HC Deb 04 November 1974 vol 880 cc672-3
9. Mr. Rost

asked the Secretary of State for Industry when he expects to bring, forward proposals to protect the profitability of industry.

Mr. Meacher

The Gracious Speech made clear the Government's wish to encourage vigorous and profitable private and public sectors of industry.

Mr. Rost

Yes, but those are empty words. When will the Minister understand that, if he does not do something quickly to undo some of the damage that he and his Ministers have done to the profitability, employment and investment prospects of British industry, there will not be any British industry left to employ anybody or to make any profit? Or is the Minister deliberately stalling in the hope that he can turn every factory into a loss-making Communist co-operative?

Mr. Meacher

The general question of financing industry's liquidity and the serious problem of profitability in industry are matters to which my right hon. Friend the Chancellor of the Exchequer will address himself when he presents his Budget proposals. I cannot be expected to forecast what he will say, but one must take account of the real factors that have affected the financing of industry. These are a boom in the United States, Europe and Japan, world high interest rates and, above all, the problem for which Conservative Members were responsible when they were the Government, namely the excessive stimulation of the money supply and the inflationary problems that that has produced. Those are the basic problems that underlie the problems of profitability in industry.

Mr. Ioan Evans

Does my hon. Friend realise that the profitability of British industry has been seriously affected by the three-day working week that was introduced by the Conservative Government? Will he do his utmost to help industry out of the difficulties that are still being experienced as a result of that situation?

Mr. Meacher

It is true that after the Conservative Government had stimulated the money supply in order to float off an investment boom they then, with criminal irresponsibility, banged it on the head by imposing a three-day working week. The effects of that are still being registered and are still a main problem of industry's profitability.

Mr. Heseltine

Will the Minister understand that the length of his answers in no way disguises the paucity of their content? The reality of the situation is that in their first Budget the Government which the hon. Gentleman represents took£1,400 million away from industry.

Mr. Meacher

I have never thought that the poverty of the hon. Gentleman's questions was any reflection on his intellect. As to the changes that were made by my right hon. Friend the Chancellor in his first Budget, there were very good reasons why they were made at that time. The social contract had certain essential requirements, and at that time it was an opinion that was widely held. The changes made by the Chancellor were concerned largely with tightening the Price Code, the last quarterly report on which makes it clear that those changes have not been a main factor in reducing industry's profitability.