Selective Employment Payments Act

Oral Answers to Questions — Ministry of Labour – in the House of Commons at 12:00 am on 10th July 1967.

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Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen 12:00 am, 10th July 1967

asked the Minister of Labour whether he is aware of the anomalies which have arisen over the operation of the Selective Employment Payments Act in the paper-making and rag-making industry; and if he will introduce amending legislation.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The Government are aware of representations made at various times by the industry and by individual employers, and are keeping these and other questions of S.E.T. classification under review.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

Is the hon. Gentleman aware that the tribunal set up for the purpose of hearing appeals has given various decisions which are almost conflicting? Is he aware that he ought again to consider the terms of reference and the quality of the tribunal if it is to command the respect which it ought to have?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I know that that is the view of a firm in the hon. and learned Gentleman's constituency, but if he looks at the report of the tribunal which considered this case he will see that the distinction which is made between the firm in which he is, quite properly, interested and other firms is genuine and legitimate.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

Is my hon. Friend aware that it is not only in the constituency of the hon. and learned Gentleman that firms are concerned? As one who represents the paper industry, may I ask for decisions fairly quickly?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I cannot promise any dates of decisions, but I can reaffirm that the entire matter of S.E.T. classification is under constant review and when my right hon. Friend feels that any revision is necessary, a revision will be made.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

asked the Minister of Labour, if he will make a statement on his further examination of matters con- nected with the order freezing the incomes of certain Longbridge vehicle delivery drivers; and if he now proposes to submit evidence to Mr. Attorney-General under Section 16(4) of the Prices and Incomes Act, 1966, concerning action taken with a view to influencing the employers affected by Statutory Instrument, 1967, No. 515, to implement settlements forbidden by that Instrument.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

Following discussions with the employers and the union concerned I have asked the employers covered by the Order to supply the detailed information necessary for consideration of the productivity aspects of the agreements between these firms and the Transport and General Workers' Union, and also information on the pay and conditions of trade plate drivers. I am keeping my right hon. and learned Friend the Attorney-General informed of the position.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

Can the right hon. Gentleman say how much longer this discussion is to go on before we get a decision from the Government? Do they regard the arrangements concerning return journeys, and using season tickets as reasons for productivity agreements?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The discussion must go on until some adequate evidence is presented to us. When this is at our disposal, the Government will be able to make a decision. Until the evidence is forthcoming, the Government have no decision facing them which they can make on the basis of fact and on the basis of information.

Photo of Mr Peter Mills Mr Peter Mills , Torrington

asked the Minister of Labour what are the latest available unemployment percentages for workers who last worked in manufacturing industries and service industries, respectively.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

At 12th June, 1967, the percentage rates of persons registered as wholly unemployed in Great Britain who last worked in manufacturing industries and service industries were 1·6 and 1·5 respectively. With the inclusion of persons temporarily stopped in these industries the percentage rates were 2·0 and 1·5 respectively.

Photo of Mr Peter Mills Mr Peter Mills , Torrington

Does not this show that S.E.T. has failed miserably and completely to shift people from service industries into manufacturing industries? What are the Government going to do about it?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

Only a small part of the period in respect of which the hon. Gentleman asked his question was a period when S.E.T. was in operation. I am sure that he will agree, on reflection, that six months is certainly too short a time to operate in order to understand the virtues and advantages of S.E.T.

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford

asked the Minister of Labour how many companies have appealed against their industrial classification for selective employment tax; and how many companies have had their classifications changed as a result of such an appeal.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

Up to 6th July, 1967, there had been 1,027 appeals to industrial tribunals against the refusal of the appropriate Minister to register an establishment as qualifying for premium or refund; 513 had been heard, of which 142 had been decided against the Minister concerned.

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford

Does the hon. Gentleman not agree that this is a fantastic number of appeals, and that in administering this tax he is organising chaos? This is a burden upon industry which is not justified. As there are no jobs in the growth industries, as he announced in his previous Answers, what is the point of this tax, which is supposed to squeeze people out of the service industries into jobs which are no longer available?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I agree that it is a fantastic figure, and I hope that when the hon. Gentleman considers the number of industrial establishments to which the S.E.T. applies, he will agree that, out of 1,000 appeals, the total of 142 which have been decided against the Government is a fantastically small figure.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

Is the hon. Gentleman aware of cases of salesmen employed by companies and who were formerly paid from an office, now being transferred—some have been transferred—by employers to the manufacturing establishment, placing them on the books of that branch and thereby escaping the effect of the tax altogether? Is he not therefore encouraging people to spend time and energy on something which is totally non-productive?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

Since that is clearly a different Question, the hon. Gentleman should put it down.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Paddington South

asked the Minister of Labour what percentage of all employed persons are in service industries and manufacturing industries, respectively; and how this compares with the figure one year ago.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The annual employment estimates for June, 1967 will not be available until early in 1968.

