HC Deb 22 May 1984 vol 60 cc830-47 3.41 pm
The Secretary of State for Trade and Industry (Mr. Norman Tebbit)

With permission, Mr. Speaker, I shall make a statement on the BL 1984 corporate plan.

I am making available in the Library of the House and in the Vote Office a report by BL on its recent performance and details of the 1984 corporate plan. The published results of BL show that, in 1983, the company achieved its objective of breaking even at the trading level for the first time since 1978. Productivity and quality standards within the company have continued to improve markedly. The House will, I am sure, wish to congratulate the company on these achievements, and on the range of new models successfully launched over the past year, including the larger Sherpa vans, the Land Rover 110, the Maestro, and—most recently—the Montego. The corporate plan, which the Government have now approved, sets out the basis on which the company's solid progress towards viability and its return to the private sector will be maintained.

A particular problem for BL in this year's plan has been Leyland Trucks, which faces an exceptionally depressed market at home and particularly overseas, showing little sign of major improvement in the medium-term, and severe over-capacity throughout Europe. The Government have endorsed the board's plan to continue the Leyland Trucks business, but accept the need for radical action to reduce costs and adjust to the medium-term prospects for the market. The company has informed its work force at its Bathgate plant today of the phased closure of that plant over the next two years. Leyland Bus, too, has suffered from a depressed market at home and will also have to reduce its capacity to a level more consistent with market prospects. The company has today informed its work force at the Charles H. Roe plant in Leeds of the closure of that plant later this year.

The Government, like the company, greatly regret these measures, which are, however, necessary to establish a viable prospect for the remainder of the commercial vehicles business and the employment in it.

It has been the long-established objective of the BL board to return its businesses to the private sector. The House will be aware of the sustained improvement in recent years in the performance of Jaguar Cars. As a result of this improvement, the BL board is now able to propose as a first step, subject to the approval of the shareholders of BL plc, that Jaguar Cars should be returned to the private sector later this year. It is the board's intention to proceed by means of a public offer for sale of Jaguar. The Government warmly welcome this plan and I look forward to keeping the House informed of progress in the coming weeks.

Mr. Peter Shore (Bethnal Green and Stepney)

In the light of this appalling statement, I give notice now that I shall be seeking leave to move the Adjournment of the House at the end of the statement.

What should have been a welcome statement by the Secretary of State, telling us about the progress that is being made under public ownership to rescue the British motor car and motor vehicle industry, has been yet another disastrous statement of closures affecting the British commercial vehicle industry. It is truly remarkable that when, only a few weeks ago, the Secretary of State was announcing the coming to Britain of the Nissan car company, due to bring 450 jobs in the first two-year phase, he has announced today the loss of 2,250 jobs, five times that number, to happen in the same time scale over the next two years.

When the Labour Government rescued the bankrupt British Leyland nine years ago, it was the intention to maintain for Britain a British-based, British-owned passenger and commercial vehicle industry. It now appears that the commercial side of the British-based British Leyland firm is to shrink to virtually negligible size.

The Government speak of over-capacity in Europe, but is it not the case that British Leyland has traditionally, through its Bathgate plant, aimed its export markets outside the continent of Europe? The Prime Minister said that there was no failure to invest, but does this decision not follow almost automatically from the decision not to invest in the Cummins diesel engine a few months ago, and the failure to invest in the 211 model truck which now offers a promising prospect?

Is not the real cause of the failure that we have seen in the commercial vehicle industry, as we have seen in British manufacturing industry as a whole, the plunge into deficit, so that last year, for the first time in our history, we became a net importer of commercial vehicles, having been a net exporter of 70,000 commercial vehicles a year in 1979 when the Government came into power? That is the story, and it is a story that is spreading blight and depression and loss of jobs all over England, and Scotland particularly, as this savage decision makes plain.

I will ask one further question about the closure at Bathgate. The right hon. Gentleman mentions 1,800 jobs. That is tragic enough, but is it not the case that it is a multiple of that figure that we have to consider when we take account of all the component and other suppliers who will also lose their jobs?

I turn now to C. H. Roe-Leyland Bus, in Leeds. Is it not the case that the reason why that enterprise is to close is that own demand for buses has fallen dramatically since the cut in the transport supplementary grant of the last two years?

Finally, on the decision to go ahead and prepare for the sale of Jaguar, the Secretary of State told us at the beginning of his statement that BL has achieved its objective of breaking even. Can he tell us what would be the deficit of BL without the profits of Jaguar?

Mr. Tebbit

I am sorry that the right hon. Member for Bethnal Green and Stepney (Mr. Shore) could not find a single word of praise for the efforts of the Leyland workers who have brought the cars group back into profitability, who have brought Jaguars to profitability and who are returning the whole business to profitability. [HON. MEMBERS: "Answer."] I am even more sorry—

Mr. Tam Dalyell (Linlithgow)

Where is the Prime Minister? We want her.

Mr. John Smith (Monklands East)

This is disgraceful.

Mr. Harry Ewing (Falkirk, East)

Answer the questions.

Mr. Speaker


Mr. Tebbit

It might help Labour Members to regain some of their courtesy—[Interruption.]—if I tell them that the Prime Minister has left to keep an appointment with the leader of one of the other parties in the House.

Mr. Dave Nellist (Coventry, South-East)

This is shameful .

Mr. Tebbit

I am sorry, too, that the right hon. Gentleman cannot distinguish between a Nissan car and a Leyland truck and appreciate that they are in different markets. I am glad, however, that he begins to understand that there has been a fall in the marked for trucks outside Europe. Indeed, in Nigeria alone, a traditional market for Leyland vehicles, sales have fallen from 1,400 in 1978 to fewer than 300 in 1983. I suppose that he also wants to blame the British Government for Nigeria's problems. [Interruption.]

