HC Deb 10 July 1980 vol 988 cc733-5
3. Mr. Michael McNair-Wilson

asked the Secretary of State for Northern Ireland if he will give a progress report on the De Lorean car project.

The Under-Secretary of State for Northern Ireland (Mr. Giles Shaw)

Since I last reported to the House on this matter there has been some slippage in the car's development programme. The company now expects pilot production to commence in its Dunmurry plant this month and to continue until November 1980. Series production is expected to start in December 1980 and the launch of the car in the USA is now due to take place early in 1981.

Mr. McNair-Wilson

In view of the recession in the American car industry and in view of the fact that imports of foreign cars on to the American market this year will be down by 12 per cent., is my hon. Friend reassessing the commercial prospects for this vehicle? In particular does he believe that it can achieve the sales output which its originator has claimed?

Mr. Shaw

My hon. Friend will be aware that in relation to the application by the company for additional funding a major review of its prospects and marketing objective is being undertaken Insofar as the prospects for entering the American market are concerned I remind my hon. Friend that two years' orders have already been obtained from that market. That is sufficient to get production and penetration off to a considerable start.

Mr. Cryer

Does the Minister accept that we all wish to see more jobs in West Belfast and, indeed, more jobs in the whole of the United Kingdom? Does he agree that, because of the system of financing De Lorean, and if more money is to be provided, he could usefully ask, as a condition for that funding, that the car should be owned by the British taxpayer? The British taxpayer has paid out £53 million. Is he aware that at the end of the day the car will be owned by Mr. J. De Lorean or the De Lorean research partnership and the British taxpayer will have nothing?

Mr. Shaw

The investment of the British taxpayer in this company is an investment in the development of an enterprise providing a substantial number of jobs in an area around West Belfast. In addition, it will provide a spin-off by way of jobs which are already becoming available in certain other companies being established there. It is in the interests both of the British taxpayer and the population of Belfast to see a successful development at Dunmurry.

Mr. Bruce-Gardyne

Is my hon. Friend aware—I am sure he is—that anxiety about the relationship of investment to equity participation in this project is not confined to Opposition Members? Is he able to tell the House how much longer we must wait before we hear the outcome of Mr. De Lorean's demand for the latest top-up from the taxpayer?

Mr. Shaw

My hon. Friend will be aware that I have promised a statement in the House as soon as we have concluded our examination. The time we are taking and the consequences, not only of the slippage but of the other factors outside the control of the company—such as the inflation rate and the dollar/ pound relationship—make it important that we take due time to husband every pound of the taxpayers' resources.

Mr. Pendry

Is the Minister aware that although there has been some slippage it has not been all that much and that the pre-sale activities of the De Lorean car, especially in the United States has been brisk? Is it not now time for the hon. Gentleman to accept the inflationary stress on that company and for his Department to back it financially?

Mr. Shaw

The hon. Gentleman is quite right. The slippage is three months and to bring a car to market penetration in two and a half years, as is presently projected, will be a considerable achievement. As far as investment is concerned, I accept the point that the Government have made a huge investment in this enterprise and that we must, therefore, look carefully to ensure that it is brought to profitable fruition.