Business Failures: April-June Quarter (Hansard, 27 July 1981)

§ Lord Hatch of Lusby
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The Minister of State, Treasury (Lord Cockfield)
My Lords, the available evidence does not support the noble Lord's claim that the number of business failures in the April to June quarter was a record. On the contrary, the evidence is that failures may well now be on a downward trend.

§ Lord Hatch of Lusby
My Lords, I have made no statement; I have asked a Question. Can the noble Lord confirm or deny that in the quarter mentioned in my Question, April to June this year, 2,296 companies went into liquidation; that this brought the total for the first six months of this year to over 4,500, which is 44 per cent. more than in the relevant period for 1980? Is this what the Government mean when the Prime Minister talks about industry being fit and lean?

§ Lord Cockfield
My Lords, the noble Lord's Question consisted of a statement, namely, that there was a record number of business failures, followed by a conclusion that he drew from it. If he would care to refer to the publication Financial Statistics by the Central Statistical Office, he will find that the number of business failures in 1975 was higher than it was in 1980; he will find that the number of business failures in 1976 was higher than it was in 1980; he will find that the number of business failures in 1977 was only marginally less than it was in 1980. I place no weight on these particular figures. But what they do illustrate is that the number of business failures is much more related to the progress of a recession than to the economic policy of any particular Government. If the noble Lord now wishes to look at the number of failures for the quarter ended June, which was the quarter specifically mentioned in his Question, he will find the latest figures in the publication British Business which appeared on Friday. The figures are necessarily incomplete because of the disruption in the Civil Service, but in so far as they go—and I stress those words—they suggest that the total number of failures is falling rather than rising.

§ Baroness Llewelyn-Davies of Hastoe
My Lords, while noting—and may we ask him why?—that the noble Lord did not mention the 1979 figures, may I also ask him whether he thinks it proper to question the nature of the Parliamentary Question which my noble friend put down, which was presumably passed by the Table? It appears to us to be not a statement but a Question, and it comes rather ill from the noble Lord to dispute it.

§ Lord Cockfield
My Lords, I entirely disagree with the noble Baroness. It is not unusual for Questions to contain statements of fact. Where those statements of fact are wrong or questionable, I think it is only right that this should be pointed out.

§ Lord Nugent of Guildford
My Lords, is my noble friend aware that the Table Office has no responsibility with regard to the form of a Question? The form of the Question is entirely the responsibility of the noble Lord putting it down.

§ Lord Cockfield
My Lords, that is entirely correct, which is why I refrained from following up the point made by the noble Baroness about the Question having been passed by the Table. It is not at all unusual for Questions to contain statements of fact, because the Question presumably is based upon something, although the noble Baroness is no doubt acquainted with many Questions based on nothing at all; but some Questions are based upon something, and if 549 what they are based upon is questionable, I think it not unreasonable to point that out.

§ Baroness Llewelyn-Davies of Hastoe
My Lords, is the noble Lord aware that the Clerks do give the many individual Members of our House a great deal of advice which we very willingly accept? Is he further aware that we on these Benches feel that if he approached these Questions with a good deal less cynicism we should enjoy his Answers much better?

§ Lord Cockfield
My Lords, I must take exception to the remarks of the noble Baroness. The noble Lord, apart from making a statement, was asking for some information, and I was endeavouring to draw his attention to the information that was available. The information which is available does in fact indicate what I said. I see nothing controversial about this; I made no attack of any sort on the record of the Labour Government; I could easily have done so. All I did was to draw attention to the fact that in the last recession, which like this one was sparked off by an oil price explosion, we also had a rise followed in due time by a fall in the number of business failures. This is a well known fact, and I cannot see why it should be regarded as controversial.

Baroness Sharpies
My Lords, would my noble friend agree that as a result of the loan guarantee scheme and the start-up scheme, which began only a month ago, the signs are extremely encouraging?

§ Lord Cockfield
My Lords, I am most grateful to my noble friend. These are measures which have been taken by the Government to assist the creation of new businesses.

§ Lord Shinwell
My Lords, is the noble Lord aware that many of us admire his capacity to defend very adequately the Government's economic policy? However, would he not sometimes yield a little and admit that the Government's economic policy has not been altogether an unqualified success?

§ Lord Cockfield
My Lords, I am always grateful to the noble Lord for his assistance. I do not think that from the dawn of history any economic policy, or indeed any other policy, has been an unqualified success. All I claim is that we have done better than our predecessors—a very modest claim.

§ Baroness Macleod of Borve
My Lords, can my noble friend give us the figures for the same quarter of businesses that have started as opposed to those that have failed?

§ Lord Cockfield
My Lords, it is very difficult to give a straight answer to that question. There are an enormous number of new businesses which have been created. Last year, for example, there were 70,000 new companies registered, compared with something like 5,000 or 6,000 which were liquidated. But it would be quite wrong to pretend that we have 70,000 entirely new enterprises compared with only 5,000 or 6,000 which have disappeared.

§ Lord Beswick
My Lords, when the noble Lord says that the failures are due to the economic recession and not governmental policy, are we to understand from him that Government policy has no effect one way or the other upon the recession?

§ Lord Cockfield
My Lords, the Government's policies are designed to provide a long-term solution to the problems which have been posed by the recession.

Lord Morris
My Lords, does my noble friend find it in any way regrettable that a Question can have been tabled in your Lordships' House in terms of petulant sarcasm?

§ Lord Cockfield
My Lords, I would only say that we all greatly regret the number of business failures. There is no dispute between the two sides of the House on that issue. But I do not think that it is really helpful if one tries to exaggerate the size of the problem. That is the only point that I have been trying to make.

§ Lord Jenkins of Putney
My Lords, does the noble Lord not agree that his party is supposed to be the friend of the businessman? Would he not further agree that some businessmen are beginning to regret the money that they have poured into the Conservative Party?

§ Lord Cockfield
My Lords, the present Government are the friend of all the people in this country.

§ The Lord President of the Council (Lord Soames)
My Lords, I think that we have had a fair crack at this Question and it is, I believe, the feeling of the House that we should move on to the next Question.