The answer to the right hon. Gentleman's question about Cummins Diesel is that it would be cheaper for BL to buy the engines from Cummins in the United Kingdom than to produce them at Bathgate, even after all the investment had been made.

The right hon. Gentleman referred to the loss of component jobs. Can he not understand that the number and value of components sold are not dependent on whether Leyland puts money into Bathgate? It depends on how many trucks the company sells; and there would be no difference in the number of trucks sold, whether Bathgate was there or not. Bathgate is a drag on the company's recovery plans as they are now seen.

Mr. Ewing

Answer the question.

Mr. Tebbit

I shall take less time if the hon. Gentleman keeps quiet for a moment.

The right hon. Member for Bethnal Green and Stepney spoke of public sector subsidies to the bus industry. He should realise that people are buying more cars than ever before and that there is less demand than ever before for buses. Indeed, more than £1 billion has been put, through various schemes, into transport subsidies for buses and allied vehicles.

Mr. Barry Henderson (Fife, North-East)

It is unfortunate that a statement so serious for central Scotland should have been made on a day when the Select Committee on Scottish Affairs is in Inverness.

Will my right hon. Friend assure the House that if British Leyland will not accept representations to support the continuation of the only wholly integrated vehicle production unit in Britain—

Mr. Ewing

The Government made the decision.

Mr. Henderson

—my right hon. Friend will ensure that British Leyland will be unable to lock out any other potential vehicle builder who might wish to use that plant?

Mr. Tebbit

I regret, of course, that this statement has come at an inconvenient moment for some Scottish Members. It was, however, dictated largely by the timetable of events concerning the annual general meeting of British Leyland and its desire to inform the work force today of the proposed closure.

We should, of course, welcome the possibility of someone taking over the Bathgate plant, and we shall do all we can to that end, but I must tell the House that the prospects are not good. On the other hand, the right hon. Member for Bethnal Green and Stepney will recollect that he was very sneering about the prospect of saving jobs at Cammell Laird until private enterprise came in to rescue those who had been let down by public industry.

Mr. Dalyell

Do hon. Members on both sides of the House comprehend that, in talking about Bathgate, we are discussing the largest concentration of machine tools under any one roof, not only in the United Kingdom but in the whole of Europe? That is the size of the problem. Are we not talking about the de-industrialisation of Britain? I appeal to those Conservative Members who are genuinely concerned — I am sure that they are — about the de-industrialisation of our country to persuade their Ministers to think again about the help that can be given to BL's Bathgate factory. That factory came about because of the decisions of Harold Macmillan, Rab Butler and lain Macleod. Is there not some prime ministerial responsibility in this case? In the days before the Conservative party was hijacked and run by its present leadership, Harold Macmillan would have stayed in his place to hear a statement of this importance, and not have left the Chamber, whatever else he had to do. Should not the present Conservative party leaders reflect on what their predecessors did for good reasons?

Mr. Tebbit

It was difficult to understand the relevance of the hon. Gentleman's question. He should understand that the plan put forward by the BL board is one that, in its consideration—

Mr. Ewing

And yours.

Mr. Tebbit

—and in my consideration, too—

Mr. Ewing

And the Prime Minister's.

Mr. Tebbit

—is the one that is best calculated to ensure the survival of truck making in BL. That is the case. The Labour party believes that, by over-investing and over-producing trucks for which there are no market, the business could be saved, but the Labour party is alone in that belief.

Mr. Hal Miller (Bromsgrove)

Will my right hon. Friend confirm that the Government and the board of British Leyland are making great efforts to keep Leyland Trucks going in circumstances in which there has been a sharp fall in demand? The course of action recommended by the Opposition is likely to lead to the downfall of the whole group by weakening the successful elements by calling on the cash needed for development to prop up part of the enterprise that has no future in the market.

Mr. Tebbit

My hon. Friend is right. During the past five years, investment of about £25 million has been made at Bathgate alone. Last year, Leyland Vehicles lost £70 million. Increased investment at Bathgate, certainly unless it were accompanied by massive closures of every other plant in BL, would result, of course, in increased losses. Those increased losses inevitably would mean increased job losses before long.

Mr. Robin Cook (Livingston)

Cannot the Secretary of State find a word of praise to say for the responsible and loyal work force at Bathgate who have been betrayed by today's statement? Does he not appreciate that this corporate plan is a clear breach of faith by management of undertakings which it gave and which the Government endorsed to the work force as recently as two years ago? Will the right hon. Gentleman accept from me—I say this out of personal anguish, not because of party politics — that a man of 50 made redundant today in West Lothian need not expect to work again until he reaches retirement age? That is the reality of unemployment in our community. Is the right hon. Gentleman really prepared to condemn several hundred men to that future? If he is, does not he or the Secretary of State for Scotland have a single proposal to help the community that they have blasted today?

Mr. Tebbit

First, let me remind the hon. Gentleman that my words of praise for the workers of British Leyland encompassed every worker, from the chairman to the last man or woman in the humblest job, whether in Scotland or in Britain—[Interruption.]—or in England, who has been doing his or her best to bring this company round. The hon. Gentleman must understand that there has been no breach of faith between the management and the work force.

Mr. Gordon Wilson (Dundee, East)

Yes, there has.

Mr. Tebbit

There has been no breach of faith between the management and the work force. The fact is that there are not sufficient customers coming forward to buy the trucks that are being produced. I have heard the hon. Member for Livingston (Mr. Cook) wax lyrical about wine lakes. Does he want to produce a lorry park as well? The point is that the measures that are being taken today are not measures to destroy jobs; they are measures to save jobs.

