§ 2. Mr. Kenneth Bakerasked the President of the Board of Trade if he will give for Great Britain the annual increase in company liquidations between 1960 and 1964 and between 1965 and the latest available date, respectively.
The Parliamentary Secretary to the Board of Trade (Mrs. Gwyneth Dun-woody)Omitting voluntary liquidations by their members of mainly solvent companies, the number increased at an annual rate of 8 per cent. in each period.
§ Mr. BakerEven leaving those out of account, would not the hon. Lady agree that the rate of company liquidations has doubled in the last five years of Socialism? Is not this an appalling indictment? Will the Labour Party consider reissuing its poster of the last General Election and, instead of it saying, " Let's go with Labour ", make it " Let's go bust with Labour "?
Mrs. DunwoodyThe hon. Member must have had a rather highly coloured lunch. He is using some very exaggerated terms. It was precisely because the Government were concerned to see what was happening to small firms that they set up the inquiry. Until we get statistics which will give the information, we cannot draw such highly exaggerated conclusions.
§ 19. Mr. J. H. Osbornasked the President of the Board of Trade how the number of voluntary and compulsory liquidations of businesses for the first quarter of 1970 compares with the previous eight quarters; what estimate he now has of the effect of the credit squeeze 1217 and interest rates on medium size and small businesses, by way of liquidations, closures, takeovers, and enforced mergers; what products; what regions of the country; and what type of businesses have been most affected.
§ Mrs. Gwyneth DunwoodyWith permission, I will circulate the available information in the OFFICIAL REPORT. Leaving aside voluntary liquidations by their members of mainly solvent companies, the figures after seasonal adjustment have recently been somewhat below the levels to which they rose last year. They do not provide any clear evidence as to the effect of the credit squeeze or of high interest rates.
§ Mr. OsbornThe hon. Lady is misleading in her reply. The number of liquidations has doubled in the last decade, and according to recent figures voluntary liquidations are very high for the first quarter of 1970, following high figures for compulsory liquidations during the fourth quarter of 1969. Is the hon. Lady not aware that her figures are misleading because they do not tell the whole tale? Many firms have had to go out of business but have avoided the official statistics.
§ Mrs. DunwoodyThe hon. Gentleman asks for information and then, when I give it, say that it is misleading. He is wrong. There was a rise in the number of liquidations after the passage of the Companies Act, 1967. This in many cases was due to the fact that the status of exempt private company was abolished and it was necessary to file accounts. We accept that there has been a rise
1218 in liquidations, but the hon. Gentleman should not use quite such highly coloured terms in this context.
BUSINESS CLOSURES IN ENGLAND AND WALES Numbers Bankruptcies and Deeds of Arrangement† Compulsory Company Liquidations Creditors' Voluntary* Members' Voluntary*‡ 1968 … … … … 4,298 1,111 2,057 6,082 1969 … … … … 4,769 1,181 2,329 4,829 Unadjusted 1968 1st quarter … … 1,231 308 590 1,787 2nd quarter … … 1,024 279 496 1,448 3rd quarter … … 932 149 438 1,285 4th quarter … … 1,111 375 533 1,562 1969 1st quarter … … 1,231 318 554 1,272 2nd quarter … … 1,095 308 563 1,404 3rd quarter … … 1,214 171 627 1,090 4th quarter … … 1,229 384 585 1,063 1970 1st quarter … … 1,310 316 663 1,146
§ Mr. Raphael TuckIf the volume of liquidations is, as the Opposition allege, so high in private enterprise, does it not make the case for nationalisation and public ownership?
§ Mrs. DunwoodyWhether the State takes over private companies by nationalisation or whether it assists them in any other way, it is essential that they should be viable units.
§ Mr. RidleyDuring the last five years of the Tory Government there were 200 liquidations a year; in the last five years under the present Government there have been 900 a year. Does the hon. Lady still believe that her reply to the Question was not misleading?
