Mr. Hugh Jenkins (Putney)
I beg to move Amendment No. 17, in page 48, line 19, after “amount” , to insert:
“in respect of each hour of employment”
The Temporary Chairman
I think that it will be convenient for the Committee if we take at the same time Amendment No. 19, in line 20, leave out “twenty-five shillings” and insert “sevenpence” , Amendment No. 22, in line 23, leave out “twelve shillings and sixpence” and insert “fourpence” , Amendment No. 25, in line 24, leave out “twelve shillings and sixpence” and insert “fourpence” , [column 1324]and Amendment No. 28, in line 26, leave out “eight shillings” and insert “threepence” .
It is fortunate indeed Mr. Steele, that you have decided in your wisdom that these Amendments should be taken together, because they are all part of a whole. Amendment No. 17 seeks to convert the tax from one levied in respect of each week of employment to one levied in respect of each hour of employment. The other Amendments are consequential. If Amendment No. 17 is carried and the tax is converted as I have described, one would hope that the [column 1325]other Amendments would be carried, because they are an essential part of it, but if Amendment No. 17 were not carried, it would be wrong for the others to follow.
I hope that this is clear. I notice that one or two hon. Gentleman and an hon. Lady opposite have added their names to one or two of the later Amendments but not to Amendment No. 17. The consequence of accepting those Amendments but not No. 17 would be strange, because it would reduce the tax to 7d. a week instead of 7d. an hour, and it is far from my purpose to reduce it to such an absurdity. If the first Amendment were not carried, the later Amendments would be purely of a wrecking character, and it is conceivable that this is not entirely unknown to the hon. Lady and hon. Gentlemen opposite who have put their names to the later Amendments. I assure the Committee and my right hon. Friends that that is far from my purpose. Indeed, I supported the Government on the Amendment which has just been carried because I am not opposed to the tax in principle. What I am opposed to is the manner in which the tax is being levied. My Amendment is tabled to improve the tax and make it more sensitive.
In what I shall say briefly in support of the Amendment, I want to say precisely why I believe that my proposal would result in a substantial improvement in the tax, and why I believe that my hon. Friends, after they have listened to my arguments and the debate, will decide to accept the Amendment and change the nature of the tax.
The object of the Amendments is not in any way to reduce the revenue that my right hon. Friend hopes to raise. Indeed, in certain circumstances, a firm employing a number of people for more than 40 hours a week each would pay a larger and not a smaller amount of tax. This would, incidentally, discourage overtime, because the rough division I have made, to the nearest penny, would provide that the tax would become payable on an hourly payment relating to a 40-hour week. Thus, in respect of any employee working more than 40 hours, the employer would pay a larger sum whereas in respect of an employee working less than 40 hours he would pay a smaller sum. [column 1326]
Let us consider the advantages of this degree of flexibility. The problem of the part-time worker would be solved because his employer would pay in respect of the number of hours in which he was engaged. I have not attempted to change the fundamental nature of the tax. I have preserved the same relationship through the hourly sums that the Government have created in their weekly sums. In Amendment No. 19 the sum of 7d., which is the hourly pro rata rate, is introduced. In Amendment No. 22 the pro rata sum of 4d. is proposed in place of the 12s. 6d. in the Clause and the same applies to Amendment No. 25. In Amendment No. 28, the sum of 3d.—the nearest we could get—is substituted for the sum of 8s. These substitutions are as near pro rata as one can get in substituting hourly for weekly payments. They would not change the amount paid in respect of each week of employment. The employer engaging a man or a woman for a 40-hour week would still pay precisely the same under the hourly rate as under the weekly rate of 25s. or 12s. 6d.
Although we are not attempting to alter the amount of revenue, the Amendments would do so incidentally because the amount paid by an employer would be on the basis of hours instead of the week. The advantage as far as part-time employees are concerned is surely immediately apparent. The great objection to the tax in respect of part-time employees has been the amount to be paid. However, it has been claimed that most of them are women and that in their case only half the tax will be payable. That does not deal with the many male part-time workers. A part-time worker is very often the man who badly needs employment. He is often a man who is not in full health or who is getting on in years and who, for one reason or another, cannot do full-time work.
Under our proposals he would continue to be employed on an hourly basis whereas his services might well be dispensed with if the tax is levied on a weekly basis. The same applies, of course, to women as part-time employees. This would make the tax more flexible and reduce many objections to it.
One might ask why the Government introduced this tax in its present form in the first place and I will anticipate one [column 1327]or two points my right hon. Friend the Chief Secretary may make in reply. It is conceivable—and hon. Members opposite probably think this—that the Government did not think of doing it in the way I suggest. But that is probably not the case. They may have thought of it but dismissed it, and, as I say, I want to anticipate their reasons so that I can spike my right hon. Friend's guns before he turns them on us.
Our proposal would be flexible and have certain advantages, but I think that my right hon. Friend will say that the problem of collection could be extremely difficult. I wonder whether this is really so. Indeed, I can see some advantages. The method of collection is to be through the National Insurance stamp. Perhaps this is because the Ministry of Labour felt able to shoulder the burden whereas the Treasury was a little fussy. But if it is no more than an administrative convenience of that kind it is a pity that the decision was made on that basis.
Another point which might have been made is that the collection on the stamp basis is rather complex. Certainly, collection on the basis of a weekly payment to the Government by each employer would be much simpler. Under my system, all that the employer would have to do at the end of the week would be to write out a cheque covering the total number of hours worked in his establishment and send it to the Chancellor. If the Chancellor prefers it done through the Ministry of Labour, the employer could send the cheque to the Minister of Labour who could then send on a cheque to the Chancellor or make a book transaction, as we know will be done on the basis proposed by the Government. All we are doing here is to remove a certain amount of purchasing power indirectly, and exactly how we set about the process does not really matter very much.
One of the concerns which moved me to look into this matter—others were drawn to my attention by constituents—is the problem created by theatrical employment in which there is a great deal of part-time work. People work in the evenings in order to keep theatres open and the amount of work and the size of their pay are really quite small.
I am not talking so much of actors as of people who work backstage or in the [column 1328]box office or at the front of the theatre. Putting them on an hourly basis for the purpose of this tax would make it possible to continue their employment and, indeed, for some theatres to remain open which would find it difficult to do so if the tax were levied in full on the basis of a weekly payment of 25s. for a man and 12s. 6d. for a woman. It was this aspect which first drew my attention to the benefit of an hourly payment, but there are other reasons.
Now I want to return to the question of collection. I see no reason why the employer should not pay in the way I have suggested. It would save a great deal of work in each establishment. Imagine the saving in a factory. Instead of having to stick on a stamp for every employee at the same time as he puts on the National Insurance stamp, which would be a great deal of extra work, under my method the employer would be able to write a cheque at the end of the week, making one simple operation in the accounting department.
My right hon. Friend might ask how we could make sure that the tax was paid. I am not sure that objection is valid. With the National Insurance stamp, the individual needs to be identified so that he can know what his own personal record is, but the individual need not be identified for the purposes of the collection of this tax. If I am right in saying that there is no necessity to preserve the individual contribution basis for the tax, that argument is destroyed. There is not the same case as there is with the National Insurance stamp. If the tax is to be collected by stamp, that is merely because that happens to be a convenient way of collecting it. It may be convenient for the Government, but I doubt whether it will be convenient for employers.