Mrs. Anna McCurley (Renfrew, West and Inverclyde)

I hate to sound like someone picking over the carrion, but will the Secretary of State confirm that the axle division is going to Albion Motors? Can my right hon. Friend give any assurances on the continuity of employment and work at Albion?

Mr. Tebbit

I can assure my hon. Friend that the Albion works will be the centre of axle production for Leyland Vehicles. That is the plan of the company, which we have endorsed. Inevitably, the size of the operation will depend on the company's success in securing sales, but it is the company's intention that Albion should remain the centre for the construction of axles and many other components.

Mr. Derek Fatchett (Leeds, Central)

Does the Secretary of State realise that this afternoon's statement will come as a bombshell not just to Scotland but to west Yorkshire, and that it gives the lie to the Government's view that an economic recovery is under way? If the 400 or more workers at C. H. Roe had been in the House, they would have heard the Secretary of State use the word "regret" in his statement and they would also have realised that the word comes falsely from his lips. Is it not about time that the Secretary of State stopped talking about regret and started talking about hope for people who are thrown on the scrap heap, about hope for the young people in Leeds who will have no future in the engineering industry, and about action so that people who are thrown out of work have some future to look forward to?

With regard to C. H. Roe, is it not the case that if the Government had not cut finance for passenger transport authorities and county councils, jobs would halve been available? Is it not time for the Secretary of State to talk to his colleague the Secretary of State for the Environment and make sure that money is made available to give people productive work in Leeds rather than wasting them on the dole?

Mr. Tebbit

I am sure that, on mature consideration, the hon. Gentleman will understand that there is no political advantage for anyone in putting men and women out of work. There is no good social reason; there is no good reason at all to put men and women unnecessarily out of work. That is why I and all my colleagues regret it when it happens. The hon. Gentleman is very strong on the suggestion that—

Mr. Norman Atkinson (Tottenham)

The right hon. Gentleman is lying.

Mr. Tebbit

I shall not comment on the view of the hon. Member for Tottenham (Mr. Atkinson) that I am lying, which he put in his usual charming way.

Mr. Speaker

Order. I hope that the hon. Member for Tottenham (Mr. Atkinson) did not say that. I did not hear it, anyway.

Hon. Members


Mr. Andrew Faulds (Warley, East)


Mr. Tebbit

I have nothing to withdraw. I say to the hon. Member for Leeds, Central (Mr. Fatchett) that there will be a market for buses when the buses are produced at prices that are right and competitive. There is no way in which the company can be subsidised into profit. I regret the fact that the hon. Gentleman had no word whatsoever for the success of the cars group—

Mr. Faulds


Mr. Tebbit

—and many other parts of British Leyland during these difficult times. I have to say that I can even shout down the hon. Member for Warley, East (Mr. Faulds), who has strayed in from the chorus line again.

Mr. Ewing

On a point of order, Mr. Speaker. During the last Question Time on trade and industry, the Secretary of State for Trade and Industry was directly involved in the incident that led to the naming of my hon. Friend the Member for Linlithgow (Mr. Dalyell) with regard to an allegation of lying. The right hon. Gentleman has just made a most serious allegation, and I ask you, Mr. Speaker, to make him withdraw that comment; otherwise there will not be seen to be fairness in the House.

Mr. Robin Corbett (Birmingham, Edgbaston)

On a point of order, Mr. Speaker.

Mr. Speaker

Order. I do not need any help on this. I did not hear what the hon. Member for Tottenham (Mr. Atkinson) said. I am certain that if it was a remark that may have misled the Secretary of State—

Mr. Faulds

Typical Tebbit.

Mr. Speaker


Mr. Tebbit


Mr. Faulds

It is absolutely in character.

Mr. Speaker

Order. If the Secretary of State was misled, I am sure that he wishes to say so.

Mr. Tebbit

I think that I can help. If I misheard the hon. Member for Tottenham (Mr. Atkinson) and if the hon. Gentleman can assure me and the House that he did not say that I was lying, of course I shall be happy to withdraw the suggestion. It is really up to the hon. Gentleman.

Several Hon. Members


Mr. Speaker

Order. I fully understand that this matter raises great passions in the House, but I ask the House to proceed—

Mr. David Winnick (Walsall, North)

Tebbit is a disgrace.

Mr. Speaker

Order. I ask the House to proceed, so that we may come to subsequent business.

Mr. Winnick

Chuck Tebbit out.

Mr. Michael Grylls (Surrey, North-West)

Will my right hon. Friend not be deflected by the silly comments by some Opposition Members who were talking about the de-industrialisation of Scotland, when so many parts of Scotland are booming with the new — [Interruption.] Does my right hon. Friend accept that many people throughout the country, perhaps in a rather calmer atmosphere than today, will realise that he is absolutely right to support the management recommendation of the board of British Leyland, and that returning Jaguar to the private sector will provide funds for expansion and investment in the viable parts of British Leyland?

Mr. Tebbit

My hon. Friend is of course right that British Leyland will retain the cash from the sale of Jaguar for the purposes of the British Leyland business. With regard to what has been referred to as the de-industrialisation of Scotland, I notice that, not least through the efforts of my right hon. Friend the Secretary of State for Scotland, inward investment to Scotland is continuing at record levels. When I was in the United States last week, I found a positive attitude among many American industrialists towards investment in Scotland. Many of them are increasing their investment. I do not think that their feelings about Scotland would have been altogether improved had they seen the behaviour of some Scottish hon. Members today.

