§ 11. Mr. William Hamiltonasked the Secretary of State for Industry if he will make a statement on the amount of financial aid to be given to Lonrho; and what are the conditions attached to it.
The Minister of State, Department of Industry (Mr. Alan Williams)The purpose of the £4.9 million is to save 1,800 jobs in special development areas. The main conditions provide that it is secured and repayable in equal instalments from January 1979. It is interest-free up to the end of 1977: thereafter interest is payable at the rate of 10 per cent per annum until January 1981 and at 12 per cent. per annum for the remaining two years. I understand that the workers involved welcome the outcome.
§ Mr. HamiltonDoes my hon. Friend understand that we would all accept the need to preserve jobs, especially in a development area? Will he also understand that the terms which he has outlined are not sufficient to satisfy many Labour Members? Does he not appreciate that we are dealing with a firm which is the very epitome of the ugly and greedy face of capitalism? Why do not the Government take a considerable equity share in this company rather than allow themselves to be subjected to the kind of terms that my hon. Friend has announced to the House today?
Mr. WilliamsObviously I looked at all possibilities when we were considering the proposal. Brentford Nylons was available on the market from February. The only meaningful offer to come forward was that from Lonhro. In those circumstances we felt that, in view of the alternative capital commitment which would be required for the co-operative venture which was suggested but which never came forward—we estimated that it would cost at least £12 million and 18 probably nearer £15 million—this was the most appropriate and cheapest way of saving jobs.
§ Mr. AdleyWe realise that many Socialists prefer unemployment to capitalist jobs, but will the Minister of State support the view of Mr. Joe Wright, the convener at the Brentford Nylons factory at Cramlington, who greatly welcomed the Lonhro intervention and the Government assistance and reject what Mr. Wright called the "ill-informed criticism" of Members of Parliament and others who are concerned only to ventilate their own dogmatic views regardless of the effect on other people's jobs?
Mr. WilliamsIn view of the developments of the past few weeks, it is understandable that hon. Members would be concerned about this proposition. It is helpful that as many of the facts as possible should be brought out. That is why I welcome this Question, because it enables me to explain more fully to my colleagues, and indeed to all hon. Members, why I made the recommendation that I did.
§ Mr. HefferWould not my hon. Friend agree that it is perfectly understandable for workers in any factory who are faced with dismissal to accept and, indeed, clutch at a straw which will save their jobs? The statements made by the shop stewards are perfectly understandable in the circumstances. Would my hon. Friend not also agree, however, that Labour Party policy over the years has been that, where public money of this kind is to be used, an attempt should be made to take equity shares so that the Government and the community at large get something back from the public money which is put in? Does my hon. Friend understand that no one is opposing the saving of jobs but that the Government should have done something about taking over the company?
Mr. WilliamsI appreciate my hon. Friend's reference to equity participation, but in this case what was needed was a short-term infusion of capital to enable management expertise to be obtained and to get correct marketing links. We believe that the procedure we followed was the best and the most inexpensive way to do it.