The other possibility is the danger of people not paying the tax, of employers fiddling the amount by returning smaller numbers of employees. It might be said that the Revenue might lose a certain amount if we were to rely on my suggested method, and if it was not to do so, that might require the establishment of some sort of inspectorate. I am not sure how much there is in that argument. If it is made and if the Government say that they are wedded to the stamp [column 1329]system, there is no reason why they should not use the stamp system even on the basis of an hourly tax. There is no need to have only stamps representing a 40-hour week. There could be a 40-hour stamp and an eight-hour stamp and some one-hour stamps. The card could then be made out quite simply for the number of hours worked by the employee concerned. If the Government are wedded to the stamp system, they could introduce this hourly basis, with all its advantages, and still stick to the stamp method of collection.
For all those reasons, I feel it desirable to urge this Amendment on my right hon. Friends. It would have the effect of making what is basically a sound tax more acceptable. That is the object of the Amendment, not, as with some other Amendments, to bring the tax into disrepute. That is no part of my feeling in the matter. I believe that the tax deserves to have a fair start. If it were to be imposed on the hourly basis which I suggest, it would become much more popular, which would give the tax a much fairer start than it would if my right hon. Friends decided to stick to the weekly method of calculation with all the anomalies which that of necessity would involve.
Mr. Nigel Birch (Flint, West)
Though I cannot agree with everything said by the hon. Member for Putney (Mr. Hugh Jenkins), I cannot deny myself the honour of following him into the Lobby against the Government on this Amendment. The reason is that he has touched on one of the most dangerous points of the tax economically and from the point of view of humanity. It is the question of what will happen to part-time workers.
The hon. Gentleman was perfectly right to say that not all part-time workers are women. No doubt a great body of them are married women who can spare a few odd hours on some days of the week and who are very largely responsible for keeping the hotel industry and the retail trade going. But there are also those who are handicapped, ill, disabled or old, as the hon. Gentleman said, and not capable of working full hours. So far, the Chancellor has said that he cannot do anything about them, but unless he can, not only will costs go up very much, but a great part of the retail and hotel in[column 1330]dustries will be badly damaged, because either their costs will go up astronomically, or they will not be able to employ these people and their business will go downhill.
I cannot say precisely whether the hon. Gentleman's scheme will work. When the Chief Secretary replies, he will probably think of some more ingenious reasons than the hon. Gentleman himself put against the Amendment. Of course it is not the Treasury which collects the tax but the Inland Revenue, and the Inland Revenue is absolutely delighted to shuffle it off to the Ministry of Labour. It knows that the Ministry of Labour is capable of doing it, while the Inland Revenue is not and that is why it has come about in this extraordinary way.
I support the hon. Gentleman because it must be wrong economically to bring in a measure which discriminates against part-time workers when, as has so often been said, one of the main efforts of the Ministry of Labour over the years has been to get more part-time workers, more old and disabled workers, into employment. The problem could have been solved, but one needs to spend the best part of the year working on a tax like this and no work has been done on this. That is why we have these endless anomalies. If it is any consolation to the hon. Gentleman, I shall vote for the Amendment.
Like the right hon. Member for Flint, West (Mr. Birch), I support the Amendment and on very similar grounds, although I do not want to deploy most of the arguments about part-timers. This is a consideration which runs right through the Clause, but we shall have an opportunity to discuss it on a later occasion and I do not wish to develop the complete case until the time comes.
There is no doubt that my hon. Friend the Member for Putney (Mr. Hugh Jenkins) has found an ingenious way of revising the tax which both those who support and those who oppose it would like to be more selective. One of the difficulties in any form of taxation is that there are borderline cases and that just over the boundary there is always a difficult case. That must result from the rough and ready way in which our taxation measures are often drawn. [column 1331]
My hon. Friend's ingenious way of using stamps of various kinds might result in something similar to the trading stamps which one gets when one purchases petrol, so that, instead of having stamp cards, people will have to have stamp books. I understand that even for the present range of part-time workers there are about 30 different varieties of stamps.
This tax is to collected by an attachment to the insurance stamp. If the Chief Secretary can find a practical way of working what my hon. Friend proposes, the person working nine or 10 hours a week—the person working eight hours a week is now excepted—would be more equitably treated. For a person working nine hours a week, usually a female worker, the incidence of the tax at 12s. 6d. a week will represent an increase of 1s. 6d. an hour. This is a heavy impost if one is employing many people doing nine, 10 or 11 hours a week. The whole point of the Amendment is that it just brings in this very small number of those just on the borderline, doing nine, 10, 11, or 12 hours a week. For that reason, I would support the Amendment.
Sir J. Foster
Let us assume for the purposes of this debate that it would be a good thing if we could allow the employment of part-time people, the disabled and elderly. Let us assume that the Financial Secretary agrees with that. I foresee that the debate will turn upon whether it is administratively possible to do this. As a result, suggestions should be made, from all sides of the Chamber, in order to enable the Chancellor to bring this about. I cannot believe that the Government Front Bench will say, “No, our object is to prevent the employment of part-time, disabled or elderly people” , or, “We do not care if they are not employed” .
Starting on this basis I would suggest a slight amendment to the way in which the hon. Gentleman the Member for Putney (Mr. Hugh Jenkins) envisages his scheme would work. I would tie it in with the calculations made on P.A.Y.E. Take the case of a factory employee. One knows what his hourly wage is because the hours of work are 42 or 44 hours a week or something of that sort. One knows his basic wage and it is quite easy to divide that by the number of hours worked and reach his hourly wage. [column 1332]
In the pay slips made at the end of the week one has to add his entitlement to overtime and one has to set down the number of overtime hours worked.
I suggest that instead of relating it to a fixed 40-hour week, the accounts department of the factory, which would have to do the same sum in any event for overtime purposes, could perform the task. There could be some stamps of the main values and where there is a stamp of unusual value, for a person employed for two hours a week or four hours or seven, the stamp should have a tick put upon it by the factory showing that a separate cheque has been sent at the same time.
There could be said to be the possibility of cheating, but the payee's slip must agree with the amount sent in and one has only to look at the payee's slip to see the hourly rate which would be paid. This would help the Ministry of Labour in checking. One would find that the 40 hours a week multiplied by 7d. was a little more expensive in certain cases. But the right hon. Gentleman's calculation is not quite right, as 40 times seven is a little less than 25s.—actually 23s. 4d. I do not believe that the Government Front Bench will say that they are glad that part-time, disabled and elderly people cannot be employed or that they do not care whether they are employed. They will have to say, “If only we could do it, we wish someone would show us how.” The hon. Gentleman for Putney has shown us.
Mr. Hugh Jenkins
Will the hon. Gentleman permit me to say that it is worked out to the nearest penny?