Mr. Paddy Ashdown (Yeovil)

Is the Secretary of State aware that many people inside and outside the House will look on the news of the tragic closures as clear evidence that the economic recovery, if it is taking place at all, is too shallow and weak to reverse the decline of the British industrial base that has taken place under the Government of which the right hon. Gentleman is a member? With regard to the privatisation of Jaguar, is the right hon. Gentleman aware that at a recent meeting between my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), the leader of the Liberal party, and the chief executive of Jaguar, Mr. John Egan, the latter expressed specific interest in worker participation and profit sharing? Can the right hon. Gentleman give the House an assurance that, in any scheme he brings forward, both those elements will feature?

Mr. Tebbit

The hon. Gentleman may have missed the fact that there has been a worldwide fall in the demand for trucks. If there is that fall, it may be prudent to reduce capacity and cut costs to recover from that position. That is what the plan is designed to do. It is designed to ensure that Leyland Vehicles can operate successfully and profitably at far lower break-even levels than would have been the case if the Bathgate projects had continued.

Mr. Neil Kinnock (Islwyn)

What about the 50,000 increase in truck imports?

Mr. Tebbit

The right hon. Gentleman is going on about imports. He had better ask those who buy them why they do so, and he might then have the answers.

Mr. Kinnock

Has demand gone down?

Mr. Tebbit

Of course demand has gone down, and both foreign and British manufacturers have suffered. What the right hon. Gentleman cannot understand, perhaps because he has never yet borne any Government responsibility, is that there is not always an easy option out of difficult problems.

As to what the hon. Member for Yeovil (Mr. Ashdown) says about the recovery of markets and worker participation, it is primarily a matter for the BL board to decide the manner in which the shares will be offered, and what percentage will be offered to the workers. I hope that, as in all the other privatisation measures that we have carried out directly under Government control, there will be some opportunity for the workers to take part.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

Does my right hon. Friend agree that it is sad that BL's corporate plan has come out with this news about Bathgate, when we should be able to—as we can—congratulate BL and its workers on transforming a music-hall joke into a very fine British company?

Mr. Nellist

Well done, lads—now go on the dole.

Mr. Beaumont-Dark

On the privatisation of Jaguar, does my right hon. Friend agree that the problem is that BL will be selling off virtually the only profitable side of the business? What then will happen to the capital raised from that? It may be that, if BL is left on its own, investors will feel that it is not as viable a company as it is with Jaguar. We do not wish the whole edifice of BL to be in danger from what may be only a once-for-all capital profit. If these jobs and this investment can be secured, all well and good, but the future of the whole group must not be endangered by one sale.

Mr. Tebbit

First the board, and secondly I and my colleagues, are satisfied that there is nothing in the sale of Jaguar that endangers the group—rather the reverse; the income will assist the group. I do not believe that those who have been advancing credit to BL have been doing so solely on the basis of the profits of Jaguar.

Mr. George Park (Coventry, North-East)

Does the Secretary of State accept that in saying that, unless Bathgate closes, there will be detrimental effects on the rest of the company, he is recognising the interdependence of the companies within BL, yet he still proposes to privatise Jaguar, which will have the same detrimental effect on the progress of the whole company? We have heard a lot, even this afternoon, about economic recovery, and the chairman of BL referred to it in the annual report. He said tht it would "assist the further growth" in commercial vehicle markets this year. Are we now to take it that there is no economic recovery?

Mr. Tebbit

No—there is some hope that the market for commercial vehicles will improve further this year. It is clear that it is unlikely that in the near future the demand will return to the levels of a few years ago. That is a result not merely of the recession but of trucks being larger, longer and more effectively used than ever before. As to what the hon. Gentleman said about the interdependence of the BL group, what is happening is that Jaguar is leaving BL but is putting back into it a large sum of cash, which the company needs. At the moment, Leyland Vehicles is losing £70 million a year, and that has to be financed out of the profits of other parts of the group. It is prudent and proper that the management should take measures to reduce those losses, and, we hope, to bring Leyland Vehicles into profit.

Mr. Robin Maxwell-Hyslop (Tiverton)

Will my right hon. Friend re-read, and remind the House of, the evidence given by the then Sir Donald Stokes to the Select Committee on Trade and Industry in its inquiry into the British motor vehicle industry 10 years ago, when Sir Donald Stokes condemned the fact that BL had been forced to go to Bathgate against its commercial judgment, and spelt out to the Committee the intolerable economic burden of extra costs that this placed on its operations? That would not have been a burden on it had the business been allowed to expand where the commercial judgment of the directors had wished it to do so. Will my right hon. Friend remind the House that we are now reaping the whirlwind of that bad decision?

Mr. Tebbit

I am grateful to my hon. Friend for reminding the House of what was said to that Committee some years ago. A great deal of it is well worth re-reading.

Mr. Gordon Wilson (Dundee, East)

Is it not the brutal truth, from what the Secretary of State has said, that there was a choice between saving jobs at Bathgate, Scottish jobs, and those at Leyland, English jobs, and that, being the Secretary of State for Trade and Industry — an English Minister—he opted to save the English jobs at the expense of Scottish jobs, and the Secretary of State for Scotland, like a quisling, has acquiesced in that decision.

The Secretary of State for Scotland (Mr. George Younger)

indicated dissent.

Mr. Wilson

Is it not time that Scotland was treated with more respect than that with which his Department and Government have so far treated it?

Mr. Tebbit

I suggest that the first thing that the hon. Gentleman should do is to put down a parliamentary question, or write to Sir Austin Bide, asking for a list of closures of BL plants north and south of the border. I think that he will find that Scotland has fared very well over the years. Secondly, the hon. Gentleman should understand that, whether the jobs are north or south of the border, one has to look at all the possible options for how one operates a number of plants. What governs the decision is not which side of the border they are but what is the most effective way to build a company. Otherwise, the hon. Gentleman must have some fantasy in his mind that Sir Austin Bide is engaged in a vendetta against Scotland. I think that he has more to do than to engage in such activities.

