The Government's pledge to abolish S.E.T. is firm and and arrangements to implement it will be laid before the House in due course. As regards direct taxation, I shall announce my detailed proposals at the appropriate time.
Does not the Chancellor agree that a reduction of, say, 6d. in direct tax and abolition of S.E.T. would amount to around £800 million? How can he take that out of revenue and maintain the social services at their present standard without imposing additional taxation? Has he value-added tax in mind?
Does my right hon. Friend agree that the best way of maintaining the revenue is to get some growth into the economy? Is he aware that in the last five years we have had the lowest growth rate in the whole of free Europe?
Yes, that is exactly right, but, with respect to my hon. and gallant Friend, I would not limit it only to growth. I think it is of first importance to encourage savings as well.
No. We have Questions later in relation to value-added tax. What we have said is that in any event the selective employment tax will go, but, in the words of the manifesto, it may be as part of a wide-ranging review of indirect taxation.
With reference to the second part of the Question asked by the hon. Member for Huddersfield, West (Mr. Lomas)—that of maintaining the revenue—does my right hon. Friend agree that a very prudent regard to economic management must lead him critically to examine the present size of the surplus and to consider whether the maintenance of this surplus is having a detrimental effect on the liquidity of the economy generally?
asked the Chancellor of the Exchequer whether, prior to any general legislation in regard to selective employment tax, he will initiate immediate legislation for the repeal of section 51(9) of the Finance Act, 1969 which retrospectively reverses the decision of the Appellate Committee of the House of Lords in Secretary of State for Employment and Productivity versus C. Maurice and Company Limited, Bishop's Stortford, rejecting the Minister's appeal against the decision of the Court of Appeal in favour of the Company.
While appreciating the firm pledge, may I ask whether my hon. Friend does not agree that anything which carries a degree of inequity cannot be called minor and should not be called minor in this House? Has he observed the words of the Master of the Rolls in the Court of Appeal pointing out that the law as it now stands confers an unfair advantage on the public sector over the private sector, and, in view of that, will my hon. Friend be good enough to reconsider his answer?
I have some sympathy with my right hon. and learned Friend's point, but if we were to devote our attention to correcting all the unfairnesses and anomalies in the selective employment tax we might never have time to get round to abolishing it.
Will the hon. Gentleman confirm that where it has already been decided to correct some inadequacies or mistakes in the application of the selective employment tax—for example, in relation to removing it from the theatre—and where that is currently being carried out, there is no intention of altering that decision and that such decisions already taken will continue?
In reply to the first part of the Question, I would refer the hon. Member to the answer my right hon. Friend gave the hon. Member for Huddersfield, West (Mr. Lomas) earlier today.
On the second part, it is estimated that S.E.T. represents about 1 per cent. on the retail price index.
Does the Minister recall the Prime Minister's television statement earlier this year that selective employment tax will be abolished in the first Budget and his further statement on television last month:
I give you my word and I will keep my word"?
Will the Minister confirm that the Prime Minister's second statement will govern action on his first statement?