Mr. John Fraser (Norwood)
I support the Amendment in principle because it will help to iron out some of the anomalies affecting the part-time worker. I am aware that in the sort of business which I practised before I came here it was possible to employ someone who comes to work for eight or nine hours a week, to make the tea in place of the secretary. By doing that one pays a fairly small but remunerative wage and is able to save the time of skilled staff. There are chemists in my constituency who employ people part-time in the evenings to dispense prescriptions and by doing this they are able to save the time of full-time staff. [column 1333]
It is a pity—and this is why I support my hon. Friend's Amendment in principle—that no provision has been made for part-time workers. One would have thought that the deployment of labour would have required the encouragement of part-time workers, rather than having everyone pay the stamp at the same rate. I suspect that the reason for not being able to exempt these people is because of the limitation of the type of insurance card. I am convinced that if men and women had the same colour insurance card they would both be paying the same amount of Selective Employment Tax.
It is only because there is a convenient distinction between one kind of card and another that one can draw the distinction between the various amounts to be paid. I know that the arguments against having some special provision for the part-time worker is that in some large industries the thing tends to iron itself out. This applies when there are full and part-time workers, but it is not true of some firms employing almost exclusively part-time workers. Thus one has the anomalous situation, if one takes the cleaning industry employing the Mr. Mopps, about whom we have heard, in which, if the industry is a service industry, employing mainly part-time people, when the tax is very much a poll tax on labour costs, the industry will be paying a fairly high rate of tax in proportion to the amount of wages which the cleaning women receive.
On the other hand if a large factory in a manufacturing group employs its own cleaning labour, it will receive a premium and, by extending some concession to the part-time worker, it is not going to cost anything—because some money will be lost by manufacturing industry in that it will lose some premium for its part-time workers and something may go to the service industries because it will not have to pay quite so much.
I said that I was in favour of the Amendment in principle, but I am against it in practice because it would be unworkable. Let us assume that hon. Members were classed as employed persons liable to pay the tax. It would be an extremely difficult thing for the Paymaster-General to be running round this House in the early hours of the morning working out how many hours each Member had worked. I mention [column 1334]hon. Members as an illustration of the difficulty in working out the number of hours everyone has worked in order to calculate the rates. I know that my hon. Friend the Member for Putney (Mr. Hugh Jenkins) is interested in the theatre. It might provide some incentive to various playwrights to write plays of an hour in length so as to save the amount of tax payable upon those working in theatres.
There is a very real practical objection to working to an hourly basis. I would like to suggest a method capable of being able to deal with a part-time worker, which, at the same time, does not create the enormous administrative difficulties which would arise in the case of the Amendment proposed by the hon. Member for Putney. It is proposed by the Treasury that the tax should be collected by an extra payment of the National Insurance stamp. I cannot see why it has not been possible to use the graduated pension system. When sending graduated pension contributions one would add on the employer's side 25s. per week for a male and 12s. 6d. for a female.
It would be just as easy to calculate the tax in this way, but one could make exemptions and say that where someone earned less than £4 or £5 a week the amount to be paid on the employer's side of the graduated contribution section of the P.A.Y.E. card would only be one shilling a week. Operated in that fashion one would be able to cope with the part-time workers, with people working 16 or 20 hours a week without creating administrative difficulties suggested by my hon. Friend's Amendment. It would get round the problem in a perfectly simple fashion and I hope that this suggestion might commend itself to my right hon. Friend and lead to a middle way between the points of view expressed.
Sir D. Glover
I support what the hon. Member for Putney (Mr. Hugh Jenkins) has said. I do not believe that his proposals are such that the Treasury could accept them in their entirety, but they are another argument why the Government should have accepted the previous Amendment which proposed that this tax should be postponed until February. I am sure that the Government have not given nearly enough [column 1335]thought to the problem of part-time workers. I was impressed by what the hon. Member for Norwood (Mr. John Fraser) said. I realise that there are many difficulties about the proposals of the hon. Member for Putney, but the Government should do something, not in the distant future, but now, about the problem of part-time workers.
The hon. Member for Norwood mentioned the question of firms which employed Mr. Mopps. Under the Government's proposal, a firm in Liverpool employing a lot of Mr. Mopps on contract in cleaning the Ford factory at Halewood will form them up on parade outside the factory and have to pay 12s. 6d. for each one, although the ladies who work in that factory probably do not work more than 15 or 20 hours a week. The employer then says, “Ladies, I am very sorry, but owing to the Government's stupidity I am now going to give you the sack.”
The ladies will then walk through the doors of the Ford factory where they will be signed on by the Ford company, which will get a premium of 3s. 9d. for each of them. They use the same mops, the same buckets, the same taps; they clean the same floors and the same windows. They do exactly the same job they have been doing for years. The difference to the State is this. If they are employed by an outside contractor, the State gets 12s. 6d. a week for each. If they are employed by Ford's the State pays 16s. 3d. to Ford's for each, a difference of 28s. 9d.
The Government must realise that any system which produces that sort of anomaly is crazy. It is not the economics of Socialism; it is the economics of Bedlam.
Take the retail distribution trade. An enormous number of shops employ women part-time on Friday afternoons, which is the busy time of the week, and Saturday. They may do 12 hours a week, for which the firm has to pay an on-cost of 12s. 6d. on their pay. If the woman is getting a little old, or has become less efficient, she gets the sack. Yet the Ministry of Labour has been working for years to try to get exactly that sort of person into employment. It cannot be right that the State should ask [column 1336]the firm to pay the same amount in tax in respect of a girl or woman working 12 hours a week as it pays in respect of full-time staff working 40 hours or more a week.
The hon. Member for Putney probably accepts that the Government would not accept his Amendment in its entirety. What he is disturbed about is the anomalies. He wants to bring more common sense and a more practical approach to the Bill. The hon. Member for Norwood wants to do exactly the same thing. We must ask the Government to consider this problem again. Although the tax will operate from September, it is not too late for the Government to say, “We have been impressed by the arguments about part-time workers. We have heard what our hon. Friends the Members for Putney and Norwood have said. We realise that there is a problem and we will introduce an Amendment on Report which, even if it does not go the whole way, will go a long way in removing anxiety.”
This Amendment, oddly enough, is an all-party Amendment. It will not bring down the Government if it is accepted. Since the Government's proposals on part-time workers are complete and utter nonsense, I hope that the hon. Member will press his Amendment to a Division. I will support him, not in trying to bring down the Government, but in trying to introduce a little common sense into this tax in dealing with the segment of the population with which the hon. Member is concerned.
Mr. Norman Buchan (Renfrew, West)
Timeo Danaos et dona ferentes. When hon. Members opposite say that they will follow us into the Lobby on the principle of a Clause and not because of their objection to the principle of this tax, then I for one am very wary. I support my hon. Friend the Member for Putney (Mr. Hugh Jenkins), first, because I always support him; secondly, because I think his arguments are irrefutable; and, thirdly, because I notice that my name is on the Amendment Paper along with his.
There are those of us who approve of this tax because it is a correct measure, a Socialist measure. Perhaps the hon. Member for Ormskirk (Sir D. Glover) does not agree, but basically it is a Socialist measure. However, it suffers [column 1337]from the gross defect of a lack of selectivity because it is far too blunt. My hon. Friend's Amendment is an attempt to refine the instrument, to make it more selective. In this year and age, we cannot leave merely a division between service and manufacturing industries. We must look at things a little more closely. The trouble with the tax, and indeed with all taxation, is that it is considered in the light of the efficiency of the country and of raising revenue and not also in terms of the graces of life.
