Government Trading Funds Bill

Part of New Schedule – in the House of Commons at 12:00 am on 19th June 1973.

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Photo of Mr Robert Cant Mr Robert Cant , Stoke-on-Trent Central 12:00 am, 19th June 1973

That raises a very important point. The Young Conservatives' bible, the Economist has on a number of occasions, and particularly in its penultimate issue, heavily criticised the Government for being far too lenient with industry and far too tough in other respects. Those of us who have to meet constituents from time to time notice that there is a subtle discrimination, even in the present context, between the way in which the Government are preventing nationalised industries from increasing their prices, and their attitude towards, say, the manufacturers of fish-fingers where an increase of 20 per cent. is quite acceptable to the Price Commission.

If the Government's policy is to be the same towards these hybrid institutions, is there any sense in trying to apply all these commercial criteria? When we are testing their performance in respect of profits, margins, surpluses, and so on, this is totally unrealistic because we do not allow them to charge the prices they wish to charge.

I have misgivings. All this introduction of public dividend capital to give the enterprise an air of commercialism so that they will take the rough ride into the market place, is rather bogus. I agree to some extent with the hon. Member who made the point that unless we have a flexible pricing policy, allowing the industries to charge the prices they believe to be realistic, all that will happen is that the public dividend capital will be much cheaper than fixed interest capital because no interest will be paid. The British Steel Corporation is enjoying something of a bonanza in this particular respect at present.

Perhaps the phrase "break-even" gives the key to the Government's policy in respect of what will happen to these industries, as has happened to the nationalised industries. They will not suddenly be expected to be imbued with a commercial spirit and to adopt aggressive marketing policies which will substantially increase their profits. They will be trampled down in exactly the same way as nationalised industries are now. The real target they have to aim at is not profitability but this somewhat austere phrase "break-even". Whenever I see the phrase "break-even", I think that we are adopting a policy in which we are seeking the worst of both worlds and in the last resort probably getting it.