HC Deb 13 June 1974 vol 874 cc1810-1
12. Mr. Biffen

asked the Chancellor of the Exchequer if he will make a statement on the present situation and future prospects for corporate liquidity.

Mr. Dell

The gross liquid assets of industrial and commercial companies were at the high level of £10,000 million at the end of the fourth quarter of 1973. The strains of three-day working will since have eroded the position to some extent. The Government will continue to watch the situation and will ensure that investment is not hampered by a lack of finance.

Mr. Biffen

When watching the situation will the right hon. Gentleman bear in mind that there is a malaise among British industrial and commercial managements, which amounts almost to a crisis of confidence? This derives partly from the belief that the Government are unaware of the serious cash difficulties in British industry and the belief that there is hostility to the profit motive among many Labour Members and appropriate anxiety about the intervening ambitions of the Secretary of State for Industry.

Mr. Dell

I do not believe that there is reason for a lack of confidence on those grounds. The problem arises from the changing pattern of company finance. Companies are increasingly reliant on bank finance and, therefore, their net liquidity position shows a deficit. Nobody believes that money outstanding from them will be called in. They are as far as we can see generally speaking in a strong liquidity position and this should have a beneficial effect on investment.

Mr. Kinnock

Is it not the case that the fears allegedly expressed by the business community about the activities of the Secretary of State for Industry are simply the latest in a long and old list of excuses for the useless and hopeless performance of large sectors of British privately-owned industry in past years?

Mr. Dell

There are many reasons for the poor economic performance of this country. One may be our stop-go policies since the war. I do not wish to distribute the burden of responsibility for our poor performance unequally between Government and industry.