HC Deb 25 October 1971 vol 823 cc1220-1
29. Mr. Cronin

asked the Secretary of State for Trade and Industry if he will introduce legislation to enable him to improve the management of large companies where there is, without adequate reason, continuing evidence of inefficiency, such as poor return on capital employed, failure to expand under favourable conditions for expansion, inadequate export record or reduction of production causing large-scale redundancy.

Mr. John Davies

No, Sir; we consider that management is best improved by vigorous competition.

Mr. Cronin

Bearing in mind the number of large companies which have gone into liquidation in recent years and the number which are still managed with obvious inefficiency, would not it help if the Government were in a position to intervene in good time, in the interests of the national economy?

Mr. Davies

No, Sir. I do not think that the Government would be the best party to intervene in that way. I should like to feel that every encouragement was given to shareholders to take a more active part in monitoring the performances of their own managements.

Mr. Bruce-Gardyne

Does not my right hon. Friend agree that the best way of achieving the objectives outlined by the hon. Member for Loughborough (Mr. Cronin) would be to reverse the bias imposed by the Labour Government in the shape of corporation withholding tax so as to encourage distribution rather than retention?

Mr. Davies

As my hon. Friend will know, the possibility of a revision of corporation tax is under review actively, and I have no doubt that it is intended to take place.

Mr. Joel Barnett

Is it fair to assume from his replies that the Minister considers the Government to be less competent than the most incompetent of all these companies going into liquidation?

Mr. Davies

No, that would not be fair.