The arts, theatre and music, will be affected by the tax. It is true, as my hon. Friend the Member for Putney said, that with the full-time actor working 40 hours a week, or whatever he does, there will not be much variation. But we think of all the services which are necessary not only to make the theatre function, but to make it function in a comfortable and graceful fashion. Many of the services are given on a part-time basis. The same is true in the field of music. This tax will have the tendency of reducing the number of part-time musicians who help to add grace—and fulfil a necessity—to our lives.
An hon. Member opposite referred to the mentally handicapped. But there is another serious issue with me because, as hon. Members will know, the Erskine Hospital for War Disabled is in my constituency. One of the tasks which frequently faces me at my “surgeries” is to see how one can bring some aim and purpose into the lives of people disabled in various ways, and one of them is to try to get them part-time jobs. Anything that we can do in this direction through taxation or any other method will be useful. For this reason, too, I support the Amendment.
Along with this is the question of the retired. Again, we should be giving more and more attention to the “graces” of life. This has nothing to do with efficiency, but concerns, perhaps, the nature and quality of the life we lead. One of our jobs with so many people is to fit them into part-time work, where they can be useful and where they feel that they are useful, so that they can spend their days with some kind of dignity partly because they feel that they are being useful. My hon. Friend's proposal would help in this way. [column 1338]
I am too long in the tooth to think that a discussion based upon the graces and the quality of life brings much conviction to bear upon the Treasury. The argument of efficiency is the rock on which we always falter. My hon. Friend the Member for Putney pointed out, however, that far from losing revenue the Treasury would, by his proposal, gain productive revenue in the sense not only that overtime payment would make a bigger contribution to the revenue but because efficiency would also begin to be sharpened.
For far too long, many of our workers have been looking at their wages based upon their assessment of their basic wage plus overtime. It is conceivable that the low standard of wages in this country, together with the question of overtime, has been the crux in the seamen's struggle. I certainly want overtime—we are trying to boost exports—but I want it to be efficient and not inefficient overtime. I believe that the workers want the same. Therefore, my hon. Friend's proposal would tend to cut down the unproductive and inefficient overtime by making employers look at it twice.
I did not imagine when I began to speak that I have so many arguments in favour of this Amendment to put forward. We seem now, in this Amendment to be moving towards the much fairer method of a payroll tax plus an added selectivity by bringing in the basic division between services and manufacturing industry. I ask my right hon. and hon. Friends at the Treasury to go down in history by adding yet another grace and bringing in the extra refinement proposed by my hon. Friend.
I agree that the form of the tax is deliberately simple. We are using an existing classification which bears the stamp of the Ministry of Labour. It should not, however, be beyond the ingenuity of my right hon. Friend the First Secretary and the Chancellor to devise a scheme on the lines put forward by my hon. Friend the Member for Putney. The Government Front Bench will not be so modest as to imagine that they cannot bring forward such a scheme. The solution could follow the totalling of hours each week and the payment of money in relation to that number of hours. This would solve the problem. I urge the Government Front Bench not to put my hon. Friend the Member for Putney in the [column 1339]embarrassing position of having to accompany the hon. Member for Ormskirk through one of the exits of this Chamber, but to accept the Amendment.
There must surely be something wrong with a Bill which treats a full-time employee for the purpose of this tax in virtually the same way as a part-time employee or a partially disabled person—one, for example, who is blind. The Chief Secretary and the Government generally must be disturbed at the obvious deep misgivings, which are shared on both sides of the Committee and outside Parliament, about the consequences of the Bill in its present form on the future employment of persons in part-time employment, and the disabled in particular.
I listened with care and sympathy to the hon. Member for Putney (Mr. Hugh Jenkins), because he was suggesting a possible partial solution. I agree with the hon. Member for Norwood (Mr. John Fraser) that it obviously would not cover all persons in employment, some of whom are paid by other methods. Obviously, however, it would cover the classification of people who are employed on an hourly basis, who represent a quite large proportion of those who are employed. In that way the Amendment would go a considerable way to meet that difficulty.
The Chief Secretary will have some fairly powerful technical objections to the Amendment in its present form, but unless he can deal with the arguments of principle I, like a lot of other hon. Members, will have to follow the hon. Member for Putney into the Lobby. I am sure that he will divide the Committee unless the Chief Secretary can give us an assurance on the matter of principle.
There is anxiety. It could not be otherwise. Reference has been made to the employment of Mrs. Mopps, the people in the cleaning industry. The only consequence of the Government's proposal can be that either these people will not be employed in such numbers or that the cost of the work they do will be considerably greater. If I were getting work done by cleaners and they were affected by this tax, as they must be, I should not expect to have the cleaning [column 1340]done at the same price. It would not be feasible.
In the long run, the person having to pay such a high—almost a poll—tax for each person in that category would be obliged to employ people who were able to do full-time work. I hope, therefore, that the Chief Secretary will be able to give a satisfactory answer on the argument of principle. I certainly would not expect him to accept the Amendment in detail. An interesting variation to it was suggested by my hon. and learned Friend the Member for Northwich (Sir J. Foster). Obviously there is ample scope for further variation and the Chief Secretary must surely respond to us on the argument of principle. Otherwise we must divide against the Government.
Mr. Nicholas Ridley (Cirencester and Tewkesbury)
I, too, shall have pleasure in following the hon. Member for Putney (Mr. Hugh Jenkins) into the Lobby, though whether he will lead us from in front or behind, like the Duke of Plaza Toro, remains to be seen, but I will be in his army if he goes there.
The Amendment he has proposed certainly deals to some extent with the problem of the part-timer, one of the most glaring examples of injustice in this Bill, and I, indeed, have many constituents who would greatly benefit. I am thinking particularly of home helps and the part-time agricultural workers, whose employers would pay a small amount of tax if the Amendment were carried as it now is, rather than the full 25s., and this, I think, is the very great advantage of the Amendment.
But in some senses it does not go as far as it should. I do not believe that it is a simple way of basing the tax. I think pence per £ is a rather complicated way to work it out and a difficult way to levy it. With respect to my hon. and learned Friend the Member for Northwich (Sir John Foster), when he tried to explain the method of collection I found myself at times not entirely following him, I must say. I do not think it could be called simple or easy to collect.
The hon. Member for Renfrew, West (Mr. Buchan) called this a Socialist tax. What an extraordinary idea. It seems to me that this is a flat-rate tax. It is not Socialist at all. It is not progressive at all. One pays the same 25s. if one [column 1341]employs a labourer for eight hours and if one employs the top financial brain in this country for a whole week; it makes no difference; it is not progressive. Surely, the whole point of this tax ought to be that for the use of scarce and skilled people one should pay more tax; but if one uses unskilled people for a few hours a week one should pay very little tax. It should be an incentive to economy in the use of labour and skill of all sorts, not just a flat-rate, blanket tax as proposed by the hon. Member.
Lastly, the other objection to this tax, I think, is that it is not inflation proof. Seven pence an hour may be a derisory sum of money after this Government have been office a few more years—hardly worth paying: if one has to go to get one's wages in sacks as a result of prolonged and uncontrolled inflation 7d. an hour will be so insignificant it will not be worth paying. Of course, it should be a percentage of wages or earnings paid, and this, in my opinion, is the only conceivable and sensible way of collecting a tax of this sort.
