MG SPORTS CAR

HC Deb 17 December 1979 vol 976 cc244-56

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Le Marchant.]

1.29 am

Mr. Robert Adley (Christchurch and Lymington)

I am glad to have the opportunity, albeit at 1.29 am, to raise the question of the future of the MG sports car, which is at this moment in some doubt.

By way of declaration of interest, I should explain that my brother-in-law is a former MG-sponsored racing driver, and for that reason our family is extremely interested in the future of this motor car. The fact that a number of my hon. Friends are sitting around me, accompanied by a number of MG fans in the Gallery of the House at this time of the morning, is an indication of the widespread interest in this subject.

It is a national issue, as the MG car still accounts for more than 50 per cent. of British Leyland sales in the North American market. The success of the MG, which it is still enjoying, is a success in spite of and not because of the interest of the management of British Leyland in this motor car.

Tonight I wish briefly to look at the matter from the point of view of the Government and of British Leyland. I make it clear to my hon. Friend the Minister that we are not here to ask the Government to supply money. We are not seeking anaesthetics for lame ducks. The situation as far as MG is concerned is quite the reverse. We want the Government to encourage the rolling back of the dead hand of State intervention, which has brought MG to its present situation. MG is to British Leyland as Asprey's is to Bond Street. It is the star in a sea of mediocrity. It will not be the Allegros and Marinas that will leave their trace on motoring history for Britsh Leyland.

My right hon. Friend the Secretary of State for Industry has, to my displeasure, constantly repeated that it is not his intention to intervene in the MG affair. What does he mean by non-intervention? Non-intervention to me—and I am sure that my colleagues who are present will agree—means not using the taxpayer to save the inefficient, the unproductive and the unmarketable from their deserved fate. We support that definition, but surely in the case of MG it does not mean sanctioning the creation of a State monopoly of British sports cars at the expense of the national interest and private enterprise.

British Leyland's commercial interest in the matter is clear, and it seems to dominate the thinking of my right hon. Friend the Secretary of State. Its interest is in killing off MG as quickly as possible. MG competes with the TR7, and British Leyland is hooked on the TR7, thanks to a long history connected with Lord Stokes, which I shall not go into now. As far as British Leyland is concerned, the sooner it can kill off the MG the better.

The Minister of State, Department of Industry wrote to me on 22 November this year, explaining the Government's position. He said: it would be quite inconsistent for us to require BL to act in any other than their own business interests on a particular issue like MG. If the Government encourage private capital involvement in the case of British Airways and British Aerospace, surely it is consistent to do so in the case of British Leyland.

If the national interest conflicts with British Leyland's commercial interests, I believe that the Government have an important role. In this unique situation of MG, there is that conflict of interest, and, as I see it, the Government's duty is to uphold the national interest above the narrow commercial interests of British Leyland.

My main plea to my hon. Friend tonight is a simple one. When Sir Michael Edwardes comes along and asks for more money for British Leyland, will he make it a condition of the giving of more funds that British Leyland be required to sell off to commercial interests, where there is a willing buyer, those production facilities that British Leyland either cannot or will not maintain? I believe that British Leyland plans, as originally announced for the MG factory, are a national insult. To stick the MG mark on a TR7 is bad enough, but to stick it on a Honda would be totally unacceptable to many thousands of people in this country and around the world.

Mr. John Patten (Oxford)

Does my hon. Friend agree that that insult is equalled by the fact that there is not one Member of the Labour Party here to listen to the debate on the future of a vitally important member of our most important indigenous motor car manufacturing company?

Mr. Adley

I regret their absence. However, I am in full contact with Labour Members and I know that they would prefer to see MG continue private enterprise production rather than go out of business.

The national interest demands that the MG car should be maintained as a British-made sports car, particularly in view of its role in the United States market. The MG car club has 6,000members in the United Kingdom and more than 25,000 members overseas and there are 54 MG car clubs overseas, including those in Yugoslavia and Japan. I doubt whether the Marina or the Allegro will ever claim such distinction.

BL claims that it loses £900 per car sold. It also states that it is selling all the cars that it can make. I am a business man and if I ran my business that way I would expect to get the sack. If the circumstances described by BL are accurate, it is either charging too much for overheads or is selling at the wrong price, or both. It smacks of thoroughly bad management. I wish to see MG saved from the fate which has befallen Riley and Wolseley, which became victims of BL's "progress story".

There is a saviour at hand. I am not here to act as spokesman for Aston Martin-Lagonda. However, that company has expressed a firm financial interest in maintaining MG production by taking over the MG factory from BL. It wishes to maintain and, indeed, to increase the production of the sports car. Above all others, that company is best qualified to provide the proof that in this plastic era there is a growing demand for specialisation, quality and individuality—the qualities which identify the MG car.

