Bodfordshire, s.)|
|Driberg, Tom||Lee, Rt. Hn. Jennie (Cannock)||Robertson, John (Paisley)|
|Dunn, James A.||Lee, John (Reading)||RobimionRt.Hn.Kermeth(St.P'c'as)|
|Dunnett, Jack||Lestor, Miss Joan||Robinson, W. 0. J. (Walth'stow E.)|
|Dunwoody, Mrs. Gwyneth (Exeter)||Lever, Harold (Cheatham)||Rodgers, William (Stockton)|
|Dunwoody, Dr. John (F'th & C'b'e)||Lever, L. M. (Ardwick)||Roebuck, Roy|
|Eadie, Alex||Lewis, Arthur (W. Ham, N.)||Rogers, George|
|Edelman, Maurice||Lewis, Ron (Carlisle)||Rose, Paul|
|Edwards, Robert (Bilston)||Lomas, Kenneth||Ross, Rt. Hn. William|
|Edwards, William (Merioneth)||Loughlin, Charles||Rowland, Christopher (Meriden)|
|Ellis, John||Luard, Evan||Rowlands, E. (Cardiff, N.)|
|English, Michael||Lyon, Alexander W. (York)||Ryan, John|
|Ensor, David||Lyons, Edward (Bradford,E.)||Shaw, Arnold (Ilford, S.)|
|Sheldon, Robert||Taverne, Dick||White, Mrs. Eirene|
|Shore, Peter (Stepney)||Thomas, George (Cardiff, W.)||Whitlock, William|
|Short,Rt.Hn.Edward(N'c'tle-u-Tyne)||Thomas, lorwerth (Rhondda, W.)||Willey, Rt. Hn. Frederick|
|Short,Mrs.Renée (W'hampton.N.E.)||Thomson, Rt. Hn. George||Williams, Alan (Swansea, W.)|
|Silkin, Rt. Hon. John (Deptford)||Thornton, Ernest||Williams, Alan Lee (Hornchurch)|
|Silkin, S. C. (Dulwich)||Tinn, James||Williams, Clifford (Abertillery)|
|Silverman, Julius (Aston)||Tourney, Frank||Williams, Mrs. Shirley (Hitchin)|
|Skeffington, Arthur||Tuck, Raphael||Willis, George (Edinburgh, E.)|
|Slater, Joseph||Urwin, T. W.||Wilson, William (Coventry, S.)|
|Small, William||Varley, Eric G.||Winnick, David|
|Snow, Julian||Wainwright, Edwin (Dearne Valley)||Winterbottom, R. E.|
|Steele, Thomas (Dunbartonshire, W.)||Walker, Harold (Doncaster)||Woof, Robert|
|Stewart, Rt. Hn. Michael||Wallace, George||Wyatt, Woodrow|
|Storehouse, John||Watkins, David (Consett)||Yates, Victor|
|Strauss, Rt. Hn. G. R.||Weitzman, David||Zilliacus, K.|
|Summerskill, Hn. Dr. Shirley||Wellbeloved, James||TELLERS FOR THE NOES:|
|Swain, Thomas||Wells, William (Walsall, N.)||Mr. Charles R. Morris and|
|Swingler, Stephen||Whitaker, Ben||Mr. Harry Gourlay.|
On a point of order. So many Amendments cannot be discussed in the time allocated, may I ask whether there is an arrangement for the Government to announce which Amendments they would have accepted if they had been discussed?
I beg to move Amendment No. 263, in page 2, line 23, at the end to insert:
(2) This section applies to the employment of any person who is registered as a disabled person in any establishment or activity not mentioned in sections 1, 3, 4, 5. 6 of this Act, or in other subsections of this section.
This Amendment seeks to put persons registered under the Disabled Persons (Employment) Acts of 1944 and 1958 in a neutral position under the Selective Employment Tax. In other words, they will get the repayment so that the tax does not affect them. Unless something is done for these people, and if the Tax goes through unamended, there is not the slightest doubt that it will have a catastrophic effect on the present machinery for dealing with disabled people.