I should like to see the tax developed and added to along the lines of the hon. Member's Amendment and along the lines I have suggested. I should like to see it replace Income Tax in the lower ranges of income altogether—below, shall we say, £1,500 a year or something of that sort? I am shocked, if I may say so, at the enormously small percentage of our tax revenue collected by means of employment taxes, through the stamp and now through this tax which is proposed. We in this country collected by this means only 13.8 per cent. of total revenue, whereas in Germany it is 28 per cent. and in France it is 35dec;5 per cent. These figures show how much greater reliance we place on direct taxation, and how far too little reliance is placed on the other forms of taxation.
It is interesting that in France, tax is 50 per cent. on labour and in Holland it is 23 per cent. on labour, whereas at the present time, on an average wage of over £18, one only pays 7½ per cent. in this country. If the Clause goes through as it is proposed, that will rise to 14 per cent. when the Selective Employment Tax has been paid; but, for those who receive the premium, it will [column 1342]fall back again to 5.3 per cent. on labour. I suggest that the figure of 5.3 per cent. on labour shows that the Government are attempting to collect their tax on an entirely wrong basis.
I would like to try to solve the difficulties of collection which hon. Members have referred to and to which the Chief Secretary will doubtless refer when he catches your eye, Mr. Irving. Of course, it is difficult to collect either the 7d. per hour tax, a percentage tax or any other form of tax than the flat-rate tax which the Government have put forward. But that is an argument for not putting forward the tax until the system of collection has been arranged.
It is ridiculous to bring in the wrong tax just because one has not thought far enough ahead to arrange a system of collection which is viable, fair and sensible. In my opinion, the insurance stamp itself should not be on a flat rate. We should go to a percentage basis of collection for all taxes on labour, whether they be to cover unemployment, health, pensions or straightforward tax as we are discussing in this case.
The Government have made a fatal mistake in trying to bring in a tax, which is in some ways not ill-conceived, before bringing into being the machinery which would be required to collect it on a fair, sensible and equitable basis. The anomalies which have been mentioned by my right hon. and hon. Friends will become more and more of a nightmare to the Chief Secretary during the coming months.
This Bill and the Ministry of Labour one which we are to discuss will take many weeks to get through the House, and he will rue the day when he supported the Chancellor in bringing forward a tax which had not been thought out, for which the machinery for collection was not in existence and for which the machinery for paying back the premiums was not in existence, either.
The anomalies are so frightful that the only way we can salvage the principle, for which the whole Committee has some sympathy, is for the Chancellor to withdraw the tax now, get his machinery right and bring it in again next year on the basis of what the Opposition have been suggesting.[column 1343]
Mr. R. J. Maxwell-Hyslop (Tiverton)
It will be noticed that I have joined with the hon. and bearded Member for Putney (Mr. Hugh Jenkins) in sponsoring the Amendment——
Mr. Hugh Jenkins
Mr. Irving, is it in order for hon. Members to refer to each other's facial characteristics? If so, I shall refer to the hon. Member for Tiverton (Mr. Maxwell-Hyslop) as “the hon. and unbearded Gentleman” .
We can settle for that difference, though I hope that we shall have in common support for the Amendment.
In part, it removes from the tax its regressive element. It is not a flat-rate tax, as has been suggested by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). It is a regressive tax, because the rate of tax charged per hour increases with the small number of hours worked per week by each employee. It is an example of regressive taxation brought in by a Labour Government, and I hope that the Chief Secretary will not endeavour to persuade us to accept it as being, in some way, a progressive measure.
It is not incumbent upon the sponsors of the Amendment to detail to the Government the mechanics under which they can collect their own tax. That is the proper function of Treasury Ministers and their professional advisers. When an Amendment is put before the Committee to get rid of anomalies, injustices, and follies in a tax introduced by the Government, it is not on the plate of the sponsors of the Amendment to determine the mechanism by which that can be done, and I imagine that this is what the Chief Secretary would say if he were sponsoring an Amendment to get rid of anomalies and injustices in a Finance Bill.
What are the characteristics of the people who are engaged in part-time work? Why are they working part-time instead of full-time? Broadly speaking, there are two reasons for this, either because the employment potentialities in the area are inadequate to provide them with full-time work, in other words their employment is marginal, or because there is something in their personal circum[column 1344]stances—they are not fully physically or mentally fit, or they have family commitments, or elderly relatives or friends to look after—which prevents them from enjoying the higher standard of living which they would enjoy if they were able to work full time. Yet these are the people who are singled out—unless of course the Amendment is accepted—for an effective rate of taxation which may well prove punitive, which may well result in them losing that part-time employment.
As well as resulting in considerable hardship to the individual, in many cases it will not result in any significant saving to the Treasury, because the persons concerned, instead of earning income on which, in many cases, an element of tax is paid, as here, will go on to National Assistance or whatever it is called when the Bill dealing with this has been considered by both Houses.
The loss to the Treasury as a result of accepting the Amendment would be considerably less than its face value, and the reason for this must be borne in mind. One hon. Gentleman talked about a mental hospital in his constituency. There are three in mine, and one of the major problems is that of rehabilitating people who are temporarily mentally sick, and of rendering sufficiently self-confident to stand, at least partially, on their own feet people who are born mentally subnormal and are incorrigibly mentally subnormal. Very often this starts with a form of contract labour where they go out to work under supervision. For instance, in the south end of my constituency they go out in teams to pull swedes on farms at certain times of the year. By working under supervision it is hoped that with the passage of time they will gain sufficient skill and sufficient self-confidence to be released to look after themselves without permanent supervision. This is the most marginal type of labour of all. These are the people who are most vulnerable to an unamended Selective Employment Tax of this kind.
The Amendment would apply also to people who have no mental or physical disabilities, but who live in areas of the country where there are not sufficient opportunities for full employment. Unashamedly I admit that the West Country is one of these. Surely it is not seriously [column 1345]imagined by the Treasury Bench that people will work part time in the West Country in the morning, and in Macclesfield or Birmingham in the afternoon? Nor, I take it, is it imagined that as a result of the tax they will move to Coventry or to Birmingham where houses are not available.
The effect of the tax will be to render it unprofitable in many cases to employ part-time labour, or, alternatively, to employ it for a certain period of the year as is done at the moment. A considerable amount of part-time labour is employed in the holiday industry, in the licensed distributive trades, and the catering trades in general. In so far as the results of the tax is to restrict activities to which the Chancellor has paid tribute as a massive earner of foreign currency—and, incidentally, a saver of currency which would otherwise be spent by British people on holiday abroad—this is contrary to another aspect of the Chancellor's policy.
Moreover, even if the individual businesses continue to offer facilities which involve employing part-time labour, the decreasing margin of profitability will effectively reduce the proportion of the year in which it is possible to employ those people, which is neither to the benefit of the economy nor to the benefit of the individual. The benefit to the Treasury is both speculative and small. It was said by the hon. Member for Putney, with excessive charity, that he was quite sure that his right hon. Friends on the Treasury Front Bench had thought of all this before they introduced the Selective Employment Tax in the first place. Charity obviously begins at home. I do not believe that they had. This was a crudely drafted proposal.
Mr. Hugh Jenkins
I said that I was sure that they had not the charity on the other side of the Committee. I did not say that I had it.
