§ 1. Ms. Clare Short
asked the Secretary of State for Trade and Industry what is his latest estimate of the number of bankruptcies which occurred in 1983; and how this compares with the figure for 1982.
§ The Under-Secretary of State for Trade and Industry (Mr. Alexander Fletcher)
The number of bankruptcies in England and Wales is provisionally put at 7,000 compared with 5,700 in 1982. The figures cover all individuals and partnerships and include deeds of arrangement.
§ Ms. Short
Does the Minister agree that, with such a high death rate for firms, there is no point in seeking to give aid to new small businesses, and that without a change of economic strategy we shall not achieve economic growth or an end to unemployment, but will have continuing bankruptcy and failure?
§ Mr. Fletcher
I disagree with the hon. Lady. The number of new businesses has increased. The number of new companies registered last year was about 9,000 more than in the previous year. That has occurred as a direct result of Government policy, and outside objective support for that came yesterday from the CBI's quarterly survey, which showed that profits and productivity are rising fast.
§ Mr. Kenneth Carlisle
Will my hon. Friend confirm that when considering bankruptcies it is, as he said, important to note how many new businesses are being created, for that is the other side of the equation? Are not the figures which he gave of new businesses greatly encouraging for the future of employment and for business generally?
§ Mr. Ashdown
Is the Minister aware of the time that has elapsed since the publication of the Cork report on 246 insolvency? Does he recognise that there is urgent need for action in this area? Will he give the timetable for legislation and make a statement on his proposals following Cork so that we may have an idea of when action will be taken?
§ Mr. Nicholls
Is it not a fact that in some ways the figures are even better than my hon. Friend suggested, because over the years 1980, 1981 and 1982 there were 363,000 new businesses, with only about 343,000 going out of business, so that over a three-year period there was an increase of about 20,000?
§ Mr. Fletcher
I am grateful to my hon. Friend for making that point. One of the main reasons was that the average rate of inflation in 1983 was 4.6 per cent., the lowest for 16 years.
§ Mr. Janner
Is the Minister aware that there can be no excuse for the shattering and disgraceful increase in the number of individuals going bankrupt? In view of the agonising way in which people are suffering as a result — and at which the Minister is apparently laughing—may I ask for a firm date when the House will have the promised White Paper arising out of the Cork report? May we have a date now, please?
§ Mr. Bill Walker
Does my hon. Friend agree that firms usually go bankrupt when their expenses exceed their revenue and that that is often the result of bad management and the high rates levels imposed by local authorities?
§ Mr. Fletcher
There are many factors which cause it, and when my right hon. Friend publishes the White Paper it will be seen what steps the Government are proposing to try to make directors and managers of businesses more responsible in their financial affairs.
§ Mr. Shore
I am sure the Minister is aware that the question refers to companies, and the normal measure of the failure of companies is liquidations rather than bankruptcies. Will he confirm that last year over 13,000 British companies went into liquidation, the highest figure for any year this century? Is he aware that that makes a total of about 44,000 British companies which have gone into liquidation since the Conservatives assumed office in May 1979? Does the hon. Gentleman expect the record number for 1983 to be smaller, or larger, in 1984? If he thinks that it will be smaller, will that be due to the fact that the British economy has had the stimulus of an unexpected increase in public expenditure here at home, or will it be because the United States Government, through their record increase in spending, are stimulating the economies of the West, including our own?
§ Mr. Fletcher
The question refers to bankruptcies. About 9,000 more companies were registered in 1983 than in 1982.