Rolls-Royce (Hansard, 21 April 1971)

§ 3. Mr. Dalyell
asked the Minister of Aviation Supply what assessment he has made of the debt incurred by Rolls-Royce, involving the development and sale of Bristol-Siddeley engines, such as the Spey.

§ Mr. David Price
I have been asked to reply.
None, Sir.

§ Mr. Dalyell
In that case, what guidelines have been laid down for the Receiver?

§ Mr. Price
There are no guidelines laid down for the Receiver in those terms. If I may go back to the hon. Gentleman's original question, I should say, in order to get his facts right, that the Spey engine was not developed by Bristol-Siddeley.

§ 13. Mr. Dalyell
asked the Minister of Aviation Supply if he will make a further statement on his negotiations with the Rolls-Royce sub-contractors.

§ Mr. David Price
I have been asked to reply.
Negotiations with Rolls-Royce subcontractors about amounts owing to them from Rolls-Royce Ltd. are the responsibility of the Receiver.

§ Mr. Dalyell
I accept that this is a very delicate moment, but do the Government accept that some of us are rather baffled about the relationship between the Government and the Receiver and think that sometimes the Government are passing the buck to the Receiver when it suits them and accepting responsibility again when it suits them? Equally, could the hon. Gentleman perhaps have some discussion with the bankers of the sub-contractors to help tide them over the difficult months ahead?

§ Mr. Price
The hon. Gentleman will find the relationship between the Receiver and unsecured creditors clearly laid down in the appropriate Section of the Companies Act. With regard to the question of banking facilities that some of the sub-contractors may require, he will recall that at the beginning of this series of episodes following the collapse of Rolls-Royce my right hon. Friend the Chancellor of the Exchequer said that the 1157 banks, within normal commercial judgment, would not be limited by the normal credit ceiling.

§ 16. Mr. Barnett
asked the Minister of Aviation Supply if he will make a further statement on Rolls-Royce.

§ Mr. Corfield
I have been asked to reply.
Beyond what I have already said today in answer to previous Questions, I have at present nothing to add to my previous statements. I will inform the House as soon as I have.

§ Mr. Barnett
One does not expect the right hon. Gentleman to go into detail at this stage, but could he confirm that the Government are still insisting, as they have always done, that, whatever the outcome of the proposition, it will be economically viable? Whilst he is dealing with that, could he also deal with the question of the sub-contractors? There is no point in asking the banks to lend to companies which are in many cases in a worse position than when he accepted the advice in respect of Rolls-Royce. Could he not give stronger advice to the sub-contractors as to what percentage they might hope to be able to get on their unsecured debts?

§ Mr. Corfield
I am sure that the hon. Gentleman, from his personal experience, recognises that that is not a fair question to ask. It is quite impossible, until the Receiver knows the outcome of the Rolls-Royce negotiations, to make even a guess as to the sort of dividend that would be paid.

§ Mr. Adley
In view of the mischievous suggestion made earlier—and the way it was put—by the hon. Member for Stockton-on-Tees (Mr. William Rodgers), will my right hon. Friend confirm that if Lockheed had been a viable company throughout it would not have been necessary to look for help from Congress and we would not be in the present situation?

§ Mr. Corfield
This is the basic problem. We are dealing with a company which itself is known to have very considerable financial trouble.

§ Mr. Sheldon
The statement made by the right hon. Gentleman in reply to my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers) is a crucial matter 1158 which has been raised for the first time in this House—that the future of Rolls-Royce very largely depends on the U.S. Congress. It is likely that Congress will take many months, during which time this country will be spending at the rate of £5 million to £6 million a month on Rolls-Royce. Do the Government intend to cancel the project and throw away all this money if Congress refuses to give them the support for which they are asking?

§ Mr. Corfield
It is absurd to say that the future of Rolls-Royce depends on this. The future of this particular project must depend not only on what we are prepared to do for Rolls-Royce but on what Lockheed is capable of doing itself. That surely is obvious. If it transpires that in order to get the necessary assurance of Congressional approval some time will be involved, it is our intention to keep the project going while there is a reasonable chance of being able to continue.

§ Mr. Biffen
Is my right hon. Friend aware that there will be general appreciation for the frankness with which he has answered questions on this particularly delicate point today? Would he therefore take this opportunity to confirm whether or not he is, at this point of time, advised that it is likely that Congressional permission or endorsement will be required for the circumstances in which the contract could be fulfilled?

§ Mr. Corfield
It is early to say whether that is likely or not.

§ Mr. Bishop
Is the right hon. Gentleman aware that yesterday the Prime Minister said, in effect, that it is essential to have guarantees about the future of the aircraft if we are to go ahead with the engine? Is the right hon. Gentleman saying that the future of Rolls-Royce depends on the United States Congress? If that is so, it is a matter of grave concern to this House and to all those whose jobs are at stake.

§ Mr. Corfield
What I made abundantly clear, and what I am sure the hon. Gentleman realises with his background knowledge of the industry, is that to complete this project there must be security of both engine and airframe. It is no good holding out false hopes to people who may be redundant or to creditors and so on 1159 if there is grave danger of the whole project collapsing owing to the inability of Lockheed to proceed with it.

§ Mr. Walter Johnson
Now that the receiver has been able to assure debenture holders that they are going to be paid in full, will the right hon. Gentleman ask him to make a similar statement to people who have invested their savings in workers' shares in Rolls-Royce? It is a worrying feature that those people who, advised by the company over the years, invested in Rolls-Royce now stand to lose their money, Will he ask the Receiver to make an early statement on this matter?

§ Mr. Corfield
The hon. Gentleman must appreciate that any question of workers' shares and our ability to reinstate them depends on the financial structure of the new company, and that is not a matter for the Receiver.