The hon. Member was referring to his own Front Bench. He thought that they had in mind—but were deterred by difficulties—the problems envisaged in the Amendment. I do not believe that they had them in mind at all. The entire Finance Bill, like that of last year, is riddled with incompetence. It was not clearly thought out before it was introduced. Neither [column 1346]the mechanics of carrying it out nor the purpose were properly defined when the Bill was drafted in the first place. Nor was it competently drafted. As we progress further through the Bill, further through the night, further through the week and further through the month, the hon. Member will find that out with a superior degree of conviction to that which he has at the moment.
We do not yet know what will be the response of the Treasury Bench to the Amendment or what will be the response of those who have given lip-service to its aims. We observed them supporting a previous Amendment with their voices and then scuttling into the Lobby to support the Government. I have something less than confidence that those who have advanced on the benches opposite good concrete reasons in favour of the Amendment, supported by adequate evidence, will have the courage of their convictions and will vote for it if it comes to a Division.
Let us still permit the flame of hope to burn within us. Let us hope that the Treasury Bench will reply that the Amendment is reasonable, because it turns a regressive tax into an effective flat-rate tax, because it does not go to the heart of the objectives of the Selective Employment Tax, ill-warranted as those objections are, and because it does not ruin the financial forecast on which the Budget was based. The results are nothing like as heavy as that.
The best reason of all is the positive reason for accepting the Amendment: it will not turn a foolish tax into a good tax, but it will reduce the sum total of anomalies and injustices introduced by the Clause. Unless the Government can see their way to accept the Amendment and its consequential Amendments or be persuaded to do so by the voting of the Committee, this will be a worse Finance Bill than it need otherwise have been.
The Chief Secretary to the Treasury (Mr. John Diamond)
As was expected, this debate has dealt with the principle of part-time workers and with the mechanical details of the collection of the tax. It was inevitable that the principle should be debated, because it is to meet the fears and anxieties which my hon. Friend the Member for Putney (Mr. Hugh Jenkins) has about part-time [column 1347]workers, or certain categories of them that he was seeking to propose a method by which there would no longer be a disproportionately heavy tax on those who worked a disproportionately short time a week, by having a flat-rate tax. It was, therefore, right and proper—and, indeed, inevitable—that the principle should have been brought in.
The Chair has been good enough to let the Committee debate several Amendments dealing with the principle of the part-time worker, and I am sure that it is right that the arguments for and against part-time workers in this connection should be fully deployed when we come to the Amendments which have been selected. Suffice it to say, meantime, that the debate we will have will, I am sure, satisfy the Committee that the anxieties expressed about part-time workers are somewhat exaggerated.
My hon. Friend the Member for Putney moved an Amendment which is attractive. It is not aimed at destroying the tax, it is not aimed at postponing it for an unconscionable time and it is not aimed at withdrawing revenue. It is aimed, in a practical way, at overcoming a difficulty which we all recognise. It therefore has many attractions.
My hon. Friend was right in saying that this is a difficulty, and we recognise that it is. 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 right hon. Friend is right in saying that we would have introduced something to meet his point had it been possible to do so. But the Committee will have noticed that, whereas the debate on the principle showed a great deal of unanimity about the anxieties concerning the effect of S.E.T. on part-time workers—be they disabled or other part-time workers; we all wish to pay particular attention to them—it showed anything but unanimity on the method by which the tax could be collected. [column 1348]
My hon. Friend the Member for Putney put forward his very interesting method, with which I will deal shortly. He was supported by the hon. and learned Member for Northwich (Sir J. Foster) who said he recognised that the proposal of my hon Friend would not work but who also said that he had a proposal based on P.A.Y.E. which would work.
Sir J. Foster
I did not say that it would not work. I said that I had an improvement on it.
I do not want to put words into the hon. and Learned Gentleman's mouth. He speaks with great care, and I withdraw any words which I inadvertently attributed to him. He said that he had an improvement on my hon. Friend's method. His improvement was to make the payment of the tax depend on the machinery of P.A.Y.E., but he was overlooking the fact that there are many people—I do not have the exact number—to whom P.A.Y.E. does not apply but where this tax would apply.
The hon. Member for Norwood (Mr. John Fraser) said he recognised that the proposal of my hon. Friend the Member for Putney was not a practicable one, but that he had a better suggestion, which was to relate it to the graduated pensions scheme, although he omitted for the moment—and I am sure that it was only for the moment—to recollect that there are vast numbers who are contracted out of that scheme, vast numbers in respect of whom the tax should be paid. When we look at it from the point of view of either of the two methods suggested we find immediate and very evident difficulties which my hon. Friend the Member for Putney would hope are not associated with his scheme.
I come back to my hon. Friend's scheme, which is the only one before us at the moment. I have dealt with the others because it was obviously courteous to do so and because, in the Committee, there is recognition that there are great difficulties about the scheme of my hon. Friend the Member for Putney which hon. Members would like to meet if they can. The Government very much sympathise with this and would like to have a scheme which would not result in a disproportionate tax if this were possible. [column 1349]
The tax has been described as a flat-rate tax by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), and as a regressive tax by the hon. Member for Tiverton (Mr. Maxwell-Hyslop), but I say that this tax is, in fact, a progressive tax. The tax is a tax on services. If both hon. Members will be good enough to direct their minds to services and the relation which services bear to standards of income, they will recognise immediately—it is not denied in any quarter—that this is a progressive tax. I am not talking about a particular Amendment, but about the fact that the tax as a whole is a progressive tax.
Is not the comment by the right hon. Gentleman true only on the assumption that every bit of tax is passed on to the consumer?
It is not true on that basis alone. I do not want to divert the debate on this issue, but I do both hon. Members the courtesy of responding to their comments. And I wish to make quite clear that the Government do not accept that this is not a progressive tax.
I come next to the proposal of my hon. Friend the Member for Putney, having made clear that there are difficulties associated with the many alternative proposals. I must also ask the Committee to recognise that there are difficulties associated with his. First, I deal with the question: should there be stamps or can we manage without stamps? If one is reduced to stamps one is faced immediately with difficulties. There have been many similar occasions where an additional tax has been put forward, not by this Government but by previous Governments, where methods of collection have been considered and it has been decided that by far the most simple and reliable method is to have a stamp, or to add it to the existing National Insurance stamp.
I need only remind the Committee about the Industrial Injuries Scheme payments which are collected in the same way, and, more recently, payments under the redundancy scheme. I can assure my hon. Friend, from vast experience, that this is the only economic, reliable, and fair way of collecting taxes of this nature. Other methods have been fully considered on every occasion. It simply [column 1350]would not be practicable to adopt a different kind of system. It would not be fair to other taxpayers. It would not be administratively possible to adopt a system other than that of relying on stamps. If we rely on stamps we are brought up against a very major difficulty of having all the different categories of stamps which one would require to satisfy the detailed proposals of my hon. Friend. We would need a book as big as a blackboard to provide space for every different kind of stamp and it would be administratively far too difficult to cope with.
