The Government is to assume liability of up to £2.5million on any losses incurred by manufacturers of machine tools under a new scheme announced by anthony Wedgwood Benn, Min ter of Téchnology, on December 14th. Under the scheme, the industry will be able to build up to &5m. worth of equipment for stock, knowing that the Government will assume liability om losses incurred when the equipment is eventually sold. Mr. Haviland, chairman of Stavely Industries, put an idea of this kind before the Minister of Technology in June, 1965, in the hope that it would help’ the industry defeat the cyclical demand problem which has dogged it for years. When the economy runs down, machine tool makers find themselves with a shortage of orders. Sometimes they have to lay off skilled men, and when the pace of activity quickens again they cannot win these workers back from other industries. This means that they cannot cope with the flood of orders, they normally face. Consequently, delivery dates lengthen, and many buyers turn to . overseas suppliers, with the result that imports soar. In addition, many medium-sized concerns simply cannot afford to build for stock, or will not accept the risks invived. Mr. Haviland suggested that the Government should back an insurance scheme designed to lessen the risk. This is precisely the system which Mr. Anthony Wedgwood Benn has announced. He said that stockbuilding programmes would de agreed between individual firms and his department. The scheme would be introduced immediately, on an experimental basis. "The Government is prepared to assume a maximum contingent liability of &2.5m," he sfid, in a speech on Decmber 14th, which will enable £5m—worth of machines to be built for stock. The extent of the contingent liability will kept under review in the light of the response from industry. My department will charge a premium of 1 per cents on the estimated cost of the stock, and willaccept:.50..per-cent. of any net loss arising from the sale of the total stock in hand or in course of production at December 31, 1968, he added.
The Government seems to be prepared to do anything rather than face the abvious answer to problems like these: nationalisation under workers control. Then we could have a national plan to help to overcome the cyclical affects of world trade and other aspects of capitalist instability. This would be far better than giving money to big business.