HC Deb 28 January 1982 vol 16 cc987-9
2. Mr. Cryer

asked the Secretary of State for Northern Ireland if he is satisfied with the current voting rights of the Government directors in the De Lorean Car Co. Ltd. of Dunmurry.

The Minister of State, Northern Ireland Office (Mr. Adam Butler)

Under the arrangements agreed by the previous Administration, the Northern Ireland Development Agency is represented by two nominated directors on the board of the company. In view of its minority shareholding the agency does not have voting control.

As I informed the House on 19 January in reply to a question from my hon. Friend the Member for Epping Forest (Sir J. Biggs-Davison)—[Vol. 16, c. 115]—it is the Government's intention that such matters as the board's membership should be included in the proposed independent consultants' survey. In this regard I can now inform the House that my right hon. Friend the Secretary of State has appointed Coopers and Lybrand to carry out this survey and report within 14 days. I must stress that nothing in the Government's present words or actions should be taken as committing any further Government assistance or comfort to the De Lorean companies. The directors of the company have told my right hon. Friend that in continuing to trade they will not incur any credit that they cannot meet.

Mr. Cryer

Does the Minister agree that, with the massive public contribution to the company, there should be a majority shareholding on behalf of the taxpayer? Does he accept that the two directors, who watched £9 million go to Lotus Cars via a Panamanian company and proposed a bonus of £400, 000 to the directors only last month, should be replaced? Is it not a disgrace that, after contributing £83 million, the taxpayer does not even own the cars? The only way of providing future jobs in that important area of the United Kingdom is for there to be public ownership under the National Enterprise Board. Does the right hon. Gentleman accept that that private enterprise venture appears to be a rip off for the directors and a potential disaster for the workers?

Mr. Butler

It was the Labour Administration, of which the hon. Gentleman was a member, that made the arrangement with Mr. De Lorean. If that Government, with their philosophy on nationalisation, were not prepared to take a majoriy shareholding, the hon. Gentleman will not be surprised if I do not agree with his first proposition.

Mr. Kilfedder

Is it not remarkable and scandalous that the De Lorean company, which is in such financial jeopardy that it is seeking more taxpayers' money, should have provided Mr. De Lorean with first-class travel by Concorde to New York and back for one meeting and first-class travel for seven directors from Belfast to New York for one meeting, at a total cost of £15, 000? Will that matter be investigated?

Mr. Butler

The hon. Gentleman must appreciate the importance of the board meetings of the two companies. They were called at short notice to consider some important points that were put to Mr. De Lorean and other directors by my right hon. Friend the Secretary of State.

Mr. Fitt

Does the Minister agree that the attraction of building that new industry in Northern Ireland was that it would provide a ray of hope for a constituency that has had many unemployed for many years? Is not the fact that this Administration have continued to give support to that undertaking a vindication that the right steps were taken by the Labour Administration? Does the hon. Gentleman recognise that a dreadful sense of insecurity is felt by every employee in that company? The employees do not know from one week to the next whether their jobs are safe. Will he reach a conclusion as quickly as possible so that the workers may lose that dreadful sense of insecurity?

Mr. Butler

The hon. Gentleman rightly speaks with feeling about the anxieties of the workers at the plant. I understand that the management will meet the unions this afternoon and tell them whatever it can about the present circumstances. I assure the hon. Gentleman that we shall treat the matter with all speed in the interests both of the workers at the plant and of the public stake that has been put into that company.

Mr. Alan Clark

Has not my hon. Friend, and his predecessors, been warned consistently by hon. Members on both sides of the House about the commercial prospects of that enterprise and the financial integrity of Mr. De Lorean? Is he aware that Mr. De Lorean boasts openly in New York that he has a headlock on the British Government and that they will always pay up in the end? If my hon. Friend wants to use taxpayers' money on job creation schemes in Northern Ireland, would it not be better to find a way of doing so without subsidising the extravagant lifestyle of many American con men?

Mr. Butler

I do not believe that my hon. Friend appreciates either the success of the company in producing a car from a green field site or the commercial acceptance of the car on the market. The company has been hit hard, in the same way as Ford and General Motors, by the sudden and unexpected depression in the car market in the United States. I shall not comment on the word "headlock", but Mr. De Lorean can be in no doubt about the Government's view following two meetings with my right hon. Friend.

Mr. Concannon

Is the Minister aware that unemployment in Northern Ireland is more than 20 per cent. and that in the area where the factory is situated it is 50 per cent? We have received dreadful news today that Mackie's and Sons Ltd. is laying off 500 workers in that area. That is not a laughing matter. I am concerned not about Mr. De Lorean, but about the 7, 000 workers who are involved, directly or indirectly, in the firm. I hope that some of my hon. Friends share my concern. Is the Minister aware that the Opposition deeply regret the projected redundancies in De Lorean, which have resulted mostly from the collapse of the American car market? I think that he will agree that some misconceived utterances at the end of last year have not helped to serve the credibility of the whole operation. Does the hon. Gentleman accept that the fight to save De Lorean is symbolic not just for Mr. De Lorean, but for the 7, 000 workers and jobs now and in the future in Northern Ireland?

Mr. Butler

I am certain that, in their original decision, the Labour Administration put special weight on the factors to which the right hon. Gentleman referred. Even then there was high unemployment in West Belfast. It was for that reason that we felt it right to provide more funds for loan guarantees to bring the car to launch. That point will continue to be taken into account when we take a decision on the consultants' report. There is a point beyond which we cannot go. We have an acute responsibility to the taxpayers for the way in which the money has been used. We must take that into account as well as the situation of the workers and the unemployed in the Province.