My hon. Friend has assumed that in all cases the hours of work are known, but that is very far from being the case—very far indeed. There are all the salaried employees who work a variety of hours. Their hours are not known. There are vast numbers of factory workers and others who are paid not by reference to hours who work different hours. There is a whole host of employees in services of one kind or another whose hours of work are not known. It would be an enormous burden to put on the employer to find the hours of work and to pay stamps accordingly. The difficulties associated with this are of such an order that it is just not a practicable scheme, as my hon. Friend the Member for Norwood pointed out. The other schemes proposed also have their glaring difficulties.
We have thought about this very carefully. We do not think that the difficulties associated with part-time workers are anything like as great as some hon. Members on both sides fear, although we recognise that these are difficulties to be taken very seriously into account. The debate which we shall have when you, Sir Eric, are good enough to call that series of Amendments, will give an opportunity for expounding these arguments in full. I am bound to tell my hon. Friend that, attractive as his proposal is, constructive as it is, and constructive as was the method by which he put it forward to the Committee, I cannot recommend the Amendment to the Committee.
Mr. Hugh Jenkins
Can I read into what my right hon. Friend has just said that, when the matter of part-time work comes up for discussion at a later date, [column 1351]the Government's approach to the problem will be sympathetic and possibly constructive?
I must not in any way mislead my hon. Friend. The Government will, as ever, be sympathetic and constructive, but I do not want by that to mislead my hon. Friend into thinking that we have any particular proposals for machinery which would meet the difficulties relating to part-time workers.
The debate will, I think, satisfy my hon. Friend that many of his anxieties about part-time workers are without foundation. I think that the debate will satisfy my hon. Friend that we are most anxious to ensure that in no circumstances are part-timers lost to the total labour force. It is along those lines that the arguments will develop.
My right hon. Friend the Chancellor is not proposing, in connection with part-timers, to alter the method of payment of the tax at this stage. My right hon. Friend has made it clear throughout that there is nothing in the tax to prevent us from considering, after we have seen it working for an appropriate time, whether it is necessary to introduce further refinements at a later date.
Mrs. Margaret Thatcher (Finchley)
I do not rise with the intention of curbing the debate in any way, because I recognise that there are a number of my hon. Friends and hon. Members opposite who may still wish to speak. I want to register a protest now at J. Diamondthe Chief Secretary's reply to the debate. If the hon. Member for Putney (Mr. Hugh Jenkins) is satisfied with that reply, he will be satisfied with anything.
The Chief Secretary always has a lot of sympathy, but it never extends to his pocket. What we are asking for is some fiscal change with regard to part-time workers. All the argument has shown the unwisdom of using the National Insurance system as a means of raising general revenue. The whole National Insurance system was designed to give specific insurance cover to individuals, and the amount they receive is related to their own contributions.
I agree that certain things have been drafted on to the system. However, Industrial Injury benefits, which the [column 1352]Chief Secretary mentioned, are also designed to give specific insurance cover Redundancy payments are designed to give specific cover in certain events. The National Health Service contribution is a revenue earmarked for a specific purpose. There has been no example yet of using this system designed for individual insurance cover as a means of raising large sums for general revenue purposes. I think a lot of the trouble would not have arisen had this been a very small impost. It is the general level of 25s. for a man and 12s. 6d. for a woman which has led to a great deal of the argument. It was a staggering amount to impose. It is this which has given rise to this debate.
I say to the hon. Member for Putney that if we could have knocked this tax out completely, we would have done. But all Oppositions recognise that if they cannot do that, they must concentrate their case on mitigating the effect of the tax upon deserving cases, and that is the spirit in which we approach this Amendment. I accept that, once the Chief Secretary had decided to use the flat-rate National Insurance system, he was bound to be in difficulties. But in deciding to use that system, what he was saying was that he preferred simplicity of collection to all reasons of an equitable distribution of the burden and to all reasons of social justice.
What he should have done was to have said, “This is the amount of tax we want to raise. Now we must consider how best that burden should be distributed and what are the economic side-effects of the decisions we take.” What he has done has been to say, “We want so much tax. We must use the National Insurance poll tax system of collection. Therefore, we must ignore equity. Therefore, we must disregard the economic side-effects. Therefore, we must turn our back on social cases.”
I cannot accept any of that at all. My hon. Friends and hon. Members opposite have given very cogent detailed account of the effects of this particular poll tax on various part-time workers and a various social cases. They have made out their case excellently. It is quite wrong that a woman who works for nine hours a week should attract the same amount of tax liability on her employer [column 1353]as a woman who works 42 hours a week. It is quite wrong that a woman aged 22 who works for 48 hours week should attract the same tax liability as an old-age pensioner who works perhaps for two days a week. Clearly the old-age pensioner should attract very much less, and the woman who works for a much shorter time also should attract a lesser tax liability.
One of the difficulties of the Chief Secretary is because of the eight-hour rule in the National Insurance scheme. When we tried to deal with this, the Chancellor said the other day, “That would mean that a number of people who had insurance cover would not get it if we raised that limit to 20 hours.” That shows the unwisdom of using this system of collection, because it was never designed for this purpose.
On the method of collection, a number of alternative suggestions have been proposed. The hon. Member for Norwood (Mr. John Fraser) suggested not, I thought, P.A.Y.E. but an extension of the graduated pension contribution. The Chief Secretary said that a large number of persons contracted out. Of course they did, but in September when wage-related earnings contributions come in, everyone will be paying graduated contributions for graduated sickness or unemployment benefit, provided they earn above £9 a week. Everyone will be in it.
It would be a very good thing if people who earned less than £9 a week did not attract any tax liability. It would be a different equitable way of achieving what the hon. Gentleman wants to achieve. All those above £9 a week will be paying graduated contributions of one sort or another. Therefore, the Chief Secretary does not have to be bound by the flat-rate system. He could have chosen the other way.
He could have achieved the purpose of the Amendment even under the flat-rate National Insurance system. He has chosen to make the tax follow the employer's contribution. Had he made it follow cases in which both employer's and employee's contributions are paid, a lot of the people we want to help would have been out of the purview of the tax. For example, retirement pensioners who work do not pay the employee's contribution. Those drawing widow's pension [column 1354]do not pay the employee's contribution. Married women who opt out of National Insurance, the vast majority of part-timers, do not pay the employee's contribution. Had the right hon. Gentleman made it dependent upon employer's plus employee's contribution, many of the anomalies which he has now brought in would automatically have been out.
I do not accept his reasoning or that he has exhausted the possibilities under either the flat-rate National Insurance system or under the graduated system. Perhaps he has not lived with the system as long as I have, or perhaps he has not been tough enough with the Department. There are some very good people with some very good ideas on this subject, and it is an insult to say that they have not some method to offer for overcoming the difficulties.
The case on merit is very strong. I understand that it was said in the debate on the Selective Employment Tax that one of the reasons why the tax in respect of women was 12s. 6d. per head was that so many women were part-time workers. This was never part of the White Paper or of James Callaghanthe Chancellor's original speech. The original reason given for the tax in respect of a woman being 12s. 6d. as against 25s. for a man was that average earnings for a woman working full time were less than half the average earnings of a man working full time. For example, in the Monthly Digest of Statistics for May the average earnings of a man in manufacturing industry were given as £20 3s. 3d. and the average for a woman working full time were given as £8 11s. 11d. a week!
