The Gazette 1972

Equal Pay Before coming to my concluding remarks, there are two important matters to which I wish to refer. The first of these is equal pay for women, which the Government accept in principle and which they now affirm as a national aim. The second relates to efficiency in the public service. The Government have been considering the interim report on equal pay submitted by the Commission on the Status of Women. The Employer-Labour Confer- ence have arranged that the working party established to negotiate on pay, with a view to reaching a new National Agreement, will take the recommendations of the commission into account in these negotiations. The Government welcome this decision and hope that agree- ment will result which will be acceptable to all. Pro- gress on this front depends on the will of the entire community, whatever general arrangements are accepted by the conference will be applied to the public service. The commission also recommended the enactment of legislation to give effect to their proposals. They sug- gested that legislation should take into account any phasing arrangements agreed by the conference. The Government will, accordingly, consider what specific action is required in this area in the light of the con- ference's finding. It is also intended to consider the question of ending of restrictions on the employment of women which, by excluding them from equal work with men, are an automatic barrier to equal pay. It is hoped that the final report of the commission will be available when the legislation is peing prepared. In the meantime, the various restrictions under statute or regulation which comprise the "marriage-bar" in the public service are being examined. It is hoped that all non-statutory restrictions on the employment of married women will be ended as soon as possible and that the necessary legislation for the repeal of any statutory re- strictions and for the prohibition of restrictions on the employment of married women generally will be enacted within the period of two years recommended in the interim report. Efficiency in the public service Acceptance of the principal of equal pay will increase substantially the cost of pay in the public sector. Foremost among measures to promote efficiency in the public service I must place the administrative steps, which are continuing, for the reorganisation of the pub- lic service. As well as the legislation for the setting up of the Department of the Public Service, which will, I expect, be enacted during the current parliamentary sessions, two other main developments should be men- tioned. First, the Report of the Public Services Organisation Review Group emphasised the great responsibility of the Government to select the right men for the top posts in the new Department. The Government have recognised this by the exceptional arrangement whereby two of the three posts of Deputy Secretary in the new Department were filled by a competition open to all comers. I am satisfied that, in this way, we have got the best available talent to carry the heavy burden of leading and directing the reform and reorganisation of our public service instiutions. Secondly, the Government have decided to accept, on an experimental basis, the major administrative reform recommended by the review group by initiating, in a number of selected Departments, the separation of policy and execution and by reshaping them into an 142

cided that the restoration of the pre-October 1970 rate of company taxation should be advanced from 1973-74 to this year. The cost of this concession, which reduces the rate of taxation of company profits to 50 per cent, will be £2.7 million this year in addition to the sum of £2.7 million already taken into account in the pre- budget estimate of tax revenue. When the provision for free depreciation is taken into account, the over-all tax position of companies is now, in fact, more favourable than it was before the October, 1970, increase. Free depreciation Last year, as a special measure to encourage a con- centration of capital investment in the two-pear period ending 31st March, 1973. I extended free depreciation to the whole country for that limited period. Represen- tations have been made to me that the concession cannot be claimed in cases where, although expenditure has been incurred, the asset will not be brought into use before the limiting date. I propose to remedy this in the Finance Bill. Death duties relief I have had under consideration the threshold at which estate duty becomes payable. The present exemption limit is £5,000, introduced in 1960. I have decided to increase it by 50 per cent to £7,500. Furthermore, a new scale of rates from 1 per cent upwards will operate for estates between £7,500 and £11,000 so that these estates will also have their liability to duty reduced. The exemption limit for legacy and succession duties will also be raised from £5,000 to £7,500. When comparing the rates of estate duty chargeable in this country with those chargeable elsewhere, it is important that the abatements of estate duty provided here be taken into account. These abatements provide considerable relief from duty where that relief is most needed, that is, in estates which pass to a widow or to a widow with dependent children. I increased these abate- ments last year from £1,000 to £1,500 in the case of the widow and from £500 to £750 in the case of each de- pendent child. This is an expensive form of relief. In the last finan- cial year, it cost more than £650,000 in estate duty. Nevertheless, I have come to the conclusion that further relief is called for and have decided to increase the widow's abatement from £1,500 to £2,000 and the de- pendent child's abatement from £750 to £1,000. In the case of a widow without dependants, the effect is to raise the exemption limit from £15,300 to £17.750; where there are three dependent children, the new exemption limit will be £30,200 as compared with £25,250 pre- viously. These concessions will cost £130,000 in the present year and £500,000 in a full year. Financing the deficit The tax reliefs which I have announced will cost in all £14.1 million this year. When added to the social welfare and other concessions and taking account of the open- ing gap of £8.6 million, they bring the overall deficit in the budget to £34.8 million. To finance part of this deficit I propose to bring into the Exchequer an excep- tional non-recurring receipt of £7 million from the Cen- tral Bank. The balance of the deficit—£27.8 million—will be financed by borrowing. To the extent that the budgetary measures give rise to increased economic activity, there will be a consequential increase in revenue which will reduce correspondingly the borrowing requirement.