I know that the machinery is very efficient because I am part of it. The Minister of Labour, who has responsibility for the tax, is also part of it. If the tax went through unamended, I believe that all those concerned with the machinery for providing employment for disabled people would find their work very much hampered.
I have had considerable experience of the working of this machinery. As a general practitioner for about 18 years, I have had the job from time to time of finding employment for disabled persons, of assisting disabled persons to keep employment, and of looking after disabled persons when they have lost their employment. As a member of one of the Ministry of Labour's disablement panels, I have been responsible for deciding who should go on the disabled persons' register and who should be assisted by this machinery and, finally, as a former part-time medical officer in industry in an establishment which made considerable use of disabled persons, I am personally aware of the great difficulty which occurs from time to time in finding suitable employment and, indeed, in persuading management to keep such people in that suitable employment.
When the question of disabled persons was discussed in Committee on the Finance Bill, the Financial Secretary went some distance towards conceding that there was a case. I am not saying that he showed any wild enthusiasm, but, after all, he has shown that he is
not disposed to react vigorously in any direction. At least, however, he assured the Committee that there was a problem. These were his words:
But I say at once that my right hon. Friend will be watching and reviewing the working of this tax, particularly in its relation to the disabled, most anxiously and carefully. He will certainly not hesitate to take what steps he can to adjust the form of the tax if these fears to be better founded….
and he concluded this speech by saying:
I repeat that my right hon. Friend will watch this position most carefully, and if it is found to be right and possible,
right and possible, note,
he will consider what special treatment can and should be made…. to help the disabled." —[OFFICIAL REPORT, 29th June 1966; Vol. 730 c. 1953–55.]
It is my job to show that it is right that the Chancellor should take certain steps arid that it is not only possible but simple 10 take them. I believe that since the Financial Secretary made that statement the matter has become urgent, because since then we have had the statement to which we all listened today from the Prime Minister, who said some things about unemployment. If I remember accurately the words used by the Prime Minister in reply to a question by my right hon. Friend the Leader of the Liberal Party, the right hon. Gentleman said that unemployment would rise but he believed it would not rise to a level which hon. Members in all parts of the House would find intolerable.
The tolerability of various levels of unemployment is a matter on which I suspect there will be some difference of opinion between hon. Members in various parts of the House; people's thresholds of tolerability of unemployment vary. But I am sure that we all expect an increase in unemployment. That increase is relevant to this question. It is relevant to the remarks which the Financial Secretary made in Committee on the Finance Bill. In arguing that perhaps this problem was not as great as we thought the hon. and learned Gentleman said this:
A full employment society is the greatest protection and security to the disabled person in finding employment."—[OFFICIAL REPORT, 29th June. 1966; Vol. 730, c. 1953–5.]
I agree with the hon. and learned Gentleman. We all agree with him, but we must realise that we are moving into a
situation in which we shall not have full employment in the context of this speech.
At present, as the Chief Secretary well knows, unemployment amongst disabled persons is 5½times the national average. If unemployment is to rise, I do not think that the Chief Secretary has any reason to conclude that this ratio will change. Therefore, there will be a considerable increase in the total number of disabled unemployed. At the moment 48,000 registered disabled persons are unemployed. There are 650,000 persons on the disabled persons' register. Of those, 48,000 are at present unemployed in a time of virtually full employment. But with unemployment the situation will get much more difficult.
In talking of the size of the problem it is important to remember that the figure of 650,000 registered disabled persons does not necessarily represent the total number of persons who would be on the disabled register if conditions became very difficult. The tendency is for a disabled person not to go on the disabled persons' register until he loses his employment and finds difficulty in obtaining another job. At this point the Ministry of Labour assists him and sees to it that he goes on the register. The potential figure is very much larger than 650,000 and the potential figure of disabled unemployed is very much larger than the present figure of 48,000, which is bad enough, of those already registered.
