HC Deb 21 January 1974 vol 867 cc1197-9
25. Mr. Biffen

asked the Secretary of State for Trade and Industry if he will make a statement on the impact of the three-day working on smaller businesses.

31. Mr. Kinnock

asked the Secretary of State for Trade and Industry what representations he has received from organisations representing small firms on the effects of three-day working.

Mr. Anthony Grant

At my request, I have had meetings with the CBI Small Firms Council, the Smaller Businesses Association, the Association of British Chambers of Commerce and the National Chamber of Trade. Although the present situation poses serious problems for small firms as well as large, my information is that the majority of small firms are coping well, with a high degree of co-operation between employers and employees. I am naturally watching the position closely and maintaining direct contact with the sector.

Mr. Biffen

What representations has my hon. Friend received concerning the financial problems which are likely to arise for the whole of industry, and especially smaller firms, if the three-day working week persists for a long time?

Mr. Grant

Naturally the representatives of the small firms whom I saw were concerned about the problems of future cash flow. They made their points on that basis. They hoped that the banks and financial institutions would be as sympathetic as possible. I have no doubt that that will be the case.

Mr. Kinnock

Will the Minister accept that, contrary to his experience, a lot of small firms are outraged at the administrative chaos which appears to reign in the regional centres of the Department of Trade and Industry? I accept that members of the Department must not bear the blame for that since it must lie with the regulations which they have to apply. Does he appreciate that small firms are fed up with the way in which responsibility is being shuffled off by the regional electricity boards? Does he accept that there is a growing feeling, at least in South Wales, about the enormous disparity of treatment regarding applications and appeals from employers in different regions? Is he aware that some firms in similar areas and with similar demands to others are receiving much smaller allowances of electricity?

Mr. Grant

The hon. Gentleman's information from firms in Wales is not the same as that which has been supplied to me by various organisations with which I have spoken, which had considerable praise for the way in which the regional offices were coping with a difficult situation. We shall consider carefully the difficulties which they are experiencing. By and large, the organisations are in complete support of the Government's counter-inflation measures and there is a remarkable degree of co-operation between both sides of industry. In that respect I pay tribute to them.

Mr. Wyn Roberts

Will my hon. Friend consider introducing a rotational system for the three-day working week? Does he accept that firms working at the end of the week are clearly at a disadvantage compared with their competitors which are working at the beginning of the week?

Mr. Grant

That matter was discussed with my right hon. and noble Friend the Secretary of State for Energy. He will no doubt give full consideration to the views which were then expressed.

Mr. Ford

Is the hon. Gentleman aware that Lucas Aerospace, one of the smaller companies in its type of business, declared a substantial redundancy over the weekend which it attributed to Government policy? Would the hon. Gentleman accept that as a valid reason for declaring redundancy at this stage?

Mr. Grant

I cannot now comment on the case which the hon. Gentleman has mentioned. Happily, that has not happened in many firms, but I will gladly consider the case in the hon. Gentleman's constituency.

Mr. Alan Williams

Will the hon. Gentleman bear in mind that, as a result of the utterly unnecessary retreat into a three-day working week, many small firms are facing not only critical but crippling cash flow problems resulting in part from the failure of the larger firms to pay their smaller suppliers? What urgent action do the Government intend to take to ease the cash flow situation? Will they consider allowing extra time for the payment of the January value added tax demand and introducing staged payments for partially completed contracts in the public sector?

Mr. Grant

Those points have been referred to the Government and are being considered. My right hon. Friend the Chancellor of the Exchequer must consider them as well and will announce in due course what we can do. The Government are naturally watching the cash flow situation very closely and will wish to ensure that the banks have sufficient liquidity to meet the reasonable needs of industry. However, undoubtedly the best contribution which could be made towards solving the difficulties of small firms would be a return to full-time working by the miners and railwaymen.