I shall quote from two letters among the many that I have received. The first is from an MG dealer, Mr. Beer, of Houghton, who says: If it had not been for my extreme loyalty for the marque MG I would not have suffered BL and would have sold some other make of vehicle. There lies the underlying reason for BL's gradual downhill slide. Any dealer who was really any good and had no inner feelings said enough, I am going foreign'. It is these inner feelings on which we must build in this country. We must not allow these feelings which are so important to be destroyed. I hope that my second quotation will not embarrass any member of the Government. It comes from the political adviser to a member of the Cabinet: It shows a complete misunderstanding of the 'mystique' surrounding MG for British Leyland to suppose the present world-wide following for MG is going to continue for a Honda, or even a Triumph, sold with an MG label. As far as the enthusiast is concerned, the MG 'proper' will have stopped in 1979 and anything sold by British Leyland as an MG after that will have no more attraction than a Marina or an Allegro, and possibly a lot less. The loyalty of the customer and the tremendous achievements of the Abingdon work force have been, and remain, the cornerstones of the success of MG. I hope that my hon. Friend the Member for Abingdon (Mr. Benyon) will catch your eye, Mr Deputy Speaker, and I shall terminate my remarks to a allow others of my hon. Friends to make their contributions.

1.38 am

Mr. Tom Benyon (Abingdon)

I congratulate my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) on the way in which he put across the case for MG nationally. It is more than a national problem—it is very much a constituency problem for Abingdon. The work of MG has continued and flourished for more than 50 years in Abingdon and the proposal is a tragedy for the work force. The crash of 1979 for Abingdon will mean the possible loss of 1,100 jobs and all that that will bring. It is a dash in the teeth for the work that the work force has done for BL and the country over the years. There have been first-class labour relations. The strike record is excellent and low and there is a traditional father-to-son relationship of excellence which has continued over the years.

The Abingdon work force is all that BL does not have in other parts of its empire. It should be regarded by BL as the Cinderella. The "ugly sisters" have told the work force in Abingdon that it cannot go to the jubilee ball. Indeed, the work force has not been told, but the press has told it. Not only that, but the work force was told that it would have to clean the Japanese pumpkin as well.

Not only are 1,100 people in my constituency facing the sack, but the engineering firms in and around the constituency, who make the bits to go inside the MG car, will face tremendous devastation if the plans go through.

I fully recognise that Abingdon forms part of a team, albeit an important part, involved in the manufacture of the car. English sports cars have been built there successfully for the past 50 years. That is what the workers wish to continue to do, and they deserve far better than to spend the rest of their lives unpacking Japanese bits. They feel aggrieved that they have not had answers to the questions that they have asked of the management of British Leyland and that they have not had the position and plans fully explained to them. They deserve much better.

If British Leyland cannot make the sports car pay, it should be sold to the highest bidder. I am delighted that AlanCurtis of Aston Martin is making encouraging noises, but it would be wrong to raise too many hopes and expectations, because they are many problems still to resolve.

May I say to whoever purchases MG—and I pray that a purchaser will be found—that the car should not be made in Kilmarnock, Dumfries or anywhere but Abingdon, where it has been made successfully for the past 50 years?

1.41 am

Mr. Robert Hicks (Bodmin)

I declare an interest as the owner of an MG sports car. It is an excellent car. I have a large and varied constituency. I drive 1,000 miles a month and the MG has been the most reliable car that I have ever had. If it helps me to increase my majority, as it did at the last election, I hope that we go on making them for many more years.

Most people would agree that for the past 20 years this country and the car industry have experienced a period of rapid change. At times one feels that some of the change has been for the sake of change. One consequence has been that we have destroyed some of what is best in Britain.

The MG has an excellent and successful record. It has an international, as well as national, reputation. British Leyland, in its commercial wisdom, has decided to back the TR range rather than the MG. That is its decision, but I believe that it would be a sad day for Britain and for MG and all it stands for if it disappeared from the scene.

The Government and the country as a whole should give every possible encouragement to any appropriate bidder to ensure that MG continues as a car made in the United Kingdom, so that the traditions and strengths that we associate with the car can carry on.

1.44 am

Mr. John Browne (Winchester)

As a Sandhurst cadet, I was the proud owner of a 1934 MG. I also lived for about five years in the United States and I feel strongly about British exports to the United States, particularly MG, which has earned for itself an international name that spells quality of workmanship and motoring enjoyment.

