HC Deb 10 December 1979 vol 975 cc895-6
8. Mr. Marlow

asked the Secretary of State for Industry what action he is taking to reduce the impact of high interest rates on small businesses.

The Under-Secretary of State for Industry (Mr. David Mitchell)

The Government recognise that the high interest rates add to the difficulties faced by businesses of all sizes. But we must pursue our policies to control monetary growth if inflation is to be squeezed out of the economy. That is the most effective action we can take to assist small firms.

Mr. Marlow

Since Conservative Members believe that small businesses are the engine of future economic well-being, and as such businesses will be squeezed by the forthcoming world recession, and by their customers retaining cash because of high interest rates, will my hon. Friend be more positive? I am sure that many small businesses throughout the country will wish to hear a more realistic appraisal from the Government.

Mr. Mitchell

There is no greater destructor of small businesses than rampant inflation, the removal of which has to be our first priority.

Mr. Cryer

Is it not true that high interest rates are smashing small businesses? Is it not also true that the attitude of the Government towards large public and private enterprises, such as British Leyland, for example, will take its toll on small businesses? Does the hon. Gentleman accept that when the Government attack large enterprises they are, in turn, attacking many small businesses which supply components and services?

Mr. Mitchell

The future of British Leyland depends upon the management and workers. We fully recognise the implications for the smaller business community.

Mr. Bruce-Gardyne

Will my hon. Friend always treat advice from the hon. Member for Keighley (Mr. Cryer) with all the respect that it deserves? Is he aware that when the hon. Gentleman held the position my hon. Friend now occupies he was described as being about as suitable to look after small businesses as Jack the Ripper would have been to look after a nurses' home?

Mr. Mitchell

I shall not comment on that, save to say that the only piece of furniture that I inherited from the hon. Gentleman was a picture of a twisted railway line ending in a brick wall. I draw my own conclusions.

Mr. John Evans

Does the hon. Gentleman agree that unless the Government reduce interest rates quickly the only growth industry in Great Britain will be bankruptcy?

Mr. Mitchell

I am aware that the efforts of the Labour Government led to the highest rate of bankruptcy that has ever occurred in Britain's history. We recognise that the consequences of dealing with the problems of inflation, which we inherited, will be difficult for small businesses. We have taken that on board. Unless we squeeze inflation out of the economy we shall do immense damage to all businesses, large and small.