That was the reason for the difference in the tax, and it has no part-time element in it at all. The average women working part time works 21.9 hours for £5 2s. 11d. a week. If one is to say that the reduction of the tax for women should take into account that a large number work part time, it should be only a quarter of the tax for men, not a half. I cannot accept that, therefore. It would be a great help for women working part time if the tax were only 6s. 3d., but the Chief Secretary would then have gone half way to meet us.
The case in respect of retirement pensioners who put in a couple of days and for the handicapped is even stronger. There are many who employ such people [column 1355]for social reasons. It is often better for a retirement pensioner to go out to work even though, perhaps, he cannot put as much into the hours, one pays him for doing certain odd jobs. To add 25s. a week to the cost of employing a retirement pensioner for a couple of days in the garden may mean that he has to be stood off altogether and has to go to National Assistance. Most of us who employ such people for what I call social reasons will, naturally, do our level best not to stand them off, but there will be a number who have to be.
There will also be a number of employers in the retail trade who stand off part-timers and see whether they can find one skilled full-timer because of the imposition of the Selective Employment Tax. The effect of this will be quite the reverse of what the Chief Secretary wants. Instead of employing labour which could not be used elsewhere, they will draw off skilled labour which could be used elsewhere.
The right hon. Gentleman has given one of the weakest replies on the whole Budget. This is a strong case on merit for mitigating the effects of the tax on part-timers and on the mentally and physically handicapped. We agree with the purpose behind the Amendment. We hope that the hon. Gentleman will press it to a Division, and we shall support him in order to give as much help as we can to these people.
Mr. Norman Miscampbell (Blackpool, North)
I shall not delay for long the opportunity of the hon. Member for Putney (Mr. Hugh Jenkins), who moved Amendment No. 17, to vote with us. We have had a thoroughly disappointing reply from the Chief Secretary. There is no reason why we should cease to urge upon him better ways. After all, he will have plenty of opportunities, if he does not accept them here and now, to think better of the decision that he has made this evening.
The right hon. Gentleman says that he thinks that the difficulties of part-timers are greatly exaggerated. I wonder whether it would be possible to exaggerate them in the case of certain industries which depend almost entirely on part-timers. The right hon. Gentleman says, as every Minister does, that there are technical difficulties why these people [column 1356]cannot be excepted, why Amendment No. 17 cannot be accepted, and why he does not even wish to accept the spirit of the Amendment. The answer is that all these difficulties are wished upon a Government who have imposed such a high rate of taxation—25s. or 12s. 6d.—on a selected pattern of the employed population. I can see that, once that decision was taken, exceptions would be difficult.
Let us consider whether we have been exaggerating in any way. Let us look at the difficulties of certain industries in which part-time workers are a common feature. I will take two examples of different social importance, or, at any rate, ones which we may view differently.
First, it is perhaps not often realised that those who provide holiday accommodation for, often, the lower-paid workers all round our coasts—I am not thinking just of Blackpool, but my constituency cannot be far from one's mind in this—rely almost exclusively on part-time workers. A typical hotel or boarding house has the proprietor and his family and a squad of part-time workers to help. It is difficult to get people who will work the whole time because of the long hours which have to be worked in the season, so one has to rely on part-time workers.
Some come in to do the breakfasts and the washing-up, some come in for lunch, and others come in later. The burden upon an industry which has to rely almost exclusively on part-time workers is in many cases even greater than if it had full-time workers able to work all through the day.
Mr. Eric Lubbock (Orpington)
Does not the hon. Gentleman think that the Government are encouraging tax evasion, that people in this position will be encouraged to say that their employees are doing less than eight hours?
I have not the slightest doubt that that will be the circumstance in many places, though I hesitate to suggest that it is likely to happen in Blackpool. But I suppose one can envisage a situation where it may happen there. Certainly, common sense indicates that this will be the type of thing that will happen. In any establishment where people are just coming in and going out all day, it is all too easy for that type of thing to happen. [column 1357]
As the Committee may feel that that is a particular constituency point, I turn from it to something else of which I am well aware because of the constituency that I represent. There must be scores of other hon. Members who have exactly the same problem. Anyone who represents a constituency which contains a high proportion of old-age pensioners will find that a common feature of their constituencies is a number of nursing homes which provide care and help for the old and for those in post-operative conditions who must be looked after.
These are people for whom the National Health Service and the hospitals have no place—people who are too old and too ill to stay at home, but there is no place for them in the hospitals. They are not being looked after by full-time nurses, who are in too short supply, but by part-timers who come in to help the old, the sick and the geriatric and post-operative cases.
Only two months ago, during the election campaign, all of us went round such establishments to see the old folk. The problem was put before us and one could not turn away. I am thinking particularly of one place where there are usually about 18 or 19 patients and 12 part-time workers who come in every day to look after them. This is not an expensive establishment. It is as modest in its fees as such a place can be—a scale of 12, 13, or 14 guineas a week. That is the minimum possible for people to be looked after in these conditions.
Yet the Government have decided that it is impossible to leave such establishments out of an impost which will amount to about £350 to £400 a year. Such a selection has no social merit. If such places are not exempted it will be quite shameful. I have instanced these examples, but I remind the Committee that part-time workers are the basis of many industries and social services.
Mr. Hugh Jenkins
May I, Sir Eric, have leave of the Committee to speak again for a few moments?
The hon. Gentleman does not need leave to speak again.
I think that it is necessary for me to speak again. Hon. Members who have just come into the Chamber [column 1358]are not aware that what is being debated is an Amendment in my name. Most of the debate has been directed to two main questions: first, whether the position of part-time workers in principle is one which the Government need to ameliorate; and, secondly, whether my proposal is the right and practicable way of dealing with it.
On the question of principle, most of the Committee seems to agree that it is desirable to do something special for part-time workers. That is a wide range of agreement. I have not been convinced by my right hon. Friend on the question of practicability. He holds out to us the prospect that he will say something later about the position of part-time workers which will make us feel that the position is not as grave as we think. Unfortunately, he has not told us now.
In effect, he says, “Do not press the Amendment, because, later, I shall tell you something which will make it unnecessary for you to do so.” If I had to rely on that alone, I would not be able to agree with my right hon. Friend, but what has convinced me is the arguments put forward by hon. Members opposite. One after another they said that this was a good proposal in principal, but that for one reason or another it would not work, and then they suggested this, that or the other alternative. With one or two exceptions, practically every hon. Member opposite who has spoken has said that the principle of the Amendment is right, but that it would not work. The hon. Member for Blackpool, North (Mr. Miscampbell), however, agreed that it was right and was practicable, but there is still a great deal of difference between us, because I am in favour of the tax in principle whereas he is not.
In these circumstances, the question arises what action the Committee ought to take and, in particular, what action I should take. For me to pursue an Amendment which, I am convinced by hon. Members opposite, would be impracticable of working would be entirely wrong. Therefore, because hon. Members opposite are apparently only too keen to go through the Lobby in support of my Amendment, which they believe to be hopelessly wrong in order to assist me to defeat my own Government, which is a [column 1359]proposition I could not be expected to accept, I beg to ask leave to withdraw the Amendment. [Hon. Members: “No.” ] In doing so, I must tell my right hon. Friend that we shall want to hear some stronger arguments from him about the [column 1360]position of part-time workers before the debates on this Clause are over.
Question put, That those words be there inserted:—
The Committee divided: Ayes 134, Noes 175.