Jaguar Cars

HC Deb 29 February 1984 vol 55 cc242-4

7. Mr. Neil Hamilton

asked the Secretary of State for Trade and Industry whether he has any plans for the privatisation of Jaguar.

10. Sir William van Straubenzee

asked the Secretary of State for Trade and Industry whether a date has yet been set for the flotation of shares in Jaguar Cars as an independent company.

Mr. Tebbit

We are currently considering the board's 1984 corporate plan, which includes the board's proposals for the first steps towards the return of the business to ownership by the public. We shall announce our decisions as soon as possible.

Mr. Hamilton

Is my right hon. Friend aware that the excellent performance of this company makes it a very attractive candidate for privatisation? The taxpayer's interest in this matter, as the finder of the company, is to get his money out on the best terms possible, and the experience of nationalised industries so far for the taxpayer is that he should take the money when it is available and run.

Mr. Tebbit

I am anxious to see this company returned to true ownership by the public, as I said, and I shall be bound to bear in mind, when I am arranging that matter, the best interests not only of the taxpayer but of Jaguar and of BL.

Sir William van Straubenzee

To explain my concern about my hon. Friend the Member for Tatton (Mr. Hamilton), may I ask my right hon. Friend to make clear his absolute commitment to handing over this great company to the private sector? Will he bear in mind the great lesson to be learnt from the National Freight Corporation of allowing those who work in the company to participate in the shareholding?

Mr. Tebbit

As with all our measures of privatisation, we shall do our best to ensure that there are attractive terms for the workers in the company. However, it would probably be too big an operation for a management and work force buy-out, which would probably have adverse effects on the company's balance sheet in relation to the borrowings that would be required.

Mr. Park

When considering his privatisation plans for Jaguar, will the Secretary of State also bear in mind that although Jaguar has an established identity, there is still a degree of interdependence with the rest of British Leyland? Will the right hon. Gentleman also bear in mind that if Jaguar were sold to a company with its own means of producing components so that orders were taken away from British Leyland, the repercussions might have an effect on the future of British Leyland?

Mr. Tebbit

I shall bear all those considerations in mind when reaching my conclusions.

Mr. Dykes

Is my right hon. Friend entirely happy with the profit projections in the corporate plan?

Mr. Tebbit

I am never entirely happy about anybody's profit forecasts. Such forecasts are never high enough, and they are always too likely to be affected by various adverse circumstances. That is the way of the world. However, I am confident that Jaguar can successfully return to the private sector in due course.

Mr. Geoffrey Robinson

We are only somewhat reassured that the right hon. Gentleman understands that the need for long-term capital for Jaguar puts it way beyond a management buy-out provision, but will he bear in mind that Jaguar will also need long-term access to research and development, which could be provided by BL? Will the right hon. Gentleman give us an assurance that he has not ruled out—as has been reported in the press—the idea of BL retaining a strong minority stake in Jaguar?

Mr. Tebbit

Of course I understand the need for a company the size of Jaguar to have some access to ouside research and development facilities. Many companies have such access and buy in expertise of one sort or another. I note what the hon. Gentleman has said about BL retaining a shareholding, and in due course our decisions will be announced to the House.

Mr. Randall

Is the Secretary of State aware that the sale of Jaguar could have a serious impact on BL's ability to remain in the high-volume, low-margin car manufacturing business, and that that could have a detrimental effect on jobs in Britain?

Mr. Tebbit

I note what the hon. Gentleman says, but I do not think that that would be a bar to the sale of Jaguar, and nor does the board, which probably knows at least as much about the business as the hon. Gentleman does.

Mr. Shore

Does it occur to the Secretary of State that we are glad that he has so far given rather cautious answers? Does he agree that it would be manifest nonsense and would lead to a weakening of British Leyland as a whole, and Jaguar if separated from it — [Hon. Members: 'Why?".]—if Jaguar were privatised in the way suggested by some Conservative Members? Before the Secretary of State reaches any decision, will he look not only into the prospects for capital expenditure and from where that money may come, but into the history of Jaguar, which, when it was under private ownership, voluntarily merged with BMC, which was also under private ownership, to give it sufficient strength to survive?

Mr. Tebbit

I certainly shall. As the right hon. Gentleman will recollect, it did not work out too well.