§ Mr. Peter Walker
It is estimated that the halving of selective employment tax will result in a decrease of between 1 and 2 per cent. in building costs. This represents about £60 on the cost of an average three-bedroomed house. The reduction in tax will affect public sector 1322 housing prices in cases where the existing fixed price contract includes a tax fluctuation clause.
§ Mr. Urwin
Is the right hon. Gentleman aware that his reply is, to some extent, at variance with informed opinion in the industry, which is that there is very little likelihood of the reduction in the tax being passed on to the consumer? What steps does he intend to take to ensure that it is passed on and that there is an effective reduction in house prices?
§ Mr. Walker
I think it will result in an effective reduction in house prices and will certainly be of much more help than the action which the Labour Government took in increasing selective employment tax and putting the betterment levy on land.