Sir Dudley Smith (Warwick and Leamington)

Is my right hon. Friend aware that the Jaguar management and work force have shown what can be achieved in the British car industry? Is he also aware that the people of the west midlands welcome the overall progress of BL, which he has announced today, from a position of near-disaster a few years ago—something which is always conveniently overlooked by the Opposition?

Mr. Tebbit

Indeed—and it is always as well to remind ourselves that, as recently as 1980, the Jaguar work force produced 1.3 cars per man per year and now produces 3.42 cars per man per year. The production of cars has doubled, the company is profitable and the cars are well made and have a high reputation. If we could achieve that standard of improvement in the rest of the business, we would perhaps be talking of job gains rather than job losses.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

Will the Secretary of State estimate how many jobs will be lost in the firms supplying components to Bathgate, and, in particular, what the effect will be on the Scottish Stamping and Engineering Company in Ayrshire, in the Secretary of State for Scotland's constituency?

Mr. Tebbit

The hon. Gentleman will understand that it would be unreasonable to expect me to know all the circumstances of that company. I suspect that his point was directed rather more at my right hon. Friend the Secretary of State for Scotland than at me. Of course we shall look into the circumstances. The volume of components bought does not depend on whether they are assembled at Bathgate — it depends on how many vehicles are assembled. That depends on how many can be sold, which depends upon their cost. Therefore, the proposals are more likely to increase the sale of components than to reduce them.

Mr. Michael Forsyth (Stirling)

Does not my right hon. Friend agree that the real tragedy of the closure is that the work force has co-operated in every way and is almost blameless, and that the closure has been made necessary because of the total collapse of the market? In the two years before closure, will every effort be made to build on the success already achieved in Scotland through re-industrialisation and the bringing in of new companies selling goods, products and services that people want to buy, so that employment can be created in West Lothian as has already happened in Livingston with NEC?

Mr. Tebbit

My hon. Friend is absolutely right. There has been no criticism from the Leyland board of the work force at Bathgate. That is not the point at issue—it is that the market has collapsed. The recovery of the market, although it is there, is slow. Therefore, the company must be run at a lower volume. We have looked for the most efficient way to do that.

Of course, there is a most excellent record on investment in Scotland in new companies such as the Digital Equipment Company, National Semi-conductors Limited and many others in the hi-tech industries that have been pouring in and creating jobs in recent years.

Mr. Nellist

Does not the right hon. Gentleman's statement tell volumes about his view of society—close down a bus factory that working people use and laud and extend the production of super-toy cars for the rich? Why does not he admit that he knows less about cars and the truck and bus division of BL—in which I once worked —than he does about bikes? Why does not he confirm the worthlessness of the reported promise by the Prime Minister that she intended to save Bathgate? She could not be bothered even to stay in the Chamber to listen to the questions on the statement?

Finally — I have waited for a second Coventry Member to speak before rising—why does not the right hon. Gentleman explain the reality of the privatisation of Jaguar? Is it not that, after the investment of public money and the sacrifice of workers—so that the same number of cars are produced now as in 1976, but with fewer workers because of greater exploitation on the track—the right hon. Gentleman's mates will pick up the pickings when he sells Jaguar to them? That tells us a great deal about the Secretary of State for Trade and Industry.

Mr. Tebbit

The hon. Gentleman's question tells us a great deal about him and his view that the way to success is to produce cars of too low a quality and too high a price for anyone but thick millionaires to buy.

Mr. Kenneth Warren (Hastings and Rye)

Did my right hon. Friend's Department receive any proposals from British Leyland to save Bathgate, or did his Department make any proposals to BL? Will he assure the House that there is no chance of Jaguar falling into foreign hands?

Mr. Tebbit

On the first question, both the BL board and the Government looked at all the possible combinations and proposals that we could envisage to determine how much of Leyland Vehicles' productive capacity and how many jobs could be saved. At the end of the day, we concluded that we were forced to agree with the BL board that the plan that it had put to us, and which it asked us to approve, was the best option available.

On the question of possible foreign control of Jaguar, arrangements will be made about that and will be announced by BL at the time of the flotation.

Mr. Ian Wrigglesworth (Stockton, South)

Is the right hon. Gentleman aware that alliance Members very much welcome the success of the volume car production part of BL, which is the absolute kernel of its operation? But does not that success underline the failure of the Government's economic policies that have led to the closure of Bathgate and the plant in Leeds? Will he listen to the representations from a broad spectrum of British industry, seeking a reinvigoration of British industry to increase the demand for such factories?

Will the right hon. Gentleman give an absolute assurance—it was not clear from his answer to the hon. Member for Hastings and Rye (Mr. Warren) — that Jaguar will not be allowed to fall into foreign hands? Are there any plans to sell other parts of BL, such as Unipart?

Mr. Tebbit

I am glad that the hon. Gentleman has added to the general welcome that has been given by all those of a more thoughtful turn of mind to the progress made in the volume cars group. On the question about the general expansion of demand, I can suggest only that he takes a short trip across the channel and asks the French about the consequences of artificially expanding demand and then finding that they have caught a tiger by the tail in no mean fashion.

On the arrangements for Jaguar, I can only say again that those will be announced at the time of flotation. On the privatisation of other parts of BL, it is best to say only that, as possibilities arise, I shall inform the House.

Mr. Bruce Milan (Glasgow, Govan)

The right hon. Gentleman mentioned the quality of the work force at Bathgate. Is he aware that at the time of the last re-organisation of Leyland Trucks, that work force was given a specific assurance that Bathgate would remain a key operation of BL? Have not those assurances been repeated many times? Will not today's statement be met by the work force with a deep sense of betrayal, which will be widely shared in Scotland?

