HL Deb 13 November 1974 vol 354 cc776-8
LORD FRASER OF LONSDALE

My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government to state what steps they are taking to encourage increased profits in free industry and the nationalised industries so as to provide enough money to meet the Government's requirements for all charges upon the Exchequer.

LORD JACQUES

My Lords, my right honourable friend the Chancellor of the Exchequer yesterday announced a series of measures to improve company profitability and liquidity. He also made clear the Government's determination to safeguard the health and efficiency of the nationalised industries by phasing out as quickly as possible those subsidies which are paid in compensation for price restraint.

LORD FRASER OF LONSDALE

My Lords, while congratulating the Chancellor and the Labour Government upon this attitude, may I ask whether "profits" is now no longer a dirty word but is recognised to be the requisite for the life of this land, without which we could not do any of the good things that we want to do?

LORD JACQUES

My Lords. "profits" has never been a dirty word. What really matters is what is done with the profits.

LORD ORR-EWING

My Lords, will the Minister acknowledge that the majority of wage demands and wage rises now being made go far beyond the guidelines laid down in the social contract?

THE LORD PRIVY SEAL (LORD SHEPHERD)

My Lords, that has nothing to do with this case.

LORD ORR-EWING

My Lords, it has to do with the Question, if the noble Lord the Leader of the House will allow. Curiously enough, the biggest inflationary factor, acknowledged by the Government of the day, is wage demands and wage rises. That point was made in the Budget speech yesterday. Secondly, is the noble Lord aware that the Budget, with its predicted steep rises in the cost of rates, gas, electricity and transport, will not adequately compensate industry for the steep rises that it is having to meet, and will not cure the serious cash problem which is now affecting thousands of firms in this country?

LORD JACQUES

My Lords, the measures are aimed at providing the right cost environment in which companies can operate efficiently and profit- ably. The Price Code and the corporation tax measures are directed at the point where inflation has hit hardest. These, together with the proposals to ensure an adequate supply of short and medium term finance, should mean that firms which are basically efficient will find that adequate financial resources are available. In addition, where the current economic climate threatens firms which are otherwise viable, funds will be made available selectively under the Industry Act.

LORD BLYTON

My Lords, is the Minister aware that since 1947 all Governments, for political expediency, have refused the nationalised industries increases of prices at given times over the years? Is he further aware that some of us are pleased that now the people will at least have to pay an economic price, and that the nationalised industries will then show a profit? I hope that the Tory Party will not exploit the fact that energy costs must increase.

LORD JACQUES

My Lords, I entirely agree.