§ Mrs. DunwoodyI do because, as the hon. Gentleman carefully refrained from saying, until very recently the growth in the number of companies was such that in many cases it kept pace with the liquidations. There have not been very many more liquidations overall when set against the number of new companies which have been created.
§ Mr. BarnettIs this situation not a natural and understandable trend brought about, quite rightly, by the abolition of resale price maintenance?
§ Mrs. DunwoodyIt is a pity that the Leader of the Opposition is not here to welcome this improvement in efficiency.
§ The following is the information: 1219
| Seasonally adjusted | ||||||
| 1968 | ||||||
| 1st quarter | … | … | 1,113 | 279 | 566 | — |
| 2nd quarter | … | … | 1,043 | 279 | 502 | — |
| 3rd quarter | … | … | 1,031 | — | 458 | — |
| 4th quarter | … | … | 1,111 | 275 | 531 | — |
| 1969 | ||||||
| 1st quarter | … | … | 1,102 | 290 | 531 | — |
| 2nd quarter | … | … | 1,112 | 305 | 568 | — |
| 3rd quarter | … | … | 1,331 | — | 650 | — |
| 4th quarter | … | … | 1,224 | 266 | 580 | — |
| 1970 | ||||||
| 1st quarter | … | … | 1,180 | 285 | 632 | — |
| *Notified to the Board of Trade. | ||||||
| †The numbers of bankruptcies are of receiving orders made; about 20 per cent. relate to private individuals not engaged in business. | ||||||
| ‡I Mainly liquidations of solvent companies. |
| BUSINESS CLOSURES IN SCOTLAND | ||||||||
| Numbers | ||||||||
| Company Liquidation | ||||||||
| Sequestration | Compulsory Voluntary | Creditors' Voluntary | Members'Voluntary* | |||||
| 1968 | … | … | … | … | 104 | 35 | 100 | 395 |
| 1969 | … | … | … | … | 118 | 27 | 145 | 334 |
| 1968 | ||||||||
| 1st quarter | … | … | … | 25 | 8 | 23 | 132 | |
| 2nd quarter | … | … | 24 | 6 | 30 | 86 | ||
| 3rd quarter | … | … | 33 | 9 | 26 | 82 | ||
| 4th quarter | … | … | 22 | 12 | 21 | 95 | ||
| 1969 | ||||||||
| 1st quarter | … | … | … | 23 | 8 | 23 | 78 | |
| 2nd quarter | … | … | 37 | 6 | 31 | 91 | ||
| 3rd quarter | … | … | 27 | 6 | 50 | 70 | ||
| 4th quarter | … | … | 31 | 7 | 41 | 95 | ||
| 1970 | ||||||||
| 1st quarter | … | … | … | 30 | 16 | 33 | 71 | |
| *Mainly liquidations of solvent companies. |
| BUSINESS CLOSURES IN NORTHERN IRELAND | ||||||||
| Numbers | ||||||||
| Company Liquidation | ||||||||
| Bankruptcies | Compulsory | Creditors' Voluntary | Members' Voluntary* | |||||
| 1968 | … | … | … | … | 47 | — | 23 | 45 |
| 1969 | … | … | … | … | 40 | 3 | 12 | 32 |
| * Mainly liquidations of solvent companies. |
| INDUSTRIAL ANALYSIS FOR ENGLAND AND WALES | ||||||||||||
| Company Liquidation | Company Liquidation | |||||||||||
| Bankruptcies and Deeds of Arrangement | Compulsory | Creditors Voluntary | Bankruptcies and Deeds of Arrangement | Compulsory | Creditors Voluntary | |||||||
| 1968 | 1969 | 1969 | 1969 | 1968 | 1969 | 1969 | 1969 | |||||
| Numbers | Percentages | |||||||||||