Fifty-four per cent. of British Leyland's sales to the United States are represented by MG. In spite of that, MG has suffered from internal politics within British Leyland. For the good of MG, its management and its employees, and for the good of MG owners throughout the world, I urge the Government seriously to consider the sale of MG by British Leyland. But I urge the Government to beware that a potential purchaser does not buy MG for its name or, most important, for its valuable sales outlets in the United States. The Government must break MG out of British Leyland but ensure that MG cars are still made in Britain, and if possible at Abingdon, where they have been made, to the great pleasure of the motoring public for 50-odd years.

1.46 am

Mr. Nicholas Baker (Dorset, North)

I rise to support my hon. Friends because of the potential for MG in North America. The name MG has passed into the language there like Hoover and Coca-Cola. I have been indirectly contacted by a young American who has a business in Akron, Ohio, which employs six people. It is called University Motors of Akron, like University Motors in London, the MG dealers where he trained. He is amazed that MG might possibly close and cease to be a marque that is marketed in North America. I therefore add my voice to the voices of my hon. Friends.

1.47 am

The Under-Secretary of State for Industry (Mr. Michael Marshall)

We are all extremely grateful to my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) for raising this important question. He, as the House knows, has a long and outstanding record in the protection of the industrial heritage of this country. His work on the SS "Great Britain" is well known. It is typical of him that he should take this task upon himself. I appreciate the support he has had from my hon. Friends the Members for Abingdon (Mr. Benyon), Bodmin (Mr. Hicks), Dorset, North (Mr. Baker) and Winchester (Mr. Browne).

I have the greatest sympathy with the underlying motivations of my hon. Friends and all those outside the House in the general argument that is being put forward in respect of MG. I immediately declare an interest. My first car was an MG TC. I progressed to an MG TF. For 10 years I ran an MGB GT until, sadly and just recently, as the children got too big, I had to move on to quieter pastures.

I can fairly claim to stand comparison with any of my hon. Friends in my commitment to the MG cause. However, I hope that my hon. Friends will be realistic and recognise the problems the Government face in dsicussing the matter tonight. There is, first, the question of the whole future of BL and its corporate plan, which the Government are considering. My hon. Friends will not expect tonight to hear a pronouncement on that broader issue.

My hon. Friends will also understand that while discussions are in progress between Aston Martin-Lagonda and BL, these are commercially confidential. These are two obvious constraints.

I want to take the opportunity of putting what I understand to be the present position. There are one or two fears that I can partly assuage. There has been reference to the famous MG marque, that famous octagon that we all prize so highly. That marque is not, according to the assurances I have heard, likely to be put on a Honda car. BL has ceased production of the smaller of the two MG models, the Midget. The major model, the MGB, is to continue in production until the end of 1980, and stocks will continue to serve the markets, principally North America, into 1981. As I understand it, the present prospect is that at some time during that year a distinctive development of the Triumph TR range will be introduced. This model will carry the MG badge, as may possibly other later BL models.

The reasoning for BL discontinuing the present MG models is based on a number of factors, which many of my hon. Friends will understand but which I should perhaps briefly recapitulate. The first, of course, is the problem of legislation, particularly the emission legislation in the United States. I need not dwell on that very much because I think that the implications are obvious.

Another factor to be considered is product acceptability. Although much can be said and has been said—I specified my own commitment—the fact remains that this model has been around for rather a long time.

The third aspect is that of market size and profitability. My hon. Friend the Member for Christchurch and Lymington touched on this. I think, in fairness, that he will accept that one of the reasons, which everyone can understand, for the difficulties over exports to the United States has been the way that the pound has strengthened against the dollar. This is relevant to the arguments about profitability.

Let me turn now to the main argument advanced by my hon. Friend. He draws a distinction between, on the one hand, what he sees as intervention by way of the provision of taxpayers' money to support an ailing British Leyland and, on the other, intervention with the object of saving taxpayers' money. Despite the ever-lucid way in which my hon. Friend puts the argument, I suggest that the difference is perhaps more apparent than real. My right hon. Friend the Secretary of State for Industry, as I have said, has under consideration the 1980 BL corporate plan. As he said the other day, the plan envisages the provision of public funding additional to that already provided to BL by our predecessors. I cannot, of course, anticipate the outcome of that consideration, but I put this thought to my hon. Friend.

If, for the sake of argument, my right hon. Friend were to come to the House and say that it had been agreed that we should put forward more money from the taxpayers' purse, what justification should we reasonably put to the House? I think that all my hon. Friends will have different answers to that question, but I am sure that no one—least of all my right hon. Friend—would feel it right to present a justification other than that it was to make profitable products, be they models or components.

Mr. Adley

Will my hon. Friend please make clear to the House that he accepts that there may well be occasions when the national interest departs from British Leyland's purely commercial interests, and if this can be seen to be so the former and not the latter will have the Government's support?