Is it not all the more nauseating that the Government should have given approval to the closure when, only a fortnight ago, the right hon. Gentleman, the Chancellor of the Exchequer and the Prime Minister—not to mention the Secretary of State for Scotland — attended the Scottish Tory party conference and said how well the economy was doing and what wonders the Government were doing for Scotland? Is the right hon. Gentleman aware that the Opposition will not accept today's statement as the final word about Bathgate? We shall do everything possible to prevent the closure of that modern and efficient plant.

Mr. Tebbit

Of course, one can understand the feelings of those workers who are faced with redundancies.

Mr. Willie W. Hamilton (Fife, Central)

Here he goes again.

Mr. Tebbit

The fact remains that, unless people come forward to buy the vehicles, there is not much point in making them. That cannot be emphasised too strongly. BL — management and work force alike — have tried to make a success of Leyland Vehicles and the Bathgate plant. That success has so far been denied to them. The management has now concluded that success will be most likely if Bathgate is closed and there is a concentration on bringing the company back into profit.

It is a pity that the right hon. Gentleman did not say anything about the work force at Albion, in whose interests it is that Leyland Vehicles should become successful and profitable.

Mr. Charles Morrison (Devizes)

Is my right hon. Friend aware that in 1978–79 the Leyland car body plant in my constituency was producing 88 car bodies per man year, while currently it is producing 266? Is that not a remarkable reflection on the ability of both work force and management?

While I regret the closures, will my right hon. Friend confirm that the Government's job is not so much to retain old factories which, for good or bad reasons, have outlived their usefulness, as to do their utmost to create the conditions that will ensure that new jobs will be created?

Mr. Tebbit

My hon. Friend is indeed right, and he is right to point out the extraordinary increase in productivity by the workers in the factory in his constituency. What is all the more remarkable is that those 266 car bodies are finding ready and willing buyers. That is the key to the success of the car group. My hon. Friend asks about creating conditions in which new jobs can be established. Indeed, that is the purpose of the strategy, and that is why it is so pleasing to see that many foreign investors have much more faith in Scotland than many Opposition Members have in their constituents.

Mr. Ron Brown (Edinburgh, Leith)

Will not the Secretary of State accept that responsibility for managing a company lies with the management? Since our German and Japanese competitors have done reasonably well, despite the crisis, would not the Secretary of State be wise to point the finger at management? Would it not be a good idea to dismiss the board of directors instead of the workers at Bathgate? Would not that be true justice? Or is the Minister simply trying to shuffle the cards and cover up for his Government as usual?

Mr. Tebbit

The hon. Gentleman is of course right to say that the performance of management is a key factor in the performance of a company, but there are other factors too. The managements of German factories, faced with unreasonable pay demands and demands for the reduction of hours, are probably thinking at the moment that their problems are not totally related to management skills.

Sir Kenneth Lewis (Stamford and Spalding)

I had anticipated that the Government's objective for British Leyland was to privatise the whole of the corporation. Jaguar and Unipart are two very successful areas of the business. If we sell off Jaguar and Unipart—and and my right hon. Friend seemed to accept a moment ago that there is pressure within BL to sell off Unipart—will not the Government have to give up the idea of privatising the rest of the corporation, and be tied to giving Government support to the remainder?

Mr. Tebbit

No, I do not think so. BL is behaving exactly as a private sector company would behave if it was short of cash for the mainstream business. It is finding items in its inventory which are not central to the business and which can be sold off to raise cash for the mainstream business—the volume car business. BL is entirely right to take that route as if it were a private sector company.

Mr. Robin Corbett (Birmingham, Erdington)

Would the Secretary of State not acknowledge that none of the improvements made at BL in the past few years at a terrible cost in jobs would have been possible without the rescue attempt launched by the Labour Government at a cost of £1,000 million, and opposed by the right hon. Gentleman and his right hon. and hon. Friends? Could the Secretary of State also give us some insight into his neolithic economics and explain how success can be wrapped around the loss of 2,200 jobs? Will there not be further job losses when Jaguar in my constituency has also been sold to the right hon. Gentleman's friends?

Mr. Tebbit

The hon. Gentleman's latter point suggests that he believes, in essence, that whenever a private sector company is making profits, there are job losses. The reverse is true.

On his earlier point, what the hon. Gentleman must understand is that, although there are to be nearly 1,800 jobs lost at Bathgate, in the longer run, as those jobs disappear, engines will have to be produced elsewhere in the United Kingdom, so jobs will also be created. The developments are not all of one kind. The hon. Gentleman must bring himself up to date on these matters and try to acquire a little understanding of them.

Lord James Douglas-Hamilton (Edinburgh, West)

Will my right hon. Friend confirm that he will make full use of the two-year phasing period to investigate employment uses for the Bathgate factory in future, in cooperation with the Scottish Office, the Scottish Development Agency and any other relevant bodies.

Mr. Tebbit

Indeed, Sir. The Secretary of State and I and all other Ministers concerned with investment, particularly overseas investment, will be continuing to devote ourselves to bringing new investment to Scotland as well as other parts of the United Kingdom.

Mr. Ernie Ross (Dundee, West)

Will not the Secretary of State accept that the corporate plan that he has announced today and which the workers have had to accept, is one of a succession of corporate plans which are influenced by Government policy? This Government's policy is to compartmentalise British Leyland and sell it off bit by bit, because they do not believe in a British car, bus and vehicle corporation?

Mr. Tebbit

There is nothing incompatible in believing in success for the British industry, and privatising it. The success that we have achieved in bringing BL back into profit — [HON. MEMBERS: "We?"] Yes, we — the Government, the management, the work force and everybody concerned. I would hope that even some Opposition hon. Members might have tried to do something to help. Our job has been made far more difficult by the fact that we had to undo so much work shoddily and badly done by our predecessors.