| Traders and self-employed | ||||||||||||
| Farming etc. | … | … | … | 174 | 240 | 16 | 33 | 4.3 | 5.2 | 1.4 | 1.4 | |
| Total Manufacturing | … | 137 | 167 | 182 | 725 | 3.4 | 3.6 | 16.7 | 31.0 | |||
| Food, drink and tobacco | … | 9 | 4 | 6 | 18 | 0.2 | 0.1 | 0.6 | 0.8 | |||
| Chemicals etc | … | … | 1 | 1 | 4 | 17 | — | — | 0.3 | 0.7 | ||
| Metals and engineering | … | 33 | 33 | 79 | 329 | 0.9 | 0.7 | 7.4 | 14.0 | |||
| Textiles and clothing | … | 19 | 49 | 22 | 110 | 0.5 | 1.1 | 2.0 | 4.7 | |||
| Timber, furniture etc | … | 28 | 35 | 18 | 86 | 0.7 | 0.8 | 1.6 | 3.7 | |||
| Paper, printing and publishing | … | … | … | 21 | 21 | 30 | 69 | 0.5 | 0.4 | 2.8 | 3.0 | |
| Other manufacturing | … | 26 | 24 | 23 | 96 | 0.6 | 0.5 | 2.0 | 4.1 | |||
| Construction | … | … | … | 849 | 996 | 295 | 355 | 20.9 | 21.9 | 24.0 | 15.3 | |
| Road haulage, taxis and hire cars | … | … | … | … | 176 | 177 | 39 | 76 | 4.3 | 3.9 | 3.3 | 3.3 |
| CompanyLiquidation | CompanyLiquidation | ||||||||||
| Bankruptcies and Deeds of Arrangement | Compulsory | Creditors Voluntary | Bankruptcies and Deeds of Arrangement | Compulsory | Creditors Voluntary | ||||||
| 1968 | 1969 | 1969 | 1969 | 1968 | 1969 | 1969 | 1969 | ||||
| Numbers | Percentages | ||||||||||
| Wholesaling: | |||||||||||
| Industrial and buildersmaterials, coal, grain etc. | 110 | 84 | 65 | 47 | 2.7 | 1.8 | 5.3 | 2.0 | |||
| Consumer goods | … | … | 53 | 64 | 126 | 218 | 1.3 | 1.4 | 10.7 | 9.3 | |
| Food retailers | … | … | 382 | 409 | 12 | 84 | 9.4 | 8.9 | 1.0 | 3.6 | |
| Non-food retailers | … | … | 403 | 522 | 69 | 213 | 9.9 | 11.4 | 5.6 | 9·1 | |
| Financial, business and professional services | … | … | 204 | 166 | 184 | 345 | 5.0 | 3.6 | 15.6 | 14.8 | |
| Hotels, restaurants etc | … | 254 | 281 | 30 | 35 | 6.3 | 6.1 | 2.5 | 1.5 | ||
| Garages | … | … | … | 109 | 174 | 66 | 85 | 2.7 | 3.8 | 5.6 | 3.6 |
| Other consumer services | … | 144 | 127 | 68 | 43 | 3.5 | 2·8 | 5.8 | 1.8 | ||
| All other businesses | … | … | 45 | 24 | 29 | 70 | 1.1 | 0.5 | 2.5 | 3.3 | |
| Total | … | … | … | 3,040 | 3,231 | 1,181 | 2,329 | 74.8 | 74.9 | 100 | 100 |
| Employees, no occupation andunemployed | … | … | 793 | 930 | — | — | 19.6 | 20.3 | — | — | |
| Directors and promoters ofcompanies | … | … | … | 231 | 220 | — | — | 5.7 | 4.8 | — | — |
| Total | … | … | … | 4,064 | 4,581 | 1,181 | 2,329 | 100 | 100 | 100 | 100 |
| There is no statistical information about smaller companies which are the subject of takeovers or mergers. | |||||||||||
| Some information about the regional distribution of bankruptcies is provided by the analysis of cases handled by different courts which is published in the Bankruptcy General Annual Report. A regional analysis of company liquidations is not available. | |||||||||||
| The industrial analysis given for England and Wales for 1968 and 1969 is only available tow calendar years. |