Mr. Marshall

I certainly take my hon. Friend's point, and I think that this really means getting down to cases to assess what is truly in the national interest. I think that we shall have to judge that by the test which is exemplified in the old saying that the proof of the pudding is in the eating.

In arguing for intervention, my hon. Friend is, I know, trying to look more generally to what he would see as the national interest, but I think that he will recognise also that if, for example, an outsider approaches BL with an offer to take over MG or any other asset, then, provided that there is some sensible possibility of the offer being commercially advantageous to BL, BL has an obligation to look at that proposal. That is a normal commercial obligation upon BL and its shareholders, who are not just the NEB but a number of private individuals. It is an obligation which, naturally, we should expect BL to look at.

In fairness, I should say that BL has expressed its willingness to look at any likely proposals which may come forward. My understanding is that the discussions which have taken place between Aston Martin-Lagonda and BL have been discussions which Aston Martin-Lagonda says are very significant and have been of value at this stage. So we must, as it were, immediately acquit BL of any suggestion that it is not considering offers.

I should like to take the point a little further. If we assume that someone, whoever it may be, has made an offer to BL, the question must then come as to what would happen if, in effect, we endeavoured to achieve a forced sale. I think that it cannot be said that if we were to do that we should be working in the best interests not just of the shareholders but of the taxpayer. These are, therefore, matters of getting down, as it were, to cases.

Certainly, if we demanded that BL should sell against its judgment, BL and its shareholders would be entitled to say "There will be a price to be paid by us for that action; we ask you to compensate us for your decision." It would be difficult for us to resist such a claim.

I turn now to what I think is the more hopeful situation. I think that my hon. Friend has realistically recognised that things have perhaps moved on since some of these issues were first raised. He and many of my hon. Friends may well feel entitled to take some credit for arousing the interest they have in this subject. The concern which has been expressed by my hon. Friend is shared in all parts of the House. I make the point that in broad terms we expect British Leyland to adjust its manning realistically to reflect the production demands placed upon it by its position in the market place.

Nevertheless, and here I come particularly to the points raised by my hon. Friend the Member for Abingdon, it is important to say that recent indications from the company suggest that the prospects for Abingdon are rather brighter than initially seemed likely. BL last week described to its employees a range of proposals of which I know my hon. Friend will be aware but which it will be useful to mention to my other hon. Friends. The range of proposals dealt with the future use of Abingdon. I must enter the caveat that these have not yet been finalised, but these are the proposals as we understand them for the future of Abingdon.

First, export packing activities will be transferred from Cowley to Abingdon, releasing space at Cowley needed to support new model programmes. Next, Abingdon's existing work on special tuning of cars and motor sport activities will continue, as well as its air pollution centre. Perhaps the most interesting proposal is the setting up of the specialised vehicle production facility. The idea here is to take partially completed vehicles from various of BL's volume production lines and finish them to special specification. These might include a wide range of models—the Princess, perhaps the new Metro, the LC10. Obviously much of this comes back to the problem I outlined at the beginning, namely, what will be the future of BL under its corporate plan. Assuming that the opportunities arise, as we all hope they will, that is the kind of range envisaged.

The project could move on to work involving luxury trim fitting, high performance derivatives, specially tuned cars and limited edition runs of volume cars. It is also possible that some of the high-performance derivatives would bear the special MG badge. Some of these developments will be felt to be very much in the MG tradition. This is something which MG has specialised in from the beginning—a limited volume of special cars based largely on standard engineering components. That is true even with the present models, the Midget and the MGB.

The employment indications of the present proposals would appear to be rather involved, but it would seem on balance as though there is a very good chance, with the interchange of Abingdon and Cowley, to move into a reasonably balanced situation.

I return to the speech of my hon. Frend the Member for Christchurch and Lymington. The points he has made will have been widely noted inside and outside the House. I end on a note of conditional optimism. Subject to the overriding question of BL's future, there is, under present plans, no intention that the MG name, on cars which deserve its application, will disappear from our roads or those of our overseas customers.

In fairness, I must say that I was one of those, and possibly there were others among my right hon. and hon. Friends, who jibbed when we moved from the TC to the TF and to the MGB. We must be fair-minded and allow whoever produces the MG car to prove that, perhaps in a new range of models, they can produce models worthy of that fine and traditional name. I think it is even possible that we shall see a continuation of the MGB. It is clear that there is a range of possibilities open to us. What is clear, above all, thanks to the energy of my hon. Friends, is that the reports of the death of the MG have been greatly exaggerated.

Question put and agreed to.

Adjourned accordingly at two minutes to Two o'clock.