Mr. Roger King (Birmingham, Northfield)

Would my right hon. Friend take note of the fact that the odd tear will be shed in Birmingham over the closure at Bathgate, because that was our truck industry, wrenched away from the midlands in the 1960s in the name of progress along with many other parts of the British motor industry, which were scattered to the winds and have fallen one by one?

Would my right hon. Friend agree that the policies followed by the management of BL Cars in particular have resuscitated that company, leading to the Longbridge plant alone employing an extra 500 people this year and the launch of another new car tomorrow at a press preview at the national exhibition centre? Together with the extra workers taken on at Cowley, those are good examples of how to redevelop our motor industry. When Jaguar, Unipart and, ultimately, Austin-Rover are privatised will there be arrangements for the work force to have a slice of the action?

Mr. Tebbit

I shall take the last point first. Arrangements will be announced by the British Leyland board, which will be in the lead in the privatisation programmes. I also rejoice in the resurgence of motor manufacture in my hon. Friend's constituency, but he must not tempt me to take the nationalistic view about these matters which some hon. Members from north of the border appear to take.

Mr. Doug Hoyle (Warrington, North)

Can the Secretary of State say how many commercial vehicles are imported now, as compared with 1979? Can he also tell us why the closure at Bathgate has happened and how far the people of West Lothian will have to go on his father's famous or infamous bike to find jobs?

Mr. Tebbit

The market in Britain for trucks fell by about 45 per cent. from the peak demand to the trough. It is now recovering, but not very quickly. I do not have the figure for import penetration in front of me.

Mr. Hoyle

I thought that the Secretary of State would not have the figure.

Mr. Tebbit

If the hon. Gentleman will forgive me, I know that Leyland Vehicles lost market share very severely until last year. Last year, it picked up a little and it is continuing to do so.

Mr. Nicholas Winterton (Macclesfield)

I very much regret the closure of the two plants at Bathgate and Leeds and the social consequences that will follow from those closures. However, will my right hon. Friend accept that those who know anything about the motor industry accept that the closures were inevitable? Will my right hon. Friend explain to the House why the United Kingdom bus and commercial vehicle industries are losing out in international trade, particularly to the Japanese? Will he carry out an inquiry to find out why this is happening? That would give hope to what remains of the industry. His decision is welcome in that it does not provide unfair competition for both Fodens of Sandbach and ERF of Sandbach, which would have taken the provision of assistance to BL very badly. Such assistance would have placed those firms in a very bad position. Is it not surprising that Jaguar's success is receiving no applause from the Opposition? The massive and growing demand for the new improved Jaguar car is coming not from the wealthy of Britain but from America.

Mr. Tebbit

My hon. Friend is right. The Opposition are interested only in gloom and doom and are disappointed if they do not get enough of it. With regard to what he said about the performance of British as opposed to other truck makers, all truck makers have had a pretty thin time during the world recession. My hon. Friend asked for an inquiry into why the Japanese might have been more successful than some of the rest of us. We do not require a new inquiry to discover the answer. They make the trucks that people want for a price that they are willing to pay and deliver them on the day that they are wanted.

Mr. John Maxton (Glasgow, Cathcart)

Has the Secretary of State for Scotland sat silent for all this time out of loyalty to the Secretary of State for Trade and Industry or because he will follow this statement with the announcement of his resignation from the Cabinet, in which he has totally failed to safeguard the interests of Scotland?

Mr. Tebbit

I think it far more likely that my right hon. Friend has sat silent because, as Secretary of State for Trade and Industry, I take the lead in making a statement on BL, not least because it spans the border and because I have the unhappy task of announcing a closure in England as well. Moreover, it would look rather untidy if two or three of us were jumping up and down to answer the same questions.

Mr. Den Dover (Chorley)

Is my right hon. Friend aware that his announcement will be welcomed by thousands of hard-working BL workers in Lancashire, as it will come as a relief to them? Will he confirm that, because of the harsh economic facts of life and the dramatic reduction in the need for vehicles, there has already been a loss of about 3,5000 jobs in BL in Lancashire?

Mr. Tebbit

My hon. Friend is, of course, right. I hope that these measures will lead to the success of Leyland Vehicles. We must understand that there has been vast over-capacity, which must be reduced. It now looks as though there is a prospect of the company breaking even before too long at a volume of perhaps 12,000, or 11,000, trucks a year. At that point we could look forward to success and further expansion to regain jobs.

Mr. Greville Janner (Leicester, West)

Is the Secretary of State aware that Opposition Members object most to the awful dumping of people by making them unemployed in the public sector while selling off those parts of the public sector which are profitable? Does the right hon. Gentleman accept that this disgraceful decision about Jaguar will have an effect on the loan stock of the company, much of which is held by small investors and pension funds, which the right hon. Gentleman claims to hold in such high regard?

Mr. Tebbit

I must confess that I find the hon. and learned Gentleman uncharacteristically muddled on this matter. He seems to think that, for some reason, jobs in a state-owned Jaguar are of greater intrinsic value than jobs in a privately-owned Jaguar. I do not believe that that is true. Nor do I believe that the change will make any difference to those who have lent money to BL.

Mr. Donald Dewar (Glasgow, Garscadden)

The Secretary of State will remember remarking a little while ago on the interest of the Albion work force in a successful British Leyland. Many of them are my constituents and while they are, of course, interested in success, they will strongly disagree with the suggestion that the closure of Bathgate is the way in which to achieve that success. Today, they will be wondering what is the worth of the right hon. Gentleman's assurances bearing in mind the catalogue of bad faith and broken promises that workers at Bathgate have experienced.

