§ 5. Mr. McFall
To ask the Secretary of State for Trade and Industry when he next plans to meet representatives of the high street banks to discuss business bankruptcies and banking policy.
§ The Minister for Corporate Affairs (Mr. John Redwood)
The Chancellor of the Exchequer has met with the chairmen of the leading banks recently. The Treasury is conducting an inquiry into the relationships between banks and businesses and the Department of Trade and Industry has assisted by organising through each regional office a meeting between banks and business men passing on full information from those meetings to the Treasury. We await the Chancellor's conclusions.
§ Mr. McFall
In this David and Goliath struggle between small businesses and banks, what does the Secretary of State intend to do to redress the imbalance? How does he view the written contract proposal under which banks could not increase interest rates and charges without due notice? Businesses are collapsing at the rate of 1,000 a week. When, oh when, will the Government do something about small businesses?
§ Mr. Redwood
I have seen the Forum of Private Business proposals, to which I believe the hon. Gentleman is referring. They have been passed to the banks for comment, and will be one of the matters on which the Chancellor may touch when he produces his conclusions. 304 [HON. MEMBERS: "When?"] The Chancellor will produce his conclusions as soon as he finishes his review. I am sure that hon. Members will want this to be a good review that takes into account all the evidence that the forum and others have passed to the Treasury. We all await the outcome of those findings with interest. The hon. Gentleman may also have noticed that the Forum of Private Business did not want to see the matter referred to the competition authorities because it thought that that would take too long.
§ Sir Robert McCrindle
Irrespective of the lack of sensitivity with which banks have sometimes been prone to deal with their small business customers, does my hon. Friend agree that so far there has been no evidence of a cartel among the banks? Would it not have been on that basis, and that basis alone, that the Government could have been asked to intervene?
§ Mr. Redwood
My hon. Friend is right in that, for the competition authorities to intervene, there would have to be evidence of cartel collusion or anti-competitive practices. That is a matter for the Director General of Fair Trading. He has not completed his review. He made a preliminary statement the other day, in which he said that at that date he did not have sufficient evidence to instigate an inquiry, but his preliminary inquiries are continuing. We have sent him other evidence and we await his findings, which will be made public in some form or other after the Chancellor has presented his conclusions.
§ Mrs. Mahon
Given that the Machine Tools Technologies Association recently told a group of Labour Members of Parliament that the industry could be wiped out in the next six or nine months, is not the Minister worried that industry has so little confidence in his Department? The association went further and said that it lacked confidence that the DTI could do anything to help small and medium-sized businesses, and that it was easier to get an audience with the Pope or Gorbachev than with a Minister in his Department. Does not that reflect a complete lack of confidence in what the Government have done for the past 12 years?
§ Mr. Redwood
Ministers in the DTI are ready and willing to meet business, and do so regularly. Many such meetings occur, day after day and week after week, with Ministers and officials in the Department because we are interested in and concerned about what the business community is saying, as we are its voice in Whitehall. As for the industry to which the hon. Lady refers, it has reported great success in exporting in recent months and in the past year. The DTI will do all that it can, with my hon. Friend the Minister for Trade in the lead, to promote its exports abroad and to work closely with it. I recommend that its representatives get in touch with the Minister for Trade if they are concerned mainly about exports and orders. The Government want to see banks supporting all good, viable businesses and I am sure that banks will listen to that message.