We must look at the problem of the employment of disabled persons in a rather different way from that in which we look at employment generally. We have talked a great deal about the need to make our labour force efficient and the importance of not wasting labour. I am sure that every hon. Member agrees that it is essential that we use our labour force efficiently and do not waste it, and for this reason hon. Members in various parts of the Committee are prepared to support any measure which they believe will result in the redeployment of labour and people moving to more important jobs.
But here we are dealing with people for whom it is very difficult to find jobs at all. Again replying on the last occasion—and he was replying to something I had said—the Financial Secretary said that the vast majority of the disabled who find work do it as well as a normal man. This is not correct. It may seem to be correct from a superficial examination—and I mean no criticism of the Financial Secretary; but these people who are working as displaced persons are working with special arrangements and special consideration by management. They may appear to be doing their particular job satisfactorily, but their particular job might not exist at all had it not been created especially for them.
In other words, medical officers all over the country, when examining disabled persons, may say, for example, "This person who is an unstable diabetic must do no shift work." The firm may take him on in a job which according to the Financial Secretary he is doing as well as a normal person, but he is not working shifts. A special arrangement has been made for him. A medical officer may say that a man must have no long periods of standing. Special arrangements may be made to allow him to work in a special place so that he is not standing. Or a medical officer may say, "This man should do no climbing ". Duties which may involve climbing are excluded from his contract. It may appear to the Financial Secretary that this person is working as well as the normal person but in fact he is doing only part of the job.
Most of these people would be getting the premium. The hon. Member is talking about people employed in manufacturing industry. Would he address his mind to disabled persons in the service industries?
On the Financial Secretary's own figures, which he gave last time, there are 600,000 registered disabled persons who are employed and more than 200,000 of them are employed in service industries. The considerations which I mentioned apply in service industries as well as in manufacturing industries. I agree that in manufacturing industry a premium is paid in respect of them and that it is not paid in the service industries.
There are many service occupations which apply to people in this category. We have heard about bakeries and about the catering industry. There are a great many disabled people employed in the catering industry and, as the hon. Mem- ber for Sheffield, Brightside (Mr. Winter-bottom) said in the last debate, there are in the catering industry special jobs which are paid at specially low rates for disabled persons. This is not a problem which relates only to manufacturing, for 200,000 of those on the register are in service occupations, many employed through the ancillary organisations connected with the British Legion and with other organisations of this kind. Those 200,000 would in every case be penalised under the tax and handicapped in relation to the retention of their employment. What will happen? We have before us a whole series of measures designed to make employers in service industries look at their wage bill and their list of employees, and scratch their heads and ask. "Who can we get rid of?".
In the end, their attention will inevitably come down on those with whom they have certain difficulties, such as having to arrange special lunch times, special rest periods and all sorts of special consideration not given to ordinary employees. They will also come down on people who, through no fault of their own, are not so productive as others. They will not get rid of efficient productive people who can make a significant contribution to the manufacturing industries that the Treasury wants to help.
On a point of order, Mr. Irving. Unfortunately, the hon. Gentleman has been in the House only a short while. No doubt he has a limited knowledge of industry, but he is accusing the larger directorates of being inhuman, and that is not so. The fact of the matter, and I speak with personal experience—
This is what the Chancellor of the Exchequer wants employers to do, and in many cases they will do it. Some people will say that the quota that industry must keep will make it keep these people, but let me remind the Chief Secretary first that there are very large numbers of these disabled persons who work in establishments which are too small to come within the quota arrangements and are not off the necessary scale.
Secondly, there are many people who have disabilities that do not affect them in their present job who nevertheless qualify for inclusion in the disabled persons register. One of the difficulties of the panels operating the disablement scheme is to persuade managements not to fill their quota with people who do not need this particular assistance.