At June, 1966, employees in service industries and manufacturing industries formed 48·4 and 38·1 per cent., respectively, of employees in all industries and services. The corresponding percentages at June, 1965, were 48·1 and 38·2.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Paddington South

While thanking the hon. Gentleman for a meaningless Answer, may I ask him whether he can produce a shred of evidence that either the Selective Employment Tax or the Government's economic policies have led to a more purposive use of labour?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I am not sure what "a more purposive use of labour" is. While I have heard the word used, I have not heard it used in that context. I assure the hon. Gentleman that the first two objectives of the S.E.T. have certainly been achieved. Evidence is mounting which will enable us in the near future to say that the third object has been achieved as well.

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

But since the whole object, so we were told, of the economic agonies through which we are going was to get a redeployment of labour, should not the Government take measures to get statistics to show whether the tax is having the desired effect?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

Very many statistics are available. I have conceded to the right hon. Gentleman on many occasions that statistical improvement is necessary and have promised him that statistical revisions are going on. The only figures which are not available are those concerned with the results of the S.E.T. I can only repeat that it would be unreasonable to assume that a final answer about the virtues and advantages of the S.E.T. could be given less than a year after it was first put into operation.

Photo of Mr David Crouch Mr David Crouch , Canterbury

asked the Minister of Labour what has been the drop in numbers employed in manufacturing industries between July, 1966 and the latest convenient date.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

It is provisionally estimated that between July, 1966, and May, 1967, the numbers fell by 339,000.

Photo of Mr David Crouch Mr David Crouch , Canterbury

In view of that very distressing figure, can the Joint Parliamentary Secretary give some idea when the rundown of manufacturing industry will cease and the build-up begin again?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The hon. Gentleman is now asking me to make the sort of forecast which my right hon. Friend rightly refused to make. I must join my right hon. Friend in the refusal.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

Is the hon. Gentleman aware that the figure which he has given is 29,000 more than the figure for the corresponding period last month? Is he happy with employment in manufacturing industry declining by 29,000 a month in the middle of the summer?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I understand very well the problem to which the hon. Gentleman refers. However, I hope that he understands that the sort of measures which produce that figure were necessary for the economic long-term health of the country.

Photo of Mr Frank Allaun Mr Frank Allaun , Salford East

On a point of order. We have reached Question No. 39. Since we began Questions, there have been 14 interventions by the three Opposition Front Bench speakers. Is not that an abuse of the House?

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

I should like to hear points of order at half-past three.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

asked the Minister of Labour, in view of the recent representations by the Economic Development Committee for the Distributive Trades about the arrangement whereby manufacturers receive the premium for transport drivers under the Selective Employment Payments Act whereas independent wholesalers do not, if he will introduce legislation to remove this anomaly and grant the premium to wholesale establishments in distribution.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The Government are keeping questions of S.E.T. classification under review and these representations will be among those considered.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

Has the hon. Gentleman had any representations from the Transport and General Workers' Union about this anomaly? Would not he agree that these anomalies show that the tax was an ill-thought-out measure and should be abandoned as quickly as possible?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I do not even automatically agree that it is an anomaly.

Photo of Mr James Davidson Mr James Davidson , Aberdeenshire West

asked the Minister of Labour (1) why he does not put fitters and mechanics employed by agricultural machinery and tractor dealers in the same classification for purposes of regional employment premiums and Selective Employment Tax as fitters and mechanics employed by manufacturing industry;

(2) why he does not exempt agricultural machinery and tractor dealers, who employ fitters and mechanics for assembly, preparation and maintenance work, from payment of Selective Employment Tax on employees in these categories.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The eligibility of an establishment for selective employment premium or refund depends on its activities and not on the occupations of its employees. Agricultural machinery and tractor dealers are classified to a heading of the Standard Industrial Classification which does not qualify for premium or refund. I see no reason to treat them differently from other employers in the distributive trades.

Photo of Mr James Davidson Mr James Davidson , Aberdeenshire West

That Answer is extremely unsatisfactory. Would the Parliamentary Secretary explain why mechanics and fitters should be regarded any differently when they are doing work of extreme importance for agricultural retailers and suppliers—work such as assembly, preparation and maintenance, which is every bit as important as the work done in manufacturing industries —from the S.E.T. point of view? Is he aware of the tremendous contribution made by the agricultural industry to our balance of payments and the need for there to be an efficient service industry to look after this equipment?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

Of course, I accept that the agricultural industry makes an enormous contribution to our balance of payments position. However, the hon. Gentleman must accept that the entire basis of S.E.T., which makes it work in the way it does work, is that the calculation should be made on establishments rather than on individuals. The premium or refund is received not in accordance with the work a man does but in accordance with the nature of the establishment in which he works. To change that principle would be to change the tax out of all recognition.

Photo of Mr Arthur Lewis Mr Arthur Lewis , West Ham North

Is not it ridiculous to say that a man who is making one-armed bandits and jukeboxes is the subject of premium, which is paid to his firm, while workers engaged in making bread, milk production and other essentials are not so subject, and their firms must pay the tax on them? This situation cannot be right.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The principle is that a firm engaged in manufacturing activities gets the premium while a firm engaged in service activities does not. While even my hon. Friend can find examples on the margin which appear to him to throw some doubt on the whole validity of the tax, the principle, which distinguishes between manufacturing and service industries, remains good.