British Leyland

HC Deb 01 December 1975 vol 901 cc1233-5

7. Mr. Hurd

asked the Secretary of State for Industry what sums of public money have so far been advanced to British Leyland.

Mr. Varley

Following the Government's acceptance of the Ryder Report as a basis for policy, £200 million of equity capital has been provided to the company.

Mr. Hurd

Is the Secretary of State aware of the widespread anxiety among car component manufacturers that Leyland, as part of its new investment programme, will manufacture components such as car heaters, which may put at risk existing manufacturers? Will he give an assurance that he will not allow these very large sums of public money to be used in such a way that they destroy existing firms and efficient suppliers?

Mr. Varley

I know that the hon. Gentleman is concerned about this matter. Representations have been made to us by the Society of Motor Manufacturers and Traders, and I believe that representatives saw my right hon. Friend, Lord Beswick, a few weeks ago and expressed their concern to him. Since then we have been in touch with the National Enterprise Board and with British Leyland. A balance must be struck between British Leyland's buying in components from manufacturers and using its commercial judgment. Everyone concerned is aware of this. We are also aware of it and are taking it into consideration.

Mr. Heseltine

Will the Secretary of State remember that when it was decided to put substantial sums of money into British Leyland it was also firmly announced by the Government that no further money would be injected unless the results proved satisfactory? Therefore, what instructions has he given to Lord Ryder as to the rate of return he is expecting on the £200 million? Is the Secretary of State satisfied that in terms of both industrial relations and profit forecasts. British Leyland is achieving the return upon which the next tranche of the money must depend?

Mr. Varley

The hon. Gentleman is absolutely right. When the Prime Minister made his statement on British Leyland to the House, he said that some improvement would have to be made in productivity and in labour relations. There has been some improvement, but there is a long way to go. We have made that plain to Lord Ryder and to those who work in the industry. Equally, the unions themselves are co-operating and, I believe, want to co-operate. But if there is not an improvement, we shall certainly stand by the original statement made by the Prime Minister.