Can the right hon. Gentleman throw any light on the mysterious leaks to the BBC and the Scottish press only this weekend that Bathgate has been saved by the personal intervention of the Prime Minister? Will he note that we want to know how that story originated? Was there such an intervention, and what happened to it? Is he further aware that, under his stewardship and that of the Secretary of State for Scotland, we have witnessed the closure of Linwood, Invergordon, Corpach and now Bathgate—almost all the major centres of industrial growth, or hope-for industrial growth that came to Scotland in the 1960s?

That is an unprecedented catalogue of disaster that has ripped hope out of the Scottish economy and makes into rank hypocrisy the talk that the right hon. Gentleman has given us today, and which the Secretary of State for Scotland constantly gives us, about recovery in the Scottish economy? Can he not reconsider on Bathgate? I thank him for accepting frankly that the decision rested ultimately with Ministers. If we do not see evidence of the Secretary of State for Scotland fighting successfully to reverse this decision and to save the plant, his position will be untenable. He will have lost all credibility, and ought to go.

Mr. Tebbit

The hon. Gentleman is very strong on allegations of bad faith and the rest, but if he looks back, especially at the time during which I have been responsible for matters concerning British Leyland, he will find that I and my colleagues have done everything we can to back the company and its work force through extremely difficult times. That has included putting £1 billion of taxpayers' money into the company, often when there were strong competing claims and when many people inside the House and outside gave little chance for the firm's survival. The hon. Gentleman should congratulate the Government on our faith and on the success that all of us — the Government and the company together—have had.

The hon. Gentleman must not expect me to know where rumours originate.

Mr. Ewing

It was the Secretary of State for Scotland who told the press that Bathgate was to be saved.

Mr. Tebbit

If the hon. Member for Falkirk, East (Mr. Ewing) has a point to make, no doubt Mr. Speaker will call him. If the hon. Gentleman has a theory, I suggest that he advances it. The rumours did not come from anywhere within the Government.

Mr. Ewing

It was the Secretary of State for Scotland who told the press.

Mr. Tebbit

Really, it is impossible if the hon. Member for Falkirk, East continues to behave in such a disorderly and ill-mannered way. On closures, the hon. Member for Glasgow, Garscadden (Mr. Dewar) is saying that I should substitute my judgment or, more correctly, that I should substitute his judgment for that of the board which has had such success in guiding the car group to profitability. I do not think that it would be right to substitute the hon. Gentleman's judgment for that of a true, tried and successful management, and I do not think that anyone else does either.


Mr. Alan Williams (Swansea, West)

On a point of order, Mr. Speaker, As we have seen recently in the House, the use of the word "liar" can lead to the expulsion of an hon. Member. It follows, therefore, that to allege that a fellow hon. Member has accused another Member of lying is itself a serious allegation.

This afternoon, during questions on the statement, the Secretary of State for Trade and Industry accused my hon. Friend the Member for Tottenham (Mr. Akinson) of saying that he —the Secretary of State—was lying. Inspection of the Official Report will show that there was absolutely no foundation for that allegation. In defence of my hon. Friend and, indeed, in defence of the practices of the House, may I ask you, Mr. Speaker, to inspect the Official Report? If, as I am sure will be the case, you find that there was no foundation for what the Secretary of State alleged, will you require that the Secretary of State come hack to the House, apologise for the falsity of his allegation, and withdraw it?

Mr. Speaker

Order. I shall, of course, look into the matter. I did not hear an allegation of lying and I said so at the time. I thought that the Secretary of State dealt with the matter in his response—

Mr. Williams


Mr. Speaker

Order. I shall read Hansard and see. Certainly, I did not hear the remark in question. Had I heard it, I should have required the hon. Member concerned to withdraw it.

I must tell the House, however, that observations from a sedentary position are not usually reproduced in Hansard. That is not part of the official record.

Mr. Ewing

On a point of order, Mr. Speaker. The fact of the matter is that my hon. Friend the Member for Tottenham (Mr. Atkinson) did not use the word "liar". I was sitting as near to him as any other hon. Member and he did not use the word "liar". The Secretary of State for Trade and Industry, however, made an allegation that my hon. Friend had called him, the Secretary of State, a liar.

For the sake of future proceedings in the House, I suggest that if any hon. Member, including the Secretary of State for Trade and Industry, is to be allowed to make that baseless allegation against another hon. Member and, when he finds that the allegation is false, to rise in his place and put the responsibility for denying it on someone such as my hon. Friend the Member for Tottenham, the House will find itself in the most serious difficulty.

With respect, Mr. Speaker, I refer you back to the recent incident which led to the naming of my hon. Friend the Member for Linlithgow (Mr. Dalyell), who was not accusing the Prime Minister of lying but saying in effect what the Secretary of State said today—that another hon. Member was accusing her of lying. You, Mr. Speaker, named my hon. Friend the Member for Linlithgow on that occasion.

The Secretary of State for Trade and Industry has slipped away—I know that he has other work to do and I apologise for raising the matter in his absence—but in my view this matter must be cleared up. If the Secretary of State is allowed to get away with what happened today, I believe that the House will find itself in the most serious difficulty.

Mr. Speaker

Order. I have said that I will look into the matter. I repeat, however, that remarks from a sedentary position are not usually reproduced in Hansard, so I may not know. I certainly did not hear the remark. On the earlier occasion to which the hon. Member for Falkirk, East (Mr. Ewing) referred, I did not hear the remark in question. Had I heard the same remark today, I should, of course, have ruled it out of order. As the House well knows, no hon. or right hon. Member may be accused of lying or of any other dishonourable attitude or behaviour.