There is no doubt that this happens. I hasten to acknowledge that there are large firms, little firms and firms of all descriptions all over the country which do their level best to operate the disabled persons scheme. Many do a lot more than they are required to do under the Act. Many fall over themselves backwards to assist. But if new factors, penal obstacles of this kind, are introduced, employers will be virtually forced to take avoiding action.
The Financial Secretary earlier has shaken his head in acute depression about the number of things that he clearly felt should be done but which were not possible. Here is something which the Financial Secretary will admit is not merely possible but easy. These people are readily identified. They are on a register. The Minister now to be made responsible for the tax, the Minister of Labour, is responsible for compiling the register, and it is accurate. There are no technical difficulties in identifying these people, nor are there any difficulties of people getting through the back door. The arrangements operated by the Minister of Labour are efficient and ensure that only people who are really qualified get on the register. So he has an identifiable class of people whom he can easily help.
I have listened with great patience to the hon. Gentleman, but the innuendo behind what he is saying is that those who are registered as disabled are not contributing to the industrial capacity of the country.
There are no imputations. The plain fact is that disabled people frequently, through no fault of their own, are not able to make the same contribution as fully fit people, and we should help them. As a matter of social necessity we should help them to make a contribution. It is not just an economic problem. We should help them feel that they are helping the community and taking an active part in community life.
I have listened with great sympathy and agree entirely with almost all that the hon. Gentleman has said. He said that these people are identifiable. I agree. But he will recall that in the debates on the Finance Bill the Financial Secretary objected, saying that the Government would have to inspect establishments to prove how many people were employed there. Would he comment on that?
It is true that the Financial Secretary said that, but he has had time to think it over and may now realise that he was wrong. The Ministry of Labour, which is to deal with the tax, has the necessary information; it keeps it up to date, and it is readily available. I beg the Government to think again about this category of people. It would be easy to help them.
There have been suggestions from time to time that the Government have been too ready to help the under-privileged. I do not accept that, but I am sure that every hon. Member feels that the Government have not gone far enough to help this group of people. This is a sensible Amendment. In the terms of the Financial Secretary's speech, it is both right that something should be done and possible for something to be done. We are now waiting for something to be done.
This debate will continue tomorrow, and so I ask the Parliamentary Secretary to the Ministry of Labour to use her influence with the Government on this problem. I am sure that the whole House had sympathy with the Amendment long before the Prime Minister made his announcement yesterday. It is obvious from what he said that there will be an increase in unemployment.
It is even more worrying than that. When the increase in unemployment takes place, a great many service institutions will find it far more difficult to make a profit as a result of the deflationary measures brought in by the Government. Some may find that they are not making a profit and examine their on-costs and decide to reduce their staff. Unless the hon. Lady can get a concession from the Government it is all too likely that staff will be reduced by dismissing disabled persons.
Take a small establishment employing perhaps five or six persons. From a sense of social justice, the employer may have as a cashier a man who has lost a leg or both legs, who can, of course, do the job once he is behind the cash desk.
But if the staff has to be reduced through the Government's deflationary policy, that person cannot do any other job in the shop, and if one person has to be got rid of, he is likely to be the one dismissed. It may hinge on the 25s. a week. If such a person is placed in a special category, the employer may say, and I hope he will, that he will keep that person on.
The hon. Lady must realise that there are literally thousands of disabled people in distribution and services whose jobs are at risk as a result of the measures announced by the Prime Minister. She has built up a reputation before entering the House of Commons and since as a woman with a great sense of social justice and I would hate to see her tarnish that reputation by allowing the Government to go on with this Bill without bringing in some alleviation for the disabled.
It is a matter of considerable pleasure to support the Amendment, which was moved so clearly, cogently and effectively by the hon. Member for Cheadle (Dr. Winstanley).
It being one hour and eleven minutes after half-past Eleven 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, pursuant to Order, left the Chair to report Progress and ask leave to sit again.