HC Deb 14 June 1982 vol 25 cc599-600
7. Sir William van Straubenzee

asked the Secretary of State for Industry when he expects to announce a successor to Sir Michael Edwardes as chairman of British Leyland.

Mr. Patrick Jenkin

Sir Michael Edwardes has made it known that he will relinquish his position as chairman and chief executive of BL when his contract expires at the end of this year. The question of a successor is being considered.

Sir William van Straubenzee

I am sure that my right hon. Friend appreciates how difficult it will be to replace Sir Michael, whose contribution to industry, and to his company in particular, has been massive. When considering the terms of appointment for a successor, will my right hon. Friend refrain from closing his mind to the idea of including permission to break down the messy unit of British Leyland? Will he examine other highly successful industrial enterprises such as Racal and learn from Sir Ernest Harrison, the foundation of whose management expertise rests on much smaller units?

Mr. Jenkin

I entirely endorse what my hon. Friend has said about Sir Michael Edwardes' contribution to restoring British Leyland to viability. The nation stands in his debt. With regard to the future structure of BL, the succession of management and structure are linked. I assure my hon. Friend that all options are open and being considered. In due course I hope that it will be possible for me to make a statement about the matter.

Mr. Park

Will the Minister say whether the successor to Sir Michael Edwardes will have the same terms of reference? Perhaps I may pose more bluntly what is implicit in the question of the hon. Member for Woking (Sir W. van Straubenzee). Will the terms of reference include the sale of other parts of British Leyland as they become profitable?

Mr. Jenkin

Yes. It is the Government's policy that BL should be returned to the real public as soon as possible. That has been clear from the beginning and it remains firmly at the forefront of my policy.

Mr. Freud

The real public?

Mr. Jenkin

I am not surprised that Opposition Members do not recognise the phrase. They do not understand it. Companies should be floated off and owned by real people, not by the State. That is our policy. We shall urge that policy on the successor to Sir Michael Edwardes, whoever he may be.

Mr. Hal Miller

Has my right hon. Friend given any thought to the answer to a question that any prospective successor that he may interview is bound to ask: in 'what type of industrial climate can BL expect to operate during the next three years in view of the over-capacity in the motor industry throughout the world, the measures that have been taken within the EEC to increase steel prices there and the trading practices of Spain? All of these are bound to come to any successor's mind.

Mr. Jenkin

Any successor will find that he has inherited a company with an increasing number of new models of cars that are demonstrating considerable prospects of success in the market. The effectiveness of BL's new model programme can be demonstrated by the fact that in the first quarter of this year sales were 6 per cent. higher than for the same period last year and exports increased by 23 per cent. as compared with 1981. The quality of the product and the cost of its manufacture will determine BL's success in the market. In that regard, Sir Michael and his team have made their contribution.

Mr. Orme

I appreciate and welcome the fact that BL's share of the market has increased. Does the Secretary of State agree that breaking up BL, which is one of the smallest motor manufacturers in the world, would be disastrous? That is the basic reason for our opposition to the proposal. Are not taxpayers real people as well?

Mr. Jenkin

The structure of the company is under review. I do not wish to go further into that matter now. With regard to private shareholders and the taxpayer—

Mr. Orme

Real people.

Mr. Jenkin

That is right. I doubt whether taxpayers feel that BL has been anything other than a substantial burden to them. I suspect that they would be very pleased if they knew that future capital investment in BL will be financed by the market rather than the Exchequer.