HC Deb 01 March 1976 vol 906 cc898-900
8. Mr. Ridley

asked the Secretary of State for Industry if he will publish in theOfficial Reportthe full list of conditions attaching to the rescue of Chrysler United Kingdom Ltd.

Mr. Varley

Copies of the agreement that I reached with Chrysler Corporation and Chrysler United Kingdom, together with supporting documents, are available in the Library. The conditions are set out in the agreement.

Mr. Ridley

Does the right hon. Gentleman agree that in the expenditure of £162 million, the legal conditions are woefully inadequate? Does he further agree that there is nothing to stop Chrysler's siphoning off this money to America? When spending public money the Government should impose stricter conditions before they indulge in such largesse.

Mr. Varley

The hon. Gentleman has got it wrong. The £162 million is a contingent liability. Whether that liability falls on the Government will depend on a series of factors, which have been debated on many occasions in the House. There is no reason to believe that it will happen. The money will not be siphoned off to the United States. The monitoring is being conducted by Coopers and Lybrand, the Department's advisers, and we shall receive up-to-date reports, as required.

13. Mr. Moonman

asked the Secretary of State for Industry what commitments have been made with Chrysler should the losses in the current year exceed £60 million.

Mr. Varley

None, Sir.

Mr. Moonman

I understand that there is a limited liability and that the company will make no further payments beyond £10 million, should the debts go beyond £60 million. Some of us are worried because there is still no information about monitoring. Who are the Government's representatives monitoring the company?

Mr. Varley

I read with great interest my hon. Friend's letter in The Times this morning. I have already announced that Messrs. Coopers and Lybrand have been engaged on behalf of the Department to help with the monitoring. I am not yet in a position to announce the names of the Government directors. I hope to be able to say something within the next few weeks. Chrysler United Kingdom is to enter into a planning agreement with the Government, and I hope to be able to initiate discussions on that very soon. It is also to resuscitate its worker-participation scheme, which it mooted some time ago.

Mr. Nelson

Will the Secretary of State now answer the main Question? As Chrysler's share of the market is still substantially below what it will have to achieve to meet its objectives, there must be a chance that its losses will exceed £60 million. Just what is the taxpayer's liability if that should happen?

Mr. Varley

It is far too early to jump to the conclusion that there will be losses exceeding £60 million. I think that £18 million has so far been paid to Chrysler. The information that Chrysler gave to the Government in our discussions suggested that losses this year could be £40 million. There is a formula for the other £20 million. If the losses exceed £60 milion, which I do not think they will, the Government will have to consider the situation afresh, but no provision has yet been made.

Mr. Madden

To revert to the question asked by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), does my right hon. Friend consider a net increase in the size of the board of Chrysler United Kingdom to be justified? Does he agree with middle and senior management of Chrysler United Kingdom being made redundant and then retained as industrial advisers? Does he not think that that it is a highly dubious practice?

Mr. Varley

I am not going to get involved in the day-to-day management of Chrysler United Kingdom. We have made provision, so far as possible, to undertake the monitoring. It would be intolerable for me to assume that I can run Chrysler United Kingdom. I shall not do that or attempt to do it. As for the way in which the board is constituted, that is a matter for the Chrysler Corporation and Chrysler United Kingdom.

Mr. Tom King

The Secretary of State said that he had made provision for monitoring, and then said that he did not intend to become involved in the day-today activities of Chrysler. Is it not outrageous that three months after the matter arose there are still no Government representatives? Since the Secretary of State appears to wash his hands of the matter, will he put in some Government directors to ensure that this vast amount of taxpayers' money is properly overseen.

Mr. Varley

Shortly.