§ 17. Mr. Ernie RossTo ask the Secretary of State for Trade and Industry when he next plans to meet representatives of Trade Indemnity to discuss the number of business bankruptcies.
§ Mr. SainsburyNeither I nor my right hon. Friend has any plans to hold such a meeting.
§ Mr. RossHas the Minister read the recent Trade Indemnity report, which showed that business failures rose by 90 per cent. in the third quarter of 1990 and predicted that those figures will remain the same through much of next year? Is he aware that 24,442 firms failed in 1990? How does he propose to deal with that catastrophic failure in businesses?
§ Mr. SainsburyI draw the hon. Member's attention to the fact that the figures from Trade Indemnity are not comprehensive, as they relate only to the businesses where Trade Indemnity has a liability. I also draw his attention to the fact that, although insolvencies are always a matter of regret, the percentage of the total stock of businesses that encountered insolvency in 1990 was in no way out of line with the experience of the 1980s. A dynamic economy will always feature a high turnover of firms.
§ Mr. BatisteDoes my hon. Friend agree that, if there has been a record number of new company start-ups over a long time, there is bound, in a recession, to be a record number of bankruptcies? What matters is that British industry is able to compete effectively in the increasingly competitive environment that will exist in Europe post-1992 and to sell its goods on quality, not just on price.
§ Mr. SainsburyMy hon. Friend is entirely right. In 1990 there were one third more businesses and, therefore, in a dynamic economy, there will inevitably be more bankruptcies. What is necessary for success is a high degree of productivity and innovation. That is what the Government's policies are encouraging.