HC Deb 28 March 1974 vol 871 cc622-5
Q4. Mr. Redmond

asked the Prime Minister what plans he has for future discussions with the Confederation of British Industry on the subjects of the economy and industrial relations.

The Prime Minister

I shall be seeing it later this afternoon, Sir.

Mr. Redmond

May I press a point on the right hon. Gentleman that I pressed from the other side of the House in the last Parliament? With all respect to the CBI, how can it be representative of the whole of British industry, particularly of small firms, the majority of which are not members? Would not the right hon. Gentleman get a much better picture of the small firms, the grass roots of industry, particularly in the regions, by consulting the chambers of commerce? If he were to talk to the chambers of commerce now, would he not learn how the small firms have been clobbered by the Budget and how they are worried about their cash flow?

The Prime Minister

I do not entirely agree that the CBI is incapable of representing small firms. At its quarterly meetings a large number of small firms appear and are very vocal. But I agree that there are special problems for small businesses. They were clobbered worst of all by the three-day week, as I happened to mention in the debate on the Gracious Speech. We are all aware of the serious liquidity problems that they are facing as a result not only of the three-day week, but of the need now to build up stocks and components.

As regards the chambers of commerce, with which I have had close relations for a quarter of a century, I agree that they have a great deal to say on behalf of small, medium and large firms, and we shall listen to them.

Mr. Ashley

Does the Prime Minister agree that the CBI's lukewarm attitude to the Government's proposals, in stark contrast to its attitude towards the previous administration, will not discourage the Government from carrying those proposals through?

The Prime Minister

I have said that I shall be meeting the CBI this afternoon and we shall then be able to hear directly its views on these matters.

Mr. Heath

The Prime Minister has mentioned the question of liquidity. How will he explain to the CBI the need for the measure in the Chancellor of the Exchequer's Budget which will further reduce the liquidity of British industry by between £1,000 million and £1,200 million in the year?

Secondly, when the right hon. Gentleman meets the CBI, will he give it the facts about the impact on the retail price index for the coming year—facts which have so far not been given by either the Chancellor of the Exchequer or the Paymaster-General? Last night, the Paymaster-General said that the rent freeze would reduce the index by ¾ per cent. Unless there is a reduction in rents, it cannot possibly reduce the retail price index. The freeze, therefore, will not provide an offsetting ¾ per cent. So far as fond subsidies are concerned, the only reduction is 1p on milk, which is 0.4 on the retail price index.

Therefore, the total consequence of the Chancellor's Budget is an increase in the RPI in the course of this year of between 3 per cent. and 4 per cent., with all the consequences on threshold agreements.

The Prime Minister

I shall be very interested to study the figures just given by the right hon. Gentleman in his speech, and I have no doubt that my right hon. and hon. Friends who will be taking part in the debate will be happy to base their replies on the information that he has just given the House.

With regard to the answer that I shall give to the CBI, I shall see first the precise nature of its questions on these matters. The CBI is conscious that both small and large firms are facing a severe liquidity problem, caused by the right hon. Gentleman's induced three-day week.

Mr. Heath

I strongly repudiate what the Prime Minister has said. When the National Union of Mineworkers introduces an overtime ban and then challenges the country with a strike, the loss is its responsibility.

The Prime Minister

May I, in the friendliest way, advise the right hon. Gentleman not to keep on fighting the General Election and repeating the arguments he used on that occasion? In an earlier question he referred to my right hon. Friends having concealed figures from the House. The right hon. Gentleman will be aware that one of the central features of the Budget Statement was the very large increases required in the prices of public industries, which followed the policy enunciated by the then Chancellor last December and the figures that the right hon. Gentleman the then Prime Minister systematically concealed from the electorate throughout the General Election.