HC Deb 07 August 1980 vol 990 cc760-2
6. Mr. Cryer

asked the Secretary of State for Northern Ireland if he will make a statement on the application for financial assistance to the De Lorean Car Co. Ltd.

Mr. Humphrey Atkins

Yes, Sir. As I explained yesterday in my reply to my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne), the extra funds available for industrial assistance and energy in 1980–81 will include up to £14 million by way of repayable loans towards the cost of bringing the De Lorean DMC 12 project to market launch. Detailed negotiations with De Lorean on this point are in progress.

Mr. Cryer

Is not the private enterprise contribution to this project a somewhat nebulous £13 million? Is not the taxpayer already contributing about £53 million? Does not an additional £14 million, allied to savage cutbacks in social services and education, suggest that the taxpayer is getting an extremely bad deal when he will not even own the car at the end of the day? The car will be owned by the De Lorean research partnership. Does not the right hon. Gentleman begin to believe that this looks like the biggest rip-off since the South Sea Bubble?

Mr. Atkins

We decided that we had to honour the commitment entered into by the previous Labour Government of whom the hon. Gentleman was a member—

Mr. Cryer

No. I had just left.

Mr. Atkins

No, the hon. Gentleman had not. I have checked that. I refer to the commitment to launch the DMC 12 car, which we must remember holds the prospect of 2,000 jobs in West Belfast

Mr. Alan Clark

Of course, my right hon. Friend is, to some extent, the prisoner of the small print of an agreement that was negotiated by the previous Labour Government. That we accept. But does he realise that he is really the laughing stock, not only of the international motor industry but, for all I know, the criminal fraternity as well, on account of the scale of this rip-off? Would he like to confirm the rumour—I hope that he will be able to confirm the rumour—that this £14 million is, in fact, the very last tranche to be handed out, and that it is being done in consideration of an undertaking in writing from Mr. De Lorean not to ask for any more money, which will get him off the hook on which he was placed by the previous Government?

Mr. Atkins

The company has agreed in writing that the provision of extra funds removes the obligation contained in the original agreement to consider further applications.

Mr. Pendry

We accept that De Lorean needed financial assistance, but will the right hon. Genttleman accept that we totally oppose the method that has brought it about—namely, to fund De Lorean at the expense of education, which was cut by £10 million last year, and social services, where there is already too little provision? Will he accept that nothing short of massive Government assistance will rectify the serious economic imbalance in the Province? No rejigging of the existing Estimates will overcome these grave problems.

Mr. Atkins

The hon. Gentleman appears to have overlooked that part of my statement yesterday which indicated that the Government are providing an extra £48 million from the Contingency Reserve towards Northern Ireland.

Mr. Bruce-Gardyne

Will my right hon. Friend confirm that the undertaking that he has now extracted from this American gentleman will not in any way be vitiated by the fact that we announced last year that we were not giving any more money to Harland and Wolff and we now are? Will he deal with the rather alarming proposition advanced yesterday that we had to put up £14 million for De Lorean because the company employs Catholics as we had given £42 million to Harland and Wolff because that company employs Protestants? Does he accept that that is not acceptable from the British taxpayer's point of view?

Mr. Atkins

There is no truth in the last part of my hon. Friend's question. We found that we had a commitment, which we have now discharged, to provide funds to bring the DMC 12 to market launch. An agreement has been signed, not by Mr. De Lorean but by the company, that releases the Government from the obligation contained in the original agreement.

Mr. Fitt

Does the right hon. Gentleman accept that even those, such as myself, who were enthusiastic in their support for the undertaking at its beginning are now beginning to have deep reservations about the project especially as so much employment was promised that has not materialised? Yesterday the right hon. Gentleman linked a mini-Budget statement on cuts in education, health, social services and the environment and savage housing cutbacks with the De Lorean issue. Will he accept the opportunity given to him today to make a full statement on the savage cuts that he announced yesterday in Northern Ireland expenditure?

Mr. Atkins

I made a statement yesterday. If the hon. Gentleman wishes to ask me questions about it, let him do so.