SET
One or two economists have been writing to The Times in praise of the new Selective Employ- ment Tax, on the grounds that by taxing ser- vices the Government is doing something to les- sen the previous discrimination against goods— many of which, of course, are liable to purchase tax—and so helping to produce a less distorted and more efficient allocation of the nation's resources. There's a good deal less in this argu- ment than meets the eye. It's not much of a help to refrigerator sales, for example, to tax the shops that sell the refrigerators. But they've got a
point, even if it's smaller than they think.
The real question is whether this particular aspect of the SET is intentional or not. The very fact that the S stands for 'selective' gives one cause to doubt—even though a form of selection which discriminates most acutely against the old, the infirm, charities and the arts seems almost too bad to be true. Its not difficult to imagine what Mr Wilson would have said if a Tory chancellor had brought in a . measure of this kind. But 'selection,' however outrageous its implementa- tion, is plainly the core of Labour's economic policy, as Mr Wilson has made clear ad nauseant in his speeches. and as the discriminatory cash grants for investment—before the SET came along—plainly showed. If Mr Callaghan has sud- denly been converted to the diametrically oppo- site doctrine of removing all recognisable dis- tortions in the economy. then let him say so. Then, and not before, will be the time for the economists to rejoice—and I'll gladly join them. Mortgages Again
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